Meatheney v. Arts Performing Ctr.

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ROBYN MEATHENEY, Plaintiff, v. ARTS PERFORMING CENTER, LLC, DOWNTOWN JUNEAU INVESTMENTS, LLC d/b/a Silk Exotic on Water and SCOTT KRAHN, Defendants.

No. 21-cv-683-pp

United States District Court, E.D. Wisconsin

March 10, 2023

ORDER DENYING DEFENDANT KRAHN'S MOTION FOR ECONSIDERATION (DKT. NO. 52)

On June 2, 2021, the plaintiff filed a complaint on behalf of herself and others similarly situated, alleging violations of the Fair Labor Standards Act related to her employment with the defendants. Dkt. No. 1. The complaint asserts (1) failure to pay minimum wage, (2) failure to pay overtime wages, (3) illegal kickbacks, (4) unlawful taking of tips and (5) forced tipping. Id. at 16-23. On July 15, 2021, all of the defendants filed a motion to dismiss and to compel the plaintiff to submit to individualized arbitration. Dkt. No 16.

On March 29, 2022, the court issued an order denying the defendants' motion to dismiss but granting their motion to compel arbitration. Dkt. No. 31. Under 9 U.S.C. §3 the court stayed the litigation, but only as to the plaintiff's claims against the corporate defendants Art's Performing Center and Downtown Juneau Investments. Id. at 29. The court found that the defendants had provided no evidence that individual defendants Lyle Messinger or Scott Krahn were parties to the entertainment lease or the arbitration agreement. Id. The court stated that “[i]f the parties believe that the court should stay the proceedings on the plaintiff's claims against Messinger and Krahn, they may file a motion or stipulation requesting a stay and explaining why the court should grant that request.” Id. at 30.

On June 23, 2022, defendants Krahn and Messinger filed a motion asking the court to reconsider its March 29 ruling requiring them to remain parties in the lawsuit. Dkt. No. 52. On August 12, 2022, the parties stipulated to dismissal of defendant Messinger with prejudice. Dkt. No. 65. Defendant Krahn continues to seek enforcement of the arbitration agreement through this motion and asserts the stay should apply to him. Dkt. No. 64 at 1, n.1. Because the motion is improperly brought as a motion for reconsideration and defendant Krahn has not met his burden under Rule 60(b), the court will deny the motion to reconsider.

I. Standard

“[T]he Federal Rules of Civil Procedure do not expressly recognize a ‘motion to reconsider.'” United States v. Lewis, No. 17-cr-191, 2019 WL 3068310, at *1 (E.D. Wis. July 11, 2019) (quoting United States v. Roth, No. 10 Misc. 001, 2010 WL 1541343, at 2 (E.D. Wis. Apr. 19, 2010)). “Rather, [s]uch motions are properly brought pursuant to Rule 59(e) or Rule 60(b).” Austin v. Comm'r of Soc. Sec. Admin., No. 16-CV-1296, 2018 WL 2271032, at *1 (E.D. Wis. May 17, 2018) (alteration in original) (quotation omitted). The defendants label their motion as one for reconsideration, but do not articulate under which Federal Rule they bring the motion. See Civil Local Rule 7(a) (E.D. Wis.) (“Every motion must state the statute or rule pursuant to which it is made ....”).

Nevertheless, the Seventh Circuit has explained “that the important question for categorizing these motions is their timing.” Carter v. City of Alton, 922 F.3d 824, 826 n.1 (7th Cir. 2019) (citing Lac Du Flambeau Band of Lake Superior Chippewa Indians v. State of Wis., 957 F.2d 515, 517 (7th Cir. 1992)).

Rule 59(e) allows a court to alter or amend a judgment if the party files the motion “no later than 28 days after the entry of judgment.” Fed.R.Civ.P. 59(e). “The rule essentially enables a district court to correct its own errors, sparing the parties and the appellate courts the burden of unnecessary appellate proceedings.” Russell v. Delco Remy Div. of Gen. Motors Corp., 51 F.3d 746, 749 (7th Cir. 1995) (citation omitted). “When a motion is filed more than 28 days after the entry of judgment, whether the movant calls it a Rule 59(e) motion or a Rule 60(b) motion, we treat it as a Rule 60(b) motion.” Banks v. Chi. Bd. of Educ., 750 F.3d 663, 666 (7th Cir. 2014) (citations omitted). See also United States v. Bishop, 854 Fed.Appx. 77, 77 (7th Cir. 2021) (“In civil cases, an untimely request for reconsideration can be treated as a motion under Fed.R.Civ.P. 60(b).”); Williams v. Illinois, 737 F.3d 473, 475 (7th Cir. 2013) (referring to the Seventh Circuit's establishment of this “bright-line rule” for “any motion for reconsideration filed after the deadline”). The court entered its order on March 29, 2022. Dkt. No. 31. Defendant Krahn filed his motion for reconsideration on June 23, 2022, eighty-six days after the court's order. Dkt. No. 52. Therefore, the court must analyze the motion for reconsideration under Rule 60(b).

Rule 60(b) provides that “[o]n motion and just terms, the court may relieve a party” from a final judgment or order for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

Fed. R. Civ. P. 60(b). “Rule 60(b)(6) provides a catchall” that “is available only when Rules 60(b)(1) through (b)(5) are inapplicable.” Kemp v. United States, 142 S.Ct. 1856, 1861 (2022). “Although Rules 59(e) and 60(b) have similar goals, Rule 60(b) motions are generally subject to a higher threshold of proof.” Tartt v. Nw. Cmty. Hosp., 79 Fed.Appx. 219, 221 (7th Cir. 2003). “Rule 60(b) relief is an ‘extraordinary remedy' granted only in ‘exceptional circumstances.'” In re Cook Med., Inc., 27 F.4th 539, 542 (7th Cir. 2022) (quoting Eskridge v. Cook Cty., 577 F.3d 806, 808 (7th Cir. 2009)).

II. Analysis

Defendant Krahn seeks reconsideration only of the portion of the court's March 29, 2022 order that declined to stay the case against him and compel the plaintiff's claims against him to be arbitrated. Dkt. No. 52. Specifically, he asserts that the court erred in compelling only the corporate defendants to arbitration and requiring defendant Krahn to remain a party in the lawsuit. Id. Krahn does not identify a statute or rule under which he brings this motion, but rather quotes case law on motions to reconsider in general: “Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence.” Id. at 1-2 (citing Caisse Nationale de Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1269 (7th Cir. 1996) and Rothwell Cotton Co. v. Rosenthal Co., 827 F.2d 246, 251 (7th Cir. 1987)).

Krahn clarifies in his reply brief in support of the motion to reconsider that his “motion is based solely on manifest error of law.” Dkt. No. 64 at 2.

Krahn asserts that “the terms of the arbitration agreement require that the determination of who is to be referred to arbitration be made by the arbitrator, not the Court” and that “principles of agency and equitable estoppel require the individual Defendants to be referred to arbitration along with the corporate Defendants.” Id. at 1-2. The Supreme Court recently has confirmed that “a ‘mistake' under Rule 60(b)(1) includes a judge's errors of law” and that “Rule 60(b)(1) covers all mistakes of law made by a judge . . . .” Kemp, 142 S.Ct. at 1861-62 (2022). See also Blitch v. United States, 39 F.4th 827, 834 (7th Cir. 2022) (same, citing Kemp). The court will construe Krahn's motion as a motion under Rule 60(b)(1).

The court did not, however, make the “manifest error of law” Krahn describes in his motion to reconsider. In its March 29 order, the court concluded that it could not grant the defendants' motion to compel arbitration as to the individual defendants (at the time, Messinger and Krahn) because the defendants had not demonstrated that the individual defendants were parties to or bound by the lease or the arbitration agreement: “The defendants have provided no evidence that Lyle Messinger or Scott Krahn were parties to the entertainment lease or the arbitration agreement.” Dkt. No. 31 at 29. The court gave Krahn an opportunity to clarify: “If the parties believe that the court should stay the proceedings on the plaintiff's claims against Messinger and Krahn, they may file a motion or stipulation requesting a stay and explaining why the court should grant that request.” Id. at 30. Rather than doing either, Krahn waited almost three months, then asked the court to reconsider its decision. But the motion to reconsider does not address the issue the court identified in its March 29 order-the fact that he was not a signatory to the entertainment lease or the arbitration agreement.

Krahn first asserts that the plaintiff did not object to compelling arbitration for all defendants, nothing that in her brief opposing the motion to dismiss, the plaintiff had stated “In the event the Court does not dismiss the Motion, Meatheney is willing to submit her claims to arbitration ....” Dkt. No. 52 at 2 (emphasis in original) (quoting Dkt. No. 21 at 3). Krahn argues that, “[h]aving failed to make the argument in her response brief that arbitration should be compelled only as to the signatories to the arbitration agreement, the Plaintiff has forfeited it.” Id. at 3. He asserts that because “this was an issue on which the Plaintiff bore the burden of proof . . . Plaintiff's failure to object to the Defendants who were nonsignatories enforcing the arbitration agreement should be taken as conclusive.” Id. (citing ...