Montero v. Jpmorgan Chase & Co.

CECILIA MONTERO and ANABEL RODRIGUEZ, on behalf of themselvesand all other similarly situated persons, known and unknown Plaintiffs, v. JPMORGAN CHASE & CO., and JPMORGAN CHASE BANK, N.A., Defendants.

No. 14 cv 9053

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

December 14, 2016

Magistrate Judge Susan E. Cox

Order

For the reasons provided, Cecilia Montero's ("Montero's" or "Plaintiff's") motion to vacate the order compelling Anabel Rodriguez ("Rodriguez") to arbitration (Dkt. No. 78) and Montero's motion to join Rodriguez as a plaintiff (Dkt. No. 78) are denied. Montero's motion to file a third amended complaint (Dkt. No. 78) is granted.

Procedural Background

Montero filed this class action suit against JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. ("Chase") alleging that Chase failed to pay overtime wages at the rate required under the Fair Labor Standards Act 29 U.S.C. § 201 et seq. ("FLSA"), the Illinois Minimum Wage Law, 820 Ill. Comp. Stat. 105/1, et seq. ("IMWL"), and the Illinois Wage Payment and Collection Act, 820 Ill. Comp. Stat. 115/ 1 et seq. ("IWPCA"). (Dkt. No. 1).

On January 14, 2015, Montero filed a first amended complaint (Dkt. No. 20), which alleged the same violations of law, but added Rodriguez as a plaintiff. Montero and Rodriguez were given leave to file a second amended complaint on February 13, 2015, alleging that Chase violated the IWPCA by making unauthorized deductions from their agreed-upon wages. (Dkt. Nos. 25, 29, 31).

Chase filed a motion to dismiss the second amended complaint (Dkt. No. 32) on March 2, 2015. Simultaneously, Chase moved to compel arbitration with respect to Rodriguez, arguing that Rodriguez was subject to a Binding Arbitration Agreement ("BAA") with Chase. (Dkt. No. 32, 33 at 11-15). Notably, the BAA waived Rodriguez's right to arbitrate any claims she might have on a class basis. Plaintiffs initially agreed to dismiss Rodriguez's claims "in light of the precedent in the area of forced arbitration." (Dkt. No. 41 at 1). On May 8, 2015, however, Plaintiffs filed a supplemental motion, asking the district court to deny Chase's motion to compel arbitration; that motion was premised on "Rodriguez subsequently receiv[ing] a Settlement Claim Form from Chase in the matter of Hightower, et al. v. JPMorgan Chase Bank, N.A., et al., U.S.D.C. for the C.D. Cal. (Case No. 11-cv-1802), which identified [Rodriguez] as a class member and sought to resolve her wage claims." (Dkt. No. 78 at 3; Dkt. No. 48 at 1-2.) Plaintiffs argued that Chase's decision not to adhere to the BAA in the Hightower matter should render Chase unable to compel individual arbitration of her claims in this matter. (Dkt. No. 48 at 1-2.) This is the only argument put forward by Plaintiffs on the enforceability of the BAA during the pendency of Chase's motion to dismiss; they never raised the issue that the BAA's prohibition on collective actions might run afoul of the National Labor Relations Act or any other federal statute. On January 15, 2016, the district court entered an order compelling arbitration of Rodriguez's claims.¹ (Dkt. No 58 at 1, 4).

While Chase's motion to dismiss was pending before the district court, a case bearing on the enforceability of arbitration agreements that prohibit collective actions was winding its waythrough the Seventh Circuit. In Lewis v. Epic Systems Corp., 2015 WL 5330300, at *1-2 (W.D. Wis. Sept. 11, 2015), the court decided to follow the National Labor Relation Board's conclusion that "an employer violates the National Labor Relations Act by entering into individual arbitration agreements that include a prohibition on collective actions by employees." Id. (citing In re D.R. Horton, Inc., 357 NLRB No. 184, 2012 WL 36274 (2012)). The very same day that the district court's opinion issued, the defendant in Lewis filed a notice of interlocutory appeal before the Seventh Circuit. Lewis, 3:15-cv-0082-bbc, Dkt. No. 55 (W.D. Wis. Sept. 11, 2015). By the time the district court in the instant suit had issued its opinion, the Lewis appeal had been fully briefed (including several amicus briefs), and oral argument was scheduled before the Seventh Circuit. See Lewis v. Epic Systems Corp., No. 15-cv-2997, Dkt Nos. 13-16, 19, 21, 23, 30, 31). On May 26, 2016, the Seventh Circuit affirmed the district court's decision in Lewis, holding that arbitrations clauses that prohibit collective actions by employees violate the NLRA, and that "[n]othing in the [Federal Arbitration Act] saves the ban on collective action." Lewis v. Epic Systems Corp., 823 F.3d 1147, 1161 (7^th Cir. 2016).

Montero filed the instant motion on September 1, 2016, asking this Court to vacate the order entered on January 15, 2016 (Dkt. No. 58) based upon the subsequent binding precedent issued by the Seventh Circuit Court of Appeals in Lewis. (Dkt. No. 78). Montero alternatively moved for leave to join Rodriguez as a plaintiff pursuant to Fed. R. Civ. P. 20(a)(1) (Dkt. No. 78). On the same date, Plaintiff filed a motion for leave to file a third amended complaint (Dkt. No 78), seeking to clarify her FLSA and IMWL claims and seeking to add a new IWPCA claim for untimely payments.

Discussion

1. Motion to vacate an order under Fed. R. Civ. P. 60(b)(6)

The Court first considers Montero's motion to vacate an order under Fed. R. Civ. P. 60(b)(6). Rule 60(b) provides:

On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; (6) any other reason justifying relief from the operation of the judgment.

Montero seeks relief under Rule 60(b)(6), the catch-all provision. Relief from a final judgment or order under Rule 60(b) is "an extraordinary remedy and is granted only in exceptional circumstances." C.K.S. Engineers v. White Mountain Gypsum, 726 F.2d 1202, 1204-05 (7th Cir. 1984). This principle is rooted in a "strong policy favoring the finality of judgments." Lee v. Village of River Forest, 936 F.2d 976 (7th Cir. 1991) (quoting Margoles v. Johns, 798 F.2d 1069, 1073 (7th Cir. 1986). The Seventh Circuit has indicated that a change in the law after entry of judgment does not, by itself, justify relief under Rule 60(b). Kathrein v. City of Evanston, Ill., 752 F.3d 680 (7th Cir. 2014) (citing McNight v U.S. Steel Corp., 726 F.2d 333, 336 (7th Cir. 1984)). Indeed, the Supreme Court has noted that "[i]ntervening developments in the law by themselves rarely constitute the extraordinary circumstances required for relief under Rule 60(b)(6)." Agostini v. Felton, 521 U.S. 203, 239 (1997).

Montero argues that since the district court rendered its decision compelling arbitration, the Seventh Circuit in Lewis has decided that arbitration agreements mandating individual action, like the one binding Rodriguez, are unenforceable because they preclude all collective or classaction, violating Section 7 and 8 of the National Labor Relations Act ("NLRA"). (Dkt. 78 at 3); see Lewis v. Epic Sys. Corp., 823 F.3d 1147, 1154 (7th Cir. 2016). As discussed above, the Seventh Circuit in Lewis further held that the Federal Arbitration Act ("FAA") does not conflict with the NLRA, and thus does not mandate enforcement of the individual arbitration process. See 823 F.3d at 1157. Montero points out that the individual Arbitration Agreement signed by Rodriguez contains identical class waiver provisions to the agreement the Seventh Circuit deemed unlawful in Lewis. (Dkt. No. 78 at 5-6). Montero argues that this subsequent change in law constitutes an extraordinary circumstance that justifies granting relief under Rule 60(b)(6). (Id. at 4). (Dkt. No. 78 at 4).

The Court rejects Montero's arguments. In the Seventh Circuit, a change in law does not constitute extraordinary circumstances for the purposes of a motion brought pursuant to Rule 60(b)(6). See Kathrein, 752 F.3d at 690. Norgaard v. DuPuy Orthopaedics, Inc., 121 F.3d 1074 (7^th Cir. 1997), is instructive. In that case, the defendants won summary judgment on a federal preemption question in a tort case. Id. at 1075. Two months after the district court entered judgment, the Supreme Court issued an opinion that "furnished the [plaintiffs] with arguments they could have used" to challenge the defendants' motion for summary judgment. Id. Plaintiffs had failed to appeal the district court's ruling for summary judgment or file a motion for reconsideration under Federal Rule of Civil Procedure 59(e); as a result, they filed a motion under Rule 60(b). Id. The district court denied that motion, and the plaintiffs appealed. Id. The Seventh Circuit affirmed the district court's decision, reasoning that:

Litigants who want to take advantage of the possibility that the law may evolve—or who seek to precipitate legal change—must press their positions while they have the chance. If the law of the circuit is against a litigant . . . , the party still may appeal and ask the court to modify or overrule the adverse decision, or ask the Supreme Court to reverse the court of appeals. The [plaintiffs] could havemade the same arguments that the [petitioners made in the Supreme Court case plaintiffs relied on in their 60(b)(6) motion]. The briefs in that case were readily available. Before filing suit on the [plaintiffs'] behalf, their lawyer presumably planned some way to counter the defendants' inevitable [preemption

...