Pruitt et al v. Act Fast Delivery, Inc. et al

Western District of Texas, txwd-5:2019-cv-00049

REPLY to Response to Motion, filed by Act Fast Courier of Texas, Inc., Act Fast Delivery of Houston, Inc., Act Fast Delivery of S.A., Inc., Act Fast Delivery of Travis County, Inc., Act Fast Delivery of Tyler, Inc., Act Fast Delivery, Inc., Act Fast of Coastal Bend, Inc., Mike D Miller, re [22] MOTION filed by Defendant Mike D Miller, Defendant Act Fast Delivery, Inc., Defendant Act Fast Delivery of Travis County, Inc., Defendant Act Fast Delivery of S.A., Inc., Defendant Act Fast Delivery of Houston, Inc., Defendant Act Fast Courier of Texas, Inc., Defendant Act Fast of Coastal Bend, Inc., Defendant Act Fast Delivery of Tyler, Inc.

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION SANDRA PRUITT, JASMINE § HUNTSBERRY, YUVANNDA § WATSON, AYAN NUR, and KAREN § LAWSON, Individually and § On Behalf of All Others Similarly § Situated, § Plaintiffs, § § V. § § C.A. No. 5:19-CV-00049-DAE ACT FAST DELIVERY, INC.; ACT § FAST COURIER OF TEXAS, INC.; § ACT FAST DELIVERY OF § HOUSTON, INC.; ACT FAST OF § COASTAL BEND, INC.; ACT FAST § DELIVERY OF S.A., INC.; ACT § FAST DELIVERY OF TYLER, § INC.; ACT FAST DELIVERY OF § TRAVIS COUNTY, INC.; and § MIKE MILLER; § Defendants § DEFENDANTS' REPLY TO PLAINTIFFS' RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION TO COMPEL ARBITRATION [Relates to Doc. No. 22 and 33] TO THE UNITED STATES DISTRICT COURT: COME NOW Defendants Act Fast Delivery, Inc.; Act Fast Courier of Texas, Inc.; Act Fast Delivery of Houston, Inc.; Act Fast of Coastal Bend, Inc.; Act Fast Delivery of S.A., Inc.; Act Fast Delivery of Tyler, Inc.; Act Fast Delivery of Travis County, Inc.; and Mike Miller (collectively, the "Defendants") and files this Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration, and, in support, shows the Court as follows: Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration Page 1 of 6 I. SUMMARY OF REPLY 1. Four of the five plaintiffs (those with arbitration agreements, hereinafter "Plaintiffs") should be compelled to arbitration. They cannot avoid arbitration by arguing they are transportation workers engaged in foreign or interstate commerce. There are not. In fact, they do not even allege they are. And even if they were, the Texas General Arbitration Act would still require arbitration. Moreover, Plaintiffs can't avoid arbitration by asserting the agreements are barred due to a merger clause in another document. The merger clause on which Plaintiffs would rely specifically excepts its effect from a writing—such as the arbitration agreements—that are signed by the parties. Nor can Plaintiffs avoid arbitration by arguing that their claims are based on the Fair Labor Standards Act since the arbitration agreements expressly apply to "all disputes. . . based on. . . unpaid compensation. . . including. . . the Fair Labor Standards Act." II. ARGUMENT AND AUTHORITIES A. Plaintiffs' claims are not excluded under the FAA, but even if they were, the TGAA requires arbitration. 2. Plaintiffs argue the Federal Arbitration Act (the "FAA") does not apply to employees or independent contractors who engage in interstate commerce as transportation workers. This argument fails for two reasons. First, Plaintiffs do not perform activities in foreign or interstate commerce, nor have they even alleged they do so. Second, even if the Plaintiffs were engaged in foreign or interstate commerce, the Texas General Arbitration Act (the "TGAA") would still apply and require arbitration. i. Plaintiffs' do not claim to perform activities in "interstate" commerce. 3. The FAA contains an exception for the "employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." 9 U.S.C.A. Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration Page 2 of 6 § 1. The definition of commerce in § 1 is to be construed narrowly. Circuit City Stores, Inc. v. Adams, 121 S. Ct. 1302, 1305 (2001). "The plain meaning of the words 'engaged in commerce' is narrower than the more open-ended formulations 'affecting commerce' and 'involving commerce'". Id. Commerce is only considered "interstate," for purposes of FAA § 1, when the plaintiff driver claims to have personally, physically crossed state lines. See Magana v. DoorDash, Inc., 343 F. Supp 3d 891, 899 (N.D. Cal. 2018) (holding delivery driver was not engaged in interstate commerce under § 1 because he never alleged that "he ever crossed state lines as part of his work") accord, Levin v. Caviar, Inc., 146 F.Supp. 3d 1146, 1152–54 (N.D. Cal. 2015); Vargas v. Delivery Outsourcing, LLC, 2016 WL 946112, slip op. at 3–5 (N.D. Cal. 2016). 4. Plaintiffs offer New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) in support of their argument. In New Prime, "happily [all parties] agreed" that Oliveira was engaged in interstate commerce. Id. at 539. Here, both sides have not agreed. In fact, Plaintiffs have not even alleged that their work for any of the Defendants took them beyond the borders of the state of Texas. Because Plaintiffs case were not physically moving goods across state lines, the exception under § 1 of the FAA, does not apply to them. Since § 1 does not apply, the arbitration agreements signed by the Plaintiffs are enforceable under the FAA. ii. Even assuming arguendo, the FAA does not apply, Plaintiffs' arbitration agreements are enforceable under Texas law. 5. In the alternative, even assuming, arguendo, Plaintiffs' claims fall under the FAA exception for "workers engaged in foreign or interstate commerce," and the FAA does not apply, the TGAA would nevertheless require arbitration. Under the TGAA, a written agreement to arbitrate is generally valid and enforceable with respect to controversies that exist at the time of the agreement or arise thereafter. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.001. Unlike the FAA, the TGAA does not exclude a specific class of employees from its coverage. See Id. § 171.002. Thus, even if Davis were an employee of EGL, he would still be Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration Page 3 of 6 subject to arbitration under the TGAA. We therefore hold that the Agreement's arbitration provision is valid and enforceable under the TGAA, even if the Agreement is excepted from application of the FAA. Davis v. EGL Eagle Glob. Logistics L.P., 243 F. App'x 39, 44 (5th Cir. 2007) (holding TGAA applies to require arbitration of claims of truck driver who otherwise fell under FAA exclusion for workers in interstate commerce.) 6. Thus, even if § 1 of the FAA were not to apply to require arbitration, the TGAA nevertheless would. B. The merger clause in the independent contractor agreement does not bar enforcement of the arbitration agreement. 7. Plaintiffs argue that a merger clause in an unsigned form (Plaintiffs do not attach any an independent contractor agreement signed by a Plaintiff) bars enforcement of Plaintiffs' arbitration agreements. However, the merger clause in the unsigned form does not, by its terms, exclude the terms of other agreements—such as the Plaintiffs' arbitration agreements—that are "signed by both parties." Doc. 33-1 Exhibit A to Response to Motion to Compel Arbitration, p. 5. C. The arbitration agreements apply even to claims brought under the Fair Labor Standard Act. 8. Plaintiffs contend that their claims are not subject to their arbitration agreements because their claims are based on the Fair Labor Standards Act. Plaintiffs rely on a line of cases related to forum selection clauses, not to arbitration clauses. Plaintiffs also patently ignore the plain language of their arbitration agreements: Except as noted below, included within the scope of this Agreement are all disputes, whether based on tort, contract (express or implied), statute (including, but not limited to, any claims of breach of contract, wrongful termination, discrimination and harassment, unpaid compensation of any kind, whether they be based on applicable state law or federal law, including any laws prohibiting discrimination, the Fair Labor Standards Act, or any other state or federal law or regulation, equitable law, or otherwise. Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration Page 4 of 6 (emphasis added) See arbitration agreements, Exhibits to Motion to Compel Arbitration A-1, A-2, A-3, and A-4, ¶ 2. 9. Further, to the extent arbitrability of a claim is in issue, "the parties agree[d] to submit claims to the arbitrator regarding issues of arbitrability, the validity, scope, and enforceability of [the] agreement." See arbitration agreements, Exhibits to Motion to Compel Arbitration A-1, A-2, A-3, and A-4, ¶ 2. If Plaintiffs truly have an issue with whether or not these claims are arbitrable, then the dispute should be submitted to the arbitrator. 10. Because FLSA claims are specifically listed within Plaintiffs' arbitration agreements, Plaintiffs cannot avoid arbitration. WHEREFORE, Defendants Act Fast Delivery, Inc.; Act Fast Courier of Texas, Inc.; Act Fast Delivery of Houston, Inc.; Act Fast of Coastal Bend, Inc.; Act Fast Delivery of S.A., Inc.; Act Fast Delivery of Tyler, Inc.; Act Fast Delivery of Travis County, Inc.; and Mike Miller respectfully request that the Court grant this Motion, compel the claims of Plaintiffs Sandra Pruitt, Karen Lawson, Ayan Nur, and Jasmine Huntsberry to arbitration, dismiss those claims from this suit, and award Defendants any and all further relief to which they are justly entitled. Respectfully submitted, By: /s/ Joseph F. Colvin, Jr. Joseph F. Colvin, Jr. TBN: 24072777 Hughes Watters Askanase, L.L.P. Total Plaza 1201 Louisiana, 28th Floor Houston, Texas 77002 Phone:(713) 759-0818 Fax: (713) 759-6834 jcolvin@hwa.com ATTORNEY-IN-CHARGE FOR DEFENDANTS Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration Page 5 of 6 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of Defendants' Reply to Plaintiffs' Response to Motion to Compel Arbitration was served on the following counsel of record via the Court's ECF Filing System on the 19th day of July 2019: Melissa Moore melissa@mooreandassociates.net Curt Christopher Hesse curt@mooreandassociates.net Bridget Dale Davidson bridget@mooreandassociates.net Moore & Associates Lyric Center 440 Louisiana, Ste. 675 Houston, Texas 77002 By: /s/ Joseph F. Colvin, Jr. Joseph F. Colvin, Jr. Defendants' Reply to Plaintiffs' Response to Defendants' Motion to Compel Arbitration Page 6 of 6