Opinion
Case No. 1:22-CV-606
07-05-2023
Glenn PETER, et al., Plaintiffs, v. PRIORITY DISPATCH, INC., Defendant.
Matthew W. Thomson, Pro Hac Vice, Zachary L. Rubin, Pro Hac Vice, Harold Lichten, Pro Hac Vice, Lichten & Liss-Riordan, P.C., Boston, MA, Robert E. DeRose, II, Jacob Assaf Mikalov, Barkan Meizlish DeRose Cox, LLP, Columbus, OH, for Plaintiffs. Brian G. Dershaw, Taft Stettinius & Hollister LLP, Cincinnati, OH, Andrew James Ireland, Pro Hac Vice, Russell Jay Taylor, Jr., Pro Hac Vice, Christopher James Eckhart, Pro Hac Vice, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Indianapolis, IN, for Defendant.
Matthew W. Thomson, Pro Hac Vice, Zachary L. Rubin, Pro Hac Vice, Harold Lichten, Pro Hac Vice, Lichten & Liss-Riordan, P.C., Boston, MA, Robert E. DeRose, II, Jacob Assaf Mikalov, Barkan Meizlish DeRose Cox, LLP, Columbus, OH, for Plaintiffs. Brian G. Dershaw, Taft Stettinius & Hollister LLP, Cincinnati, OH, Andrew James Ireland, Pro Hac Vice, Russell Jay Taylor, Jr., Pro Hac Vice, Christopher James Eckhart, Pro Hac Vice, Scopelitis, Garvin, Light, Hanson & Feary, P.C., Indianapolis, IN, for Defendant.
OPINION & ORDER
Michael R. Barrett, Judge
This matter is before the Court on Defendant's motion to dismiss and to compel arbitration. (Doc. 17). Plaintiffs have responded in opposition, (Doc. 23), and moved for leave to file a sur-reply, (Doc. 26); Defendant has filed a response in opposition to Plaintiff's motion or, in the alternative, moved for leave to file a sur-reply, (Doc. 28).
For the reasons set forth below, Defendant's motion to dismiss and to compel arbitration will be DENIED and the remaining motions will be DENIED as moot.
I. FACTUAL BACKGROUND
Defendant Priority Dispatch, Inc. ("Priority") is in the business of "last-mile" delivery services for e-commerce products, medical products, and financial documents to locations across the Midwest. (Doc. 1, PageID 4). According to the complaint, Priority assigns and schedules deliveries and determines the pay rates of drivers, but drivers are required to use their own personal vehicles and pay for related expenses, including gas and maintenance. (Id., PageID 5-6).
Plaintiffs—current and former Priority delivery drivers—allege, inter alia, unlawful deductions in pay, minimum wage law violations, and overtime law violations at both the state and federal levels. As a result, they are pursuing a collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., and also seek the certification of an Illinois class, a Michigan class, and an Ohio class, pursuant to Federal Rule of Civil Procedure 23(b)(3). (Doc. 1, PageID 7-10). Priority, however, argues that Plaintiffs are independent contractors who are contractually obligated to pursue their claims through bilateral arbitration. (Doc. 17, PageID 146). Accordingly, Priority asks that the Court compel arbitration and dismiss this matter, pursuant to Federal Rule of Civil Procedure 12(b)(6). (Id.).
The Sixth Circuit has recently reiterated that a motion to dismiss under Rule 12(b)(6) is not the proper procedural device to enforce an arbitration clause because it "seeks a remedy (dismissal) that the Federal Arbitration Act does not provide." Boykin v. Family Dollar Stores of Mich., LLC, 3 F.4th 832, 838 (6th Cir. 2021); see also Witemyre v. GE Flight Efficiency Servs., 2021 WL 3079884, at *3, 2021 U.S. Dist. LEXIS 135573, at *9 (S.D. Ohio July 21, 2021) (noting that "an order compelling arbitration . . . is not an available remedy under Rule 12(b)(6)"). And although a passing reference to 9 U.S.C. §§ 3-4 does not cure this deficiency, the Court will construe the motion as properly filed and proceed in the interest of judicial economy.
II. ANALYSIS
As a threshold matter, Plaintiffs contend that they are exempt from the Federal Arbitration Act ("FAA") because they are classified as "transportation workers." See 9 U.S.C. § 1 (providing an exception for "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce"). And while the bounds of that term have long been subject to dispute, the Supreme Court recently held that "any class of workers directly involved in transporting goods across state or international borders falls within § 1's exception." Southwest Airlines Co. v. Saxon., 596 U.S. 450, 142 S. Ct. 1783, 1789, 213 L.Ed.2d 27 (2022).
Contracts for employees and contracts for independent contractors all fall under the § 1 definition of "contracts of employment." See New Prime Inc. v. Oliveira, 586 U.S. 105, 139 S. Ct. 532, 544, 202 L.Ed.2d 536 (2019).
In Saxon, an airline cargo loader in Chicago argued that she was not required to arbitrate an employment dispute because she was a transportation worker within the FAA exception. Southwest Airlines disagreed, arguing in part that the exception only applied to workers who "physically accompany freight across state or international boundaries." Id. at 1791. The Supreme Court ultimately ruled in favor of the cargo loader, holding that she "frequently loads and unloads cargo on and off airplanes that travel in interstate commerce," and "therefore belongs to 'a class of workers engaged in foreign or interstate commerce' to which § 1's exemption applies." Id. at 1793. But to be sure, "the answer will not always be so plain when the class of workers carries out duties further removed from the channels of interstate commerce or the actual crossing of borders." Id. at 1789 n.2.
Plaintiffs here are workers engaged in supporting delivery operations by physically handling and transporting goods, but the pleadings indicate that their personal job responsibilities largely entail transporting goods intrastate. And while the Supreme Court has not specifically taken up the issue of last-mile delivery drivers, this Court finds instructive the recent First and Ninth Circuits decisions holding that "last-mile delivery workers who haul goods on final legs of interstate journeys are transportation workers 'engaged in . . . interstate commerce,' regardless of whether the workers themselves physically cross state lines." Waithaka v. Amazon.com, Inc., 966 F.3d 10, 26 (1st Cir. 2020), cert. denied, — U.S. —, 141 S. Ct. 2794, 210 L.Ed.2d 928 (2021); see Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), cert. denied, — U.S. —, 141 S. Ct. 1374, 209 L.Ed.2d 121 (2021). This is because "[e]ven if the final leg of shipment is within state lines, the reality is that a delivery associate's final drive is a part of a continuous interstate delivery of an item from place of production to purchaser." McKinnes v. Atx Inc., 2020 WL 13499605, at *4, 2020 U.S. Dist. LEXIS 264857, at *10 (E.D. Mich. Dec. 14, 2020) (citing Rittmann, 971 F.3d at 916).
If "airplane cargo loaders plainly do perform 'activities within the flow of interstate commerce' when they handle goods traveling in interstate and foreign commerce," Saxon, 142 S. Ct. at 1792, then the same naturally holds true for Plaintiffs, who transport and deliver goods in the stream of commerce and operate under contract with "a corporation that provides third-party logistics and delivery services to its customers" in multiple states, (Doc. 17, PageID 146), see Fraga v. Premium Retail Servs., 61 F.4th 228, 235 (1st Cir. 2023) (Observing that "Saxon's repeated and emphasized command to focus on what the workers themselves actually do strongly suggests that workers who do transportation work are transportation workers."). Plaintiffs have met their burden and Priority has failed to demonstrate that Plaintiffs are far enough removed from "the channels of interstate commerce" so as not to fall under the umbrella of § 1. Therefore, Plaintiffs are exempt from the FAA's enforcement provisions and cannot be compelled to arbitrate their claims under that Act.
In the alternative, Priority asserts in passing that Plaintiffs can still be compelled to arbitrate their claims under the Ohio Arbitration Act ("OAA"). See Ohio Rev. Code § 2711.01, et seq. The Court finds that argument unavailing because the language of the arbitration clause at issue does not reflect that "the parties unambiguously intended to displace the FAA with state rules of arbitration." Savers Prop. & Cas. Ins. Co. v. Nat'l Union Fire Ins. Co., 748 F.3d 708, 716 (6th Cir. 2014); see Martis v. Dish Network Serv., L.L.C., 597 F. App'x 301, 304 (6th Cir. 2015) (noting that ambiguities are to be resolved in favor of the FAA); cf. Swiger v. Rosette, 989 F.3d 501, 505 (6th Cir. 2021) (discussing the differences between general choice-of-law provisions and specific clauses agreeing to abide by alternative rules of arbitration).
Because this is so, the Court declines at present to address the conscionability or severability of the arbitration clause's cost-splitting provision.
III. CONCLUSION
Based on the foregoing, it is hereby ORDERED that the motion to dismiss and to compel arbitration, (Doc. 17), is DENIED, and the outstanding motions seeking leave to file sur-replies, (Docs. 26, 28), are DENIED as moot.
IT IS SO ORDERED.