De Niro v. Arise Virtual Solutions, Inc. ( 2024 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 * * * 4 DIAVION DE NIRO, individually, and on Case No. 2:24-cv-00695-APG-EJY behalf of similarly situated individuals, 5 Plaintiffs, 6 ORDER v. 7 ARISE VIRTUAL SOLUTIONS, INC., 8 Defendant. 9 10 Pending before the Court is Defendant’s Renewed Motion to Defer and/or Extend Time to 11 File its Response to Plaintiff’s Motion for Conditional Certification. ECF No. 32. The Court 12 considered the Motion, the Opposition (ECF No. 33), and the Reply (ECF No. 34). 13 Before discussing the merits of the more substantive arguments made, the Court finds 14 Defendant sought and timely responded to the Court’s Order requiring a meet and confer regarding 15 the extension of time Defendant seeks in its Renewed Motion. That Order belies the notion that 16 the Court intended to create a scenario in which Defendant had to respond to Plaintiff’s Motion 17 for Conditional Certification at the same time it sought an extension of time to respond to the 18 Motion. Further, the Court finds the stipulation granting Defendant through May 2, 2024 within 19 which to respond to Plaintiff’s Motion for Conditional Certification did not, under any rule or the 20 stipulation itself, foreclose Defendant’s right to seek a further extension. 21 The Court moves on to the merits and considers whether a motion seeking conditional 22 certification of a Fair Labor Standards Act (“FLSA”) collective action should be decided before 23 the Court decides whether any collective action member is subject to mandatory arbitration. 24 Plaintiff cites numerous decisions from district courts in the Ninth Circuit in support of its position 25 that the “dominant approach” in this Circuit is to treat the arbitrability of a plaintiff’s claim as a 26 merit based argument properly addressed in the second stage of an FLSA collective action.1 27 1 The second stage of an FLSA collective action is often referred to as the merits stage, which follows the 28 1 In Costa v. Apple, Inc., the U.S. District Court for the Northern District of California 2 recognized “the Ninth Circuit has not addressed whether arbitration agreements should be 3 considered at the notice stage in FLSA actions.” Case No. 23-cv-02353-WHO, 2023 WL 8101980, 4 at *5 (N.D. Cal. Nov. 21, 2023). The court also stated “the mere possibility of mandatory 5 arbitration should not prevent the conditional certification of a collective action.” Id. (internal 6 citation omitted). Of course, what is distinct about the Costa matter is that only four of the 22 to 7 25 opt-in plaintiffs signed arbitration agreements. Id. Thus, it appears there was no dispute that 8 the vast majority of those who would receive a notice to opt-in following conditional certification 9 would not be subject to dismissal based on a binding and enforceable arbitration agreement. 10 Ultimately, the court found there was “no reason to delay notice to potential opt-in class members 11 while the statute of limitations clock is ticking.” Id. at 7. The court did not determine there was 12 never a circumstance in which a decision on conditional certification should be delayed until a 13 ruling on whether a named plaintiff is or putative plaintiffs in an FLSA collective action are subject 14 to mandatory arbitration and, therefore, not proper putative collective action members. 15 In Harrignton v. Cracker Barrel Old Country Store Inc., Case No. CV-21-00940-PHX- 16 DJH, 2024 WL 342440, at *7 (D. Ariz. Jan 23, 2024), the court recognized “district courts have 17 taken varying approaches when handling arbitration issues in FLSA collective actions.” In 18 Harrignton, the court was deciding “remaining disputes over which potential opt-in plaintiffs are 19 subject to arbitration.” Id. The court stated “Cracker Barrel invoke[d] a number of out-of-circuit 20 authorities and persuasive, in-circuit authorities to argue to a contrary approach, [but] Cracker 21 Barrel … [did] not point … to any binding authority that precludes the [c]ourt from addressing 22 arbitrability issues at the second stage of certification.” Id. Again, this decision does not establish 23 that arbitrability must or even should wait until after conditional certification is decided. Rather, 24 Harrington makes clear that whether to defer such decision is up to the court that is presented with 25 both a motion for conditional certification and a challenge to conditional certification based on 26 arbitrability.2 27 28 1 The Court exercises its considerable discretion to manage and control its docket taking into 2 account (1) the efficiency of sending post-conditional certification opt-in notices to individuals 3 who potentially cannot participate in this collective action and, (2) the possible prejudice to 4 putative collective action members whose opportunity to opt-in could be lost if the decision 5 resolving conditional certification is delayed. There is little doubt that the potentially enforceable 6 arbitration agreement, which may impact some if not many potential collective action members, 7 will be raised by Defendants in response to Plaintiff’s Motion for Conditional Certification. It is 8 also reasonable to anticipate the Court will at least consider the issues of arbitrability when issuing 9 its conditional certification decision. This does not suggest the issues will be decided at the same 10 time. The Court could grant conditional certification leaving arbitrability to be decided after all 11 potential plaintiffs are given an opportunity to opt-in. The Court could decide the arbitration 12 agreement is enforceable, grant conditional certification, but allow opt-in notices to be sent only 13 to those who did not sign an arbitration agreement. Or, the Court could deny conditional 14 certification because of the existence of an enforceable arbitration agreement that defeats a 15 collective action. What is not logical is that arbitrability must be decided before conditional 16 certification or that the existence of arbitration agreements will be ignored during consideration of 17 conditional certification. In toto, the Court finds no basis for entering an order that effectively 18 stays Plaintiff’s Motion for Conditional Certification pending the outcome of Defendant’s Motion 19 to Compel Arbitration. 20 Accordingly, IT IS HEREBY ORDERED that Defendant’s Renewed Motion to Defer 21 and/or Extend Time to File its Response to Plaintiff’s Motion for Conditional Certification (ECF 22 No. 32) is GRANTED only to the extent that the due date for Defendant’s Response to Plaintiff’s 23 Motion for Conditional Certification is extended to May 31, 2024. 24 IT IS FURTHER ORDERED that Plaintiff’s Reply in Support of its Motion for Conditional 25 Certification is due June 14, 2024. 26 27 28 1 IT IS FURTHER ORDERED that if Defendant has not already done so it must immediately 2 ensure all contact information and records pertaining to putative collective active members are 3 retained such that they will be available to Plaintiff should conditional certification be granted. 4 DATED this 10th day of May, 2024. 5 6 ELAYNA J. YOUCHAH 7 UNITED STATES MAGISTRATE JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28