United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
H. Miller United States District Judge
before the court is a motion to stay (Dkt. 40) filed by
defendant EOG Resources, Inc. (“EOG”) and a
motion for equitable tolling (Dkt. 42) filed by plaintiff
Marcus Qualls. Having considered the motions, responses,
replies, and applicable law, the court is of the opinion that
the motion to stay should be GRANTED and the motion for
equitable tolling should be GRANTED IN PART and DENIED IN
Fair Labor Standards Act (“FLSA”) case, Qualls
worked as a consultant for EOG. Dkt. 25 at 1. Qualls
interviewed and was hired through a third party, Bedrock PC
1099 (“Bedrock”). Id. Qualls alleges
that EOG misclassified him as an independent contractor even
though he was actually an employee. Id. at 2. During
his time working with EOG, Qualls typically worked over forty
hours a week but was not paid overtime. See id.
September 7, 2017, Qualls sued EOG, Bedrock, and
Bedrock's CEO, Jonathan Falcon, for violating the FLSA
and the New Mexico Wage Act by failing to properly pay him
for the time worked. Dkt. 1. His complaint included
collective action allegations under the FLSA and class action
allegations under Rule 23 of the Federal Rules of Civil
Procedure. Id. at 6-9. Both classes consisted of:
All oilfiled workers hired by Bedrock and working for EOG in
New Mexico during the past 3 years who were classified as
independent contractors and paid a day-rate and/or straight
time with no overtime.
Id. at 2.
and Falcon filed a motion to dismiss for lack of personal
jurisdiction, motion to transfer venue, and motion to compel
arbitration and stay proceedings. Dkts. 10, 11. In response,
Qualls filed an amended complaint dismissing Bedrock and
Falcon. Dkt. 25. Qualls then filed another suit against
Bedrock in the Southern District of Texas and the parties
agreed to submit their case to arbitration. Dkt. 42 at 2.
Then, EOG moved to transfer the case to the Southern District
of Texas, and Qualls did not oppose. Dkt. 32.
instant motions, EOG asks the court to stay the proceedings
pending the arbitration between Qualls and Bedrock, and
Qualls asks the court to toll the statute of limitations for
FLSA opt-in plaintiffs from the date EOG filed its motion to
stay until the court rules on a motion to certify the class.
Dkts. 40, 42.
Motion to Stay
Federal Arbitration Act (“FAA”) governs the
enforcement of arbitration agreements. See 9 U.S.C.
§§ 2, 3. Section 3 requires that a court stay
proceedings upon application of one of the parties where the
underlying lawsuit is referred to arbitration under a binding
arbitration agreement. Id. § 3. When a
non-signatory attempts to invoke § 3's mandatory
stay provision, a stay is only warranted if: (1) “the
arbitrated and litigated disputes . . . involve the same
operative facts”; (2) “the claims asserted in the
arbitration and litigation [are] ‘inherently
inseparable'”; and (3) “the litigation [will]
have a ‘critical impact' on the arbitration.”
Waste Mgmt., Inc. v. Residuous Industriales Multiquim,
S.A. de C.V., 372 F.3d 339, 343 (5th Cir. 2004)
(citations omitted). “The question is not ultimately
one of weighing potential harm to the interests of the
non-signatory, but of determining whether proceeding with
litigation will destroy the signatories' right to a
meaningful arbitration.” Id.
a mandatory stay is not warranted, a case may still be stayed
“in accordance with the court's inherent
authority.” Citgo Petroleum Corp. v. M/T Bow
Fighter, No. H-07-2950, 2009 WL 960080, at *5 (S.D. Tex.
Apr. 7, 2009) (Miller, J.). A district court “has broad
discretion to stay proceedings as incident to its power to
control its own docket.” Clinton v. Jones, 520
U.S. 681, 706, 117 S.Ct. 1636 (1997). “[T]he power to
stay proceedings is incidental to the power inherent in every
court to control the disposition of the causes on its docket
with economy of time and effort for itself, for counsel, and
for litigants.” Landis v. N. Am. Co., 299 U.S.
248, 254, 57 S.Ct. 163 (1936). In the context of granting a
discretionary stay pending arbitration, the Fifth Circuit has
stated that “the moving party bears a heavy burden to
show why a stay should be granted absent statutory
authorization, and a court should tailor its stay so as not
to prejudice other litigants unduly.” Coastal
(Bermuda) Ltd. v. E.W. Saybolt & Co., 761 F.2d 198,
203 n.6 (5th Cir. 1985). Further, although inherent power
should not be abused, it is discretionary and “largely