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Qualls v. EOG Resources, Inc.

United States District Court, S.D. Texas, Houston Division

May 22, 2018

Marcus Qualls, Plaintiff,
EOG Resources, Inc., et al., Defendants.


          Gray H. Miller United States District Judge

         Pending 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 PART.

         I. Background

         In this 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.

         On 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.[1]

Id. at 2.

         Bedrock 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.

         In the 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.

         II. Motion to Stay

         A. Legal Standard

         The 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.

         Even if 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 unreviewable.” Id.

         B. ...

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