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LeJeune v. Cobra Acquisitions, LLC

United States District Court, W.D. Texas, San Antonio Division

December 2, 2019

EJ LEJEUNE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARY SITUATED; HENRY TORRES VILLEGAS, JOSE A. REYES DIAZ, JULIO LOPEZ RIOS, ISRAEL DIAZ, LUIS M. RODRIGUEZ, WILFREDO SANCHEZ, KELVIN CULP, KERRY POOL, DARIN REID, FORREST SMITH, DARREN GULIN, CRAIG WRIGHT, JOSHUA GRIMES, BOBBY PATTON, STEVE EBEL, BRIAN KOPP, RICHARD GIBSON, MIKE SIELICKI, BENNETT ELLIOTT, OSCAR CASTANOJR., DOMINGO DE LA GARZA, DYLAN SUTTON, CHARLES FOSS, KEVIN AHEARN, COURTNEY BEASLEY, ROCKY COCHRAN, ENSLEY WINDHAM, TYLER NEGRI, RICARDO BENAVIDESJR., ZACHARY AKEY, DANIEL PERALES, ALEXANDRE PENNANT, CHARLES ENMANJR., RUBEN TREJO, MICHAEL TUCKER, MAX HIDALGO, ESEQUIEL NAVEJAS, MARIO BELLAMY, NEYSHA DIAZ, Plaintiffs,
v.
COBRA ACQUISITIONS, LLC, COBRA; ESPADA LOGISTICS AND SECURITY GROUP, LLC, ESPADA CARIBBEAN, LLC, JAMES JORRIE, JENNIFER GAY JORRIE, Defendants.

          ORDER

          ELIZABETH S. ("BETSY") CHESTNEY UNITED STATES MAGISTRATE JUDGE

         Before the Court in the above-styled cause of action is Defendant Espada Logistics and Security Group, LLC's Partially Opposed Motion to Stay Proceedings in Light of Currently Pending Arbitration [#53] and Plaintiff's Motion for Conditional Certification and for Notice to Putative Class Members [#54]. This case was referred to the undersigned for all non-dispositive pretrial proceedings on October 4, 2019. Accordingly, the undersigned has authority to issue this Order on Defendant's motion pursuant to 28 U.S.C. § 636(b)(1)(A). The Court held a hearing on the pending non-dipositive motions on November 25, 2019. For the reasons set forth below, the motion to stay is DENIED. The motion for conditional certification remains pending, and Defendants are ordered to file a response to the motion within 14 days of the District Court's ruling on the pending motion to dismiss.

         I. Background

         This case is a putative collective action arising under the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”). Plaintiff Ej LeJeune filed this action, on behalf of himself and all others similarly situated, to recover unpaid overtime compensation from Defendants Mammoth Energy Services, Inc. d/b/a Cobra Energy (“Cobra”) and Espada Logistics and Security Group, Inc. (“Espada”). (Orig. Compl. [#1].) LeJeune alleges he worked as a paramedic for Defendants in Puerto Rico to provide medical services to individuals who were injured in the wake of Hurricanes Irma and Maria.

         LeJeune filed an Amended Complaint adding several additional Defendants-Espada Caribbean LLC, James Jorrie, and Jennifer Gay Jorrie-all of whom LeJeune claims were his employers under the FLSA. (Am. Compl. [#40].) LeJeune contends that he and other similarly situated individuals regularly worked for Defendants in excess of 40 hours each week and were paid a day rate without any overtime compensation, whether classified as employees or independent contractors, in violation of the FLSA and the Puerto Rico Wage Payment Statute, 29 L.P.R.A. §§ 171, et seq.

         Defendant Cobra is identified in the Amended Complaint as an Oklahoma-based wholly-owned subsidiary of Mammoth Energy Services, Inc. and as a signatory to a series of Master Service Agreements between Cobra and the Government of Puerto Rico related to energy-infrastructure repairs after Hurricane Maria. Cobra allegedly contracted with Defendant Espada, a Texas-based company, to provide the security team necessary for the infrastructure repair service contracts. LeJeune claims that Espada hired him and other proposed class members to perform labor, security, and paramedic services in connection with restoration of power in Puerto Rico under the Master Service Agreements. Espada Caribbean is allegedly the corporate entity created to conduct Espada's work in Puerto Rico; James Jorrie and Jennifer Jorrie are allegedly the CEO and Vice President of Espada, respectively. Espada Caribbean and the Jorries have not yet been served with process and have not made an appearance in this case. Over thirty additional Plaintiffs have filed consents to join this lawsuit since its filing.

         There are three motions currently pending in this case, two of which are before the undersigned. After LeJeune filed his Amended Complaint, Espada and Cobra filed a motion to dismiss, arguing that LeJeune failed to sufficiently allege an employment relationship with Espada or Cobra. The motion to dismiss remains pending before the District Court, which retains jurisdiction over all dispositive motions under the governing referral order. Soon after the filing of the Amended Complaint, Espada filed the motion that is the subject of this Order, which asks the Court to stay all proceedings in this action so that the issues raised in this case can be adjudicated by an arbitrator in London pursuant to the arbitration agreement executed between LeJeune and Espada. LeJeune has also filed a motion seeking conditional certification of this case as a collective action.

         The undersigned held a hearing on Espada's motion to stay and LeJeune's certification motion on November 25, 2019, at which counsel for Plaintiffs, Espada, and Cobra were present. The undersigned previously stayed Defendants' obligation to file a written response to the certification motion until after the District Court rules on Defendants' motion to dismiss but nonetheless heard argument on the issues raised in both motions. After considering Espada's motion, the responses and replies thereto and the attached exhibits [#59, #61], the arguments of counsel at the hearing, the governing law, and the case file in its entirety, the undersigned will deny the motion to stay and order Defendants to file a response to LeJeune's conditional certification motion within 14 days of the Court's ruling on Defendants' motion to dismiss (if the motion is denied or a more definite statement is ordered).

         II. Analysis

         Espada moves for an order staying all proceedings in this case so that an arbitrator in London can adjudicate the overtime claims raised in this suit. Espada contends that LeJeune, a Louisiana resident, and Espada, a Texas-based company, executed two Independent Contractor Service Agreements with respect to LeJeune's work in Puerto Rico on February 12, 2018 and April 23, 2018, both of which contain an identical arbitration agreement providing as follows:

This Agreement and all disputes, controversies, acts and omissions relating to, arising from or in connection with the entry into this Agreement or its performances shall be governed by and construed in accordance with English Law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act of 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this clause.

         (Agreements [#53-2, #53-3] at 11.) The Agreements require that the arbitration “be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced” and be referred to a panel of three arbitrators. (Id.) Espada contends that LeJeune was contractually obligated to pursue his wage claims before an arbitrator in London instead of filing this lawsuit. To reserve its rights under the arbitration agreement, Espada initiated arbitration proceedings before LMAA and now asks the Court to stay this case pursuant to the Federal Arbitration Act, 9 U.S.C. § 3, so that the arbitration may proceed in London. (Notice of Arbitration [#53-4] at 1-3.)

         Espada's motion relies on the enforceability of the arbitration agreement contained in the Agreements. LeJeune contends the arbitration agreement is unenforceable and therefore the motion to stay should be denied. The Court agrees with LeJeune.

         A. The parties' arbitration agreement ...


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