Collado v. J. & G. Transport, Inc.

820 F.3d 1256, 2016 U.S. App. LEXIS 7203, 2016 WL 1594581
CourtCourt of Appeals for the Eleventh Circuit
DecidedApril 21, 2016
DocketNo. 15-14635
StatusPublished
Cited by16 cases

This text of 820 F.3d 1256 (Collado v. J. & G. Transport, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Collado v. J. & G. Transport, Inc., 820 F.3d 1256, 2016 U.S. App. LEXIS 7203, 2016 WL 1594581 (11th Cir. 2016).

Opinion

PER CURIAM:

Enrique Collado filed a collective action lawsuit under the Fair Labor Standards Act alleging that J. & G. Transport, Inc. (J & G) failed to pay its truck drivers for overtime work.1 J & G waived its contractual right to compel arbitration by participating in the litigation, but when Collado amended his complaint to add state law claims for breach of contract and quantum meruit, J & G moved to compel arbitration as to those new claims. The district court denied the motion to compel arbitration, finding that the addition of the state law claims did not unexpectedly change the scope or theory of the litigation to an extent that would give J & G the authority to insist on arbitration of those new claims. This is J & G’s interlocutory appeal of that ruling. See 9 U.S.C. § 16(a)(1).

I.

In June 2014 Collado filed an amended complaint alleging that he had worked for J & G as a truck driver hauling garbage, debris, and mulch from July 2013 into January 2014, during which time he worked about 85 hours per week. According to Collado, J & G made its truck drivers sign an independent contractor agreement in a scheme to evade the FLSA’s overtime wage requirements. He sought compensatory and liquidated damages for the purported failure to pay him and similarly situated employees the overtime wages required by the FLSA.2

Immediately after the close of discovery and shortly before trial was scheduled to begin, Collado moved to file a second amended complaint seeking to add state law claims for breach of contract and quantum meruit. He asserted that an addendum to the agreement provided that his compensation was to be 35% of the adjusted gross revenue received by J & G for loads that he accepted and completed, but that on the last day of discovery J & G had disclosed documents showing that he was actually paid less than that. And, he continued, it was not until after discovery ended that J & G explained, in response to an interrogatory, its position that the addendum did not apply to Collado because of the type of loads he was hauling.

J & G opposed the motion to amend the complaint, arguing that Collado should not be permitted to file a second amended complaint so close to trial because he had been aware of the potential breach of contract claim for some time. It pointed to allegations in Collado’s first amended complaint, filed a year earlier, and asserted that they showed that he had been aware of a potential breach of contract claim at that time. J & G also argued that shortly [1259]*1259after Collado filed his first amended complaint, one of its corporate officers testified in deposition that the compensation rate provided in the addendum did not apply to drivers like Collado, which put Collado on notice of the potential claim well before he moved to amend his complaint. J & G contended that it would be : a waste, of judicial resources to permit amendment only to later compel arbitration of the state law,.claims.

The district court granted Collado’s motion to file, a second amended complaint; finding that he could not have discovered the potential breach of contract claim until he learned how much money J & G earned per haul. After Collado filed his second amended complaint, J & G immediately moved to dismiss the new state law claims or, in the alternative, to compel arbitration of those claims. J & G conceded that it had waived arbitration of Collado’s FLSA claim but argued that the second' amendment to his complaint revived’its right to elect arbitration of the state law claims because those new claims unexpectedly broadened the' scope of the case.

The district court denied J'& G’s motion. It concluded that while Collado’s second amended complaint altered the theory of the case, the alteration was not unexpected and fairness did not compel reviving J & G’s right to elect arbitration.

II.

We review de novo a district court’s denial of a motion to compel arbitration. Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir.2004). The law is that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such groünds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Federal policy strongly favors enforcing arbitration agreements. See, e.g., Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983); Krinsk v. Sun-Trust Banks, Inc., 654 F.3d 1194, 1200 n. 17, 1203 (11th Cir.2011); Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309, 1315 (11th Cir.2002). But “courts will not compel arbitration when 'the party who seeks to arbitrate has waived its right to do so.” Krinsk, 654 F.3d at 1200. In limited circumstances, however, where a party has waived the right to compel arbitration, an amended complaint can revive that right “if it is shown that the amended complaint unexpectedly changes the scope, or theory of the plaintiffs claims.” Id. at 1202.

J & G concedes that it waived its right to compel arbitration with respect to Collado’s FLSA claim but’ contends that it has the right' to compel arbitration of the state law claims that were not'pleaded until after it had litigated to the point of waiver the FLSA claim. The pleading of the state law claims in the second amended complaint, it argues, unexpectedly changed the scope or theory of the litigation.3 Col-lado does not dispute that his second amended complaint changed the scope or theory of the litigation, but he argues that it still did not revive J & G’s right to compel arbitration because that change was not unexpected.

The parties rely on our Krinsk decision as the closest precedent on point, but that case is not quite the same as this one. In [1260]*1260the Krinsk case, the plaintiff brought a class action lawsuit against the defendant, estimating that the class would consist of hundreds of class members. Id. at 1197-98. ' The defendant waived the right to compel arbitration by engaging in the judicial process. Id. at 1198-99, 1202. The plaintiff later amended the complaint, asserting “revised, but mostly similar, claims,” and expanding the class definition so that it included “thousands — if not tens of thousands” of potential class members. Id. at 1199. The defendant filed a motion to compel arbitration, which the district court denied. Id. at 1199-1200. We vacated that order, holding that, the amended complaint revived the defendant’s right to compel arbitration because the defendant could not have foreseen such a major change to the definition of the class. Id. at 1204.

This, case is different from Krinsk because the amended complaint in that case “asserted revised, but mostly similar, claims.” Id. at 1199, It did not plead any new claims.

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Cite This Page — Counsel Stack

Bluebook (online)
820 F.3d 1256, 2016 U.S. App. LEXIS 7203, 2016 WL 1594581, Counsel Stack Legal Research, https://law.counselstack.com/opinion/collado-v-j-g-transport-inc-ca11-2016.