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Butcher v. Teamsters Local 955

United States District Court, D. Kansas

March 11, 2019

JEREMY BUTCHER, JEREMY BUTCHER, INC., Plaintiffs,
v.
TEAMSTERS LOCAL 955 and JOHN DOES 1-5, Defendants.

          MEMORANDUM & ORDER DENYING MOTION TO STAY PENDING ARBITRATION

          KENNETH G. GALE UNITED STATES MAGISTRATE JUDGE.

         Currently pending before the Court is Defendant's “Motion to Stay Pending Arbitration, or in the Alternative, to Consolidate Pre-Trial Discovery.” (Doc. 15.) After review of Defendant's motion and relevant filings, the Court DENIES the Motion to Stay (Doc. 15).

         FACTUAL BACKGROUND

         Plaintiffs purchased, from Bimbo Bakeries (“Bimbo”), the right to sell and distribute bakery products of Bimbo Bakeries and its affiliates through a particular “Sales Area.” This resulted in Plaintiffs entering into a Distribution Agreement with Bimbo and becoming an Independent Operator (“IO”). Plaintiffs allege that at some point Bimbo Bakeries undertook efforts to purchase back Distribution Routes from IOs, including Plaintiffs. (See Doc. 1, at 7.) Plaintiffs describe this effort by Bimbo as “improper.” (Id.) According to Plaintiffs' Complaint, Plaintiffs were unwilling to sell their distribution rights. (Id.)

         Plaintiffs allege that in 2017, “Bimbo undertook negotiations with [Defendant] to establish a new pay schedule for its drivers to take over the Routes owned by the Plaintiffs and other independent Route owners in the Kansas City metropolitan area.” (Id., at 5.) Plaintiffs allege that by doing so, Defendant has “undertaken to service Plaintiffs' route and appropriate for themselves the customer contacts that Plaintiffs have developed.” (Id., at 7-8.)

         Plaintiffs allege that Defendant and its drivers who have taken over Plaintiffs' Route “have conspired and agreed with each other and with Bimbo to commit the foregoing torts and have each taken affirmative steps to implement such agreement and conspiracy.” (Id., at 8.) Defendant contends, however, that “the real dispute at issue is a breach of contract action between Plaintiffs and Bimbo Bakeries.” (Doc. 15, at 6.) Referring to Plaintiffs' Complaint, Defendant notes that Plaintiffs allege that Bimbo “breached the Distribution Agreement” with Plaintiffs and Bimbo “wrongfully assigned [Defendant's] employees and/or other personnel to service Plaintiffs' Route and furnished said employees and personnel with the tools, marks, and other trade necessities to take over the Plaintiffs' Route.” (Doc. 1, at 28-29.) The Court notes that Bimbo is not a party to this action. (See generally, id.)

         Defendant moves to stay the present case pending the outcome of arbitration in another matter involving Plaintiffs, Jeremy Butcher and Jeremy Butcher, Inc. v. Bimbo Foods Bakery Distribution and Bimbo Bakeries USA (JAMS No. 1340016191), filed on August 9, 2018 (hereinafter “Bimbo litigation”). (Doc. 15, at 4.) As stated above, the present lawsuit was filed a week later, on August 16, 2018. (Doc. 1.) Defendant argues that the arbitration complaint and pleadings in the present case “are illustrative of the fact that there are overwhelming common issues of law and fact in the case being arbitrated and the case being litigated.” (Doc. 15, at 7.) According to Defendant, “[u]nder these circumstances, it is appropriate for the Court to stay this case pending the outcome of arbitration” in the Bimbo litigation “to promote judicial efficiency and avoid problems related to issue preclusion and damages.” (Id., at 7-8.)

         ANALYSIS

         I. Federal Arbitration Act.

         Defendant initially argues that “[t]he Federal Arbitration Act (FAA), 9 U.S.C. § 3, requires a district court to stay judicial proceedings where a written agreement provides for arbitration of a dispute that is the subject of the litigation.” (Doc. 15, at 8 (citing Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511, 1514 (10th Cir. 1995)). Section 3 states:

[i]f any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3.

         Defendant argues that a stay is “justified” under the FAA in cases

where the arbitration may partially determine issues or facts common to the claim against a non-arbitrating party. Staying proceedings for nonarbitrable claims when an arbitration is ongoing is appropriate if the ‘arbitrable claims will have a preclusive effect on the ...

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