United States District Court, W.D. Tennessee, Eastern Division
KERRY YOUNG, on behalf of himself and all similarly situated persons, Plaintiff,
WH ADMINISTRATORS, INC., Defendant.
ORDER DENYING DEFENDANT'S MOTION FOR STAY WITHOUT
THOMAS ANDERSON CHIEF UNITED STATES DISTRICT JUDGE
the Court is Defendant's Motion to Stay (ECF No. 64)
these proceedings in light of the filing of a second lawsuit
against Defendant by the United States Department of Labor
raising facts substantially similar to those in this suit.
For reasons set forth below, the instant Motion is hereby
DENIED without prejudice.
November 10, 2017, Plaintiffs Tennessee Tractor, LLC, and
Kerry Young, on behalf of himself and all similarly situated
persons, filed a class-action Complaint (ECF No. 1) under the
Employee Retirement Income Security Act (“ERISA”)
against Defendant WH Administrators, Inc. On November 27,
2017, Plaintiffs filed a still-pending Motion for Preliminary
Injunction (ECF No. 10). On December 4, 2017, Defendant filed
a Motion to Compel Arbitration (ECF No. 14). Then on December
11, 2017, Plaintiffs filed an Amended Complaint (ECF No. 22),
resulting in Defendants' re-filed Motion to Compel
Arbitration (ECF No. 24). After the parties filed a Response
(ECF No. 25), a Reply (ECF No. 30), and a Sur- Reply (ECF No.
34), the Court granted Defendant's Motion to Compel
Arbitration in Part (ECF No. 44) and compelled Tennessee
Tractor to take its claims against Defendant to arbitration.
Defendant sought reconsideration of its Motion as to Kerry
Young and the other class Plaintiffs (ECF No. 46), which the
Court denied in its April 13, 2018 Order (ECF No. 49).
4, 2018, Plaintiff filed a Motion for Leave to Supplement
(ECF No. 59) the Motion for Preliminary Injunction with
information concerning the filing of a lawsuit by the United
States Department of Labor against WHA in the United States
District Court of Maryland on May 2, 2018. The Court granted
that Motion (ECF No. 61). The parties seem to be in agreement
that the Department of Labor makes allegations against
Defendant that are substantially similar to those made by
addition to Plaintiff's pending Motion for Preliminary
Injunction, Defendant has filed a Motion to Dismiss (ECF No.
60), the instant Motion to Stay, and a Motion to Quash (ECF
No. 67). This Order is solely concerned with the Motion to
Stay. Upon the consultation of counsel for this Motion,
Plaintiff indicated his opposition but has not yet filed a
memorandum. The time for Plaintiff to file has not yet
expired, but since the Court agrees with Plaintiff's
position, Plaintiff will suffer no prejudice in not being
afforded an opportunity to respond.
asks the Court to exercise its discretion and stay this
action pending resolution of the Department of Labor's
suit against Defendant. “[T]he power to stay
proceedings is incidental to the power inherent in every
court to control the disposition of the causes in its docket
with economy of time and effort for itself, for counsel and
for litigants . . . .” Ohio Envtl. Council v. U.S.
District Court, 565 F.2d 393, 396 (6th Cir. 1977)
(quoting Landis v. N. Am. Co., 299 U.S. 248, 254-55
(1936)). “[A]nd . . . the entry of such an order
ordinarily rests with the sound discretion of the District
Court.” Id. “[A] court must tread
carefully in granting a stay of proceedings, since a party
has a right to a determination of its rights and liabilities
without undue delay.” Id. The party seeking
a stay must make out a clear case of hardship or inequity in
being required to go forward, if there is even a fair
possibility that the stay for which he prays will work damage
to someone else. Only in rare circumstances will a litigant
in one cause be compelled to stand aside while a litigant in
another settles the rule of law that will define the rights
Landis, 299 U.S. at 255. “Thus the burden is
on the party seeking the stay to show that there is pressing
need for delay, and that neither the other party nor the
public will suffer harm from entry of the order.”
Ohio Envtl. Council, 565 F.2d at 396. In the
supporting memorandum incorporated into its Motion.
writes that a district court generally considers (1)
“any prejudice to the non-moving party if a stay is
granted, ” (2) “any prejudice to the moving party
if a stay is not granted, ” and (3) “the extent
to which judicial economy and efficiency would be served by
the entry of a stay.” Def. WH Admins., Inc.'s Mot.
to Stay, at 2, May 14, 2018, ECF No. 64 (quoting Voeltner
v. Gen. Elec. Co., 2007 U.S. Dist. LEXIS 92254, at *2
(S.D. Ohio Dec. 4, 2007)) (citations omitted). While these
factors have not calcified into a controlling standard, the
Court nonetheless finds them instructive as it considers
argues that (1) a stay would not be prejudicial to Plaintiff,
(2) failure to stay this matter would be prejudicial to
Defendant, and (3) a stay would serve the interests of
judicial efficiency and economy. To the first point,
Defendant asserts that there is no risk of dissipation of
assets, such as Plaintiff is concerned about, because the
relevant plan trust account only has $263.44, and Defendant
does not have control over those funds. To the second point,
Defendant submits that it will suffer prejudice by being
forced to defend itself in two different courts over the same
subject matter. Finally, Defendant offers that a stay will
serve judicial economy because, depending upon the outcome of
the case involving the Department of Labor, this Court may
have no need to review the pending Motions or the underlying
merits of the case.
Court is not convinced. At this early stage of the
proceedings-an early stage more than six months into the case
despite or perhaps because of the high degree of activity by
the parties-the Court is forced to give substantial weight to
the harm that Plaintiff alleges it will suffer if its Motion
for Preliminary Injunction is not granted. Pls.' Mem. of
Law in Supp. of Rule 65(a) Mot. for Prelim. Inj., at 8, Nov.
27, 2017, ECF No. 10-1 (“If WHA is successful in . . .
dissipating the Plan assets, any judgment obtained against
WHA by the Plaintiffs shall be rendered worthless. . . . The
failure of WHA to pay the claims of the Plan participants has
created a host of debt collection issues that are causing,
and will continue to cause, substantial harm and hardship to
the Plaintiffs.”). The Sixth Circuit and Supreme Court
have made clear that it is a heavy burden that must be met
for a party's rights to be resolved without his
participation. And the Court is not satisfied that the ...