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Morgan v. Sundance, Inc.

Morgan v. Sundance, Inc.

United States Court of Appeals for the Eighth Circuit

September 23, 2020, Submitted; March 30, 2021, Filed

No. 19-2435

Opinion

 [*713]  GRASZ, Circuit Judge.

Sundance, Inc. appeals the district court's order denying its motion to compel arbitration of Robyn Morgan's claims. We reverse.

I. Background

In September 2018, Morgan sued Sundance for violations of the Fair Labor Standards Act. See 29 U.S.C. § 201. Morgan alleged Sundance failed to pay her, and other similarly situated employees, for overtime.

In November 2018, Sundance moved to dismiss Morgan's complaint, arguing that under the "first-to-file" rule,1 a similar lawsuit filed in a Michigan federal court (the "Michigan case") barred this lawsuit. [**2]  The district court denied Sundance's motion to dismiss more than four months later in March 2019.

Sundance then answered Morgan's complaint, but did not assert its right to arbitrate Morgan's claims. After filing its answer, Morgan participated in a settlement mediation with the Michigan case plaintiffs. The Michigan case settled, but Morgan's case moved forward.

In May 2019, after the failed mediation and nearly eight months after the filing of Morgan's complaint, Sundance moved to compel arbitration. The district court denied the motion, concluding Sundance's participation in the litigation waived its right to arbitration.

II. Discussion

] We review de novo the district court's conclusion that Sundance waived its right to compel arbitration, and we examine the underlying factual findings for clear error. Messina v. N. Cent. Distrib., Inc., 821 F.3d 1047, 1050 (8th Cir. 2016). "[A]ny doubts concerning waiver of arbitrability should be resolved in favor of arbitration." Id. (internal quotation marks and citation omitted).

] A party waives its right to arbitration if it: "(1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the other  [*714]  party by these inconsistent acts." Messina, 821 F.3d at 1050 (internal quotation marks and citation [**3]  omitted). Utilizing this test, we conclude the district court erred in determining Sundance waived its right to arbitrate because Sundance's conduct, even if inconsistent with its right to arbitration, did not materially prejudice Morgan.

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992 F.3d 711 *; 2021 U.S. App. LEXIS 9215 **; 2021 WL 1181677

Robyn Morgan, on behalf of herself and all similarly situated individuals, Plaintiff - Appellee v. Sundance, Inc., Defendant - Appellant

Subsequent History: US Supreme Court certiorari granted by, Motion granted by Morgan v. Sundance, Inc., 2021 U.S. LEXIS 5660 (U.S., Nov. 15, 2021)

Prior History:  [**1] Appeal from United States District Court for the Southern District of Iowa - Iowa City.

Morgan v. Sundance, Inc., 2019 U.S. Dist. LEXIS 178422, 2019 WL 5089205 (S.D. Iowa, June 28, 2019)

CORE TERMS

arbitration, right to arbitration, district court, compel arbitration, motion to dismiss, mediation, duplicate, federal court, discovery, invoke, waived, prejudiced, machinery, lawsuit

Civil Procedure, Subject Matter Jurisdiction, Jurisdiction Over Actions, Concurrent Jurisdiction, Governments, Courts, Judicial Comity, Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Appeals, Standards of Review, Clearly Erroneous Review, Waiver, De Novo Review, Pretrial Matters, Judicial Review, Federal Arbitration Act, Orders to Compel Arbitration, Mediation