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Newhouse v. Sugar Creek Pizza, LLC

United States District Court, S.D. West Virginia, Charleston Division

April 24, 2019

SUGAR CREEK PIZZA, LLC, et al., Defendants.



         Plaintiff Charleigh Newhouse (“Plaintiff”) brings this action against Defendants Pizza Hut, LLC (“Pizza Hut”), Sugar Creek Pizza, LLC (“Sugar Creek”), and New River Pizza, LLC[1](“New River”) (collectively, “Defendants”). Before the Court are Pizza Hut's Motion to Dismiss, (ECF No. 7), and Sugar Creek and New River's Motion to Dismiss or, in the Alternative, Compel Arbitration, (ECF No. 10). For the reasons discussed below, the Court GRANTS the motions.

         I. BACKGROUND

         This case arises out of Plaintiff's employment at a restaurant in Oak Hill, West Virginia. Plaintiff alleges she began working at the restaurant on May 1, 2014, as a server. (ECF No. 1-1 at ¶ 5.) She continued working in this capacity until her employment was terminated on December 4, 2016.[2] (Id. at ¶ 22.) At the start of her employment, Plaintiff executed an “Agreement to Arbitrate” with New River. The written arbitration agreement provides that Plaintiff agrees “to use binding arbitration . . . for any claims . . . that [she] may have against New River, its affiliates, and/or their current or former employees, owners, or officers . . . .”[3] (ECF No. 10-1 at 1.)

         After her termination, Plaintiff filed a complaint in the Circuit Court of Fayette County, West Virginia, alleging violations of the Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. § 2601, et seq., and West Virginia common law claims for retaliation in violation of public policy, negligent and intentional infliction of emotional distress, and outrage against New River, Sugar Creek, [4] and Pizza Hut. (Id. at ¶¶ 26-76.) On January 4, 2019, Defendants removed the case to this Court asserting federal question jurisdiction under 28 U.S.C. § 1331. (ECF No. 1.)

         Following removal, Pizza Hut filed a motion to dismiss on February 2, 2019, arguing that Plaintiff inadequately pleads facts against it under any theory of liability. (ECF No. 7.) Sugar Creek and New River also filed a motion to dismiss or, alternatively, to compel arbitration on February 2, 2019, contending that the arbitration agreement executed between Plaintiff and New River divests this Court of subject matter jurisdiction and requires the parties to arbitrate this dispute. (ECF No. 10.) Plaintiff has not filed a response to either motion. As the time for responding has elapsed, the motions are now ripe for adjudication.


         A. Motion to Dismiss for Failure to State a Claim

         A motion to dismiss for failure to state a claim upon which relief may be granted tests the legal sufficiency of a civil complaint. Fed.R.Civ.P. 12(b)(6). A plaintiff must allege sufficient facts, which, if proven, would entitle him to relief under a cognizable legal claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-55 (2007). A case should be dismissed if, viewing the well-pleaded factual allegations in the complaint as true and in the light most favorable to the plaintiff, the complaint does not contain “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. In applying this standard, a court must utilize a two-pronged approach. First, it must separate the legal conclusions in the complaint from the factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Second, assuming the truth of only the factual allegations, the court must determine whether the plaintiff's complaint permits a reasonable inference that “the defendant is liable for the misconduct alleged.” Id. Well-pleaded factual allegations are required; labels, conclusions, and a “formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555; see also King v. Rubenstein, 825 F.3d 206, 214 (4th Cir. 2016) (“Bare legal conclusions ‘are not entitled to the assumption of truth' and are insufficient to state a claim.” (quoting Iqbal, 556 U.S. at 679)). A plaintiff's “[f]actual allegations must be enough to raise a right to relief above the speculative level, ” thereby “nudg[ing] [the] claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 555, 570.

         B. Motion to Dismiss for Lack of Subject Matter Jurisdiction

         A challenge to subject matter jurisdiction may be either facial, which is based solely on the allegations in the pleadings, or factual, which permits the consideration of matters outside the pleadings. See Kerns v. United States, 585 F.3d 187, 192-93 (4th Cir. 2009). When the challenge is factual, this Court “appl[ies] the standard applicable to a motion for summary judgment, under which the nonmoving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists.” Richmond, Fredricksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991); see also Fed. R. Civ. P. 56(a) (stating that summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law”).

         C. Motion to Compel Arbitration

         The Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (“FAA”) provides federal courts with the power to compel arbitration in cases where, save for the applicability of an arbitration clause, the case would fall within the court's federal subject matter jurisdiction. See Del Webb Cmtys., Inc. v. Carlson, 817 F.3d 867, 872 (4th Cir. 2016) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)). In particular, the FAA mandates that “upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4. In such circumstances, the FAA requires that the court “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 . . . .” Id. at § 3.

         The FAA's directive to federal and state courts is mandatory and, therefore, courts have “no choice but to grant a motion to compel arbitration where a valid arbitration agreement exists and the issues in a case fall within its purview.” Adkins v. Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002); see also Hightower v. GMRI, Inc., 272 F.3d 239, 241 (4th Cir. 2001) (stating that “[b]ecause FAA provisions are mandatory, courts must compel arbitration when a valid arbitration agreement exists”). The FAA reflects “a congressional declaration of a liberal federal policy favoring arbitration agreements . . . [and] create[s] a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.” Moses H. Cone, 460 U.S. at 24; Stolt-Nielsen S.A. v. Animal Feeds Int'l Corp., 559 U.S. 662, 682 (2010). Indeed, the principal purpose of the FAA is to place arbitration contracts “on an equal footing with other contracts . . . and enforce them according to their terms[.]” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citations omitted). “The issue whether a dispute is arbitrable presents primarily a question of contract interpretation, requiring that we give effect to the parties' intentions expressed in their agreement, ” with “[a]ny uncertainty regarding the scope of arbitrable issues . . . resolved in favor of arbitration.” Muri ...

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