Carney v. JNJ Express, Inc.
10 F. Supp. 3d 848
W.D. Tenn.2014Background
- JNJ Express, Inc. is a motor carrier that transports property in interstate commerce and uses equipment leased from independent truck drivers, including the Carneys.
- The Leases are titled Independent Contractor Lease Agreements and designate the Carneys as contractor-lessors and JNJ as carrier-lessee.
- Each Lease contains an arbitration clause requiring binding arbitration after a face-to-face pre-arbitration meeting and, if no location agreement, arbitration in Memphis, Tennessee.
- Carneys allege the Leases do not meet the Truth in Leasing Regulations (TIL) under 49 C.F.R. § 376.12 and seek a declaratory judgment, an accounting, and damages.
- Carneys signed the Leases on or about October 21, 2012; JNJ removed the case after the Carneys filed a state-court complaint on October 24, 2013.
- The Court has federal question jurisdiction over TIL claims and supplemental jurisdiction over the state-law breach-of-contract claim; the FAA governs arbitration and the dispute involves whether the Carneys are employees or independent contractors for arbitrability purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the Carneys bound to arbitrate under the Leases and the FAA? | Carneys dispute enforceability due to alleged TIL deficiencies. | JNJ argues there is a binding arbitration agreement under the FAA and that interstate commerce involvement satisfies §2. | Arbitration agreement exists and is enforceable under the FAA. |
| Do the TIL-based claims fall within the scope of the arbitration clauses? | Claims arise from alleged lease deficiencies under TIL and may not be arbitrable. | Claims related to the Leases fall within the arbitration clauses. | TIL-based claims are within the scope of arbitration. |
| Are Carneys employees or independent contractors, and does that status affect arbitrability? | Carneys contend they are employees; thus, not arbitrable under §1 FAA. | Carneys are independent contractors; FAA applies to their claims. | Carneys are independent contractors; FAA provides arbitratability of claims. |
Key Cases Cited
- EEOC v. Waffle House, Inc., 534 U.S. 279 (U.S. 2002) (arbitration favored; enforceability rooted in federal policy)
- Johnson v. Long John Silver's Rests., Inc., 320 F.Supp.2d 656 (M.D. Tenn. 2004) (doubts resolved in favor of arbitration; contract enforceable unless voided)
- Haskins v. Prudential Ins. Co. of Am., 230 F.3d 231 (6th Cir. 2000) (contractual arbitration favored absent voiding grounds)
- Stout v. J.D. Byrider, 228 F.3d 709 (6th Cir. 2000) (four tasks for court on motion to compel arbitration; summary-judgment standard)
- Great Earth Cos., Inc. v. Simons, 288 F.3d 878 (6th Cir. 2002) (burden shifting and issue of validity of arbitration agreement)
- Swift Transp. Co. v. Owner-Operator Indep. Drivers Ass'n, Inc., 288 F.Supp.2d 1033 (D. Ariz. 2003) (methodology for determining employment contract status under FAA)
- Gagnon v. Serv. Trucking, Inc., 266 F.Supp.2d 1361 (M.D. Fla. 2003) (rejects mere title of independent-contractor agreement as controlling; assesses employment status under FAA)
- C.R. England, Inc. v. Owner-Operator Indep. Drivers Ass'n, Inc., 325 F.Supp.2d 1252 (D. Utah 2004) (examines when an independent-contractor agreement constitutes an employment contract)