Lawhead v. CenturyLink, Inc., 0:17-cv-04622

CenturyLink moved to compel arbitration and enforce class-action waivers for 37 of 38 named plaintiffs; the 38th (Maguire) allegedly agreed only to a class-action waiver.
Plaintiffs sought to begin class-wide merits discovery immediately; CenturyLink sought a temporary stay pending resolution of its motion to compel arbitration.
CenturyLink asserted class-wide discovery would implicate over 5.5 million customers and be unduly burdensome and costly if arbitration applies.
Plaintiffs argued discovery should proceed in federal court without delay.
The Court reviewed the filings and oral argument and found CenturyLink’s motion to compel arbitration appears to have substantial grounds at this early stage.
The Court granted a temporary stay of all discovery except narrow, reasonable discovery limited to (1) whether claims are subject to arbitration/class waivers, (2) discovery related to CenturyLink’s alternative 12(b)(2) and 12(b)(6) motion, and (3) discovery directed to the pending Motion to Intervene.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether discovery should proceed pending motion to compel arbitration	Plaintiffs: class-wide discovery should begin immediately	CenturyLink: discovery should be stayed because most claims are subject to arbitration and class waivers, making class discovery unnecessary and prejudicial	Stayed discovery except limited discovery on arbitrability, alternative motions, and intervention issues
Whether CenturyLink’s motion to compel arbitration has merit	Plaintiffs: vigorous opposition; arbitration clauses not dispositive at this stage	CenturyLink: produced admissible evidence showing 37 plaintiffs bound to arbitration and waivers	Court: motion appears to have substantial grounds; not unfounded in law
Whether plaintiff(s) would be prejudiced by a temporary stay	Plaintiffs: delay would impede case progress	CenturyLink: proceeding would cause irreparable prejudice by losing arbitration’s efficiencies and arbitrator control of discovery	Court: Plaintiffs would not be prejudiced by brief stay; defendant would suffer irreparable prejudice if broad discovery proceeded
Scope of permitted discovery during stay	Plaintiffs: seek broad class-wide discovery	CenturyLink: only narrow discovery on arbitrability and limited other issues should proceed	Court: permits only reasonable discovery on arbitrability, alternative 12(b) motions, and intervention; all other discovery stayed

CIGNA HealthCare of St. Louis, Inc. v. Kaiser, 294 F.3d 849 (7th Cir. 2002) (arbitrator determines scope of discovery when arbitration applies)
Nat’l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184 (2d Cir. 1999) (arbitration’s efficiency and limited discovery are key advantages that may be lost if court discovery proceeds)