Cabanillas v. 4716 Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Alexia Cabanillas, et al., No. CV-20-00894-PHX-MTL 10 Plaintiffs, ORDER 11 v. 12 4716 Incorporated, et al., 13 Defendants. [14] 15 Before the Court is Defendants 4716 Inc., Frank Zanzucchi, Jason Brown, John 16 Zanzucchi, William V. Zanzucchi, and Paul Johnson’s (collectively, “Defendants”) 17 Renewed Motion to Compel Plaintiffs Cabanillas, Ingram, and Garcia to Binding 18 Arbitration (the “Motion to Compel”).1 (Doc. 43.) Also before the Court is Plaintiffs 19 Alexia Cabanillas, Christen Ingram, and Gabriela Garcia’s (collectively, “Plaintiffs”) 20 Renewed Motion for Conditional Certification and Issuance of Notice Pursuant to Fair 21 Labor Standards Act, 29 U.S.C. § 216 (b) (the “Motion for Certification”). (Doc. 46.) The 22 Court will grant the Motion to Compel, deny the Motion for Certification, and dismiss 23 this case.2 [24] 1 Defendants’ Motion to Compel incorporates by reference, see LRCiv 7.1(d)(2), the 25 arguments raised in their previous motions to compel (Docs. 8, 19, 28) and their prior replies (Docs. 17, 22, 37). The Court will allow that incorporation in these circumstances. 26 See Ulloa v. Potter, No. CV07-1567-PHX-SMM, 2008 WL 2561939 , at *3 n.3 (D. Ariz. June 24, 2008). Consequently, the Court will also consider Plaintiffs’ oppositions to those 27 pleadings. (Docs. 10, 21, 33.) 2 Both parties have fully briefed the issues and oral argument would not have aided the 28 Court’s decisional process. See Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. 1998); see also LRCiv 7.2(f); Fed. R. Civ. P. 78(b). 1 I. BACKGROUND 2 Defendants own and operate Hi Liter Gentlemen’s Club (“Hi Liter”) in Phoenix, 3 Arizona. (Doc. 42 ¶¶ 29.) Plaintiffs are current or former exotic dancers at Hi Liter. (Id. 4 ¶¶ 3, 32.) On Plaintiffs first day of employment, each signed an Entertainment License 5 Agreement (“ELA” or “ELAs”). (See Docs. 17-2, 17-3, 28-1.) The ELAs provide a notice 6 at the beginning of the document, which provides: [7] NOTICE: THIS IS A LEGAL CONTRACT. DO NOT 8 SIGN IT UNLESS YOU FULLY UNDERSTAND AND AGREE TO ALL OF ITS TERMS (AND PLEASE NOTE [9] THAT THIS CONTRACT CONTAINS AN 10 AGREEMENT TO INDIVIDUALLY ARBITRATE DISPUTES AND CLAIMS, WHICH IS FOUND IN [11] PARAGRAPH 21). IF YOU HAVE ANY QUESTIONS, 12 FEEL FREE TO TALK TO THE CLUB’S GENERAL MANAGER. WE SUGGEST THAT BEFORE SIGNING, [13] YOU HAVE THIS CONTRACT REVIEWED BY AN 14 ATTORNEY, ACCOUNTANT, OR OTHER PERSON OF YOUR CHOICE. [15] 16 (See, e.g., Doc. 17-2 at 3.) The ELAs outline the purpose of the agreement and several 17 terms of the agreement, including privacy, entertainment fees, taxes, license fees, and 18 severability. (Id. at 3–6.) 19 Each ELA also includes provisions relating to arbitration and waivers of class and 20 collective actions. (Id. at 6–9.) The non-mandatory arbitration provision reads: [21] 22 NOTE: PROCEEDINGS IN ADMINISTRATIVE AGENCIES, SUCH AS THE NATIONAL LABOR 23 RELATIONS BOARD, THE DEPARTMENT OF LABOR, AND THE EQUAL EMPLOYMENT [24] OPPORTUNITY COMMISSION, ARE NOT 25 GOVERNED OR BARRED BY THE PROVISIONS IN THIS PARAGRAPH 21. YOU MAY FILE ANY CLAIM [26] YOU WANT WITH ANY ADMINISTRATIVE 27 AGENCY. IN ORDER TO RESOLVE DISPUTES THAT [28] MAY ARISE OUT OF YOU PERFORMING AT THIS 1 CLUB, THE CLUB HAS ESTABLISHED A PRIVATE “ARBITRATION” PROCESS SET OUT IN THIS [2] SECTION 21. ARBITRATION IS SIMILAR TO A 3 COURT PROCEEDING, BUT IT’S LESS FORMAL, LESS TIME-CONSUMING, AND CAN BE LESS [4] EXPENSIVE THAN GOING TO COURT. IF YOU DO 5 NOT DESIRE TO RESOLVE DISPUTES THAT MAY COME UP IN THE FUTURE THROUGH [6] ARBITRATION, YOU MAY EXCLUDE YOURSELF 7 FROM THIS PROCESS BY FOLLOWING THE STEPS SET OUT IN SECTION 21(H) BELOW. [9] 10 (Id. at 6.) The other ELAs contain substantially similar language. (See Docs. 17-3, 28-1.) 11 The document then sets out detailed arbitration procedures and allows dancers the 12 opportunity to opt out. (See Doc. 17-2 at 8.) The ELAs end with language stating: 13 BY SIGNING THIS DOCUMENT, ENTERTAINER 14 REPRESENTS THAT SHE HAS RECEIVED A COPY OF, AND HAS FULLY READ, THIS LICENSE 15 AGREEMENT; THAT SHE UNDERSTANDS AND AGREES TO BE BOUND BY ALL OF ITS TERMS; [16] THAT SHE IS UNDER NO DISABILITY THAT 17 WOULD PRECLUDE HER FROM UNDERSTANDING, OR BEING BOUND TO, THE TERMS OF THIS [18] LICENSE AGREEMENT; THAT NO ONE HAS 19 COERCED, FORCED OR INTIMIDATED HER INTO SIGNING THIS LICENSE AGREEMENT; AND THAT [20] SHE HAD OPPORTUNITIES TO BOTH ASK 21 QUESTIONS REGARDING THIS LICENSE AGREEMENT’S CONSENT AND HAVE IT [22] REVIEWED BY PERSONS OF HER CHOICE, 23 INCLUDING BY ATTORNEYS AND ACCOUNTANTS. 24 (Id. at 9.) 25 Plaintiffs filed this action, contending that Defendants misclassified them as 26 independent contractors, rather than employees, and in turn denied them minimum wage 27 and overtime payments in violation of the Fair Labor Standards Act (“FLSA”). (Doc. 1 28 ¶¶ 3, 5–7.) Based on the ELAs, Defendants filed motions to compel arbitration for 1 Plaintiffs Cabanillas, Ingram, and Garcia. (Docs. 8, 19, 28.) Plaintiff Kristen Ellis then 2 filed a motion for conditional certification under the FLSA.3 (Doc. 29.) This Court then 3 granted Plaintiffs’ request to file an amended complaint and denied those pending 4 motions as moot. (Doc. 41.) Plaintiffs and Defendants have since refiled those same 5 motions. (Docs. 43, 46.) 6 II. DISCUSSION 7 A. Motion to Compel 8 1. Legal Standard 9 The Federal Arbitration Act (“FAA”) was enacted in response to widespread 10 judicial hostility toward arbitration agreements. AT&T Mobility LLC v. Concepcion, 563 11 U.S. 333, 339 (2011). Section 2 of the FAA states that “[a] written provision in . . . a 12 contract evidencing a transaction involving commerce to settle by arbitration a 13 controversy thereafter arising out of such contract or transaction . . . shall be valid, 14 irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the 15 revocation of any contract.” 9 U.S.C. § 2 . The Supreme Court has described this 16 provision of the FAA as both a “liberal federal policy favoring arbitration,” and the 17 “fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC, 563 18 U.S. at 339 (citing Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 , 24 19 (1983), and Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 , 67 (2010)). 20 In line with these principles, courts must place arbitration agreements on equal 21 footing with other contracts and enforce them according to their terms. AT&T Mobility 22 LLC, 563 U.S. at 339 (citations and quotations omitted); Chiron Corp. v. Ortho 23 Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The FAA “leaves no place for 24 the exercise of discretion by a district court, but instead mandates that district courts shall 25 direct the parties to proceed to arbitration on issues as to which an arbitration agreement 26 has been signed.” Chiron Corp., 207 F.3d at 1130 (quoting Dean Witter Reynolds Inc. v. 27 Byrd, 470 U.S. 213, 218 (1985)). The Court’s role under the FAA, therefore, is limited to 28 3 Plaintiff Kristen Ellis was dismissed as a plaintiff on August 20, 2021 for failure to prosecute. (Doc. 74.) Any argument pertaining to her as a plaintiff is therefore moot. 1 determining “(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether 2 the agreement encompasses the dispute at issue.” Id. 3 “When evaluating a motion to compel arbitration, courts treat the facts as they 4 would when ruling on a motion for summary judgment, construing all facts and 5 reasonable inferences that can be drawn from those facts in a light most favorable to the 6 non-moving party.” Totten v. Kellogg Brown & Root, LLC, 152 F. Supp. 3d 1243 , 1249 7 (C.D. Cal. 2016) (internal citation omitted). Generally, “the party resisting arbitration 8 bears the burden of proving that the claims at issue are unsuitable for arbitration.” Green 9 Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 91 (2000). But where the issue is 10 whether there exists an agreement to arbitrate, the party seeking to enforce an arbitration 11 agreement bears the burden of showing that it exists. See, e.g., Sanford v. Memberworks, 12 Inc., 483 F.3d 956 , 962–64 (9th Cir. 2007). Courts apply state-law principles to 13 determine whether an agreement to arbitrate is valid. First Options of Chi., Inc. v. 14 Kaplan, 514 U.S. 938, 944 (1995); Circuit City Stores, Inc. v. Adams, 279 F.3d 889 , 892 15 (9th Cir. 2002). Neither party contests that Arizona state law governs the agreements. 16 2. Analysis 17 To create a valid enforceable contract, there must be “an offer, acceptance, 18 consideration, a sufficiently specific statement of the parties’ obligations, and mutual 19 assent.” Buckholtz v. Buckholtz, 246 Ariz. 126, 129 (App. 2019) (citations omitted). 20 These principles apply with no less vigor to formation of arbitration contracts. See, e.g., 21 Estate of Decamacho ex rel. Guthrie v. La Solana Care & Rehab, Inc., 234 Ariz. 18 , 21 22 (App. 2014). The Court agrees with Defendants that a valid agreement to arbitrate exists 23 between the parties. Plaintiffs do not seem to dispute, and affirmatively agree at times, 24 that a valid arbitration agreement exists. (See Docs. 10, 21, 33.) Indeed, Plaintiffs have 25 noted that they “have been willing to arbitrate their claims since the beginning.” (See, 26 e.g., Doc. 33 at 2; Doc. 21 at 2 (“Ingram does not oppose submitting her individual 27 claims to arbitration.”).) 28 Plaintiffs do, however, contest two provisions in Plaintiffs’ ELAs that they claim 1 are substantively unconscionable. (See, e.g., Doc. 45 at 3–10.) The first provision at issue 2 in Garcia’s and Ingram’s agreements provides, “ANY JUDGMENT, ORDER, OR 3 RULING ARISING OUT OF A CLAIM BETWEEN THE PARTIES SHALL, TO 4 THE EXTENT PERMITTED BY APPLICABLE LAW, AWARD COSTS 5 INCURRED FOR THE PROCEEDINGS AND REASONABLE ATTORNEY FEES 6 TO THE PREVAILING PARTY” (the “Attorney Fees Provision”). (Doc. 17-3 at 5; 7 Doc. 28-1 at 7.) Cabanillas’ Attorney Fees Provision is nearly identical. (See Doc. 17-2 at 8 8.) Plaintiffs also note that another provision, only found in Cabanillas’ ELA, is also 9 substantively unconscionable. That provision reads: “THE ACTUAL COSTS OF 10 ARBITRATION (THE ARBITRATOR’S FEES AND RELATED EXPENSES) 11 SHALL BE BORNE EQUALLY BY THE ENTERTAINER AND THE CLUB 12 UNLESS APPLICABLE LAW REQUIRES THE ARBITRATOR TO IMPOSE A 13 DIFFERENT ALLOCATION” (the “Equal Costs Provision”). (Id. at 7.) Plaintiffs ask 14 this Court to sever these provisions from each of their respective arbitration agreements. 15 (Docs. 10, 21, 33, 45.) The Court will address each provision in turn. 16 Arizona courts divide the unconscionability doctrine into substantive and 17 procedural components. See Guglielmo v. LG&M Holdings LLC, No. CV-18-0371818 PHX-SMB, 2019 WL 3253190 , at *2 (D. Ariz. July 19, 2019) (citing Maxwell v. Fidelity 19 Fin. Servs., Inc., 184 Ariz. 82 , 87–89 (1995)). “Procedural unconscionability arises from 20 unfairness in the bargaining process.” Pinto v. USAA Ins. Agency Inc. of Texas (FN), 275 21 F. Supp. 3d 1165, 1170 (D. Ariz. 2017). It “is concerned with ‘unfair surprise,’ fine print 22 clauses, mistakes or ignorance of important facts or other things that mean bargaining did 23 not proceed as it should.” Maxwell, 184 Ariz. at 88–89. Substantive unconscionability, on 24 the other hand, is concerned with the fairness of the contract terms. Id. at 89. “Arizona 25 allows unconscionability to be established ‘with a showing of substantive 26 unconscionability alone, especially in cases involving either price-cost disparity or 27 limitation of remedies.’” Guglielmo, 2019 WL 3253190 , at *2 (citation omitted). Here, 28 the Court will not address the procedural component because Plaintiffs only argue that 1 the Attorney Fees Provision and the Equal Costs Provision are substantively 2 unconscionable.4 3 First, the Court does not find that the Attorney Fees Provision is substantively 4 unconscionable. Plaintiffs bring their claims under federal law, namely the FLSA. (See 5 Doc. 42.) Plaintiffs correctly note that “FLSA rights cannot be abridged by contract or 6 otherwise waived.” Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728 , 740 7 (1981). The provision at issue here notes that costs and fees can be recovered by the 8 prevailing party “TO THE EXTENT PERMITTED BY APPLICABLE LAW.” (See 9 Docs. 11-2 at 8, 11-3 at 5, 28-1 at 7.) Courts have found that the inclusion of this limiting 10 language in similar provisions renders the provision not substantively unconscionable. 11 See, e.g., Ridgeway v. Nabors Completion & Prod. Servs. Co., 725 F. App’x 472 , 474 12 (9th Cir. 2018) (“[T]he fees and expenses provision, are not unconscionable, because 13 they contain the phrase ‘except as otherwise provided by law.’”). The Court therefore 14 finds Plaintiffs’ argument on this provision unpersuasive. To be sure, if that limiting 15 clause was not included in the Attorney Fees Provision, there could be an issue because 16 the FLSA entitles only the prevailing plaintiff to an award of costs and fees. See 29 17 U.S.C. § 216 (b). But with the clause included in the ELA provisions at issue, an arbitrator 18 must allow the recovery of costs and fees to the extent permitted by the FLSA. Here, it is 19 premature for this Court to engage in judicial rewriting of the offending ELA provisions 20 because Plaintiffs suppose that an arbitrator might overlook settled law. 21 To the extent the Attorney Fees Provision is ambiguous, the Supreme Court has 22 established that ambiguities in arbitration agreements must be interpreted by the 23 arbitrator. See PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401 , 406–07 (2003). It 24 4 In passing, Plaintiff Ingram notes that the “agreements are adhesive and are unconscionable such that Defendants, as the parties in superior bargaining power, drafted 25 the agreements with vague and ambiguous language so as to deprive Ingram and other Hi Liter dancers of their due process rights.” (Doc 21 at 2.) Plaintiffs do not elaborate on this 26 argument or contend more than this conclusory statement that any ELA is procedurally unconscionable. The ELA’s terms were uncomplicated and included explicit, bolded 27 clauses in large typeface in many of the challenged areas. Even if this Court considered this argument, it finds such an argument unpersuasive. See Bufford v. VXI Global 28 Solutions LLC, No. CV-20-00253-TUC-RCC, 2021 WL 229240 , at *6–7 (D. Ariz. Jan. 22, 2021). 1 explained that courts “should not, on the basis of mere speculation that an arbitrator 2 might interpret . . . ambiguous agreements in a manner that casts their enforceability into 3 doubt, take upon ourselves the authority to decide the antecedent question of how the 4 ambiguity is to be resolved.” Id. The Court in PacifiCare therefore noted that, rather than 5 resort to speculation, “the proper course is to compel arbitration.” Id. at 407 . Here, even if 6 there was some ambiguity between the rights guaranteed by the FLSA and the language 7 used in the ELA regarding the shifting of certain costs, that ambiguity must be resolved 8 by the arbitrator. Thus, the Attorney Fees Provision is not substantively unconscionable 9 as written. 10 As to the Equal Costs Provision, the Court finds that there is not enough evidence 11 to find it substantively unconscionable. Arizona courts have adopted a case-by-case 12 approach in considering whether fees imposed by an arbitration agreement effectively 13 deny a potential litigant the opportunity to vindicate his rights. Harrington v. Pulte Home 14 Corp., 211 Ariz. 241 , 252–53 (2005). An arbitration agreement is enforceable unless 15 plaintiff presents “individualized evidence to establish that the costs of arbitration are 16 prohibitive.” Id. (citing Green Tea Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 , 91–92 17 (2000)). When certain provisions require plaintiffs to bear costs that might impact their 18 ability to seek relief under the FLSA, Arizona courts look certain factors. See Chavez v. 19 Creative Impact Inc., No. CV 20-01652 PHX CDB, 2021 WL 2474512 , at *6–8 (D. Ariz. 20 Feb. 12, 2021). “First, the party seeking to invalidate the arbitration agreement must 21 present evidence concerning the cost to arbitrate.” Clark v. Renaissance W., LLC, 232 22 Ariz. 510, 513 (App. 2013). “Second, a party must make a specific, individualized 23 showing as to why he or she would be financially unable to bear the costs of arbitration.” [24] Id. This evidence must consist of more than conclusory allegations that a person is unable 25 to pay the costs of arbitration. Harrington, 211 Ariz. at 253 . 26 Here, the Equal Costs Provision only appears in Cabanillas’ ELA. (Doc. 17-2.) 27 She argues that she “would be responsible for substantial filing fees, final fees, and costs 28 such as arbitrator compensation, which she would not face in court.” (Doc. 10 at 5; Doc. 1 45 at 6.) Cabanillas also notes that she “cannot afford those costs as an exotic dancer.” 2 (Id.) Absent from the record is any evidence concerning the cost to arbitrate. Cabanillas 3 has not established what arbitration costs or fees might be incurred. See Harrington, 211 4 Ariz. at 252-53 (refusing to find fees substantively unconscionable when litigant failed to 5 “show arbitration will put them in any worse position than litigation,” and noting the 6 record was “speculative” about the costs of arbitration). There is also no “specific, 7 individualized showing” as to why she would be unable to bear the costs of arbitration. 8 Simply stating that she would face substantial fees and she cannot afford those costs is 9 too conclusory to meet the burden both Arizona and federal law requires. See Green Tree 10 Fin. Corp.-Ala., 531 U.S. at 91–92; Clark, 232 Ariz. at 513. The Equal Costs Provision 11 also provides that the costs will be borne equally “UNLESS APPLICABLE LAW 12 REQUIRES THE ARBITRATOR TO IMPOSE A DIFFERENT ALLOCATION.” 13 (Doc. 17-2 at 7.) The ELA therefore allows the arbitrator to follow the governing law, 14 including the FLSA, to make sure that the appropriate cost structure is followed. For 15 these reasons, the Equal Costs Provision is not substantively unconscionable. See Chavez, [16] 2021 WL 2474512 , at *6–9 (rejecting a similar “equal costs” provision because the 17 plaintiffs did not present evidence concerning the cost to arbitrate or why they could not 18 personally bear the costs of arbitration). 19 The final step is to assess whether the agreement encompasses the dispute at issue. 20 Chiron Corp., 207 F.3d at 1130 . Each ELA at issue provides the same as, or substantially 21 similar language to, the following provision: [22] ANY CONTROVERSY, DISPUTE, OR CLAIM 23 ARISING OUT OF, OR RELATING IN ANY WAY TO, THIS LICENSE AGREEMENT, ITS TERMINATION, [24] ENTERTAINER PERFORMING AND/OR WORKING 25 AT THE CLUB AT ANY TIME . . . SHALL BE RESOLVED EXCLUSIVELY BY BINDING [26] ARBITRATION IN ACCORDANCE WITH THE 27 FEDERAL ARBITRATION ACT (THE “F.A.A.”). THIS REQUIREMENT TO ARBITRATE ANY [28] AND ALL NON-ADMINISTRATIVE CLAIMS 1 APPLIES REGARDLESS OF WHETHER SUCH A CLAIM IS BASED UPON CONTRACT, TORT OR [2] OTHER COMMON LAW, STATUTE, REGULATION, 3 ORDINANCE, OR OTHERWISE. 4 (See, e.g., Doc. 17-2 at 6.) 5 The Court finds that the broadly drafted arbitration provisions cover the disputes at 6 issue between Plaintiffs and Defendants. The clause says that any controversy, dispute, or 7 claim arising out of the ELA will be resolved by arbitration. See Guglielmo, 2019 WL 8 3253190, at *5, 8 (finding similar language in arbitration provisions to encompass the 9 disputes at issue). This also includes the statutory claims that Plaintiffs bring now in their 10 Amended Complaint (Doc. 42). Again, Plaintiffs seem to concede this point because 11 nowhere do they argue that their claims are not covered by the arbitration clauses at issue. 12 Therefore, the arbitration clauses cover Plaintiffs’ claims. 13 3. Conclusion 14 Plaintiffs Cabanillas, Garcia, and Ingram’s ELAs are valid and enforceable 15 agreements between the parties. By signing those agreements, Plaintiffs knowingly 16 agreed to have their claims subject to arbitration. As neither the Attorney Fees Provision 17 nor the Equal Costs Provision are substantively unconscionable, the Court will grant 18 Defendants’ Motion to Compel (Doc. 43). 19 B. Motion for Certification 20 1. Legal Standard 21 The FLSA provides employees with a private right of action to enforce the 22 minimum wage and overtime provisions within the statute. See 29 U.S.C. § 216 (b). 23 “[W]orkers may litigate jointly if they (1) claim a violation of the FLSA, (2) are 24 ‘similarly situated,’ and (3) affirmatively opt into the joint litigation, in writing.” 25 Campbell v. City of Los Angeles, 903 F.3d 1090, 1100 (9th Cir. 2018). As the Ninth 26 Circuit explained, “similarly situated” means “plaintiffs must be alike with regard to 27 some material aspect of their litigation.” Id. at 1114 . “[W]hat matters is not just any 28 similarity between party plaintiffs, but a legal or factual similarity material to the 1 resolution of the party plaintiffs’ claims, in the sense of having the potential to advance 2 these claims, collectively, to some resolution.” Id. at 1115 . 3 When deciding to certify a FLSA collective action, the Ninth Circuit follows a 4 two-step inquiry. Id. at 1110 . First, the Court makes “a preliminary determination that the 5 collective as defined in the complaint satisfies the ‘similarly situated’ requirement.” Id. at 6 1109. If the collective is similarly situated, the “sole consequence” is “the sending of 7 court-approved written notice” to workers who may wish to join the suit. Id. at 1101 8 (citation omitted). Courts apply a “lenient” standard, focusing primarily though not 9 exclusively on the pleadings, to determine whether there are “substantial allegations” of 10 similarity. Id. at 1109 . “Assuming the collective action has survived its earlier scrutiny, 11 the second stage will come at or after the close of relevant discovery.” Id. At that point, 12 the defendant can “move for ‘decertification’ of the collective action for failure to satisfy 13 the ‘similarly situated’ requirement in light of the evidence produced to that point.” Id. 14 “The district court will then take a more exacting look at the plaintiffs’ allegations and 15 the record.” Id. If it survives the decertification motion, “the collective proceeds toward 16 trial, at least on the questions justifying collective treatment.” Id. at 1110 . 17 2. Analysis 18 Despite the lenient first-step inquiry when deciding to certify a collective action, 19 Courts in this District have not permitted collective certification to proceed, and will 20 dismiss the action, where “the Plaintiff and opt-in Plaintiffs are not capable of 21 representing the class because the claims are wholly subject to arbitration.” Bufford, 2021 22 WL 229240 , at *8; see also French v. Whitefeather Holdings LLC, No. CV-20-00349/No. 23 CV-19-00482-TUC-RCC, 2020 WL 5383531 , at *3 (D. Ariz. Oct. 30, 2020). At least in 24 the circumstances presented here, the Court agrees with that approach. Plaintiffs “have no 25 interest in the outcome of a collective lawsuit because their individual claims cannot be 26 litigated.” Bufford, 2021 WL 229240 , at *8; see also Hollingsworth v. Perry, 570 U.S. 27 693 , 705–06 (2013) (standing requires a plaintiff to have a “direct stake in the outcome” 28 of the case). There is no evidence provided to this Court that any putative opt-in Plaintiff 1 would not be subject to a valid arbitration agreement or class-action waiver. In fact, one 2 Defendant has stated that he has reviewed every dancer’s ELA during the relevant period 3 and “[i]n every instance the entertainer executed an [ELA] that contained a clause 4 waiving the ability to enter into a collective or class action.” (Doc. 56 at 5.) The only 5 person who Plaintiffs have identified as opting out of the arbitration agreement was 6 dismissed from this case. (Doc. 74.) 7 Also, allowing a collective action to proceed would not serve the interests of 8 judicial economy. See Longnecker v. Am. Exp. Co., No. 2:14-cv-0069-HRH, 2014 WL 9 4071662, at *4 (D. Ariz. Aug. 18, 2014) (“[N]either the remedial purposes of the FLSA, 10 nor the interests of judicial economy, would be advanced if [the court] were to overlook 11 facts which generally suggest that a collective action is improper.”) (citation omitted). As 12 one Court in this District noted, allowing “notice to potential opt-in litigants at this time 13 would put the proverbial cart in front of the horse.” Bufford, 2021 WL 229240 , at *9. 14 Given this Court’s broad discretion when deciding whether to notify putative Plaintiffs 15 under the FLSA’s framework, see Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 , 16 169 (1989), the Court will deny Plaintiffs’ Motion to Certify (Doc. 46). 17 C. Dismiss or Stay the Case 18 Where parties enter into an enforceable arbitration agreement, the FAA requires 19 the Court to stay proceedings pending arbitration. 9 U.S.C. § 3 . The Ninth Circuit has 20 held that, “notwithstanding the language of § 3, a district court may either stay the action 21 or dismiss it outright when, as here, the court determines that all of the claims raised in 22 the action are subject to arbitration.” Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 23 1072, 1074 (9th Cir. 2014) (citing Sparling v. Hoffman Constr. Co., 864 F.2d 635 , 638 24 (9th Cir. 1988)). Because each ELA at issue is valid and enforceable, and because it 25 covers all of Plaintiffs’ claims, the Court finds dismissal is the appropriate remedy in this 26 situation and will dismiss the case without prejudice. See Meyer v. Fifth Third Bank, 842 27 F. App’x 104, 106 (9th Cir. 2021) (“The district court therefore correctly held that it 28 lacked the power to adjudicate Meyer’s claims, and appropriately exercised its discretion 1 || to dismiss the case.”’). TT. CONCLUSION 3 Accordingly, 4 IT IS ORDERED granting Defendants’ Motion to Compel (Doc. 43). 5 IT IS FURTHER ORDERED denying Plaintiffs’ Motion for Certification (Doc. 6|| 46). 7 IT IS FINALLY ORDERED directing the Clerk of the Court to dismiss this 8 || action without prejudice and close this case. 9 Dated this 25th day of August, 2021. [10] Wichad T. gibuade Michael T. Liburdi 13 United States District Judge [28] -13-