Court Opinion

ID: 2771232
Source: CourtListenerOpinion
Date Created: 2015-01-20 16:00:28.107003+00
Date Added: 2024-06-11T10:45:01.634151
License: Public Domain

13-4868-cv
Sutherland v. E&Y

                                    UNITED STATES COURT OF APPEALS
                                       FOR THE SECOND CIRCUIT

                                            SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or
after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and
this court’s Local Rule 32.1.1. When citing a summary order in a document filed with this court, a
party must cite either the Federal Appendix or an electronic database (with the notation “summary
order”). A party citing a summary order must serve a copy of it on any party not represented by
counsel.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 20th
day of January, two thousand and fifteen.

PRESENT:

           JOSÉ A. CABRANES,
           CHESTER J. STRAUB,
           DEBRA ANN LIVINGSTON
                                Circuit Judges.
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STEPHANIE SUTHERLAND, on behalf of herself and all others
similarly situated,
                      Plaintiff-Appellant,

                     -v.-                                                                  No. 13-4868-cv

ERNST & YOUNG, LLP,
                      Defendant-Appellee.
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FOR PLAINTIFF-APPELLANT:                                                  Max Folkenflik, Folkenflik & McGerity LLP,
                                                                          New York, New York.

FOR DEFENDANT-APPELLEE:                                                   Daniel L. Nash, Akin Gump Strauss Hauer &
                                                                          Feld LLP, Washington D.C., Rex S. Heinke,
                                                                          Gregory W. Knopp, Akin Gump Strauss
                                                                          Hauer & Feld LLP, Los Angeles, California.

       Appeal from a November 22, 2013 order of the United States District Court for the
Southern District of New York (Katherine B. Forrest, Judge).

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     UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the November 22, 2013 order of the District Court is AFFIRMED.
        Appellant Stephanie Sutherland appeals from the District Court’s dismissal of her case,
following remand from this Court, in Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. N.Y.
2013). Sutherland filed this case on April 20, 2010, alleging two causes of action based on Ernst &
Young LLP’s (“Ernst & Young”)’s alleged misclassification of her and other employees under the
Fair Labor Standards Act (29 U.S.C. § 201 et seq.) and New York Labor Laws (12 N.Y.C.R.R. § 142-
2.2). Ernst & Young answered the complaint on May 19, 2010, and filed its motion to compel
arbitration, pursuant to the terms of Sutherland’s employment agreement, on August 20, 2010.

                                           DISCUSSION

        We review a district court’s decision regarding waiver of a party’s right to arbitrate de novo.
Thyssen, Inc. v. Calypso Shipping Corp., S.A., 310 F.3d 102, 104 (2d Cir. 2002).

        The appeal turns on whether Ernst & Young waived its right to demand arbitration. In
determining whether a party has waived its right to arbitration by expressing its intent to litigate the
dispute in question, we consider the following three factors: “(1) the time elapsed from when
litigation was commenced until the request for arbitration; (2) the amount of litigation to date,
including motion practice and discovery; and (3) proof of prejudice.” La. Stadium & Exposition Dist.
v. Merrill Lynch, Pierce, Fenner & Smith, 626 F.3d 156, 160 (2d Cir. 2010). “The key to a waiver analysis
is prejudice. Waiver of the right to compel arbitration due to participation in litigation may be found
only when prejudice to the other party is demonstrated.” Thyssen, 310 F.3d at 105 (internal quotation
marks and brackets omitted).

        This Court has recognized two types of prejudice: substantive prejudice and prejudice due to
excessive cost and time delay. Id. “Prejudice can be substantive, such as when a party loses a motion
on the merits and then attempts, in effect, to relitigate the issue by invoking arbitration, or it can be
found when a party too long postpones his invocation of his contractual right to arbitration, and
thereby causes his adversary to incur unnecessary delay or expense.” Kramer v. Hammond, 943 F.2d
176, 179 (2d Cir. 1991). This Court “has refused to find waiver in a number of cases where delay in
trial proceedings was not accompanied by substantial motion practice or discovery.” See Thyssen, 310
F.3d at 105 (collecting cases).
        Sutherland argues that she has been substantively prejudiced by Ernst & Young’s
“procedural gamesmanship.” But Sutherland must demonstrate how any gamesmanship
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disadvantaged her in the litigation. She fails to do so. Sutherland also fails to present any other
argument as to how she has been prejudiced by Ernst & Young’s failure to demand arbitration in a
more timely manner.
        The facts before us are uncomplicated. Plaintiff filed her case in April 2010 and Ernst &
Young filed its motion to dismiss or compel arbitration four months later. No substantial motion
practice or discovery was undertaken by either party during that time period. Accordingly, Ernst &
Young cannot be said to have waived its right to compel arbitration.

                                           CONCLUSION

        For the foregoing reasons, the November 22, 2013 order of the District Court is
AFFIRMED.

                                                FOR THE COURT,
                                                Catherine O’Hagan Wolfe, Clerk of Court

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