900 F.3d 1240 (10th Cir. 2018), 17-1013, Dish Network L.L.C. v. Ray
|Citation:||900 F.3d 1240|
|Opinion Judge:||SEYMOUR, Circuit Judge.|
|Party Name:||DISH NETWORK L.L.C. and Echosphere, L.L.C., Plaintiffs-Appellants, v. Matthew RAY, on behalf of himself and all similarly situated persons, Defendant-Appellee.|
|Attorney:||Meghan W. Martinez, Martinez Law Group, P.C., Denver, Colorado, (Dayna L. Dowdy, Martinez Law Group, P.C., Denver, Colorado, with her on the briefs) for Plaintiffs-Appellants. Brian D. Gonzales, The Law Offices of Brian D. Gonzales, PLLC, Fort Collins, Colorado, (Ryan F. Stephan, Stephan Zouras, ...|
|Judge Panel:||Before TYMKOVICH, Chief Judge, SEYMOUR, and McHUGH, Circuit Judges. TYMKOVICH, Chief Judge, concurring.|
|Case Date:||August 21, 2018|
|Court:||United States Courts of Appeals, Court of Appeals for the Tenth Circuit|
Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CV-00314-LTB)
Meghan W. Martinez, Martinez Law Group, P.C., Denver, Colorado, (Dayna L. Dowdy, Martinez Law Group, P.C., Denver, Colorado, with her on the briefs) for Plaintiffs-Appellants.
Brian D. Gonzales, The Law Offices of Brian D. Gonzales, PLLC, Fort Collins, Colorado, (Ryan F. Stephan, Stephan Zouras, LLP, Chicago, Illinois, with him on the brief) for Defendant-Appellee.
Before TYMKOVICH, Chief Judge, SEYMOUR, and McHUGH, Circuit Judges.
SEYMOUR, Circuit Judge.
This case involves an arbitration proceeding between DISH Network L.L.C. ("DISH") and Matthew Ray, a former employee who signed an arbitration agreement when he was employed. The arbitrator determined that the Arbitration Agreement between the two parties permitted classwide arbitration, and then stayed the arbitration to permit DISH to contest the issue in court. DISH filed a Petition to Vacate Clause Construction Arbitration Award, which the district court denied. We affirm.
Matthew Ray worked as a sales associate for DISH until his termination in 2015. When he was employed, Mr. Ray signed an Arbitration Agreement drafted by DISH, which provided the following:
[T]he Employee and DISH agree that any claim, controversy and/or dispute between them, arising out of and/or in any way related to Employees application for employment, employment and/or termination of employment, whenever and wherever brought, shall be
resolved by arbitration. The Employee agrees that this Agreement is governed by the Federal Arbitration Act,
9 U.S.C. § § 1 et seq., and is fully enforceable.
... The arbitration shall be governed by and construed in accordance with the substantive law of the State in which the Employee performs services for DISH as of the date of the demand for arbitration, or in the event the Employee is no longer employed by DISH, the substantive law of the State in which the Employee last performed services for DISH. A single arbitrator engaged in the practice of law from the American Arbitration Association ("AAA") shall conduct the arbitration under the then current procedures of the AAAs National Rules for the Resolution of Employment Disputes ("Rules").
Aplt. App. at 51 (emphasis added).
After his termination, Mr. Ray initially filed an action in the federal district court alleging violations of the Fair Labor Standards Act ("FLSA"), Colorados Wage Claim Act, Colorados Minimum Wage Act, and a common law claim for breach of contract. Dish moved to dismiss, demanding that Mr. Ray arbitrate his claims pursuant to the Agreement. Mr. Ray dismissed the lawsuit and filed with the American Arbitration Association ("AAA"), asserting the same four claims. In addition, and the focus of this case, Mr. Ray attempted to pursue his claims as a class action under Fed.R.Civ.P. 23 and a collective action under 29 U.S.C. § 216(b).
One of the issues presented to the arbitrator was whether the Agreement permitted class arbitration. In his Clause Construction Award, the arbitrator first determined that he had jurisdiction to decide the issue. He reasoned that the determination of whether an arbitration agreement permits classwide arbitration was not a "gateway issue," an issue that is normally decided by courts rather than arbitrators. Gateway disputes include "whether the parties have a valid arbitration agreement at all or whether a concededly binding arbitration clause applies to a certain type of controversy." Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003) (plurality opinion) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) ); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 546-47, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964) (a court should decide whether arbitration agreement survived corporate merger and bound resulting corporation); AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 651-52, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (a court should decide whether labor-management layoff controversy falls within arbitration clause of collective-bargaining agreement). The arbitrator reasoned that even if the issue presented was a "gateway issue," the parties had clearly and unmistakably expressed their intention in the Agreement that questions of arbitrability be resolved by the arbitrator rather than the courts.
After concluding that he had jurisdiction to decide the issue, the arbitrator analyzed the language of the Agreement to determine the parties intent as to classwide arbitration. Examining six features relevant to that end, the arbitrator ultimately concluded that the Agreement permitted collective action covering Mr. Rays FLSA and state law claims.
DISH filed with the district court a Petition to Vacate Clause Construction Award, which the court denied. The court agreed with the arbitrator that he had jurisdiction to decide the issue. Although, unlike the arbitrator, the court concluded that the determination of classwide arbitrability was a "gateway issue" normally decided by
the court, it nevertheless held that the Agreement clearly and unmistakably expressed the parties intention to have the arbitrator resolve such questions. The court also held that the arbitrator did not manifestly disregard the law in interpreting the Agreement. DISH appeals.
DISH first contends that the arbitrator exceeded his powers in determining the gateway issue of jurisdiction over the arbitrability of class and collective claims. It therefore asserts that the normal standard of review usually applicable to an arbitrators decision, which is extremely deferential, does not apply to the arbitrators ultimate conclusion here that the Agreement permits classwide arbitrations. DISH also argues that even if the arbitrator did not exceed his powers, his decision manifestly disregarded the applicable law and must therefore be vacated. We address each argument in turn.
A. Class Arbitration as a Gateway Issue
We review a district courts order to vacate or enforce an arbitration award de novo. U.S. Energy Corp. v. Nukem, Inc., 400 F.3d 822, 830 (10th Cir. 2005). "In doing so, however, we give great deference to an arbitrators decision." Chevron Mining Inc. v. United Mine Workers of America, Local 1307, 648 F.3d 1151, 1154 (10th Cir. 2011) (quoting U.S. Energy, 400 F.3d at 830). Under the Federal Arbitration Act ("FAA"), vacation of an award is only proper in a few instances that include fraud, corruption, arbitrator misconduct, and arbitrator overreach. 9 U.S.C. § 10(a). Various courts have determined that vacation is also appropriate when the arbitration award violates public policy, when the arbitrator did not conduct a fundamentally fair hearing, or when an arbitrators decision is "based on a manifest disregard of the law, defined as willful inattentiveness to the governing law. " Chevron Mining, 648 F.3d at 1154 (quoting U.S. Energy, 400 F.3d at 830); see also Denver & Rio Grande W. R.R. v. Union P. R.R., 119 F.3d 847, 849 (10th Cir. 1997) (citing cases). Our powers of review have been described as "among the narrowest known to the law." Litvak Packing Co. v. United Food and Commercial Workers, Local Union No. 7, 886 F.2d 275, 276 (10th Cir. 1989). In fact, "[e]rrors in either the arbitrators factual findings or his interpretation of the law (unless that interpretation shows a manifest disregard of controlling law) do not justify review or reversal on the merits of the controversy." Chevron Mining, 648 F.3d at 1154 (quoting Denver & Rio Grande, 119 F.3d at 849).
But this level of deference only applies to disputes that the parties agreed to submit to arbitration. The Supreme Court has recognized that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Howsam, 537 U.S. at 83, 123 S.Ct. 588 (2002) (quoting United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) ). "Accordingly, the first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). In making this determination, the Court has "long recognized and enforced aliberal federal policy favoring arbitration agreements. " Howsam...
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