Anderson v. Va. Coll., LLC
| Decision Date | 13 September 2012 |
| Docket Number | CIVIL ACTION NO. 3:12CV503TSL-MTP |
| Parties | TIFFENY ANDERSON; DIANNA BOND; VERONICA BOYD; CRYSTAL LARKIN; SHARONDA NIXON; BARBARA TURNER; SHIRLEY WASHINGTON, TANKIA AMOS, DIANNA BOND, JOSEPHINE CAMERON, TIFFANY PERKINS AND ROSALYN REESE PLAINTIFFS v. VIRGINIA COLLEGE, LLC; EDUCATION CORPORATION OF AMERICA; EDUCATION CORPORATION OF AMERICA, INC.; DEFENDANT |
| Court | U.S. District Court — Southern District of Mississippi |
This cause is before the court on the motion of defendants Virginia College, LLC, Education Corporation of America and Education Corporation of America, Inc. (collectively Virginia College) to compel arbitration and stay proceedings pursuant to Section 4 of the Federal Arbitration Act (FAA), 9 U.S.C. § 4, or, in the alternative, to dismiss plaintiffs' federal claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Plaintiffs Tiffeny Anderson, Dianna Bond, Veronica Boyd, Crystal Larkin, Sharonda Nixon, Barbara Turner, Shirley Washington, Tanika Amos, Dianna Bond, Josephine Cameron, Tiffany Perkins and Rosalyn Reese have responded in opposition to the motion and the court, having considered the memoranda of authorities, together withattachments, submitted by the parties, concludes that the motion to compel arbitration and stay proceedings is well taken and should be granted.
According to the complaint, all the plaintiffs herein were at some point enrolled in the Medical Assistant program at Virginia College in Jackson, Mississippi. In this case, they have sued Virginia College alleging, among other things, that it made fraudulent misrepresentations "about the educational quality and career advancement opportunities provided by the school," and that it engaged in a pattern and practice of specifically targeting African-Americans and women with this fraudulent scheme. Plaintiffs allege that as a result of defendants' scheme, they are now burdened with significant student loan debt and yet due to manifest deficiencies in their educational instruction at Virginia College, they do not possess the necessary qualifications for employment in their chosen fields. In short, they are now deeply in debt and have worthless degrees from Virginia College.
Plaintiffs' complaint includes claims for violation of the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq.; violation of Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq.; fraud in the inducement of the contract; negligence; negligent hiring, retention, supervision, and control; gross negligence; negligence per se; fraudulent misrepresentation; breach of contract; breach of fiduciary duty; breach of theimplied covenants of good faith and fair dealing; and fraud. As relief, plaintiffs seek injunctive relief, declaratory relief, economic damages, non-economic damages, punitive damages, and attorney's fees and costs.
Defendants' motion is based on an arbitration provision included in the Enrollment and Tuition Agreement executed by each plaintiff prior to her enrollment at Virginia College. The provision states:
ARBITRATION: Any claim, controversy or dispute arising out of or relating to this Contract or any alleged breach, violation or default of this Contract, together with all other claims, controversies or disputes of any nature whatsoever arising out of or in relation to the Student's enrollment and participation in courses at the College (provided such dispute is not resolved by negotiation between the parties within thirty days after notice of such alleged or threatened breach, violation or default by either party), shall, upon notice by either party to the other party, be resolved and settled by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. Such arbitration shall take place in Birmingham, Alabama. The arbitrator is authorized to fashion remedies, which make the prevailing party whole for the demonstrated losses incurred, including determining that the Student should be enjoined from certain actions or be compelled to undertake certain actions, provided, however, that the arbitrator shall have no authority to award punitive or other damages (including without limitation consequential or incidental damages or damages for lost profits or lost opportunities) not measured by the prevailing party's actual compensatory damages. The arbitrator's decision and award shall be final, binding on the parties, and non-appealable, and may be entered in any court of competent jurisdiction to enforce it. The parties shall, respectively, pay any expenses incurred as American Arbitration Association fees, administrative fees, arbitrator fees, mediation fees,hearing fees, and postponement/cancellation fees in accordance with the rules and procedures adopted by the American Arbitration Association. Notwithstanding the provisions of this Paragraph, in the event a breach, violation or default of this Contract (or any of its terms) is alleged, the College shall have the option to seek injunctive relief in any court of competent jurisdiction barring further breach or violation of this Contract pending arbitration. BY SIGNING THIS CONTRACT, THE STUDENT (AND, IF APPLICABLE, HIS/HER PARENT OR LEGAL GUARDIAN) GIVE UP THE RIGHT TO GO TO COURT AND THE RIGHT TO TRIAL BY JURY AND EXPRESSLY ACKNOWLEDGE AND UNDERSTAND THAT HIS, HER OR THEIR RIGHTS AND REMEDIES WILL BE DETERMINED BY AN ARBITRATOR AND NOT BY A JUDGE OR JURY. THE PARTIES UNDERSTAND THAT A DETERMINATION BY AN ARBITRATOR IS AS ENFORCEABLE AS ANY ORDER AND IS SUBJECT TO VERY LIMITED REVIEW BY A COURT.
"The 'principal purpose' of the FAA is to "ensur[e] that private arbitration agreements are enforced according to their terms.'" AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1748 (U.S. 2011) (quoting Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478, 109 S. Ct. 1248, 1255 (1989)). Section 2 of the FAA provides that written agreements to arbitrate controversies arising out of an existing contract "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Section 4 requires courts to compel arbitration "in accordance with the terms of the agreement" upon the motion of either party to the agreement.
A district court adjudicating a motion to compel arbitration must engage in a two-step process. Hadnot v. Bay, Ltd., 344 F.3d 474, 476 (5th Cir. 2003). Brown v. Pacific Life Ins. Co., 462 F.3d 384, 397 (5th Cir. 2006) (internal citations omitted). "The FAA expresses a strong national policy in favoring arbitration of disputes, and all doubts concerning arbitrability of claims should be resolved in favor of arbitration." Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002). "The party resisting arbitration has the burden of demonstrating why arbitration is not appropriate." Kisner v. Bud's Mobile Homes, 512 F. Supp. 2d 549, 556-557 (S.D. Miss. 2007) (citing Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 81, 121 S. Ct. 513, 517, 148 L. Ed. 2d 373 (2000)).
Defendants maintain in their motion that the arbitration provision in the Enrollment and Tuition Agreement is valid, and that the claims asserted in plaintiffs' complaint fall within the scope of that provision so that defendants are entitled to an order compelling arbitration according to the terms of the agreement. In their response memorandum, plaintiffs "concede that there is a valid arbitration agreement between themselves andVC."1 However, they contend their federal claims are beyond the scope of the arbitration agreement and further, that there are external constraints that preclude enforcement of the arbitration agreement as to their federal claims.2
Plaintiffs base their argument that their (federal) claims are outside the scope of the arbitration provisions is based entirely on Rogers-Dabbs Chevrolet-Hummer, Inc. v. Blakeney, 950 So. 2d 170 (Miss. 2007). The plaintiff in Blakeney signed an arbitration agreement in connection with his purchase of a vehiclefrom Rogers-Dabbs Chevrolet-Hummer. Subsequent to his purchase, employees of Rogers-Dabbs stole his identity and used his title to forge fraudulent titles for stolen vehicles which were sold to unsuspecting buyers. The Mississippi Supreme Court held that Blakeney's claim of civil fraud was not subject to the arbitration agreement in the sales contract as such claim was "totally outside the formation of the agreement" and thus outside the scope of the arbitration agreement. Blakeney, 950 So. 2d at 178, n.9.
Plaintiffs herein argue that just as Blakeney was unaware at the time he executed the arbitration agreement of the fraud perpetrated by Roger-Dabbs' employees and thus was not bound to arbitrate his claims relating to such fraud, they likewise were unaware when they executed the Enrollment and Tuition Agreements that they had been targeted for defendants' predatory fraudulent scheme because of their race, African-American, and their gender, female.3 In other words, plaintiffs reason that since they had noknowledge of defendants' discriminatory fraudulent scheme, then they could not have intended that a claim for such alleged violation of their civil rights would be subject to the arbitration agreement.
As plaintiffs have clearly noted, the court in Blakeney did observe that Blakeney was "presumedly totally unaware" at the time he executed the arbitration agreement that he would fall victim to...
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...as an argument that her claims are outside the Arbitration Clauses' scope. See, e.g., Anderson v. Va. College, LLC, No. 3:12CV503TSL-MTP, 2012 WL 4052198, at *3 & n.3 (S.D. Miss. Sept. 13, 2012) (treating plaintiffs' argument that there was no mutual assent to submit their civil rights clai......