Biotechpharma, LLC v. Ludwig & Robinson, PLLC

• Decision Date: 04 September 2014
• Docket Number: No. 13–CV–546.,13–CV–546.
• Citation: 98 A.3d 986
• Court: D.C. Court of Appeals
• Parties: BIOTECHPHARMA, LLC, et al., Appellants, v. LUDWIG & ROBINSON, PLLC, Appellee.

98 A.3d 986

BIOTECHPHARMA, LLC, et al., Appellants,

v.LUDWIG & ROBINSON, PLLC, Appellee.

No. 13–CV–546.

District of Columbia Court of Appeals.

Argued Oct. 31, 2013.

Decided Sept. 4, 2014.

Albert Wilson, Jr., Washington, DC, for appellants.

Robert W. Ludwig, with whom Salvatore Scanio, James E. Tompert, Washington, DC, and W. Clifton Holmes were on the brief, for appellee.

Irvin B. Nathan, Attorney General for the District of Columbia, Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and James C. McKay, Jr., Senior Assistant Attorney General, filed a brief for the District of Columbia, amicus curiae, in support of this court's jurisdiction over the present appeal.

Before FISHER and BLACKBURNE–RIGSBY, Associate Judges, and KING, Senior Judge.

FISHER, Associate Judge:

Appellants—BiotechPharma, LLC; Converting Biophile Laboratories, Inc.; and Dr. Raouf Albert Guirguis (collectively “BTP”)—are former clients of appellee Ludwig & Robinson, PLLC (“L & R”), a law firm. L & R sued BTP to collect unpaid legal fees, and BTP moved to stay the litigation and compel arbitration. After the trial court denied the motion, BTP brought this interlocutory appeal, arguing mainly that District of Columbia Bar Rule XIII ¹ obligates L & R to arbitrate the fee dispute. We agree with BTP, reverse the trial court's order, and remand the case with instructions to compel arbitration.

I. Procedural and Factual Background

BTP, a biotechnology firm, retained L & R as counsel in March 2011 to help resolve a trade secret dispute. The dispute was settled in May 2012, L & R having billed BTP on a monthly basis during the course of its representation. By June 2012 L & R claimed that BTP owed approximately $1.7 million in outstanding legal fees, disbursements, and expenses. In January 2013 L & R brought suit to collect its fees.

Several weeks later, BTP responded to the complaint by filing a motion to stay the trial court proceedings and compel arbitration. In addition to claiming that L & R had expressly agreed to arbitrate the fee dispute, BTP argued that a binding agreement to arbitrate had been formed by operation of law. BTP cited Rule 8 of the D.C. Bar's Attorney/Client Arbitration Board (“ACAB”), which states that if a client files a petition to arbitrate a fee dispute with a lawyer, “the lawyer is deemed to have agreed to arbitrate.” Although it was not mentioned in the trial court, D.C. Bar Rule XIII similarly provides that

[a]n attorney subject to the disciplinary jurisdiction of [the District of Columbia Court of Appeals] shall be deemed to have agreed to arbitrate disputes over fees for legal services ... when such arbitration is requested by a present or former client, ... if a substantial portion of the services were performed by the attorney in the District of Columbia....

L & R raised several arguments opposing BTP's motion to stay litigation and compel arbitration, although the firm had already acknowledged in its complaint that it “maintains its office and performed work related to this” matter in the District of Columbia. Ultimately, the trial court denied BTP's motion without clearly explaining why. BTP now appeals from that order.

II. Analysis

Before reaching the merits of BTP's appeal, we first address a jurisdictional issue raised by L & R. We then consider whether the parties to this case had an enforceable arbitration agreement, and we conclude that such an agreement existed pursuant to D.C. Bar Rule XIII. Finally, we treat (and reject) L & R's claims that Rule XIII is unconstitutional and that this court exceeded its authority by promulgating it.

A. Jurisdiction

L & R argues that we lack jurisdiction to hear this interlocutory appeal, despite a provision of the Revised Uniform Arbitration Act (“RUAA”) that states: “An appeal may be taken from ... [a]n order denying or granting a motion to compel arbitration.” D.C.Code § 16–4427(a) (2012 Repl.). According to L & R, the RUAA cannot serve as our jurisdictional predicate because it violates the Home Rule Act, which prohibits the Council of the District of Columbia from passing a law “with respect to any provision of Title 11 (relating to organization and jurisdiction of the District of Columbia courts).” D.C.Code § 1–206.02(a)(4) (2012 Repl.). Among other things, Title 11 gives this court jurisdiction over appeals from “final orders and judgments of the Superior Court” and interlocutory orders “refusing ... injunctions.” D.C.Code § 11–721(a) (2012 Repl.). L & R argues that orders denying motions to compel arbitration are not orders “refusing ... injunctions,” nor do they qualify as appealable orders under any other provision of Title 11. Consequently, L & R asserts that the RUAA has impermissibly expanded this court's jurisdiction, thereby violating the Home Rule Act.

We disagree for two principal reasons. First, for more than twenty years, this court has routinely exercised jurisdiction over the type of appeal presented here. See Giron v. Dodds, 35 A.3d 433, 436–37 (D.C.2012); 2200 M St. LLC v. Mackell, 940 A.2d 143, 147 n. 2 (D.C.2007); Nat'l Trade Prod. v. Info. Dev., 728 A.2d 106, 109 (D.C.1999); Benefits Commc'ns Corp. v. Klieforth, 642 A.2d 1299, 1301 n. 10 (D.C.1994); Friend v. Friend, 609 A.2d 1137, 1139 n. 5 (D.C.1992); Hercules & Co., Ltd. v. Beltway Carpet Serv., Inc., 592 A.2d 1069, 1071–72 (D.C.1991). In doing so, we have regularly cited either the RUAA or its predecessor, the Uniform Arbitration Act (“UAA”),² as a proper basis for jurisdiction. See, e.g., Friend, 609 A.2d at 1139 n. 5 (applying the UAA); Giron, 35 A.3d at 436–37 & n. 1 (applying the RUAA). This history evinces our long-held premise that interlocutory appeals from orders denying motions to compel arbitration fit comfortably within our jurisdiction. That premise, which has become part of our jurisprudence, has neither threatened our independence nor otherwise proven unworkable, but L & R's position would require us to abandon it.³

Even if we set aside this extensive history (indeed, even if we set aside the RUAA and the UAA altogether), a second consideration supports our jurisdiction here. This court's 1981 decision in Brandon v. Hines involved an arbitration agreement not subject to the UAA, and we nevertheless concluded that “denials—but not grants—of stays of litigation pending arbitration are appealable interlocutory orders.” ⁴439 A.2d 496, 507 (D.C.1981). Several years later, in Hercules & Co., Ltd. v. Shama Rest. Corp., this court reaffirmed Brandon's rule and explained that it “will remain the law of the District of Columbia unless and until it is reconsidered en banc or modified by statute.” 566 A.2d 31, 38 (D.C.1989).

Applying Brandon's rule to this case resolves the concern L & R raises regarding the Home Rule Act, for if we may exercise jurisdiction pursuant to the terms of Title 11, then the RUAA's provision for interlocutory appeals works no change to this court's jurisdiction (at least, that is, with respect to orders denying motions to compel arbitration). See Bank of Am. v. District of Columbia, 80 A.3d 650, 660–61 (D.C.2013) (relying on Brandon and recognizing that “[t]his court has exercised jurisdiction of an appeal from an order denying a motion to compel arbitration, concluding that it is a final order, appealable pursuant to D.C.Code § 11–721(a)(1)”).

L & R argues that Brandon was incorrect at the time it was decided because it overlooked binding precedent in John Thompson Beacon Windows, Ltd. v. Ferro, Inc., 232 F.2d 366 (D.C.Cir.1956). However, the John Thompson court dealt primarily with the finality of an order in an independent proceeding. ⁵Id. at 366–69. By contrast, the Brandon court focused carefully on whether an order refusing to stay ongoing litigation pending arbitration is appealable as an interlocutory order refusing an injunction. 439 A.2d at 497, 500–09 (analyzing D.C.Code § 11–721). Consequently, John Thompson did not control Brandon and does not control here. See Parker v. K & L Gates, LLP, 76 A.3d 859, 864 n. 3 (D.C.2013) (“Because this case arises in the context of an independent proceeding, we have no occasion to consider the appealability of orders compelling arbitration in other contexts.”).

In summary, Brandon and Hercules remain binding authority and apply to this case. Moreover, the result Brandon commands here is consistent with the long line of cases in which we have exercised jurisdiction over appeals like this one. We have no reason (and, in fact, no discretion) to depart from our precedent. Having determined that we have jurisdiction to decide this appeal, we now turn to the merits of BTP's claim.

B. L & R's Agreement to Arbitrate

BTP argues that the trial court erred in denying its motion to stay litigation and compel arbitration. Because a trial court must grant such a motion where a valid arbitration agreement exists, seeD.C.Code § 16–4407(b) (2012 Repl.), the central question before us is whether L & R and BTP had such an agreement. ⁶ This is a question of law that we review de novo. Giron, 35 A.3d at 437. The relevant facts are not in dispute.

1. Was There an Express Agreement to Arbitrate?

BTP suggests that because arbitration agreements are “irrevocable” under the RUAA, emails from L & R communicating its willingness to arbitrate were immediately binding. We disagree. Mere offers to arbitrate are not irrevocable, and the record demonstrates that L & R's first offer to arbitrate was not accepted by BTP. L & R's second offer was conditioned on ACAB's acceptance of BTP's petition, and L & R revoked this conditional offer long before BTP filed such a petition. Consequently, no express agreement to arbitrate was ever formed between the parties.⁷

2. Was There an Implied Agreement to Arbitrate?

BTP maintains, in the alternative, that an agreement was formed by operation of law when it (the client) requested arbitration.

a. Was This Claim Preserved?

When raising this claim before the trial court, BTP...