CPK/Kupper Parker Communications v. HGL/L. Gail Hart

• Decision Date: 31 July 2001
• Citation: 51 S.W.3d 881
• Parties: (Mo.App. E.D. 2001) CPK/Kupper Parker Communications, Inc., <A HREF="#fr1-1" name="fn1-1">1 Respondent v. HGL/L. Gail Hart, Appellant. ED78661 0
• Court: Missouri Court of Appeals

51 S.W.3d 881 (Mo.App. E.D. 2001)

CPK/Kupper Parker Communications, Inc.,¹ Respondent v. HGL/L. Gail Hart, Appellant.

ED78661

Missouri Court of Appeals Eastern District

07/31/2001

Appeal From: Circuit Court of St. Louis County, Hon. Patrick Clifford

Counsel for Appellant: David O. Kreuter

Counsel for Respondent: Patrick R. Gunn and Sharon R. Wice

Opinion Summary:

Kupper Parker Communications terminated the employment of L. Gail Hart, who then filed charges of discrimination against Kupper Parker under Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Missouri Human Rights Act. Because Hart signed an agreement to arbitrate, her complaint was referred to arbitration. During those proceedings, the arbitrator denied Kupper Parker Communications' request to depose 20 witnesses. Kupper Parker petitioned the circuit court to stay the arbitration and to determine the extent of deposition discovery permitted under the agreement to arbitrate. The circuit court stayed the arbitration until Kupper Parker could take "such depositions as it shall feel necessary." Hart appeals, arguing that the circuit court is without jurisdiction to overturn an arbitrator's denial of a discovery request.

Division Two holds: (1) The Agreement to Arbitrate provided that the arbitrator shall establish the extent of and schedule for discovery, and rule on all discovery disputes. (2) Neither Section 435.380(1) nor Group Health Plan, Inc. v. BJC Health Systems, Inc., 30 S.W.3d 198 (Mo.App. E.D. 2000) permit the circuit court to take jurisdiction over an arbitration case and reverse an arbitrator's denial of a discovery request.

Ahrens, P.J., and Crandall, Jr., J., concur.

James R. Dowd

This is an arbitration case. The arbitrator denied Kupper Parker Communications' request to depose 20 witnesses and Kupper Parker petitioned the circuit court to stay the arbitration and to determine the extent of deposition discovery permitted under the agreement to arbitrate. The circuit court stayed the arbitration until Kupper Parker could take "such depositions as it shall feel necessary." L. Gail Hart appeals, arguing that the circuit court is without jurisdiction to overturn an arbitrator's denial of a discovery request. We reverse.

Hart was an employee of Kupper Parker. On January 15, 1993, Kupper Parker required her to sign a Grievance Procedure and Agreement to Arbitrate "in consideration of . . . continued employment." According to that Agreement, "all disputes, claims, charges or grievances of whatever nature . . . between the parties shall be finally resolved by arbitration . . ."

On March 2, 1994, Kupper Parker terminated the employment of Hart. On August 12, 1994, Hart timely filed charges of discrimination with the Equal Employment Opportunity Commission and the Missouri Commission on Human Rights. Hart alleged that Kupper Parker discriminated against her on the basis of her age, sex and disability, in violation of Title VII, the Age Discrimination in Employment Act, the Americans with Disability Act, and the Missouri Human Rights Act.

Pursuant to the Agreement to Arbitrate, the matter was referred to arbitration. During the arbitration, Hart identified twenty-two potential witnesses. Kupper Parker sought subpoenas to depose all of these witnesses, but the arbitrator ruled that the Agreement to Arbitrate limited each party to three depositions unless the other party agreed to more. Hart did not consent to more than three depositions.

On May 27, 1999, Kupper Parker filed a petition for declaratory judgment in the Circuit Court of St. Louis County, requesting that the court stay all proceedings in the arbitration and determine the extent of deposition discovery permitted by the arbitration agreement. Hart filed her answer on June 9, 1999. On October 6, 1999, Hart filed a motion for judgment on the pleadings, which the court denied on December 9, 1999. On May 22, 2000, Kupper Parker filed a motion for summary judgment. On June 26, 2000, Hart filed her response to Kupper Parker's motion for summary judgment and filed her own motion for summary judgment. On August 10, 2000 the court denied Hart's motion and granted summary judgment in favor of Kupper Parker. In its Order the court allowed Kupper Parker to take all the depositions it felt necessary to defend against Hart's claims of discrimination.

Hart then requested that the arbitrator schedule a hearing "as soon as practical." In response, Kupper Parker filed a motion in the Circuit Court on September 6, 2000, to amend judgment and to stay the arbitration until Kupper Parker could depose the twenty-two individuals Hart named as possible witnesses. The court granted this motion on October 10, 2000, stating:

This Court's Judgment of August 10, 2000 is hereby amended to provide that Plaintiff [Kupper Parker] is authorized to take such depositions as it shall feel necessary in defense of Defendant's [Hart's] claims, the scheduling of such depositions to be within a time frame reasonably determined by Plaintiff's counsel, considering the schedules of the parties and their counsel as well as the schedules of the prospective witnesses. The parties shall not seek further proceedings before the American Arbitration Association until discovery shall be verified as completed or until further order of this Court.

Hart appeals.

Missouri has adopted the Uniform Arbitration Act (UAA),² which is fashioned after the Federal Arbitration Act (FAA).³ Group Health Plan, Inc. v. BJC Health Systems, Inc., 30 S.W.3d 198, 202 (Mo.App. E.D. 2000). The FAA and Missouri's Arbitration Act are substantially similar. Cairo v. Bodine, 685 S.W.2d 253, 257 (Mo.App. 1985). Section 2 of the FAA requires state courts to enforce written agreements to arbitrate when the transaction involves or affects interstate commerce, unless there is a basis under state law or in equity that is applicable to all other contracts that renders the agreement revocable or unenforceable. The FAA thus implements a national policy favoring arbitration and withdraws a state's power to deny arbitration when the litigation involves interstate commerce. See Southland Corp. v. Keating, 465 U.S. 1, 10 (1984); 9 U.S.C. Section 2.

Congress's express goal in passing the FAA was to offer parties a way to avoid "the delay and expense of litigation"⁴ and to "minimize[] hostility and . . . disrupti[on] of ongoing and future business dealings among the parties."⁵ Proponents claim other advantages of arbitration are that it is less complex and reduces the burden on the court system.

The procedures under the Rules of the American Arbitration Association are informal by design. An ordinary letter summarizing the claim and stating the relief sought typically serves as a demand for arbitration. No responsive pleading is required. The arbitrator, often selected by the parties themselves, is expected to have expertise in the subject matter of the controversy. In order to speed the process and to reduce expenses certain constitutional, statutory and court created rights have been sacrificed. One of these is the right to depose every witness endorsed by one's opponent. Absent a compelling reason, arbitrators ordinarily direct limited document disclosure and deny requests for interrogatories and depositions. The hearing is marked by informality. Rules of evidence do not apply unless the arbitrators choose to enforce them. And a stenographic record of the hearing is kept only if one of the parties makes arrangement for a court reporter.

In order to secure the advantages of arbitration and to preserve arbitration as a substitute for, and not as a mere prelude to, litigation, judicial oversight of arbitration is strictly limited. Sheffield Assembly of God Church, Inc. v. American Ins. Co., 870 S.W.2d 926, 929 (Mo.App. W.D. 1994); Eljer Mfg., Inc., v. Kowin Dev. Corp., 14 F.3d 1250 (7th Cir. 1994). The scope of judicial review of an arbitration award "is among the narrowest known to the law." Litvak Packing Co. v. United Food & Commercial Workers, Local Union No. 7, 886 F.2d 275, 276 (10th Cir. 1989). This is a policy decision made by the U.S. Congress and by the Missouri General Assembly. 9 U.S.C. Sections 1 -16; Sections 435.350 435.470 RSMo 1994. Missouri has limited the scope of judicial review of arbitration awards by statute since 1835. Revised Statutes of Missouri at 70-74 (1835).

The U.S. Supreme Court in United Paperworkers International Union, AFL-CIO v. Misco, Inc., 484 U.S. 29 (1987) makes clear that it is not the function of courts to supervise arbitrators. In United Paperworkers the court directed that:

where the contract provides grievance and arbitration procedures, those procedures must first be exhausted and courts must order resort to the private settlement mechanisms without dealing with the merits of the dispute. Because the parties have contracted to have disputes settled by an arbitrator chosen by them rather than by a judge, it is the arbitrator's view of the facts and of the meaning of the contract that they have agreed to accept. Courts thus do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts.

Id. at 38.

There is nothing in either the FAA or the UAA that suggests a court has any power to order or prohibit discovery in an arbitration proceeding. The only statutory reference to the courts' power over arbitration discovery is the specific grant of power to the courts to enforce subpoenas issued by arbitrators found in Section 435.380.1 RSMo. That statute provides:

The arbitrators may issue or cause to be issued subpoenas for the attendance of witnesses and for the production of books, records, documents and other evidence, and shall have the power to administer oaths. Subpoenas so issued shall be served, and upon application to the court by a party or the arbitrators, enforced, in the manner provided...