Fernandez v. Sierra Plastics, Inc.

• Decision Date: 16 March 2021
• Docket Number: EP-20-CV-00290-DB-ATB
• Parties: JOSE FERNANDEZ, Plaintiff, v. SIERRA PLASTICS, INC., REGENCY PLASTICS-UBLY, INC., GEMINI GROUP SERVICE, INC., Defendants.
• Court: U.S. District Court — Western District of Texas

JOSE FERNANDEZ, Plaintiff, v. SIERRA PLASTICS, INC., REGENCY PLASTICS-UBLY, INC.,GEMINI GROUP SERVICE, INC., Defendants.

EP-20-CV-00290-DB-ATB

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION

March 16, 2021

REPORT AND RECOMMENDATION OF THE MAGISTRATE JUDGE

On this day, the Court considered Defendants' "Motion to Compel Arbitration and to Abate Proceedings Pending Arbitration" ("Motion"), filed by Sierra Plastics, Inc. ("Sierra"), Regency Plastics-UBLY, Inc. ("Regency"), and Gemini Group Service, Inc. ("Gemini") (collectively "Defendants"). The matter was referred to this Court pursuant to the Standing Order re: Procedures for the Pilot Project and the Direct Assignment to Magistrate Judges of Civil Proceedings.

For the reasons set forth below, the Court RECOMMENDS that Defendants' Motion to Compel Arbitration and to Abate Proceedings Pending Arbitration be GRANTED.

I. BACKGROUND

a. Procedural Background

Plaintiff Jose Fernandez ("Plaintiff") originally filed his Complaint asserting claims for negligence and negligent hiring, supervision, training, and retention on October 14, 2020, in the 171st District Court in El Paso County, Texas, styled Jose Fernandez, Plaintiff, v. Sierra Plastics, Inc., Regency Plastics-Ubly, Inc., and Gemini Group Service, Inc; Case No. 2020-DCV-3332 ("State Court Suit"). (ECF No. 1-1, p. 2). On November 20, 2020, Defendants filed their Notice of Removal pursuant to 28 U.S.C. §§ 1332, 1441(b), and 1446 on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). (ECF No. 1, p. 1-2).

On November 30, 2020, Defendants filed their Motion seeking to "compel arbitration and abate the proceedings as required by the Arbitration Agreement and applicable law." (ECF No. 4, p. 2). After being granted an extension of time to file his response (Text Order dated December 18, 2020) and leave to exceed page limitation (ECF No. 10), Plaintiff filed his "Plaintiff's Response in Opposition to Defendants' Motion to Compel Arbitration and to Abate Proceedings Pending Arbitration" ("Response") on January 5, 2021. (ECF No. 11). Thereafter, Defendants filed their "Reply Brief in Support of Defendants' Motion to Compel Arbitration" ("Reply") on January 11, 2021. (ECF No. 13).

b. Factual Background¹

Collectively, Defendants are "in the business of manufacturing plastic parts." (ECF No. 11, p. 2); see also (ECF No. 13-1, p. 2-3) (affidavit of Alice S. Mata) ("Sierra Plastics is among three Gemini facilities that 'specialize in manufacturing custom plastic extrusions for OEM, Tier-1 automotive, lawn and garden, medical, consumer and appliance industries.'") (quoting Gemini Group's Plastic Extrusion Locations, Gemini Group, https://geminigroup.net/plastics/profile-extrusion-gpi-sp/locations-and-contact/ (last visited Mar. 16, 2021)).

Plaintiff started working as a die setter for Defendants in August 2018. (ECF No. 11, p. 3); (ECF No. 4, p. 1). As a die setter, Plaintiff's job duties included: "(1) being responsible for the die changes on stretch bending machines; (2) maintaining and caring for the dies so that they were [in] proper clean working condition; and (3) performing required operations to set-up and operate various sizes and types of machines." (ECF No. 11, p. 3-4).

At the beginning of his employment, Plaintiff signed a "Receipt and Arbitration Acknowledgement" ("Arbitration Acknowledgement") (ECF No. 4-2, p. 2) and agreed to the "Arbitration of Certain Injury Related Disputes" ("Arbitration Agreement"). (ECF No. 4, p. 1); (ECF No. 4-1, p. 2-5); (ECF No. 11, p. 4) (citing (ECF No. 11-1, p. 7-10)).

Plaintiff alleges that on or about October 31, 2018, "Plaintiff sustained an on-the-job injury." (ECF No. 11, p. 3). This on-the-job injury caused "injuries and damages suffered by Plaintiff to his back and other parts of his body." (Id.).

II. LEGAL STANDARDS

Section 2 of the Federal Arbitration Act ("FAA") provides that agreements to arbitrate are "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. Under the FAA, the court must perform a two-step inquiry to determine whether to compel a party to arbitrate. Dealer Computer Services, Inc. v. Old Colony Motors, Inc., 588 F.3d 884, 886 (5th Cir. 2009). "[T]he 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 (1985); see also Fleetwood Enterprises, Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir. 2002) ("In adjudicating a motion to compel arbitration under the Federal Arbitration Act, courts begin by determining whether the parties agreed to arbitrate the dispute."). The second step for the court to determine is "whether federal statute or policy renders the claims nonarbitrable." Dealer Computer Services, 588 F.3d at 886.

Courts divide the first step of the analysis—whether the parties agreed to arbitrate the dispute in question—into two separate determinations: "(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of thatarbitration agreement." Title v. Enron Corp., 463 F.3d 410, 418 (5th Cir. 2006) (quoting Webb v. Investacorp, 89 F.3d 252, 258 (5th Cir. 1996)); see also Dealer Computer Services, 588 F.3d at 886 ("The courts divide the first step into two more questions: whether a valid agreement to arbitrate exists and whether the dispute falls within that agreement."). Due to the "federal policy favoring arbitration," the "ambiguities as to the scope of the arbitration clause itself [should be] resolved in favor of arbitration." Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 476 (1989); see also Fleetwood Enterprises, 280 F.3d at 1073 ("In determining whether the dispute falls within the scope of the arbitration agreement, ambiguities are resolved in favor of arbitration.") (internal quotes and punctuation omitted). "However, this federal policy favoring arbitration does not apply to the determination of whether there is a valid agreement to arbitrate between the parties; instead ordinary contract principles determine who is bound." Fleetwood Enterprises, 280 F.3d at 1073 (internal quotes omitted); see also Volt Information Sciences, 489 U.S. at 478 ("[T]he FAA does not require parties to arbitrate when they have not agreed to do so.").

The Supreme Court has held that, since the FAA is merely a "policy guaranteeing the enforcement of private contractual arrangements, [courts should] look first to whether the parties agreed to arbitrate a dispute, not to general policy goals, to determine the scope of the agreement." E.E.O.C. v. Waffle House, 534 U.S. 279, 294 (2002) (internal citations omitted). Furthermore, the Court reiterated that "[i]t goes without saying that a contract cannot bind a nonparty." Id. Finally, in resolving issues regarding the existence of an agreement to arbitrate, the Fifth Circuit has held that "courts apply ordinary state-law principles that govern the formation of contracts." Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 301 (5th Cir. 2004).

III. ANALYSIS²

Plaintiff first argues that "Defendants have not met their burden to show the existence of a valid contract." (ECF No. 11, p. 5). However, Plaintiff provides no argument or authority to support the assertion that there is no agreement between Plaintiff and Defendants or that Plaintiff's claims fall outside of the Arbitration Agreement. See Title, 463 F.3d at 418 (holding that courts consider two separate determinations when deciding whether the parties agreed to arbitrate the dispute in question: "(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement.").

a. Defendants have met Their Burden to Show the Existence of a Valid Agreement

In fact, Defendants provided the Arbitration Acknowledgement signed by Plaintiff and the "Arbitration Agreement" as exhibits to their Motion. (ECF No. 4-2, p. 2); (ECF No. 4-1, p. 2-5). The Arbitration Agreement provides, in relevant part:

The employer hereby adopts a mandatory company policy requiring that the following claims or disputes must be submitted to final and binding arbitration under this Appendix: . . . any legal or equitable claim by or with respect to an employee for any form of physical or psychological damage, harm or death which relates to an accident, occupational disease, or cumulative trauma (including, but not limited to, claims of negligence or gross negligence or discrimination; [and] claims for . . . negligent hiring/training/supervision/retention . . . .

(ECF No. 4-1, p. 2) (emphasis added). The Court finds that Plaintiff's claims of "negligence" and "negligent hiring, supervision, training, or retention" are clearly covered by the Arbitration Agreement. See (ECF No. 1-1, p. 6-7).

Furthermore, the Arbitration Acknowledgement is signed by Plaintiff and provides, in relevant part:

ARBITRATION. I acknowledge that this [Summary Plan Description] includes a mandatory company policy requiring that certain claims or disputes . . . must be submitted to an arbitrator rather than a judge and jury in court. I understand that by receiving this SPD and becoming employed (or continuing my employment) with the Company . . . , I am accepting and agreeing to comply with these arbitration requirements. I understand that the Company is also accepting and agreeing to comply with these arbitration requirements.

(ECF No. 4-2, p. 2) (first emphasis in original) (second emphasis added). Although Plaintiff alleges that he "did not ever knowingly sign away [his] right to a jury trial . . . and [] would never have knowingly given up [his] right to a jury trial," the Arbitration Acknowledgement clearly states that...