Grant v. House of Blues New Orleans Rest. Corp.

• Decision Date: 27 April 2011
• Docket Number: NO. 10-3161,10-3161
• Parties: EARTHA GRANT v. HOUSE OF BLUES NEW ORLEANS RESTAURANT CORPORATION
• Court: U.S. District Court — Eastern District of Louisiana

EARTHA GRANT

v.HOUSE OF BLUES NEW ORLEANS RESTAURANT CORPORATION

NO. 10-3161

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA SECTION "K" (2)

Dated: April 27, 2011

ORDER AND REASONS ON MOTION

Plaintiff, Eartha Grant, sued her former employer, House of Blues New Orleans Restaurant Corporation ("House of Blues"), alleging race and gender discrimination and constructive discharge during her employment, all in violation of Title VII, 42 U.S.C. § 2000e et seq. Complaint, Record Doc. No. 1. House of Blues filed a Motion to Dismiss or Stay Proceedings and Compel Arbitration, arguing that Grant had agreed to submit any employment-related dispute to binding arbitration. Record Doc. No. 15. House of Blues received leave to supplement its motion with additional exhibits. Record Doc. Nos. 20, 22.

Grant filed a timely opposition memorandum, supported by her own affidavit. Record Doc. No. 36. House of Blues received leave to file a reply memorandum. Record Doc. Nos. 37, 38, 39. In its reply memorandum, defendant pointed out that plaintiff's affidavit, Record Doc. No. 36-1, did not contain the handwritten signatures of Grant andthe notary public who notarized the affidavit, but contains only the typed notations on the signature lines of "/s/ Eartha Grant" and "/s/ John O. Pieksen, Jr." Thus, by order dated April 13, 2011, I required plaintiff to submit a properly signed and notarized affidavit into the record. Record Doc. No. 40. Plaintiff has done so. Record Doc. No. 41. Therefore, I have considered her affidavit.

This matter was referred to the undersigned magistrate judge for all proceedings and entry of judgment in accordance with 28 U.S.C. § 636(c) upon written consent of all parties. Record Doc. No. 32.

I. APPLICABLE PROVISIONS OF THE FEDERAL ARBITRATION ACT

House of Blues bases its Motion to Dismiss or Stay Proceedings and Compel Arbitration on Section 3 of the Federal Arbitration Act ("the Act"), which provides that

[i]f any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3 (emphasis added).

Section 2 of the Act

makes written arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of acontract." That provision creates substantive federal law regarding the enforceability of arbitration agreements, requiring courts "to place such agreements upon the same footing as other contracts." Section 3, in turn, allows litigants already in federal court to invoke agreements made enforceable by § 2. That provision requires the court, "on application of one of the parties," to stay the action if it involves an "issue referable to arbitration under an agreement in writing."

Arthur Andersen LLP v. Carlisle, 129 S. Ct. 1896, 1901-02 (2009) (quoting 9 U.S.C. §§ 2, 3; Volt Info. Sci., Inc. v. Bd. of Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 478 (1989)) (footnote omitted).

Thus, "arbitration is simply a matter of contract between the parties; it is a way to resolve those disputes-but only those disputes-that the parties have agreed to submit to arbitration." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995) (citations omitted); see also id. at 945 ("Arbitration Act's basic purpose is to ensure judicial enforcement of privately made agreements to arbitrate") (quotation omitted).

"The [Act] does not require arbitration unless the parties to a dispute have agreed to refer it to arbitration. Likewise, the mandatory stay provision of the [Act] does not apply to those who are not contractually bound by the arbitration agreement." Todd v. S.S. Mut. Underwriting Ass'n (Bermuda) Ltd., 601 F.3d 329, 334 (5th Cir. 2010) (quotation omitted). "[A] party who has not agreed to arbitrate will normally have a right to a court's decision about the merits of its dispute." First Options, 514 U.S. at 942.

Section 3 of the Act permits a party to file a motion to stay an action, while Section 206 provides that the court may compel arbitration. See 9 U.S.C. § 206 ("A court having jurisdiction under this chapter may direct that arbitration be held in accordance with the agreement at any place therein provided for, whether that place is within or without the United States.").

II. STANDARDS OF REVIEW

Federal Rule of Civil Procedure 81(a)(6)(B) provides that "[t]hese rules, to the extent applicable, govern proceedings under the following laws, except as these laws provide other procedures:... (B) 9 U.S.C., relating to arbitration..." Fed. R. Civ. P. 81(a)(6)(B). Neither Section 2 nor Section 3 of the Act provides procedural standards of review for a motion to dismiss or stay pending arbitration. The parties in their motion papers have not addressed the procedural standard that this court should apply in reviewing defendant's Motion to Dismiss or Stay Proceedings and Compel Arbitration. My research has not located any Fifth Circuit case that discusses the appropriate standard. SeeRain CII Carbon LLC v. ConocoPhillips Co., No. 09-4169, 2010 WL 148292, at *3 (E.D. La. Jan. 11, 2010) (Berrigan, J.) ("As both parties acknowledge, the 5th Circuit has never discussed the appropriate standard for a district court to apply when considering a motion to stay or compel arbitration.").

Although House of Blues partially styles its motion as a "motion to dismiss," defendant does not cite Fed. R. Civ. P. 12(b) as the basis for its motion. Arbitrability is not listed as one of the defenses that can be presented through a motion to dismiss under Rule 12(b). When a district court has denied a motion to stay brought under Section 3 of the Act, "nothing prevents that party from then filing a Rule 12 motion to dismiss." Conrad v. Phone Directories Co., 585 F.3d 1376, 1383 n.2 (10th Cir. 2009) (citing Fed. R. Civ. P. 12(g)(2), 12(h)(1); 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1386 (3d ed. 2004)); compare Bombardier Corp. v. Nat'l R.R. Passenger Corp., 333 F.3d 250, 252, 253 (D.C. Cir. 2003) (Defendant's motion to dismiss plaintiff's "claim pursuant to Rule 12(b)(6), on the grounds that [plaintiff] had not exhausted the contract's dispute resolution procedures," without arguing expressly that the contract contained an arbitration clause enforceable under the Act, "was neither a motion to compel arbitration under 9 U.S.C. § 4 nor a motion to stay arbitration under 9 U.S.C. § 3.").

In the instant case, House of Blues does not mention Rule 12(b) as a basis for its requested dismissal of this action and "it is plainly apparent from the four corners of the motion that the movant seeks only the relief provided for in the [Act], rather than any other judicially-provided remedy." Conrad, 585 F.3d at 1385; see also Fit Tech, Inc. v. Bally Total Fitness Holding Corp., 374 F.3d 1, 6 (1st Cir. 2004) (defendant "clearly isinvoking the [arbitration] remedy, even if a stay rather than dismissal ensues"). Thus, the Rule 12(b) standard of review does not apply to defendant's instant motion, despite its partial style as a "motion to dismiss."

Courts in other circuits "use a summary judgment standard, compelling arbitration only where there is 'no genuine issue of fact concerning the formation of the agreement' to arbitrate." Prevost v. Islands Mech. Contractor, Inc., No. 08-cv-00110, 2010 WL 2772662, at *2 (D.V.I. July 13, 2010) (quoting Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 159 (3d Cir. 2009)) (internal quotation omitted); accord Rain CII Carbon LLC, 2010 WL 148292, at *3 (citing Clutts v. Dillard's, Inc., 484 F. Supp. 2d 1222, 1224 (D. Kan. 2007)).

The courts that use the summary judgment standard of Fed. R. Civ. P. 56 have found it appropriate "because the district court's order compelling arbitration is in effect a summary disposition of the issue of whether or not there had been a meeting of the minds on the agreement to arbitrate." Century Indem. Co. v. Certain Underwriters at Lloyd's, 584 F.3d 513, 528, 532 (3rd Cir. 2009) (quotation omitted); accord Aliron Int'l, Inc. v. Cherokee Nation Indus., Inc., 531 F.3d 863, 865 (D.C. Cir. 2008); Magnolia Capital Advisors, Inc. v. Bear Stearns & Co., 272 F. App'x 782, 785-86 (11th Cir. 2008); Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003); Tinder v. Pinkerton Sec., 305 F.3d 728, 735 (7th Cir. 2002); see also Gibson v. Wal-Mart Stores, Inc., 181 F.3d 1163, 1166 (10th Cir. 1999) (reviewing district court's grant of motion to compel arbitration under summary judgment standard when parties agreed that the standard applied); cf. Prescott Architects, Inc. v. Lexington Ins. Co., 638 F. Supp. 2d 1317, 1324 n.14 (N.D. Fla. 2009) (stating that Eleventh Circuit has not adopted summary judgment standard for motions to compel arbitration); Clutts, 484 F. Supp. 2d at 1224 ("Although the Tenth Circuit has not precisely addressed this issue, there is no reason to believe that it would apply a different legal standard.") (citing Gibson, 181 F.3d at 1166; Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1283 (10th Cir. 1997)).

Under the summary judgment standard, the "party seeking to stay the case in favor of arbitration bears an initial burden of demonstrating that an agreement to arbitrate was made.... This burden does not require the moving party to show initially that the agreement would be enforceable, merely that one existed." Hines v. Overstock.com, Inc., 380 F. App'x 22, 24 (2d Cir. 2010) (citations omitted).

Both parties in the instant case have submitted sworn...