Isernia v. Danville Reg'l Med. Ctr.

• Decision Date: 06 September 2022
• Docket Number: Civil Action 4:22-cv-00022
• Parties: JAMES MICHAEL ISERNIA, Plaintiff, v. DANVILLE REGIONAL MEDICAL CENTER, LLC, et al., Defendants.
• Court: U.S. District Court — Western District of Virginia

JAMES MICHAEL ISERNIA, Plaintiff, v. DANVILLE REGIONAL MEDICAL CENTER, LLC, et al., Defendants.

Civil Action No. 4:22-cv-00022

United States District Court, W.D. Virginia, Danville Division

September 6, 2022

MEMORANDUM OPINION

Hon Thomas T. Cullen United States District Judge

This case is before the court on Plaintiff Dr. James Michael Isernia's Rule 54(b) motion for reconsideration. (ECF No 26.) A district court's interlocutory “order or other decision” “may be revised at any time before entry of a judgment” to correct a “clear error causing manifest injustice.” See Fed.R.Civ.P. 54(b); U.S. Tobacco Coop. v. Big S Wholesale of Va., LLC., 899 F.3d 236, 257 (4th Cir. 2018). For the reasons explained below, the court will deny the motion.

I.

Dr. Isernia practiced medicine with Martinsville Physician Practices, LLC (“MPP”). (See Compl. ¶ 5 [ECF No. 1].) He and MPP entered a written employment agreement with each other, and this agreement included an arbitration provision. (See ECF No. 6-1, at 10.) Specifically, Dr. Isernia agreed to arbitrate “any dispute, breach, or other claim arising out of or related to this Agreement” “in accordance with [the American Health Lawyers Association's (“AHLA”)] rules.” (Id.)

In addition to MPP, Dr. Isernia also practiced with Defendant Danville Regional Medical Center (“DRMC”). DRMC eventually fired Dr. Isernia, and the parties dispute why. Dr. Isernia alleges that DRMC fired him for complaining about staffing decisions. (Compl. ¶¶ 15-16.) DRMC claims it fired Dr. Isernia for violating its rules about prescribing opioids. (Defs.' Mem. Supp. Mot. Dismiss and Compel Arbitration at 2 n.4 [ECF No. 6].)

In response to his termination, Dr. Isernia sued DRMC (and another healthcare entity, Defendant HSCGP, LLC (“HSCGP”)) for defamation per se, tortious interference, and retaliatory discharge in violation of Virginia Code § 40.1-27.3. (Compl. ¶¶ 39-79.) Those companies have moved to compel arbitration on these matters under Dr. Isernia's arbitration provision with MPP. (See ECF No. 5.) The question before the court is whether Dr. Isernia's arbitration provision requires an arbitrator to decide whether the defendants-neither of which is a party to that agreement-can enforce it against Dr. Isernia.

The court has already addressed this issue once. (See ECF No. 23 (“First Mem. Op.”).) It reasoned that parties can contract to have arbitrators decide certain issues, including issues of arbitrability, so long as they do so clearly and unmistakably. (Id. at 5-7 & n.4.) Dr. Isernia's arbitration provision clearly and unmistakably delegates issues of arbitrability to an arbitrator through its incorporation of the AHLA rules. (Id. at 6-8.) And the Supreme Court has implied that whether any of the parties have agreed to arbitrate any issues is a question of arbitrability. (Id. at 5 (citing Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 69 (2010)).)

The court held that Dr. Isernia's arbitration provision delegated the issue of whether the non-signatory defendants could enforce Dr. Isernia's arbitration provision with MPP against him to an arbitrator. (Id. at 6-8.) Out-of-circuit precedent and the plain language of Dr. Isernia's arbitration provision informed the court's conclusion. The AHLA's arbitration rules initiate arbitration once the party seeking arbitration “produces a document that arguably requires arbitration of the claim.” (Id. at 7 (citing ECF No. 6-2, at 4).) At that time, the arbitrator is empowered “to determine his or her jurisdiction and any issues of arbitrability.” (Id. (citing ECF No. 6-2, at 4).) The non-signatory defendants in this case had produced Dr. Isernia's arbitration provision, which arguably required him to arbitrate his claims against them, and accordingly empowered a relevant arbitrator to resolve any issues of jurisdiction or arbitrability. (Id. at 6-8.) Several circuit courts analyzing similar language routinely allow nonsignatories to enforce arbitration provisions against signatories. (Id. at 5-6 (collecting cases).)

Dr. Isernia has moved the court to reconsider this ruling. His briefing advances three specific arguments. First, he argues that courts, and not arbitrators, must make threshold determinations confirming a “sufficient relationship” between a signatory and a non-signatory before recognizing the non-signatory's ability to enforce an arbitration provision. (ECF No. 27, at 9-12 (citing Contec Corp. v. Remote Sol. Co., 398 F.3d 205 (2d Cir. 2005).) This court did not do so. Second, Isernia contends that non-signatories can never clearly and unmistakably agree to arbitrate issues of arbitrability because they did not sign the relevant contracts. (Id. at 6-8, 12-16.) Neither DRMC nor HSCGP is a party to Dr. Isernia's employment contract. And third, he claims that the cases cited by the court in its first Mem. Op. are distinguishable on the facts. (See generally ECF No. 30.)

Having reviewed the Federal Arbitration Act (“FAA”), the Supreme Court's precedents interpreting the same, and the caselaw considering the issue here for a second time, the court will deny Dr. Isernia's motion.

II.

The court begins with some background on the FAA. “[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960).

FAA cases generally involve one document that houses two separate contracts. The arbitration provision^[1] is independent of and severable from the contact in which it sits. See 9 U.S.C. § 2 (conceiving of an arbitration provision as “[a] written provision in . . . a contract . . . to settle by arbitration a controversy”) (emphasis added); Jackson, 561 U.S. at 67.

Arbitration provisions typically state which disputes the parties have agreed to arbitrate. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944-45 (1995). Presumptively, whether the arbitration provision at issue covers a particular dispute (in other words, whether a particular dispute is arbitrable) is a question of arbitrability and for the presiding court. See id.

However, within their arbitration provisions, parties can further agree to “delegate” issues of arbitrability to arbitrators. These “delegation provision[s]” are “agreement[s] to arbitrate ‘gateway' questions of ‘arbitrability,' such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” Jackson, 561 U.S. at 6869. A delegation provision must be clear and unmistakable. First Options, 514 U.S. at 944-45. “An agreement to arbitrate a gateway issue is simply an additional, antecedent agreement the party seeking arbitration asks the federal court to enforce, and the FAA operates on this additional arbitration agreement just as it does on any other.” Jackson, 561 U.S. at 70. At least in the context of “whether their agreement covers a particular controversy,” courts must enforce these provisions even if the court thinks that the argument made by the party seeking arbitration is “wholly groundless.” See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524, 529-30 (2019). “When the parties' contract delegates the arbitrability question to an arbitrator, a court may not override the contract. In those circumstances, a court possesses no power to decide the arbitrability issue.” Id. at 529.

Whether a particular delegation clause satisfies the clear-and-unmistakable standard is a question of federal law. “When deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally ([subject to the clear-and-unmistakable standard]) should apply ordinary state-law principles that govern the formation of contract.” See First Options, 514 U.S. at 944-45; see also id. (describing the clear-and-unmistakable standard as a “qualification” to this general rule); Blanton v. Domino's Pizza Franchising LLC, 962 F.3d 842, 846-47 (6th Cir. 2020). Otherwise, federal courts apply state-law principles to arbitration provisions. See GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S.Ct. 1637, 1643-44 (2020) (interpreting 9 U.S.C. § 2). Specifically, “[t]he ‘traditional principles of state law' that apply under [the FAA] include doctrines that authorize the enforcement of a contract by a nonsignatory.” Id. (quoting Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009)). State contract law governs arbitration provisions unless the parties have explicitly abrogated those principles. Cf. id. at 1645 (reasoning that a treaty did not displace state law principles otherwise applicable under the FAA because the treaty was silent on the issue). In short, federal law controls whether a judge or an arbitrator decides the contested issue, but state law controls the relevant analysis.

The FAA gives contracting parties wide latitude in committing both the merits of their disputes and the arbitrability of certain issues to arbitration. The Supreme Court only requires that they do so clearly and unmistakably. See First Options, 514 U.S. at 942-45. Incorporating by reference arbitration rules that refer certain disputes to arbitration satisfies this standard. Cf. Simply Wireless, Inc. v. T-Mobile US, Inc., 877 F.3d 522, 526-28 (4th Cir. 2017) (couching this holding “in the context of a commercial contract between sophisticated parties”) abrogated on other grounds, Henry Schein, 139 S.Ct. 524. (See also First Mem. Op. at 6-7 & n.4 (collecting cases from other circuits, many of which affirm this proposition without the Fourth Circuit's qualification).)

A litigant resisting arbitration must decide whether to challenge the relevant contract as a whole, the relevant...