Moore v. Ferrellgas, Inc., 1:07-CV-997.

• Decision Date: 08 February 2008
• Docket Number: No. 1:07-CV-997.,1:07-CV-997.
• Citation: 533 F.Supp.2d 740
• Parties: Kenneth A. MOORE, Plaintiff, v. FERRELLGAS, INC., Defendant.
• Court: U.S. District Court — Western District of Michigan

533 F.Supp.2d 740 Kenneth A. MOORE, Plaintiff,
v.
FERRELLGAS, INC., Defendant. No. 1:07-CV-997. United States District Court, W.D. Michigan, Southern Division. February 8, 2008.

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Stanley E. Burke, Chelosea, MI, for Plaintiff.

James R. Wierenga, Julie Westcott O'Dell, Grand Rapids, MI, for Defendant.

OPINION

RICHARD ALAN ENSLEN, Senior District Judge.

This matter is before the Court on Defendant Ferrellgas, Inc.'s Motion to Dismiss, or, in the Alternative, to Compel Arbitration and Stay Proceedings. Plaintiff Kenneth A. Moore has responded in opposition. Upon review of the briefing, the Court discerns no reason for oral argument. See W.D. Mich. LCivR. 7.2(d). After review, it is clear dismissal of Plaintiffs Complaint is appropriate.

I. BACKGROUND

On June 12, 1993, Plaintiff entered into an Employee Agreement, (Dkt. No. 8, Ex. 1), with Defendant.¹ In the Employee Agreement, Plaintiff agreed to, inter alia, arbitrate any dispute arising out of his employment relationship with Defendant. The Arbitration Agreement provides as follows:

Any dispute (whether the dispute sounds in contract, tort, or otherwise) arising out of or relating to this Agreement or its breach, or the employment relationship of the parties, except injunctive relief to preserve the status quo, shall be fully and finally settled by binding arbitration conducted expeditiously in accordance with this paragraph, the United States Arbitration Act² (to the exclusion of any provisions of state law inconsistent with the Act or which would produce a different result), and the Center for Public Resources Rules for Non-Administered Arbitration of Business Disputes (1989) by three independent and impartial arbitrators. Each party shall appoint one arbitrator, and the third arbitrator must be an attorney. The arbitration shall take place in the state in which the Ferrellgas location is found. Any court having jurisdiction may enter judgment upon the arbitration award. Ferrellgas reserves the right to change the arbitrator (prior to any dispute) as evidenced by written documentation of such substitution.

(Employee Agreement ¶ 20.) The Employee Agreement also contains the following sentence — which is in larger font than standard contract language, bold, and separated from standard contract language by a large bold line — in its acceptance field: "This Agreement contains a binding arbitration provision which may be enforced by the parties." (Id. at 2.)

Defendant terminated Plaintiff on January 11, 2007. Defendant claims the termination was based on a general reduction in workforce, while. Plaintiff alleges age discrimination and disparate treatment in violation of Michigan common law and the Elliot-Larsen Civil Rights Act, Mich. Comp. Laws § 37.2 101 et seq. (Compl.1.) Despite agreeing to resolve all disputes in arbitration, Plaintiff filed a Complaint against Defendant in Michigan state court. Defendant thereafter removed the action to federal court pursuant to 28 U.S.C. § 1441 and filed the present Motion to Dismiss or Compel Arbitration.

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II. LEGAL STANDARDS

Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may move for dismissal based on lack of subjectmatter jurisdiction. "A Rule 12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which case the trial court must weigh the evidence and the plaintiff bears the burden of proving that jurisdiction exists." Abbott v. Michigan, 474 F.3d 324, 328 (6th Cir.2007) (citing DLX Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004)).

When responding to a facial attack, the plaintiffs burden to prove subject Matter jurisdiction is not onerous. See RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir.1996). The plaintiff must only show that the complaint alleges a "substantial" claim under federal law. Musson Theatrical Inc. v. Fed. Express Corp., 89 F.3d 1244, 1248 (6th Cir. 1996). A federal claim is "substantial" unless "prior decisions inescapably render [it] frivolous." Transcon. Leasing, Inc. v. Michigan Nat'l Bank of Detroit, 738 F.2d 163, 165 (6th Cir.1984). "In short, when faced with a 12(b)(1) challenge to the face of a complaint, the plaintiff can survive the motion by showing any arguable basis in law for the claim made." Musson Theatrical, 89 F.3d at 1248.

A factual attack, on the other hand, does not challenge the sufficiency of the pleading's allegations. Warren Steel Holdings, LLC v. Williams, No. 4:07-cv-1883, 2007 WL 2688240, at *2 (N.D.Ohio Sept. 11, 2007). A, factual attack challenges the court's power to hear the case. No presumption of truthfulness applies to the plaintiffs factual allegations and the plaintiff bears the burden of establishing jurisdiction. RMI Titanium, 78 F.3d at 1134; Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990). "[A] trial court has wide discretion to allow affidavits, documents, and even a limited evidentiary hearing to resolve disputed jurisdictional facts." Ohio Nat'l Life Ins., 922 F.2d at 325 (citations omitted). Ultimately, the court must "weigh the conflicting evidence to arrive at the factual predicate that subject matter jurisdiction exists or does not exist." Id.

In this case, the Court notes Defendant's Motion "would more properly have been brought under Rule 12(b)(6), because the existence of a valid arbitration clause does not technically deprive the Court of subject matter jurisdiction." Liveware Publishing, Inc. v. Best Software, Inc., 252 F.Supp.2d. 74, 78 (D.Del. 2003); see also Nationwide Ins. Co. of Columbus, Ohio v. Patterson, 953 F.2d 44, 45 n. 1 (3d Cir.1991) ("Dismissal of a declaratory judgment action because the dispute is covered by an arbitration provision is generally effected under Rule 12(b)(6) covering dismissals for failure to state a claim upon which relief can be granted, or Rule 56 covering summary judgments if matters beyond the pleadings were considered.") (citations omitted). An arbitration agreement "requires the Court to forego the exercise of jurisdiction in deference to the parties' contractual agreement to address in another forum those disputes which fall within the scope of the agreement to arbitrate." Liveware Publ'n, 252 F.Supp.2d at 78-79.

Notwithstanding the appropriateness of a Rule 12(b)(6) motion, courts have allowed parties to receive the equivalent remedy in a Rule 12(b)(1) motion. See, e.g., Nova CTI Caribbean v. Edwards, No. CIV. A. 03-5319, 2004 WL 35759, at *2 (E.D.Pa. Jan. 8, 2004); Thompson v. Nienaber, 239 F.Supp.2d 478, 483 (D.N.J.2002). The Court will allow Defendant to proceed under Rule 12(b)(1). The distinction between

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Rule 12(b)(1) and Rule 12(b)(6) is immaterial because based on either ground, the Arbitration Agreement requires arbitration of Plaintiff's claims, as demonstrated infra. Cf. Nova CTI Caribbean, 2004 WL 35759, at *2.

Defendant does not explicitly state whether it is making a facial or factual attack on the Complaint. The Court finds that Defendant is making a factual attack because. Defendant relies on matters outside the pleadings, namely, the Employee Agreement. Plaintiff neither referenced the Employee Agreement in the Complaint nor attached it to the Complaint. Accordingly, Plaintiff bears the burden of establishing jurisdiction.

III. ANALYSIS

The FAA was enacted in response to the hostility of American courts to enforcing arbitration agreements. Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001). The "jealous notion held by the common law courts of England [was] that arbitration agreements were nothing less than a drain on their own authority to settle disputes." Raasch v. NCR Corp., 254 F.Supp.2d 847, 853 (S.D.Ohio 2003) (citing Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-20 n. 6, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985)). The FAA sought "to place arbitration agreements upon the same footing as other contracts." Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991) (citations omitted).

Section 2 of the FAA provides in pertinent part:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be 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. "By its terms, the Act leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds, 470 U.S. at 218, 105 S.Ct. 1238 (citing 9 U.S.C. §§ 3-4). Thus, only generally applicable state-law contract defenses are available to a plaintiff seeking to invalidate an arbitration agreement, such as fraud, forgery, duress, mistake, lack of consideration or mutual obligation, and unconscionability...