Northport Health Services of Arkansas, LLC et al v. O'Brien

Filing 26

ORDER granting 21 Motion for Summary Judgment insofar as it seeks to compel arbitration. The court hereby directs the parties to proceed to arbitration of their disputes in accordance with the arbitration provisions of the signed Admission Agreemen t and Accompanying Consent to Arbitration and Waiver of Jury Trial. This matter is stayed pending the parties completion of arbitration. IT IS FURTHER ORDERED that the parties shall file a stipulation of dismissal or a status report in this matter on or before July 31, 2011. Plaintiffs Motion is denied insofar as it seeks to enjoin proceedings between the parties in the Circuit Court of Logan County, Arkansas. Signed by Honorable Paul K. Holmes, III on May 10, 2011. (sh)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
NORTHPORT HEALTH SERVICES OF
ARKANSAS, LLC, d/b/a Paris
Health and Rehabilitation;
NORTHPORT HEALTH SERVICES, INC.;
and NHS MANAGEMENT, LLC
v.

PLAINTIFFS

Case No. 2:10-CV-02013

SANDRA O’BRIEN, as Special
Administrator of the Estate of
Robert Warren, Deceased

DEFENDANT

OPINION AND ORDER
Plaintiffs Northport Health Services of Arkansas, LLC d/b/a
Paris Health and Rehabilitation Center; Northport Health Services,
Inc.; and NHS Management, LLC, (collectively “Northport”) bring
their

Complaint

against

Defendant

Sandra

O’Brien

as

Special

Administrator of the Estate of Robert Warren, deceased (“O’Brien”),
to

compel

arbitration

of

claims

asserted

by

O’Brien

against

Northport in state court and to enjoin state court proceedings on
O’Brien’s claims. O’Brien’s state court complaint asserts claims of
medical

malpractice,

ordinary

negligence,

violations

of

the

Arkansas Long Term Care Resident’s Rights Statute, and Wrongful
Death. (Doc. 3-1). Northport alleges that all claims must be
submitted to arbitration pursuant to an admission agreement, which
explicitly included an arbitration agreement, signed by O’Brien as
Robert Warren’s “responsible party” and as his power of attorney.
Currently before the Court are Northport’s Motion for Summary
Judgment seeking to compel arbitration and to enjoin state court

-1-

proceedings

and

supporting

documents

(Docs.

21-23),

O’Brien’s

Response (Doc. 24) and Northport’s Reply (Doc. 25).
I. Jurisdiction
This Court, in denying O’Brien’s Motion to Dismiss (Doc. 4)
found that the Court may properly exercise jurisdiction over this
matter, as complete diversity has been established between the
parties. The Court further finds that the amount in controversy
requirement has been met, as the object of this litigation is the
value

potentially

at

stake

in

the

arbitration.

Advance

Am.

Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170, 1174 (8th Cir.
2008). “Looking through” to the underlying complaint, the damages
sought in a state court action may inform the Court as to the
possible award resulting from the desired arbitration. Id. at 1175.
In her state court complaint, O’Brien specifically alleges damages
“in an amount exceeding the minimum amount required for federal
court jurisdiction in diversity of citizenship cases.” (Doc. 3-1).
The Court finds, therefore, that it has jurisdiction over the
instant matter pursuant to 9 U.S.C. § 4 and 28 U.S.C. § 1332(a)(1).
II. Background
Robert Warren was a resident at Northport Health Services of
Arkansas,

LLC

d/b/a

Paris

Health

and

Rehabilitation

Center

(“Paris”) from November 8, 2004 until March 8, 2009. Prior to Mr.
Warren’s admission to Paris, Sandra O’Brien signed an Admission
Agreement and Consent to Arbitration and Waiver of Jury Trial
(collectively “the Agreement”) as Mr. Warren’s “Responsible Party.”
Mr. Warren had appointed O’Brien as his Attorney-in-Fact a year

-2-

prior to his admission to Paris, vesting in her a General Power of
Attorney “to do all acts whatsoever concerning my property or
personal affairs as is necessary or advisable . . .” (Doc. 3-3). On
April 8, 2009, O’Brien was appointed Special Administrator of Mr.
Warren’s estate, and now brings her state claims against Northport
in that capacity.
The Agreement was signed both by O’Brien and a Northport
representative, Jaclyn Hughes. In a signed affidavit, Hughes states
that the Agreement was discussed with O’Brien and Mr. Warren at
some length before O’Brien signed. (Doc. 3-2). O’Brien states in a
signed affidavit that she questioned Hughes as to what would happen
if she refused to sign, saying that she knew the Arbitration Clause
was not legal in Arkansas. O’Brien states that Hughes responded,
“It has to be signed.” (Doc. 13-1). O’Brien also disputes that Mr.
Warren was with her at the time she signed the Agreement.
The

Agreement

contains

various

broadly-worded

provisions

mandating that disputes including, but not limited to, “claims for
breach of contract or promise (express or implied); tort claims;
and claims for violation of any federal, state, local, or other
governmental law, statute, regulation, common law, or ordinance”
shall be resolved by binding arbitration, notwithstanding some
narrow exceptions. (Doc. 3-2 at p. 6). Under the Agreement, the
parties

mutually

arbitration

rather

agree
than

“to
by

settle
a

judge,

all

Disputes

jury,

or

by

binding

administrative

agency.” Id. In several instances, the Agreement highlights the
fact that parties are specifically waiving their rights to a jury
trial, including the following:
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THE PARTIES ACKNOWLEDGE THAT BY ENTERING INTO
THIS ARBITRATION AGREEMENT, THEY ARE GIVING UP
THEIR RIGHT TO HAVE ANY SUCH DISPUTE IN A
COURT OF LAW BEFORE A JUDGE OR JURY, AND
INSTEAD ARE ACCEPTING THE USE OF ARBITRATION.
Id.(formatting in original). The Agreement goes on to describe the
arbitration procedure in detail. On the final page before the
signature lines, the Agreement sets forth the following:
By your execution of his Agreement and/or
acceptance of service at the Facility, you and
Responsible Party acknowledge, understand and
agree that this Agreement includes a dispute
resolution program for all claims and disputes
between you and the Facility (except for
monetary claims involving less than $25,000)
covered by the Program (as previously defined
herein); that all such claims and disputes
will be resolved by binding ARBITRATION; that
ARBITRATION is a complete substitute for
traditional litigation; and that you and your
Responsible Party waive your right to file a
lawsuit in regard to a Dispute and to have any
Dispute heard in a court by a judge or jury.
You and your Responsible Party further
acknowledge that you have had an opportunity
to question a representative of the Facility
concerning the terms of this Admission
Agreement and the contents of the Handbook and
that any questions you had have been answered
to your satisfaction.
Id. at p. 9. O’Brien also signed a separate “Consent to Arbitration
and Waiver of Jury Trial.” Id. at page 13.
III. Discussion
Northport

filed

a

Motion

to

Expedite

Consideration

of

Complaint (Doc. 10), which the Court granted in an Order (Doc. 15)
directing the parties to file briefs addressing the specific and
limited issue of whether the agreement to arbitrate was void for
-4-

duress. After both parties filed briefs (Docs. 18-19), the Court
issued an Order (Doc. 20) finding no basis upon which a jury could
find that the arbitration agreement was signed under duress. The
Court then identified the remaining issues raised by O’Brien’s
Answer as estoppel, waiver, and violation of federal law. As the
remaining issues were purely legal, the Court ordered Northport to
file a Motion for Summary Judgment. Northport timely filed a Motion
(Doc.

21)

addressing

the

three

legal

bases

the

Court

had

identified, and arguing as to why those bases were insufficient to
warrant a

ruling

in O’Brien’s

favor.

O’Brien

timely

filed

a

Response (Doc. 24), and Northport filed a Reply (Doc. 25). These
filings are currently before the Court for consideration.
In her three-page Response, O’Brien succinctly advances only
two arguments. First, O’Brien argues that the arbitration agreement
violates federal law. Second, O’Brien argues that, in the event
Northport contends there was no valuable consideration for the
arbitration agreement, the arbitration agreement fails for lack of
consideration. These arguments will be addressed in turn.
In failing to advance any other arguments, even after being
prompted by the Court and Northport’s Motion, the Court must find
that Defendant voluntarily abandoned any arguments that might
otherwise have been available to her. Defendant has declined to
advance any arguments concerning estoppel or waiver, as identified
by the Court and as discussed and analyzed in Northport’s Motion.
Nor has O’Brien argued issues preemptively raised by Northport,
including

O’Brien’s

ability

to

bind

her

present

claims

to

arbitration. “It is not the obligation of this court to research
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and construct the legal arguments open to parties, especially when
they are represented by counsel.” Sanchez v. Miller, 792 F.2d 694,
703

(7th

Cir.

1986)

(citations

omitted);

see

also

Good

v.

Khosrowshahi, 296 Fed. Appx. 676, 680 (10th Cir. 2008) (“It is not
the province of this court to advocate on behalf of litigants
(counseled or pro se) by attempting to construct for them potential
arguments of either a legal or factual nature.”).

“A litigant who

fails to press a point by supporting it with pertinent authority,
or by showing why it is sound despite a lack of supporting
authority or in the face of contrary authority, forfeits the
point.”

Pelfresne v. Williams Bay, 917 F.2d 1017, 1023 (7th Cir.

1990) (citations omitted). Nor is it for the Court to review
O’Brien’s litigation strategy. The Court turns, instead, to those
claims that O’Brien has advanced in opposing Northport’s Motion for
Summary Judgment.
Here, O’Brien has staked her all on attempting to persuade the
Court that the Arbitration Agreement is void as violative of
federal law. O’Brien’s second argument, that in the event Northport
contends there was no valuable consideration for the arbitration
agreement

the

arbitration

agreement

fails

for

lack

of

consideration, is without merit. Northport makes no contention that
there was no valuable consideration for the arbitration agreement.
Furthermore, in consideration of entering into the Agreement, both
parties mutually agreed to waive their respective rights to a jury
trial in

order to resolve disputes arising under the Agreement.

The only remaining issue for the Court to consider, therefore,
is whether the arbitration agreement violates federal law. The
-6-

parties do not dispute that the Agreement is “a contract evidencing
a transaction involving commerce,” and the Agreement is, therefore,
subject to the Federal Arbitration Act (“FAA”). 9 U.S.C. § 2. “By
its terms, the FAA ‘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.” Pro Tech Indus. v.
URS Corp., 377 F.3d 868, 871 (8th Cir. 2004)(quoting Dean Witter
Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985))(emphasis in
original).

This

Court

is therefore

limited

under

the

FAA

to

determining (1) whether a valid agreement to arbitrate exists and,
if it does, (2) whether the agreement encompasses the dispute
between the parties. Id. Only the first determination is at issue
in this case, as the parties do not argue that their disputes do
not fall within the broad ambit of the Agreement. The Court need
only determine, therefore, whether the Agreement is valid. In
conducting its analysis, the Court is mindful that the FAA declares
a “liberal federal policy favoring arbitration agreements.” Moses
H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24
(1983) (citing 9 U.S.C. § 2). In addition, “[a]rbitration is
strongly favored in Arkansas as a matter of public policy and is
looked upon with approval by courts as a less expensive and more
expeditious means of settling litigation and relieving docket
congestion.” Pest Mgmt., Inc. v. Langer, 250 S.W.3d 550, 556 (Ark.
2007) (citation omitted).
In determining whether summary judgment is appropriate, the

-7-

burden is placed on the moving party to establish both the absence
of a genuine dispute of material fact and that it is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(c); Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87
(1986); Nat’l. Bank of Commerce of El Dorado, Ark. v. Dow Chem.
Co.,

165

F.3d

602

(8th

Cir.

1999).

Once

the

moving

party

demonstrates that the record does not disclose a genuine dispute on
a material fact, the non-moving party

must set forth specific

facts showing that there is a genuine issue for trial. Ghane v.
West, 148 F.3d 979, 981 (8th Cir. 1998)(citing Burst v. Adolph
Coors Co., 650 F.2d 930, 932 (8th Cir. 1981)). In order for there
to be a genuine dispute of material fact, the non-moving party must
produce evidence “such that a reasonable jury could return a
verdict for the nonmoving party.” Allison v. Flexway Trucking,
Inc., 28 F.3d 64, 66 (8th Cir. 1994) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). Furthermore, “[w]here the
unresolved issues are primarily legal rather than factual, summary
judgment is particularly appropriate.” Aucutt v. Six Flags Over
Mid-America, Inc., 85 F.3d 1311, 1315 (8th Cir. 1996)(quoting Crain
v. Bd. of Police Comm’rs, 920 F.2d 1402, 1405-06 (8th Cir. 1990)).
O’Brien, as the party seeking to avoid arbitration, has the
burden of proving any affirmative defenses raised in objecting to
the viability or applicability of the agreement to arbitrate. See
e.g., Madol v. Dan Nelson Auto. Group, 372 F.3d 997, 999 (8th Cir.
2004)(“A party resisting arbitration bears the burden of proving
that the claims at issue are unsuitable for arbitration”)(internal

-8-

quotation omitted); Pro Tech Indus., 377 F.3d at 873 (“the party
seeking to avoid the arbitration provision has the burden of
proving an

arbitration

provision

is

unconscionable”).

O’Brien

argues that the Agreement is void on grounds of illegality. O’Brien
claims the nursing home required her to sign the Agreement, which
included the provisions mandating arbitration, as a condition of
admission in violation of the Medicaid Act, 42 U.S.C. § 1396r, and
the Code of Federal Regulations on Medicare and Medicaid services
at 42 C.F.R. § 483.12(d)(3), (collectively “Medicaid regulations”)
which prohibit a nursing facility from requiring any additional
consideration as a precondition of admission. Specifically,
[w]ith respect to admissions practices, a
nursing facility must – in the case of an
individual
who
is
entitled
to
medical
assistance for nursing facility services, not
charge, solicit, accept, or receive, in
addition to any amount otherwise required to
be paid under the State plan under this title,
any
gift,
money,
donation,
or
other
consideration as a precondition of admitting
. . . the individual to the facility . . .
42 U.S.C. § 1396r(c)(5)(A)(iii); see also 42 C.F.R. § 483.12(d)(3)
(using substantially similar language). O’Brien provides the Court
with no legal authority to bolster her argument that an arbitration
agreement should be considered additional consideration, and little
in the way of analysis in support of her position. O’Brien cites
only to a newspaper article, which posits that plaintiffs may
receive lower payouts in nursing home cases which are resolved
through arbitration. While the article is rife with opinions on the
evils of arbitration agreements in nursing home cases, it does
nothing to develop O’Brien’s argument that such agreements are
-9-

illegal.
Northport anticipated, in its briefings, that O’Brien would
argue that a Memorandum released by The Centers for Medicare and
Medicaid Services(“CMS”) in 2003, and a Declaratory Order issued by
the Arkansas Department of Human Services (“Arkansas DHS”) in 2002,
support the position

that nursing facilities may not require the

signing of an arbitration agreement as a condition of admission.
While these documents are not binding on the Court, and O’Brien
failed to reference them in her briefings, they are instructive.
Both documents would, in fact, seem to support the argument that
arbitration agreements should not be required as a condition of
admission to a nursing facility. The CMS Memo, however, stops short
of explicitly stating that an arbitration agreement may not be
required

as

a

condition

of

admission,

instead

focusing

on

prohibiting the discharge of existing residents who fail to sign or
comply with a binding arbitration agreement. (Doc. 22-1). As for
the declaratory order, Northport later entered into a settlement
agreement with Arkansas DHS, in which Arkansas DHS back-pedaled
from the harsher language it had used in the declaratory order. In
the settlement agreement, Arkansas DHS agreed “that an arbitration
agreement used as a condition of admission to a nursing home is
permissible if it complies with the CMS January 9, 2003 memorandum
. . .” (Doc. 22-2 at para. 13). The settlement agreement further
states,

“Consistent

with

the

January

9,

2003

CMS

position

memorandum . . . it is not the Department’s position that the use
of arbitration agreements violates a resident’s right to a jury
trial.” (Id. at para. 15).
-10-

The Court notes that Arkansas DHS, in its declaratory order
seemed

to

be

more

concerned

with

the

unequal

terms

of

the

arbitration agreement than with the fact that the agreement itself
may

be

void

as

constituting

separate

consideration.

Unconscionability of the Agreement is not an argument that O’Brien
has pursued in this case. As the issue has not been adequately
briefed by the parties, the Court does not purport to make any
ruling as to whether the Agreement in this case may or may not be
void on grounds of unconscionability. In the same settlement
agreement, Arkansas DHS and Northport stipulated that “Northport
requires that residents or their representative sign an Admission
Agreement before admission to its nursing homes . . . Agreement to
arbitration is a condition of admission to Northport’s nursing
homes.” (Id. at para 8). The Court need make no further inquiry,
then, as to the factual issue of whether agreement to arbitrate is
actually a required precondition to admission at a Northport
facility.
Both CMS and Arkansas DHS (in relying on the CMS memo)
skillfully skirt the issue of whether a requirement of signing an
arbitration

agreement

as

a

precondition

to

admission

may

be

violative of Medicaid regulations. In fact, it seems to the Court
that the legality - or illegality - of requiring an arbitration
agreement

as

a

condition

to

admission

is

far

from

clearly

established. The case law on this subject is sparse. Most courts
that

have

arbitration

considered
agreements

the
are

issue,
not

to

however,
be

have

considered

found

that

additional

consideration. See, e.g., Owens v. Coosa Valley Health Care, Inc.,
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890 So.2d 983, 989 (Ala. 2005)(“requiring a nursing-home admittee
to sign an arbitration agreement is not charging an additional fee
or

other

consideration

as

a

requirement

to

admittance”);

Gainesville Health Care Ctr., Inc. v. Weston, 857 So.2d 278, 288
(Fla. Dist. Ct. App. 2003) (“We have found no authority from any
jurisdiction which holds that an arbitration provision constitutes
‘consideration’ . . . nor do we believe that the federal regulation
was intended to apply to such a situation.”); Broughsville v.
OHECC, LLC, 2005 Ohio 6733 at *7-8 (Ct. App. Ohio 2005) (“inclusion
of an arbitration provision in a nursing home admissions agreement
does not constitute additional consideration”). In some cases in
which a court has faced this issue, the fact that an arbitration
agreement was not mandatory significantly influenced the court’s
decision. See e.g., Rainbow Health Care Ctr., Inc. v. Crutcher,
2008 U.S. DIST LEXIS 6705 at *20-*21 (N.D. Okla. 2008)(basing its
finding that 42 U.S.C. § 1396r(c)(5)(A)(iii), in part, on the fact
that residents had a unilateral right to revoke the arbitration
provision for up to ten days after signing the agreement). In this
case, Northport does not dispute that signing an arbitration
agreement

is

mandatory

for

persons

seeking

admission

to

its

facilities.
Northport claims that its arbitration agreement is valid,
whether mandatory or not, arguing in part that an arbitration
agreement is simply a forum selection clause. There is some support
for this proposition. See e.g., Owens, 890 So. 2d at 989 (rejecting
the idea of an arbitration agreement as separate consideration and
finding that “an arbitration agreement sets a forum for future
-12-

disputes”); Sanford v. Castleton Health Care Ctr., LLC, 813 N.E.2d
411 (Ind. Ct. App. 2006) (finding that “requiring a nursing-home
admittee to sign an arbitration agreement is not akin to charging
an

additional

arbitration

fee

or

agreement

other
merely

consideration”
establishes

a

but

“[r]ather,

forum

for

an

future

disputes”). The Alabama Supreme Court reasoned in Owens that both
parties are bound by an arbitration agreement and “both receive
whatever benefits and detriments accompany the arbitral forum.” 890
So. 2d at 989. The Court agrees, in part, with this reasoning.
Arbitration

agreements,

however,

are

more

than

simple

forum-

selection clauses. They are process-selection clauses. The choice
to forego the constitutional right to a trial by jury and instead
submit disputes to binding arbitration is more involved than
agreeing that disputes will be governed by the law of a certain
geographical location. However, the Agreement does represent a
mutual agreement by the parties to resolve any disputes that may
arise, subject to certain exceptions, through arbitration. Both
parties are mutually bound. To that extent, while it may be argued
that one side may benefit more than another when arbitration
agreements are forged between a corporation and a consumer, the
fact remains that neither side is deprived of an opportunity to
adequately air their grievances before an impartial decision-maker.
A contrary finding would serve only to perpetuate the historical
prejudice against arbitration agreements that Congress sought to
eradicate through enactment of the FAA over eighty years ago. See
Rainbow Health, 2008 U.S. DIST LEXIS 6705 at *20-*21 (citing Volt
Info. Sciences, Inc. v. Board of Trustees of Leland Stanford, 489
-13-

U.S. 468, 474 (1989)).
Furthermore, the Court agrees with the rationale expressed by
some courts when ruling on this issue, based on straightforward
application

of

statutory

construction.

See

e.g.,

Sanford

v.

Castleton Health Care Ctr., LLC, 813 N.E.2d 411, 419 (Ct. App. Ind.
2004). Ejusdem generis, as a canon of construction, dictates that
when a list of two or more specific descriptors is followed by a
more general descriptor, the otherwise wide meaning of the general
descriptor must be restricted to the same class, if any, of the
specific words that precede it. Wash. State Dep’t of Soc. & Health
Servs. v. Guardianship Estate of Keffeler, 537 U.S.371, 384-85
(2003).

Additionally,

according

to

the

interpretive

maxim

of

noscitur a sociis, “a word is known by the company it keeps.”
Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307 (1961). The maxim
“is often wisely applied where a word is capable of many meanings
in order to avoid the giving of unintended breadth to Acts of
Congress.” Id. The regulations at issue here, cited by O’Brien,
provide that a nursing facility must “not charge, solicit, accept,
or receive, in addition to any amount otherwise required to be paid
under the State plan under this title, any gift, money, donation,
or other consideration as a precondition” of admission. 42 U.S.C.
§ 1396r(c)(5)(A)(iii); see also 42 C.F.R. § 483.12(d)(3) (using
substantially similar language). At issue, here, is the meaning of
“other consideration.” In effect, O’Brien argues that Northport
solicited her signature on the Agreement, which signature and
agreement was tantamount to a gift, money, or donation, such that

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when Northport accepted the Agreement, it was in violation of
Medicaid regulations. The Court disagrees for several reasons.
First, employing the principle of ejusdem generis, the general
descriptor “other consideration,” when employed directly following
a specific enumeration of the terms “gift,” “money,” and “donation”
does

not

encompass

an

arbitration

agreement.

Rather

“other

consideration” must be restricted to the same class of the more
specific preceding terms. Requiring a nursing home admittee to sign
an arbitration agreement is not akin to charging or soliciting
gifts or money. While the right to a jury trial no doubt has some
undefinable value, it is not in the same class as a gift, money, or
donation which are all terms denoting something tangible of easily
determinable value. Secondly, employing the principle of noscitur
a sociis and viewing the words of the statute in context, the
prohibition against “other consideration,” looks to be an attempt
to prevent nursing facilities from charging potential admittees or
existing residents over and above any funds already provided by
Medicaid. The language of the regulations prohibiting “charg[ing],
solicit[ing], accept[ing] or receiv[ing] in addition to any amount
otherwise required to be paid” clearly indicates an intent to
prohibit a nursing facility from accepting tangible payments,
gifts,

moneys,

or

donations

of

discernible

amount.

Lastly,

consideration, in the contractual sense, is not limited to an
exchange of money. O’Brien did not sign the Agreement or give up
any rights gratuitously, in the same manner that someone might be
forced to make a payment, without receiving consideration from
Northport

in

return.

Both

parties
-15-

mutually

agreed

to

submit

disputes to arbitration in lieu of resorting to litigation. The
Court finds that such a mutually binding agreement, especially in
view of the strong federal policy in favor of arbitrating disputes,
is not contemplated as “other consideration” by the Medicaid
regulations.
Based on the foregoing, the Court finds that Defendant’s
opposition to the pending motion fails to provide sufficient
grounds to

deny

the

motion,

raising no

genuine

dispute

that

arbitration should not be compelled. Northport has met its burden
of proving that a valid arbitration agreement existed and that the
disputes between the parties fall under the broad scope of that
agreement such that they should be made subject to arbitration.
O’Brien then failed to meet her burden in proving the applicability
of any of the affirmative defenses set forth in her Answer (Doc.
13) and Response (Doc. 24) to Northport’s Motion for Summary
Judgment. Specifically, the Court finds that on the very narrow
issue of illegality advanced by O’Brien, the Agreement is not void
as violative of federal regulations prohibiting solicitation of
“other consideration.” The Court, therefore, finds that arbitration
of O’Brien’s claims should be compelled.
Finally, as to Northport’s request that the state court
proceedings be enjoined, the Court notes that a federal court
enjoining

a

state

court

proceeding

raises

serious

federalism

concerns. The Anti-Injunction Act provides that a federal court may
grant a stay of a state court proceeding only "as expressly
authorized by Act of Congress, or where necessary in aid of its
jurisdiction, or to protect or effectuate its judgments." 28 U.S.C.
-16-

§ 2283. “The Supreme Court has interpreted the Act as ‘an absolute
prohibition against enjoining state court proceedings, unless the
injunction

falls

within

one

of

three

specifically

defined

exceptions’ included in the language of the statute.” Canady v.
Allstate Ins. Co., 282 F.3d 1005, 1014 (8th Cir. 2002)(quoting
Atlantic C.L.R. Co. v. Bhd. of Locomotive Eng'rs, 398 U.S. 281,
286-87 (1970)). “Any doubts as to the propriety of a federal
injunction against state court proceedings should be resolved in
favor of permitting the state courts to proceed in an orderly
fashion to finally determine the controversy.” Atlantic C.L.R. Co.,
398 U.S. at 297. The Court finds that none of the exceptions apply
in this case and, therefore, declines to enjoin the state court
proceedings. The Court fully expects, however, that O’Brien will
refrain

from

pursing

those

claims

which

are

subject

to

the

complaint to compel arbitration.
IV. Conclusion
IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Summary
Judgment (Doc. 21) is GRANTED insofar as it seeks to compel
arbitration, and the Court hereby directs the parties to proceed to
arbitration of their disputes in accordance with the arbitration
provisions of the signed Admission Agreement and accompanying
Consent to Arbitration and Waiver of Jury Trial. This matter is
STAYED pending the parties’ completion of arbitration. IT IS
FURTHER ORDERED that the parties shall file a stipulation of
dismissal or a status report in this matter on or before July 31,
2011.

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Plaintiffs’ Motion is denied insofar as it seeks to enjoin
proceedings between the parties in the Circuit Court of Logan
County, Arkansas.

IT IS SO ORDERED this 10th day of May, 2011.

/s/ Paul K. Holmes, III
Paul K. Holmes, III
United States District Judge

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