Lindsey v. Travelers Commercial Ins. Co. al

Filing 39

ORDER signed by Chief District Judge Kimberly J. Mueller on 5/10/2024 GRANTING 31 Motion to Remand. CASE REMANDED to Arbitration. The motion to reassign the matter to a different arbitrator on remand is DENIED; Plaintiff's Motion 32 for fees and costs is DENIED, and defendant's request for sanctions is DENIED. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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Brent Lindsey,

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No. 2:19-cv-01855-KJM-CKD
Plaintiff,

ORDER

v.
Travelers Commercial Insurance
Company, et al.,
Defendants.

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The court previously granted the parties’ stipulated request to submit this action to

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arbitration. See Stip., ECF No. 17; Min. Order, ECF No. 18. After the arbitrator issued an award

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in favor of defendants, plaintiff Brent Lindsey moved to vacate that award under section 10(a)(3)

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of the Federal Arbitration Act, but only as to one of the eleven claims in his complaint. See

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generally Mot. Vacate, ECF No. 19. The court granted that motion, and the Ninth Circuit

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affirmed the court’s order in an unpublished memorandum disposition. See Prev. Order, ECF

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No. 25; Ninth Cir. Mem., ECF No. 29.

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Lindsey now moves to remand the action to arbitration. See generally Mot. Remand, ECF

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No. 31. He asks the court to order specifically that a different arbitrator hear the case on remand

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“to avoid the prejudice previously found.” Id. at 1. Separately he moves for an award of the

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attorneys’ fees he incurred seeking to vacate the award and defending this court’s order on
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appeal. See generally Mot. Fees, ECF No. 32. Defendants do not oppose Lindsey’s motion to

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remand the matter to arbitration, but they do oppose his request for an order reassigning the

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matter to a different arbitrator. See generally Opp’n Remand, ECF No. 36. Defendants also

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oppose Lindsey’s request for fees, and they contend his request for fees is so frivolous that the

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court should award them their own costs in opposing it, citing 28 U.S.C. § 1927 and this court’s

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inherent authority. See generally Opp’n Fees, ECF No. 35. Lindsey filed a reply in support of

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his motion to remand, but not in support of his fees motion. See generally Reply, ECF No. 37.

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The court took both matters under submission without a hearing. See Min. Order, ECF No. 38.

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1. Remand: The court grants Lindsey’s unopposed motion to remand the matter to

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arbitration. See United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 40 n.10

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(1987) (“The court . . . has the authority to remand for further proceedings when this step seems

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appropriate.”).

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2. Reassignment: The court denies Lindsey’s request for an order directing that the

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arbitration proceed before a different arbitrator on remand. Lindsey cites no authority that would

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permit this court to issue such an order. The court itself has not identified any controlling law

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addressing the question. There may be some circumstances in which a district court could order a

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reassignment, such as conduct showing the arbitrator was not an impartial adjudicator. See

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Grand Rapids Die Casting Corp. v. Loc. Union No. 159, United Auto., Aerospace & Agr.

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Implement Workers of Am., UAW, 684 F.2d 413, 416 (6th Cir. 1982); Hart v. Overseas Nat.

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Airways Inc., 541 F.2d 386, 393–94 (3d Cir. 1976); CoreCivic of Tennessee v. Loc. 825 Int’l

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Union, Sec., Police & Fire Pros. of Am., No. 21-00410, 2022 WL 4386722, at *2 (D. Ariz. Sept.

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22, 2022). But federal district courts ordinarily play a relatively limited role when they review

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arbitration awards under section 10(a) of the Federal Arbitration Act. See United Paperworkers,

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484 U.S. at 40 n.10 (“[T]he court should simply vacate the award, thus leaving open the

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possibility of further proceedings if they are permitted under the terms of the agreement.”);

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Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 998 (9th Cir. 2003)

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(“[Section 10(a)] afford[s] an extremely limited review authority, a limitation that is designed to

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preserve due process but not to permit unnecessary public intrusion into private arbitration
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procedures.”). Even assuming this court could order a reassignment on remand, it would not do

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so on this record. Lindsey has not shown the arbitrator was biased, faced a conflict of interest or

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engaged in conduct that compromised the appearance of impartiality. That said, this order does

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not bar Lindsey from seeking a different arbitrator under the terms of the arbitration agreement or

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the relevant arbitration rules. Elecs. Corp. of Am. v. Int’l Union of Elec., Radio & Mach.

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Workers, AFL-CIO Loc. 272, 492 F.2d 1255, 1257 (1st Cir. 1974) (“[W]e think it best if on

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remand the parties be free to proceed with a different arbitrator if they choose to do so.”).

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3. Fees: The court denies Lindsey’s request for an award of attorneys’ fees. The “basic

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point of reference when considering the award of attorney’s fees is the bedrock principle known

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as the American Rule: Each litigant pays his own attorney’s fees, win or lose, unless a statute or

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contract provides otherwise.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252–53

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(2010) (quotation marks and citations omitted). Lindsey relies on the California Fair

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Employment and Housing Act to support his fee request. See Mot. Fees at 7 (citing Cal. Gov’t

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Code § 12965(c)(6)). That law gives the court discretion to award fees and costs to “the

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prevailing party.” Cal. Gov’t Code § 12965(c)(6). To decide which party is the “prevailing”

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party, the court analyzes “the extent to which each party has realized its litigation objectives.”

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Bustos v. Glob. P.E.T., Inc., 19 Cal. App. 5th 558, 562–63 (2017) (quoting Castro v. Superior

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Court, 116 Cal. App. 4th 1010, 1023 (2004)). Although the court granted Lindsey’s motion to

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vacate the arbitration award, Lindsey has not prevailed on any of his substantive claims. This

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court vacated the arbitration award and remanded the matter for further arbitration. Lindsey

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might yet prevail in the arbitration, but defendants, too, might ultimately prevail.

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4. Sanctions: The court denies defendants’ request for sanctions under 28 U.S.C. § 1927

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and under this court’s inherent authority. Under § 1927, “[a]ny attorney . . . who so multiplies the

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proceedings in any case unreasonably and vexatiously may be required by the court to satisfy

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personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such

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conduct.” 28 U.S.C. § 1927. “Sanctions pursuant to section 1927 must be supported by a finding

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of subjective bad faith.” New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298, 1306 (9th Cir.

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1989). This court’s inherent authority to award fees is similarly limited to cases in which “the
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losing party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” Roadway

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Exp., Inc. v. Piper, 447 U.S. 752, 766 (1980) (quotation marks omitted) (quoting Alyeska Pipeline

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Co. v. Wilderness Soc’y, 421 U.S. 240, 258–59 (1975)). Although the court has denied Lindsey’s

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request for fees, the court cannot conclude on this record that he or his counsel requested fees in

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bad faith such that he should be required to pay defendants’ fees.

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For the reasons above, (1) the motion to remand the matter to arbitration is granted,

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(2) the motion to reassign the matter to a different arbitrator on remand is denied, (3) plaintiff’s

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motion for fees and costs is denied, and (4) defendant’s request for sanctions is denied.

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This order resolves ECF Nos. 31 and 32.
IT IS SO ORDERED.
DATED: May 10, 2024.

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