Barton v. Fidelity National Financial, Inc. et al

Filing 248

ORDER re MOTION FOR CLARIFICATION OF ARBITRATION ORDER. Signed by Judge JEFFREY S. WHITE on 12/3/12. (jjoS, COURT STAFF) (Filed on 12/3/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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IN RE CALIFORNIA TITLE INSURANCE
ANTITRUST LITIGATION

No. 08-01341 JSW

THIS DOCUMENT RELATES TO ALL
ACTIONS

ORDER RE MOTION FOR
CLARIFICATION OF
ARBITRATION ORDER

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For the Northern District of California

United States District Court

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The Court has considered Defendant First American Title Insurance Company
(“Defendant”)’s motion to compel or clarify the Court’s former arbitration order.

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The Court has determined that implicit in its order dated June 27, 2011 was the

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prescription that Plaintiffs must pursue their claims in arbitration on an individual basis. The

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Court found that Defendant had not waived the right to arbitrate because the arbitration clauses

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in the operative title insurance policies for each real estate transaction – which were silent as to

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whether class-action arbitration was permissible – would not have been enforceable under

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California law prior to the decision in AT&T v. Concepcion, 131 S. Ct. 1740 (2011). The matter

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was stayed pending the result of the arbitration proceedings.

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Under the Federal Arbitration Act (“FAA”), “a party to an arbitration agreement may

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petition the United States district court for an order directing that ‘arbitration proceed in the

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manner provided for in the agreement.’” Stolt-Nielsen v. AnimalFeeds International Corp., 130

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S. Ct. 1758, 1773 (2010) (citing 9 U.S.C. § 4). The FAA “imposes certain rules of

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fundamental importance, including the basic contractual precept that arbitration ‘is a matter of

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consent, not coercion.’” Id. (citing Volt Information Sciences, Inc. v. Board of Trustees of

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Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989)).

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In Stolt-Nielsen, the Supreme Court considered an arbitration clause that was silent as to

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whether the arbitration proceedings could be conducted on a class basis, meaning, according to

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the parties’ stipulation, that “‘no agreement ... ha[d] been reached on that issue.’” Id. at 1766.

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The Court concluded that because there was no agreement on arbitration on a class basis, the

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courts had no authority to compel arbitration on that basis. It noted that whether enforcing an

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agreement to arbitrate or construing an arbitration clause, courts and arbitrators must “give
effect to the contractual rights and expectations of the parties.” Id. at 1773-74 (quoting Volt,

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For the Northern District of California

United States District Court

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489 U.S. at 479) (other internal quotation marks omitted). In this endeavor, as with any other

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contract, the parties’ intentions control.

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The Supreme Court in Stolt-Nielsen reiterated that “[a]rbitration is simply a matter of

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contract between the parties; it is a way to resolve those disputes-but only those disputes-that

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the parties have agreed to submit to arbitration.” Id. at 1774 (quoting First Options of Chicago,

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Inc. v. Kaplan, 514 U.S. 938, 943 (1995) (emphases in Stolt-Nielsen )), and reiterated that the

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courts “must not lose sight of the purpose of the exercise: to give effect to the intent of the

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parties.” Id. at 1774-75 (citing Volt, 489 U.S. at 479). The Court stated that “‘[n]othing in the

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[FAA] authorizes a court to compel arbitration of any issues, or by any parties, that are not

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already covered in the agreement.’” Id. at 1774 (quoting EEOC v. Waffle House, Inc., 534 U.S.

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279, 289 (2002) (emphasis in Stolt-Nielsen )), and therefore party may not be compelled under

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the FAA to submit to class arbitration unless there is a contractual basis for concluding that the

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party agreed to do so.” Id. at 1775 (emphasis in original).1

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Accord Fensterstock v. Education Finance Partners, 611 F.3d 124, 140-41 (2d Cir.
2010). See also, e.g., Reed v. Florida Metropolitan University, Inc., 681 F.3d 630, 641 (5th
Cir. 2012); Corrigan v. Domestic Linen Supply Co., 2012 WL 2977262, at *5 (N.D. Ill. July
20, 2012); Eshagh v. Terminix International Co., 2012 WL 1669416, at *10 (E.D. Cal. May
11, 2012); Lopez v. Ace Cash Express, Inc., 2012 WL 1655720, at *8 (C.D. Cal. May 4,
2012); Valle v. Lowe’s HIW, Inc., 2011 WL 3667441, at *6 (N.D. Cal. Aug. 22, 2011);
Swift v. Zynga Game Network, Inc., 805 F. Supp. 2d 904, 909 (N.D. Cal. 2011); Quinonez v.
Empire Today, LLC, 2010 WL 4569873, at *5 (N.D. Cal. Nov. 4, 2010).
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Accordingly, in the absence of a contractual agreement to submit to class-wide

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arbitration, this Court finds that the parties to the operative title insurance policies cannot be

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compelled to arbitrate in a fashion they have failed to agree upon. Therefore, in order to

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advance the parties’ efficient resolution of this matter, and considering the time pressure facing

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the parties, the Court issues this brief order of clarification of its previous order compelling

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arbitration on an individual basis and staying the action pending completion of such arbitration

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or settlement of the action.

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Dated: December 3, 2012
JEFFREY S. WHITE
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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IT IS SO ORDERED.

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