Cheatham v. Virginia College, LLC et al

Filing 27

OPINION AND ORDER - Defendants' Motion to Compel Individual Arbitration, to Deny Class Arbitration, and to Dismiss Plaintiff's Class Action Claims [ECF 3 ] is GRANTED in part and DENIED in part. The parties are DIRECTED to arbitrate Plaint iff's Class Action Claims, including all disputes concerning arbitrability. The parties are further DIRECTED to file with the Court every 180 days after the date of this Order a joint status report concerning whether the arbitration is on-going. The Clerk of Court is DIRECTED to resubmit this Order to the undersigned every 180 days. The parties are also INSTRUCTED to notify the Court within five business days if they resolve the dispute between them, whether through settlement or otherwise. Finally, the Clerk of Court is DIRECTED to ADMINISTRATIVELY CLOSE this case. This closure is not a dismissal and does not preclude the filing of documents. The case may be re-opened if necessary. Signed by Judge Steven D. Grimberg on 9/15/2020. (tcc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MATTHEW CHEATHAM, on behalf of
himself and all others similarly situated,
Plaintiff,
v.
VIRGINIA COLLEGE, LLC and EDUCATION
CORPORATION OF AMERICA,

Civil Action No.
1:19-cv-04481-SDG

Defendants.
OPINION AND ORDER
This matter is before the Court on Defendants’ Motion to Compel Individual
Arbitration, to Deny Class Arbitration, and to Dismiss Plaintiff’s Class Action
Claims [ECF 3]. For the reasons stated below, Defendants’ motion is GRANTED
in part and DENIED in part.
I.

BACKGROUND
“This is another arbitration dispute in which the parties
are litigating whether or not they should be litigating.
The familiar scenario is that the parties agree in writing
to arbitrate any disputes between them, but then one
party files a lawsuit taking the position that the
agreement to arbitrate is inapplicable, invalid, or
unenforceable for one reason or another.”

Terminix Int’l Co., LP v. Palmer Ranch L.P., 432 F.3d 1327 (11th Cir. 2005) (quoting
Anders v. Hometown Mortg. Servs., 346 F.3d 1024, 1026 (11th Cir. 2003)).

Plaintiff Matthew Cheatham initiated this action on August 26, 2019 in the
State Court of Gwinnett County, Georgia.1 He alleges that Defendants “operated
and ran one of the largest for-profit colleges in the United States.”2 Defendant
Education Corporation of America (ECA) allegedly operates Defendant Virginia
College, LLC (the College).3 Cheatham asserts that the College’s accreditation was
suspended on December 4, 2018, which means (as Cheatham contends) his
coursework will not qualify for transfer credit.4 Cheatham further alleges that
former students now “possess degrees without value” and current students have
purportedly made tuition payments that “provided them no benefit.”5
Cheatham seeks to represent each of these putative classes (former students
and current students).6 His Complaint specifically alleges that any arbitration
agreements he entered into with Defendants are unenforceable because of 2016

1

ECF 2-1.

2

Id. ¶ 1.

3

Id. ¶ 2. Compare with ECF 2-2 (Decl. of Kellie Kennedy), ¶ 1 (asserting ECA is
the “parent company” of the College).

4

ECF 2-1, ¶ 4.

5

Id. ¶¶ 6–7.

6

Id. ¶ 35.

Department of Education (DoE) regulations that prohibit schools participating in
the federal student loan program from entering into (1) arbitration agreements
with students and (2) agreements that prevent students from bringing class action
suits.7 Cheatham further contends that, under these regulations, schools cannot
“rely on an existing arbitration agreement to force an individual or class action out
of court, even if the agreement was entered into prior to the rule’s effective date.”8
He asserts causes of action for negligence, breach of contract, and unjust
enrichment.9
On October 4, 2019, the College removed the action to this Court based on
the Class Action Fairness Act, diversity jurisdiction, and federal question
jurisdiction.10 On October 8, 2019, Defendants answered the Complaint and filed
their motion to compel arbitration.11 The motion to compel asserts that agreements
to arbitrate are valid and enforceable under the Federal Arbitration Act (FAA) and
that all of the FAA’s prerequisites to compelling arbitration have been satisfied.12

7

Id. ¶ 81. See generally id. ¶¶ 81–86 (citing 34 C.F.R. §§ 685.206, 685.222, 685.300).

8

ECF 2-1, ¶¶ 85–86 (citing 34 C.F.R. § 685.300(e)(3), (f)(3)).

9

ECF 2-1, at 9–12.

10

ECF 2.

11

ECF 1; ECF 3.

12

ECF 3, at 4–9.

Defendants also contend that the Court should deny class arbitration and dismiss
Cheatham’s class claims because the parties did not agree to arbitrate such
claims.13 Finally, Defendants argue that the Department of Education regulations
on which Cheatham relies do not prevent enforcement of the parties’ arbitration
agreements.14 On October 22, Cheatham opposed the motion to compel.15 On
November 5, Defendants filed a reply in support of the motion.16 On November
14, Cheatham filed a notice of supplemental authority.17 On November 18,
Defendants filed a notice of supplemental authority.18
II.

CONTRACT TERMS
Cheatham’s Complaint did not attach copies of any contracts between the

parties and does not identify when the contract (or contracts) on which his claims

13

Id. at 12–13.

14

Id. at 14–21.

15

ECF 9.

16

ECF 11.

17

ECF 15. Instead of providing authority to supplement arguments Cheatham
had already presented, the filing was actually an improper sur-reply brief that
responded to arguments raised in Defendants’ reply brief.

18

ECF 16 (identifying Chamber of Com. v. U.S. Dep’t of Labor, 885 F.3d 360 (5th Cir.
2018) and Thrivent Fin. for Lutherans v. Acosta, No. 16-cv-03289-SRN-DTS, 2017
WL 5135552 (D. Minn. Nov. 3, 2017)). The notice did not point to court rulings
that were only made available after the briefing had closed. Rather, the cited
opinions were available before Defendants filed their opening brief.

are based was executed. However, Defendants’ motion to compel attached (1) an
Arbitration Policy and an Enrollment and Tuition Agreement both executed by
Cheatham on April 18, 2011 (collectively, the 2011 Agreements);19 (2) an
Arbitration Policy and an Enrollment and Tuition Agreement both executed by
Cheatham on December 14, 2016 (collectively, the 2016 Agreements);20 and (3) an
Arbitration Policy and an Enrollment and Tuition Agreement both executed by
Cheatham on September 12, 2017 (collectively, the 2017 Agreements).21
The arbitration provisions in the 2017 Agreements state:
ARBITRATION: Any claim, controversy or dispute
arising out of or relating to this Contract or any alleged
breach, violation or default of this Contract, together
with all other claims, controversies or disputes of any
19

ECF 3-3, at 28, 29–32.

20

Id. at 34, 35–38.

21

Id. at 39, 40–45.
Cheatham does not contest the authenticity of these documents. Accordingly,
the Court may appropriately consider them without converting Defendants’
motion into one for summary judgment. Adamson v. Poorter, No. 06-15941, 2007
WL 2900576, at *2 (11th Cir. Oct. 4, 2007) (“[A] document attached to the
pleadings as an exhibit may be considered if it is central to the plaintiff’s claim
and the authenticity of the document is not challenged.”) (citations omitted);
Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002) (“Our Rule 12(b)(6)
decisions have adopted the ‘incorporation by reference’ doctrine, under which
a document attached to a motion to dismiss may be considered by the court
without converting the motion into one for summary judgment only if the
attached document is: (1) central to the plaintiff’s claim; and (2) undisputed.”)
(citations omitted).

nature whatsoever, including but not limited to all claims
based in tort, fraud, contract, equity, state law, and/ or
federal law, arising out of or in relation to the Student’s
enrollment and participation in courses at the college,
shall, upon notice by either party to the other party, be
resolved and settled by binding arbitration administered
by the American Arbitration Association in accordance
with its Commercial Arbitration Rules. Such arbitration
shall take place in Birmingham, Alabama. The parties
agree that any dispute subject to arbitration shall not be
adjudicated as a class action or a consolidated class
arbitration proceeding either in court or under the rules
of the American Arbitration Association. The right of any
party to pursue a class action for any dispute subject to
arbitration shall be waived to the fullest extent permitted
by law. The arbitrator’s decision and award shall be final,
binding on the parties, and non-appealable, and may be
entered in any court of competent jurisdiction to enforce
it. The parties shall, respectively, pay any expenses
incurred as American Arbitration Association fees,
administrative fees, arbitrator fees, mediation fees,
hearing fees, and postponement/cancellation fees in
accordance with the rules and procedures adopted by the
American Arbitration Association. Notwithstanding the
provisions of this Arbitration Provision, in the event a
breach, violation or default of this Contract (or any of its
terms) is alleged, the College shall have the option to
seek injunctive relief in any court of competent
jurisdiction barring further breach or violation of this
Contract pending arbitration. In the event any provision
of this binding Arbitration Provision is held to be invalid,
illegal or unenforceable for any reason and in any
respect, such invalidity, illegality, or unenforceability
shall in no event affect, prejudice or disturb the validity
of the remainder of this Arbitration Provision, which
shall be and remain in full force and effect, enforceable in
accordance with its terms. BY SIGNING THIS CONTRACT,

THE STUDENT (AND, IF APPLICABLE, HIS/HER PARENT OR
LEGAL GUARDIAN) GIVE UP THE RIGHT TO GO TO COURT
AND THE RIGHT TO TRIAL BY JURY AND EXPRESSLY
ACKNOWLEDGE AND UNDERSTAND THAT HIS, HER OR
THEIR RIGHTS AND REMEDIES WILL BE DETERMINED BY AN
ARBITRATOR AND NOT BY A JUDGE OR JURY. THE PARTIES
UNDERSTAND
THAT
A
DETERMINATION
BY
AN
ARBITRATOR IS AS ENFORCEABLE AS ANY ORDER AND IS
SUBJECT TO VERY LIMITED REVIEW BY A COURT.22

Each of the three sets of agreements (2011, 2016, and 2017) is governed by
Alabama law and requires arbitration pursuant to the Commercial Arbitration
Rules of the American Arbitration Association.23 The 2016 and 2017 Agreements
contain express class action and consolidated class arbitration waivers,24 while the
2011 Agreements do not.25 The 2016 and 2017 Agreements also require arbitration

22

ECF 3-3, at 41 ¶ 10 (emphasis added). See also id. at 39.

23

Id. at 28 (2011 Arbitration Policy); id. at 30 (2011 Tuition Agreement ¶ 10
Arbitration); id. at 31 (2011 Tuition Agreement ¶ 17 Governing Law); id. at 34
(2016 Arbitration Policy); id. at 36 (2016 Tuition Agreement ¶ 10 Arbitration);
id. at 37 (2016 Tuition Agreement ¶ 17 Governing Law); id. at 39 (2017
Arbitration Policy); id. at 41 (2017 Tuition Agreement ¶ 10 Arbitration); id. at
43 (2017 Tuition Agreement ¶ 16 Governing Law).

24

Id. at 34 (2016 Arbitration Policy); id. at 36 ¶ 10 (2016 Tuition Agreement); id.
at 39 (2017 Arbitration Policy); id. at 41 ¶ 10 (2017 Tuition Agreement).

25

Id. at 28 (2011 Arbitration Policy); id. at 30 ¶ 10 (2011 Tuition Agreement).

of tort claims.26 The 2017 Agreements expressly require any arbitration to take
place in Birmingham, Alabama.27
III.

APPLICABLE LEGAL STANDARDS
The FAA reflects the strong federal policy in favor of arbitration. Howsam v

Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (noting that the Supreme Court
has “long recognized and enforced a ‘liberal federal policy favoring arbitration
agreements’”) (quoting Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S.
1, 24–25 (1983)). See also Parnell v. CashCall, Inc., 804 F.3d 1142, 1146 (11th Cir. 2015)
(“The FAA places arbitration agreements on equal footing with all other contracts
and sets forth a clear presumption—‘a national policy’—in favor of arbitration.”)
(citations omitted). That said, parties cannot be required to submit a dispute to
arbitration unless they have agreed to do so. The Supreme Court has made clear
that “the arbitrability of the merits of a dispute depends upon whether the parties
agreed to arbitrate that dispute.” First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938, 943 (1995) (citations omitted). See also Granite Rock Co. v. Int’l Bhd. of Teamsters,
561 U.S. 287, 297 (2010) (“[A] court may order arbitration of a particular dispute

26

Id. at 34 (2016 Arbitration Policy); id. at 36 ¶ 10 (2016 Tuition Agreement); id.
at 39 (2017 Arbitration Policy); id. at 41 ¶ 10 (2017 Tuition Agreement).

27

Id. at 41 ¶ 10 (emphasis in original).

only where the court is satisfied that the parties agreed to arbitrate that dispute.”)
(citations omitted); Howsam, 537 U.S. at 83; AT&T Techs. Inc. v. Commc’ns Workers
of Am., 475 U.S. 643, 649 (1986).
Further, unless parties have agreed otherwise, questions of arbitrability—
i.e., whether a particular dispute must be decided by a court or an arbitrator—are
to be made by the court. First Options, 514 U.S. at 943; AT&T Techs., 475 U.S. at 649.
See also Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 527 (2019)
(“The [Federal Arbitration] Act allows parties to agree by contract that an
arbitrator, rather than a court, will resolve threshold arbitrability questions as well
as underlying merits disputes.”) (citations omitted). There must be clear and
unmistakable evidence that the parties intended for the arbitrator, rather than the
court, to determine arbitrability. Howsam, 537 U.S. at 83 (“The question whether
the parties have submitted a particular dispute to arbitration, i.e., the ‘question of
arbitrability,’ is ‘an issue for judicial determination [u]nless the parties clearly and
unmistakably provide otherwise.’”) (quoting AT&T Techs., 475 U.S. at 649). Where
the parties have done so, arbitrability has been “delegated.”
IV.

DISCUSSION
The initial question the Court must address is whether it or an arbitrator

must rule on Cheatham’s attack on the enforceability of the arbitration agreements

entered into by the parties. The Court concludes that this is a matter the parties
delegated to the arbitrator.
a.

The parties entered valid agreements to arbitrate.

In general, it is for the Court to decide disputes about contract formation.
Granite Rock, 561 U.S. at 296. But here, the parties’ disagreement is not about
whether valid contracts were created in the first place. It is clear that the parties
entered into valid, broad agreements to arbitrate any disputes related to
Cheatham’s enrollment in and attendance at the College. Every iteration of the
Arbitration Policy and Tuition Agreement signed by Cheatham contained the
following language:
Any claim, controversy or dispute arising out of or
relating to this Contract or any alleged breach, violation
or default of this Contract, together with all other claims,
controversies or disputes of any nature whatsoever
[ . . . ] arising out of or in relation to the Student’s
enrollment and participation in courses at the College,
shall . . . be resolved and settled by binding
arbitration . . . .28
No party contends that these contracts were never formed. In fact, while he does
not specify on which agreement his claims are based, Cheatham asserts a cause of

28

ECF 3-3, at 28, 30, 34, 36, 39, 41.

action for breach of contract.29 He affirmatively alleges that he (and members of
the putative classes he seeks to represent) entered into contracts with Defendants
and that Defendants breached those contracts by, among other things, failing to
maintain the College’s accreditation.30
Nor is there any dispute that all of Cheatham’s claims are covered by the
relevant arbitration provisions—unless there is something (such as the DoE
regulations) that prohibits their enforcement.31 Cheatham’s argument is that the
DoE regulations, which became effective after the parties had formed the
Agreements, made the arbitration and class waiver provisions unenforceable and
require the College to amend the agreements or “notify the students that they will
not enforce the agreement.”32 The crucial question is whether the parties delegated

29

ECF 2-1, ¶¶ 66–75 (Count II).

30

Id. ¶¶ 67, 70.

31

See, e.g., ECF 9, at 1–2 (“Plaintiff’s Complaint specifically attacked the
enforceability of the arbitration provision of the Enrollment Agreement as
unenforceable due to Borrower Defense regulations promulgated by the
Department of Education . . . .”).
Although Cheatham asserts in the alternative that the arbitration and class
waiver provisions are not enforceable because they are unconscionable, this
argument is also based on the contention that the provisions are unenforceable
because they conflict with the DoE regulations. Id. at 24.

32

ECF 2-1, ¶¶ 85–86. See also, e.g., id. ¶ 81 (“The Department of Education entered
a rule in 2016 which was in effect as of October 16, 2018 prohibiting schools
participating in the federal student loan program from entering into certain

such determinations about enforceability to an arbitrator or if they must be
decided by the Court. The parties’ contracts make clear that these determinations
have been delegated.
b.

The parties’ agreements delegate to the arbitrator questions of
arbitrability.

The Agreements all expressly incorporate the American Arbitration
Association’s (AAA) Commercial Arbitration Rules (the Rules).33 Those Rules
specifically delegate to the arbitrator questions of arbitrability:
The arbitrator shall have the power to rule on his or her
own jurisdiction, including any objections with respect
to the existence, scope, or validity of the arbitration
agreement or to the arbitrability of any claim or
counterclaim.34

pre-dispute arbitration agreements with students or agreements that purport
to waive students’ rights to bring class actions.”); id. ¶ 86 (“The school must
either amend the agreement or notify the students that they will not enforce
the agreement.”) (citing 34 C.F.R. § 685.300(e)(3), (f)(3)); ECF 15, at 1–2
(indicating relevant rules became effective in October 2018).
33

ECF 3-3, at 28 (2011 Arbitration Policy); id. at 30 (2011 Tuition Agreement ¶ 10
Arbitration); id. at 34 (2016 Arbitration Policy); id. at 36 (2016 Tuition
Agreement ¶ 10 Arbitration); id. at 39 (2017 Arbitration Policy); id. at 41
(2017 Tuition Agreement ¶ 10 Arbitration).

34

Am. Arb. Ass’n Com. Arb. R. R-7(a) (emphasis added). See also id. R-7(b)
(“The arbitrator shall have the power to determine the existence or validity of
a contract of which an arbitration clause forms a part. Such an arbitration
clause shall be treated as an agreement independent of the other terms of the
contract. A decision by the arbitrator that the contract is null and void shall not
for that reason alone render invalid the arbitration clause.”).

Thus, there is clear and unmistakable evidence that the parties delegated to the
arbitrator questions of arbitrability. Howsam, 537 U.S. at 83; AT&T Techs., 475 U.S.
at 649. Nor has Cheatham specifically challenged this portion of the arbitration
agreements; rather, he seeks to invalidate the entire requirement to arbitrate and
the class action waiver.35 Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 72 (2010)
(“[U]nless [the plaintiff] challenged the delegation provision specifically, we must
treat it as valid under [9 U.S.C.] § 2, and must enforce it under §§ 3 and 4, leaving
any challenge to the validity of the Agreement as a whole for the arbitrator.”);
Parnell, 804 F.3d at 1144 (“The Supreme Court has explained that where an
arbitration agreement contains a delegation provision—committing to the
arbitrator the threshold determination of whether the agreement to arbitrate is
enforceable—the courts only retain jurisdiction to review a challenge to that
specific provision. Absent such a challenge, the Federal Arbitration Act (FAA)
requires that we treat a delegation provision as valid and permit the parties to
proceed to arbitration. We hold that when a plaintiff seeks to challenge an
arbitration agreement containing a delegation provision, he or she must challenge

35

See, e.g., ECF 2-1, ¶¶ 81–86.

the delegation provision directly.”) (citing Rent-A-Center, 561 U.S. at 72; 9 U.S.C.
§ 2). See also Parnell, 804 F.3d at 1146–47, 1148.
Further, the Eleventh Circuit has made clear that incorporation of the Rules
into an arbitration agreement delegates to the arbitrator questions about the
enforceability or validity of the arbitration agreement—as opposed to challenges
to the formation of an agreement to arbitrate in the first instance. In Terminix
International Company, LP v. Palmer Ranch L.P., 432 F.3d 1327 (11th Cir. 2005), the
parties disputed whether Palmer Ranch’s numerous claims were required to be
arbitrated. Palmer Ranch did not deny that all of its contracts with Terminix
contained broad arbitration clauses; it instead asserted (among other things) that
the arbitration agreements were unenforceable because arbitration would deprive
Palmer Ranch of the ability to obtain punitive damages, treble damages, and
injunctive and declaratory relief. Id. at 1329. The district court denied Terminix’s
motion to compel arbitration, holding that the arbitration clauses were
unenforceable. Id. at 1330–31.
The appellate court acknowledged that:
[T]he reason a challenge such as the one advanced by
Palmer Ranch is ordinarily a matter for the court to
decide is that it ultimately goes to the validity of the
parties’ agreement to arbitrate. That is, Palmer Ranch
argues that the whole arbitration clause is unenforceable

because it contains unenforceable remedial restrictions
that are not severable from the remainder. The Supreme
Court has recently reaffirmed that the question “whether
the parties have a valid arbitration agreement at all” is
for the court, not the arbitrator, to decide. This rule
makes imminent sense, for in the absence of “clear and
unmistakable evidence” that the parties intended the
arbitrator to rule on the validity of the arbitration
agreement itself, the arbitrator would lack authority to
invalidate the very contract from which he derives his
authority to begin with.
Id. at 1331–32 (citations omitted). However, where the parties to an arbitration
agreement “agreed that the arbitrator will answer this question by
providing . . . that ‘arbitration shall be conducted in accordance with the
Commercial Arbitration Rules then in force of the American Arbitration
Association’ . . . . the parties clearly and unmistakably agreed that the arbitrator
should decide whether the arbitration clause is valid.” Id. at 1332. As a result,
Palmer Ranch’s arguments against the relevant arbitration clauses were required
to be arbitrated. Id. at 1333 (“Because the parties have agreed that the arbitrator
should decide this ultimate question, there is no reason for us to decide the
subsidiary, antecedent questions regarding the validity of the remedial restrictions
that Palmer Ranch now challenges. In the ordinary case, we would decide these
questions only because they go to the validity of the arbitration clause itself, which
is by default an issue for the court, not the arbitrator. Here, however, the parties

have contracted around that default rule, and it is, therefore, unnecessary for us to
reach these issues.”) (footnote omitted).
In Fallo v. High-Tech Institute, 559 F.3d 874, 876 (8th Cir. 2009)—a case even
more factually on point than Terminix (albeit not controlling)—current and former
students of a for-profit vocational school sued the school for breach of the
enrollment agreement, as well as in tort and for violation of a Missouri statute. The
district court denied the school’s second motion to compel arbitration, concluding
that it had the authority to determine arbitrability. Id. at 877. The school appealed.
Id. On appeal, the Eighth Circuit concluded that:
The act of incorporating Rule 7(a) of the AAA
[Commercial Arbitration] Rules provides even clearer
evidence of the parties’ intent to leave the question of
arbitrability to the arbitrator than does the act of
incorporating Section 35 of the NASD Code because Rule
7(a) expressly gives the arbitrator “the power to rule on
his or her own jurisdiction.” Consequently, we conclude
that the arbitration provision’s incorporation of the AAA
Rules . . . constitutes a clear and unmistakable
expression of the parties’ intent to leave the question of
arbitrability to an arbitrator.
Id. at 878 (citing, inter alia, Terminix, 432 F.3d at 1332). Accordingly, the appellate
court reversed the district court’s denial of the school’s motion to compel
arbitration and directed that the motion be granted.

Similarly here, the clear and unmistakable evidence is that the parties
incorporated the Rules into their arbitration agreements and delegated to the
arbitrator all questions concerning the validity and enforceability of those
agreements. Thus, whether Cheatham has standing to assert that the arbitration
agreements are barred by DoE regulations, whether the DoE regulations actually
bar enforcement of the arbitration agreements for any reason, and whether
Cheatham’s putative class claims should be dismissed or can be arbitrated, are all
questions the parties agreed to submit to the arbitrator for decision. Accordingly,
to the extent Defendants’ motion seeks to compel arbitration, the motion is
GRANTED.
V.

STAY OF PROCEEDINGS
The Court declines, however, to dismiss this action with prejudice. The

Federal Arbitration Act proscribes that federal courts stay an action when the
matter is referred to arbitration:
If any suit or proceeding be brought in any of the courts
of the United States upon any issue referable to
arbitration under an agreement in writing for such
arbitration, the court in which such suit is
pending . . . shall on application of one of the parties stay
the trial of the action until such arbitration has been
had . . . .

9 U.S.C. § 3. Defendants acknowledge as much, but argue that dismissal is
appropriate where all of the issues in the case are being submitted to arbitration.36
The plain language of the statute provides that cases should be stayed pending
arbitration—not dismissed. A stay is particularly appropriate here, where the
parties have delegated questions of arbitrability and Cheatham challenges the
enforceability of the arbitration agreements. Accordingly, to the extent
Defendants’ motion seeks dismissal of this action and dismissal of Cheatham’s
class allegations, the motion is DENIED and this action is STAYED pending
arbitration.
VI.

CONCLUSION
Defendants’ Motion to Compel Individual Arbitration, to Deny Class

Arbitration, and to Dismiss Plaintiff’s Class Action Claims [ECF 3] is GRANTED
in part and DENIED in part. The parties are DIRECTED to arbitrate Plaintiff’s
Class Action Claims, including all disputes concerning arbitrability. The parties
are further DIRECTED to file with the Court every 180 days after the date of this

36

ECF 3, at 13–14 (citing Choice Hotels Int’l, Inc. v. BSR Tropicana Resort, Inc., 252
F.3d 707 (4th Cir. 2001); Halford v. Deer Valley Home Builders, Inc., No. 2:07-cv180, 2007 WL 1229339 (M.D. Ala. April 25, 2007); Dale v. Comcast Corp., 453
F. Supp. 2d 1367, 1378 (N.D. Ga. 2006)). Dale, however, was reversed on appeal.
498 F.3d 1216 (11th Cir. 2007).

Order a joint status report concerning whether the arbitration is on-going. The
Clerk of Court is DIRECTED to resubmit this Order to the undersigned every 180
days. The parties are also INSTRUCTED to notify the Court within five business
days if they resolve the dispute between them, whether through settlement or
otherwise.
Finally, the Clerk of Court is DIRECTED to ADMINISTRATIVELY
CLOSE this case. This closure is not a dismissal and does not preclude the filing
of documents. The case may be re-opened if necessary.
SO ORDERED this the 15th day of September 2020.

Steven D. Grimberg
United States District Court Judge