Byrnes v. Santa Fe Natural Tobacco Company, Inc.

Filing 20

MEMORANDUM AND ORDER granting Defendant's 10 Motion to Dismiss; denying Plaintiiff's 2 Motion to Stay; closing case. Signed by Judge George Levi Russell, III on 2/22/2017. (dass, Deputy Clerk)

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
Chambers of
GEORGE L. RUSSELL, III
United States District Judge

101 West Lombard Street
Baltimore, Maryland 21201
410-962-4055

February 22, 2017
MEMORANDUM TO COUNSEL RE:

Leo R. Byrnes v. Santa Fe Natural Tobacco
Company, Inc.
Civil Action No. GLR-16-2445

Dear Counsel:
Pending before the Court is Plaintiff Leo R. Byrnes’s Motion to Stay Pending Arbitration
(ECF No. 2) and Defendant’s, Santa Fe Natural Tobacco Company, Inc. (“Santa Fe”), Motion to
Dismiss. (ECF No. 10). The Motions are ripe for disposition, and no hearing is necessary. See
Local Rule 105.6 (D.Md. 2016). For the reasons outlined below, the Court will grant Santa Fe’s
Motion and deny Byrnes’s Motion.
Byrnes was a sales representative for Santa Fe from 2007 to 2013. (Id. ¶¶ 13, 18). He
alleges that his supervisors “targeted [him] for discharge and termination because of his age,”
despite his decades of experience and excellent sales performance. (Id. ¶ 16). Santa Fe
terminated Byrnes in March 2013 based upon an allegedly false performance rating in which
Byrnes’s supervisors concluded Byrnes “Fails to Meet” performance requirements. (Id. ¶ 18).
On June 29, 2016, Byrnes filed his Complaint, a Demand for Arbitration, and a Motion to Stay
Pending Arbitration. (ECF Nos. 1, 2). Byrnes asserts age-discrimination claims under the Age
Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621, et. seq. (2012). (Compl. ¶ 1, ECF
No. 1). Byrnes and Santa Fe both acknowledge that Byrnes’s employment contract contained an
arbitration agreement and the parties agreed to arbitrate this dispute. Santa Fe, though, opposes
Byrnes’s Motion to Stay and filed a Motion to Dismiss on July 18, 2016. (ECF No. 10). On
August 4, 2016, Byrnes filed a Response (ECF No. 17) and on August 22, 2016, Santa Fe filed a
Reply (ECF No. 19).
Byrnes first argues a stay is necessary to “protect and preserve” his claims in the event
that Santa Fe seeks to dismiss the arbitration proceedings. (Pl. Resp. at 1–2, ECF No. 17). If,
however, all his claims are subject to arbitration—as Byrnes acknowledges here—“no useful
purpose will be served by staying the pertinent proceedings pending arbitration.” Taylor v.
Santander Consumer USA, Inc., No. DKC 15-0442, 2015 WL 5178018, at *7 (D.Md. Sept. 3,
2015) (quoting In re Titanium Dioxide Antitrust Litig., 962 F.Supp.2d 840, 856 (D.Md. 2013)).
Additionally, if Byrnes disagrees with the arbitrator’s final decision, he can request a judicial
review of the arbitrator’s reward. Styles v. Triple Crown Publ’ns, LLC, No. WDQ-11-3759,
2013 WL 3944471, at *7 n.19 (D.Md. July 30, 2013) (quoting Sea-Land Serv., Inc. v. Sea-Land
of P.R., Inc., 636 F.Supp. 750, 757 (D.P.R. 1986)). Accordingly, the Court concludes that
preserving Byrnes’s claims through a stay is unnecessary.
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Byrnes next argues that the Federal Arbitration Act (FAA), 9 U.S.C. § 3 (2012), requires
a stay of an arbitrable claim. Byrnes relies on Hooters of America, Inc. v. Phillips, where the
court, interpreting § 3 of the FAA, held that “the FAA commands the federal courts to stay any
ongoing judicial proceeding.” 173 F.3d 933, 937 (4th Cir. 1999). Byrnes’s interpretation of
Hooters, however, overlooks that Hooters dealt with the enforceability of an arbitration
agreement. Id. at 937. Hooters failed to address whether a stay is mandated when an arbitration
provision is enforceable, and only held that a stay is preferable to a court continuing with a case
while arbitration is pending. Id. at 936–37 (recognizing the “longstanding judicial hostility to
arbitration” that the FAA’s “liberal federal policy favoring arbitration agreements” reversed
when enacted in 1925) (internal quotations omitted).
In fact, contrary to Byrnes’s interpretation of § 3, the Fourth Circuit in Choice Int’l
Hotels, Inc. v. BSR Tropicana Resort, Inc., held, “[n]otwithstanding the terms of § 3 . . .
dismissal is a proper remedy when all of the issues presented in a lawsuit are arbitrable.” 252
F.3d 707, 709–10 (4th Cir. 2001). In Choice Hotels, the Fourth Circuit analyzed the arbitrability
of plaintiff’s claims, rather than the general enforceability of the arbitration agreement, as it did
in Hooters. See id. at 710–11 (considering the applicability of the arbitration agreement’s
exception to each of the plaintiff’s claims). The Fourth Circuit ultimately stayed the case in
Choice Hotels finding arbitration was inapplicable to one of the plaintiff’s several claims. See
id. at 712 (“Choice’s complaint is not subject to dismissal, because it contains at least one nonarbitrable claim.”).
Byrnes, while acknowledging Choice Hotels, argues there is unresolved “tension” or
inconsistency in the Fourth Circuit between Choice Hotels and Hooters. See Aggarao v. MOL
Shipping Mgmt. Co., Ltd., 675 F.3d 355, 376 n.18 (4th Cir. 2012) (“There may be some tension
between our decision in Hooters . . . and Choice Hotels.”). The Fourth Circuit, however, has
relied on Choice Hotels to dismiss cases where all of the claims are subject to arbitration. See
Poteat v. Rich Prods. Corp., 91 F.App’x 832, 835 (4th Cir. 2004) (compelling arbitration and
dismissing the action where all of the claims are arbitrable, citing Choice Hotels). Following this
line of Fourth Circuit decisions, courts in the District of Maryland have uniformly dismissed
cases where all of the claims are arbitrable. See, e.g., Van Horn v. Symantec, No. GJH-15-1452,
2015 WL 8751411, at *2 (D.Md. Dec. 14, 2015) (relying on Choice Hotels to dismiss the matter
because the claim is subject to arbitration); Bey v. Midland Credit Mgmt., No. GJH-15-1329,
2016 WL 1226648, at *5 (D.Md. Mar. 23, 2016) (granting defendant’s motion to dismiss when it
moved to stay or in the alternative dismiss, holding that “because all of the Plaintiff’s claims . . .
are subject to arbitration, dismissal of this action is appropriate”). Here, because both Byrnes
and Santa Fe agree that all of Byrnes’s claims are arbitrable, the Court will grant Santa Fe’s
Motion to Dismiss.
For the foregoing reasons, the Court GRANTS Santa Fe’s Motion to Dismiss (ECF No.
10) and DENIES Byrnes’s Motion to Stay Pending Arbitration (ECF No. 2). Despite the
informal nature of this memorandum, it shall constitute an Order of this Court, and the Clerk is
directed to docket it accordingly and CLOSE this case.

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Very truly yours,
/s/
_______________________
George L. Russell, III
United States District Judge

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