Harrison et al v. General Motors, LLC

Filing 45

OPINION and ORDER Granting in Part GM's Motion to Compel Arbitration 37 . Signed by District Judge Laurie J. Michelson. (EPar)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
DANNY HARRISON, et al.,
Plaintiffs,

Case No. 21-12927
Honorable Laurie J. Michelson

v.
GENERAL MOTORS LLC,
Defendant.
OPINION AND ORDER GRANTING IN PART
GM’S MOTION TO COMPEL ARBITRATION [37]
Danny Harrison, along with 41 other plaintiffs, bought new or pre-owned
General Motors vehicles that they believe are defective. Specifically, Plaintiffs allege
that each of their vehicles (which encompass a variety of GM models and range from
model years 2014 to 2021) has a valve-train system that malfunctions in a few ways.
The valve-train system controls when the intake valves and the exhaust valves
open and close in a vehicle’s engine. As their names suggest, the intake valves
introduce either gasoline and air or just air to the combustion chamber and the
exhaust valves allow exhaust to escape the chamber. Plaintiffs say that the rocker
arms, which turn or pivot to open the valves, shed needle bearings, causing them to
move out of rhythm with the rest of the valve train. And the valve springs, which
close the valves, break down and fail prematurely, so they are unable to hold the
combustion chamber closed. The defect also includes issues with the lifters, which
apply pressure to the rocker arms, collapsing or becoming stuck.

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As a result of this broadly defined defect, Plaintiffs say that they hear noises
from the engine, such as a “chirping, squeaking, and/or ticking when the vehicle is
not idling.” Eventually, the defect leads to the engine misfiring as valves fail to open
and close at the appropriate times. This, say Plaintiffs, causes them to stall, surge,
or lose power while driving.
So Plaintiffs sued GM over what they call the Valve-Train Defect. They bring
a host of claims, all on behalf of nationwide or statewide classes, which include
fraudulent omission or concealment, unjust enrichment, breach of express warranty,
breach of implied warranty, violation of the Magnuson-Moss Warranty Act, and
violations of consumer-protection statutes in 22 states.
GM moved to compel 20 of the plaintiffs to arbitrate their claims. (GM also
sought to dismiss many claims, which is the subject of a separate opinion.) Given the
adequate briefing, the Court considers the motion to compel arbitration without
further argument. See E.D. Mich. LR 7.1(f).
For the reasons given below, the Court will grant in part GM’s motion to
compel arbitration. The claims on behalf of the 17 plaintiffs who have a delegation
clause in their arbitration agreement are stayed pending arbitration. As for the three
remaining Plaintiffs, the Court finds that GM may not compel them to submit their
claims to arbitration.

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GM argues that about half of the named plaintiffs signed valid arbitration
clauses, and thus, the Court may not adjudicate their claims.1
A motion to compel arbitration under § 4 of the Federal Arbitration Act is
treated like a Rule 56 motion for summary judgment, and GM “had the initial duty
to present evidence that would allow a trier of fact to find all required elements of a
contract . . . because it bore the burden of proof on its contract claim under § 4.” See
Boykin v. Family Dollar Stores of Mich., LLC, 3 F.4th 832, 839 (6th Cir. 2021).
One of the main issues raised by the parties here is whether GM can enforce
the arbitration agreement even though it is not a signatory to the agreement. Related
to that issue, there are two sub-issues the Court will address in turn. First, it will
address issues related to the delegation clause, which delegates issues of arbitrability
(including whether GM can enforce the arbitration provision) to the arbitrator.
Second, for Plaintiffs without a delegation clause, it will address whether GM can
enforce the arbitration provision against those Plaintiffs.
Delegation Clause
Delegation clauses delegate questions of arbitrability to the arbitrator. In other
words, these clauses state that an arbitrator (rather than a judge) must determine
“gateway” questions, such as whether the parties have a valid arbitration agreement,

The Court has provided a factual background for this case in its opinion on
GM’s motion to dismiss, which was issued simultaneously with this opinion. As the
issue of arbitration requires little understanding of the underlying dispute, the Court
does not include the factual summary here.
1

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whether GM may enforce the arbitration agreement, and whether the agreement
covers a particular issue. See Rent-A-Center West, Inc. v. Jackson, 561 U.S. 63, 68–69
(2010).
The Supreme Court has recognized that a delegation clause “is simply an
additional, antecedent agreement the party seeking arbitration asks the federal court
to enforce, and the [Federal Arbitration Act] operates on this additional arbitration
agreement just as it does on any other.” Rent-A-Center West, Inc., 561 U.S. at 68–69.
“The additional agreement is valid under § 2 [of the FAA] save upon such grounds as
exist at law or in equity for the revocation of any contract, and federal courts can
enforce the agreement by staying federal litigation under § 3 [of the FAA] and
compelling arbitration under § 4 [of the FAA].” Id. “[I]f a valid agreement exists, and
if the agreement delegates the arbitrability issue to an arbitrator, a court may not
decide the arbitrability issue.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139
S. Ct. 524, 530 (2019).
The Court may refer issues of arbitrability to an arbitrator “so long as the
parties’ agreement [delegates these issues] by clear and unmistakable evidence.” Id.
(citing Rent-A-Center, 561 U.S. at 69). The Sixth Circuit has held that incorporation
of or reference to the American Arbitration Association (AAA) rules is “clear and
unmistakable evidence” that there was an agreement to delegate issues of
arbitrability, as those rules “clearly empower an arbitrator to decide questions of
‘arbitrability.’” Blanton v. Domino’s Pizza Franchising LLC, 962 F.3d 842, 845–46
(6th Cir. 2020). Here, 17 of the named plaintiffs entered into contracts that either

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explicitly refer issues of arbitrability to an arbitrator or incorporate the AAA’s rules
into the agreement. (See ECF No. 37-2, PageID.3361 (arbitration agreement for
Ibrahim and Lamberts stating, “Any dispute as to the validity, existence, scope,
jurisdiction, or applicability of this arbitration agreement shall be arbitrated and
decided by the arbitrator.”); id. at PageID.3308 (arbitration agreement for Solis
stating “Any claim or dispute . . . (including the interpretation and scope of this
Arbitration Provision, and the arbitrability of the claim or dispute) . . . shall, at your
or our election, be resolved by neutral, binding arbitration[.]”); id. at 3323
(Velasquez); id. at 3326 (Zembol); id. at 3334 (Demarest); id. at PageID.3342
(Thorsons’ agreement that “[a]ny dispute between Buyer and Dealer arising out of
this transaction will be decided by arbitration . . . under . . . the applicable rules of
the American Arbitration Association.”); id. at PageID.3349 (Cecchini); id. at
PageID.3372 (Hudson); id. at PageID.3376 (Fancher); id. at PageID.3381 (Prosser);
ECF No. 37-3, PageID.3384 (Johnson); ECF No. 37-4, PageID.3391 (Brown); ECF No.
37-5, PageID.339 (Acree); ECF No. 37-6, PageID.3403 (Lacys).)2 So these Plaintiffs
agreed to delegate questions of arbitrability to the arbitrator.
GM says that an 18th plaintiff is part of this group, but the Court disagrees.
GM argues that Dittman’s agreement to submit to arbitration “all claims, demands,
disputes or controversies of every kind or nature that may arise concerning . . .

Demarest’s and Acree’s arbitration agreements (ECF No. 37-2, PageID.3334;
ECF No. 37-5) are illegible or cut off. GM states that Demarest’s arbitration clause
incorporates the AAA rules, and that Acree’s delegates questions of scope and
enforceability to the arbitrator, and Plaintiffs do not argue otherwise. So the Court
will accept that Demarest and Acree agreed to a delegation clause.
2

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statements relating to the arbitration agreement” delegates questions of arbitrability
to the arbitrator. (See ECF No. 37-2, PageID.3366.) This phrase is not “clear and
unmistakable evidence that the parties agreed to have the arbitrator decide” issues
of enforcement, validity, and scope. See Blanton, 962 F.3d at 844. Compared to the
other delegation clauses found in Plaintiffs’ sales and lease agreements, Dittman’s
arbitration provision does not mention scope, existence, or validity. The provision
merely states that disputes over “statements relating to the arbitration agreement”
are for the arbitrator. Arbitrability does not clearly and unmistakably fall into that
category. It is much more likely that the phrase refers to statements the dealership
employees made about the arbitration agreement, for example, and not whether GM
could enforce the agreement. The clause simply does not show that Dittman agreed
to arbitrate gateway issues.
As for the 17 named plaintiffs with delegation clauses, they do not contest that
they agreed that an arbitrator would decide issues of arbitrability. Instead, they say
those delegation clauses cannot be enforced against them in this litigation because
they were only made in agreements with GM dealerships, and not with GM directly.
Put differently, according to these plaintiffs, there is not clear and unmistakable
evidence that they agreed with GM to delegate issues of arbitrability to the arbitrator.
(ECF No. 41, PageID.5309.)
Plaintiffs are correct that the arbitration agreements in question were made
with GM dealerships. GM does not contest that. But that fact only gets them so far,

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as precedent from the Sixth Circuit instructs the Court to also delegate the issue of
whether non-parties can enforce this agreement against Plaintiffs.
In Swiger v. Rosette, the Sixth Circuit acknowledged that the issue of whether
a non-signatory (like GM) can enforce a delegation clause against signatories (like
Plaintiffs) presents a “logical conundrum” because generally, it is the courts
responsibility to “determine whether a contract exists at all, and if the nonsignatories
are not parties to the contract, then the Plaintiff has no agreement with them.” 989
F.3d 501, 506–07 (6th Cir. 2021) (quoting De Angelis v. Icon Ent. Grp. Inc., 364 F.
Supp. 3d 787, 796 (S.D. Ohio 2019)). The Sixth Circuit concluded, however, that
whether a non-party could enforce the arbitration agreement, including the
delegation clause, “concerned a question of arbitrability . . . that [Plaintiff’s]
arbitration agreement delegated to an arbitrator.” Id. (citing Blanton v. Domino’s
Pizza Franchising LLC, 962 F.3d 842, 848–49 (6th Cir. 2020)); see also Blanton, 962
F.3d at 852 (“Keep in mind that the question here is quite narrow. It’s not about the
merits of the case. It’s not even about whether the parties have to arbitrate the merits.
Instead, it’s about who should decide whether the parties have to arbitrate the
merits.”); Becker v. Delek US Energy, Inc., 39 F.4th 351, 356 (6th Cir. 2022) (leaving
the question of whether Delek could enforce the arbitration agreement for the
arbitrator). So the fact that these named plaintiffs did not contract with GM does not
bar the Court from delegating questions of arbitrability, including that very issue, to
the arbitrator.

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Resisting this conclusion, Plaintiffs argue that because they are specifically
challenging the delegation clause, as opposed to the whole arbitration agreement, the
Court is required to determine whether GM can enforce that provision against them.
To this end, Plaintiffs challenge the delegation clause on three grounds: (1) “[they]
and GM did not manifest an intent to agree, and did not agree to them,” (2) “that GM
is incapable of meeting its heightened burden, specific to the delegation clauses, of
proving the parties’ intent by clear and unmistakable evidence,” and (3) “the
[delegation clauses] are completely subsumed within the arbitration provisions that
are buried at the end of dense vehicle contracts.” (ECF No. 41, PageID.5317.)
True, the Supreme Court has stated that “[i]f a party challenges the validity
under § 2 [of the FAA] of the precise agreement to arbitrate at issue, the federal court
must consider the challenge before ordering compliance with that agreement under §
4.” Rent-A-Center, 561 U.S. at 71. This test, however, “is hard to meet” and, as the
Sixth Circuit explained in Becker, “is not met here.” See 39 F.4th 351, 356 (6th Cir.
2022).
Start with Plaintiffs’ first two challenges to the delegation clause. The primary
reason GM is unable to show “clear and unmistakable evidence” of an intent to
delegate issues of arbitrability, according to Plaintiffs, is because they did not sign an
arbitration agreement with GM. The Becker Court rejected this argument, finding
that it is not a “specific” challenge to the delegation clause. To meet the “specific
challenge” test in the Sixth Circuit, Plaintiffs “must show that the basis of their
challenge is directed specifically to the delegation provision.” Becker, 39 F.4th at 356.

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Such a showing is not made when a party “simply recycles the same arguments that
pertain to the enforceability of the agreement as a whole” or invokes the same factual
or legal grounds as the ones supporting its challenge to the agreement as a whole. Id.
Applying this standard, the Becker Court went on to find that the plaintiff’s challenge
to the delegation clause relied on a “single circumstance, that [Defendant] is a nonsignatory to the employment agreement[.]” Id. In other words, the plaintiff’s
challenge to “the enforceability of both the arbitration agreement and the delegation
provision” were “identical in substance.” Id. Thus, the Sixth Circuit held that an
arbitrator must decide whether the defendant could enforce the arbitration
agreement. Id.
That is true here, too. Though styled as a “specific” challenge, Plaintiffs use
the same factual and legal bases to challenge GM’s ability to enforce both the
arbitration agreement in general and the delegation clause specifically. (ECF No. 41,
PageID.5320–5324 (emphasizing the agreements’ use of “you or our” or “the parties”
to argue that the agreements create “rights and duties between the Subject Plaintiffs
and the dealerships only.”).) So, as the Sixth Circuit did in Becker, the Court finds
that this challenge is not “specific” to the delegation clause such that the Court, and
not the arbitrator, should decide whether GM can enforce the agreement against
Plaintiffs.
Plaintiffs’ third challenge to their delegation clauses—that the delegation
clause is completely “subsumed” within the arbitration provisions—does not fare
much better. Though Plaintiffs provide little explanation of this argument, the Court

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surmises that Plaintiffs are arguing that there is only clear and unmistakable
evidence of an agreement to delegate issues to an arbitrator if the delegation clause
is independent of other provisions of the agreement.
This argument gets Plaintiffs nowhere. Though the challenge is perhaps
specific to the delegation clause, it does not challenge the “validity” of the delegation
clause. See Cunningham v. Ford Motor Co., No. 21-CV-10781, 2022 WL 2819115, at
*6 (E.D. Mich. July 19, 2022); see also Rent-A-Center, 561 U.S. at 71 (“If a party
challenges the validity under § 2 [of the FAA] of the precise agreement to arbitrate
at issue, the federal court must consider the challenge before ordering compliance
with that agreement under § 4.”). Courts recognize a validity challenge as one that
asserts a “generally applicable contract defense” such as “fraud, duress, or
unconscionability” to show that the delegation clause is unenforceable. See
Cunningham, 2022 WL 2819115, at *6 (citing Rent-A-Center, 561 U.S. at 68).
Plaintiffs have not pointed to any “generally applicable contract defense” that a
provision subsumed within another provision is not enforceable.
And even if the Court were to consider the merits of such an argument, GM
would still have shown by “clear and unmistakable evidence” that Plaintiffs had
agreed to a delegation clause. As the Cunningham court found, the Sixth Circuit’s
decision in Swiger involved a delegation clause that was not a standalone provision.
Cunningham, 2022 WL 2819115, at *4 (citing Swiger, 989 F.3d at 506). Yet, in Swiger,
the Sixth Circuit enforced the delegation clause against the plaintiffs and required
an arbitrator to decide if the defendant could enforce the arbitration agreement

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against them. See id. The Court agrees with the reasoning in Cunningham that
“Swiger makes clear that under these circumstances – i.e., where a plaintiff has
signed a contract with an arbitration provision and a delegation clause and where a
non-party to the contract seeks to compel the plaintiff to arbitrate claims that bear
some relation to the contract – the question is not whether the plaintiff specifically
intended that the non-party could enforce the delegation clause.” Id. “Rather,” the
court continued, “the sole question is whether the delegation clause clearly and
unmistakably delegates questions of arbitrability to the arbitrator.” Id. GM has met
this burden despite the delegation clauses being subsumed within the arbitration
provision.
In support of their argument that the delegation clause must stand alone,
Plaintiffs disregard this Sixth Circuit authority and instead rely on Straub v. Ford
Motor Company, No. CV 21-10634, 2021 WL 5085830, at *6 (E.D. Mich. Nov. 2, 2021).
True, the court in Straub concluded that without a standalone delegation clause,
there was not clear and unmistakable evidence that the plaintiffs intended to
delegate these issues to an arbitrator. Id. But the court cited no precedent in support
of its reasoning. Id. Further, the court relied on the now-overturned district court
opinion in Becker. Id. Having the benefit of the Sixth Circuit’s opinion in Becker, this
Court declines to follow Straub’s reasoning on both the issue of who should decide
enforceability and whether the embedded nature of the clauses is dispositive of
Plaintiffs’ intent to delegate these issues.

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So the Court is not persuaded that Plaintiffs’ argument about the
embeddedness of the delegation clause is a “validity challenge” such that the Court
needs to decide it, but even if it was, the Court would not find it compelling on the
merits either.
*

*

*

In sum, the Court finds that GM has shown by clear and unmistakable
evidence that the following named plaintiffs agreed to delegate issues of arbitrability,
including whether GM can enforce the agreement, to an arbitrator: Adam Ibrahim,
Tyler Lamberts, Adria Lacy, Chad Lacy, Daniel Demarest, Dave Cecchini, Forrest
Hudson, Jeremiah Johnson, Joey Brown, Nancy Velasquez, Randall Thorson, Salome
Rodriguez-Thorson, Rebecca Prosser, Richard Zembol, Ruben Solis, Ryan Fancher,
and Trenton Acree.
Thus, pursuant to its authority under the FAA, 9 U.S.C. § 3, the Court stays
proceedings as to these plaintiffs. See De Angelis v. Icon Ent. Grp. Inc., 364 F. Supp.
3d 787, 796–97 (S.D. Ohio 2019) (“This Court has stayed proceedings in a similar
situation in which it found the claims subject to arbitration but was without
jurisdiction to compel arbitration in the forum for which the parties contracted.”);
Cunningham, 2022 WL 2819115, at *7. If an arbitrator ultimately determines that
GM may not compel arbitration, these plaintiffs may file a motion to lift the stay and
proceed with the merits of their claims here.

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Enforceability of Arbitration Clause
That leaves three plaintiffs—Podojil, Dittman, and Luster—who have entered
into arbitration agreements that do not have delegation clauses. That means this
Court, as opposed to the arbitrator, must determine whether GM can compel
arbitration of their claims.
Under the Federal Arbitration Act, the Court looks to “traditional principles of
state law” to determine whether a nonsignatory to an arbitration agreement may
enforce that agreement. GE Energy Power Conversion France SAS, Corp. v.
Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1643 (2020). The Supreme Court
has noted that it has “recognized that arbitration agreements may be enforced by
nonsignatories through assumption, piercing the corporate veil, alter ego,
incorporation by reference, third-party beneficiary theories, waiver and estoppel.” Id.
at 1643–44. And the Court has permitted “a litigant who was not a party to the
relevant arbitration agreement” to “invoke § 3 [of the FAA] if the relevant state
contract law allows him to enforce the agreement.” Arthur Andersen LLP v. Carlisle,
556 U.S. 624, 632 (2009).
So the Court will address whether GM can enforce the arbitration agreements
against Podojil, Dittman, and Luster according to applicable state law for each
plaintiff.
Podojil
Podojil bought his vehicle in Ohio. GM asserts that Ohio law thus applies to
his arbitration agreement, and Plaintiffs do not argue otherwise. So the Court will

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use Ohio law to resolve the arbitration issue as to Podojil without resolving any
choice-of-law questions, to the extent there are any. See AtriCure, Inc. v. Meng, 12
F.4th 516, 525 (6th Cir. 2021) (“AtriCure, by comparison, argues that Ohio law
applies, and Meng and Med-Zenith do not dispute this choice in their reply brief. We
thus will apply Ohio law without resolving any choice-of-law questions.”).
GM first asserts that Podojil is equitably estopped from contesting arbitration.
Ohio courts have applied estoppel in cases where a plaintiff, who is a signatory
to an arbitration agreement, seeks to enforce other portions of the agreement against
a non-signatory defendant. See AtriCure, 12 F.4th at 527 (applying Ohio law and
finding “[e]quitable estoppel, in short, prevents a party from picking and choosing the
contract terms that it alleges govern its relationship with the other litigant”). To
“trigger the doctrine,” however, Podojil’s claims need to “arise from the contract
containing the arbitration clause[.]” AtriCure, Inc., 12 F.4th at 527 (quoting Taylor v.
Ernst & Young, LLP, 958 N.E.2d 1203, 1213 (Ohio 2011)).
That is not the case here. As Podojil points out, he does not seek to hold GM
accountable for any alleged duties under his sales agreement with the dealership,
which is what contains the arbitration provision. GM’s argument that “had they not
entered into the agreements to purchase or lease their vehicles, the Arbitration
Plaintiffs would have no claims against GM at all” (ECF No. 37, PageID.3291), does
not meet the standard set out under Ohio law. Ohio law is clear that estoppel applies
“when the signatory to the written agreement must rely on the terms of the written
agreement in asserting its claims against the nonsignatory.” I Sports v. IMG

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Worldwide, Inc., 813 N.E.2d 4, 9 (Ohio Ct. App. 2004). No such reliance occurred here,
so GM may not enforce the arbitration provision against Podojil under a theory of
equitable estoppel.
GM also cites an “alternate estoppel theory” under Ohio law where arbitration
may be compelled by a nonsignatory against a signatory “due to the close relationship
between the entities involved, as well as the relationship of the alleged wrongs to the
nonsignatory’s obligations and duties in the contract . . . and [the fact that] the claims
were intimately founded in and intertwined with the underlying contract
obligations.” (ECF No. 37, PageID.3289 (quoting Short v. Res. Title Agency, Inc., No.
95839, 2011 WL 1203906, at *3 (Ohio Ct. App. 2011)).) As explained, Podojil has not
alleged GM had any “obligations and duties” under the sale or lease agreement. So
this argument is inapt. Further, when looking at Short more closely, the court
specified that “[u]nder this theory, because the individual defendants’ allegedly
wrongful acts related to their actions as agents of the company that was a party to
the arbitration agreement, the nonsignatory agents should also have the benefit of
the arbitration agreement made by their principal.” Short v. Res. Title Agency, Inc.,
No. 2011-Ohio-1577, 2011 WL 1203906, at *3 (Ohio Ct. App. Mar. 31, 2011). GM does
not argue, nor could it, that it acted as the dealership’s agent, so it appears that the
“alternate estoppel” theory would not apply for this reason as well.
GM also asserts that it may enforce the arbitration agreement against Podojil
because Podojil alleges GM and the dealerships engaged in “concerted action.” GM
does not cite Ohio case law in support of this argument, and as discussed below, other

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states have required more robust allegations of concerted action before allowing a
non-party to enforce an arbitration agreement on this basis.
The Court therefore finds that GM cannot enforce the arbitration agreement
against Podojil under Ohio law.
Dittman
The parties apparently agree that Tennessee law would apply to Dittman’s
arbitration agreement. (See ECF No. 37, PageID.3276–3277, n.6; ECF No. 41 (no
mention of choice-of-law).)
As with Podojil, GM asserts that Dittman is estopped from contesting
arbitration. Like Ohio courts, Tennessee courts have similarly recognized that a
nonsignatory can enforce an arbitration provision against a signatory using estoppel.
And, like Ohio, Tennessee uses a “benefits” and “burdens” standard for estoppel. See
Blue Water Bay at Ctr. Hill, LLC v. Hasty, No. M201602382COAR3CV, 2017 WL
5665410, at *11 (Tenn. Ct. App. Nov. 27, 2017) (“In our view, if a party is seeking to
enforce a contract against another party, it is proper that equity binds them to accept
the contract’s benefits as well as its burdens.”).
As discussed above, this standard presents a problem for GM, as Plaintiffs are
not seeking to enforce any duties under the sale or lease agreements against GM. In
other words, they are not seeking to invoke the “benefits” of the contract while
avoiding the “burden” of arbitration. And according to GM’s own understanding of
Tennessee law, “estoppel should not apply when a signatory’s claim merely references
or factually presumes the existence of the contract containing the arbitration

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provision, because like some courts have stated, we are of the opinion that a ‘but-for’
factual relationship is not sufficient to warrant the application of an estoppel
argument.” Blue Water Bay, 2017 WL 5665410, at *13. So it seems Tennessee courts
have squarely rejected the exact argument GM relies on—that but-for Plaintiffs’
execution of the purchase or lease agreements, they would have no claims against
GM.
GM also cursorily states that the broad language of the agreements “confirms
that arbitration is appropriate here.” (ECF No. 37, PageID.3293.) The Court
disagrees that Dittman’s agreement reflects such an intent. See Individual
Healthcare Specialists, Inc. v. BlueCross BlueShield of Tennessee, Inc., 566 S.W.3d
671, 688 (Tenn. 2019) (“The common thread in all Tennessee contract cases—the
cardinal rule upon which all other rules hinge—is that courts must interpret
contracts so as to ascertain and give effect to the intent of the contracting parties
consistent with legal principles.”). Dittman’s agreement specifies that “[i]n the event
either party asserts any claim in litigation which is covered by this Agreement, the
other party shall have the right to seek arbitration in accordance with this
Agreement.” (ECF No. 37-2, PageID.3366 (emphasis added).) GM is not a “party” to
the Agreement. So the Court is not persuaded that the language of the agreement
evidences an intent to allow GM to compel arbitration. Cf. Green v. Mission Health
Comms., LLC, 2020 WL 6702866, at *5 (M.D. Tenn. Nov. 13, 2020) (finding that
Defendant was a party to the agreements because the agreements included

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Defendant as a co-employer and Plaintiff agreed to abide by the agreement “regarding
employment with” Defendant).
Finally, GM discusses a “concerted action” exception, but it has provided no
case law suggesting that Tennessee recognizes such an exception, and the Court has
been unable to identify such an exception on its own. The closest Tennessee case the
Court identified was Mid-South Maintenance Inc. v. Paychex Inc., but there, the court
applied New York law, both the signatory and nonsignatory to the agreement were
defendants, and the complaint treated the signatory and nonsignatory as a “single
unit” without specifying which damages were attributable independently to each
defendant. No. W2014-02329-COA-R3-CV, 2015 WL 4880855, at *22 (Tenn. Ct. App.
Aug. 14, 2015). So that case is distinguishable from the facts here where GM is
seeking to enforce the agreement under Tennessee law and where Plaintiffs have
made no claims against the dealerships, let alone identified damages attributable to
the dealerships.
The Court thus denies GM’s motion to compel arbitration as to Dittman.
Luster
The Court uses Florida law to analyze whether GM can enforce Luster’s
arbitration agreement. (See ECF No. 37, PageID.3287.)
Once again, GM asserts an estoppel argument that Luster’s claims are
“interrelated” with the underlying sale or lease agreement because without the
agreement, Luster would have no claims against GM. According to the very case GM
cited, however, Florida law does not allow a “simple but-for relationship” to amount

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to “actual dependence on the underlying contract that equitable estoppel requires.”
Allscripts Healthcare Sols, Inc. v. Pain Clinic of Northwest Florida, Inc., 158 So.3d
644, 646 (Fla. App. Ct. Aug. 13, 2014). “A plaintiff's dependence on the contract in
this sense means more than that plaintiff would not own the product except for the
contract[.]” Id. And where the “causes of action in the Complaint are not attempts to
enforce contractual rights” under the relevant agreement, estoppel does not allow GM
to compel Luster to arbitrate. See id. at 647.
GM also argues that Plaintiffs’ allegations of “concerted action” between the
dealerships and GM allow it to compel arbitration. Under Florida law, however,
claims must be asserted against both the signatory and nonsignatory to establish that
the claims are “intertwined” with the relevant agreements. Kratos Invs. LLC v. ABS
Healthcare Servs., LLC, 319 So. 3d 97, 101 (Fla. Dist. Ct. App. 2021) (“ICD specifically
alleges the appellants conspired with its agents . . . causing the agents to breach the
Agent Agreements. The claims against the appellants and the agents are based on
the same set of operative facts and unquestionably premised upon substantially
interdependent and concerted misconduct between the non-signatories and
signatories to the Agent Agreements.”). This standard is simply not met here. There
are no claims asserted against the dealerships, and Plaintiffs do not allege a
conspiracy between the dealerships and GM. Plaintiffs do allege that GM instructed
its dealerships to repair the defect in an ineffective way and to tell customers
particular things when they complained about the defect, but that does not amount
to concerted action. The complaint focuses on GM’s actions in directing the

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dealership’s activities more than any concerted actions taken by both GM and its
dealerships. And, unlike Kratos, Plaintiffs are not saying any actions by GM led to a
breach of the sales or lease agreements by the dealerships. So GM has not persuaded
the Court that every reasonable trier of fact would find that it could enforce the
arbitration agreement against Luster based on allegations of concerted action.
The last leg of GM’s argument is based on the broad language of Luster’s
arbitration agreement. GM cites Florida law that states “[i]t is well established that
the courts broadly construe arbitration provisions containing the language ‘arising
out of or relating to,’ such that in certain instances the clause will include nonsignatories.” Cunningham Hamilton Quiter, P.A. v. B.L. of Miami, Inc., 776 So.2d
940, 942 (Fla. Ct. App. Nov. 15, 2000).
This is not such an instance, though. In Cunningham, the relevant arbitration
provision “provide[d] for inclusion of necessary parties,” which the court found
expressed plaintiff’s intent to arbitrate disputes with more than just signatories. Id.
Luster’s agreement, on the other hand, states “I understand and agree that . . . any
claim or dispute which arises out of or relates to . . . purchase or condition of the
vehicle . . . will, at your or my election, be submitted to binding arbitration.” (ECF No.
37-2, PageID.3311 (emphasis added).) And the agreement defines “you” and “your” as
the “dealer” and “my” as “the buyer(s).” Id. The Court does not see how this language
indicates an intent to arbitrate claims made against nonparties to the agreement. No
law GM provided indicates otherwise. So the Court declines to allow GM to enforce
the arbitration agreement based on the broad language of the arbitration provision.

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In all, GM has not shown that that it is entitled to compel Luster to arbitrate
her claims. So its motion to compel arbitration as to Luster is denied.

For the foregoing reasons, GM’s motion to compel arbitration is GRANTED IN
PART and DENIED IN PART. Ibrahim, Lamberts, Adria Lacy, Chad Lacy,
Demarest,3 Cecchini, Hudson, Johnson, Brown, Velasquez, Thorson, RodriguezThorson, Prosser, Zembol, Solis, Fancher, and Acree must submit their claims to
arbitration. Thus, their claims against GM are STAYED.
GM is not entitled to compel Podojil, Dittman, and Luster—who have
arbitration agreements with GM dealerships that do not contain delegation clauses—
to arbitrate their claims. Thus, their claims will move forward in this litigation.
SO ORDERED.
Dated: January 19, 2023
s/Laurie J. Michelson
LAURIE J. MICHELSON
UNITED STATES DISTRICT JUDGE

Demarest’s Magnusson-Moss claim is not subject to arbitration pursuant to
the plain language of his agreement, and GM does not seek to compel him to arbitrate
that claim.
3

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