Medicine Shoppe International, Inc. v. JKRX, Inc. et al
Filing
41
OPINION, MEMORANDUM AND ORDER: HEREBY ORDERED that Respondents' Motion to Dismiss Petition or Compel Arbitration, [Doc. No. 13 ], is granted. FURTHER ORDERED that this matter is dismissed. Case Closed. Signed by Honorable Henry E. Autrey on 06/18/2012. (CLK)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
MEDICINE SHOPPE INTERNATIONAL, INC.,)
)
Petitioner,
)
)
vs.
) Case No. 4:12CV157 HEA
)
JKRX, INC., et al.,
)
)
Respondents.
)
)
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on Petitioner’s Motion to Dismiss Petition or
Compel Arbitration, [Doc. No. 13]. Petitioner opposes the motion, and the matter
is fully briefed. For the reasons set forth below, the Motion is granted.
Respondents initially move to dismiss the Amended Petition pursuant to
Rule12(b)(1) for lack of subject matter jurisdiction, arguing that the issues raised
in Petitioners’ Petition relate not to arbitrability of the issues in dispute, but rather,
are procedural in nature and therefore are for the arbitrator to decide.
According to the Petition, Respondents are parties to separate arbitration
agreements, but have filed a“putative collective arbitration demand.” 1 The
1
According to the Petition, in December 2011 and January 2012, various franchisees of
the Medicine Shoppe franchise system commenced the following actions: (1) two
putative collective arbitrations before JAMS; (2) one putative collective arbitration before United
States Arbitration & Mediation Midwest, Inc.; (3) one putative collective arbitration before the
American Arbitration Association; (4) one individual arbitration before the American Arbitration
Association; and (5) two collective actions in the Eastern District of Missouri. Several
franchisees of the Medicap franchise system, filed a collective action in the Southern District of
Iowa. The amended petition relates to one of the four putative collective arbitrations.
Petition seeks to have this arbitration demand action stayed in order that Petitioner
may proceed with individual arbitration proceedings pursuant to 9 U.S.C. § 4.
Respondents rely on the absence of the Court’s jurisdiction over the Petition
for dismissal. Respondents contend that, because the issue of whether the disputes
should be arbitrated together, rather than individually, as asserted by Petitioner, is
a question of procedure, the arbitrator, not the Court, must make that
determination.
As this Court has previously held, in Cause Number 12CV159HEA, the
issue before the Court is one of procedure, which must be determined by the
arbitrator.
[A] gateway dispute about whether the parties are bound by a
given arbitration clause raises a “question of arbitrability” for a court
to decide. See [First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995)] at 943-946, 115 S.Ct.
1920 (holding that a court should decide whether the arbitration
contract bound parties who did not sign the agreement); John Wiley &
Sons, Inc. v. Livingston, 376 U.S. 543, 546-547, 84 S.Ct. 909, 11
L.Ed.2d 898 (1964) (holding that a court should decide whether an
arbitration agreement survived a corporate merger and bound the
resulting corporation). Similarly, a disagreement about whether an
arbitration clause in a concededly binding contract applies to a
particular type of controversy is for the court. See, e.g., AT & T
Technologies, supra, at 651-652, 106 S.Ct. 1415 (holding that a court
should decide whether a labor-management layoff controversy falls
within the arbitration clause of a collective-bargaining agreement);
Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241-243, 82 S.Ct.
1318, 8 L.Ed.2d 462 (1962) (holding that a court should decide
whether a clause providing for arbitration of various “grievances”
covers claims for damages for breach of a no-strike agreement).
At the same time the Court has found the phrase “question of
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arbitrability” not applicable in other kinds of general circumstance
where parties would likely expect that an arbitrator would decide the
gateway matter. Thus “ ‘procedural’ questions which grow out of the
dispute and bear on its final disposition” are presumptively not for the
judge, but for an arbitrator, to decide. John Wiley, supra, at 557, 84
S.Ct. 909 (holding that an arbitrator should decide whether the first
two steps of a grievance procedure were completed, where these steps
are prerequisites to arbitration). So, too, the presumption is that the
arbitrator should decide “allegation[s] of waiver, delay, or a like
defense to arbitrability.” Moses H. Cone Memorial Hospital, supra, at
24-25, 103 S.Ct. 927. Indeed, the Revised Uniform Arbitration Act
of 2000 (RUAA), seeking to “incorporate the holdings of the vast
majority of state courts and the law that has developed under the
[Federal Arbitration Act],” states that an “arbitrator shall decide
whether a condition precedent to arbitrability has been fulfilled.”
RUAA § 6(c), and comment 2, 7 U.L.A. 12-13 (Supp.2002). And the
comments add that “in the absence of an agreement to the contrary,
issues of substantive arbitrability ... are for a court to decide and
issues of procedural arbitrability, i.e., whether prerequisites such as
time limits, notice, laches, estoppel, and other conditions precedent to
an obligation to arbitrate have been met, are for the arbitrators to
decide.” Id., § 6, comment 2, 7 U.L.A., at 13 (emphasis added).
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002).
The manner in which the arbitrations should be conducted is undeniably an
issue of procedure. It goes not to the merits of the disputes to be arbitrated.
Indeed, not a single substantive finding can be made through joining like disputes
together. To the contrary, joining arbitrations is a procedural issue which
encompasses factors such as, effective use of time and resources and considerations
of consistency. Thus, because the precise remedy Petitioner seeks is one of
procedure, the matter is not properly before the Court.
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Accordingly,
IT IS HEREBY ORDERED that Respondents’ Motion to Dismiss Petition
or Compel Arbitration, [Doc. No. 13], is granted.
IT IS FURTHER ORDERED that this matter is dismissed.
Dated this 18th day of June, 2012.
______________________________
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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