Walker et al v. Dillard's, Inc. et al
Filing
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MEMORANDUM OPINION AND ORDER by District Judge Martha Vazquez GRANTING 12 MOTION to Compel Arbitration and Dismiss Plaintiffs' Claims with Prejudice, or in the Alternative, Stay Proceedings. IT IS THEREFORE ORDERED that Dillard 39;s, Inc.'s Motion to Compel Arbitration and Dismiss Plaintiffs' Claims with Prejudice or in the Alternative, Stay Proceedings [Doc. 12 ] is GRANTED as follows: (1) Dillard's request for an order compelling arbitration of Plaintiff 's claims against it is GRANTED; (2) this Court ORDERS Plaintiff to arbitrate the claims asserted in this action against Dillard's in accordance with the terms of the Arbitration Agreement; and (3) Dillard's request for an order to stay this lawsuit, as against it, pending the completion of arbitration is GRANTED. (gr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
JON WALKER and PAMELA WALKER,
Plaintiffs,
v.
CV 17-657 MV/KK
DILLARD’S, INC., a Delaware Corporation;
GUY BRADY, and BRIAN HUDSON,
Defendants.
MEMORANDUM OPINION AND ORDER
THIS MATTER comes before the Court on Dillard’s, Inc.’s Motion to Compel
Arbitration and Dismiss Plaintiffs’ Claims with Prejudice or in the Alternative, Stay Proceedings
[Doc. 12].
The Court, having considered the motions, briefs, and relevant law, and being
otherwise fully informed, finds that the motion is well-taken and will be granted.
BACKGROUND
Dillard’s has an intranet program whereby its employees are required to electronically
execute an agreement to arbitrate. Doc. 12-1 at ¶¶ 4-5.
Specifically, an employee logs on to
the Dillard’s intranet by entering his User ID or Associate Identification Number (“AIN”), and
his password. Id. at 6. The employee is presented with Dillard’s Rules of Arbitration and
Agreement to Arbitrate Legal Claims (collectively, the “Arbitration Agreement”). Id. at ¶ 7.
To electronically agree to and sign the Arbitration Agreement, an employee scrolls through the
Arbitration Agreement, and then clicks “I agree,” and enters his AIN and password. Id. at ¶ 9.
Dillard’s maintains records of its employees’ electronically executed arbitration agreements on
its intranet. Id. at ¶ 12.
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Plaintiff Jon Walker was employed as a maintenance engineer at Dillard’s Store 921,
located in Albuquerque, New Mexico, from approximately March 24, 1998 through December 3,
2015.
Doc. 12-1 at ¶ 15; Doc. 1-1 at ¶ 2. Although he does not recall electronically signing
an agreement to arbitrate, Doc. 16 at ¶ 3, Dillard’s has submitted to the Court an Arbitration
Agreement dated July 6, 2011, containing Mr. Walker’s electronic signature, AIN, and password.
Doc. 12-1, Ex. 1.
Additionally, Dillard’s has submitted two prior versions of its Arbitration
Agreement, one dated August 22, 2001, which contains Mr. Walker’s handwritten signature, and
one dated November 30, 2005, which contains Mr. Walker’s electronic signature. Doc. 18-2,
Exs. A-B.
The 2011 Arbitration Agreement containing Mr. Walker’s electronic signature provides
that “the Company and the Associate agree that the procedures provided in these Rules will be
the sole method used to resolve any dispute over Legal Claims arising between them.”
12-1, Ex. 1 at 1.
Doc.
“Legal Claim” is defined as “a claim which would be recognized by a court of
competent jurisdiction as stating a claim which would be remediable under existing law in that
jurisdiction.”
Id. at 9. The Arbitration Agreement further states that Legal Claims include
“any common law claims” and “personal injuries.” Id. at 2.
“Enforcement,” the Arbitration Agreement provides:
Under the heading,
“Any dispute over a Legal Claim
concerning this Agreement – the way it was formed, its applicability, meaning, enforceability, or
any claim that all or part of this Agreement is void or voidable – is subject to arbitration under
this Agreement.”
Id. at 8.
On the final page of the Arbitration Agreement, entitled “Agreement to Arbitrate Legal
Claims,” there is a heading in bold, capital letters and underlined, that reads:
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IMPORTANT NOTICE: THIS AGREEMENT WAIVES YOUR RIGHT
TO A JURY TRIAL AND TO PURSUE LITIGATION IN COURT, READ
IT CAREFULLY BEFORE SIGNING.
Id. at 12. The first paragraph below this heading states: “This Agreement contains the rules
and procedures that Dillard’s, Inc. and associates must follow to resolve any disputes between
them over Legal Claims.” Id. The last line of the document states “WE AGREE TO
ARBITRATE OUR LEGAL CLAIMS AND TO ABIDE BY THE RULES OF
ARBITRATION:” Id. Immediately following the last line are the electronic “authorized
signature” of Paul J. Schroeder, on behalf of “the Company”, and the electronic signature of Mr.
Walker, as the “Associate.” Id.
On August 11, 2015, while at work, Mr. Walker was electrocuted and, as a result, fell
from a ladder.
Doc. 1-1 at ¶ 33.
As a result of Mr. Walker’s injuries, Mr. Walker and his
wife, Pamela Walker, commenced the instant action by filing their Complaint for Damages on
April 26, 2017 in the Second Judicial District Court of the State of New Mexico, County of
Bernalillo. Doc. 1-1. Plaintiffs named as Defendants Dillard’s and Guy Brady and Brian
Hudson, both managerial employees of Dillard’s. Id. at ¶ 5.
The Complaint alleges claims of
negligence and negligence per se, Delgado v. Phelps Dodge Chino, Inc., loss of consortium, and
conspiracy, seeks compensatory and punitive damages, and seeks to hold Defendants jointly and
severally liable.
Doc. 1-1.
After being served with the Complaint on May 24, 2017, on June
19, 2017, Dillard’s removed the action to this Court. Doc. 1.
To date, neither Mr. Brady nor
Mr. Hudson have been served with the Complaint.
On the instant motion, Dillard’s requests that the Court compel Plaintiffs to arbitrate their
claims against it.
Plaintiff opposes the motion.
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LEGAL STANDARD
The Federal Arbitration Act (“FAA”) applies to arbitration provisions in “a contract
evidencing a transaction involving commerce.”
9 U.S.C. § 2.
Under the FAA, such
arbitration provisions “are valid, irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Section 2 of the FAA
creates “a substantive rule applicable in state as well as federal courts.”
Keating, 465 U.S. 1, 16 (1984).
Southland Corp. v.
To implement this substantive rule, “a party may apply to a
federal court for a stay of the trial in an action ‘upon any issue referable to arbitration under an
agreement in writing for such arbitration.”
9 U.S.C. § 3.
Describing the FAA as “a liberal
federal policy favoring arbitration,” the Supreme Court has emphasized “the fundamental
principle that arbitration is a matter of contract,” and, accordingly, that “courts must place
arbitration agreements on an equal footing with other contracts . . . and enforce them according
to their terms.” AT&T Mobility LLC v. Conception, 131 S. Ct. 1740, 1745 (2011).
The FAA, however, “was not enacted to force parties to arbitrate in the absence of an
agreement.” Avedon Eng’g, Inc. v. Seatex, 126 F.3d 1279, 1286 (10th Cir. 1997).
Rather,
Congress’ concern “was to enforce private agreements into which parties had entered.”
Id.
Accordingly, “[t]he existence of an agreement to arbitrate is a threshold matter which must be
established before the FAA can be invoked.”
Id. at 1287.
DISCUSSION
Dillard’s moves to compel Plaintiffs to arbitrate their claims against it. In support of its
motion, Dillard’s argues that the Arbitration Agreement, electronically signed by Mr. Walker on
July 6, 2011, is valid and enforceable, and that Plaintiffs’ claims fall squarely within the scope of
that Agreement.
Dillard’s further requests that the Court dismiss Plaintiffs’ claims or,
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alternatively, stay Plaintiffs’ claims against it pending resolution of the arbitration.
Plaintiffs
oppose Dillard’s motion to compel, arguing that: (1) there is no evidence of a valid and binding
agreement to arbitrate, as Dillard’s has not produced a signed copy of the Arbitration Agreement;
and (2) any such Agreement is unenforceable for lack of consideration. Plaintiffs also argue
that they are entitled to further discovery on the issue of the existence and/or enforceability of the
Arbitration Agreement.
I.
The Evidence Establishes that the Parties Entered into an Agreement to Arbitrate.
Plaintiffs argue that Dillard’s has failed to establish the existence of an agreement to
arbitrate between Mr. Walker and Dillard’s because Dillard’s has failed to “produce[] a signed
copy of the arbitration agreement.”
Doc. 16 at 1.
This argument is perplexing, as Dillard’s
did in fact submit, as an exhibit to its motion, a copy of the Arbitration Agreement, dated July 6,
2011, containing Mr. Walker’s electronic signature. While Mr. Walker represents that he does
not recall electronically signing the Arbitration Agreement, he has come forward with no
evidence to refute that he signed, electronically, the Arbitration Agreement submitted with
Dillard’s motion.
Where the parties dispute the existence of an arbitration agreement, “a court may grant a
motion to compel arbitration if there are no genuine issues of material fact regarding the parties’
agreement.” Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248, 1261 (10th Cir. 2012) (citations
omitted). The court “should give to the opposing party the benefit of all reasonable doubts and
inferences that may arise.” Id.
On a motion to compel arbitration, the moving party “bears the
initial burden of presenting evidence sufficient to demonstrate the existence of an enforceable
agreement; if it does so, the burden shifts to the nonmoving party to raise a genuine dispute of
material fact regarding the existence of an agreement.” Bellman v. i3Carbon, LLC, 563 F.
5
App’x 608, 612 (10th Cir. 2014).
Here, Dillard’s has presented evidence that, since 2001, it has required each of its
employees to electronically execute an agreement to arbitrate, and that it keeps on its intranet
copies of all such electronically executed agreements.
Consistent with that evidence, Dillard’s
has presented a copy of the Arbitration Agreement with Mr. Walker’s electronic signature.
Further, Dillard’s has presented copies of two prior versions of the Arbitration Agreement, both
also signed by Mr. Walker.
This evidence is sufficient to demonstrate the existence of an
enforceable agreement.
In the face of this evidence, Plaintiffs present no more than Mr. Walker’s representation
that he does not recall electronically signing an agreement to arbitrate in 2011.
This
representation is insufficient to raise a genuine dispute of material fact regarding the existence of
the Arbitration Agreement. See, e.g., Burcham v. Expedia, No. 07CV1963, 2009 WL 586513
(E.D. Mo. Mar. 6, 2009) (plaintiff’s denial that he ever saw or read terms of Expedia’s online
clickwrap agreement, which requires user to specifically assent to terms of use before proceeding
further, insufficient to invalidate agreement); Zaltz v. JDATE, 952 F. Supp. 2d 439, 451-51
(E.D.N.Y. 2013) (fact that plaintiff did not remember agreeing to, and did not believe she agreed
to, forum selection clause contained in defendant’s terms of service insufficient to overcome
evidence that in order to have obtained and maintained a JDate.com account, a user was required
to click a box confirming that she had both read and agreed to website’s terms and conditions);
Fteja, 841 F. Supp. 2d at 834 (declarations filed by defendant’s employees, screenshots of
defendant’s website, and defendant’s current website, which indicated that potential members
must agree to website’s terms of service in order to join site, negated force of plaintiff’s
argument that he did not remember agreeing to website’s forum selection clause when he
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joined).
The Court thus finds that Dillard’s and Mr. Walker entered into the Arbitration
Agreement.
II.
Whether the Arbitration Agreement is Unenforceable for Lack of Consideration is for the
Arbitrator to Decide.
Citing Piano v. Premier Distrib. Co., 107 P.3d 11 (N.M. Ct. App. 2004), Plaintiffs argue
that the Arbitration Agreement is unenforceable because it lacks valid consideration under New
Mexico law.
The Arbitration Agreement, however, contains a “delegation provision” that
specifically states that any dispute as to “the way [the Arbitration Agreement] was formed, its
applicability, meaning, enforceability, or any claim that all or part of this Agreement is void or
voidable . . . is subject to arbitration under this Agreement.” Doc. 12-1, Ex. 1 at 8 (emphasis
added).
The controversy over whether the Arbitration Agreement is unenforceable for lack of
consideration falls squarely within this delegation provision. Dillard’s asks the Court to enforce
the delegation provision and, in keeping with that provision, compel Plaintiffs to arbitrate the
issue of the enforceability of the Arbitration Agreement.
The Supreme Court has consistently “held that parties may agree to have an arbitrator
decide not only the merits of a particular dispute but also ‘gateway’ questions of ‘arbitrability,’
such as whether the parties have agreed to arbitrate or whether their agreement covers a
particular controversy.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529
(2019).
An “agreement to arbitrate a gateway issue is simply an additional, antecedent
agreement the party seeking arbitration asks the federal court to enforce, and the FAA operates
on this additional arbitration agreement just as it does on any other.” Id. Accordingly, when
the parties’ agreement contains a provision that delegates the arbitrability question to an
arbitrator “by ‘clear and unmistakable evidence,’” the “court may not override the contract,” and
“possesses no power to decide the arbitrability issue.” Id. at 529-30.
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Importantly, unless the
party opposing arbitration “challenge[s] the delegation provision specifically,” as opposed to
“challeng[ing] only the validity of the contract as a whole,” this Court “must enforce it under §§
3 and 4 [of the FAA], leaving any challenge to the validity of the Agreement as a whole for the
arbitrator.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 72 (2010).
Here, the Arbitration Agreement clearly and unmistakably delegates to the arbitrator any
dispute as to the enforceability of the Agreement.
In their opposition, Plaintiffs do not
challenge this delegation provision and, indeed do not “even mention the delegation provision.”
Id.
Rather, Plaintiffs challenge “only the validity of the contract as a whole.” Id. As a
result, this Court is constrained to treat the delegation provision as valid and enforce it, leaving
any challenge to the enforceability of the Arbitration Agreement – due to lack of consideration or
otherwise – for the arbitrator. See id.
III.
Plaintiffs Have Failed to Demonstrate A Need for Further Discovery.
Plaintiffs argue that, if their opposition is insufficient to rebut Dillard’s prima facie case,
they “should be allowed to conduct limited discovery on the issue of the alleged electronic
signature on 07/06/11.” Doc. 16 at 4.
“In enacting the FAA, Congress intended that
proceedings to compel arbitration be ‘expeditious and summary,’ ‘with only restricted inquiry
into factual issues.’” THI of NM at Hobbs Ctr., LLC v. Spradlin, 532 F. App'x 813, 819 (10th
Cir. 2013) (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983)).
Accordingly, “[t]o obtain discovery in opposition to a motion to compel arbitration, the
arbitration opponents must at least show how discovery would ‘assist[ ] them in opposing the
motion to compel arbitration.’” Id. (quoting Wolff v. Westwood Mgmt., LLC, 558 F.3d 517, 521
(D.C. Cir. 2009)).
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Here, Plaintiffs fail to show, as they must, how discovery would assist them in opposing
Dillard’s motion to compel arbitration.
First, Plaintiffs’ request for discovery is based on the
faulty premise that Dillard’s has not provided a copy of the Arbitration Agreement electronically
signed by Mr. Walker on July 6, 2011.
Agreement with its motion.
As discussed above, Dillard’s submitted a copy of that
Further discovery will not result in the production of a document
that has already been produced.
Nor have Plaintiffs shown how discovery as to “the manner in
which Mr. Schroeder, Jr., could reasonably sign off on employment documents” would be of any
assistance in opposing Dillard’s motion, as the mechanism by which Mr. Schroeder signed the
Arbitration Agreement on behalf of Dillard’s is irrelevant to Plaintiffs’ specific challenges to the
validity of the Arbitration Agreement, namely, whether Mr. Walker signed it and whether it was
supported by consideration.
Doc. 16 at 4.
Finally, Plaintiffs have not shown the need for
discovery as to “whether there is actually a meeting of the minds that could have resulted in a
binding agreement in light of the ethereal nature of this particular agreement.” Id. As
Dillard’s has produced a signed copy of the Arbitration Agreement, there is nothing “ethereal”
about it, or Mr. Walker’s assent thereto.
Discovery as to a “meeting of the minds” would not
change the fact that Mr. Walker signed the Arbitration Agreement; nor would it shed light on the
issue of consideration. Accordingly, Plaintiffs’ have failed to meet their burden of
demonstrating that additional discovery is warranted.
IV.
This Court Will Stay the Instant Proceedings as Against Dillard’s.
“Regarding a suit brought in federal court ‘upon any issue referable to arbitration under
an agreement in writing for such arbitration,’ the [FAA] provides the district court ‘shall on
application of one of the parties stay the trial of the action until such arbitration has been had in
accordance with the terms of the agreement.’” Adair Bus Sales v. Blue Bird Corp., 25 F.3d
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953, 955 (10th Cir. 1994) (quoting 9 U.S.C. § 3).
In its motion, Dillard’s moves this Court for a
dismissal of Plaintiff’s claims against it, or, in the alternative, a stay of the action pending
arbitration. The Court finds it proper to grant a stay of the action, as against Dillard’s, pending
arbitration. See id.
CONCLUSION
The undisputed facts demonstrate that the parties entered into an agreement to arbitrate.
The undisputed facts further demonstrate that the parties agreed that it is for the arbitrator, not
this Court, to determine the enforceability of the Arbitration Agreement. Plaintiffs have failed
to demonstrate their need for additional discovery.
Having found that the issues in this case
should be referred to arbitration, the proper course is for this Court to stay the action, as against
Dillard’s, pending arbitration.
IT IS THEREFORE ORDERED that Dillard’s, Inc.’s Motion to Compel Arbitration
and Dismiss Plaintiffs’ Claims with Prejudice or in the Alternative, Stay Proceedings [Doc.
12].is GRANTED as follows: : (1) Dillard’s request for an order compelling arbitration of
Plaintiff’s claims against it is GRANTED; (2) this Court ORDERS Plaintiff to arbitrate the
claims asserted in this action against Dillard’s in accordance with the terms of the Arbitration
Agreement; and (3) Dillard’s request for an order to stay this lawsuit, as against it, pending the
completion of arbitration is GRANTED.
DATED this 20th day of March 2019.
MARTHA VÁZQUEZ
United States District Judge
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