Herod v. DMS Solutions Inc

Filing 67

OPINION AND ORDER granting 57 Renewed Motion to Compel Arbitration and Dismiss Judicial Proceedings. (Signed by Magistrate Judge Andrew M Edison) Parties notified. (rrc3)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DARYL HEROD,
Plaintiff.
V.
DMS SOLUTIONS INC.,
Defendant.

November 25, 2024
Nathan Ochsner, Clerk

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§ CIVIL ACTION NO. 4:23-cv-04465
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OPINION AND ORDER

This is a Fair Labor Standards Act (“FLSA”) case filed by Plaintiff Daryl
Herod. Pending before me is a Renewed Motion to Compel Arbitration and
Dismiss Judicial Proceedings or, Alternatively, Strike Collective Allegations filed
by Defendant DMS Solutions Inc. (“DMS”).1 Dkt. 57. Having reviewed the parties’
briefing, the record, and the applicable law, I grant the motion.2
1 DMS’s request to dismiss this lawsuit does not make its motion dispositive. As DMS itself

notes, I am obligated to stay this case pending arbitration if Herod so requests. See Dkt.
57 at 25 (citing Smith v. Spizzirri, 601 U.S. 472, 477 (2024)). Moreover, I have discretion
to stay these proceedings pending arbitration, and “[a]n arbitration order entering a stay
. . . is not an appealable final order.” Apache Bohai Corp., LDC v. Texaco China, B.V., 330
F.3d 307, 309 (5th Cir. 2003).
2 Since taking the bench in 2018, I have issued a Memorandum and Recommendation for

every motion to compel arbitration that has been referred to me, including the first
motion to compel arbitration in this case. See Herod v. DMS Sols. Inc., No. 4:23-cv04465, 2024 WL 3558385, at *1 (S.D. Tex. July 26, 2024). Recently, however, I have
reconsidered my position and determined that I should instead rule on referred motions
to compel arbitration by Opinion and Order. Although the Fifth Circuit has never reached
the question of whether a motion to compel arbitration is a dispositive or non-dispositive
motion, see Lee v. Plantation of La., L.L.C., 454 F. App’x 358, 359 n.3 (5th Cir. 2011), I
previously said that I thought the appellate court would hold that a motion to compel
arbitration is dispositive. See Allen v. W&T Offshore, Inc., No. 3:18-cv-00305, 2019 WL
2996695, at *1 n.1 (S.D. Tex. July 1, 2019). I reached that view because the Fifth Circuit, in
holding that a motion to remand is a dispositive motion, utilized reasoning that I felt was
equally applicable to a motion to compel arbitration. See Davidson v. Ga.-Pac., L.L.C.,
819 F.3d 758, 764 (5th Cir. 2016) (finding that a motion to remand “is dispositive insofar
as proceedings in the federal court are concerned” and thus is the functional equivalent

BACKGROUND
Herod worked for DMS from April 2022 until October 2023. In November
2023, Herod filed this lawsuit, alleging that “DMS misclassified Herod as an
independent contractor to avoid paying him overtime wages.” Dkt. 1 at 2. “Herod
brings this collective action on behalf of himself and all other similarly situated
workers who worked for, or on behalf of, DMS who were paid under its day rate
pay scheme.” Id.
On April 5, 2022, DMS entered into an Independent Contractor Agreement
(“Agreement”) with DN Herod Consulting LLC (“DNHC”). Herod, DNHC’s Owner,
signed the Agreement on DNHC’s behalf. The Agreement contains a broad
arbitration provision (“Section 14”) that requires the parties to submit any disputes
arising out of the Agreement to arbitration:
14.
Parties Will Arbitrate: All claims, disputes or controversies,
including but not limited to . . . reimbursement, and all payment
and/or entitlement disputes, arising out of or relating to this
Agreement, the Services and any Service Order executed pursuant
thereto or the Services performed shall be finally decided by resort of
either Party to bilateral arbitration (each Party, solely in their capacity
as Company and Contractor) utilizing a single arbitrator in
accordance with the applicable Rules then in effect by the American
Arbitration Association.
of an order of dismissal” (citation omitted)). Upon further reflection, I am now confident
that a motion to compel arbitration is a non-dispositive motion, and the Fifth Circuit will
reach that same conclusion when it ultimately confronts the issue. Unlike a ruling
granting a motion to remand, which generally sends the case back to state court without
any right to appeal, “[e]ven if [a motion to compel arbitration] is granted, the court still
retains authority to dissolve the stay [pending arbitration] or, after the arbitration has run
its course, to make orders with respect to the arbitral award.” PowerShare, Inc. v. Syntel,
Inc., 597 F.3d 10, 14 (1st Cir. 2010). For this reason, at least two circuit courts have
observed that “a motion to compel arbitration is a non-dispositive motion.” Patton v.
Johnson, 915 F.3d 827, 832 (1st Cir. 2019); see also V.I. Water & Power Auth. v. Gen.
Elec. Int’l. Inc., 561 F. App’x 131, 134 (3d Cir. 2014) (“A ruling on a motion to compel
arbitration does not dispose of the case, or any claim or defense found therein. Instead,
orders granting this type of motion merely suspend the litigation while orders denying it
continue the underlying litigation.”). This reasoning makes sense. Accordingly, I will no
longer treat motions to compel arbitration as dispositive. Rather, I will rule on these nondispositive motions by Opinion and Order.
2

Dkt. 57-1 at 11. On March 21, 2024, DMS moved to compel arbitration or,
alternatively, to strike the collective allegations contained in the Complaint. See
Dkt. 23.
Herod implicitly conceded then, and still does not dispute, that his claims
fall within Section 14’s scope. According to Herod, however, he never personally
agreed to arbitrate with DMS. Rather, his company, DNHC, agreed to arbitrate
with DMS. See Dkt. 28 at 12. Thus, Herod contends that DMS cannot prove it has
an arbitration agreement with him.
DMS countered for the first time in its reply brief that, even if he is not
personally bound to the agreement, Herod is bound under the theory of
intertwined claims estoppel. See Dkt. 31 at 11. Herod moved to strike DMS’s
belated argument. See Dkt. 32. I denied that motion, but allowed Herod to file a
surreply, see Dkt. 37, which he did. See Dkt. 38. On July 26, 2024, I issued a
Memorandum and Recommendation, finding that binding Fifth Circuit precedent
prevented the court from applying intertwined claims estoppel and recommending
that DMS’s motion to compel arbitration be denied. See Dkt. 39.
DMS timely objected to my recommendations and Herod replied. In its
reply, DMS raised for the first time the argument that DNHC has been inactive
since August 2021, approximately eight months before Herod signed the
Agreement on DNHC’s behalf. DMS argued that because DNHC was without legal
status when Herod signed the Agreement, Herod is personally bound by the
Agreement. See Dkt. 46 at 2. On September 10, 2024, Judge George C. Hanks, Jr.
adopted my July 26, 2024 Memorandum and Recommendation, “declin[ing] to
consider the newly proffered legal argument submitted with [DMS]’s Reply in
support of its Objections.” Dkt. 53 at 2.
On September 20, 2024, DMS asked to file a second motion to compel
arbitration. See Dkt. 56. I issued a minute entry that same day giving DMS leave to
file a second motion to compel arbitration and stating: “I am not, at this time,

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deciding (1) whether a Defendant is legally entitled to file a second motion to
compel arbitration; or (2) the merits of the underlying motion.”
On October 7, 2024, DMS filed its Renewed Motion to Compel Arbitration,
arguing that Herod is personally bound by the Agreement because DNHC lacked
corporate privileges at the time Herod signed the Agreement. See Dkt. 57. Two days
later, DMS asked to stay discovery pending a ruling on its renewed motion. See
Dkt. 58. I granted DMS’s motion to stay discovery on October 21, 2024. See Dkt.
61. In doing so, I brought the parties’ attention to the Fifth Circuit’s October 1, 2024
decision in Cure & Associates, P.C. v. LPL Financial LLC, in which the Fifth Circuit
observed that “a nonsignatory plaintiff can be compelled to arbitrate a claim
[under Texas law] when the claim is itself based on, or inextricably intertwined
with, the contract containing the arbitration clause.” 118 F.4th 663, 670 (5th Cir.
2024) (cleaned up). I asked the parties to “address[] this recent development in
the case law in their briefing on DMS’s Renewed Motion to Compel Arbitration,”
and provided them additional time and pages to do so. Dkt. 61 at 3.
In his response to DMS’s renewed motion, Herod maintains that: (1) he
never personally agreed to arbitrate with DMS; (2) DMS waived any argument
regarding DNHC’s corporate privileges and, even if not waived, such arguments
are unavailing; (3) the Agreement has been terminated, along with the arbitration
provision; and (4) Cure does not apply to this case. DMS responds that: (1) any
waiver was restricted to its first motion to compel arbitration and does not apply
now; (2) DNHC lacked corporate privileges when Herod signed the Agreement and
has not been reinstated; (3) the Agreement’s arbitration provision continues
beyond the Agreement’s termination; and (4) Cure applies and this court should
compel Herod to arbitration under intertwined claims estoppel. I will address each
of these arguments in turn.
FEDERAL ARBITRATION ACT (“FAA”), 9 U.S.C. §§ 1–16
The FAA requires the Court to enforce an arbitration agreement in the same
manner that it would enforce any other contract. See Specialty Healthcare Mgmt.,

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Inc. v. St. Mary Par. Hosp., 220 F.3d 650, 654 (5th Cir. 2000) (“The FAA’s primary
goal is to place agreements to arbitrate on the same footing as other contracts.”
(quotation omitted)). Specifically, the FAA provides that:
A party aggrieved by the alleged failure . . . of another to arbitrate
under a written agreement for arbitration may petition any United
States district court which, save for such agreement, would have
jurisdiction . . . for an order directing that such arbitration proceed in
the manner provided for in such agreement.
9 U.S.C. § 4.
There is a two-step analysis for adjudicating a motion to compel arbitration.
See Wash. Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 263 (5th Cir. 2004). First,
I must determine “whether the parties agreed to arbitrate the dispute.” Klein v.
Nabors Drilling USA L.P., 710 F.3d 234, 236 (5th Cir. 2013). “Two questions guide
this analysis: (1) is there a valid agreement to arbitrate the claims and (2) does the
dispute in question fall within the scope of that arbitration agreement?” Id.
(quotation omitted). In light of the strong federal policy favoring arbitration, the
Supreme Court has instructed that “any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration, whether the problem at hand is
the construction of the contract language itself or an allegation of waiver, delay, or
a like defense to arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 24–25 (1983). This presumption does not apply, however, to the
determination of whether a valid agreement to arbitrate exists between the parties.
That inquiry is committed to traditional principles of state contract law. See Klein,
710 F.3d at 237.3 Here, Texas law applies.
ANALYSIS
A.

DMS’S RENEWED MOTION TO COMPEL ARBITRATION IS PROPER.
When I allowed DMS to file a renewed motion to compel arbitration, I

assumed that we would spill much ink discussing the propriety of such a motion.

The second step in the analysis—“determining the scope of a valid arbitration
agreement”—is not at issue in this case. Klein, 710 F.3d at 237.
3

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DMS certainly seems to have thought the same, devoting approximately four pages
to the topic in its opening brief. See Dkt. 57 at 13–17. DMS’s argument centered on
the Fourth Circuit’s decision in Dillon v. BMO Harris Bank, N.A., in which the
appellate court observed that “no authority—not the FAA, the Federal Rules of Civil
Procedure, or any other source of law of which we are aware—limits a party to only
one motion under §§ 3 or 4 of the FAA.” 787 F.3d 707, 715 (4th Cir. 2015). Although
not binding precedent, I found Dillon’s reasoning persuasive and eagerly awaited
Herod’s response.
And then . . . crickets.
Herod’s entire response to whether this court should entertain DMS’s
renewed motion is this: “And while DMS asserts it is entitled to file a second
motion to compel arbitration, it offers no precedent holding such a motion allows
it to revive a waived issue.” Dkt. 65 at 7. Herod failed to even acknowledge Dillon,
much less address DMS’s arguments as to why its renewed motion is proper. The
only takeaway from Herod’s statement that DMS “offers no precedent holding such
a motion allows it to revive a waived issue,” id., is that Herod concedes the
propriety of a renewed motion generally. Accordingly, I will not devote any more
time to the topic and will instead address Herod’s arguments regarding waiver.
B.

DMS DID NOT WAIVE ITS ARGUMENTS CONCERNING DNHC’S LACK OF
CORPORATE PRIVILEGES AT THE TIME HEROD SIGNED THE AGREEMENT.
Herod contends that this court has already determined that any argument

concerning DNHC’s lack of corporate privileges is forever waived. It is true that
Judge Hanks declined to consider arguments about DNHC’s inactive status as
waived when adopting my July 26, 2024 Memorandum and Recommendation. But
Herod is incorrect that such waiver necessarily applies to subsequent motions.
Tellingly, Herod cites no authority for the proposition that an argument deemed
waived as to one motion cannot properly be put before the court on a subsequent
motion. Rather, “Judge [Hanks]’s conclusion that the [inactive corporation]
argument raised in [DMS’s reply to its objections] was ‘waived’ can only be read to

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mean that it would not be considered for purposes of that motion.” Calder v. SBC
Pension Ben. Plan, 549 F. Supp. 2d 824, 837 (W.D. Tex. 2008) (emphasis added).
C.

HEROD IS PERSONALLY BOUND BY THE AGREEMENT.
This court has already held that “Herod signed the Agreement only as

DNHC’s agent, and is therefore not a party to the Agreement.” Herod v. DMS Sols.
Inc., No. 4:23-cv-04465, 2024 WL 3558385, at *2 (S.D. Tex. July 26, 2024).
Implicit to that holding, however, was the assumption that DNHC was a valid
corporate entity at the time Herod signed the Agreement. DMS argues that it was
not and therefore Herod is personally bound to the Agreement. I concur.
It is undisputed that “DNHC was forfeited in 2021 ‘pursuant to Section
171.309 of the Texas Tax Code.’” Dkt. 65 at 19 (quoting Dkt. 46-1 at 4). Texas law
permits an entity terminated under the Tax Code to continue in existence for three
years post-termination for only five purposes:
(1)
(2)
(3)

(4)
(5)

prosecuting or defending in the terminated filing entity’s name
an action or proceeding brought by or against the terminated
entity;
permitting the survival of an existing claim by or against the
terminated filing entity;
holding title to and liquidating property that remained with the
terminated filing entity at the time of termination or property
that is collected by the terminated filing entity after
termination;
applying or distributing property, or its proceeds, as provided
by Section 11.053; and
settling affairs not completed before termination.

TEX. BUS. ORGS. CODE ANN. § 11.356(a). Entering into contracts is not among the
five limited purposes for which an entity continues after termination. Rather, “[a]
terminated filing entity may not continue its existence for the purpose of
continuing the business or affairs for which the terminated filing entity was formed
unless the terminated filing entity is reinstated under [the Business Organizations
Code] or the Tax Code.” Id. § 11.356(b) (emphasis added).
“Generally, one who contracts as an agent in the name of a nonexistent or
fictitious principal, or a principal without legal status or existence, is personally
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liable on the contract.” 12 Williston on Contracts § 35:39 (4th ed. 2024); see also
RESTATEMENT (THIRD) OF AGENCY § 6.04(a) (2006) (“[A] person who purports to
act as an agent becomes a party to a contract made on behalf of the purported
agent’s purported principal when the purported agent knows or has reason to know
that the purported principal does not exist at the time of the contract or lacks
capacity to be a party to a contract.”). Texas courts follow this principle. See, e.g.,
Kahn v. Imperial Airport, L.P., 308 S.W.3d 432, 438 (Tex. App.—Dallas 2010, no
pet.) (holding that agent who “purported to sign” lease on behalf of DBA entity
“bound only himself”); Stacy v. Energy Mgmt. Grp. Ltd., 734 S.W.2d 149, 150
(Tex. App.—Houston [1st Dist.] 1987, no writ) (“[A]n agent who executes a contract
on behalf of a fictitious principal is also personally liable on the contract for failure
to accurately disclose his principal.”); A to Z Rental Ctr. v. Burris, 714 S.W.2d 433,
436 (Tex. App.—Austin 1986, writ ref’d n.r.e.) (discussing “the general rule that
one who contracts as an agent in the name of . . . a principal without legal status or
existence . . . renders himself personally liable on those contracts”).
Herod argues “that where an entity’s forfeiture occurs pursuant to . . .
Section 171.309 of the Texas Tax Code and its reinstatement is under the Tax Code,
it ‘[i]s not a terminated entity . . . and therefore not subject to the limitations’ found
in . . . the Texas Business Organizations Code.” Dkt. 65 at 19 (quoting G Force
Framing LLC v. MacSouth Forest Prods., L.L.C., No. 05-20-00835-cv, 2022 WL
500027, at *7 (Tex. App.—Dallas Feb. 18, 2022, no pet.)). That is all fine and good
but, unlike G Force, there is no evidence in the record to suggest that DNHC has
been reinstated. “As a terminated entity, [DNHC] no longer existed” when Herod
signed the Agreement. Donica Grop., LP v. Thompson Excavating, Inc., No. 0519-00235-cv, 2020 WL 57340, at *3 (Tex. App.—Dallas Jan. 6, 2020, no pet.). Even
if DNHC had been recently restated, the law is clear: “[R]einstatement of a filing
entity’s certificate of formation after its forfeiture has no effect on any issue of the
personal liability of the governing persons, officers, or agents of the filing entity
during the period between forfeiture and reinstatement of the certificate of

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formation.” TEX. BUS. ORGS. CODE § 11.254(b). Accordingly, I find that Herod is
personally bound to the Agreement.
D.

THE ARBITRATION PROVISION SURVIVES TERMINATION.
Herod argues that, even if he is a party to the Agreement, he terminated the

Agreement, and Section 14 does not survive termination because it is not one of
the enumerated sections in the survivability clause of Section 6, the Agreement’s
termination provision.4 True as that may be, it is not enough to show that Section
14 terminates with the Agreement.
The United States Supreme Court has held that “where the dispute is over a
provision of [an] expired agreement, the presumptions favoring arbitrability must
be negated expressly or by clear implication.” Nolde Bros., Inc. v. Local No. 358,
Bakery & Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 255 (1977).
“Consequently, the parties’ failure to exclude from arbitrability contract disputes
arising after termination, far from manifesting an intent to have arbitration
obligations cease with the agreement, affords a basis for concluding that they
intended to arbitrate all grievances arising out of the contractual relationship.” Id.
In other words, “arbitration clauses are presumed to govern grievances under the
[parties’] agreement that occur after the expiration of the agreement, unless the
arbitration clause states otherwise.” Seafarers Intern. Union of N. Am. v. Nat’l
4 Section 6 provides as follows:

Term of Agreement: This Agreement shall be for an initial term of one year
from the Effective Date. Upon expiration of the initial term, this Agreement
shall continue on a month-to-month basis; provided, however, either Party
may terminate this Agreement at any time without cause during the initial
term or thereafter on not less than 30 days’ prior written notice of such
termination. Any such termination shall not affect any rights or obligations
which have accrued under this Agreement. For the avoidance of doubt,
rights and obligations accruing under any outstanding Service Orders,
including Contractor’s obligations to perform as agreed pursuant to such
Service Orders, shall not be affected by any such termination.
Notwithstanding the foregoing, the terms of Sections 2, 3, 4, 5, 6, 7, 10, 13
and 15 shall survive the termination, cancellation or completion of this
Agreement and any Service Orders.
Dkt. 57-1 at 9.
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Marine Servs., Inc., 820 F.2d 148, 153 (5th Cir. 1987) (emphasis added),
abrogated on other grounds by Litton Fin. Printing Div., a Div. of Litton Bus. Sys.,
Inc. v. N.L.R.B., 501 U.S. 190 (1991).
Herod contends that the maxim expressio unius est exclusio alterius
demonstrates that Section 14 terminated with the Agreement. That maxim
“instructs that the expression in a contract of one or more things of a class implies
the exclusion of all not expressed, even though all would have been implied had
none been expressed.” Oxy USA, Inc. v. Sw. Energy Prod. Co., 161 S.W.3d 277, 285
(Tex. App.—Corpus Christi 2005, pet. denied) (quotation omitted). Under this
maxim, Herod contends that the inclusion of Sections 2, 3, 4, 5, 6, 7, 10, 13, and 15
in the survivability clause of Section 6 means that the exclusion of Section 14 is a
clear implication that Section 14 does not survive termination.
In any context other than this one, that might be a powerful argument.
Tellingly, however, the case that Herod cites—Oxy USA—has nothing to do with
arbitration. Rather, courts throughout the Fifth Circuit routinely hold that “absent
a showing that the arbitration provision, itself, provides that it does not survive
termination, . . . arbitration provisions are still enforceable [post-termination]
where it involves ‘disputes arising under the contract.’” Sparrow v. EK Real Est.
Servs., NY, LLC, No. 4:22-cv-00046, 2023 WL 3035359, at *9 (E.D. Tex. Feb. 9,
2023) (quoting Athas Health LLC v. Giuffre, No. 3:17-cv-300, 2017 WL 8809604,
at *4 (N.D. Tex. Oct. 12, 2017)). Because nothing in Section 14 expressly negates or
clearly implies that the parties intended it to terminate with the Agreement,
Section 14 survives the Agreement’s termination.
E.

EVEN IF HEROD WAS NOT PERSONALLY BOUND BY THE AGREEMENT
(HE IS), EQUITY DEMANDS HE BE HELD TO IT ANYWAY.
Under the theory of intertwined claims estoppel, “non-signatories can

successfully compel arbitration when (1) they have a close relationship with a
signatory to a contract with an arbitration agreement and (2) the claims are
intimately founded in and intertwined with the underlying contract obligations.”

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Jody James Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624, 639 (Tex. 2018)
(quotation omitted). I have already observed that:
This certainly seems like the type of case that merits the application of
intertwined claims estoppel. Herod is the sole owner and operator of
DNHC. There is no one other than Herod with whom DMS could
interact concerning the Agreement. Thus, Herod has a close
relationship with DNHC, a signatory to a contract with an arbitration
agreement.
Herod, 2024 WL 3558385, at *3 (quotation omitted). Yet, despite that observation,
I found that “binding Fifth Circuit precedent prevents me from applying
intertwined claims estoppel here.” Id. That precedent was the Fifth Circuit’s
decision in Janvey v. Alguire, in which the Fifth Circuit said that intertwined
claims estoppel “does not govern the present case, where a signatory-defendant
seeks to compel arbitration with a nonsignatory-plaintiff.” 847 F.3d 231, 242 (5th
Cir. 2017).
Yet, the Fifth Circuit recently observed that “a nonsignatory plaintiff can be
compelled [under Texas law] to arbitrate a claim when the claim is itself based on,
or inextricably intertwined with, the contract containing the arbitration clause.”
Cure, 118 F.4th at 669 (cleaned up). DMS contends that Cure’s observation about
intertwined claims estoppel under Texas law is not at odds with Janvey because:
Janvey’s single-sentence statement that intertwined-claims estoppel
does not apply “where a signatory-defendant seeks to compel
arbitration with a nonsignatory-plaintiff” relied on Bridas SAPIC v.
Gov’t of Turkmenistan, 345 F.3d 347 (5th Cir. 2003). The Bridas case,
in turn, relied on federal substantive law in deciding whether or not
intertwined claims estoppel applied to the facts before it. Neither
Janvey or Bridas addressed intertwined-claims estoppel under Texas
law or predicted whether Texas state courts would recognize
intertwined claims estoppel as a basis to compel a nonsignatory to
arbitration.
Dkt. 66 at 17–18. I find this argument persuasive and would otherwise recommend
ordering Herod to arbitration under the theory of intertwined claims estoppel.

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That is unnecessary, however, because Herod is personally bound to the
Agreement.5
CONCLUSION
I find that there is a valid, enforceable arbitration agreement between DMS
and Herod. I do not reach the question of whether Herod’s collective action
allegations should be struck from the Complaint. Although the parties argue about
whether this court or the arbitrator should determine if Herod’s claims fall within
5 Herod admonishes this court for requesting briefing on Cure’s applicability. According

to Herod, “it is not the role of the Court to raise issues foregone by a party.” Dkt. 65 at 29.
Herod offers some cherry-picked quotes from United States Supreme Court decisions to
support his contention that this court’s “presentation of [Cure’s applicability] at this stage
places it in the position of advocate rather than an adjudicator.” Id. at 30. It is worth
examining those cases to see just how wrong Herod is to suggest that it was improper for
a court of first instance, not an appellate court, to ensure it gets the law right.
In United States v. Sineneng-Smith, 590 U.S. 371, 375 (2020), the Supreme Court held
that the Ninth Circuit Court of Appeals’ departure from the party presentation principle
constituted an abuse of discretion where a Ninth Circuit panel overtook the defendant’s
appeal by requesting amicus briefs from three organizations and affording those nonparties more time before the panel than Sineneng-Smith’s own counsel. In that same
opinion, however, the Supreme Court observed that “[t]here are no doubt circumstances
in which a modest initiating role for a court is appropriate.” Id. at 376. Indeed, even the
Supreme Court has ordered briefing on issues not directly presented but raised in the
lower courts. See id. at 381–82. Here, “the question [of whether intertwined claims
estoppel should bind Herod to the Agreement] was not interjected into the case for the
first time by [this court].” Id. Rather, this court simply sought to ensure that its prior
holding was correct in light of recent developments in the case law. Nor do this court’s
actions here remotely resemble the actions of the Eight Circuit Court of Appeals in
Greenlaw v. United States, 554 U.S. 237 (2008), in which an Eight Circuit panel sua
sponte ordered the district court to add 15 years to Greenlaw’s sentence to conform to the
statutory requirement, despite the fact that the United States did not appeal or crossappeal.
This court is free to “revisit prior decisions of its own in any circumstance.” Zarnow v.
City of Wichita Falls, 614 F.3d 161, 171 (5th Cir. 2010) (cleaned up). Moreover, “it is wellsettled that a district court may grant summary judgment sua sponte, so long as the losing
party has ten days notice to come forward with all of its evidence in opposition to
summary judgment.” Love v. Nat’l Med. Enters., 230 F.3d 765, 770–71 (5th Cir. 2000)
(quotation omitted). “The broad rule is that a district court may dismiss a claim on its
own motion as long as the procedure employed is fair.” Carver v. Atwood, 18 F.4th 494,
498 (5th Cir. 2021) (quotation omitted). Accordingly, there is nothing untoward about
this court requesting briefing from the parties—and affording them extra time and pages
for such briefing—on an issue this court had already addressed.
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the Agreement’s scope, Herod has never contested that the Agreement would
otherwise cover his claims—he has only ever disputed that he is a party to the
Agreement. Accordingly, I grant DMS’s Renewed Motion to Compel Arbitration
(Dkt. 57). This case is stayed and administratively closed pending arbitration.
SIGNED on this 25th day of November 2024.

______________________________
ANDREW M. EDISON
UNITED STATES MAGISTRATE JUDGE

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