International Bancshares Corporation d/b/a International Bank of Commerce d/b/a IBC Bank v. Lopez
Filing
6
MEMORANDUM AND ORDER denying IBC's 1 Motion to Vacate. (Signed by Judge George P. Kazen) Parties notified. (dmorales, 5)
United States District Court
O
Southern District of Texas
ENTERED
November 06, 2015
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
LAREDO DIVISION
§
§
§
§
v.
§
§
JOSE ANTONIO LOPEZ, On Behalf of §
Himself and All Others Similarly §
Situated
§
David J. Bradley, Clerk
INTERNATIONAL BANCSHARES
CORPORATION d/b/a INTERNATIONAL
BANK OF COMMERCE d/b/a IBC BANK
CIV. NO. 5:15-cv-173
MEMORANDUM AND ORDER
Pending
before
Corporation’s
(IBC)
Certification.”
the
Court
“Motion
(Dkt.
1.)
to
is
International
Vacate
Jose
Award
Antonio
of
Lopez
response (Dkt. 4.) and IBC has filed a reply.
Bankshares
Conditional
has
filed
(Dkt. 5.)
a
The
Court considers these filings and the attached exhibits.
BACKGROUND
The instant Motion concerns one of three similar disputes
currently
associates.
in
arbitration
between
IBC
and
former
sales
These sales associates, including Lopez, claim back
pay for overtime work under the Fair Labor Standards Act (FLSA).
For the past two years the parties have argued about the meaning
of IBC’s Open Door Policy for Dispute Resolution (arbitration
agreement),
which
requires
disagreements
between
employees to be arbitrated rather than litigated.
IBC
and
its
This Court first became involved with these disputes on
September 4, 2013, when Ceasar Berlanga filed a complaint in
this Court under the FLSA accusing IBC of underpaying him and
other sales associates for overtime work.
1.)
Berlanga
requested
that
the
suit
(5:13-cv-149, Dkt.
proceed
as
an
FLSA
collective action, which would allow similarly situated sales
associates to join as plaintiffs.
arbitration.
IBC filed a motion to compel
While that motion was pending, Jose Antonio Lopez
attempted to join the action as a plaintiff.
IBC’s
motion
to
compel
arbitration
and
The Court granted
dismissed
the
suit
without considering Lopez’s request to join.
Berlanga and Lopez together tried to initiate collectiveaction
arbitration
(AAA).
IBC
assigned
arbitrator
Berlanga’s
with
objected
claims
the
to
Arbitration
collective-action
sustained
were
American
the
divided
arbitration,
objection,
into
Association
and
separate
Lopez’s
the
and
arbitrations.
IBC’s instant motion to vacate concerns the Lopez arbitration,
as the Court has not been involved in the Berlanga arbitration.
Lopez
moved
for
a
clause-construction
ruling
that
the
arbitration agreement allows him to bring an FLSA collectiveaction arbitration.
On August 19, 2014, the arbitrator granted
Lopez’s motion, finding that the arbitration agreement allows
for collective action (the “clause-construction award”).
2/6
IBC then filed a “Motion to Vacate the Clause Construction
Award” in this Court.
It argued that the arbitrator exceeded
his
Lopez
power
by
arbitration.
allowing
to
proceed
(5:14-cv-138, Dkt. 1.)
in
collective-action
Lopez countered that the
Court lacked jurisdiction to consider IBC’s motion.
On October
28, 2014, this Court found that it had jurisdiction under StoltNielsen,
S.A.
v.
AnimalFeeds
Int’l
Corp.,
130
S.
Ct.
1758
(2010), but that the arbitrator did not exceed his powers by
finding
that
collective
the
actions.
arbitration
Int’l
agreement
Bancshares
allows
Corp.
v.
for
Lopez,
FLSA
57
F.Supp.3d 784 (S.D. Tex. 2014) (Kazen, J.) (Lopez I).
The
arbitration
proceedings
continued.
The
arbitrator
temporarily abated the proceedings to allow Lopez to complete
the
grievance
policy.
without
procedure
outlined
in
IBC’s
dispute-resolution
The arbitrator lifted the abatement on June 10, 2015,
stating
the
result
of
the
grievance
procedure.
The
arbitrator granted Lopez’s motion for conditional certification
of a collective-action class on June 22, 2015.
IBC objected,
requesting
ruling.
clarification
of
the
arbitrator’s
In
response, the arbitrator withdrew his June 22 order and issued a
new order detailing his reasoning on August 18, 2015, granting
Lopez conditional certification and outlining the procedure the
parties must follow to give potential opt-in plaintiffs notice
of the arbitration proceedings (the “conditional certification
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award”).
In the instant Motion, IBC asks the Court to vacate
this conditional certification award.
ANALYSIS
IBC’s claim arises under 9 U.S.C. § 10(a)(4), part of the
Federal Arbitration Act (FAA), which allows a court to vacate an
arbitration
award
“[w]here
the
arbitrators
exceeded
their
powers, or so imperfectly executed them that a mutual, final,
and
definite
made.”
award
on
the
subject
matter
submitted
was
not
This section allows a court to vacate an arbitrator’s
decision “only in very unusual circumstances.”
First Options of
Chi., Inc. v. Kaplan, 115 S. Ct. 1920, 1923 (1995).
The general rule is that a court may review an arbitral
award “only after a final award is made by the arbitrator.”
Folse v. Richard Wolf Med. Instruments Corp., 56 F.3d 603, 605
(5th Cir. 1995).
out
of
the
dispute
presumptively
decide.”
Therefore, “procedural questions which grow
not
for
and
the
bear
on
its
judge,
but
final
for
an
disposition
arbitrator,
are
to
Howsam v. Dean Witter Reynolds, Inc., 123 S. Ct. 588,
592 (2002) (internal quotations omitted).
Objections to the
nature and fairness of the proceedings are for the arbitrator to
decide “‘subject only to the limited post-arbitration judicial
review as set forth in section 10 of the FAA.’”
Gulf Guar. Life
Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d 476, 487 (5th
Cir. 2002)
4/6
(quoting Hooters of Am., Inc. v. Phillip, 173 F.3d
933, 940–41 (4th Cir. 1999)).
Moreover, “federal courts may not
graft a provision for interlocutory judicial review onto the
otherwise straight-forward regime contemplated by the FAA. . .
.”
Savers Prop. & Cas. Ins. Co. v. Nat’l Union Fire Ins. Co. of
Pittsburg, PA, 748 F.3d 708, 722 (6th Cir. 2014).
As the Court discussed last year in its opinion involving
these same parties and proceedings, the Supreme Court carved out
a limited exception to this general rule in Stolt-Nielsen, 130
S. Ct. at 1767.
See Lopez I, 57 F.Supp.3d at 787–89.
Stolt-
Nielsen opened the door to judicial review of an arbitrator’s
decision concerning whether an arbitration agreement allows for
class-action arbitration.
See, e.g., Opalinski v. Robert Half
Int’l, Inc., 761 F.3d 326, 329 (3d Cir. 2014) (reviewing an
order allowing class-action arbitration); DIRECTV, LLC v. Arndt,
546 Fed.Appx. 836, 838–39 (11th Cir. 2013).
In Lopez I, this
Court found that the potential hardship raised by an unagreed-to
collective
action
was
similar
enough
to
that
raised
by
an
unagreed-to class action to justify including orders allowing
collective action in the Stolt-Nielsen exception.
Id.
This limited exception to the general rule does not give
courts blanket jurisdiction over all arbitral orders concerning
collective action.
Rather, it gives courts limited jurisdiction
to consider an arbitrator’s ruling on a particular threshold
issue: whether an arbitration agreement allows for collective5/6
action arbitration.
Once this question has been answered and
the
properly
parties
are
subject
to
collective-action
arbitration, the general rule barring interlocutory review of
arbitration
awards
applies,
preventing
a
federal
court
from
reviewing an arbitrator’s order until final award issues.
As the Court found in Lopez I, IBC is properly subject to
collective-action proceedings.
The Court has already dealt with
the issue Stolt-Nielson allows it to review, and the parties
have moved on to the next step in the proceedings.
The award
IBC asks the Court to review conditionally certifies a class of
plaintiffs
and
outlines
the
procedures
notifying and defining the class.
no final award has issued.
to
be
followed
in
This award is procedural, and
Therefore, under the general rule
barring interlocutory review of arbitration orders, this Court
lacks jurisdiction to review the arbitrator’s order.
CONCLUSION
Because
this
Court
lacks
jurisdiction,
IBC’s
Motion
to
Vacate (Dkt. 1) is DENIED.
DONE at Laredo, this 5th day of November, 2015.
___________________________________
George P. Kazen
Senior United States District Judge
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