Alfred Zaklit et al v. Global Linguist Solutions LLC et al
Filing
125
MEMORANDUM OPINION in re 108 Motion for Reconsideration (See order for details). Signed by District Judge James C. Cacheris on 08/19/2014. (jlan)
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
ALFRED ZAKLIT, et al.,
)
)
)
)
)
)
)
)
)
)
Plaintiffs,
v.
GLOBAL LINGUIST SOLUTIONS,
LLC, et al.,
Defendants.
M E M O R A N D U M
1:14cv314 (JCC/JFA)
O P I N I O N
This matter is before the Court on Plaintiffs’ Motion
for Reconsideration, [Dkt. 108], and corresponding Memorandum in
Support, [Dkt. 109].
For the reasons set forth below, the Court
will deny Plaintiffs’ motion. 1
I. Background
The procedural and factual history of this case has
been recited at length in an earlier opinion and will not be
repeated here in any detail.
(See Mem. Op. [Dkt. 100].)
In
brief, Defendant Global Linguist Solutions, LLC (“GLS” or
“Defendant”) is a Delaware corporation that provides translation
and interpretation services to the United States Army and other
government agencies stationed in the Middle East.
1
(Second Am.
Plaintiffs have noticed this matter for oral argument on September 4, 2014;
however, because the facts and legal contentions are adequately set forth in
the current record, the Court will dispense with oral argument and decide
this matter on the papers without additional briefing.
1
Compl. [Dkt. 102] ¶¶ 1, 6, 11.)
Plaintiffs are linguists who
either currently work for or have worked for GLS.
(Id. at ¶ 1.)
Plaintiffs have filed this action alleging various claims
stemming from their employment with GLS in Kuwait.
(Id.)
On July 8, 2014, the Court issued a Memorandum Opinion
granting in part and denying in part GLS’s first motion to
dismiss for failure to state a claim.
(Mem. Op. at 54.)
Plaintiffs’ instant motion takes issue with the Court’s decision
to uphold and enforce the Virginia choice-of-law provision
contained in their employment contracts with GLS.
in Supp. at 1.)
(Pls.’ Mem.
Plaintiffs’ specifically ask the Court to
“reconsider its ruling . . . and reserve ruling on the
enforceability of any part of the contract at issue, including
the choice-of-law clause, until evidence is presented regarding
whether the contract, or any of its provisions, should not be
enforced because ‘such provisions are unfair or unreasonable, or
are affected by fraud or unequal bargaining power.’”
(Id. at 2
(citation omitted).)
II. Standard of Review
Plaintiffs’ brief fails to identify the authority on
which they base the instant motion, apparently leaving it to the
Court to research this threshold issue.
Although certainly not
overly burdensome, the Court finds little pleasure in acting as
counsel’s impromptu research associate.
2
That said, Plaintiffs’
motion is properly addressed under Federal Rule of Civil
Procedure 54(b) given it is directed at a prior order that did
not result in a final judgment.
See Bradford v. HSBC Mortg.
Corp., 838 F. Supp. 2d 424, 427 (E.D. Va. 2012) (“Because
[plaintiff’s] motion is directed at the July 22 Order’s partial
dismissal of his action, [plaintiff] is correct that the motion
is governed by Rule 54(b)[.]”); Netscape Commc’ns Corp. v.
ValueClick, Inc., 704 F. Supp. 2d 544, 546 (E.D. Va. 2010) (“The
Fourth Circuit has made clear that where, as here, the entry of
partial summary judgment fails to resolve all claims in a suit,
Rule 54(d)—not Rule 59(e) or 60(b)—governs a motion for
reconsideration[.]” (citation omitted)).
Rule 54(b) provides, in pertinent part:
[A]ny order or other decision, however
designated, that adjudicates fewer than all
of the claims or the rights and liabilities
of fewer than all the parties does not end
the action as to any of the claims or
parties and may be revised at any time
before the entry of a judgment adjudicating
all the claims and all the parties’ rights
and liabilities.
Fed. R. Civ. P. 54(b).
The resolution of motions to reconsider
pursuant to Rule 54(b) is “committed to the discretion of the
district court,” which may be exercised “as justice requires.”
Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505, 515 (4th
Cir. 2003).
The Fourth Circuit has made clear that the
standards governing reconsideration of final judgments are not
3
determinative of a Rule 54(b) motion.
Id. at 515.
Yet, many
courts in this circuit have appropriately considered those
factors in guiding the exercise of their discretion under Rule
54(b).
See Al Shimari v. CACI Int’l, Inc., 933 F. Supp. 2d 793,
798 (E.D. Va. 2013); see also In re C.R. Bard, Inc., No. 2:11–
cv–00114, 2013 WL 2949033, at *2 (S.D. W. Va. June 14, 2013)
(“[A]lthough a ‘motion for reconsideration under Rule 54(b) is
not subject to the strictures of a Rule 60(b) motion,’ this
district has been ‘guided by the general principles of Rules
59(e) and 60(b)’ in determining whether a Rule 54(b) motion
should be granted.” (citation omitted)).
Courts generally do
not depart from a previous ruling unless “(1) a subsequent trial
produces substantially different evidence, (2) controlling
authority has since made a contrary decision of law applicable
to the issue, or (3) the prior decision was clearly erroneous
and would work manifest injustice.”
at 515 (citation omitted).
Am. Canoe Ass’n, 326 F.3d
Such problems “rarely arise and the
motion to reconsider should be equally rare.”
Above The Belt,
Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va.
1983).
A party’s mere disagreement with the district court’s
ruling does not warrant a motion for reconsideration, and such
motions should not be used “to raise arguments which could have
been raised prior to the issuance of the judgment, nor may they
4
be used to argue a case under a novel legal theory that the
party had the ability to address in the first instance.”
Pac.
Ins. Co. v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir.
1998).
A motion for reconsideration is “an extraordinary remedy
which should be used sparingly.”
Id.
Here, Plaintiffs do not assert an intervening change
in the law or new evidence.
Rather, Plaintiffs claim the Court
erred in ruling that the Virginia choice-of-law provision was
enforceable and covered the claims in this action.
With the
above standards in mind, the Court will address Plaintiffs’
arguments in turn.
III. Analysis
A. Plaintiffs’ Introduction
The Court will start with the introduction section of
Plaintiffs’ brief given it contains a number of conclusory
arguments that not only misrepresent the Court’s prior ruling
but also contradict pertinent case law.
(See Pls.’ Mem. in
Supp. at 1-2.)
Plaintiffs first declare that the Court “summarily
decided as a matter of law that Plaintiffs would not be allowed
to establish that the choice-of-law provision in [their]
contracts was unfair, unreasonable or that the contracts
containing the clause were tainted by unequal bargaining power.”
(Pls.’ Mem. in Supp. at 1.)
This assertion rings hollow.
5
Virginia law presumes contracts to be valid, “and the burden is
on the party challenging the validity to establish that the
provision in question is unfair, unreasonable, or affected by
fraud or unequal bargaining power.”
Global One Commc’ns, LLC v.
Ansaldi, No. C165948, 2000 WL 1210511, at *2 (Va. Cir. Ct. May
5, 2000).
Plaintiffs were given an opportunity to overcome this
presumption in responding to Defendant’s motion to dismiss.
See
Cooper v. Samsung Elecs. Am., Inc., 374 F. App’x 250, 255 n.5
(3d Cir. 2010) (rejecting argument that the district court erred
by addressing choice of law issue at motion to dismiss stage).
Plaintiffs’ counsel, however, failed to present any evidence to
establish the exceptional circumstances necessary to persuade
the Court that the parties’ deliberate selection of Virginia law
should be ignored.
(See Mem. Op. at 19-20.)
Plaintiffs cannot
now blame the Court for counsel’s apparent failure to properly
litigate their case.
Next, Plaintiffs assert that the “necessary
implications of [the Court’s] ruling are that a party can force
another under duress, or induce them by fraud, to sign a
contract, and unless the fraud or duress related specifically to
the choice of law clause, the wrongdoer would always be entitled
to enforce that provision.”
(Pls.’ Mem. in Supp. at 1.)
It is
not for this Court to question the wisdom of Virginia law, but
rather to apply the law as it is established.
6
See, e.g.,
Mercado v. HFC Collection Ctr., Inc., No. 3:12–cv–122–J–12JBT,
2013 WL 645988, at *6 (M.D. Fla. Jan. 28, 2013), report and
recommendation adopted by, 2013 WL 654419 (M.D. Fla. Feb. 21,
2013).
This is precisely what the Court did.
17-19.)
(See Mem. Op. at
To the extent Plaintiffs find the Court’s ruling
repugnant for policy reasons, this argument is better raised in
Richmond.
Nonetheless, it is worth noting that if a choice-of-
law provision could be avoided every time an issue going to the
formation of the contract is raised, as Plaintiffs’ apparently
contend, the efficiency and certainty achieved by such clauses
would be largely nullified.
Finally, Plaintiffs suggest the Court should have
deferred ruling on the choice-of-law issue until later in the
proceedings.
(Pls.’ Mem. in Supp. at 2.)
position is self-evident.
The fallacy of this
Determining the validity of the
choice-of-law provision was a necessary prerequisite to deciding
Defendant’s motion to dismiss.
See, e.g., Merrill Lynch Bus.
Fin. Servs. Inc. v. Plesco, Inc., 859 F. Supp. 818, 824 (E.D.
Pa. 1994).
Otherwise, the Court would have been without
guidance as to what body of law to apply in analyzing
Plaintiffs’ claims.
See Fin. One Pub. Co. Ltd. v. Lehman Bros.
Special Fin., Inc., 414 F.3d 325, 332 (2d Cir. 2005) (“The
validity of a contractual choice-of-law clause is a threshold
question[.]”).
7
Having addressed the claims raised in Plaintiffs’
introduction, the Court will turn to the argument section of
their brief.
B. Plaintiffs’ First Argument
Plaintiffs start by repeating an argument advanced in
their opposition brief to Defendant’s motion to dismiss: because
a contract allegedly procured by fraud is itself void, any
choice-of-law provision contained therein must be unenforceable.
(Pls.’ Mem. in Supp. at 5-7.)
Thus, according to Plaintiffs,
disputing the validity of a contract as a whole is sufficient to
upset a choice-of-law provision.
(Id.)
As the Court has
already held, this argument is unsustainable.
See Jones v. Dent
Wizard Int’l Corp., No. CL02-386, 2002 WL 32254731, at *1 (Va.
Cir. Ct. May 6, 2002) (noting that Virginia has adopted the
“federal standard” regarding the enforceability of dispute
resolution provisions); Grace v. Corp. of Lloyd’s, No. 96 Civ.
8334(JGK), 1997 WL 607543, at *8 (S.D.N.Y. Oct. 2, 1997) (“[A]
general allegation of fraud in the inducement of the contract as
a whole is not enough to support the invalidation of the forum
selection and choice of law clauses.”); Chitsey v. Client
Servs., Inc., No. 4:08–CV–74, 2009 WL 305530, at *2 (E.D. Tex.
Feb. 6, 2009) (“Fraud and overreaching must be specific to a
forum selection clause in order to invalidate it.
Thus,
allegations of [fraud and overreaching] as to the contract as a
8
whole—or portions of it other than the [forum selection/choiceof-law] clause—are insufficient; the claims of fraud or
overreaching must be aimed straight at the [forum
selection/choice-of-law] clause in order to succeed.” (citation
and internal quotation marks omitted)); Haynsworth v. The Corp.,
121 F.3d 956, 964 (5th Cir. 1997) (“While [plaintiff’s general]
allegations [of fraud], if proved, might very well be relevant
to the merits of the claims in the absence of a forum selection
clause, they are wholly inapposite to our enforceability
determination, which must of course precede any analysis of the
merits.”).
C. Plaintiffs’ Second Argument
Next, Plaintiffs argue that the Court erred in
upholding the choice-of-law provision in light of their
allegations of unequal bargaining power.
at 7-8.)
(Pls.’ Mem. in Supp.
According to Plaintiffs:
The
Court
correctly,
and
repeatedly
acknowledges that under Virginia law choiceof-law clauses may be held unenforceable
when “affected by . . . unequal bargaining
power.”
. . .
It
is
nearly
impossible
to
imagine
a
stronger case of unequal bargaining power.
Plaintiffs
were
individual
employees
of
Defendant, a large government contractor.
Here, the Plaintiffs were in dire and
desperate
circumstances
imposed
by
Defendant.
Plaintiffs were utterly reliant
9
upon Defendant.
While in these desperate
circumstances, Plaintiffs
were
handed
a
form, instructed not to read it, not given
the opportunity to consult with an attorney
before signing, and threatened to be evicted
from the base if the contracts were not
signed.
(Id. at 7-8.)
The Court is unpersuaded.
To begin, this is the first time Plaintiffs have
presented this argument to the Court.
Plaintiffs never argued
in their opposition brief to Defendant’s motion to dismiss that
the choice-of-law provision should be stricken in light of the
parties’ unequal bargaining power.
Instead, Plaintiffs argued
that “[s]ince fraud in the inducement precedes the contract, the
contract is invalid and the contractual choice of law is
likewise ineffective.”
85] at 8.)
(Pls.’ Opp’n to Mot. to Dismiss [Dkt.
The only mention of unequal bargaining power was in
the following sentence:
When the other circumstances alleged in the
Amended Complaint are considered, including
the disparity in bargaining power between
the parties, the creation of the parties’
relationship in California, the fraud, the
duress, and concealment that accompanies the
contracts’ creation, there are more than
sufficient “unusual circumstances” present
in this case to render the choice-of-law
provision unenforceable.
(Id. at 13).
This single line is insufficient to alert the
Court of the arguments now advanced, and the Court was under no
obligation to unilaterally research and provide support for such
10
a claim.
See Grimaldo v. Reno, 189 F.R.D. 617, 619 (D. Colo.
1999) (“In our adversarial system, I am under no obligation to
conduct research to provide the proper support for arguments
presented by any party other than pro se ones[.]”); United
States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991) (“Judges are
not like pigs, hunting for truffles buried in briefs.”).
Plaintiffs had the opportunity to raise all perceived
arguments in contesting the choice-of-law provision.
Plaintiffs
purposefully chose to focus on certain arguments and, for
reasons unknown, neglected the position they currently find
beneficial.
It is now too late to come back for more.
See
Potter v. Potter, 199 F.R.D. 550, 553 (D. Md. 2001) (noting that
new arguments should not be considered on a motion to dismiss
because “[h]indsight being perfect, any lawyer can construct a
new argument to support a position previously rejected by the
court, especially once the court has spelled out its reasoning
in an order”); Joe Hand Promotions, Inc. v. Dock St. Enters.,
Inc., No. WMN–11–1973, 2012 WL 401080, at *2 (D. Md. Feb. 7,
2012) (“[M]otions for reconsideration are not the vehicle to
make arguments that could have been made when briefing the
original motion.”).
Even if the Court were to consider this argument, it
would not alter the prior ruling.
A party seeking to upset a
choice-of-law provision bears a “heavy burden.”
11
Jones, 2002 WL
32254731, at *1; see also Orion Worldwide Travel, LLC v.
Commonwealth Foreign Exch., Inc., No. 1:09cv1148, 2009 WL
4064109, at *2 (E.D. Va. Nov. 20, 2009) (“The burden of proving
the unreasonableness of a forum-selection clause is a heavy one,
which the disputing party to ‘clearly show that enforcement
would be unreasonable and unjust.’” (citation omitted)).
“Absent evidence of a bad-faith motive, disparity in bargaining
power” is insufficient.
Torres v. SOH Distribution Co., Inc.,
No. 3:10-CV-179, 2010 WL 1959248, at *3 (E.D. Va. May 13, 2010).
Moreover, a lack of actual bargaining will not render a choiceof-law clause unenforceable.
Id.
Plaintiffs’ allegations that they “were handed a form,
instructed not to read it, not given the opportunity to consult
with an attorney before signing, and threatened to be evicted
from the base if the contracts were not signed” are insufficient
to overcome the burden described above.
8.)
(Pls.’ Mem. in Supp. at
While Plaintiffs’ bargaining position was certainly
inferior, they were not in a “take-it-or-leave-it” position
since it is undisputed they could have terminated their
employment and made GLS transport them back to the United
States.
See Jones, 2002 WL 32254731, at *2 (“[A] contract which
is a prerequisite to employment is not adhesive because the
employee can choose to forego the employment[.]”); Senture, LLC
v. Dietrich, 575 F. Supp. 2d 724, 727 n.1 (E.D. Va. 2008) (“If
12
an employee has the freedom to consider employment elsewhere and
is not bound to continue working for his current employer, an
employment agreement will not be considered an adhesion
contract.”); see also Torres, 2010 WL 1959248, at *3.
D. Plaintiffs’ Third Argument
Plaintiffs then argue that the choice-of-law provision
is invalid as matter of law because “parties cannot simply
contractually opt out of compliance with governing law by
stipulating that the laws of some other jurisdiction where the
conduct is unregulated will govern.”
9.)
(Pls.’ Mem. in Supp. at
According to Plaintiffs, “[t]he current ruling effectively
permits a party to avoid complying with the law by the simple
expedient of providing in the contract [for] the laws of another
jurisdiction[.]”
(Id.)
The Court’s prior memorandum opinion addresses this
issue at length:
Plaintiffs’ assertion that a choice-of-law
provision cannot nullify a statutory claim
under foreign law is simply not the case.
See Pyott-Boone, 918 F. Supp. 2d at 544-45
(finding
the
parties’
choice
of
law
provision displaced plaintiff’s claims under
the Virginia Securities Act).
While a
Virginia court can decline to honor a
choice-of-law provision if application of
the chosen law will usurp a statutory claim
that is a fundamental policy of a state
which has a materially greater interest in
the litigation, see Malpractice Research,
Inc., 1991 WL 11031257, at *2, Plaintiffs
have presented no compelling argument that
13
is the case here.
Plaintiffs’ brief is
devoid of any claim that the Kuwaiti labor
laws cited above represent a fundamental
policy of the contracting state such that
they cannot be waived through a choice-oflaw provision.
See Volvo Const. Equip. N.
Am., Inc. v. CLM Equip. Co., Inc., 386 F.3d
581, 607 (4th Cir. 2004) (“[W]e begin with
the proposition that not every statutory
provision constitutes a fundamental policy
of a state.”).
Moreover, Plaintiffs have
made no showing that applying the choice-oflaw provision to these claims would be
unfair or unreasonable.
See Senture, LLC,
575 F. Supp. 2d at 727.
(Mem. Op. at 51-52.)
Plaintiffs have failed to present any persuasive
authority contradicting the holding above.
For instance,
Plaintiffs cite to Keller v. Woods, No. L93-415, 1995 WL 1055817
(Va. Cir. Ct. Mar. 22, 1995), for the general proposition that
in Virginia a party cannot “opt out of otherwise governing
laws.”
(Pls.’ Mem. in Supp. at 9.)
however, is not so broad.
The holding in Keller,
In Keller, the plaintiffs brought
suit under Virginia’s “Business Opportunity Sales Act” in
connection with a franchise agreement previously executed with
the defendants.
Id. at *1.
Defendants argued that the Virginia
Business Opportunity Sales Act was inapplicable because “the
parties’ contract says that it is governed by the law of Utah.”
Id. at *2.
The court rejected this argument, holding that
Virginia’s interest in litigating these claims within its
borders trumped the parties’ right to designate foreign
14
law.
Id.
This holding fits squarely within the Court’s
reasoning above.
To the extent Plaintiffs now seek to claim that the
Kuwaiti labor laws usurped by the choice-of-law provision
represent a fundamental policy of the contracting state such
that they cannot be waived through a choice-of-law provision,
this argument is barred.
See Pac. Ins. Co., 148 F.3d at 403
(noting that a motion for reconsideration should not be used “to
raise arguments which could have been raised prior to the
issuance of the judgment, nor may they be used to argue a case
under a novel legal theory that the party had the ability to
address in the first instance”).
E. Plaintiffs’ Fourth Argument
Lastly, Plaintiffs claim the Court erred in relying
upon the case Pyott-Boone Elecs. Inc. v. IRR Trust for Donold L.
Fetterolf Dated Dec. 9, 1997, 918 F. Supp. 2d 532, 542-43 (W.D.
Va. 2013), in resolving GLS’s motion to dismiss.
Plaintiffs
maintain that the “salient facts of Pyott-Boone bear little
resemblance to the facts of this case.”
12.)
(Pls.’ Mem. in Supp. at
The facts presented in this case undoubtedly differ from
those in Pyott-Boone; however, for the reasons already stated,
the Court finds the rationale underlying Judge Jones’s decision
applicable here.
(See Mem. Op. at 25-27.)
15
IV. Conclusion
In sum, upon careful review, the Court finds no clear
error of law or manifest injustice.
deny Plaintiffs’ motion.
August 19, 2014
Alexandria, Virginia
Accordingly, the Court will
An appropriate order will follow.
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
16
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