Tough Mudder, LLC et al v. Sengupta et al

Filing 35

MEMORANDUM OPINION AND ORDER GRANTING 24 MOTION TO DISMISS WITHOUT PREJUDICE. Signed by District Judge Gina M. Groh on 10/2/14. (njz)

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG
TOUGH MUDDER, LLC,
PEACEMAKER NATIONAL TRAINING
CENTER, LLC, GENERAL MILLS, INC.,
and GENERAL MILLS SALES, INC.,
Plaintiffs,
v.

CIVIL ACTION NO.: 3:14-CV-56
(JUDGE GROH)

MITA SENGUPTA, individually and as
Personal Representative of Avishek
Sengupta, BIJON SENGUPTA, and
PRIYANKA SENGUPTA,
Defendants.
MEMORANDUM OPINION AND ORDER GRANTING MOTION TO DISMISS
The above-styled matter came before the Court for consideration of the Defendants’
Motion to Dismiss for Lack of Subject Matter Jurisdiction or, in the Alternative, to Abstain.
ECF 24. For the following reasons, the Court GRANTS this motion because a necessary
and indispensable party has not been joined and his joinder would deprive this Court of
diversity jurisdiction.
I. Background
This case concerns the death of Avishek Sengupta (“the Decedent”) during a Tough
Mudder. A Tough Mudder is a running event that involves obstacles. On April 20, 2013,
Tough Mudder held a race, sponsored by General Mills, in Gerrardstown, West Virginia on
property owned by Peacemaker National Training Center, LLC. The Decedent participated
in this event. Before doing so, he completed an Assumption of Risk, Waiver of Liability,

and Indemnity Agreement (“the Agreement”). The Agreement contains the following
arbitration clause:
Mediation and Arbitration: In the event of a legal issue, I agree to engage
in good faith efforts to mediate any dispute that might arise. Any
agreement reached will be formalized by a written contractual agreement at
that time. Should the issue not be resolved by mediation, I agree that all
disputes, controversies, or claims arising out of my participation in the TM
event shall be submitted to binding arbitration in accordance with the
applicable rules of the American Arbitration Association then in effect. The
cost of such action shall be shared equally by the parties.
Pet. to Compel Arbitration at 2.
During the event, the Decedent entered an obstacle called “Walk the Plank.” This
obstacle requires that participants climb a platform, jump into a pool of water, and swim out
of the pool. Tough Mudder had retained Amphibious Medics to supervise this obstacle.
The Decedent jumped from the platform, but did not rise to the water’s surface. Travis
Pittman, an underwater medic employed by Amphibious Medics, pulled the Decedent from
the water. The Decedent did not regain consciousness. He was taken to the hospital and
placed on life support. The next day, he died after life support was withdrawn.
Following the Decedent’s death, his mother (Mita Sengupta), father (Bijon
Sengupta), and sister (Priyanka Sengupta) attended mediation with Tough Mudder and
Amphibious Medics regarding the Decedent’s death. On April 15, 2014, the Senguptas’
counsel sent an email stating his clients were terminating the mediation.
On April 18, 2014, Tough Mudder filed a demand for arbitration with the American
Arbitration Association (“AAA”) that named Mita Sengupta individually and as the personal
representative of the Decedent’s Estate, Bijon Sengupta, and Priyanka Sengupta as
respondents.

That same day, Mita Sengupta, individually and as the personal
2

representative of the Decedent’s Estate, filed suit in the Circuit Court of Marshall County,
West Virginia against Tough Mudder, Airsquid Ventures, Inc. (the business name of
Amphibious Medics), Travis Pittman, Peacemaker National Training Center, General Mills,
Inc., and General Mills Sales, Inc. (collectively “General Mills”). Her complaint raises a
wrongful death claim against all defendants.

It also seeks a declaration that the

Agreement’s arbitration clause and liability waiver are unenforceable, and, alternatively,
that the waiver does not cover gross negligence, strict liability, and intentional tort claims.
On May 22, 2014, Tough Mudder added Peacemaker National Training Center and
General Mills to its arbitration demand as claimants. The next day in the state case, Tough
Mudder, Peacemaker National Training Center, and General Mills filed a motion to dismiss
for improper venue and forum non conveniens or to transfer the case to the Circuit Court
of Berkeley County, West Virginia as well as a motion to stay and compel arbitration.
Airsquid and Mr. Pittman also filed a motion to stay and compel arbitration in the state
case. Both motions to compel arbitration rely on the Agreement. On May 30, 2014, the
state court issued a temporary restraining order that enjoined the arbitration.
On June 2, 2014, Tough Mudder, Peacemaker National Training Center, and
General Mills (collectively “the Petitioners”) filed a Petition to Compel Arbitration and to Stay
State Court Litigation in this Court against Mita Sengupta individually and as the personal
representative of the Decedent’s Estate, Bijon Sengupta, and Priyanka Sengupta
(collectively “the Senguptas”). Their petition invokes this Court’s diversity jurisdiction under
28 U.S.C. § 1332. On July 2, 2014, this Court denied the motion to stay and set an
evidentiary hearing concerning the petition for August 13, 2014.
On August 8, 2014, the Senguptas filed a motion to dismiss the petition for lack of
3

subject matter jurisdiction under Federal Rule of Civil Procedure 19 and the “look through”
doctrine pronounced by the Supreme Court in Vaden v. Discover Bank, 556 U.S. 49 (2009).
See Fed. R. Civ. P. 12(b)(1), (7). They alternatively ask the Court to abstain from hearing
this matter under Colorado River Water Conservation District v. United States, 424 U.S.
800 (1976). In light of this motion, the Court generally continued the petition to compel
arbitration hearing.
II. Discussion
The Senguptas first argue that Rule 19 mandates dismissal because Mr. Pittman is
a necessary and indispensable party whose joinder would destroy diversity jurisdiction.1
Because the Court finds this is the case, the Court does not reach the questions of Vaden’s
applicability or abstention.
Section 4 of the Federal Arbitration Act (“FAA”) authorizes a party to petition a
federal court for an order compelling arbitration. To hear the petition, however, a federal
court must have an independent basis for subject matter jurisdiction. Home Buyers
Warranty Corp. v. Hanna, 750 F.3d 427, 432-33 (4th Cir. 2014). Here, the Petitioners rely
on this Court’s diversity jurisdiction.

The parties’ citizenship therefore must be

complete–that is, “the state of citizenship of each plaintiff must be different from that of
each defendant.” Id. at 433 (citation and quotation marks omitted). The Senguptas argue
that the Court must dismiss this action for lack of subject matter jurisdiction because Mr.
Pittman, who shares Maryland citizenship with Mrs. Sengupta, must be joined to this

1

The Senguptas also argue Airsquid must be joined. Because Airsquid’s
citizenship would not destroy diversity jurisdiction, the Court does not consider whether
Rule 19 requires his joinder.
4

action. The Petitioners do not contest Mr. Pittman’s citizenship. Instead, they contend that
Rule 19 does not require his joinder.
A court must dismiss a case if an absent party is necessary and indispensable under
Rule 19. Id.; see also Fed. R. Civ. P. 12(b)(7). This analysis has two steps. Home Buyers
Warranty Corp., 750 F.3d at 433. First, a court must determine “whether a party is
necessary to [the] proceeding because of its relationship to the matter under
consideration.”

Id. (citation and quotation marks omitted).

Second, if the party is

necessary but its joinder would deprive the court of subject matter jurisdiction, “the court
must decide under Rule 19(b) whether the proceeding can continue in that party’s absence”
(i.e., whether the party is indispensable). Id. (citation and quotation marks omitted). Thus,
the Court will first consider whether Mr. Pittman is a necessary party.
1.

Whether Mr. Pittman Is a Necessary Party

A party can be necessary in three ways under Rule 19. See Fed. R. Civ. P.
19(a)(1)(A)-(B). Mr. Pittman is a necessary party under at least two of these provisions.
Under Rule 19(a)(1)(B)(ii), a party is necessary if it “claims an interest relating to the
subject of the action and is so situated that disposing of the action in the person’s absence
may leave an existing party subject to substantial risk of incurring double, multiple, or
otherwise inconsistent obligations because of the interest.”
As a threshold matter, Mr. Pittman has an interest in the petition because he, too,
seeks to compel arbitration of the wrongful death claim based on the Agreement. See
Home Buyers Warranty Corp., 750 F.3d at 434-35; see also Owens-Illinois, Inc. v. Meade,
186 F.3d 435, 441 (4th Cir. 1999); Cytec Indus., Inc. v. Powell, 630 F. Supp. 2d 680, 686
(N.D.W. Va. 2009) (finding absent party had interest in petition to compel arbitration
5

because it sought to compel arbitration in underlying state case). The Petitioners urge to
the contrary, essentially arguing that Mr. Pittman has no interest in this matter because he
can seek arbitration in the state court proceedings like he could here. The Fourth Circuit,
however, has consistently found a non-joined party has an interest in a petition to compel
arbitration even if it can litigate arbitrability in the underlying state proceeding. See Home
Buyers Warranty Corp., 750 F.3d at 434-35 (finding absent party had interest in petition to
compel arbitration where it also had a right to demand arbitration); Owens-Illinois, Inc., 186
F.3d at 441 (holding non-diverse parties in underlying state action who were omitted from
petition to compel arbitration but subject to same arbitration provision were necessary
parties). Indeed, Mr. Pittman has an interest in how the arbitrability issue is resolved as a
general matter because he–like the Petitioners and Airsquid–all face the same wrongful
death claim and all rely on the same Agreement to compel arbitration of that claim. Given
these overlapping legal and factual issues, limiting Mr. Pittman’s interest in the arbitration
of this claim solely to the state court case ignores the fact that any ruling on the petition will
necessarily impact the obligations of all parties to the state case.
Having found that Mr. Pittman has an interest in this matter, concurrent state and
federal proceedings concerning arbitrability of the wrongful death claim creates a “high
likelihood” that one or more of the parties will face inconsistent obligations.2 See Home
2

The Petitioners contend that this Court’s authority to rule on their petition and
supersede any prior order of the state court on arbitrability ameliorates the risk of the
inconsistent obligations contemplated by Rule 19(a)(1)(B)(ii), relying heavily on the
Supreme Court’s decision in Moses H. Cone Memorial Hospital v. Mercury Construction
Corp., 460 U.S. 1 (1983). This argument is misplaced. In Moses H. Cone, the Supreme
Court found, among other things, that the pendency of the arbitrability issue before state
and federal courts did not counsel for abstention under Colorado River. See 460 U.S. at
19-23. In doing so, the Supreme Court recognized that the FAA embodies a strong policy
6

Buyers Warranty Corp., 750 F.3d at 434; see also Owens-Illinois, Inc., 186 F.3d at 441;
Cytec Indus., Inc., 630 F. Supp. 2d at 686. Indeed, one court may compel arbitration of the
wrongful death claim while the other does not. The Fourth Circuit has consistently held that
the risk of differing interpretations of an arbitration provision in this situation justifies having
one tribunal with all of the affected parties before it hear the matter. See Home Buyers
Warranty Corp., 750 F.3d at 434; Owens-Illinois,Inc., 186 F.3d at 441. Thus, Mr. Pittman
is a necessary party under Rule 19(a)(2)(ii).
Mr. Pittman can also be a necessary party under Rule 19(a)(1)(A), which applies if
“the court cannot accord complete relief among existing parties” in his absence. Here, a
single wrongful death claim underlies this matter. For Mrs. Sengupta to recover fully on this
claim (assuming she proves liability), it is critical for all of the state court defendants to be
bound to a common judgment. See Home Buyers Warranty Corp., 750 F.3d at 434
(holding district court could not issue complete relief to home buyer where petition to
compel arbitration arose from home buyer’s claims against joined and non-joined parties
concerning defects in her home). This Court cannot provide Mrs. Sengupta with complete
relief in this regard because the Court can only decide the forum in which the Senguptas
favoring arbitration and, by extension, piecemeal litigation. See id. at 20, 24 (stating that
the FAA “requires piecemeal resolution when necessary to give effect to an arbitration
agreement”). While Moses H. Cone makes it clear that federal courts can compel
arbitration even when a state court is considering the same issue, the Fourth Circuit stated
in Home Buyers that the requirements of Rule 19 and subject matter jurisdiction apply
regardless of Moses H. Cone and the FAA’s policy favoring arbitration. See 750 F.3d at
437 (rejecting argument that Moses H. Cone required district court to assume subject
matter jurisdiction over petition to compel arbitration where an absent party was necessary
and indispensable). Indeed, the requirements of Rule 19 are particularly critical here
because the Court’s authority to rule on the petition without all affected parties before it
regardless of a state court order is what creates the risk that the parties will face
inconsistent obligations. It does not eliminate that risk.
7

must pursue her claim against the Petitioners. Thus, Mr. Pittman is also a necessary party
under Rule 19(a)(1)(A). See id.
2.

Whether Mr. Pittman Is an Indispensable Party

There is no dispute that joining Mr. Pittman to this action would destroy diversity
jurisdiction. Thus, the Court must now determine whether he is indispensable to this action
in light of four factors enumerated in Rule 19(b). See id. at 435.
The first factor is “the extent to which a judgment rendered in [Mr. Pittman’s]
absence might prejudice” him “or the existing parties.” Fed. R. Civ. P. 19(b)(1). It “speaks
to many of the same concerns addressed by the necessity analysis under Rule
19(a)(1)(B).” Home Buyers Warranty Corp., 750 F.3d at 435. As noted earlier, there is a
significant chance that Mrs. Sengupta will be prejudiced if this petition proceeds. See id.
Mrs. Sengupta has a strong interest in having the arbitrability issue and her wrongful death
claim litigated before a single tribunal with all affected parties present. See id. Proceeding
otherwise subjects her to a “high potential for factual and legal whipsawing” where she may
need to litigate her claim in different forums that may reach different conclusions on those
issues. See Owens-Illinois, Inc., 186 F.3d at 441; see also Cytec Indus., Inc., 630 F. Supp.
2d at 686. Thus, this factor indicates Mr. Pittman is indispensable. See Home Buyers
Warranty Corp., 750 F.3d at 435.
The Petitioners argue that various decision from other circuits, including Brookedale
Senior Living Inc. v. Stacy, __ F. Supp. 2d __, 2014 WL 2807524 (E.D. Ky. 2014),
demonstrate that prejudice cannot arise from the possibility that a state and federal court
may decide the arbitrability issue differently. Not only do these decisions not bind this
Court, but Brookedale demonstrates that this argument is misplaced. In Brookedale, the
8

district court noted that the Fourth Circuit, unlike the Sixth Circuit where the Brookedale
court is located, has held that “duplicative litigation and potentially inconsistent legal
conclusions over [an] arbitration agreement” generates prejudice that renders a party
indispensable. Id. at *5-6. This statement is accurate as the Fourth Circuit reached just
that conclusion in Owens-Illinois, Inc. See 186 F.3d at 441. Thus, this Court declines to
depart from well-established Fourth Circuit precedent as the Petitioners urge.
The second factor concerns the extent to which the Court could lessen or avoid “the
prejudicial impact of proceeding” without Mr. Pittman through protective measures. Home
Buyers Warranty Corp., 750 F.3d at 435; see also Fed. R. Civ. P. 19(b)(2). The Court
could not take any such actions because prejudice stems from the pendency of the
arbitrability issue before this Court without all affected parties present. See Home Buyers
Warranty Corp., 750 F.3d at 436; see also Owens-Illinois, Inc., 186 F.3d at 442; Cytec
Indus., Inc., 630 F. Supp. 2d at 686. Moreover, the Petitioners do not argue that the Court
could do so. Thus, this factor also shows Mr. Pittman is indispensable.
The third factor addresses “whether a judgment in [Mr. Pittman’s] absence would be
adequate.” Fed. R. Civ. P. 19(b)(3). This factor “focuses on ‘the interest of the courts and
the public in complete, consistent, and efficient settlement of controversies.’” Home Buyers
Warranty Corp., 750 F.3d at 436 (quoting Provident Tradesmens Bank & Trust Co. v.
Patterson, 390 U.S. 102, 111 (1968)). The Fourth Circuit recently explained in Home
Buyers that parallel proceedings concerning arbitrability “could produce just the opposite:
incomplete, inconsistent, and inefficient rulings.” Id. Thus, like in Home Buyers, this factor
indicates Mr. Pittman is an indispensable party.
The final factor is whether the Petitioners “would have an adequate remedy if the
9

action were dismissed for non-joinder.” Fed. R. Civ. P. 19(b)(4). There is no question that
they would, and the Petitioners do not argue otherwise. The Petitioners, Mr. Pittman, and
Airsquid all filed motions to compel arbitration in the state case. The state court is currently
considering those motions and has the power to decide whether to compel arbitration just
like this Court does. See Home Buyers Warranty Corp., 750 F.3d at 436. Moreover, unlike
here, the state court has the benefit of having all affected parties before it. Thus, the state
court provides the Petitioners with an adequate remedy.
In sum, all of the relevant factors indicate that Mr. Pittman is indispensable to this
matter. Because Mr. Pittman is a necessary and indispensable party, the Court must
dismiss the petition for lack of subject matter jurisdiction.
III. Conclusion
For the foregoing reasons, the Court GRANTS the Defendants’ Motion to Dismiss
for failure to join a necessary and indispensable party. Accordingly, the Court DISMISSES
this action WITHOUT PREJUDICE. The Court ORDERS that this case be STRICKEN from
this Court’s active docket.
It is so ORDERED.
The Clerk is DIRECTED to transmit copies of this Order to all counsel of record.
DATED: October 2, 2014

10