Stover v. Blackhawk Mining LLC et al
Filing
12
MEMORANDUM OPINION AND ORDER The 6 MOTION by Blackhawk Mining LLC, Panther Creek Mining, LLC to Dismiss Complaint or, in the Alternative, Compel Arbitration is denied as to the motion to dismiss and granted as to the motion to compel arbitr ation; directing plaintiff Frank Stover and defendants Blackhawk Mining LLC and Panther Creek Mining, LLC submit to bilateral arbitration the claims raised in this civil action relating to these parties; this action is stayed until the bilateral arbitration has concluded; further directing the Clerk to retire this case to the inactive docket of the court. Signed by Senior District Judge John T. Copenhaver, Jr. on 4/23/2020. (cc: counsel of record; any unrepresented parties) (ts)
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
FRANK STOVER, individually
and on behalf of all others
similarly situated,
Plaintiff,
v.
Civil Action No. 2:20-cv-00096
BLACKHAWK MINING LLC and
PANTHER CREEK MINING, LLC,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is defendants Blackhawk Mining LLC and Panther
Creek Mining, LLC’s (“defendants”) motion to dismiss complaint
or, in the alternative, compel arbitration, filed March 4, 2020.
I.
Background
Plaintiff Frank Stover worked for Panther Creek
Mining, LLC for approximately three years at the Panther Creek
Mine.
Mem. of Law in Supp. of Defs.’ Mot. to Dismiss or Compel
Arbitration 2, ECF No. 7 (“Defs.’ Mem.”); Compl. ¶ 7.
The sole
officer of Panther Creek Mining, LLC is identified as Blackhawk
Mining LLC.
Compl. ¶ 3.
Plaintiff alleges that on January 7,
2020, defendants carried out a mass layoff at the Panther Creek
Mine that included the plaintiff and other similarly situated
employees.
Compl. ¶ 13.
Case 2:20-cv-00096 Document 12 Filed 04/23/20 Page 2 of 10 PageID #: 119
Plaintiff filed this action in this court on January
31, 2020, alleging a violation of the Worker Adjustment and
Retraining Notification (“WARN”) Act, 29 U.S.C. § 2101, et seq.
Compl., at p.1.
Specifically, the plaintiff claims that the
defendants failed to provide plaintiff and other similarly
situated employees with written notice 60 days prior to the mass
layoff, which is required under the WARN Act.
Compl. ¶ 17-23.
The plaintiff also brings class allegations and defines the
proposed class as follows: “All full-time employees who were
terminated and/or subjected to a mass layoff from employment at
the Panther Creek Mine site by the Defendants on or about
January 7, 2020[,] or within a 90-day period, without receiving
the mandated 60-day notice required by the WARN Act.”
Compl.
¶ 27.
On March 4, 2020, the defendants moved to dismiss the
complaint or, in the alternative, compel arbitration.
According
to the defendants, the plaintiff “is bound by a mutual
arbitration agreement under which he agreed to resolve any and
all claims against Blackhawk Mining and ‘its owner(s),
subsidiaries, affiliates, and related companies and their
employees’ through binding arbitration.”
Defs.’ Mem. 1.
The
Mutual Arbitration Agreement details that “the Parties agree to
submit all past, present, and future disputes that arise between
them to final and binding arbitration.”
2
Mutual Arbitration
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Agreement, Defs.’ Mem., Ex. A.
The defendants argue that the
Mutual Arbitration Agreement is enforceable and that the
plaintiff’s claim is referable to arbitration under the Federal
Arbitration Act (“FAA”).
Defs.’ Mem. 5, 7.
The plaintiff responds that the arbitration clause in
the Mutual Arbitration Agreement does not mention class-wide
arbitration.
Pl.’s Resp. to Defs.’ Mot. to Dismiss or Compel
Arbitration 4, ECF No. 9 (“Pl.’s Resp.”).
Accordingly, the
plaintiff argues that the “parties cannot be forced to arbitrate
on a class-wide basis absent a contractual basis for concluding
that the part[ies] agreed to do so.”
Pl.’s Resp. 4 (quoting Del
Webb Cmtys., Inc. v. Carlson, 817 F.3d 867, 875 (4th Cir.
2016)).
II.
Legal Standard
The motion to compel arbitration is governed by § 4 of
the FAA, which provides that:
A party aggrieved by the alleged failure, neglect, or
refusal 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 under title 28, in a civil
action or in admiralty of the subject matter of a suit
arising out of the controversy between the parties[.]
9 U.S.C. § 4.
The FAA was enacted “in response to widespread
judicial hostility to arbitration[,]” Am. Express Co. v. Italian
Colors Rest., 570 U.S. 228, 232 (2013), and establishes a
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“strong federal policy in favor of enforcing arbitration
agreements.”
See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.
213, 217 (1985).
It provides that arbitration clauses in
contracts involving interstate commerce 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.
Consequently, “if parties execute a valid agreement to arbitrate
disputes, a federal court must compel arbitration.”
See Sydnor
v. Conseco Fin. Servicing Corp., 252 F.3d 302, 305 (4th Cir.
2001).
III. Discussion
A. Claim is Referable to Bilateral Arbitration
If (1) the arbitration agreement between the plaintiff
and the defendants is enforceable and (2) the plaintiff’s claim
is referable to arbitration under that agreement, then the court
must compel arbitration.
9 U.S.C. § 3; See Adkins v. Labor
Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002).
The enforceability of an arbitration agreement is
determined by the applicable state contract law.
See First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
“Generally applicable contract defenses, such as fraud, duress,
or unconscionability, may be applied to invalidate arbitration
agreements without contravening § 2” of the FAA.
Doctor’s
Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996).
4
The
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plaintiff does not make any argument that the arbitration
agreement he signed is unenforceable.
The Mutual Arbitration
Agreement is enforceable under West Virginia state law.
See
Adkins v. Labor Ready, Inc., 185 F.Supp.2d 628, 640 (S.D. W. Va.
Sept. 28, 2001) (holding mutual arbitration agreement signed by
plaintiff was enforceable under West Virginia state law).
In this circuit, a party may compel arbitration under
the FAA if it can demonstrate:
(1) the existence of a dispute between the parties,
(2) a written agreement that includes an arbitration
provision which purports to cover the dispute, (3) the
relationship of the transaction, which is evidenced by
the agreement, to interstate or foreign commerce, and
(4) the failure, neglect or refusal of [a party] to
arbitrate the dispute.
Adkins v. Labor Ready, Inc., 303 F.3d 496, 500-01 (4th Cir.
2002) (quoting Whiteside v. Teltech Corp., 940 F.2d 99, 102
(4th Cir. 1991)).
Here, it appears that all four elements are
met with respect to plaintiff’s claim.
First, it is clear that a dispute exists between the
parties, as evidenced by the civil suit brought by the plaintiff
for the defendants’ alleged violation of the WARN Act.
Second, there is a written arbitration agreement that
purports to cover the dispute.
The Mutual Arbitration Agreement
states that it covers “all disputes or claims . . . relating to
employment or termination from employment.”
5
Mutual Arbitration
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Agreement, Defs.’ Mem., Ex. 1.
Plaintiff’s claim of a violation
of the WARN Act relates to plaintiff’s employment termination
from Panther Creek Mining, LLC.
Third, the diverse citizenship of the parties
indicates that their business relationships relate to interstate
commerce.
See Allied-Bruce Terminix Cos. v. Dobson, 513 U.S.
265 (1995) (holding that the interstate commerce requirement
should be interpreted broadly); Cochran v. Coffman, No. 2:09-cv00204, 2010 WL 417422, at *3 (S.D. W. Va. Jan. 28, 2010) (“[T]he
parties are of diverse citizenship, and thus their business
relationships cross interstate lines.”).
Plaintiff is a citizen
of West Virginia while both defendants are citizens of Delaware,
the state of incorporation, and Kentucky, the principal place of
business.
Finally, the plaintiff has refused to arbitrate this
action, instead opting to file a suit for a WARN Act violation
in this court and oppose defendants’ motion to dismiss or, in
the alternative, compel arbitration.
As such, the fourth factor
is met, and the plaintiff’s claim is properly referable to
bilateral arbitration between the plaintiff and the defendants.
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B. Claim is Not Referable to Class Arbitration
The issue of “whether an arbitration clause permits
class arbitration is a gateway question of arbitrability for the
court.”
Carlson, 817 F.3d at 873.
“[A] party may not be
compelled under the FAA to submit to class arbitration unless
there is a contractual basis for concluding that the party
agreed to do so.”
Stolt-Nielsen S.A. v. AnimalFeeds Int’l
Corp., 559 U.S. 662, 684 (2010) (emphasis in original).
“An
implicit agreement to authorize class-action arbitration,
however, is not a term that the arbitrator may infer solely from
the fact of the parties' agreement to arbitrate.”
Id. at 685.
The court noted that “[t]his is so because class-action
arbitration changes the nature of arbitration to such a degree
that it cannot be presumed the parties consented to it by simply
agreeing to submit their disputes to an arbitrator.”
Id.
Here, the Mutual Arbitration Agreement does not
indicate that the parties consented to class arbitration.
The
Mutual Arbitration Agreement is silent on the issue of class
arbitration.
In fact, the Mutual Arbitration Agreement is put
in terms of bilateral disputes “between the Parties.”
Arbitration Agreement, Defs.’ Mem., Ex. 1.
Mutual
Therefore, the court
finds that the parties did not consent to class arbitration but
only to bilateral arbitration.
See, e.g., NCR Corp. v. Jones,
157 F.Supp.3d 460, 471 (W.D.N.C. Jan. 6, 2016) (finding that the
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arbitration agreement indicated that the parties consented to
bilateral arbitration and not class arbitration because the
arbitration agreement was silent on the issue of class
arbitration); Bird v. Turner, No. 5:14CV97, 2015 WL 5168575, at
*9 (N.D. W. Va. Sept. 1, 2015) (same).
C. Staying or Dismissing the Action
The final issue before the court is whether to dismiss
the case or stay the case pending the resolution of the parties’
bilateral arbitration proceedings.
Defendants move for
dismissal of this action, but, in the alternative, they request
that the action be compelled to arbitration.
If the court finds that the case is referable to
arbitration under an arbitration agreement, the 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[.]”
9 U.S.C. § 3.
The Fourth Circuit has
noted that “[t]here may be some tension between our decision in
Hooters1 -- indicating that a stay is required when the
arbitration agreement ‘covers the matter in dispute’ -- and
Choice Hotels2 -- sanctioning dismissal ‘when all of the issues
presented ... are arbitrable.’”
Aggarao v. MOL Ship Mgmt. Co.,
1
Hooters of Am., Inc. v. Phillips, 173 F.3d 988 (4th Cir. 1999)
Choice Hotels Intern, Inc. v. BSR Tropicana Resort, Inc., 252
F.3d 707 (4th Cir. 2001).
2
8
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675 F.3d 355, 376 n.18 (4th Cir. 2012).
When a plaintiff has
brought class allegations and all the named plaintiffs have
signed an arbitration agreement, courts have stayed the
proceedings pending resolution of arbitration.
See Billie v.
Coverall N. Am., Inc., No. 3:19-CV-0092, 2020 WL 1185251 (D.
Conn. Mar. 12, 2020); Bird v. Turner, No. 5:14cv97, 2015 WL
5168575 (N.D. W. Va. Sept. 1, 2015); Adkins, 185 F.Supp.2d at
646.
Since the only named plaintiff, Frank Stover, signed a
binding arbitration agreement, the court will stay the
proceedings pending bilateral arbitration between the parties
currently in this case.3
3
Defendants’ motion to compel arbitration relates exclusively
to the representative plaintiff Frank Stover. The court does
not have before it any documentation relating to the arbitration
agreements executed by the potential class members, nor does it
have any information relating to the conditions surrounding the
execution of these arbitration agreements. It appears, however,
based upon the defendants’ representations, that every employee,
including every potential class member, has executed an
arbitration agreement identical or similar to that executed by
Mr. Stover, as a part of the standard, company-wide employment
application. See Defs.’ Mem. 10-11 (stating that “each member
of the proposed class would have signed a similar (if not
identical) arbitration agreement during their respective
employments with Panther Creek Mining and/or Blackhawk Mining.
In fact, the Agreement provides: ‘Every individual who works for
[Blackhawk Mining or related companies] must have signed and
returned this Agreement to be eligible for employment and
continued employment with [Blackhawk Mining or a related
company].’”). If the potential class members have executed the
same arbitration agreement under substantially the same
conditions as Mr. Stover, the court's reasoning and analysis as
delineated above would apply to their claims, as well.
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IV.
Conclusion
For the foregoing reasons, it is ORDERED that the
defendants’ motion to dismiss or, in the alternative, compel
arbitration is denied as to the motion to dismiss and granted as
to the motion to compel arbitration.
It is further ORDERED that
plaintiff Frank Stover and defendants Blackhawk Mining LLC and
Panther Creek Mining, LLC submit to bilateral arbitration the
claims raised in this civil action relating to these parties, in
accordance with the terms of the Mutual Arbitration Agreement
executed by Frank Stover on November 6, 2017.
The action is
stayed until the bilateral arbitration has concluded.
The parties are directed to inform the court once the
bilateral arbitration has concluded, at which time this case
will be dismissed.
The Clerk is directed to retire this case to
the inactive docket of the court.
The Clerk is requested to transmit this Order and
Notice to all counsel of record and to any unrepresented
parties.
ENTER: April 23, 2020
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