Opinion
Case No. 03-1042-CV-W-HFS.
November 29, 2004
MEMORANDUM AND ORDER
Before the court is the motion of defendant Yellow Transportation, Inc. ("Yellow") for an order compelling arbitration and dismissing, or alternatively, staying the action. (doc. 9). Also, before the court is Yellow's motion for summary judgment (doc. 77), as well as Yellow's motion for an extension of pre-trial filing deadlines (doc. 81). Plaintiff, Richard Marlar, seeks an extension of time to respond to Yellow's motion for summary judgment (doc. 83).
Background Facts
The underlying dispute in this action involves the claims of Marlar, alleging age discrimination in violation of the Missouri Human Rights Act ("MHRA"), and the Age Discrimination Employment Act ("ADEA"). It is undisputed that Yellow is a transportation company that serves primarily as a carrier of general commodities by truck, and operates 345 terminals throughout the United States. Marlar was employed by Yellow as an Area Account Executive in the Kansas City metropolitan area. According to Marlar, he was employed from March 18, 1977, until his discharge on October 26, 2002. (Petition: ¶ 5). Yellow agrees that Marlar was hired in 1977, but states that his employment ended on June 18, 1996; he was then rehired on July 5, 1997, and terminated on October 25, 2002. (Motion to Compel ¶ 1).
In its suggestions in support of its motion to compel arbitration, defendant states that plaintiff was terminated on October 26, 2002; which, for purposes of deciding this motion will be deemed accurate.
Yellow states, and Marlar does not dispute, that on October 29, 2001, Yellow implemented a Dispute Resolution Process ("DRP"), requiring arbitration of all disputes arising out of or concerning an employee's employment with defendant. Prior notice of the implementation of the DRP was provided to all employees, including Marlar, via e-mail. (Defense Exh. 1: ¶ 5, pg. 2). The e-mail notification stated in bold letters that the DRP would become a condition of employment effective November 8, 2001, and that by remaining on Yellow's payroll after that date, the employee and Yellow agreed to binding arbitration, giving up the right to trial by jury. (Id). By its terms the DRP applied to "all disputes, claims, or controversies arising out of, or related to your employment or the cessation of your employment with Yellow that would otherwise require or allow resort to a court or other governmental tribunal ("Employment Claims") will instead be resolved exclusively by final and binding arbitration before a neutral arbitrator." (Defense Exh.: 2). Employment claims were defined as, but not limited to, "claims of discrimination, harassment or retaliation. . . . brought against Yellow . . . whether based on local, state or federal laws or regulations, or on tort, contract, or equitable law or otherwise." (Id). The DRP required all employment claims to "be resolved exclusively by final and binding arbitration before a neutral arbitrator." (Id). The DRP also required the filing of a Dispute Resolution Request Form within one year after the date that the claim arose, or the claim would be deemed waived. (Id). In conclusion, the DRP stated that it would become a condition of employment effective November 8, 2001, and that "by remaining on Yellow's payroll after that date, both you and the Company are agreeing to binding arbitration and giving up the right to trial by jury." (Id). According to Yellow, all employees, including Marlar, were provided a copy of the DRP through e-mail on October 29, 2001, and by e-mail verification dated October 30, 2001, verified that Marlar read the e-mail. (Yellow Exh.: 1, ¶ 5-6). Thus, Yellow seeks an order compelling arbitration based on the DRP.
Marlar opposes the motion on several grounds, primarily due to a lack of acceptance, mutuality of agreement, and consideration. According to Marlar, absence of agreement is evidenced by the lack of competent evidence that he read and assented to the arbitration provisions. Marlar also argues that there was no consideration, because the DRP lacked mutuality of agreement. This was evidenced by the fact that although the DRP required resort to arbitration of claims asserted by an employee, Yellow was free to seek judicial intervention of claims it asserted. Marlar also complains that, as a contract of adhesion, the DRP was unenforceable procedurally and substantively. Finally, Marlar claims that Yellow waived its right to enforcement of the DRP by failing to assert a right to arbitration within one year from the date of his termination.
Standard Of Review
There is a strong federal policy favoring arbitration. Faber v. Menard, Inc., 367 F.3d 1048, 1052 (8th Cir. 2004). The Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-14, preempts all state laws that reflect a policy disfavoring arbitration and which are designed specifically to limit arbitration. Faber v. Menard, 367 F.3d at 1052. ADEA claims are arbitrable, and the FAA extends to most arbitration agreements covering employment disputes. Id. Indeed, the FAA establishes that "as a matter of federal law, 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 arbitration." Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d 943, 945 (8th Cir. 2001);quoting, Moses H. Cone Memorial Hosp. V. Mercury Const. Corp., 460 U.S. 1, 24 (1983).
It is therefore, well settled that a dispute must be submitted to arbitration if: (1) there is a valid arbitration agreement, and (2) the dispute falls within the scope of that agreement. Faber, at 1052;Lyster, at 945. The scope of review is narrow, addressing "only such issues as are essential to defining the nature of the forum in which a dispute will be decided, and review will not be extended to "consideration of public policy advantages or disadvantages resulting from the enforcement of the agreement." Faber, at 1052. Moreover, questions about remedy are also outside the scope of review because it does not affect the validity of the agreement to arbitrate. Id.
Analysis
State contract law governs whether an arbitration agreement is valid.Lyster, at 946. Pursuant to Missouri law, "[t]he primary rule in the interpretation of a contract is to ascertain the intention of the parties and to give effect to that intention." Id. Marlar claims that Yellow failed to show mutuality of agreement to the memo regarding arbitration due to the absence of evidence that the document was communicated to him, that he read the document, and assented to its terms. In his affidavit, Marlar states that he never signed the DRP, and due to the large volume of e-mails received, he does not recall reading the e-mail regarding the DRP. Marlar also takes issue with, and questions the authenticity of the e-mail verifying that he read the DRP e-mail. In sum, Marlar claims that Yellow failed to provide sufficient notice of the DRP to its employees.Although the precise issue has not been considered in this circuit, courts that have addressed the issue of notice of company policies via e-mail have found electronic distribution of the information to be sufficient. Mannix v. County of Monroe, 348 F.3d 526 (6th Cir. 2003). In Mannix, the plaintiff-employee claimed, inter alia, that although he knew of the posting of new company policies on the computer e-mail system, he denied reading them. Mannix v. County of Monroe, 348 F.3d at 530. After determining that both the employment contract, and the Personnel Policies, as well as a subsequent amendment expressly created an at-will relationship, the court found that actual notice, while arguably a genuine issue, was not material. Mannix, at 536. Rather, the material issue was whether reasonable notice was given. Id. Based on uncontradicted evidence that the revised policies were posted on an internal database available to all employees, meetings were held between department heads and employees, and the policies were put on the County's e-mail system, the court concluded that reasonable notice was provided. Id.
See also, Highstone v. Westin Engineering, Inc., 187 F.3d 548, 553 (6th Cir. 1999) (Westin satisfied its burden of providing reasonable notice when it sent two e-mails notifying employees of changes to the policy manual and published the manual on-line).
The court noted that under the electronic distribution system, in contrast to the older hard copy distribution of revised policies, no proof of actual receipt was collected. Mannix, 348 F.3d at 536. However, considering the advancement and ubiquity of electronic corporate communications, the court would not return to older practices by imposing a paper receipt requirement. Id.
Here, in her affidavit, the manager of employee relations, Kelly Walls, avers that in October of 2001, Marlar was given notice of the implementation of the DRP to be effective November 8, 2001, via e-mail, and that on October 30, 2001, she received e-mail verification that Marlar read the DRP e-mail. (Defense Exh.: 1). Although, arguably additional notice in the way of meetings and postings on company bulletin boards may have heightened awareness of the policy, I conclude that reasonable notice was given. Through the affidavit of David Kingston, presumably a computer software expert, Marlar claims that the e-mail verification does not actually confirm that an e-mail has been read. However, as previously noted, evidence of a paper receipt is not required in order to show reasonable notice. Mannix, at 536.
Marlar next complains that the DRP was not supported by valid consideration because there was no mutuality with respect to the obligation to arbitrate. According to Marlar, the memo announcing the DRP did not bind Yellow to the arbitration provisions. In his opposition to arbitration, Marlar requested that disposition of the matter be held in abeyance until a ruling by the Eighth Circuit was decided in the case ofFaber v. Menard, Inc., ___ F.Supp. ___ (N.D.Ia. June 17, 2003, 8th Circuit Case No. 03-3075. In that case, the district court found that the fee-splitting provision of the arbitration clause to be procedurally and substantively unconscionable, and denied Menard's motion to compel arbitration. However, on appeal, the Eighth Circuit agreed with the majority of circuits that found that a fee-shifting provision by itself did not make an arbitration agreement unenforceable. Faber v. Menard, Inc., 367 F.3d 1048, 1053 (8th Cir. 2004). The case was remanded on the narrow issue of whether the requirement that Faber pay the arbitrators' fees unconscionably prevented his access to the arbitral forum. Faber, at 1055. If found to be unconscionable, the court directed that the offending clause be severed and that arbitration be compelled. Id. Consequently, the Faber case fails to support Marlar's that the DRP at bar lacked consideration.
At bar, the DRP expressly stated that by remaining on Yellow's payroll after November 8, 2001, "both you and the Company are agreeing to binding arbitration and giving up the right to trial by jury." (Defense Exh.: 2). This language has been held to constitute mutuality of obligation.Caley v. Gulfstream Aerospace Corporation, 333 F.Supp.2d 1367, 1377 (N.D.Ga. 2004). Marlar's complaint that Yellow's exclusion from arbitration those claims which it may assert against an employee, is likewise, without merit. For, in the Caley case, the Eleventh Circuit determined that similar claims were foreclosed by the decision in Rushing v. Gold Kist, Inc., 567 S.E.2d 384 (Ga.App. 2002). In Rushing, the court held that sufficient consideration existed to support an arbitration agreement which the offer or had proffered without input from the other party and which allowed the offer or to modify the disputes subject to arbitration under the agreement.
See also, Atlanta Six Flags Partnership v. Hughes, 381 S.E.2d 605 (Ga.App. 1989) ("[T]he mutual promises and obligations of the parties constituted sufficient consideration for the contract."); Porter v. Cigna, No. 1:96-CV-765-MHS, 1997 WL 1068630, at *1 (March 26, 1997) ("mutuality of obligation is established by explicit policy language stating that both employer and employee are bound to submit employment disputes to arbitration.")
In Caley, the plaintiffs contended that the DRP lacked bargained-for consideration because it was unilaterally implemented and that, furthermore, the defendants' promise to arbitrate because it was illusory in that they retained the right to modify or terminate the DRP upon thirty days notice. Caley v. Gulfstream Aerospace Corporation, 333 F.Supp.2d at 1377.
Marlar also complains that the DRP was an unconscionable adhesion contract. Pursuant to Missouri law, "[a] contract is substantively unconscionable if there is undue harshness in the terms of the contract.Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d at 947. Or, as more colorfully stated, "an unconscionable contract is one, such as no maninhis senses and not under delusion would make, on the one hand, and as no honest and fair man would accept on the other." Faber v. Menard, Inc., 367 F.3d at 1053. Marlar claims unconscionability in that, among other things, the arbitration provisions were presented to employees unilaterally without negotiation of the terms of the agreement, and failed to provide for employee initiated modification.
In support of this argument, Marlar relies, in large measure, on Ingle v. Circuit City Stores, Inc., 328 F.3d 1165 (9th Cir. 2003). Marlar's reliance is misplaced, however, for in Ingle, the court found that there was such an "insidious pattern" of unconscionable provisions that Circuit City's arbitration agreement functioned as a thumb on Circuit City's side of the scale should an employment dispute ever arise between it and one of its employees. Ingle, at 1180. The court therefore concluded that any earnest attempt to ameliorate the unconscionable aspects of the agreement would require the court to assume the role of contract author rather than interpreter. Id. Consequently, the district court's denial of the motion to compel arbitration was affirmed. Ingle, at 1180-81. In the event that a provision of the DRP at bar were found to be unconscionable, both case law and the DRP provide for severance.
The DRP expressly provides that in the event any portion is held to be in conflict with a mandatory provision of applicable law, it shall be stricken and the remainder of this procedure shall be enforced. (Defense Exh.: 2); see also, Gannon v. Circuit City Stores, Inc., 262 F.3d 677, 682 (8th Cir. 2001) (in an evolving climate such as this, if we were to hold entire arbitration agreements unenforceable every time a particular term is held invalid, it would discourage parties from forming contracts under the FAA and severely chill parties from structuring their contracts in the most efficient manner for fear that minor terms eventually could be used to undermine the validity of the entire contract).
Moreover, it has been repeatedly held, in this circuit and several of our sister circuits, that mere inequality in bargaining power does not make the contract automatically unconscionable. Faber, 367 F.3d at 1053. This is because the Supreme Court has already rejected the position that an employer's superior bargaining power should lead the Court to invalidate the entire agreement Booker v. Robert Half Intern., Inc., 315 F.Supp.2d 94, 108-09 (D.D.C. 2004) (there is no evidence here that defendant drafted the Agreement in bad faith or in an attempt to contravene public policy); see also, Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 301 (5th Cir. 2004) ("an employer may make precisely such a `take it or leave it' offer to its at-will employees;" quoting, In re Halliburton Co., 80 S.W.3d 566, 571 (Tex. 2002).
Similarly unpersuasive is Marlar's argument that the cost of using the arbitration process is much higher to employees than the cost of using the court system. For, the burden of showing that arbitrators' fees will be cost-prohibitive falls on the party seeking to avoid arbitration.Faber, at 1053. However, it must be more than, as here, just a hypothetical inability to pay in order to overcome the federal policy favoring arbitration. Id. Rather, Marlar should present specific evidence of likely arbitrators' fees and his financial ability to pay those fees so that a determination can be made as to whether the arbitral forum is accessible to him. Faber, at 1054. Moreover, one of the advantages of the arbitration process is that arbitration agreements allow parties to avoid the costs of litigation, a benefit that may be of particular importance in employment litigation, which involves smaller sums of money than disputes concerning commercial contracts. Booker, at 102; citing, Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 123 (2001).
Finally, Marlar's argument that Yellow has some how waived its right to arbitration also lacks merit. The party seeking arbitration may be found to have waived his right to it if he "(1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the other party by these inconsistent act." Kelly v. Golden, 352 F.3d 344, 349 (8th Cir. 2003). A party acts inconsistently with its right if it "`[s]ubstantially invoke[s] the litigation machinery' before asserting its arbitration right" by failing to request a stay and fully adjudicating its rights. Kelly, at 349. The actions must also result in prejudice to the other party for waiver to have occurred. Id. Here, Marlar's employment was terminated on October 25, 2002, and after receiving his right to sue, filed his lawsuit in the Circuit Court of Jackson County on October 3, 2003. Marlar claims that Yellow was required to raise the issue of arbitration within that year. Contrary to Marlar's argument, it cannot be said that Marlar acted inconsistently, for Yellow removed the case to this court one month later, on November 24, 2003, and a few weeks after that, on December 12, 2003, moved to compel arbitration. Further, Yellow's actions did not prejudice Marlar's claims.
Marlar appears to argue on the one hand that, contrary to the provisions of the DRP, Yellow failed to seek arbitration within one year from the time "your claim arises, or your claim will be waived." Here, Yellow has not asserted a claim subject to arbitration, Marlar raised the claim. Yellow has simply sought arbitration pursuant to the DRP.
Marlar's argument also implicitly states that while pursuing the prerequisite channels, i.e., the Missouri Human Rights Act as well as the Equal Employment Opportunities Commission, it may be argued that he waived his right to arbitration. However, Yellow has stated that it has no intention of claiming in arbitration that Marlar's claims are time-barred; with the exception of those claims, if any, for which Marlar failed to timely file a Charge of Discrimination. (Defendant's Rely Brief: pg. 13). Consequently, this is no longer an issue.
In his opposition papers, Marlar states that he made a conditional demand for arbitration, "conditioned upon the granting of Defendant's Motion for Order Compelling Arbitration, on or about January 7, 2004." (Plaintiff's Opposition: pg. 15, n. 7).
In conclusion, it bears noting that pursuant to motions filed by both parties, leave was granted to file supplemental pleadings in support of their respective arguments. In support of its position, Yellow points to an order issued by United States District Judge Carlos Murgia in Gratzer v. Yellow Corporation, No. 033-2363-CM (D.Kan. April 27, 2004). The plaintiff in Gratzer claimed that the arbitration agreement was unenforceable because (1) she was required to pay half of the arbitrator's costs and fees; (2) defendant waived its right to seek enforcement of the agreement; and (3) defendant retained the right to change the agreement at its discretion, thereby making it illusory and indefinite. Unlike Marlar, the plaintiff in Gratzer did not dispute that she signed an arbitration agreement or that the claims raised in her lawsuit were covered by the agreement. After careful consideration of the issues raised by the plaintiff, Judge Murgia found that in the absence of any evidence of the potential cost of the arbitration or evidence that the potential cost would prohibit the plaintiff from vindicating her statutory rights, the fee-splitting requirement did not render the agreement unenforceable. Judge Murgia also concluded that since, inter alia, the parties were not well into preparation of a lawsuit before the defendant notified the plaintiff of its intent to arbitrate, the defendant did not waive its right to seek arbitration. Judge Murgia also found that since the defendant's policies specifically exempted the dispute resolution policy from an unfettered right to modify, the agreement was not illusory. Although, Judge Murgia's findings concur with the determinations noted above in this case, they do not address the issue of notice via e-mail.
Conversely, Marlar points to a recent case in which the court denied a motion to compel arbitration on the narrow issue presented at bar, the sufficiency of notice via e-mail. see, Campbell v. General Dynamics Government Systems, 321 F.Supp.2d 142 (D. Mass. 2004). Marlar correctly argues that the notice requirement at issue in Campbell is significantly similar to the case at bar. However, contrary to Marlar's contention, any similarity between the cases end with the stated issue. For in Campbell, the court found that notice was insufficient because the e-mail informing plaintiff of the DRP prior to implementation made no mention of the DRP or the importance of the e-mail in the first two paragraphs of the e-mail. Campbell, at 144. Instead, the paragraphs simply gave innocuous descriptions of the defendant's vision statement and stated goal of achieving "open, forthright, and honest communication."Id. Although the DRP was described in broad terms in the third paragraph, it was not until the fifth paragraph that it was noted that the DRP would be an essential element of employees' employment relationship.Id. The court further noted that the e-mail message had two links, one which connected the user to a two page flyer setting out key provisions of the DRP, and the second link which connected the user to a handbook which detailed the provisions of the DRP. Campbell, at 144-45. In addition to which, the plaintiff denied any memory of receiving the e-mail, and the defendant offered no evidence to support or suggest that the plaintiff clicked on either link or read the text of the e-mail. Campbell, at 145.
The plaintiff in Campbell actually raised two points of error: (1) that notice was insufficient and that he could not have agreed to the DRP; and (2) that the DRP, in its electronic form, failed to satisfy that part of the Federal Arbitration Act, 9 U.S.C. §§ 1, requiring a "written agreement." Campbell, at 145. Because the court ultimately found notice to be insufficient, the court declined to address the plaintiff's second point of error. Id.
Yellow argues that the facts underlying the decision in Campbell are sufficiently in apposite to those at bar. I agree. Here, there was no attempt to hide or shade the DRP by attaching it to a vague e-mail. Rather, the e-mail announcing the implementation of the DRP clearly indicated such in the heading of the e-mail. (Defense Exh.: 2). The e-mail continues by alerting the reader to the effective date of the DRP, as well as many of the covered disputes. (Id). The e-mail then sets out the procedural concerns, and in bold print, states that the DRP becomes a condition of employment after the effective date. (Id).
Upon finding that there is a valid agreement to arbitrate between the parties and that the instant dispute falls within the scope of the DRP; that reasonable notice was given; that the DRP is supported by consideration and mutuality of terms; that the DRP is not unconscionable; and that there has been no waiver, Yellow's motion to compel arbitration and dismiss the action will be granted.
In the event arbitration is ordered, Marlar opposes dismissal of the action, and claims that a stay would be the appropriate remedy. Yellow argues that dismissal is proper and cites several unpublished decisions in support thereof. Unfortunately, however, neither party has provided relevant case law in support of their positions. Regrettably, the jury appears to still be out on this matter as evidenced by the divergence of opinions held by the circuits.
Section 3 of the FAA provides:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, 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 Fifth Circuit held that this rule was not intended to limit dismissal of a case in the proper circumstances, and that the weight of authority clearly supported dismissal of the case when all of the issues raised in the district court must be submitted to arbitration. Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992);citing, Sea-Land Service, Inc. v. Sea-Land of P.R., Inc., 636 F.Supp. 750, 757 (D. Puerto Rico 1986); Sparling v. Hoffman Const. Co., Inc., 864 F.2d 635, 638 (9th Cir. 1988) (expressly holding that a 9 U.S.C. § 3 does not preclude dismissal); Hoffman v. Fidelity and Deposit Co. of Maryland, 734 F.Supp. 192, 195 (D.N.J. 1990); Dancu v. Coopers Lybrand, 778 F.Supp. 832, 835 (E.D.Pa. 1991). Thus, the statutory mandate is to stop litigating; there is no road map concerning further action by the court.
Upon granting the plaintiff's motion to compel arbitration, the court in Sea-Land expressed its belief that the proper course would not be to stay the action pending arbitration. Sea-Land, at 1164. Rather, upon finding that all of the issues raised in the action were arbitrable and must be submitted to arbitration, retaining jurisdiction and staying the action would serve no purpose. Id. The court's continued reasoning noted that any post-arbitration remedies sought by the parties would not entail renewed consideration and adjudication of the merits of the controversy but would be circumscribed to a judicial review of the arbitrator's award in the limited manner prescribed by law. Id; citing, 9 U.S.C. sections 9-12.
With the relevant statute in mind, upon determining that there was a valid agreement to arbitrate and that the dispute fell within the arbitration agreement, as well as finding that there had been no waiver, and that the plaintiff failed to meet its burden of establishing that the arbitration costs were prohibitively expensive thereby rendering the arbitration agreement unconscionable, arbitration was ordered and the lawsuit was dismissed. Pro Tech Industries, Inc. v. URS Corporation, 377 F.3d 868, 869, 873 (8th Cir. 2004). The Circuit affirmed, but perhaps without argument over the propriety of a dismissal.
Conversely, in Cybertek, Inc. v. Bentley Systems, Inc., 182 F.Supp.2d 864 (D.Neb. 2002), the court held that the action would be stayed pending arbitration of all claims alleged by the plaintiff Cybertek, Inc, or asserted jointly by Cybertek and its sole shareholder, Holly Shaheen. Unlike the facts at bar, however, the defendant, Bentley Systems, did not move to compel arbitration, but rather, asserted as an affirmative defense that the plaintiffs' action was barred by an arbitration agreement. Cybertek, Inc., at 866. Due to the parties' dispute as to whether the arbitration clause applied to all of the claims, the sole issue to be decided was whether in such a case the action should be dismissed or stayed. Id. The court determined that all of Cybertek's claims were arbitrable under the arbitration agreement, as well as Shaheen's joinder in those claims. Cybertek, Inc., at 871. However, Shaheen was not bound to arbitrate any separate and distinct claims that she may have had against Bentley for its alleged tortious conduct. Id. In other words, the court concluded that section 3 was broad enough to permit the stay of an entire action even though only some of the issues in the lawsuit were referable to arbitration. Id. Notwithstanding this finding, the court expressly noted that dismissal may be an appropriate means of enforcing an arbitration agreement where all claims are subject to compulsory arbitration. Cybertek, Inc., at 872, n. 10. Thus, two district courts in this Circuit have apparently sanctioned a dismissal in a case like this one.
More recently, the Third Circuit has acknowledged that Courts of Appeals have reached different resolutions on the issue of whether a District Court has discretion to deny a motion for a stay pending arbitration and dismiss a complaint where it finds all claims before it to be arbitrable. Lloyd v. Hovensa, LLC., 369 F.3d 263, 268-69 (3rd Cir. 2004). For example, in Choice Hotels Intern, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001), the court held that "notwithstanding the terms of § 3, however, dismissal is a proper remedy when all of the issues presented in a lawsuit are arbitrable." Lloyd v. Hovensa, LLC., 369 F.3d at 269. Also noted, was Green v. Ameritech Corp., 200 F.3d 967, 973 (6th cir. 2000), in which the court held that "the weight of authority clearly supports dismissal of the case when all of the issues raised in the district court must be submitted to arbitration;" see also, Bercovitch v. Baldwin School, Inc., 133 F.3d 141, 156 n. 21 (1st cir. 1998) (the question of whether to dismiss or stay an action subject to arbitration depends on whether all issues before the court are arbitrable). Lloyd v. Hovensa, LLC., at 269.
Nevertheless, and in contrast to the above noted opinions, based upon the arguably limiting language of the statute, as well as the plaintiff's request for a stay as part of his motion to compel arbitration, theLloyd court stayed the proceedings pending arbitration. Lloyd v. Hovensa, LLC., 269 F.3d at 269, 275.
Unlike the Lloyd court I do not think the plain language of the statute requires that relief be limited to a stay. The courts have generally not read the statute as imposing such a strait-jacket. The rationale ofLloyd is quite appealing where the party seeking arbitration also seeks a stay, which precludes further delay. In this case, however, the party seeking arbitration asks for a dismissal. It apparently does not anticipate a need for further relief before the arbitrator or after arbitration. For me to reject dismissal implicitly invites further litigation before me, which is inconsistent with the purpose of arbitration. There is no reason to borrow trouble, and if trouble develops the parties are free to seek new relief in this court, and before this judge. However, if plaintiff believes I have erred in ordering arbitration and believes the issue warrants an appeal, a dismissal authorizes such an appeal.
I am confident that in this district further litigation would be filed with me or would be transferred to me.
After a review of the above noted opinions, I find that, where as here, all of the issues raised are subject to arbitration, there is sufficient case law to support dismissal of this action, and that a dismissal without prejudice is appropriate.
Accordingly, it is hereby
ORDERED that defendant's motion to compel arbitration (ECF doc. 9) is GRANTED and this case is DISMISSED without prejudice. It is further
ORDERED that defendant's motion for summary judgment (ECF doc. 77) is DENIED as moot. It is further
ORDERED that defendant's motion for an extension of time regarding pre-trial filing deadlines (ECF doc. 81) is DENIED as moot. It is further
ORDERED that plaintiff's motion for an extension of time to respond to the motion for summary judgment (ECF doc. 83) is DENIED as moot.