Id. (emphasis added); see also Genesco, Inc. v.T. Kakiuchi Co., 815 F.2d 840, 844 (2d Cir. 1987); Arbitration Between Standard Tallow Corp. and Kil-Management A/S, 901 F. Supp. 147, 149 (S.D.N.Y. 1995). Moreover, the language from Mitsubishi refers only to legal constraints imposed by federal statutes.
(citations omitted); see PRL USA Holdings, Inc. v. United States Polo Ass'n, Inc., No. 14-CV-764 RJS, 2015 WL 1442487, at *3 n.2 (S.D.N.Y. Mar. 27, 2015) (“[Because] [n]either party seeks to compel arbitration . . . the Court declines to do so sua sponte.”); Suchodolski Assocs., Inc. v. Cardell Fin. Corp., No. 03 CIV.4148 WHP, 2006 WL 10886, at *4 (S.D.N.Y. Jan. 3, 2006) (declining to compel arbitration where neither party so requested), aff'd in relevant part, 261 Fed.Appx. 324 (2d Cir. 2008); Matter of Arb. Between Standard Tallow Corp. & Kil-Mgmt. A/S, 901 F.Supp. 147, 151 (S.D.N.Y. 1995) (although expressly finding the existence of agreement to arbitrate, declining to compel arbitration absent any application from the parties); Amiron Dev. Corp. v. Sytner, No. 12-CV-3036 JS ETB, 2013 WL 1332725, at *3 (E.D.N.Y. Mar. 29, 2013) (“[T]he Court has no authority to sua sponte enforce an arbitration provision.”).
Therefore, the Court will not . . . address[] the applicability of the arbitration provision here absent a formal motion to compel." (citations omitted)); In re Arbitration Between Standard Tallow Corp. & Kil-Mgmt. A/S, 901 F. Supp. 147, 151 (S.D.N.Y. 1995) ("The court . . . does not have before it a proper petition to compel arbitration . . . and the court refuses to provide such relief sua sponte."). The right to arbitrate is waivable.
However, neither party has invoked the arbitration clause. Notwithstanding the strong federal policy favoring arbitration, see Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 121 (2d Cir. 2010), the court has no authority to enforce sua sponte an arbitration provision, see Amiron Dev. Corp. v. Sytner, No. 12-cv-3036, 2013 WL 1332725, at *3 (E.D.N.Y. Mar. 29, 2013); In re Arbitration Between Standard Tallow Corp. & Kil-Mgmt. A/S, 901 F. Supp. 147, 151 (S.D.N.Y. 1995); Suchodolski Assocs., Inc. v. Cardell Fin. Corp., Nos. 03-CV-4148, 04-CV-5732, 2006 WL 10886, at *4 (S.D.N.Y. Jan. 3, 2006). Under Delaware law, interpreting the language of a contractual provision is a question of law.
See, e.g., In re Arbitration Between Standard Tallow Corp. & Kil-Mgmt. A/S, 901 F. Supp. 147, 149 (S.D.N.Y. 1995) (noting the "[i]nterpretation of an arbitration clause under the FAA is a question of federal law, and must be interpreted in accordance with the general federal law of contracts," and that the federal law of contracts "dovetails precisely with general principles of contract law" (quotation marks and citations omitted)). Under New York principles of contract interpretation, "the 'words and phrases [in a contract] should be given their plain meaning, and the contract should be construed so as to give full meaning and effect to all of its provisions.'"
Here, however, neither First Liberty nor Proficio have petitioned the Court to compel arbitration pursuant to the FAA. District courts should not sua sponte enforce arbitration clauses. Auto. Mechs. Local 701 Welfare & Pension Funds v. Vanguard Car Rental USA, Inc., 502 F.3d 740, 746 (7th Cir.2007) (analogizing forum selection clauses and arbitration clauses and reversing the district court's sua sponte dismissal); Beauperthuy v. 24 Hour Fitness USA, Inc., No. 06–0715 SC, 2006 WL 3422198 (N.D.Cal. Nov. 28, 2006) (upon finding that claims are arbitrable, “the Court cannot, sua sponte, order parties to arbitration”); In re Standard Tallow Corp., and Kil–Mgmt., 901 F.Supp. 147, 151 (S.D.N.Y.1995) (“Although the court expressly finds that an agreement to arbitrate all disputes between the parties in London does in fact exist, ... [t]he court [ ] does not have before it a proper petition to compel arbitration there and the court refuses to provide such relief sua sponte. For these reasons, the petition is denied and no order is issued directing arbitration.”); see also Amiron Dev. Corp. v. Sytner, No. 12–CV–3036 JS ETB, 2013 WL 1332725, at *3 (E.D.N.Y. Mar. 29, 2013) (holding that the court had “no authority to sua sponte enforce an arbitration provision”); Lopardo v. Lehman Bros., Inc., 548 F.Supp.2d 450, 457 (N.D.Ohio 2008) (“A court may not sua sponte force parties to enforce an arbitration agreement.”) (citing American Locomotive Co. v. Gyro Process Co., 185 F.2d 316 (6th Cir.1950); Britton v. Coop. Banking Grp., 916 F.2d 1405, 1413 (9th Cir.1990)).
Before addressing the merits of the pending motions, the Court must make two points. First, notwithstanding the strong federal policy favoring arbitration, see Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 121 (2d Cir. 2010), the Court has no authority to sua sponte enforce an arbitration provision, see Matter of Arbitration Between Standard Tallow v. Kil-Mgmt. A/S, 901 F. Supp. 147, 151 (S.D.N.Y. 1995); Suchodolski Assocs., Inc. v. Cardell Fin. Corp., Nos. 03-CV- 4148, 04-CV-5732, 2006 WL 10886, at *4 (S.D.N.Y. Jan. 3, 2006). Therefore, the Court will not be addressing the applicability of the arbitration provision here absent a formal motion to compel.
A court may not sua sponte force parties to enforce an arbitration agreement. See, e.g., American Locomotive Co. v. Gyro Process Co., 185 F.2d 316 (6th Cir. 1950); Britton v. Coop Banking Group, 916 F.2d 1405, 1413 (9th Cir. 1990); Standard Tallow Corp. v. Kil-Management, 901 F.Supp. 147, 151 (S.D.N.Y. 1995). Because Hambrecht Quist, J.P. Morgan and Frank Gruttadauria never made an application for arbitration, and because the Plaintiffs never sought to arbitrate their claims against these defendants, the claims against them remain before this Court for determination.
"Under general principles of federal contract law, the court must review `the parties' intent as expressed in the language of the contract documents.'" Matter of Arbitration Between Standard Tallow Corp. and Kil-Mgmt. A/S, 901 F. Supp. 147, 150 (S.D.N.Y. 1995) (quoting McCarthy, 22 F.3d at 355). As noted above, the Agreement is titled "Shareholders' and Employment Agreement of West Carver Medical Associates, P.C."
As explained above, it is possible to interpret the ratability provisions in a manner that gives each meaning and effect. Contra In re Arbitration Between Standard Tallow Corp. and Kil-Management A/S, 901 F. Supp. 147 (S.D.N.Y. 1995) (where arbitration clauses directly conflict, typewritten clause prevails over pre-printed clause). Because there is no conflict between the provisions, the fact that the Part II provision is a standardized term is immaterial.