United States District Court, W.D. Missouri.
ORDER ON MOTION FOR RECONSIDERATION AND ALTERNATIVE
MOTION TO DISMISS
ROSEANN A. KETCHMARK, JUDGE
filed this suit, on behalf of themselves and others similarly
situated, against Defendants for alleged violations of the
Age Discrimination in Employment Act and the Missouri Human
Rights Act. Defendants moved to dismiss or in the
alternative, compel individual arbitration and stay this
matter. (Doc. 13.) Plaintiffs opposed the motion, and argued
alternatively that if arbitration is compelled, Plaintiffs
should be permitted to arbitrate as a class. (Doc. 29.)
Plaintiffs did not oppose the Court deciding the class
arbitration issue and did not argue alternatively, that if
arbitration is compelled, the arbitrator should determine
whether or not the parties' arbitration agreement allows
for class arbitration. The Court granted Defendants'
motion in part and denied the motion in part. (Doc. 45.)
Specifically, the Court ordered Plaintiffs to submit their
claims to individual arbitration and stayed the case pending
completion of arbitration. (Id.) Now pending is
Plaintiffs' Motion for Reconsideration or, in the
alternative, Motion to Dismiss Rather than Stay the Matter in
Order to File an Immediate Appeal (the “Motion for
Reconsideration”). (Doc. 46.) The Motion for
Reconsideration is DENIED.
their Motion for Reconsideration, Plaintiffs ask the Court
for the first time to allow an arbitrator to determine
whether or not the arbitration agreement allows for class
arbitration. Plaintiffs argue that such relief is warranted
because the parties' inclusion of the Commercial
Arbitration Rules of the American Arbitration Association
(“AAA”) in their arbitration agreement is clear
and unmistakable evidence of the parties' intent for an
arbitrator, not the Court, to decide the question of class
arbitration. Defendants oppose reconsideration and argue,
first, that Plaintiffs waived this argument by not raising it
in opposition to Defendant's motion to compel
arbitration, and second, that the inclusion of AAA's
commercial rules does not evidence a clear and unmistakable
intent of the parties to have an arbitrator determine the
question of class arbitration.
Court does not need to rule on the issue of “who
decides” whether or not a contract allows for class
arbitration when the arbitration agreement references
AAA's commercial rules, because it finds that Plaintiffs
waived the argument by arguing, without objecting to who
decides, the class arbitration question to this Court rather
than seeking to have an arbitrator decide that question.
can waive their contractual right to arbitration even if
their agreement to arbitrate is valid and enforceable.”
Schultz v. Verizon Wireless Servs., LLC, 833 F.3d
975, 978 (8th Cir. 2016). Courts will not compel arbitration
when the party who seeks to arbitrate has waived its right to
do so. See generally Lewallen v. Green Tree Servicing,
L.L.C., 487 F.3d 1085, 1094 (8th Cir. 2007); Hooper
v. Advance Am., 589 F.3d 917, 920 (8th Cir. 2009);
Erdman Co. v. Phx. Land & Acquisition, LLC, 650
F.3d 1115, 1120 (8th Cir. 2011). A party waives its right to
arbitrate when the party “(1) knew it had a right to
arbitration, (2) acted inconsistently with such right, and
(3) prejudiced [the opposing party].” Hooper,
589 F.3d 917, 920 (citations omitted).
Plaintiffs do not argue that they did not know about their
right to arbitration when they were opposing Defendants'
motion to dismiss or compel arbitration. In any event, the
arbitration agreement was discussed at length in the
parties' previous briefing and there is no basis to find
that Plaintiffs did not know of their alleged right to
arbitrate the class arbitration question.
Plaintiffs acted inconsistently with their alleged right to
arbitrate the class arbitration question. In the briefing on
Defendants' motion to dismiss or compel arbitration,
Defendants argued that, based on their arbitration agreement,
“Plaintiffs' claims must be referred individually
to arbitration and not on a class or collective basis.”
(Doc. 14 at 11.) Importantly, in their response, Plaintiffs
never requested or mentioned the proposition that the
arbitrator should determine the class arbitration issue.
Instead, Plaintiffs responded with two arguments on the
merits of class arbitration. (Doc. 29 at 8 section titled
“If the [Arbitration] Agreement is Enforced,
Plaintiffs' Claims should be Arbitrated As a Class or
Collective Basis.”) First, Plaintiffs asserted that,
without an anti-class or anti-collective action provision,
the arbitration agreement is inapplicable to Plaintiffs'
claims. Second, Plaintiffs argued that individual arbitration
would frustrate the purpose of their claims. Assuming without
deciding that the arbitration agreement provides for an
arbitrator to determine whether arbitration should proceed
individually or as a class, Plaintiffs acted inconsistently
with enforcing that right by arguing the merits of the class
arbitration issue to the Court rather than seeking to enforce
an arbitration provision reserving that determination for an
Defendants were prejudiced. “A party is  prejudiced
when . . . they litigate substantial issues on the merits, or
when compelling arbitration would require a duplication of
efforts.” Se. Stud & Components, Inc. v. Am.
Eagle Design Build Studios, LLC, 588 F.3d 963, 969 (8th
Cir. 2009); see also Hooper, 589 F.3d at 924
(internal quotations omitted) (“Although prejudice
manifests itself in myriad ways, [p]rejudice results when . .
. parties . . . litigate substantial issues on the merits, or
when compelling arbitration would require a duplication of
efforts.”) (citations and quotations omitted);
Lewallen, 487 F.3d at 1092 (“an arbitration
provision . . . does not go so far as to allow or encourage
the parties to proceed . . . sequentially, in multiple
forums.”) It is sufficient that Plaintiffs litigated
the class arbitration issue on the merits, and compelling
arbitration on the same issue would require a duplication of
final question is whether the case should remain stayed or
whether the Court should dismiss the action in order to allow
Plaintiffs to seek an immediate appeal. “Except as
otherwise provided in section 1292(b) of title 28, an appeal
may not be taken from an interlocutory order  granting a
stay of any action under [9 U.S.C. § 3.]” 9 U.S.C.
§ 16. See also Manion v. Nagin, 255 F.3d 535,
540 (8th Cir. 2001) (“[A]n interlocutory order
directing arbitration and staying an action is not
appealable.”); Green Tree Fin. Corp.-Ala. v.
Randolph, 531 U.S. 79, 87 n.2 (2000) (when a district
court enters a stay rather than dismissal, the order is not
allow for an immediate appeal, Plaintiffs ask the Court to
reconsider its order and dismiss the action. As stated in the
Court's prior Order, the Federal Arbitration Act (the
“FAA”), 9 U.S.C. § 1 et seq.,
“declare[s] a national policy favoring arbitration,
” Nitro-Lift Techs., L.L.C. v. Howard, 133
S.Ct. 500, 503 (2012), and provides that a court must stay an
action until arbitration has been completed in accordance
with the parties' agreement, 9 U.S.C. § 3. Pursuant
to a judicially-created exception to the general rule that
courts must stay an action pending arbitration under the FAA,
a district court may, in its discretion, dismiss rather than
stay an action pending arbitration. Green v. SuperShuttle
Int'l, Inc., 653 F.3d 766, 769 (8th Cir. 2011). The
Court does not conclude its prior holding was clearly
erroneous or works a manifest injustice. See Houston v.
NPC Int'l, Inc., No. 13-01160-CV-W-GAF, 2014 U.S.
Dist. LEXIS 189688, at *6-8 (W.D. Mo. May 23, 2014)
(“Allowing interlocutory appeal would undermine the . .
. goals of arbitration. Forcing Plaintiff and Defendant to
spend the time and energy appealing the Court's Order
would undermine the streamlined and expeditious results the
parties desired when entering into an agreement to arbitrate.
. . . All of Plaintiff's issues are preserved for appeal
following arbitration, and the proper procedure is for
Plaintiff to proceed with individual arbitration and
thereafter appeal the final arbitration order.”)
for the reasons set forth above, Plaintiffs' Motion for
Reconsideration is DENIED. Counsel for the parties shall file
a joint status update within ninety (90) days of ...