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W.C. Motor Co. v. Talley

United States District Court, N.D. Illinois, Eastern Division

August 7, 2014

W.C. MOTOR COMPANY, Plaintiff,

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For W.C. Motor Company, Inc., Plaintiff: Brian E McGovern, LEAD ATTORNEY, PRO HAC VICE, McCarthy, Leonard & Kaemmerer, L.C., Town & Country, MO; Samuel B Rainey, McCullough, Campbel & Lane LLP, Chicago, IL.

For Rebecca Talley, Defendant: Christian G Montroy, LEAD ATTORNEY, PRO HAC VICE, Montroy Law Offices, Lcl, East St. Louis, IL; Seamus Michael Ryan, LEAD ATTORNEY, Chicago, IL.

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Gary Feinerman, United States District Judge.

Unhappy with an arbitrator's decision to allow class-wide arbitration of a matter

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brought to the American Arbitration Association by Rebecca Talley, W.C. Motor Company filed this suit under the Federal Arbitration Act (" FAA" ), 9 U.S.C. 1 et seq., seeking to overturn the arbitrator's ruling. Doc. 1. After the suit was reassigned to the undersigned judge's calendar, Doc. 38, W.C. Motor sought and received leave to file a second amended complaint, Docs. 42-43. The second amended complaint seeks a declaration that (1) the court, and not the arbitrator, is the appropriate tribunal to decide whether the parties' arbitration agreement permits class arbitration, and (2) the arbitration clause in the agreement does not, in fact, permit class arbitration. Doc. 43 at 6. Talley, the named plaintiff in the arbitration and the defendant here, has moved to dismiss the suit on various grounds. Doc. 53. The suit is dismissed under Federal Rule of Civil Procedure 12(b)(1) for want of subject matter jurisdiction.


Talley does not dispute the jurisdictional facts alleged in the complaint, so her challenge to subject matter jurisdiction is facial rather than factual. See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443-44 (7th Cir. 2009). On a facial challenge to subject matter jurisdiction, the complaint's well-pleaded factual allegations are assumed to be true, with all reasonable inferences drawn in the plaintiff's favor. See ibid. ; Patel v. City of Chicago, 383 F.3d 569, 572 (7th Cir. 2004). As with a Rule 12(b)(6) motion, the court must also consider " documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts set forth in the non-movant's brief opposing dismissal, so long as those facts " are consistent with the pleadings." Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). To the extent an exhibit contradicts the second amended complaint's allegations, the exhibit takes precedence. See Forrest v. Universal Savings Bank, F.A., 507 F.3d 540, 542 (7th Cir. 2007). The following facts are set forth as favorably to W.C. Motor as these materials allow. See Gomez v. Randle, 680 F.3d 859, 864 (7th Cir. 2012).

In January 2008, Talley bought a used car from W.C. Motor, which charged her a $130 " Documentary & Title Preparation Fee." Doc. 53 at 2. Talley thought that W.C. Motor's charging her that fee amounted to the unauthorized practice of law, see Mo. Rev. Stat. § 484.020, violated the Missouri Merchandising Practices Act, Mo. Rev. Stat. § 407.010 et seq., and unjustly enriched W.C. Motor. Doc. 43 at ¶ 7. Because the sales contract contained an arbitration clause, id. at ¶ 8, she filed a " demand for arbitration" in March 2009 with the American Arbitration Association, id. at ¶ 6. The demand sought to compel W.C. Motor to arbitrate on a class-wide basis. Ibid. ; see also Doc. 43-1.

In December 2009, the Chicago-based arbitrator, after stating that the " parties agree that this Arbitrator has jurisdiction to decide th[e] threshold issue" of whether the contract permits class arbitration, Doc. 43-2 at 2-3, issued a " partial final clause construction award" holding that " the parties' arbitration clause permits this arbitration to proceed on behalf of a class," id. at 8. The arbitrator stayed the award for thirty days to permit either party to seek judicial review, ibid., and neither did. A few months passed. Then in April 2010 the United States Supreme Court issued Stolt-Nielsen S.A. v. Animalfeeds Int'l Corp., 559 U.S. 662, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010), which held that " a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding

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that the party agreed to do so." Id. at 684. W.C. Motor filed a motion to reconsider based on Stolt-Nielsen, which the ...

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