United States District Court, S.D. Illinois
CIPRIANO MARTINEZ and PATRICIO DONES, on behalf of themselves and all others similarly situated, Plaintiffs,
UTILIMAP CORP., Defendant.
MEMORANDUM AND ORDER
PHIL GILBERT DISTRICT JUDGE.
matter comes before the Court on the motion of plaintiffs
Cipriano Martinez and Patricio Dones to confirm the
arbitration clause construction award (Doc. 69). Arbitrator
Jeffrey L. Taren issued the award on June 10, 2016, in AAA
No. 01-15-0004-6935 (Doc. 69-1). Defendant Utilimap
Corporation has responded to the motion (Doc. 71), and the
plaintiffs have replied to Utilimap's response (Doc. 72).
plaintiff worked as an at-will employee for Utilimap, a
full-service utility inspection company, as an hourly laborer
in the Ground Line Treatment Division for about two years. In
their work for Utilimap, the plaintiffs dug around utility
poles, inspected them and treated them with wood
preservatives. They allege various wage and hour violations
of Illinois, Maryland and/or federal law.
plaintiffs filed this lawsuit in March 2014, and in an order
dated June 25, 2015, the Court compelled the parties to
arbitrate pursuant to an arbitration agreement each plaintiff
signed when he first started working for Utilimap (Doc. 61).
That agreement stated, in pertinent part, “Arbitration
shall be conducted before an experienced arbitrator chosen by
you and Utilimap Corporation and will be conducted under the
procedural rules of the American Arbitration Association
(‘AAA').” The parties ended up selecting
Arbitrator Taren, who rendered a “Partial Final Clause
Construction Award” on June 10, 2016. That award
construed the arbitration agreement to include “an
agreement to submit to binding arbitration, ‘any
claims, demand or actions based upon any claim for
wages', including any class action wage claims and any
collective action wage claims.” Arb. Award at 24. This
was despite the arbitration agreement's failure to
expressly provide that class or collective actions brought by
the plaintiffs were covered by the agreement.
plaintiffs ask the Court to confirm this award interpreting
the arbitration agreement to cover class and collective
disputes (for simplicity's sake, the Court will call
these “class” disputes). For its part, Utilimap
argues that it never agreed in the arbitration agreement to
arbitrate class disputes and that Arbitrator Taren exceeded
the scope of the authority given to him in the arbitration
agreement by deciding the question, and deciding it wrongly,
to boot. It further argues that whether the parties have
agreed to class arbitration is a threshold question of
arbitrability for a court, not an arbitrator, to decide. It
then asks the Court to conduct a de novo review of
whether it should be forced to arbitrate the plaintiffs'
class dispute. The plaintiffs respond that Utilimap agreed to
submit the question of class arbitrability to the arbitrator
in an early case management conference, by agreeing to the
AAA procedures delegating the question of class arbitrability
to the arbitrator, and by failing to object to Arbitrator
Taren's consideration of the question. It then notes that
Arbitrator Taren's decision should be confirmed because
it was a legitimate interpretation of the arbitration
Court first addresses the threshold issue of who should
decide whether the arbitration agreement covers class
disputes, the Court or the arbitrator. If it was for the
arbitrator to decide, the Court will then review Arbitrator
Taren's construction award to see if it draws its essence
from the arbitration agreement. If it was for the Court to
decide, the Court will review the question de novo.
Who Decides Whether Class Arbitration is Allowed
argues that Arbitrator Taren exceeded the scope of his power
by deciding a question not delegated to him in the
arbitration agreement - whether the agreement covers class
disputes. See 9 U.S.C. § 10(a)(4) (authorizing
court to vacate arbitration award where arbitrator exceeded
his power). It characterizes this as an issue of
arbitrability, which is presumptively a gateway issue for the
Court to decide. See Green Tree Fin. Corp. v.
Bazzle, 539 U.S. 444, 452 (2003) (plurality opinion).
Accordingly, it urges the Court to conduct a de novo
review of the question.
plaintiffs argue that, even if the question is one of
arbitrarily that is presumptively left for the Court, there
is sufficient evidence to overcome that presumption in this
case. Specifically, it argues Utilimap agreed in an early
arbitration management telephone conference to submit the
question of the arbitrability of class disputes to the
arbitrator for a decision. They also note that Utilimap
agreed in the arbitration agreement to use AAA arbitration
rules, which contain a rule in employment cases that requires
the arbitrator to determine whether class disputes are
subject to arbitration. Finally, they argue that Utilimap
waived this objection to the arbitrator's deciding the
arbitrability question by not raising it in the arbitration
beyond question that parties are only obligated to arbitrate
matters they have agreed to arbitrate. AT&T
Technologies, Inc. v. Communications Workers of Am., 475
U.S. 643, 648 (1986); Druco Rests., Inc. v. Steak N Shake
Enters., 765 F.3d 776, 781 (7th Cir. 2014).
“[A]rbitrators derive their authority to resolve
disputes only because the parties have agreed in advance to
submit such grievances to arbitration.” AT&T
Technologies, 475 U.S. at 648-49 (citing Gateway
Coal Co. v. United Mine Workers, 414 U.S. 368, 374
(1974)). Consistent with this rule, “a party may not be
compelled under the [Federal Arbitration Act] 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).
parties may agree in principle to arbitrate, it is often not
clear what is covered by that agreement, including whether
the agreement covers arbitration of class disputes. As the
Court has noted earlier in this case, the Supreme Court has
long held that questions of arbitrability are presumed to be
allocated to a court as a gateway matter. “Unless the
parties clearly and unmistakably provide otherwise, the
question of whether the parties agreed to arbitrate is to be
decided by the court, not the arbitrator.” AT&T
Technologies, 475 U.S. at 649 (citing United
Steelworkers of Am v. Warrior & Gulf Navigation Co.,
363 U.S. 574, (1960)); Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 83-84 (2002). Those gateway matters
generally include whether a specific party is bound by an
arbitration clause, whether the clause applied to a certain
kind of dispute, id. at 84, and whether a contract
was actually formed and is enforceable, Granite Rock Co.
v. International Bhd. of Teamsters, 561 U.S. 287,
299-300 (2010). On the other hand, procedural questions like
waiver, delay, time limits, notice, laches, estoppel and
satisfaction of conditions precedent to arbitration are
presumptively for the arbitrator to decide, even though they
can effectively close the gate to arbitration.
Howsam, 537 U.S.. at 84-85.
plaintiffs are correct that neither the Supreme Court nor the
Seventh Circuit Court of Appeals has determined conclusively
who decides - a court or an arbitrator - whether an
arbitration agreement covers class arbitration, that is,
whether it is a gateway arbitrability question for a court or
a procedural question for an arbitrator. See
Stolt-Neilsen, 559 U.S. at 680. Three other Courts of
Appeals have held that the class arbitration question is a
question of arbitrability presumably for a court to decide,
see Dell Webb Cmtys., Inc. v. Carlson, 817 F.3d 867,
875 (4th Cir. 2016), pet. for cert. filed No. 16-137
(U.S. July 26, 2016); Opalinski v. Robert Half Int'l,
Inc., 761 F.3d 326, 335 (3d Cir. 2014), cert.
denied,135 S.Ct. 1530 (2015); Reed Elsevier, Inc.
v. Crockett, 734 F.3d 594, 599 (6th Cir. 2013), as has
at least one District Court within the Seventh Circuit,
see Henderson v. United States Patent Comm'n,
Ltd., No. 15 C 3897, 2016 WL 3027895, at *5 (N.D. Ill.
May 27, 2016); compare Williams-Bell v. Perry Johnson
Registars, Inc., No. 14 C 1002, 2015 WL 6741819, at *6
(N.D. Ill. Jan. 8, 2015) (agreeing with the majority of
District Courts in the Northern District of Illinois that the
availability of class arbitration is a procedural ...