SUSAN O. HICKEY, District Judge.
Before the Court is the Report and Recommendation filed on May 15, 2018, by the Honorable Barry A. Bryant, United States Magistrate Judge for the Western District of Arkansas. (ECF No. 32). Judge Bryant recommends that the Court grant Separate Defendants Southwestern Bell Telephone Company; DirecTV, LLC; and Randall Stephensons' (the "Telecommunications Defendants") Motion to Confirm Arbitration Award (ECF No. 8) and dismiss this case with prejudice. Plaintiff Paul F. Miller filed objections. (ECF No. 33). Plaintiff also filed a supplement to his objections. (ECF No. 34). The Telecommunications Defendants filed a response to Plaintiff's objections and supplement. (ECF No. 37). The Court finds the matter ripe for consideration.
On February 4, 2016, Plaintiff filed suit in the District Court of Garland County, Arkansas, alleging various claims against multiple defendants. Plaintiff alleged that on May 31, 2015, he saw an advertisement in the Hot Springs Sentinel-Record for bundled DirecTV television and AT&T Internet and telephone services, known as the "Ultimate Bundle," for a discounted monthly rate of $54.94. The advertisement stated that the "Ultimate Bundle" was available to new, approved customers only. Plaintiff alleged that he accepted the offered "Ultimate Bundle," but when he paid the advertised rate of $54.94 per month, the defendants eventually terminated his service. Prior to trial, the Garland County District Court dismissed all of Plaintiff's claims for lack of jurisdiction, except for a breach-of-contract claim. Plaintiff's breach-of-contract claim proceeded to trial, and the district court entered judgment as a matter of law against Plaintiff after finding that he failed to establish a prima facie case and failed to establish damages. Accordingly, the district court dismissed Plaintiff's case.
On July 21, 2016, Plaintiff sought a de novo appeal to the Circuit Court of Garland County, Arkansas. On October 12, 2016, the circuit court entered an order granting the defendants' motion to dismiss and dismissing Plaintiff's claims with prejudice. Plaintiff subsequently pursued an appeal to the Arkansas Court of Appeals and filed a mandamus petition with the Arkansas Supreme Court. The appeal and the mandamus petition were both dismissed.
On May 15, 2017, Plaintiff filed an arbitration demand with Separate Defendant JAMS ("JAMS"), the alternative dispute resolution service with which DirecTV's 2015 Residential Customer Agreement required arbitration of disputes. Plaintiff asserted claims related to "the purchase or lease of consumer telecommunication services," against various respondents, including the Telecommunications Defendants. JAMS appointed Karen B. Willcutts ("Willcutts"), an attorney and former judge, as the arbitrator. On January 10, 2018, Willcutts issued an order granting the respondents' motion for summary adjudication, finding in the respondents' favor. Specifically, Willcutts found that Plaintiff's claims were barred by the doctrines of res judicata and collateral estoppel, and even if they were not, the claims failed on the merits as a matter of law. Willcutts also sanctioned Plaintiff $250, the amount of his filing fee, finding that he behaved vexatiously during the arbitration and had asserted several frivolous claims that could only have been brought for purposes of harassment.
On January 12, 2018, Plaintiff filed this lawsuit against Defendants. Plaintiff asks the Court to vacate the arbitration award pursuant to 9 U.S.C. § 10(a). Specifically, Plaintiff argues that Willcutts' application of res judicata and collateral estoppel constituted plain error of law, and that JAMS' arbitration agreement provides that arbitrators have no authority to make errors of law. On March 16, 2018, the Telecommunications Defendants filed a Motion to Confirm Arbitration Award, arguing that Plaintiff has failed to demonstrate cause under 9 U.S.C. § 10 to warrant vacatur of the arbitral award, and that accordingly, the Court should confirm the award. (ECF No. 8). The Court referred this case to Judge Bryant to make a Report and Recommendation.
On May 15, 2018, Judge Bryant issued the instant Report and Recommendation, recommending that the Court grant the Telecommunications Defendants' Motion to Confirm Arbitration Award and dismiss Plaintiff's case with prejudice. Specifically, Judge Bryant found no basis for vacating the arbitral award because the arbitration clause is valid and the issues determined in the arbitration did not fall outside the scope of the arbitration clause. On May 29, 2018, Plaintiff timely filed objections to the Report and Recommendation. On June 6, 2018, Plaintiff filed a supplement to his objections. On June 12, 2018, the Telecommunications Defendants filed a response to Plaintiff's objections and supplement.
Pursuant to 28 U.S.C. § 646(b)(1), the Court will conduct a de novo review of all issues related to Plaintiff's specific objections.
Plaintiff argues in his objections that the Report and Recommendation erred in failing to recommend vacatur of the arbitral award on the basis that Willcutts was a partial arbitrator. Plaintiff also argues that the arbitration agreement materially limited Willcutts' power, as it provided that she could not make any error of law, which he contends she did by applying the doctrine of res judicata "to a decision from a court lacking jurisdiction,"
In his supplement, Plaintiff argues that the recent June 4, 2018, United States Supreme Court opinion in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, No. 16-111, is relevant to show Willcutts' partiality, as her behavior during the arbitration is analogous to the behavior of the Colorado Civil Rights Commission in Masterpiece, demonstrating that she was biased against the elderly. He also argues that the "JAMS Policy on Consumer Arbitrations Pursuant to Pre-Dispute Clauses Minimum Standards of Procedural Fairness" was not followed. (ECF No. 34). Plaintiff also states that Willcutts' failure to address Plaintiff's specific issues is evidence of a breach of the neutrality owed to the parties.
The Court will now separately address all issues related to Plaintiff's specific objections.
The Court will first address Plaintiff's objection that the Report and Recommendation erred by failing to recommend vacatur of the arbitration award on the basis that Willcutts was a biased arbitrator.
A federal court's review of an arbitral award is extremely limited. See Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001). An underlying arbitral award is entitled to an "extraordinary level of deference." Boise Cascade Corp. v. Paper Allied-Indus., Chem. & Energy Workers (PACE), Local 7-0159, 309 F.3d 1075, 1080 (8th Cir. 2002). According to this narrow and deferential standard, a federal court may not set aside an arbitral award even if the court may "have interpreted the agreement differently or because the arbitrator erred in interpreting the law or in determining the facts." Hoffman v. Cargill, Inc., 236 F.3d 458, 462 (8th Cir. 2001). So long as the arbitrator has even arguably construed the underlying contract and acted within her scope of authority, the award should be confirmed. Boise Cascade Corp., 309 F.3d at 1080.
"However, an arbitrator's decision is not totally free from judicial review." Id. Federal courts may vacate an arbitral award pursuant to 9 U.S.C. § 10 in any of the following cases:
9 U.S.C. § 10(a) (footnote added); Val-U Const. Co. of S. D. v. Rosebud Sioux Tribe, 146 F.3d 573, 578-79 (8th Cir. 1998). Federal courts may not vacate an arbitral award pursuant to 9 U.S.C. § 10 for any other unenumerated reason. See Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 586-87 (2008); Med. Shoppe Int'l, Inc. v. Turner Investments, Inc., 614 F.3d 485, 489 (8th Cir. 2010).
Plaintiff states in his objections that Willcutts was biased and displayed evident partiality during the arbitration. Although Plaintiff does not elaborate on this statement in his objections, he states in his response to the Separate Defendants' Motion to Confirm Arbitration Award that Willcutts deliberately procrastinated and refused to provide a quick and inexpensive arbitration, thereby demonstrating her partiality. Plaintiff argues further that Willcutts was biased against the elderly. Plaintiff also argues that Willcutts' failure to conduct a one-day hearing before ruling on the respondents' motion for summary adjudication constituted blatant prejudice.
A party seeking to vacate an arbitral award because of a partial neutral faces "a high burden of demonstrating objective facts inconsistent with impartiality." Brown v. Brown-Thill, 762 F.3d 814, 820 (8th Cir. 2014). "Typically, courts find partiality in cases where the arbitrator has a preexisting relationship with one of the parties to the dispute." Free Country Design & Const., Inc. v. Proformance Grp., Inc., No. 09-06129-CV-SJ-DGK, 2011 WL 6032928, at *2 (W.D. Mo. Dec. 5, 2011) (citing Commonwealth Coatings Corp. v. Cont'l Cas. Co., 393 U.S. 145 (1968)). Courts must "accord even greater deference to the arbitrator's decisions on procedural matters than those bearing on substantive grounds." Stroh Container Co. v. Delphi Indus., Inc., 783 F.2d 743, 749 (8th Cir. 1986). However, vacatur is proper if the movant can demonstrate that the arbitrator took action that "so affect[ed] the rights of a party that it may be said that he was deprived of a fair hearing." Grahams Serv. Inc. v. Teamsters Local 975, 700 F.2d 420, 422-23 (8th Cir. 1982); see also El Dorado Sch. Dist. No. 15 v. Cont'l Cas. Co., 247 F.3d 843, 848 (8th Cir. 2001) (stating that "each party must be given the opportunity to present its arguments and evidence").
Upon consideration, the Court finds that Plaintiff has failed to overcome the "high burden" of demonstrating partiality. Plaintiff offers no evidence that Willcutts had a preexisting relationship with the arbitration respondents or that she is biased against the elderly. Instead, he argues that Willcutts failed to provide a quick and inexpensive arbitration and failed to grant him a hearing before granting the respondents' motion for summary adjudication. On August 22, 2017, Willcutts held a preliminary scheduling conference with all parties to the arbitration to establish a briefing schedule and, based on the discussion with the parties, entered a scheduling order allowing for dispositive motions. On September 14, 2017, Willcutts temporarily suspended the briefing schedule to allow Plaintiff the opportunity to file a motion discussing jurisdictional issues he wished to raise.
Although Willcutts admonished Plaintiff over his filing habits on several occasions, instructing him to only file documents relating to motions or in response to motions, there is no indication that Plaintiff was deprived of the opportunity to fully brief and present his case. Willcutts established a dispositive-motion briefing schedule based on discussions with the parties and amended the schedule to allow Plaintiff to raise jurisdictional issues. It appears that Plaintiff received an opportunity to file whatever documents he wished and to brief all issues, so long as he did so in accordance with the scheduling order. It also appears that Willcutts considered all documents filed by Plaintiff, including unauthorized ones.
Plaintiff argues that the Report and Recommendation erred by failing to recommend vacatur on the basis that Willcutts exceeded the scope of her arbitral authority when she found that the doctrine of res judicata barred Plaintiff's claims in the arbitration.
Although Willcutts found in the arbitral award that Plaintiff's claims were barred by the doctrines of res judicata and judicial estoppel, she also conducted a lengthy, alternative analysis of Plaintiff's claims, finding that they all failed on the merits as a matter of law if res judicata and judicial estoppel did not apply. Assuming arguendo for the sake of this Order that Willcutts erroneously applied the doctrine of res judicata, the error was harmless because she also found that Plaintiff's claims alternatively failed on the merits. Plaintiff makes no mention of Willcutts' alternative merits-based determinations, and the Court would not disturb them in any event. See Boise Cascade Corp., 309 F.3d at 1080 (stating that "federal courts are not authorized to reconsider the merits of an arbitral award"). Accordingly, the Court finds no reason to depart from the Report and Recommendation on this basis.
Plaintiff asserts that the Report and Recommendation erred by reciting contract law. At one point in the Report and Recommendation, Judge Bryant stated that the parties do not dispute that a valid arbitration agreement existed, and that Plaintiff failed to demonstrate that the issues determined during the arbitration fell outside the scope of that arbitration agreement. In doing so, Judge Bryant cited caselaw regarding the essential elements of a contract or arbitration agreement.
In his supplement, Plaintiff asserts additional arguments for vacatur of the arbitral award. Plaintiff states that Willcutts did not follow the "JAMS Policy on Consumer Arbitrations Pursuant to Pre-Dispute Clauses Minimum Standards of Procedural Fairness." (ECF No. 34). However, Plaintiff does not specify what portion of this policy Willcutts failed to follow. Similarly, Plaintiff argues that Willcutts failed to address Plaintiff's specific issues, thereby breaching the duty of neutrality owed to the arbitration parties, but again, he does not specify what issues she failed to address. Plaintiff also asserts that an audio recording of an August 18, 2017, arbitration hearing order demonstrates Willcutts' hostility toward him when compared to her September 14, 2017, scheduling order.
Upon de novo review of the Report and Recommendation, and for the reasons discussed above, the Court finds that Plaintiff's objections offer neither law nor fact which would cause the Court to deviate from the result suggested by Judge Bryant's Report and Recommendation. Accordingly, the Court hereby overrules Plaintiff's objections and adopts the Report and Recommendation (ECF No. 32) to the extent that it recommends that the Court grant Separate Defendants Southwestern Bell Telephone Company; DirecTV, LLC; and Randall Stephensons' Motion to Confirm Arbitration Award and dismiss this case with prejudice. The Motion to Confirm Arbitration Award (ECF No. 8) is hereby
