JAY C. ZAINEY, District Judge.
The following motions are before the Court:
This dispute arises out of an August 2016 contract (Laboratory Services Agreement) between Navigant Network Alliance, LLC (n/k/a Navegar Network Alliance, LLC) and Sutter East Bay Hospitals. (Rec. Doc. 1-1 Exhibit A). Under the terms of the Agreement, Navigant was to direct medical patient specimens from its Referral Sources (medical providers with whom Navigant had cultivated a relationship) to Sutter for laboratory testing. When confirmatory testing was required, Navigant made arrangements with a reference lab. In January 2017, Navigant contracted with Poydras Healthcare Advisors, LLC ("PHA"), which had relationships with reference labs. (Rec. Doc. 1-1 Exhibit B). Plaintiff UNO Health International, Inc. maintains a network of medical testing laboratories. PHA allegedly assigned its payment rights under the Navigant/PHA contract to UNO. (Petition at 5 n.1).
The Agreement between Navigant and Sutter was for a two year term unless terminated earlier. The Agreement contained express termination provisions such that either party could terminate the Agreement immediately for cause, or with at least ninety (90) days prior written notice if without cause. (Rec. Doc. 1-1 Exhibit A at 2 ¶ 3).
According to Sutter, it began to experience mounting problems with Navigant's management and billing methods. On May 3 (or 17th), 2017, Sutter terminated the Agreement but expressly did so without cause. Sutter informed the medical providers (from Navigant's Referral Sources) to send their specimens to Quest Diagnostics Clinical Laboratories. Quest is a competitor with whom Navigant had no business dealings related to the Agreement.
Navigant and UNO filed suit against Sutter in state court on June 26, 2017. Plaintiffs also joined Quest as a defendant. Shortly after filing suit, Plaintiffs persuaded a state court judge to issue a broad TRO against Defendants.
Sutter now moves to compel Plaintiffs to arbitrate their claims as required by the Agreement. Quest moves to stay the claims asserted against it pending the arbitration between Plaintiffs and Sutter.
Sutter and Navigant were the only two parties to the Laboratory Services Agreement. The Agreement expressly states that California law governs. (Rec. Doc. 1-1 Exhibit A ¶ 9.4). The Agreement has a section entitled Dispute Resolution, which reads:
(Rec. Doc. 1-1 Exhibit A at 5 ¶ 1.1) (emphasis added).
Regardless of whether the Court or the arbitrator determines arbitrability, it is beyond cavil that every claim that Navigant asserts against Sutter is encompassed within this broad arbitration agreement. Navigant can present no colorable argument to the contrary.
Navigant's position is that the Agreement preserves the parties' right to seek injunctive relief in the courts. For this contention Navigant relies upon the references to the JAMS Streamlined Rules, particularly Rule 19(d), and the California arbitration procedures. But the terms of the Agreement aside, citing Janvey v. Alguire, 647 F.3d 585 (5th Cir. 2011), Navigant contends that even where a dispute is subject to arbitration, courts retain the authority to issue injunctive relief to protect the status quo. Navigant contends that the Court should delay ordering arbitration until initial discovery is concluded and Plaintiffs' claims for injunctive relief are resolved.
Even though the Court has the authority to entertain emergency relief, the Court is not persuaded that the injunctive relief that Plaintiffs seek constitutes appropriate "status quo" type of emergency or preliminary relief. Sutter had a contractual right to terminate the Agreement at any time without cause. As Sutter points out, the only point of contention insofar as the termination of the Agreement is concerned is the failure to provide the requisite 90 days of notice. Given that Sutter gave notice of termination on or about May 17, 2017, any order requiring specific performance during the conclusion of the 90 day post-notice period would be an empty gesture because that period is about to end. Moreover, the bulk of the "preliminary" relief that Plaintiffs seek revolves around their efforts to have Sutter pay them approximately $20 million dollars that they alleged is owed to them under the Agreement. For obvious reasons, ordering a party to pay over such a substantial amount of funds is not something that the Court can order as "provisional" relief even if Plaintiffs' precarious financial situation renders it an emergency as to them. Such relief, which is not truly injunctive in nature, would require a full determination on the merits which would effectuate an end run around the arbitration provision.
UNO was not a party to the Agreement. UNO's contract was with PHA, whose contract was with Navegar. To the extent that UNO has standing to sue Sutter for any breaches of the Agreement, UNO is likewise subject to the Agreement's arbitration provision. See USHealth Group, Inc. v. South, 636 Fed. Appx. 194, 200 (5th Cir. 2015) (unpublished).
In sum, Sutter's motion will be granted insofar as the Court will stay Plaintiffs' claims against Sutter in this litigation pending the conclusion of arbitration proceedings.
Quest moves the Court to stay the claims asserted against it, a non-party to the Agreement, pending the final outcome of the anticipated arbitration between Plaintiffs and Sutter. Quest does not contend that Plaintiffs must arbitrate their claims against Quest but rather that Plaintiffs' claims against Quest should be stayed until the arbitration is concluded.
The Court is persuaded that Plaintiffs' claims against Quest should be stayed at this time. The Court agrees that Plaintiffs' claims against Quest are either identical to or inherently inseparable from their claims against Sutter. Any litigation against Quest and the arbitration against Sutter will involve common questions of law and fact.
In sum, Quest's motion will be granted insofar as the Court will stay Plaintiffs' claims against Quest pending the conclusion of arbitration proceedings between Plaintiffs and Sutter.
Accordingly, and for the foregoing reasons;