Professional Documents
Culture Documents
13-1149
GRAND WIRELESS, INC.,
Plaintiff, Appellee,
v.
VERIZON WIRELESS, INC.; ERIN McCAHILL,
Defendants, Appellants.
Before
Torruella, Ripple* and Thompson,
Circuit Judges.
It
The
defendants removed the case to the United States District Court for
the District of Massachusetts and moved for an order compelling
arbitration of Grands claims.
contended
clause
that
the
arbitration
should
be
It
interpreted
narrowly and that, because Ms. McCahill was not a signatory to the
contract containing the arbitration clause, the claim against her
could not be arbitrated in this case.
in
opposition
to
the
motion,
the
court
denied
the
-2-
I
BACKGROUND
A.
Facts
In September 2002, Grand and Verizon entered into an
sales
agent
defined
geographic
area.
The
The
The
R.20-1 3.3.
-3-
to
challenge
any
compel
arbitration;3
arbitral
award;4
[s]eeking
seeking
to
judicial
confirm
relief
or
for
retail
locations
for
Verizon
products
and
services
The
parties
then
continued
their
relationship
on
Id. 15.
Id. 15.2.1.
Id. 15.2.2.
-4-
Grand
deliberate
attempt
to
eliminate
Grand
Wireless
as
Appellants Br. 7.
Grand
representation. See Appellees Br. 2.
6
does
not
dispute
this
B.
Procedural History
Grand initially filed the present action in Massachusetts
state court.
that
used
representations
the
that
United
GRAND
States
WIRELESS
mails
.
to
.
transmit
HAS
false
CLOSED,
in
had
the
torts
of
injurious
falsehoods
and
claims.
Grand
opposed
the
motion
for
arbitration.
It
arbitration
clause
because
she
was
not
party
to
the
Agreement.
Before the deadline had passed for the defendants to file
their reply brief, the district court denied the motion to compel.
In ruling, the district court did not issue a written opinion;
So Ordered.11
See 9
10
R.26.
11
R.29.
12
stayed
-7-
the
proceedings
pending
Casino, 640 F.3d 471, 474 (1st Cir. 2011) (internal quotation marks
omitted).
Id. (quoting AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1749
(2011); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443
(2006)).
Here, the parties do not dispute the validity of the
Agreements arbitration clause. Instead, they dispute: (1) whether
Grands claims are within the scope of the arbitration clause; and
(2) whether Ms. McCahill is entitled to invoke the arbitration
clause.
A.
13
Grands
necessarily
took
memorandum.
that
Therefore,
documents
view
the
that
district
the
court
Agreements
The memorandum
13
(...continued)
uses of this quotation for readability.)
14
R.23 at 5-6.
-9-
Id. at 2856.
When
First Options
We conduct our
requires
arbitration
that
clause
arbitration.
ambiguities
itself
[must
as
be]
to
At a minimum, this
the
resolved
scope
in
of
favor
the
of
Dialysis Access
Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 379 (1st Cir. 2011);
Paul Revere Variable Annuity Ins. Co. v. Kirschhofer, 226 F.3d 15,
25 (1st Cir. 2000) (It is true that, generally speaking, the
-10-
allegations
regarding
Verizons
Grand made
termination
of
its
mailing and Grands belief that Verizon and Ms. McCahill knew that
the
mailing
contained
false
information
yet
authorized
its
15
R.15 at 13.
16
about
Verizons
termination
of
their
business
termination.
Other
allegations
may
require
Given that a
when
the
parties
have
contract
that
provides
for
at
650;
see
also
Granite
Rock,
130
Ct.
at
2858
-12-
574,
582-83
(1960).
Thus,
where
the
language
of
an
17
18
submits, its claims are not within the scope of the arbitration
clause.19
We
cannot
accept
Grands
view.
As
we
discussed
not
merely
that
the
arbitration
clause
lacked
explicit
Inc. v. McMahon, 482 U.S. 220, 223, 241-42 (1987) (holding that
parties could be compelled to arbitrate RICO claims relating to,
inter alia, making false statements and omitting material facts
where brokerage agreement stated, any controversy arising out of
or relating to my accounts, to transactions with you for me or to
this
agreement
arbitration
or
the
(internal
breach
thereof,
quotation
marks
shall
be
omitted));
settled
cf.,
by
e.g.,
Commercial Union Ins. Co. v. Gilbane Bldg. Co., 992 F.2d 386,
387-88, 391 (1st Cir. 1993) (holding that defendants Massachusetts
19
Id. at 14.
-14-
here
encompasses
the
dispute
described
in
Grands
complaint.
B.
She
20
R.23 at 5-6.
-15-
Volt Info.
Id.
We
also recognize, however, that there are exceptions allowing nonsignatories to compel arbitration and that [a] non-signatory may
be bound by or acquire rights under an arbitration agreement under
ordinary state-law principles of agency or contract.
Restoration
Pres. Masonry, Inc. v. Grove Eur. Ltd., 325 F.3d 54, 62 n.2 (1st
Cir. 2003).22
21
22
It further
agent
when
it
stated
that
its
claims
were
against
Ms. McCahill and all other [Verizon] executives who aided and
abetted her in issuing the mailed announcements.24
Grand
puts
forward
but
one
argument
as
to
why
Ms. McCahill cannot invoke the arbitration clause: that the mention
of employees in certain parts of the Agreement, combined with the
lack of mention of employees in the arbitration clause, makes clear
that the parties never agreed that claims against employees--even
abrogated by Lawson v. Life of the S. Ins. Co., 648 F.3d 1166, 1171
(11th Cir. 2011); Hughes Masonry Co. v. Greater Clark Cnty. Sch.
Bldg. Corp., 659 F.2d 836, 841 n.9 (7th Cir. 1981)). Additionally,
in Sourcing Unlimited, Inc. v. Asimco International, Inc., we noted
that [c]ourts routinely recognize that arbitration agreements may
require arbitration even where all parties to the dispute did not
sign the arbitration agreement. 526 F.3d 38, 46 n.8 (1st Cir.
2008) (citing Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d
682, 687 (7th Cir. 2005)).
23
R.15 at 13.
24
those
sued
for
actions
taken
within
the
scope
of
their
New York
We
We fail
-18-
Notably, contrary to
When the
the
employees
employment,
these
25
circuits
have
fashioned,
are
also
covered
under
the
terms
of
such
the view of these courts, would permit the party bringing the
complaint to avoid the practical consequences of having signed an
agreement
to
arbitrate;
naming
the
other
partys
officers,
See,
-20-
Notably, the highest court of New York State, the state whose law
generally governs this contract in the absence of any federal
preemption, has taken the view that the need to respect the basic
policy of the FAA--the protection of the agreement to arbitrate-requires the use of the federal rule articulated by these circuits.
See Hirschfeld Prods., Inc. v. Mirvish, 673 N.E.2d 1232, 1233 (N.Y.
1996).
The Supreme Courts decision in Arthur Andersen LLP
v. Carlisle, 556 U.S. 624 (2009), calls into some question the
propriety of relying on a rule based on federal law in this
situation. In that case, Carlisle and his associates had consulted
with the accounting firm Arthur Andersen LLP about minimizing their
tax liability.
Id. at 626.
Id.
clauses.
Id.
These
management
contracts
contained
arbitration
the tax strategy was illegal, Carlisle and his associates filed a
diversity action against Arthur Andersen, Bricolage and others.
Id. at 626-27.
Id. at 627.
nonparties
to
the
contract
through
assumption, piercing the corporate veil,
alter
ego,
incorporation
by
reference,
third-party beneficiary theories, waiver and
estoppel, the Sixth Circuits holding that
nonparties to a contract are categorically
barred from 3 relief was error.
Id. at 631 (emphasis added) (quoting 21 Richard A. Lord, Williston
on Contracts 57:19, at 183 (4th ed. 2001)).
Carlisle holds that, at least as a general principle,
state law governs the inquiry as to whether a non-party to an
arbitration agreement can assert the protection of the agreement.26
See id. at 630-32; Lawson v. Life of the S. Ins. Co., 648 F.3d
1166, 1170-71 (11th Cir. 2011).
26
As we have
Nothing
in
Carlisle
specifically
disapproves
the
Notably,
Moreover, as we have
See id.
-23-
of
an
arbitration
agreement
are
protected
by
the
agreement, Grand has not suggested any principle of New York law
that impedes the interpretation of the agreement to protect the
employee under the contract.27
contract--a
text
that
does
support
the
illogical
and
of
her
employment
is
not
protected
by
her
employers
arbitration clause.
Conclusion
The district court incorrectly denied the motion by
Verizon and Ms. McCahill to compel Grand to arbitrate its claims
against them.
27