Roundtree et al v. Primeflight Aviation Services, Inc.

REPLY BRIEF to Opposition to Motion

D.N.J.March 1, 2017

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY TANAIJAH A. ROUNDTREE, NICOLAS MOLINA, and D’ANDRE KING, Plaintiffs, v. PRIMEFLIGHT AVIATION SERVICES, INC., Defendant. : : : : : : : : : : : Hon. Claire C. Cecchi Case No.: 2:16-cv-09609-CCC-MF Civil Action RETURN DATE: March 6 , 2017 ORAL ARGUMENT REQUESTED REPLY BRIEF IN FURTHER SUPPORT OF DEFENDANT’S MOTION TO COMPEL ARBITRATION AND DISMISS PLAINTIFFS’ COMPLAINT Ryan T. Warden, Esq. OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 10 Madison Avenue, Suite 400 Morristown, New Jersey 07960 Tel: (973) 656-1600 Fax: (973) 656-1611 Attorneys for Defendant Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 1 of 13 PageID: 188 i TABLE OF CONTENTS I. Undisputed Issues ............................................................................................................... 1 II. The Obligation to Arbitrate Was Clearly Explained by PrimeFlight and Does Not Run Afoul of Atalese ................................................................................................... 2 III. Plaintiffs’ Argument is Preempted by The Federal Arbitration Act................................... 8 IV. The Proper Remedy is Dismissal of the Complaint............................................................ 8 V. Conclusion .......................................................................................................................... 9 Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 2 of 13 PageID: 189 ii TABLE OF AUTHORITIES Page(s) Cases Anthony v. Eleison Pharmaceuticals, LLC, 2016 WL 3865655 (D.N.J. July 18, 2016).................................................................................7 AT&T Mobility v Concepcion, 563 U.S. 333 (2011)...................................................................................................................8 Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014) ...............................................................................................2, 3, 5, 6, 7, 8 Barr v. Bishop Rosen & Co., 442 N.J. Super. 599 (App. Div. 2015) .......................................................................................7 Curtis v. Cellco Partnership, 413 N.J. Super. 26 (App. Div. 2010) .................................................................................2, 3, 6 Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985)...................................................................................................................8 Defina v. Go Ahead & Jump 1, LLC, 2016 N.J. Super. Unpub.............................................................................................................7 Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991).....................................................................................................................8 Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super. 515 (App. Div. 2010) ...........................................................................2, 3, 6, 7 Hernandez v. Fancy Heat Corp., 2016 WL 4072199 (App. Div. Aug. 1, 2016)............................................................................7 Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464 (App. Div. 2015) ...................................................................................5, 7 JPMorgan Chase & Co. v. Custer, 2016 WL 927339 (D.N.J. March 10, 2016)...............................................................................5 Martindale v. Sandvik, Inc., 173 N.J. 76 (2002) .............................................................................................................2, 3, 6 Morales v. Sun Contractors, Inc., 541 F.3d 218 (3d Cir. 2008).......................................................................................................8 Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 3 of 13 PageID: 190 iii Morgan v. Sanford Brown Institute, 225 N.J. 289 (2016) ...................................................................................................................7 Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 4 of 13 PageID: 191 1 Plaintiffs’ Opposition to Defendant’s Motion to Compel Arbitration and Dismiss the Complaint is based exclusively on their misplaced argument that PrimeFlight’s Dispute Resolution Agreement (“the Agreement”) is unenforceable because it did not use the right words to explain its meaning. In sum, Plaintiffs argue that arbitration cannot be compelled because the Agreement did not specifically state that Plaintiffs “waived their rights to a jury trial.” This argument depends upon a gross misreading of the law, and as discussed more fully below, it fails because the Agreement adequately explains that Plaintiffs are giving up their right to pursue in a judicial forum all claims covered by the Agreement – which is all the law requires. Further, to the extent that Plaintiffs misstate the holdings of the relevant cases and argue that state contract law requires the use of certain specific words, the Federal Arbitration Act (“FAA”) operates to preempt the contrary state law that disfavors arbitration contracts. I. Undisputed Issues In their Opposition, Plaintiffs do not raise any challenges to the Agreement other than the alleged failure to use the right words and they have not submitted any evidence in support of their objection to enforcement of the Agreement. As such, Plaintiffs have failed to raise any genuine issues of material fact as to the enforceability of the Agreement under the FAA. It is undisputed that PrimeFlight presented the Agreement to Plaintiffs; that Plaintiffs indicated their assent and accepted the terms of the Agreement, as set forth in PrimeFlight’s Declarations; that Plaintiffs’ claims are within the scope of the Agreement; that the FAA applies to this dispute; and that the Agreement is supported by valid consideration. Further, while Plaintiffs erroneously contend that Defendant’s failure to specifically state that “the parties waive their rights to a jury trial” is fatal to the enforcement of the Agreement as a matter of law, Plaintiffs have not even argued, much less presented competent evidence, that this alleged technical failure caused them Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 5 of 13 PageID: 192 2 to misunderstand the meaning of the Agreement. Instead, they seem to concede that the Agreement was readily understandable, but contend that, because of this failure to use certain words, they should be relieved of the contractual obligations to which they knew they were agreeing. Similarly, Plaintiffs do not raise any objections to the fairness or validity of any of the particular terms of the Agreement. II. The Obligation to Arbitrate Was Clearly Explained by PrimeFlight and Does Not Run Afoul of Atalese Plaintiffs’ Opposition to Defendant’s Motion to Compel depends entirely on its misplaced position that, in Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), the New Jersey Supreme Court established a hard and fast rule that an arbitration agreement cannot be enforced unless it specifically states that the parties are “waiving their rights to a jury trial.” Unfortunately for Plaintiffs, Atalese did not hold or even suggest that such specific language is a necessary condition to the enforcement of an agreement to arbitrate. To the contrary, the Atalese Court could not have been clearer that “[n]o particular form of words is necessary to accomplish a clear and unambiguous waiver of rights.” Id. at 444 (emphasis added). Rather, as the Court observed, “the point is to assure that the parties know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue.” Id. The Atalese Court then identified three examples of cases involving arbitration agreements where the language at issue was plainly sufficient to meet this requirement, two of which contained references to waiver of a “jury trial” (Martindale1 and Curtis2) and another which did not (Griffin3). Atalese, 219 N.J. at 444-45. Critically, the Atalese Court specifically endorsed the language used in the arbitration agreement at issue in Griffin, which made no 1 Martindale v. Sandvik, Inc., 173 N.J. 76 (2002). 2 Curtis v. Cellco Partnership, 413 N.J. Super. 26 (App. Div. 2010). 3 Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super. 515, 518 (App. Div. 2010). Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 6 of 13 PageID: 193 3 mention that the parties were waiving their rights to a jury trial, but rather, expressed that “by agreeing to arbitration, the parties understand and agree that they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding, to settle their disputes.”4 Id. at 445. Further hammering the point home that no specific language is required and that an arbitration agreement need not make any reference to a “jury trial” to be enforceable, the Atalese Court observed that “Martindale, Griffin, and Curtis show that, without difficulty and in different ways, the point can be made that by choosing arbitration one gives up the ‘time-honored right to sue.’” Id. (emphasis supplied). Although the Court would not know it from a review of Plaintiffs’ opposition, the Atalese Court did not find the arbitration clause before it unenforceable because it failed to make specific reference to the waiver a “jury trial,” but rather, because it found that “[n]owhere in the arbitration clause is there any explanation that plaintiff is waiving her right to seek relief in court for a breach of her statutory rights.” Id. at 446. Further compounding this problem, the Court observed that “[t]he provision does not explain what arbitration is, nor does it indicate how arbitration is different from a proceeding in a court of law.” Id. None of the concerns in Atalese are present here. Unlike the deficient arbitration clause buried on page 9 of a 23-page consumer contract at issue in Atalese, PrimeFlight’s Agreement clearly explains to Plaintiffs that important legal rights are at stake and that arbitration, not a lawsuit in court, will be the exclusive means for resolving any disputes over the parties’ legal rights. Thus, it could not be clearer that the parties surrendered their “time-honored right to sue.” The Agreement includes the following terms and provisions:  “Both you and the Company agree to resolve any and all claims, disputes, or 4 A review of the Griffin opinion confirms that not only did the Atalese Court choose to specifically endorse the above language which makes no reference to a “jury trial,” but the arbitration clause at issue in Griffin did not, in fact, contain any such language. Griffin, 411 N.J. Super. at 518-19. Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 7 of 13 PageID: 194 4 controversies arising out of or relating to your application for employment, your employment with the Company, and/or the termination of your employment exclusively by arbitration …”  A list of the types of legal claims subject to arbitration, including wage claims and claims arising under specifically named employment law statutes.  “The Arbitrator shall have the authority to award the same damages and other relief that would have been available in court pursuant to applicable law.”  A detailed explanation of the arbitration process and procedures, as well as reference to the American Arbitration Association’s website5 and the AAA’s Rules for arbitration.  “SPECIAL NOTE: This Agreement and the Rules referenced above are important documents that affect your legal rights. You should familiarize yourself with and understand them, and by signing below, you acknowledge that you have had the opportunity to do so. You may wish to seek legal advice or consult with private legal counsel before signing this Agreement. By acknowledging/signing below and by accepting employment if it is offered, you agree to be bound to this Dispute Resolution Agreement, as does the Company. You understand that, as more fully set forth above, you must arbitrate any and all employment-related claims against the Company and that you may not file a lawsuit in court in regard to any claims or disputes covered by this Agreement.”6 Declaration of Scott Mayer (“Mayer Decl.”), ¶¶ 4-9 and Exhibits 1-4 (emphasis added in italics/bold, underline in original). Also noteworthy is the fact that PrimeFlight’s Agreement was prominently displayed on a single page, in its own separate section of the employment application. The Agreement was not buried or hidden from Plaintiffs, and they do not even argue that it was. In fact, it was part of the larger employment application that required active 5 The AAA’s website (www.adr.org) includes a wide variety of information about what arbitration is and how the process works. 6 It should be noted that Plaintiffs make the absurd argument that this provision should not be read as mandatory but as permissive, given that it says that the parties “may not file a lawsuit in court,” rather than that the parties “shall not file a lawsuit in court.” PrimeFlight will not spill unnecessary ink responding to this argument in great detail – other than to say that the mandatory nature of this provision could not be clearer. Not only does it state that Plaintiffs “must arbitrate any and all employment related claims”, but it clearly states that they “may not file a lawsuit in court.” In arguing that “may” is discretionary rather than mandatory, Plaintiffs conveniently ignore the first half of the sentence, and then incorrectly assume that because a provision stating that someone “may” do something can be interpreted as being permissive, the same must be true of a provision that states that someone “may not” do something. Obviously, that is not the case. The former is permissive, while the latter is prohibitive. Surely, Plaintiffs could, as they did, file a lawsuit in court – they were simply prohibited from doing so by the terms of the Agreement. Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 8 of 13 PageID: 195 5 participation by Plaintiffs on each page in order to complete the application process. PrimeFlight’s Agreement is a far cry from the consumer contract at issue in Atalese. Following Atalese, New Jersey courts have consistently compelled arbitration in cases involving arbitration agreements similar to the Agreement here, despite the absence of specific language stating that the parties “waived their rights to a jury trial.” For example, in Jaworski v. Ernst & Young U.S. LLP, 441 N.J. Super. 464, 480-81 (App. Div. 2015), the court rejected the plaintiffs’ argument that their arbitration agreement with their employer was not a valid waiver of their constitutional and statutory rights to a jury trial. The court held that “[u]nlike the arbitration clause struck down in Atalese, here, EY’s written ADR policy unambiguously provides through highlighting and italicization, “neither [EY] nor an Employee will be able to sue in court in connection with a Covered Dispute.” Jaworski, 441 N.J. Super. at 481; see also JPMorgan Chase & Co. v. Custer, 2016 WL 927339, *5 (D.N.J. March 10, 2016) (enforcing employment arbitration agreement, which made no specific reference to the employee’s “waiver of a jury trial”, where, as here, the agreement provided detailed explanation of the differences between arbitration and a judicial forum, and stated that disputes would be resolved “without litigation,” finding that “[t]he language of the Agreement satisfies the requirement that the average consumer would understand that arbitration is not the same as a jury trial or appearing in court”). The result can be no different here. Notwithstanding the foregoing, Plaintiffs insist that Atalese and its progeny have established a non-negotiable requirement that an arbitration agreement must specifically state that the parties have “waived their rights to a jury trial,” in order to be enforceable. Plaintiffs cite to a portion of a single sentence in Atalese in support of this contention: “… the clause, at least in some general and sufficiently broad way, must explain that plaintiff is giving up her right to Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 9 of 13 PageID: 196 6 bring her claims in court or have a jury resolve the dispute.” See Plaintiffs’ Opposition at 3 (citing Atalese, 219 N.J. at 447) (emphasis added). Plaintiffs completely ignore context7 as well as the disjunctive nature of this sentence fragment to support their desired reading. That is, Plaintiffs would have the Court read this sentence fragment to say that an arbitration agreement “must explain that a plaintiff is giving up her right to bring her claims in court and have a jury resolve the dispute.” But that is not what the Atalese Court said, nor would such a reading make any sense in light of the Atalese’s Court’s mantra that “no particular language is required.” Rather, the plain, disjunctive reading of the complete sentence is the only reading that makes sense, particularly given the Atalese Court’s specific endorsement of language in certain agreements that provide that the parties are giving up their right to a jury trial (i.e., Martindale and Curtis), as well as language in other agreements that make clear that the parties are giving up their right to bring claims in court, despite making no mention of a “jury trial” (i.e., Griffin). Plaintiffs’ contention, that the Atalese Court created an absolute requirement that an arbitration agreement specifically reference the parties’ waiver of their right to a jury trial, is simply incorrect, and is irreconcilable with the Atalese Court’s clear endorsement of the language in Griffin that contained no such specific reference. Plaintiffs have not cited to a single case in which a court declined to enforce an arbitration agreement containing language even remotely similar to the language in the Agreement at issue here, much less on the grounds that the arbitration agreement failed to specifically state that the parties “waived their rights to a jury trial”. To the contrary, nearly all of the cases relied on by Plaintiffs reiterate Atalese’s mantra that “no particular words are 7 The quote, of which the cited language is a part, reads as follows: “We do not suggest that the arbitration clause has to identify the specific constitutional or statutory right guaranteeing a citizen access to the courts [e.g., the right to a jury trial] that is waived by agreeing to arbitration. But the clause, at least in some general or sufficiently broad way, must explain that the plaintiff is giving up her right to bring her claims in court or have a jury resolve the dispute.” Atalese, 219 N.J. at 447 (alteration and emphasis added). Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 10 of 13 PageID: 197 7 required” to accomplish a valid waiver of rights. Perhaps more importantly, nearly all the cases relied on by Plaintiffs specifically endorse the language contained in Griffin and/or Jaworski, neither of which made specific reference to a waiver of rights to a “jury trial.” See, e.g., Morgan v. Sanford Brown Institute, 225 N.J. 289, 309 (2016) (reiterating that “[n]o magical language is required to accomplish a waiver of rights in an arbitration agreement”, and specifically endorsing the language used in Griffin as adequately explaining “that arbitration is a waiver of the right to bring suit in a judicial forum”); Hernandez v. Fancy Heat Corp., 2016 WL 4072199, *2 (App. Div. Aug. 1, 2016) (observing that “[w]hile no particular set of words is required, the arbitration clause must explain ‘that arbitration is a substitute for the right to have one’s claim adjudicated in a court of law’”, and specifically endorsing the arbitration clause at issue in Jaworski, which, again, made no reference to a waiver of the parties’ rights to a jury trial); Barr v. Bishop Rosen & Co., 442 N.J. Super. 599, 606 (App. Div. 2015) (acknowledging Atalese’s approval of the arbitration clause in Griffin, “where the parties, in ‘agreeing to arbitration,’ expressed their ‘understanding and agreement that they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding, to settle their disputes’”); Defina v. Go Ahead & Jump 1, LLC, 2016 N.J. Super. Unpub. LEXIS 1797, *10-11 (App. Div. July 12, 2016) (same); Anthony v. Eleison Pharmaceuticals, LLC, 2016 WL 3865655, *4 (D.N.J. July 18, 2016) (same). New Jersey law does not hold that arbitration agreements are unenforceable unless they specifically state that the parties are “waiving their right to a jury trial.” As the Atalese Court emphasized: “no prescribed set of words must be included in an arbitration clause to accomplish a waiver of rights[;] [instead, w]hatever words compose an arbitration agreement, they must be clear and unambiguous that a [party] is choosing to arbitrate disputes rather than have them Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 11 of 13 PageID: 198 8 resolved in a court of law.” Atalese, 219 N.J. at 447. There is no question that this requirement has been met in the instant case. As such, PrimeFlight’s motion must be granted and Plaintiffs must be compelled to pursue their claims in arbitration. III. Plaintiffs’ Argument is Preempted by The Federal Arbitration Act Further, aside from directly conflicting with Atalese’s clear and repeated mandate that no particular words are required, Plaintiffs’ argument – that PrimeFlight needed to specifically state that Plaintiffs “waived their right to a jury trial” – if accepted by the Court, would operate to create a state law rule of contract interpretation that would necessarily be preempted by the FAA. Congress enacted the FAA to reverse judicial hostility to arbitration agreements and “to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991); Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-22 (1985). A state contract law, even one of general applicability, is preempted by the FAA where it is applied to arbitration agreements in a manner different from other contracts or in a manner that disfavors arbitration. AT&T Mobility v Concepcion, 563 U.S. 333, 341-42 (2011); see also Morales v. Sun Contractors, Inc., 541 F.3d 218, 223-24 (3d Cir. 2008) (holding application of a heightened “knowing consent” standard to arbitration agreements is inconsistent with FAA). The FAA prohibits the application of the Atalese holding argued by Plaintiffs because it would require that certain specific words be used in arbitration contracts otherwise enforceable under New Jersey contract law. Plaintiff’s arguments must be rejected. IV. The Proper Remedy is Dismissal of the Complaint Plaintiffs do not dispute that dismissal is the proper remedy. Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 12 of 13 PageID: 199 9 V. Conclusion For the foregoing reasons, as well as those set forth in PrimeFlight’s initial moving papers, PrimeFlight respectfully requests that the Court grant its pending Motion, order Plaintiffs to pursue their claims through arbitration pursuant to the Agreement, and dismiss Plaintiffs’ Complaint. Respectfully submitted, OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. Attorneys for Defendant PrimeFlight Aviation Services, Inc. By: s/ Ryan T. Warden Ryan T. Warden Dated: March 1, 2017 28913039.1 Case 2:16-cv-09609-CCC-MF Document 15 Filed 03/01/17 Page 13 of 13 PageID: 200 Ryan T. Warden, Esq. Michael J. Riccobono, Esq. OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 10 Madison Avenue, Suite 400 Morristown, New Jersey 07960 Telephone (973) 656-1600 Facsimile (973) 656-1611 ryan.warden@ogletreedeakins.com Attorneys for Defendant PrimeFlight Aviation Services, Inc. UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY TANAIJAH A. ROUNDTREE, NICOLAS MOLINA, and D’ANDRE KING, Plaintiffs, v. PRIMEFLIGHT AVIATION SERVICES, INC., Defendant. : : : : : : : : : : : Hon. Claire C. Cecchi, U.S.D.J. Civil Action No.: 2:16-cv-09609-CCC-MF Civil Action CERTIFICATE OF SERVICE I hereby declare that on March 1, 2017, the following documents:  REPLY BRIEF IN FURTHER SUPPORT OF DEFENDANT’S MOTION TO COMPEL ARBITRATION AND DISMISS PLAINTIFFS’ COMPLAINT were filed with the Clerk of the Court via ECF, and thereby simultaneously served upon Plaintiffs, through their counsel of counsel: Lloyd R. Ambinder Virginia & Ambinder, LLP 40 Broad Street, 7th Floor New York, New York 10004 I declare that the foregoing statements made by me are true. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment. Case 2:16-cv-09609-CCC-MF Document 15-1 Filed 03/01/17 Page 1 of 2 PageID: 201 By: s/ Ryan T. Warden Ryan T. Warden Dated: March 1, 2017 Case 2:16-cv-09609-CCC-MF Document 15-1 Filed 03/01/17 Page 2 of 2 PageID: 202