United States District Court, M.D. Georgia, Columbus Division
D. LAND CHIEF U.S. DISTRICT COURT JUDGE.
removed the present action to this Court from the Superior
Court of Muscogee County. In the state court action,
Plaintiff sought an order compelling Defendants, who are
current and former sales associates for Plaintiff, to
arbitrate claims their counsel asserted on their behalf in
correspondence to Plaintiff. Prior to the removal of this
action, Plaintiff obtained from the state court judge a
temporary restraining order preventing Defendants from filing
any action against Plaintiff until the state court had an
opportunity to rule on Plaintiff's motion to compel
arbitration. After Defendants removed the action, Plaintiff
moved this Court to compel arbitration (ECF No. 4). Plaintiff
also sought an expedited hearing and ruling on its motion to
compel arbitration before the expiration of the state court
temporary restraining order. In the alternative, Plaintiff
asked the Court to convert the temporary restraining order
into a preliminary injunction, to remain effective until the
Court could rule on its motion to compel arbitration (ECF
Nos. 7 & 10). This Court held a hearing on December 28,
2017, the day before the state court temporary restraining
order expired. At that hearing, the Court, without objection,
orally issued a preliminary injunction enjoining Defendants
from pursuing litigation of their claims until January 5,
2018. Today, the Court enters this Order deciding
Plaintiff's motion to compel arbitration.
genuine factual disputes exist to be tried. Therefore, the
Court proceeds based on the present record. As explained in
the remainder of this Order, that record establishes that the
Court has jurisdiction, that the arbitration agreements
entered into between the parties cover their disputes, that
the agreements are enforceable, and that Plaintiff did not
waive its right to insist on arbitration. Accordingly,
pursuant to the Federal Arbitration Act (“FAA”),
9 U.S.C. § 1 et seq., the Court grants
Plaintiff's motion to compel arbitration (ECF No. 4).
Defendants' Contractual Agreements with
is a corporation that sells life, health, and accident
insurance. Defendants are all former or current sales
associates for Plaintiff. Plaintiff entered into a separate
associate agreement with each Defendant. See
generally Pl.'s Mot. to Expedite Ruling
(“Pl.'s Mot. to Expedite”) Ex. A, J.
Arrington Aff. Ex 1, Hubbard Agreement, ECF No. 7-2 at 7-25;
id. Ex. 2, Johnson Agreement, ECF No. 7-2 at 26-49;
id. Ex. 3, Alcantara Agreement, ECF No. 7-2 at
50-74; id. Ex. 4, Cort Agreement, ECF No. 7-2 at
75-93; id. Ex. 5, McCarthy Agreement, ECF No. 7-2 at
94-106; id. Ex. 6, Leaty Agreement, ECF No. 7-2 at
107-31; id. Ex. 7, Conroy Agreement, ECF No. 7-2 at
132-42 [hereinafter, collectively, “Associate
Agreements”]. The Associate Agreements are
substantially identical, and they contain the same provision
requiring the parties to arbitrate certain defined disputes
(the “Arbitration Agreement”). E.g.,
Hubbard Agreement § 10.1, ECF No. 7-2 at 21. The
Associate Agreements also contain a collective action waiver
that states, “There shall be no consolidation of claims
or class actions without the consent of all parties.”
E.g., id. § 10.4, ECF No. 7-2 at 22.
Defendants' Threatened Class Action
November 17, 2017, Plaintiff's counsel received from
Defendants' counsel an offer to settle claims Defendants
believed they could pursue against Plaintiff and AFLAC, Inc.
(“AFLAC”), Plaintiff's parent company.
Defs.' Resp. to Pl.'s Mot. to Compel Arbitration Ex.
A., D. Joffe Aff. ¶¶ 6-7, ECF No. 12-1; Pl.'s
Mot. to Expedite Ex. B., L. Cassilly Aff. ¶ 4, ECF No.
7-3. Along with his demand for settlement, Defendants'
counsel included a draft class action complaint setting forth
federal and state-law claims Defendants had against Plaintiff
and AFLAC. D. Joffe Aff. ¶ 7; L. Cassilly Aff.
¶¶ 4-6; see generally L. Cassilly Aff. Ex.
1, Draft Class Action Complaint, ECF No. 7-3 at 6-98.
draft class action complaint, Defendants allege federal
claims under the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et
seq., the Federal Insurance Contributions Act
(“FICA”), 26 U.S.C. § 3101 et seq.,
and the Federal Unemployment Tax Act (“FUTA”), 26
U.S.C. § 3301 et seq. Draft Class Action
Complaint ¶¶ 203-14. Defendants also assert
state-law claims for fraud under California law and
violations of various deceptive trade practice acts and
consumer fraud statutes of California, Arizona, Arkansas,
Colorado, Connecticut, Delaware, Florida, Idaho, Illinois,
Massachusetts, Minnesota, Nebraska, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, North Dakota,
Oklahoma, South Carolina, South Dakota, Tennessee, Texas, and
Vermont. Id. ¶¶ 215-385.
“aggrieved by the alleged failure, neglect, or refusal
of another to arbitrate under a written agreement for
arbitration may petition any United States district court
which, save for such agreement, would have jurisdiction . . .
in a civil action . . . of the subject matter of a suit
arising out of the controversy between the parties, for an
order directing that such arbitration proceed in the manner
provided for in such agreement.” 9 U.S.C. § 4.
“Section 4 provides for an order compelling arbitration
only when the federal district court would have jurisdiction
over a suit on the underlying dispute[.]” Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S.
1, 25 n.32 (1983). “[W]here the parties'
controversy has not yet been embodied in preexisting
litigation, ‘[a] district court entertaining a § 4
petition' must decide for itself ‘what “a
suit” arising out of the allegedly arbitrable
controversy would look like.'” Cmty. State Bank
v. Strong, 651 F.3d 1241, 1255 (11th Cir. 2011) (second
alteration in original) (quoting Vaden v. Discover
Bank, 556 U.S. 49, 77 (2009) (Roberts, C.J., concurring
in part and dissenting in part)). In this case, the Court
does not have to look far to determine what the arbitrable
controversy would look like because the underlying dispute is
clearly set out in the draft class action complaint that
Defendants' counsel sent to Plaintiff's counsel.
implicitly threatened to assert in court the federal and
state-law claims set forth in the draft class action
complaint if Plaintiff did not meet their demand for
settlement. The Court would clearly have federal question
jurisdiction over the federal claims. Further, both the
federal and the state-law claims arise out of Plaintiff's
allegedly deceptive recruitment practices and its
relationship with Defendants as sale associates. The Court
would thus have supplemental jurisdiction over the state-law
claims. Because the Court would have jurisdiction over a suit
on the underlying dispute, it has subject matter jurisdiction
over Plaintiff's petition to compel arbitration of that
dispute pursuant to the FAA and the Arbitration Agreement.
The Arbitration Agreement Encompasses the ...