United States District Court, D. New Jersey
CRAIG D. PRICE, Plaintiff,
UBS FINANCIAL SERVICES, INC., Defendant.
WILLIAM J. MARTINI, U.S.D.J.
Craig D. Price brings this action against UBS Financial
Services, Inc. (“Defendant”), alleging claims of
whistleblowing retaliation under the Wall Street Reform and
Consumer Protection Act (“Dodd-Frank”), 15 U.S.C.
§ 78u-6, and the Florida Whistleblower Act (the
“FWA”), Fla. Stat. § 448.102. This matter
comes before the Court on Defendant's motion to compel
arbitration pursuant to the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 1, et seq.
There was no oral argument. Fed.R.Civ.P. 78(b). For the
reasons set forth below, Defendant's motion is
Court assumes the parties' familiarity with the facts and
procedural history of the case. The Court's November 2017
opinion provides a more complete recitation. ECF No. 19 at
1-2. The following facts are relevant to the instant motion.
March 22, 2017, Plaintiff filed a complaint
(“Complaint”), alleging that Defendant retaliated
against him for making disclosures protected under Dodd-Frank
and the FWA. ECF No. 1. Approximately two and a half months
later, Defendant filed a motion to dismiss both counts of the
Complaint. ECF No. 11. In its motion, Defendant did not
alternatively argue for the Court to compel arbitration nor
did it state its intent to do so on a later date.
20, 2017, the parties sought a consent for an adjournment of
Defendant's motion until September 5, 2017, which the
Court granted. ECF Nos. 15 & 16. The Court subsequently
decided the merits of Defendant's motion, denying
dismissal of the FWA claim but staying the Dodd-Frank claim
pending a decision by the Supreme Court in Digital Realty
Trust, Inc. v. Somers. ECF Nos. 19 & 20.
two weeks later, Defendant filed the instant motion to compel
arbitration, arguing that Plaintiff's claims fall
squarely within the scope of the arbitration agreements that
he executed in exchange for compensation packages from
Defendant. See Def.'s Mem. of Law in Supp. of
Its Mot. to Compel Arbitration (“Def.'s
Mem.”) 8-13, ECF No. 22-3. Defendant preemptively
argues that it did not waive its right to compel arbitration
by first filing a motion to dismiss. Id. at 13-14.
Specifically, it argues that the factors enumerated by the
Third Circuit in Hoxworth v. Blinder, 980 F.2d 912
(3d Cir. 1992), favor arbitration because it filed its motion
to compel in a timely fashion, it provided notice to
Plaintiff of its intent to arbitrate, and neither party has
engaged in discovery. Id. at 14. Defendant states
that the Third Circuit has unequivocally held that a single
merits-based motion to dismiss does not waive a party's
right to arbitration. Id. Finally, Defendant argues
that the Court should dismiss the Complaint or, in the
alternative, stay proceedings in this Court pending
arbitration. Id. at 15.
opposes, arguing first that Defendant has not shown a valid
arbitration agreement under New Jersey law. See
Pl.'s Resp. in Opp'n to Def.'s Mot.
(“Pl.'s Opp'n”) 5-8, ECF No. 26.
Plaintiff submits that the agreements do not satisfy New
Jersey's “express waiver rule” because they
fail to reference statutory whistleblower rights.
Id. at 6-7. Plaintiff further argues that Defendant
waived its arbitration right because Defendant's motion
to dismiss prejudiced Plaintiff through the expenditure of
substantial resources in litigating that motion. See
id. at 8-11. Alternatively, Plaintiff argues that the
Court should stay proceedings pending arbitration as opposed
to dismissing its Complaint. Id. at 12-13.
reply, Defendant counters that the agreements are valid and
enforceable because they provide for arbitration of
“any disputes, ” including related to termination
of employment and retaliation whether they arise by statute
or otherwise. See Def.'s Reply in Supp. of Its
Mot. (“Def.'s Reply”) 2-7, ECF No. 28.
Defendant also reiterates that a single merits-based motion
to dismiss is not sufficient to find that it waived its right
to arbitrate. Id. at 8-11. Finally, Defendant
reargues for dismissal over a stay in the interest of
judicial efficiency. Id. at 11-13.
“creates a body of federal substantive law establishing
and governing the duty to honor agreements to arbitrate
disputes” and expresses “a strong federal policy
in favor of resolving disputes through arbitration.”
See Century Indem. Co. v. Certain Underwriters at
Lloyd's, London, 584 F.3d 513, 522 (3d Cir. 2009).
“Before compelling a party to arbitrate pursuant to the
FAA, a court must determine that (1) there is an agreement to
arbitrate and (2) the dispute at issue falls within the scope
of that agreement.” Id. at 523. “To
determine whether the parties have agreed to arbitrate,
[courts] apply ‘ordinary state-law principles that
govern the formation of contracts.'” Id.
at 524 (quoting First Options of Chi., Inc. v.
Kaplan, 514 U.S. 938, 944 (1995)). “[O]nce a court
has found that there is a valid agreement to arbitrate, . . .
the determination of whether a particular dispute is within
the class of those disputes governed by the arbitration
clause . . . is a matter of federal law.” See
id. (quotation omitted). In making such a determination,
“‘there is a presumption of arbitrability[:] an
order to arbitrate the particular grievance should not be
denied unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation
that covers the asserted dispute.'” Id.
(quoting AT&T Techs., Inc. v. Commc'ns Workers of
Am., 475 U.S. 643, 650 (1986)).
in the Third Circuit apply two different standards when
considering a motion to compel arbitration. “[W]hen it
is apparent, based on ‘the face of a complaint, and
documents relied upon in the complaint, ' that certain of
a party's claims ‘are subject to an enforceable
arbitration clause, a motion to compel arbitration should be
considered under a Rule 12(b)(6) standard without
discovery's delay.'” Guidotti v. Legal
Helpers Debt Resolution, L.L.C., 716 F.3d 764, 776 (3d
Cir. 2013) (quoting Somerset Consulting, LLC v. United
Capital Lenders, LLC, 832 F.Supp.2d 474, 482 (E.D. Pa.
2011)). “But if the complaint and its supporting
documents are unclear regarding the agreement to arbitrate,
or if the plaintiff has responded to a motion to compel
arbitration with additional facts sufficient to place the
agreement to arbitrate in issue, then ‘the parties
should be entitled to discovery on the question of
arbitrability before a court entertains further briefing on
[the] question.” Id. (quoting same). Under
such circumstances, courts apply a summary judgment standard.
Rule of Civil Procedure 12(b)(6) provides for the dismissal
of a complaint, in whole or in part, if the plaintiff fails
to state a claim upon which relief can be granted. The moving
party bears the burden of showing that no claim has been
stated. Hedges v. United States, 404 F.3d 744, 750
(3d Cir. 2005). In deciding a motion to dismiss under Rule
12(b)(6), a court must take all allegations in the complaint
as true and view them in the light most favorable to the
plaintiff. See Warth v. Seldin, 422 U.S. 490, 501
(1975); Trump Hotels & Casino Resorts, Inc. v. Mirage
Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998).