Carmax Auto Superstores, Inc. v. Sibley
194 F. Supp. 3d 392
| D. Maryland | 2016Background
- Montgomery Blair Sibley, a law-school graduate previously suspended from bar practice in multiple jurisdictions for vexatious litigation, was employed as a CarMax sales consultant from January 2011 until his termination on May 6, 2016.
- Sibley had executed CarMax’s Dispute Resolution Agreement (DRA) and received the Dispute Resolution Rules and Procedures (DRRP); he submitted an arbitration demand on April 12, 2016 asserting employment-related claims.
- After termination, Sibley stated in writing he would pursue his claims in court rather than arbitration and filed an NLRB charge; CarMax petitioned this Court to compel arbitration on May 16, 2016.
- CarMax inadvertently filed a document that disclosed Sibley’s Social Security number; Sibley sued CarMax and its counsel asserting privacy, abuse of process, statutory, and Rule 5.2 claims and sought various interim remedies (sealing, injunctive relief, expedited discovery, sanctions, and default).
- The Court dismissed the third-party claims based on the inadvertent SSN disclosure (litigation privilege and failure to state claims), denied Sibley’s motions for sanctions, expedited discovery, injunctive relief, and summary judgment, and set a schedule for resolving the arbitration petition and declaratory-counterclaims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CarMax’s petition to compel arbitration was premature because Sibley hadn’t unequivocally refused arbitration | Sibley argued he did not breach the arbitration agreement and thus the court lacks jurisdiction to compel arbitration | CarMax argued Sibley unequivocally manifested an intent not to arbitrate by stating he would litigate in state court and pursuing other forums | Court held Sibley had unambiguously manifested an intent not to arbitrate; his summary-judgment motion was frivolous and denied |
| Whether the inadvertent public disclosure of Sibley’s SSN supports state-law privacy/abuse claims against CarMax and its counsel | Sibley alleged intentional, malicious disclosure and sought discovery to prove it | CarMax argued the disclosure was inadvertent and communications/documents are protected by litigation privilege | Court dismissed Counts IV–VI (privacy/abuse/statutory) finding absolute litigation privilege and failure to plead malice or cognizable damages |
| Whether Rule 5.2 or the Federal Rules create a private right of action for the SSN disclosure | Sibley contended Rule 5.2 (and related E-Gov Act provisions) supported a private remedy | CarMax argued the Federal Rules do not create private causes of action under the Rules Enabling Act | Court held Rule 5.2 does not create a private right of action and dismissed Count VII |
| Whether Sibley was entitled to injunctive relief restoring CarMax email access | Sibley sought TRO/PI under NLRA-related concerted-activity theory | CarMax argued NLRB has exclusive jurisdiction over alleged unfair labor practices and that Sibley had alternative means to communicate | Court denied relief as moot (withdrawn claim) and for lack of jurisdiction (NLRB exclusivity); also rejected irreparable-harm and balance-of-equities arguments |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunctions requires showing likelihood of success, irreparable harm, balance of equities, and public interest)
- Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (federal courts have inherent authority to impose sanctions for bad-faith litigation conduct)
- San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959) (NLRB has exclusive jurisdiction over activity arguably subject to NLRA sections 7 or 8)
- PaineWebber Inc. v. Faragalli, 61 F.3d 1063 (3d Cir. 1995) (arbitration-accrual rule: petition to compel accrues when respondent unequivocally refuses arbitration)
- Discover Bank v. Vaden, 489 F.3d 594 (4th Cir. 2007) (forum and arbitration issues in FAA context)
- D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344 (5th Cir. 2013) (court vacated certain NLRB arbitration reasoning and enforced arbitration agreement)
- O’Brien & Gere Eng’rs, Inc. v. City of Salisbury, 447 Md. 394 (Md. 2016) (discussion of litigation privilege and its historical scope)
- Lontz v. Tharp, 413 F.3d 435 (4th Cir. 2005) (application of NLRB preemption principles)