Grosvenor v. Qwest Corporation
2013 U.S. App. LEXIS 16873
| 10th Cir. | 2013Background
- Grosvenor filed a putative class action against Qwest alleging violations of a “Price for Life Guarantee” and sought contract and consumer-protection remedies.
- Qwest moved to compel arbitration under the FAA (9 U.S.C. §§ 3–4), relying on a Subscriber Agreement containing an arbitration clause and an amendment/notice provision.
- The district court denied Qwest’s initial motion to compel arbitration, finding factual disputes about contract formation and ordered a trial on arbitrability under § 4.
- After discovery, both parties filed cross motions for partial summary judgment: Qwest asked for judgment that an arbitration agreement existed (and said it would later move to compel arbitration); Grosvenor moved to rule the arbitration clause illusory due to Qwest’s unilateral amendment power.
- The district court granted both summary judgment motions: it found assent to the Subscriber Agreement but held the arbitration clause illusory and unenforceable.
- Qwest appealed the February 23, 2012 summary-judgment order as a denial of an order compelling arbitration; the Tenth Circuit dismissed the appeal for lack of FAA interlocutory jurisdiction because Qwest had not clearly sought FAA relief in the pertinent filings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether this court has interlocutory appellate jurisdiction under 9 U.S.C. § 16(a)(1)(B) to review the district court’s February 23, 2012 summary-judgment order | Grosvenor: Appeal is jurisdictionally defective because Qwest did not expressly move to compel arbitration in the filings ruled on; therefore § 16(a) does not apply. | Qwest: The order is effectively a denial of its § 4 petition because district proceedings were directed to arbitrability and Qwest previously moved to compel arbitration. | Held: No jurisdiction — Qwest failed to make it “unmistakably clear” from the four corners of the motion that it sought relief under the FAA; it had not filed a timely, explicit § 4 motion as to the February 23 order. |
| Whether the arbitration clause is enforceable or illusory | Grosvenor: Arbitration clause is illusory because Subscriber Agreement reserves Qwest an unfettered right to amend terms, negating mutuality. | Qwest: Clause is not illusory; any challenge to formation or clause scope belongs to an arbitrator, and unconscionability was preserved for later briefing. | District court held clause illusory and unenforceable; Tenth Circuit did not reach merits due to lack of jurisdiction to review the summary judgment order. |
| Whether a party can appeal a district court order granting the plaintiff’s motion hostile to arbitration | Grosvenor: Granting plaintiff’s motion is not within FAA’s enumerated interlocutory appeals. | Qwest: The overall proceedings (trial on formation under § 4) make subsequent hostile rulings appealable. | Held: FAA jurisdiction is limited; granting a party’s motion (here Grosvenor’s) does not transform the order into an appealable § 16(a)(1)(B) denial absent an explicit FAA petition or unmistakable FAA relief request. |
| Whether Qwest could have preserved interlocutory review | Grosvenor: Qwest could have timely appealed the district court’s earlier (Sept. 30, 2010) denial of the § 4 motion or expressly moved to compel arbitration at summary judgment. | Qwest: Appealing earlier order would have been premature because arbitrability was unresolved; filing another § 4 motion at summary judgment was unnecessary. | Held: Qwest could and should have either timely appealed the earlier denial or expressly moved to compel arbitration during summary judgment; failure to do so foreclosed § 16(a) review. |
Key Cases Cited
- Conrad v. Phone Directories Co., 585 F.3d 1376 (10th Cir. 2009) (establishes rule that § 16(a) jurisdiction requires an explicit FAA motion or that the motion’s four corners unmistakably seek FAA relief)
- Ansari v. Qwest Communications Corp., 414 F.3d 1214 (10th Cir. 2005) (§ 16(a)(1)(B) does not require a final merits determination to appeal denial of a § 4 petition)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (arbitration policy favors speedy, limited judicial delay)
- Bombardier Corp. v. Nat’l R.R. Passenger Corp., 333 F.3d 250 (D.C. Cir. 2003) (declines jurisdiction where motion did not clearly seek an order compelling arbitration)
- Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271 (10th Cir. 2001) (generally only final district court decisions are appealable)