Haire v. Smith, Currie & Hancock LLP, 925 F. Supp. 2d 126

Haire and Jones sue Smith Currie in DC Superior Court for conversion and breach of contract, seeking declaratory relief on arbitration, liquidated damages, and partnership terms, and return of funds; case removed to federal court.
Smith Currie is an Atlanta firm with a DC office; Haire and Jones were equity partners who left in Aug 2011 to join Fox Rothschild; Fox Rothschild hired staff and took over the DC office lease.
Partnership Agreement includes an arbitration clause stating disputes shall be resolved by AAA arbitration in Georgia, governed by Georgia law; AAA Rules may govern proceedings.
Plaintiffs claimed their capital contributions would be returned but were told Smith Currie would seek damages and offset against their contributions; Haire allegedly overpaid by $166,105.
Smith Currie moved to dismiss or stay and compel arbitration; the court evaluates whether arbitrability is for the court or the arbitrator and ultimately decides to compel arbitration and dismiss the case.
The court analyzes governing law (FAA applies; potential DC or Georgia law considerations) and analyzes who should decide arbitrability under the AAA rules, concluding the arbitrator should decide.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Who decides arbitrability of the claims	Former partners argue arbitration does not apply to their claims	Incorporation of AAA Rules shows arbitrator decides arbitrability	Arbitrator decides arbitrability; FAA integration supports arbitrator authority
Whether arbitration covers disputes arising from the Partnership Agreement after withdrawal	Arbitration not binding on former partners’ post-withdrawal claims	Arbitration clause remains enforceable for all disputes under the agreement	Arbitration provision covers disputes arising under the Partnership Agreement regardless of withdrawal
Governing law and framework for arbitration	FAA applies; state law considerations are secondary	Georgia law applies to interpretation; FAA governs enforceability	FAA governs enforceability; state-law considerations align under Georgia/DC framework
Effect of liquidated damages provision and return of capital contributions	Liquidated damages may be void; funds should be returned	Liquidated damages enforceable under contract; offset of contributions allowed	Not dispositive to arbitral proceedings; issues fall within arbitrator's scope
Scope of the arbitration clause for the partnership disputes	Arbitration provision may not cover disputes between former partners	Arbitration clause, by incorporation of AAA Rules, covers all disputes under the contract	Arbitration clause valid and broad; disputes are within arbitrator's purview

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (who decides arbitrability; clear and unmistakable evidence standard)
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 130 (U.S. 2010) (delegation to arbitrator via incorporation of rules)
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (FAA policy to arbitrate disputes)
Southland Corp. v. Keating, 465 U.S. 1 (U.S. 1984) (FAA preempts state law for arbitration agreements)
Contec Corp. v. Remote Solution Co., Ltd., 398 F.3d 205 (2d Cir. 2005) (incorporation of AAA Rules can assign arbitrability to arbitrator)
Rep. of Argentina v. BG Group PLC, 665 F.3d 1363 (D.C. Cir. 2012) (UNCITRAL/AAA rule implications for arbitrability)
Grynberg v. BP P.L.C., 585 F. Supp. 2d 50 (D.D.C. 2008) (signatories' obligation to arbitrate under contract)
John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543 (U.S. 1964) (basic arbitral concept of judicial vs. arbitral decisionmaking)