Lee v. JPMorgan Chase & Co.
982 F. Supp. 2d 1109
C.D. Cal.2013Background
- Plaintiffs Lee and Thompson filed a putative class/collective action alleging wage-and-hour and UCL claims arising from their employment as appraisers for JPMorgan/Washington Mutual.
- Both plaintiffs signed arbitration agreements covering “any and all disputes that involve or relate in any way to my employment.” The agreements do not expressly waive class/collective/representative actions.
- Plaintiffs agreed their claims are subject to arbitration, but the parties disputed who should decide whether the arbitration may proceed on a class, collective, or representative basis (court or arbitrator) and whether plaintiffs must re-file individually.
- Defendants moved to compel arbitration on an individual basis; plaintiffs opposed. The court limited its task to resolving who decides availability of class arbitration.
- The court concluded the question is procedural (contract interpretation of the arbitration mechanism) and thus for the arbitrator to decide, relying primarily on the reasoning in Green Tree Financial Corp. v. Bazzle.
- The court denied defendants’ motion to compel arbitration only on an individual basis and dismissed the action with prejudice so the dispute proceeds in binding arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides whether class/collective/representative arbitration is available? | Arbitrator should decide because it is an interpretive/procedural question about arbitration procedures. | Court should decide; Bazzle is no longer persuasive after Stolt‑Nielsen and class arbitration availability is a question of arbitrability for courts. | Court: Question is procedural (what arbitration procedures the parties agreed to) and thus for the arbitrator, following Bazzle reasoning. |
| Whether arbitration must proceed only on an individual basis absent an express waiver permitting class arbitration | Plaintiffs: silence does not resolve consent; but parties agreed to arbitration and the arbitrator should determine availability of class procedures. | Defendants: arbitration agreements authorize only individual arbitration; court should enforce individual-only arbitration. | Court: Declined to order individual-only arbitration; left availability of class arbitration to arbitrator. |
Key Cases Cited
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (court’s role on a motion to compel is to decide if a valid arbitration agreement exists and whether it covers the dispute)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (doubts about arbitrability are resolved in favor of arbitration)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (gateway questions of arbitrability are for courts unless parties clearly and unmistakably assign them to arbitrators)
- AT&T Techs., Inc. v. Commc'ns Workers, 475 U.S. 643 (1986) (distinction between questions of arbitrability and matters presumptively for arbitrators)
- Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003) (plurality: whether a contract authorizes class arbitration is a matter of contract interpretation and may be for an arbitrator)
- Stolt‑Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662 (2010) (a party cannot be compelled to submit to class arbitration absent contractual basis for consent)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (class arbitration must be consensual; arbitration agreements may preclude class procedures)
- Quilloin v. Tenet HealthSystem Philadelphia, Inc., 673 F.3d 221 (3d Cir. 2012) (whether class arbitration is permitted is a question of interpretation/procedure for the arbitrator)
- Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013) (contrasting view that availability of class arbitration is a question of arbitrability for courts)
- Momot v. Mastro, 652 F.3d 982 (9th Cir. 2011) (parties can clearly and unmistakably assign threshold arbitrability questions to arbitrators)