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Leonard v. Delaware North Companies Sport Service, Inc.
861 F.3d 727
| 8th Cir. | 2017
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Background

  • Matthew Leonard volunteered for Delaware North Companies Sportservice, Inc. (DNCS) at Busch Stadium on May 30, 2013; DNCS donated $1,096.57 to Washington University for the event and Leonard received no pay.
  • Three weeks before the event Leonard signed a one-page Volunteer Release, Waiver and Indemnification Agreement that included a broad mutual arbitration clause covering "any dispute arising from the Activity."
  • Leonard sued in state court alleging violations of federal and Missouri minimum-wage laws and fraud, contending the donation scheme effectively denied him wages.
  • He moved to avoid arbitration, arguing the release was unconscionable and lacked consideration; he also argued his fraud claim was outside the arbitration clause.
  • The district court compelled arbitration and dismissed the case without prejudice; the Eighth Circuit reviewed the decision de novo and affirmed.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the volunteer release is unconscionable Leonard: procedural and substantive unconscionability due to boilerplate form and unequal bargaining DNCS: agreement was clear, not oppressive, and Leonard had time to withdraw Not unconscionable — totality of circumstances did not show inequality so extreme as to void the contract
Whether the arbitration agreement lacks consideration Leonard: no consideration because he was unpaid and promise to volunteer insufficient DNCS: consideration existed — opportunity to volunteer and DNCS's donation were bargained-for benefits/detriments Consideration exists; presumption from recital of consideration stands, plaintiff failed to rebut it
Whether fraud claim falls outside the arbitration clause Leonard: fraud claim independent and therefore not governed by arbitration DNCS: clause is broad and covers disputes arising from the Activity, including factual disputes about volunteer vs. employee status Fraud claim governed by arbitration — factual allegations touch matters covered by the clause
Standard of review and scope of arbitration clause N/A (procedural) N/A De novo review of order to compel arbitration; ambiguities resolved in favor of arbitrability; broad clauses cover disputes that "touch matters" in agreement

Key Cases Cited

  • Pleasants v. Am. Exp. Co., 541 F.3d 853 (8th Cir.) (standard of review for compelling arbitration)
  • Torres v. Simpatico, Inc., 781 F.3d 963 (8th Cir.) (factual-findings clear-error standard)
  • AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (arbitration is a matter of contract; FAA enforces arbitration agreements)
  • Cicle v. Chase Bank USA, 583 F.3d 549 (8th Cir.) (general contract defenses can invalidate arbitration agreements; doubts resolved for arbitrability)
  • Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681 (1996) (state-law defenses to contract apply to arbitration agreements)
  • Eaton v. CMH Homes, Inc., 461 S.W.3d 426 (Mo. banc) (Missouri test for procedural and substantive unconscionability)
  • Brewer v. Missouri Title Loans, 364 S.W.3d 486 (Mo. banc) (example of unconscionability where terms were oppressive and nonnegotiable)
  • Earl v. St. Louis Univ., 875 S.W.2d 234 (Mo. App.) (consideration may be a benefit or detriment)
  • Tinch v. State Farm Ins. Co., 16 S.W.3d 747 (Mo. App.) (recitation of consideration creates presumption it exists)
  • Jimenez v. Cintas Corp., 475 S.W.3d 679 (Mo. App.) (promise of at-will employment insufficient consideration for arbitration)
  • Unison Co. v. Juhl Energy Dev., Inc., 789 F.3d 816 (8th Cir.) (liberal construction of arbitration clauses; "touch matters" test)
  • 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193 (8th Cir.) (arbitration clause covers disputes unless clause cannot reasonably be interpreted to do so)
Read the full case

Case Details

Case Name: Leonard v. Delaware North Companies Sport Service, Inc.
Court Name: Court of Appeals for the Eighth Circuit
Date Published: Jun 27, 2017
Citation: 861 F.3d 727
Docket Number: 16-3246
Court Abbreviation: 8th Cir.