Mercadante v. Xe Services, LLC
864 F. Supp. 2d 54
D.D.C.2012Background
- Plaintiffs allege misclassification as independent contractors and seek damages, declaratory and injunctive relief, and class relief under ERISA and other claims.
- Each named plaintiff signed an Independent Contractor Service Agreement containing a binding arbitration clause under AAA rules.
- AAA rules delegate gateway questions of arbitrability to the arbitrator, including existence, scope, or validity of the arbitration clause.
- Defendants move to compel arbitration, arguing the delegation provision governs arbitrability.
- Court denies the motion without prejudice to a renewed motion addressing the delegation provision and its enforceability under Rent-A-Center standards.
- The decision emphasizes briefing issues and the need to challenge the delegation provision specifically, rather than the contract as a whole by the opposi tion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AAA Rule 6 delegation grants arbitrator authority over gateway issues | Mercadante argues the delegation clause is not properly challenged | Xe argues the delegation provision should be enforced by the arbitrator | Denied without prejudice; require renewed briefing on delegation enforceability |
| Whether the district court should decide arbitrability or defer to the arbitrator | Plaintiffs challenge the delegation provision to prevent arbitration | Defendants contend the arbitrator should decide gateway issues | Denied without prejudice; court will not decide before targeted briefing on delegation validity |
| Whether plaintiffs adequately challenged the delegation provisions in briefing | Challenge raised late or improperly in opposition | Challenge not properly raised in opening brief and thus insufficient | Denied without prejudice; renewed motion required with focused briefing on delegation validity |
Key Cases Cited
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (delegation agreement binding; courts must address validity of delegation first)
- Awuah v. Coverall N. Am., Inc., 554 F.3d 7 (1st Cir. 2009) (gateway questions delegated to arbitrator; FAA allows delegation)
- Agere Sys., Inc. v. Samsung Elec. Ltd., 560 F.3d 337 (5th Cir. 2009) (delegation provisions and arbitrability issues)
- Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366 (Fed. Cir. 2006) (gateway questions within arbitration framework)
- Contec Corp. v. Remote Solution Co., Ltd., 398 F.3d 205 (2d Cir. 2005) (arbitration clause treated as independent from contract)
- Terminex Int’l Co., LP v. Palmer Ranch Ltd. P’Ship, 432 F.3d 1327 (11th Cir. 2005) (gateway issue arbitrability under delegation)
- Republic of Argentina v. BG Grp. PLC, 665 F.3d 1363 (D.C. Cir. 2012) (context for delegation and arbitratability)