447 F.Supp.3d 339
W.D. Pa.2020Background
- R&C Oilfield Services, LLC (an Oklahoma LLC operating three semi-trucks) contracted with American Wind Transport Group, LLC (a Pennsylvania carrier/broker) under a June 27, 2016 Independent Contractor Service Agreement to haul wind-energy components.
- R&C alleges American Wind underpaid or failed to pay detention charges for 34 loads from 2016–2018, totaling about $62,704.45, and claims consequential lost profits after selling its trucks.
- The Agreement contains a broad arbitration clause (AAA, Allegheny County) with a 120‑day written demand rule and exceptions for certain collection/confidentiality claims.
- American Wind moved to compel arbitration (and alternatively to dismiss). R&C opposed, relying on New Prime v. Oliveira to argue the FAA §1 exclusion for “contracts of employment” bars enforcement because R&C was an independent‑contractor transportation worker.
- The Court applied the Third Circuit’s guidance (Singh) and the Rule 12(b)(6) standard because the arbitration agreement was clear on the face of the complaint.
- The Court held the arbitration clause enforceable (R&C is a commercial business entity, not the type of “worker” FAA §1 protects) and stayed the case under 9 U.S.C. §3 rather than dismissing it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the FAA §1 exclusion ("contracts of employment") bars arbitration | New Prime means independent‑contractor transport agreements (like R&C's) are exempt from FAA enforcement | New Prime is limited to individual workers/federal employment claims and does not encompass commercial business entities | Court: FAA §1 exclusion does not apply; arbitration clause enforceable |
| Whether this Agreement is a "contract of employment" | R&C: small‑fleet realities made it effectively like an employment contract for interstate transport workers | Am. Wind: Agreement is a commercial contract between businesses, not an employment contract | Court: Agreement is a commercial/vendor contract between businesses, not covered by §1 |
| Applicable standard to decide compel motion | R&C: not disputed that arbitration clause present; but relied on New Prime for exemption | Am. Wind: where arbitration agreement appears on face, apply motion‑to‑dismiss standard per Singh | Court: Applied Rule 12(b)(6)/motion‑to‑dismiss standard because arbitration clause was apparent from complaint |
| Remedy after ordering arbitration | R&C: asked for a stay pending arbitration | Am. Wind: urged dismissal (district courts sometimes dismiss when all claims are arbitrable) | Court: Stayed the action under 9 U.S.C. §3, following Third Circuit precedent (Lloyd) |
Key Cases Cited
- New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) (Supreme Court interpreted FAA §1 to cover some independent‑contractor agreements for transportation workers)
- Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) (used ejusdem generis to limit FAA §1 exclusion to transportation workers)
- Singh v. Uber Techs., Inc., 939 F.3d 210 (3d Cir. 2019) (motion to compel arbitration standard: dismiss standard if arbitration agreement apparent from complaint)
- Lloyd v. HOVENSA, LLC, 369 F.3d 263 (3d Cir. 2004) (Third Circuit requires courts to stay, not dismiss, actions when ordering arbitration)
- Southland Corp. v. Keating, 465 U.S. 1 (1984) (FAA reflects strong federal policy favoring arbitration)