W & T Travel Services, LLC v. Priority One Services, Inc.
69 F. Supp. 3d 158
D.D.C.2014Background
- W&T Travel Services, LLC sued Priority One Services, Inc. to enjoin a second arbitration of a contract dispute.
- The Subcontract includes an arbitration clause requiring AAA arbitration for all claims arising under the Subcontract, with arbitrator jurisdiction over arbitrability.
- NIH awarded a Prime Contract to W&T in 2008; five-year term with options; Subcontract tied to Prime Contract extensions.
- In 2009 the Subcontract was terminated by W&T; in 2009-2010 AAA arbitration awarded Priority One damages for lost profits in option years 1 and 2, later confirmed by courts.
- NIH exercised option years 3 and 4; Priority One sought a second arbitration in 2013-2014 for losses arising from option years 3-4 and the 2013 Prime Contract, prompting this suit.
- The court denied stay of arbitration and granted dismissal, holding arbitrability vested in the arbitrator and that all claims are to be decided by arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides arbitrability—the court or arbitrator? | W&T argues arbitrability is a judicial question. | Priority One contends the Subcontract assigns arbitrability to the arbitrator. | Arbitrator decides arbitrability. |
| Does the Subcontract authorize arbitrability to be decided by AAA under its rules? | Subcontract lacks ongoing applicability post-termination to justify arbitration. | Subcontract broad clause and incorporation of AAA rules show arbitrator authority over arbitrability. | Yes, arbitrability to be decided by arbitrator. |
| Is the Subcontract's arbitration clause still enforceable after termination? | Termination negates arbitration obligation; no live dispute under the Subcontract. | Arbitration clause survives termination and covers disputes arising before or related to the Subcontract. | Arbitration clause remains enforceable post-termination. |
| Should the case be dismissed or stayed given all issues are arbitrable? | Case should not be dismissed since arbitrability is unsettled. | All claims are arbitrable; case should be dismissed and referred to arbitration. | Dismissal is appropriate; all claims belong to arbitration. |
Key Cases Cited
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (arbitration is a matter of contract; threshold question of arbitrability)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (gateway questions for arbitrability for courts)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (clear and unmistakable evidence required to submit arbitrability to arbitrator)
- AT&T Technologies, Inc. v. Commc'n Workers of Am., 475 U.S. 643 (1986) (court may determine arbitrability unless agreement clearly and unmistakably provides otherwise)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (limits on arbitrability questions reserved to court unless agreement assigns them to arbitrator)