JANE DOE, LUKE LOE, RICHARD ROE, MARY MOE, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED v. THE TRUMP CORPORATION, DONALD J. TRUMP, DONALD J. TRUMP, JR., ERIC TRUMP, IVANKA TRUMP; ACN OPPORTUNITY, LLC, Non-Party Appellant.
Docket Nos. 20-1228-cv/20-1278-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
July 28, 2021
August Term, 2020 (Argued: December 01, 2020)
Before: SACK, CHIN, AND LOHIER, Circuit Judges.
AFFIRM.
ROBERTA A. KAPLAN, Kaplan Hecker & Fink, LLP, New York, NY (John C. Quinn, Joshua
THOMAS R. MCCARTHY (Tiffany H. Bates, on the brief), Consovoy McCarthy PLLC, Arlington, VA, for Defendants-Appellants;
BENJAMIN GLASSMAN, Squire Patton Boggs (US) LLP, Cincinnati, OH (Benjamin Beaton, G. Luke Burton, Squire Patton Boggs (US) LLP, Cincinnati, OH, and Stephanie E. Niehaus, Nelson Law LLC, New York, NY, on the brief), for Non-Party Appellant.
SACK, Circuit Judge:
This case arises out of the defendants-appellants’ allegedly fraudulent, misleading, and deceptive statements. The plaintiffs-appellees assert that, through these statements, the defendants – the Trump Corporation, Donald J. Trump, and members of his family – induced them to enter into business relationships with non-party appellant, ACN Opportunity, LLC (“ACN“). ACN is a “multi-level marketing” company that enlists individuals to work on its behalf as “Independent Business Owners.” While allegedly accepting large, secret payments from ACN, the defendants publicly represented that they were independent of the company and, as such, promoted ACN as a business opportunity that offered a
The plaintiffs brought suit in the United State District Court for the Southern District of New York. After more than ten months of litigation and the court‘s denial in part of a motion to dismiss the complaint pursuant to
While the defendants’ motion to compel arbitration was pending, the plaintiffs sought third-party discovery from ACN and served it with a subpoena duces tecum to that end. ACN objected to the production of documents and – in response to the plaintiffs’ motion to compel discovery from it – requested that the district court compel arbitration.
The district court (Lorna G. Schofield, Judge) denied the defendants’ and ACN‘s motions to compel arbitration. Doe v. Trump Corp., 453 F. Supp. 3d 634, 637 (S.D.N.Y. 2020); A.538-40; A.544-58. The defendants and ACN appeal from those denials. The defendants argue that the district court erred in denying their motion because (1) the question of arbitrability must be decided by the arbitrator; (2) they are entitled to enforce the arbitration agreement under principles of equitable estoppel; and (3) they did not waive their right to arbitration. ACN argues that the district court erred in denying its motion to compel arbitration because (1) the district court had an independent jurisdictional basis over its motion to compel; (2) the arbitrator, rather than the district court, should have decided the threshold question of arbitrability; and (3) ACN is entitled to enforce the arbitration agreement under the doctrine of equitable estoppel.
The truth or falsity of the plaintiffs’ allegations is not before us. We neither express nor imply any views with respect to them. The only question before us is whether this case should be resolved before the district court or an arbitrator. See Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 118 (2d Cir. 2010) (“[T]he instant appeal considers whether the district court correctly held that [the plaintiff‘s]
For the reasons set forth below, we conclude that the defendants are not entitled to have the district court enforce the arbitration agreement under equitable estoppel principles or otherwise and that the district court lacked an independent jurisdictional basis over ACN‘s motion to compel. We therefore affirm the district court‘s orders denying the defendants’ and ACN‘s motions to compel arbitration.
BACKGROUND
The Plaintiffs’ Allegations
Non-party appellant ACN1– a “multi-level marketing” company2 – offers business opportunities to what it calls Independent Business Owners (“IBOs“) in exchange for a sign-up fee and annual renewal fees. IBOs can earn relatively small commissions by selling ACN‘s products and services to consumers or recruiting
More specifically, the plaintiffs allege that in exchange for millions of dollars in secret payments from ACN to the defendants between 2005 and 2015, the defendants fraudulently promoted and endorsed ACN as offering legitimate business opportunities that were likely to afford IBOs success. The defendants allegedly misled consumers, including the plaintiffs, to believe that: (1) IBOs would have a reasonable likelihood of commercial success if they invested in ACN; (2) the defendant Donald J. Trump was independently promoting and endorsing the ACN business opportunity because he thought that it offered a reasonable probability of commercial success for investors; and (3) Mr. Trump‘s endorsement was predicated on the defendants’ due diligence, familiarity with ACN and its business, and personal experience with ACN. The defendants conveyed this message in various forums, including at ACN events, in ACN
This message, however, was allegedly materially false. Contrary to the defendants’ representations that ACN‘s business opportunity was a low-risk entrepreneurial venture that offered investors a viable source of income, investigations by regulatory agencies allegedly have demonstrated that ACN‘s business was high-risk and that investors had a minimal likelihood of commercial success. Despite claims that ACN‘s business opportunity would be highly profitable for investors, it is nearly impossible for IBOs to profit or earn a satisfactory income from such multi-level marketing arrangements. According to the amended complaint, multiple reports have found that multi-level marketing participants experience “extraordinary” loss rates, with the vast majority of ACN‘s IBOs suffering losses or earning minimal profits. In addition, while the defendants allegedly claimed to have conducted extensive due diligence and research regarding the ACN business opportunity and to have had access to inside information or personal experience with ACN, these statements were untrue. The
The plaintiffs further allege that they all initially approached the ACN recruitment process with skepticism and that, for each of them, the defendants’ allegedly false and misleading statements about ACN were the “turning point” that persuaded them to invest. After they enlisted as IBOs, each plaintiff was allegedly further persuaded by the defendants’ endorsements to increase their investments in ACN. The plaintiffs, however, assert that none of them succeeded in making a profit from the relationship or even earning back the money that they had invested in ACN. The plaintiffs eventually concluded that the defendants’ representations about ACN‘s business opportunity were false and therefore decided to abandon their pursuit of their ACN-based businesses.
The Arbitration Agreements with ACN
ACN has represented, and it is assumed for purposes of these appeals, that in order to pursue his or her ACN-based business, each plaintiff entered into a contract with ACN (an “IBO agreement“). Because the plaintiffs allege that they enrolled in the ACN business opportunity in 2013, 2014, and 2016 the IBO
The 2013 and 2014 versions of the IBO agreement also contain the following arbitration clause:
In the event of a dispute between me [(the investor signing the agreement)] and ACN as to our respective rights, duties and obligations arising out of or relating to this Agreement, it is agreed that such disputes shall be exclusively resolved through binding arbitration before the American Arbitration Association pursuant to the Commercial Rules of Arbitration. The arbitration shall be held in Charlotte, North Carolina before a panel of three arbitrators, each side choosing one and then the two choosing the third. . . . The laws of the state of North Carolina will apply to the resolution of the dispute unless otherwise agreed in writing.
A.436 ¶ 16; A.439 ¶ 16.
The 2016 version of the IBO agreement also contains an arbitration clause:
In the event of a dispute between ACN and me [(the investor signing the agreement)] as to our respective rights, duties and obligations arising out of or relating to this Agreement, it is mutually agreed that such disputes shall be exclusively resolved through the process and according to the provisions specified in Section II.B. of the ACN Policies and Procedures (“Dispute Resolution Provisions“). . . . The Dispute Resolution Provisions require, without limitation, and except as otherwise expressly stated, that ACN and I will resolve all disputes through binding arbitration before the American Arbitration Association pursuant to the Commercial Rules of Arbitration. Both ACN and I agree that all disputes will be resolved on an individual basis and that each may only bring claims against the other in an individual capacity (and not as a claimant or class member in any purported class or representative proceeding).
A.442 ¶ 17.
Procedural History
In October 2018, the plaintiffs brought a putative class action against the defendants, but not ACN, in the United States District Court for the Southern District of New York. The complaint alleged racketeering and conspiracy to conduct a racketeering enterprise in violation of
When the plaintiffs filed the complaint, they simultaneously moved for an order permitting them to proceed under pseudonyms. On December 10, 2018, the defendants filed a pre-motion letter requesting leave to file a motion to dismiss. The defendants filed a separate letter requesting a stay of all discovery pending resolution of the motion to dismiss.
Ten days later, on December 20, 2018, the district court issued an order granting the plaintiffs’ motion for leave to proceed under pseudonyms “until a decision on the motion to dismiss and may be renewed at that time.”4 A.207; Dist. Ct. Dkt. 54. The district court‘s order also stayed discovery pending resolution of the defendants’ motion to dismiss. On December 21, 2018, the district court authorized the plaintiffs to serve a non-party subpoena on ACN requiring ACN to preserve documents relevant to this lawsuit.
On January 14, 2019, the defendants moved to dismiss the complaint pursuant to
Central to this appeal, on July 11, 2019, the defendants notified the plaintiffs – pursuant to the district court‘s individual rules – that they intended to move the court for an order compelling the plaintiffs to arbitrate their claims against the defendants and “stay[ing] litigation of this action pending completion of the arbitration[.]” SA.16. Eight days later, on July 19, 2019, the defendants filed a pre-motion letter arguing that “in addition to failing to state a claim upon which relief may be granted, Plaintiffs’ claims are arbitrable.” SA.14. Because there was a motion to dismiss the complaint then pending before the court, the defendants requested the district court‘s guidance as to how to proceed with respect to their motion to compel arbitration.
On July 24, 2019, the district court granted in part and denied in part the motion to dismiss. The court dismissed the plaintiffs’ federal racketeering claims but declined to dismiss the state-law claims.
On August 1, 2019, the defendants filed a letter requesting a stay of discovery pending resolution of the motion to compel arbitration. The district court extended the stay of discovery through a status conference scheduled for September 5, 2019. At that conference, the district court set a briefing schedule for the motion to compel arbitration but lifted the stay on discovery. The same day, the district court also entered a case management plan.
The defendants timely filed their motion to compel arbitration. They argued that the plaintiffs had agreed to arbitrate any disputes arising out of, or related to, their IBO agreements and that the plaintiffs’ claims were thus covered by the arbitration agreements. The defendants also argued that principles of agency and estoppel allowed them – despite being non-signatories to the IBO agreements – to enforce the agreements to arbitrate against the plaintiffs. The defendants explicitly asserted that their motion to compel arbitration was timely.
While the defendants’ motion to compel arbitration was pending, the parties engaged in pre-trial discovery. On September 6, 2019, the plaintiffs served ACN with a subpoena duces tecum seeking 32 categories of documents including, among other things, communications and agreements between ACN and the defendants, ACN‘s promotional materials making reference to the defendants, any
ACN objected to the plaintiffs’ subpoena “to the extent it implicates or seeks to impair any right or remedy available to ACN pursuant to its agreements with the named Plaintiffs . . . or any other Independent Business Owner . . . including but not limited to ACN‘s right to have all disputes arising out of or related to its IBO agreements submitted to mandatory arbitration.” A.463 ¶ 1. On January 31, 2020, after ACN refused to comply with the subpoena, the plaintiffs moved to compel the production of documents from the company.
On February 14, 2020, ACN filed its brief in opposition to the plaintiffs’ motion to compel compliance with the subpoena. ACN requested that the district court compel arbitration of “this discovery dispute . . . along with all other disputes arising out of or in connection with [the plaintiffs‘] IBO agreements, whether those disputes are with ACN or the Trump Defendants.” Dist. Ct. Dkt. 168 at 9-10. ACN
One month later, on March 14, 2020, ACN submitted a letter to the district court requesting “limited, expedited relief” from the court‘s orders authorizing the plaintiffs to proceed under pseudonyms. A.515. ACN argued that this relief was “necessary to allow ACN to initiate actions against Plaintiffs with the American Arbitration Association (‘AAA‘).” Id.
On April 8, 2020, the district court denied the defendants’ motion to compel arbitration. In response to their assertion that they could require the plaintiffs to arbitrate under the doctrine of “equitable estoppel,” the court concluded that while the defendants had satisfied the so-called “intertwined-ness” prong of the test, they had failed to establish the second requirement for equitable estoppel: a close relationship among the signatories to the arbitration agreement – the plaintiffs and ACN – and the non-signatory defendants. Trump, 453 F. Supp. 3d at 640-43. The district court also rejected the defendants’ agency theory – that the defendants
At a conference the next day, the district court – ruling from the bench – granted in part the plaintiffs’ motion to compel subpoena compliance and denied ACN‘s cross-motion to compel arbitration. The court first noted “ambiguity” in ACN‘s briefing as to whether it was seeking to compel arbitration of the discovery dispute or of the entire case. A.553. ACN responded that it was appropriate to compel arbitration as to both the “appropriate scope of discovery” and “the entire matter, given that the entire matter implicates a dispute with ACN.” A.554.
The district court concluded that ACN was not a party to the lawsuit and therefore had “no standing” to make an application to move the dispute to another forum. A.554; see also A.558. To the extent that ACN was suggesting in substance that the suit by the plaintiffs against the defendants was a “dispute with ACN,” the court disagreed and declined to order arbitration on that basis. A.558. Addressing ACN‘s request to compel arbitration of the discovery dispute only, the court
Plaintiffs’ discovery requests here arise out of and relate to this lawsuit. And the lawsuit is about defendants’ purported bad acts, not about plaintiffs’ rights, duties, or obligations under the IBO agreement[s between the plaintiffs and ACN].
A.556. Relying on Vaden v. Discover Bank, 556 U.S. 49, 66 (2009), and Landau v. Eisenberg, 922 F.3d 495, 497 (2d Cir. 2019), the court also held that it lacked jurisdiction to compel arbitration of the discovery dispute.
The district court issued a written order later that day, inter alia, denying ACN‘s motion to compel arbitration of the discovery disputes and granting the plaintiffs’ motion to compel “ACN to produce documents in response to Plaintiffs’ subpoena duces tecum[.]” A.539. The district court also denied ACN‘s request for relief from the court‘s orders authorizing the plaintiffs to proceed under pseudonyms “to the extent that ACN seeks relief that is broader than the [c]ourt‘s direction to Plaintiffs and ACN to confer regarding the provisions of the protective order.” A.540.
On April 13, 2020, the defendants appealed the district court‘s April 8, 2020 Opinion and Order “denying Defendants’ Motion to Compel Arbitration, and from any and all of the [c]ourt‘s rulings adverse to [the] Defendants incorporated
DISCUSSION
I. Standard of Review
“We review de novo the denial of a motion to compel arbitration[,]” Meyer v. Uber Techs., Inc., 868 F.3d 66, 72 (2d Cir. 2017), and the “issue of [whether] arbitrability is for the court or for the arbitrator[,]” Contec Corp. v. Remote Sol. Co., 398 F.3d 205, 208 (2d Cir. 2005) (internal quotation marks omitted).
II. The Trump Defendants’ Motion to Compel Arbitration
On appeal, the defendants argue that the district court erred in denying their motion to compel arbitration for three reasons. First, they assert that under Contec the district court should have referred the questions of equitable estoppel and waiver to the arbitrator for resolution. Second, they argue that they are entitled to enforce the plaintiffs’ arbitration agreements with ACN under equitable estoppel
We agree with the district court that the defendants may not compel the plaintiffs to arbitrate this dispute based on equitable estoppel principles and affirm the district court‘s order on that basis. We therefore need not determine whether the defendants waived their right to arbitration.
1. Contec
The defendants argue that the district court erred in denying their motion to compel arbitration on equitable estoppel and waiver grounds because Contec requires that those issues be referred to the arbitrator. The plaintiffs assert, however, that the defendants forfeited this argument by failing to make it before the district court.6 The plaintiffs further contend that – even if this argument
“[W]here the claimant is represented by counsel before the district court, the claimant must present the relevant legal arguments in that forum in order to preserve them for appellate review.” Poupore v. Astrue, 566 F.3d 303, 306 (2d Cir. 2009); see also Allianz Ins. Co. v. Lerner, 416 F.3d 109, 114 (2d Cir. 2005) (“[I]t is a well-established general rule that an appellate court will not consider an issue raised for the first time on appeal.” (alteration in original) (internal quotation marks omitted)). “‘[M]erely typing out the [key] words’ or ‘merely incant[ing] the [key] phrase’ ‘without offering any argument or explanation of the point’ to argument may not be revived. See United States v. Yu-Leung, 51 F.3d 1116, 1122 (2d Cir. 1995) (“If a party‘s failure to take an evidentiary exception is simply a matter of oversight, then such oversight qualifies as a correctable ‘forfeiture’ for the purposes of plain error analysis. If, however, the party consciously refrains from objecting as a tactical matter, then that action constitutes a true ‘waiver,’ which will negate even plain error review.“); Am. Home Assurance Co. v. A.P. MollerMaersk A/S, 609 F. App‘x 662, 664 (2d Cir. 2015) (summary order) (“Given that waiver means that the ‘relinquish[ment]’ was ‘knowing[] and intelligent[],’ the effect of waiver is that there was no error, and hence even plain-error analysis is unavailable.” (citations omitted)). We need not decide whether the defendants’ failure to press their Contec argument before the district court rises to the level of waiver, because we conclude that the defendants forfeited any such argument.
While we may exercise our discretion to consider forfeited arguments, the defendants fail to present a compelling reason for our doing so here. Indeed, the defendants’ passing citation to Contec in the briefing submitted to the district court suggests that they may have been aware of this argument but failed to raise
2. Equitable Estoppel
We now turn to the district court‘s determination that the defendants are not entitled to compel the plaintiffs to arbitrate their dispute under the doctrine of equitable estoppel. As a preliminary matter, the parties dispute whether we should apply North Carolina law or “federal common law” in order to resolve this question.8 The district court acknowledged that “state law governs whether a non-signatory may enforce an arbitration clause,” but instead relied on “Second
a. Legal Standard
Arbitration is a creature of contract; a party therefore cannot be required to submit to arbitration any dispute which it has not agreed to submit. Ragone, 595 F.3d at 126. Nevertheless, “we have recognized a number of common law
In Choctaw Generation Ltd. Partnership v. American Home Assurance Co., 271 F.3d 403 (2d Cir. 2001), we observed (with approval) that other circuits had recognized an estoppel theory requiring arbitration between a signatory and a non-signatory where
the relationships of persons, wrongs and issues, in particular whether the claims that the nonsignatory sought to arbitrate were intimately founded in and intertwined with the underlying contract obligations. . . . In this way, the circuits have been willing to estop a signatory from avoiding arbitration with a nonsignatory when the issues the nonsignatory is seeking to resolve in arbitration are intertwined with the agreement that the estopped party has signed.
Id. at 406 (internal quotation marks and emphasis omitted); accord Ragone, 595 F.3d at 126–27. “This does not mean, however, ‘that whenever a relationship of any kind may be found among the parties to a dispute and their dispute deals with the subject matter of an arbitration contract made by one of them, that party will be estopped from refusing to arbitrate.‘” Ragone, 595 F.3d at 127 (quoting Sokol Holdings, Inc. v. BMB Munai, Inc., 542 F.3d 354, 359 (2d Cir. 2008)). “‘In addition to the ‘intertwined’ factual issues, there must be a relationship among the parties of a nature that justifies a conclusion that the party which agreed to
This test is used to assess whether the agreement to arbitrate can be “reasonably seen on the basis of the relationships among the parties as extending not only to [the other signatory], but also to [a non-signatory related to the latter], an entity that was, or would predictably become, with [the] knowledge and consent [of the party opposing arbitration], affiliated or associated with [the other signatory] in such a manner as to make it unfair to allow [the party opposing arbitration] to avoid its commitment to arbitrate on the ground that [the non-signatory] was not the very entity with which [the party opposing arbitration] had a contract.” Ross v. Am. Express Co., 547 F.3d 137, 146 (2d Cir. 2008) (alterations in original) (internal quotation marks omitted). In other words, the relationship between the parties must either support the conclusion that the signatory effectively consented to extend its agreement to arbitrate to the non-signatory, “or, otherwise put, made it inequitable for [the signatory] to refuse to arbitrate on the ground that it had made no agreement with [the non-signatory].”
Applying this test, our “cases which have applied estoppel against a party seeking to avoid arbitration have tended to share a common feature in that the non-signatory party asserting estoppel has had some sort of corporate relationship to a signatory party; that is, this Court has applied estoppel in cases involving subsidiaries, affiliates, agents, and other related business entities.” Ross, 547 F.3d at 144. It makes rather obvious sense to prevent an entity from avoiding its
b. Application
In order to establish equitable estoppel in the present context so as to bind a signatory of a contract (here, the plaintiffs) to arbitrate with one or more non-signatories (here, the defendants), there must be a close relationship among the signatories and non-signatories such that it can reasonably be inferred that the
The defendants rely heavily on Ragone to support their theory of equitable estoppel. But Ragone is inapposite. There, the plaintiff was required to arbitrate her employment discrimination and sexual harassment claims against both the signatory to her employment and arbitration agreement, Atlantic Video (“AVI“), and a non-signatory, ESPN, which “she understood . . . to a considerable extent, [to be] her co-employer.” Ragone, 595 F.3d at 127. Although the plaintiff‘s initial employment records and arbitration agreement did not mention ESPN, the plaintiff understood that she was hired by AVI specifically to work for ESPN (which was a significant client of AVI), she was required to follow the instructions and directives of ESPN personnel and supervisors, she was “supervised by ESPN personnel in the ordinary course of her daily duties,” and she alleged that she had been harassed by ESPN employees. Id. at 127-28; Ragone v. Atl. Video at Manhattan Ctr., No. 07 CIV. 6084 (JGK), 2008 WL 4058480, at *9 (S.D.N.Y. Aug. 29, 2008).
III. ACN‘s Motion to Compel Arbitration
On appeal, ACN argues that the district court erred in several respects in denying its motion to compel arbitration. First, ACN contends that the district court erred in concluding that it lacked jurisdiction to entertain the motion. Second, ACN argues that the district court erred in ruling that the discovery dispute did not fall within the scope of the arbitration agreement between it and the plaintiffs because the arbitration agreement delegates threshold questions of arbitrability to the arbitrator and that question was therefore one for the arbitrator, not the court, to decide. Third, ACN argues that the doctrine of equitable estoppel bars the plaintiffs from avoiding arbitration.
Because, as explained below, the district court correctly concluded that it lacked jurisdiction to grant ACN‘s motion to compel and that issue alone is dispositive, we decline to address ACN‘s argument that the district court erred in
1. Jurisdiction
a. Legal Standard
“The party asserting subject matter jurisdiction carries the burden of establishing, by a preponderance of the evidence, that jurisdiction exists.” Landau v. Eisenberg, 922 F.3d 495, 497 (2d Cir. 2019). “This Court reviews issues of subject matter jurisdiction, which turn on questions of law, de novo.” Id.
“As for jurisdiction over controversies touching arbitration,” the Federal Arbitration Act (“FAA“) “is something of an anomaly in the realm of federal legislation: It bestow[s] no federal jurisdiction but rather requir[es] [for access to a federal forum] an independent jurisdictional basis over the parties’ dispute.” Vaden v. Discover Bank, 556 U.S. 49, 59 (2009) (alterations in original) (internal quotation marks omitted).
Section 4 of the FAA provides that a party aggrieved by the failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration
may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action
or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.
Section 4 therefore allows a party seeking to compel arbitration to obtain federal court assistance “only if, ‘save for’ the agreement, the entire, actual ‘controversy between the parties,’ as they have framed it, could be litigated in federal court.” Id. The relevant “controversy ” is the “substantive conflict between the parties.” Id. at 63 (internal quotation marks omitted). Moreover, the “‘parties’ to which § 4 of the FAA refers are the parties to the petition to compel.” Doctor‘s Assocs., Inc. v. Distajo, 66 F.3d 438, 445 (2d Cir. 1995).
The district court denied ACN‘s motion to compel arbitration because it concluded that it lacked an independent jurisdictional basis over ACN‘s discovery dispute with the plaintiffs. In reaching this conclusion, the district court rejected ACN‘s characterization of the underlying litigation as “in some way a dispute with ACN.” A.558. ACN argues that the district court‘s reasoning was flawed, because “instead of focusing on Plaintiffs’ underlying federal-court lawsuit, which precipitated the ‘actual, entire controversy’ here, the court broke off a small piece from that controversy (ACN‘s and Plaintiffs’ discovery dispute)[.]” ACN Br. at 44. ACN contends that the controversy at issue here is “not merely a ‘discovery dispute,‘” but rather a dispute “between Plaintiffs and ACN over their respective obligations and performance under the IBO [a]greements[.]” Id. at 46-47. ACN‘s position, however, finds no support in either the record or the law.
There is no actual case or controversy between the plaintiffs and ACN (largely, it would appear, because the plaintiffs chose not to assert one) and therefore no subject-matter jurisdiction. See Nicosia v. Amazon.com, Inc., 834 F.3d 220, 239 (2d Cir. 2016) (“Article III limits federal judicial power to the resolution
Community State Bank v. Strong, 651 F.3d 1241 (11th Cir. 2011), which ACN relies upon for support, does not persuade us to reach a different result. There, the plaintiff obtained short-term – or “payday” – loans through loan servicers. The plaintiff filed suit against the loan servicers, asserting harm from those transactions. Id. at 1248-50. The plaintiff did not, however, assert any claim
The Eleventh Circuit‘s reasoning, however, is inconsistent with the Supreme Court‘s decision in Vaden (although it cites Vaden as “rais[ing] a substantially similar jurisdictional question,” id. at 1247), and we therefore find it to be unpersuasive. In Vaden, the Supreme Court expressly rejected the
Accordingly, applying Vaden, the Fourth Circuit declined to follow the Eleventh Circuit‘s reasoning in Strong in a case involving facts strikingly similar to those in that case. See Cmty. State Bank v. Knox, 523 F. App‘x 925, 930-32 (4th Cir. 2013) (unpublished opinion). The Knox court concluded that the district court had correctly dismissed the bank‘s petition to compel arbitration because there was no underlying dispute between the plaintiff and the bank. Id. at 930. In so holding, the court rejected the bank‘s efforts to reframe the dispute or
We agree with the reasoning of Knox and conclude that it applies with equal force here. The only dispute between ACN and the plaintiffs is about discovery. ACN‘s characterization of the underlying litigation as a dispute between the plaintiffs and ACN over their respective obligations and performance under the IBO agreements is inconsistent with the plaintiffs’ complaint and the claims asserted against the defendants. We will not accept ACN‘s invitation to “dream up counterfactuals when actual litigation has defined the parties’ controversy.” Vaden, 556 U.S. at 68. Because there is no actual case or controversy between ACN and the plaintiffs, the district court correctly
2. Equitable Estoppel
ACN argues, in the alternative, that it is entitled to invoke equitable estoppel to compel the plaintiffs to arbitrate their claims against the defendants. The plaintiffs counter that ACN forfeited this argument by failing to present it to the district court and that, in any event, ACN‘s equitable estoppel theory lacks merit because the law of equitable estoppel applies where a non-signatory seeks to enforce an arbitration agreement.
In its request to compel arbitration, ACN never invoked the theory of equitable estoppel or mentioned it as a basis for compelling arbitration. Nor did ACN invoke any such argument when responding to the district court‘s questions regarding its motion to compel arbitration at the April 9, 2020, status conference. ACN nevertheless argues that it preserved this argument by “incorporat[ing] by reference the applicable facts and authorities set forth in [d]efendants‘” motion to compel arbitration. ACN Reply Br. at 20. Such conclusory and generalized references to previously filed briefs are inadequate to preserve an issue for appeal. See, e.g., Mario v. P & C Food Mkts., Inc., 313 F.3d 758, 766 (2d Cir. 2002) (plaintiff‘s
CONCLUSION
We have considered the defendants’ and ACN‘s remaining arguments on appeal and conclude that they are without merit. We therefore AFFIRM the orders of the district court denying the defendants’ and ACN‘s motions to compel arbitration.