Richard GROSVENOR, Plaintiff-Appellee, v. QWEST CORPORATION; Qwest Broadband Services, Inc., Defendants-Appellants.
No. 12-1095.
United States Court of Appeals, Tenth Circuit.
Aug. 14, 2013.
730 F.3d 990
III
As we cannot affirm the district court‘s jurisdictional ruling on the record before us, we VACATE the district court‘s dismissal of this action and the denial of the plaintiffs’ motions for reconsideration and to amend. We REMAND with instructions for the district court to determine whether it has jurisdiction to act and, relatedly, to rule in the first instance whether the Class Action Fairness Act provides jurisdiction. We DENY the plaintiffs’ motion to supplement the record. We DENY as moot plaintiffs’ motion to strike and defendants’ motiоn for leave to file supplemental briefs.
Michael D. Lieder, Mehri & Skalet, PLLC, Washington, D.C. (Beth E. Terrell and Kimberlee L. Gunning, Terrell Marshall Daudt & Willie PLLC, Seattle, Washington; and Jeffrey A. Berens and Darby K. Kenney, Dyer & Berens LLP, Denver, CO, with him on the briefs), for the Plaintiff-Appellee.
Before BRISCOE, KELLY, and LUCERO, Circuit Judges.
LUCERO, Circuit Judge.
Qwest Corporation and Qwest Broadband Services, Inc. (collectively, “Qwest“) seek to appeal a district court order granting partial summary judgment. After Richard Grosvenor filed this putative class action, Qwest moved to compel arbitration under the Federal Arbitration Act (“FAA“),
Qwest argues that we possess interlocutory appellate jurisdiction to review the district court‘s summary judgment ruling because it constitutes “an order ... denying a petition under section 4 of [the FAA] to order arbitration to proceed.”
I
In December 2009, Grosvenor filed a complaint alleging that Qwest violated its “Price for Life Guarantee” by raising the price for internet service after he signed up for the program. Grosvenor asserted claims for breach of contract, promissory estoppel, unjust enrichment, and violation of the Colorado Consumer Protection Act,
Qwest responded with а motion to compel arbitration and to stay proceedings, filed pursuant to
Dispute Resolution and Arbitration; Governing Law. PLEASE READ THIS SECTION CAREFULLY. IT AFFECTS RIGHTS THAT YOU MAY OTHERWISE HAVE. IT PROVIDES FOR RESOLUTION OF DISPUTES THROUGH MANDATORY ARBITRATION WITH A FAIR HEARING BEFORE A NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE OR JURY OR THROUGH A CLASS ACTION.
(a) Arbitration Terms. You agree that any dispute or claim arising out of or relating to the Services, Equipment, Software, or this Agreement (whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory) will be resolved by binding arbitration. The sole exceptions to arbitration are that either party may pursue claims: (1) in small claims court that are within the scope of its jurisdiction, provided the matter remains in such court and advanсes only individual (non-class, non-representative, non-consolidated) claims; and (2) in court if they relate solely to the collection of any debts you owe to Qwest.
The agreement further provides that arbitration will be conducted by the American Arbitration Association and that the FAA will govern the proceedings. In response to the motion, Grosvenor averred that, to the best of his knowledge, he had never seen the Subscriber Agreement and had never been advised of its existence.
Qwest then submitted competing evidence showing that Grosvenor first ordered internet service from Qwest in 2006 under a “click-to-accept” procеss. Before completing installation of Quest‘s software, a customer is presented with a “LEGAL AGREEMENTS” screen that advises him to read the terms of an agreement, “including arbitration,” at a website address. The screen advises: “Your click on ‘I accept’ is an electronic signature to the agreements and contracts set out herein.”
The district court denied Qwest‘s motion to compel arbitration and its motion for a stay. It concluded that “Grosvenor has raised material questions of fact as to contract formation, including: whether he received the Subscriber Agreement, and whether he received the Welcomе Letters.” The court ordered the parties to “schedule a trial to determine whether a valid arbitration agreement exists.” It also entered a scheduling order to govern “the formation proceedings on Defendant‘s Motion to Compel Arbitration.”
Following discovery, Qwest filed a motion for partial summary judgment on the issue of whether Grosvenor had entered into an arbitration agreement. It argued that because the undisputed facts established contract formation and all claims at issue were “subject to mandatory arbitration under the terms of the Agreement and the Federal Arbitration Act ... Grosvenor should be compelled to arbitrate under the terms of his Subscriber Agreement.” Qwest requested the court “enter summary judgment that Qwest and Mr. Grosvenor entered into an arbitration agreement, as set forth in the Subscriber Agreement.” Qwest‘s motion noted that Grosvenor had also “argued that the arbitration clause was unconscionable under state law by virtue of its class action waiver” in prior briefing. Qwest stated that the argument had been foreclosed by a recent Supreme Court case and that it “will move for summary judgment on the unconscionability issues and to compel the agreed-upon arbitration.”
Grosvenor also moved for partial summary judgment, arguing that the Subscriber Agreement is illusory because Qwest “reserved to itself the unfettered right to amend” the contract. He pointed to section 4 of the Subscriber Agreement, which provides:
(a) at any time, effective upon posting to www.qwest.com/legal or any written notice to you, including e-mail [Qwest may] ... modify the Service and/or any of the terms and conditions of this Agreement....
(b) upon 30 days notice to you [Qwest may] ... change this Agreement or the Service in a way that directly results in a material and adverse economic impact to you. Qwest may reduce the foregoing notice period where commercially reasonable....
Your continued use of the Service and/or the Equipment constitutes acceptance of those changes. You must immediately stop using the Service and Equipment and cancel your Service if you do not agree to the changes.
Based on this provision, Grosvenor claimed that “the Subscriber Agreement in general, and the Dispute Resolution Provision in particular, are illusory and hence not part of the contract between Qwest and Mr. Grosvenor.” In its response to the motion, Qwest complained that Grosvenor‘s argument was raised for the first time after “two plus years of litigating Qwest‘s motion to compel arbitration.” It argued that the issue of whеther the Subscriber Agreement was illusory was an issue for the
After the summary judgment motions were filed, but before briefing on those motions was complete, the court entered a final pre-trial order to “govern[] the formation proceedings on Defendant‘s Motion to Compel Arbitration.” Grosvenor stated that the “only issue to be deсided” was whether Qwest would be able to “meet its burden at trial to show a valid arbitration agreement exists.” The order listed only two pending motions: the cross motions for summary judgment. In addition, the parties also noted that they anticipated filing several motions in limine.
In its order disposing of both summary judgment motions, the district court concluded that “Grosvenor manifested his assent to clearly-disclosed contractual terms that, among other things, included an agreement to arbitrate disputes.” However, it held that because “Qwest retained an unfettered ability to modify the existence, terms and scope of the arbitration clause, it is illusory and unenforcеable.” The court accordingly granted both motions for summary judgment and ordered the parties to set a scheduling conference “to address what remains to be done to prepare this matter for trial.” Qwest filed a notice of appeal twenty-five days later.
The notice of appeal identifies the summary judgment order by docket number as the order being appealed, characterizing it as a “final order denying Qwest‘s motion to compel arbitration.”
II
Grosvenor argues in his answer brief that this court lacks jurisdiction over Qwest‘s appeal.1 “[T]he question of this Court‘s jurisdiction (i.e., our appellate jurisdiction) is antecedent to all other questions.” Lang v. Lang (In re Lang), 414 F.3d 1191, 1195 (10th Cir.2005) (quotation and emphasis omitted). “Generally, only final decisions of the district court are appealable.” Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1275 (10th Cir.2001) (citing
A
The FAA provides that “[a]n appeal may be taken from“:
-
an order—
- refusing a stay of any action under section 3 of this title,
- denying a petition under section 4 of this title to order arbitration to proceed,
- denying an application under section 206 of this title to compel arbitration,
- confirming or denying confirmation of an award or pаrtial award, or
- modifying, correcting, or vacating an award;
- an interlocutory order granting, continuing, or modifying an injunction against an arbitration that is subject to this title; or
- a final decision with respect to an arbitration that is subject to this title.
In Conrad v. Phone Directories Co., 585 F.3d 1376 (10th Cir.2009), we thoroughly considered the scope of the FAA‘s interlocutory appeal provision. In that case, a plaintiff sued his former employer, advancing state tort and breach of contract claims. Id. at 1379. The employer filed a motion to dismiss in response to the complaint, asserting that the dispute was subject to arbitration under an employment agreement, that venue was improper, and that the complaint failed to state a claim. Id. Although “the arbitration agreement was an important part of [the] motion to dismiss, the motion did not ask the court to enforce the agreement under the FAA.” Id. The motion stated that if “the Court does not dismiss this matter for improper venue, the Court should issue an order compelling arbitration and dismissing Plaintiff‘s claims,” but it did not directly discuss § 3 or § 4 of the FAA. Conrad, 585 F.3d at 1379-80. “The only mention of either provision of the FAA came in a quotation in a parenthetical appended to the citаtion of a Third Circuit case....” Id. at 1380. Although the district court dismissed some of the state tort claims, it denied the employer‘s request to dismiss the complaint in full based on the arbitration provision because “genuine issues of material fact exist as to the applicability ... and as to the enforceability” of the employment agreement. Id. (quotation omitted). The employer filed an interlocutory appeal, asserting jurisdiction under
In considering our appellate jurisdiction, we noted that § 16(a) “ensur[es] that district court orders hostile to arbitration agreements can be immediately appealed” and that “our jurisdiction would be clear” if the employer had expressly filed a motion under FAA §§ 3 or 4. Conrad, 585 F.3d at 1381. Because the order being appealed from denied a motion to dismiss, however, the dispositive question as to our jurisdiction was whether “the phrases ‘under section 3’ in § 16(a)(1)(A) and ‘under section 4’ in § 16(a)(1)(B) encompass not only motions explicitly brought pursuant to those provisions, but also motions that in some manner contemplate the applicability of §§ 3 or 4 without mentioning them by name.” Conrad, 585 F.3d at 1381. Given that “Congress chose specifically to enumerate the limited conditions under which a non-final order may be appealed” in § 16(a), we concluded that the structure of the FAA “argues against our recognizing a further category of permitted appeals.” Conrad, 585 F.3d at 1382. We also noted that “we are bound to construe statutes conferring jurisdiction narrowly,” that “we prefer clear, bright-line rules” in the jurisdictional context, and that “there is a long-established policy preference in the federal courts disfavoring piecemeal appeals.” Id.
[T]he court must look beyond the caption to the essential attributes of the motion itself. The goal of this inquiry is to determine whether it is plainly apparent from the four corners of the motion that the movant seeks only the relief provided for in the FAA, rather than any other judicially-provided remedy. To do so, the court should look to the relief requested in the motion. If the essence of the movant‘s request is that the issues presented be decided exclusively by an arbitrator and not by any court, then the denial of that motion may be appealed under § 16(a).
Conrad, 585 F.3d at 1385-86 (citation omitted).
Phrased differently, the rule in this circuit is as follows: “in order to properly invoke appellate jurisdiction under the [FAA], the movant must either explicitly move to stay litigation and/or compel arbitration pursuant to the [FAA], or it must be unmistakably clear from the four corners of the motion that the movant seeks relief provided for in the FAA.” Id. at 1379. Several other circuits have adopted similar, although perhaps not identical, modes of analysis. See Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690, 698-99 (4th Cir.2012) (in determining jurisdiction under the FAA, courts must “look to whether a motion evidences a clear intention to seek enforcement of an arbitration clause“); Wabtec Corp. v. Faiveley Transp. Malmo AB, 525 F.3d 135, 140 (2d Cir.2008) (declining jurisdiction because motion “did not explicitly request the district court to direct that arbitration be held” (quotation omitted)); Fit Tech, Inc. v. Bally Total Fitness Holding Corp., 374 F.3d 1, 5 (1st Cir.2004) (exercising jurisdiction over order denying motion for reconsideration that included “explicit request for a reference to” an arbitrator and thus “was effectively a request for an order to arbitrate under section 4“); Bombardier Corp. v. Nat‘l R.R. Passenger Corp., 333 F.3d 250, 254 (D.C.Cir.2003) (no jurisdiction to review order denying motion to dismiss that “exhibited no intent to pursue arbitration” but “sought outright dismissal with no guarantee of future arbitration“).
B
In the appeal at bar, Qwest asserts that it is appealing an order denying its motion to compel arbitration. However, the only motion explicitly titled by Qwest as a motion to compel arbitration was denied by the district court on September 30, 2010. Qwest‘s notice of appeal, filed on March 19, 2012, is clearly untimely as to this order. See
Instead, Qwest‘s notice of appeal designates the district court‘s February 23, 2012, order as the subject of this appeal. And the notice of appeal is timely as to that order. Accordingly, the issue of whether we have appellate jurisdiсtion turns on whether the February 23 order is one “denying a petition ... to order arbitration” within the meaning of
The order is thus not one denying a motion to compel arbitration, at least on its face. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 628, 129 S.Ct. 1896, 173 L.Ed.2d 832 (2009) (appellate jurisdiction under FAA “must be determined by focusing upon the category of order appealed from“). Under Conrad, however, we must also look to the motions ruled upon to determine whether the FAA confers jurisdiction. See 585 F.3d at 1385-86. Grosvenor argues that Conrad precludes jurisdiction because Qwest is appealing from an order granting Grosvenor‘s motion for partial summary judgment. And it is clear that Grosvenor did not seek to compel arbitration in his motion for partial summary judgment. See id. at 1379 (to invoke interlocutory jurisdiction, “the movant must either explicitly move to stay litigation and/or compel arbitration pursuant to the [FAA], or it must be unmistakably clear from the four corners of the motion that the movant seeks relief provided for in the FAA“) (emphases added).
Qwest provides several arguments in response. First, it argues that Conrad does not stand for the proposition that the movant‘s requested relief is dispositive, but rather that the defendant‘s pleadings are the relevant filings. Qwest argued in response to Grosvenor‘s motion for partial summary judgment that the issue of illusoriness should be decided by the arbitrator. And the district court rejected this argument in the order Qwest seeks to appeal. However,
Nor do we think that Qwest‘s response can be considered a petition to order arbitration. Qwest did not request an order compelling arbitration in its response to Grosvenor‘s motion for summary judgment. See
Second, Qwest points to its motion for summary judgment as the relevant filing. We question whether Qwest can appeal the district court‘s grant of its own motion for summary judgment. “A party generally cannot appeal from a judgment in its favor.” Amazon, Inc., 273 F.3d at 1275 (citation omitted); see also Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir.1979) (“Cross-motions for summary judgment are to be treated separately; the denial of one does not require the grant of аnother.“). To treat Qwest‘s motion as the basis of its appeal, we would have to characterize the district court‘s order as denying an implicit request for an order to compel arbitration contained in Qwest‘s motion for summary judgment.
Although Qwest noted in its motion that “Grosvenor should be compelled to arbitrate under the terms of his Subscriber Agreement,” this reference to arbitration is not dispositive. In Conrad, we concluded that a motion to dismiss did not qualify as one seeking FAA relief despite the movant‘s request that if “the Court does not dismiss this matter for improper venue, the Court should issue an order compelling arbitration.” 585 F.3d at 1379-80. Instead, the test set forth in Conrad for motions that are not captioned as seeking relief under the FAA is whether it is “unmistakably clear from the four corners of the motion that the movant seeks relief provided for in the FAA.” Id. at 1379. In applying this test, we “look to the relief requested in the motion.” Id. at 1385. Qwest did not ask the district court to enter an order compelling arbitration; it requested that the court “enter summary judgment that Qwest and Mr. Grosvenor entered into an arbitration agreement, as set forth in the Subscriber Agreement.” And most tellingly, Qwest plainly stated that a formal motion to compel arbitration would be forthcoming: Qwest notes in the motion that it “will move for summary judgment on the unconscionability issues and to compel the agreеd-upon arbitration.” Far from making it “unmistakably clear” that it sought an order to compel arbitration, id. at 1379, this statement demonstrates that Qwest was not seeking an order to compel arbitration in the motion for partial summary judgment itself. Instead, Qwest notified the district court that it would move for such an order in a future filing.
Qwest correctly notes that this case is not identical to Conrad. In particular, the defendant in Conrad never explicitly moved for an order compelling arbitration. See id. at 1379-80. In contrast, Qwest filed a motion to compel arbitration under
However, the district court denied the motion to compel arbitration outright rather than reserving its ruling. Contra Brooks v. Robert Larson Auto. Group, Inc., 2009 WL 2853452, at *4 (W.D.Wash. Sept. 1, 2009) (unpublished) (reserving ruling on a motion to compel arbitration pending a trial “to determine whether Plaintiff signed the arbitration agreement pursuant to
Despite Qwest‘s general reference to the overall thrust of the pleadings below,
In Campbell v. General Dynamics Government Systems Corp., 407 F.3d 546 (1st Cir.2005), the First Circuit considered an interlocutory appeal of a district court order denying the defendant‘s motion to compel arbitration and an order granting the plaintiff‘s motion to strike the defendant‘s affirmative defense of mandatory arbitration. Id. at 550. The appellate court concluded that although it possessed jurisdiction over the former order, it lacked the power to review the latter. An order granting a motion to strike “has no footing within the FAA‘s cache of statutory exceptions to the final judgment rule.” Id. at 551. Because “section 16(a) clearly enumerates the types of orders covered by the FAA‘s various jurisdictional shelters,” the court “decline[d] to treat that provision as a general mechanism permitting the immediate appeal of any order hostile to arbitration.” Campbell, 407 F.3d at 551. Like оur sibling circuit, we are unwilling to recognize a “further category of permitted appeals” based on the degree of hostility to arbitration given our obligation to “construe statutes conferring jurisdiction narrowly.” Conrad, 585 F.3d at 1382.
In its third and final argument in favor of appellate jurisdiction, Qwest contends that dismissing this appeal would result in “an FAA no man‘s land.” Qwest argues that an appeal from the September 30, 2010 order denying its motion to compel arbitration would not have been “ripe.” And it further claims that a plaintiff should not be permitted to rob a defendant of the right to an interlocutory appeal by obtain-
Qwest appears to take the position that it could not have appealed the district court‘s order denying its motion to compel arbitration because the court had not yet determined whether an arbitration agreement had been made. However, in Ansari v. Qwest Communications Corp., 414 F.3d 1214 (10th Cir.2005), we joined several other circuits in holding “that § 16(a)(1)(B) does not require a final determination of the merits of a petition to compel arbitration.” Ansari, 414 F.3d at 1217. We rejected a “final determination” requirement because the FAA “makes no such distinction. It expressly permits an appeal from a district court‘s order ‘dеnying a petition under section 4 ... to order arbitration to proceed.‘” Id. at 1217 (quoting
Nor are we persuaded that defendants are in danger of losing the right to an interlocutory appeal under the circumstances presented by this case. Although Qwest argues that the jurisdictional difficulty is caused by Grosvenor‘s success in obtaining summary judgment on an issue that may preclude arbitration, defendants in Qwest‘s position can avoid any such dilemma by simply filing a motion to compel arbitration at the summary judgment phase of a
Further, we do not view an explicit request for an order compelling arbitration to be a mere formality. As the present case demonstrates, a party may well prevail on a motion for partial summary judgment as to the existence of an agreement to arbitrate without obtaining an order compelling arbitration. Had Qwest explicitly filed a motion to compel, Grosvenor would have been obliged to assert each and every available defense to mandatory arbitration in a single response. However, because Qwest merely asked for partial summary judgment, Grosvenor was not required to do so. Although he prevailed on his own motion for partial summary judgment as to the illusory nature of the Subscriber Agreement, Qwest anticipated that Grosvenor would also interpose an unconscionability defense to a forthcoming motion to compel arbitration. Accordingly, even if we exercised jurisdiction over this appeal and reversed, we would not finally resolve the issue of arbitrability. On remand, Grosvenor might assert unconscionability or some other defense to arbitration, potentially leading to yet another interlocutory appeal. Such a proposed procedure runs contrary to the well-established “preference in the federal courts disfavoring piecemeal appeals.” Conrad, 585 F.3d at 1382; see also Oklahoma Tpk. Auth. v. Bruner, 259 F.3d 1236, 1241 (10th Cir.2001) (noting that the “historic federal policy against piecemeal appeals ... рromotes judicial efficiency
Qwest is threatened by neither Scylla nor Charybdis. It was free to file an interlocutory appeal of the district court‘s prior denial of its motion to compel arbitration and it could have expressly requested an order compelling arbitration at the summary judgment phase. Because Qwest did not explicitly seek such an order, but instead indicated that a formal motion to compel arbitration would be forthcoming, we conclude that it did not meet its burden of making “unmistakably clear” that it sought “relief provided for in the FAA” in the filings that lead to this appeal. See Conrad, 585 F.3d at 1379. Accordingly, we lack jurisdiction to reviеw the district court‘s order granting the parties’ motions for summary judgment.
III
For the foregoing reasons, the appeal is DISMISSED.
Eric WALKER; Shannon Walker, Plaintiffs-Appellees, v. BUILDDIRECT.COM TECHNOLOGIES, INC., Defendant-Appellant.
No. 12-6261.
United States Court of Appeals, Tenth Circuit.
Aug. 15, 2013.