ORDER GRANTING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION; DENYING DEFENDANTS’ MOTION TO COMPEL ARBITRATION
I. INTRODUCTION
On November 5, 2012, Plaintiffs Pension Plan for Pension Trust Fund for Operating Engineers (“Fund”) and F.G. Crosthwaite and Russell E. Burns as trustees (collectively “Plaintiffs”) filed a Complaint seeking money judgment against Defendants Weldway Construction, Inc. (“WCI”) and Weldway, Inc. (“Weldway,” collectively “Defendants”). Plaintiffs seek to recover withdrawal liability and related damages from Defendants pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”). Presently before the Court are two Motions: (1) Plaintiffs Motion for a Preliminary Injunction Enjoining Defendants from Participating in Arbitration Proceedings or, in the Aternative, for Stay of Abitration Proceedings (“Plaintiffs Motion”); and (2) Defendant’s Cross-Motion to Compel Abitration (“Defendant’s Motion”). The parties have consented to the jurisdiction of a United States Magistrate Judge pursuant to 28 U.S.C. § 636(e). For the reasons discussed below, the Court GRANTS Plaintiffs’ Motion and DENIES Defendants’ Motion.
II. BACKGROUND
A. Complaint
Plaintiffs state that the Fund is (a) an “employee benefit plan” as defined in ERISA § 3(3) (29 U.S.C. § 1002(3)), (b) an “employee benefit pension plan” as defined in ERISA § 3(2) (29 U.S.C. § 1002(2)), and (c) a “multiemployer plan” as defined in ERISA §§ 3(37) and 4001(a)(3) (29 U.S.C. §§ 1002(37) and 1301(a)(3)). Complaint, ¶ 5.
Plaintiffs allege that WCI was a participating employer in the Fund pursuant to a collective bargaining agreement (“CBA”) with the Operating Engineers Local Union No. 3 (“Union”). Id. at ¶ 13. Plaintiffs state that WCI was obligated to and did make contributions to the Fund on behalf of its employees covered under the CBA until about September 1, 2009, when it made a complete withdrawal from the Fund subjecting itself to withdrawal liability. Id. at ¶¶ 13-14. Plaintiffs allege that Defendants Weldway and WCI are members of the same controlled group, and as such are jointly liable for withdrawal liability. Id. at ¶ 3. Plaintiffs also allege that Defendants failed to provide sufficient information to identify each member of their controlled group. Id. at ¶ 32. Plaintiffs allege causes of action for violations of ERISA § 4219 and ERISA § 4219(a) and seek monetary damages, liquidated damages, costs, attorneys’ fees, and injunctive relief. Id. at ¶¶ 29-30, 34-35 (citing 29 U.S.C. §§ 1381,1399(a)).
B. Factual Background
Plaintiffs state that WCI withdrew from participation in the Fund during the plan year beginning January 1, 2009. Plaintiffs’ Motion, 3. On October 25, 2010, Plaintiffs sent WCI a letter that they had not, at that time, discovered any billable discrepancies in their account for the period running from January 1, 2008 to December 31, 2009. Declaration of Steve Brooks in Support of Defendants’ Reply (“Brooks Declaration”), Ex. 1. On September 16, 2011, Plaintiffs sent WCI a notice of delinquency relating to May, 2004. Id. at Ex. 2. On October 4, 2011, Plaintiffs sent WCI a letter to confirm that the prior delinquency notice had been sent in error. Id. at Ex. 3.
In a December 7, 2011 letter addressed to WCI, Plaintiffs notified WCI that they had assessed it with withdrawal liability in the sum of $133,812. Plaintiffs’ Motion, 3 (citing Declaration of Greg Trento in Support of Plaintiffs’ Motion (“Trento Declaration”), ¶ 11). Plaintiffs argue that Defendants were required to request review of the assessment by March 10, 2012. Id. (citing ERISA § 4219(b); 29 U.S.C. § 1399(b)(2)). Weldway received the letter on December 8, 2011. Declaration of Aurelio J. Perez in Support of Defendants’ Motion (“Perez Declaration”), Ex. 2.
On December 14, 2011, Weldway responded to Plaintiffs’ letter stating that Plaintiffs’ letter was sent in error because Plaintiffs had confused Weldway with WCI. Plaintiffs’ Motion, 3 (citing Declaration of Julie A. Ostil in Support of Plaintiffs’ Motion (“Ostil Declaration”), ¶ 6, Ex. E). Weldway elaborated that it, unlike WCI, has never been a signatory to any union agreements. Id. (citing Ostil Declaration, ¶ 6, Ex. E). Rather, Weldway’s position was that WCI withdrew from the Fund because it went out of business, but Weldway never had any connection with the Fund. On December 15, 2011, Plaintiffs’ counsel spoke to Steven Brooks (“Brooks”), the purported owner of Weld-way and WCI. Id. (citing Ostil Declaration, ¶ 7). Plaintiffs’ counsel claims that she requested additional information to evaluate Weldway’s contentions set forth in the December 14, 2011 letter. Id. (citing Ostil Declaration, ¶ 7). Brooks contests this assertion. Brooks Declaration, ¶ 21. Brooks agrees that Plaintiffs’ counsel was planning on performing a further review, but he believed Plaintiffs’ counsel would notify him if they had reason to believe their assessment was valid. Id. at ¶¶ 22-24. Based on the ensuing six months of silence, he assumed that the Fund had conceded his position. Id. at ¶ 25.
On May 30, 2012, Plaintiffs’ counsel sent a letter to Brooks, referencing a conversation “earlier this year,” summarizing the content of that conversation, and requesting documents to verify Brooks’ purported position. Plaintiffs’ Motion, 3-4 (citing Os-til Declaration, ¶ 8, Ex. F). Plaintiffs contend that counsel was reiterating requests made during the December 15, 2011 phone call. Id. at 3
Defendants assert that after Weldway sent the December 14, 2011 letter Plaintiffs did not request any documentation until Plaintiffs’ May 30, 2012 letter. Defendants’ Motion, 1-2. Moreover, Defendants initially called into question the timing of the purported December 15, 2011 phone conversation by noting that Plain
On June 20, 2012, Weldway’s counsel sent a letter responding to Plaintiffs’ May 30, 2012 letter. Plaintiffs’ Motion, 4 (citing Ostil Declaration, ¶ 9, Ex. G). The letter restated Weldway’s position as laid out in the December 14, 2011 letter and included the Articles and Bylaws of both Weldway and WCI, which Plaintiffs deemed unresponsive to their document request. Id. at 4 (citing Ostil Declaration, ¶ 9, Ex. G). The letter further stated that Defendants expected the matter resolved promptly “via written confirmation.” Perez Declaration, Ex. 4. On August 8, 2012, Plaintiffs sent Weldway a letter containing a formal denial of their “request for review.” Plaintiffs’ Motion, 4 (citing Ostil Declaration, ¶ 10, Ex. H). On August 16, 2012, Weldway filed an arbitration demand with the American Arbitration Association (“AAA”) and sent a copy to Plaintiffs’ counsel. Id. (citing Ostil Declaration, ¶ 11, Ex. I).
On August 24, 2012, the AAA sent Plaintiffs a letter stating that Plaintiffs were required to submit a response to the demand by August 31, 2012. Plaintiffs’ Opposition to Defendants’ Cross-Motion to Compel Arbitration (“Plaintiffs’ Opposition”), 4 (citing Declaration of Julie Richardson (“Richardson Declaration”), ¶ 3, Ex. 1). The letter also required Plaintiffs to respond to a list of arbitrators by the same date. Id. (citing Richardson Declaration, ¶ 3, Ex. 1). The AAA would treat failure to respond to the list as demonstrating that all arbitrators on the list were acceptable. Id. (citing Richardson Declaration, ¶ 3, Ex. 1).
On August 30, 2012, the parties submitted the name of the agreed-upon arbitrator to the AAA. Id. (citing Richardson Declaration, ¶ 4, Ex. 2). On August 31, 2012, Plaintiffs filed an answering statement and counterclaim request (“answering statement”) with the AAA. Plaintiffs’ Motion, 4 (citing Ostil Declaration, ¶ 12, Ex. J). In their answering statement, Plaintiffs argued that Weldway did not demand to initiate arbitration within the time specified by ERISA § 4221(a)(1) and thus that the arbitrator lacked jurisdiction to hear the merits. Ostil Declaration, Ex. J. Plaintiffs included a counterclaim, seeking to have the arbitration proceeding dismissed with a determination that Defendants waived its arbitrable defenses by failing to timely initiate arbitration. Id. Pending the arbitrator’s decision on the jurisdictional issue, Plaintiffs reserved the right to amend its counterclaim to seek withdrawal liability, interest, liquidated damages, costs, attorneys’ fees, and information regarding Defendants controlled group. Id. Plaintiffs contend that they reserved their right to judicial review. Plaintiffs’ Motion, 4.
On September 10, 2012, after learning the agreed-upon arbitrator would be out of the country until September 18, 2012, Plaintiffs counsel wrote AAA. stating that it was willing to await the arbitrator’s return. Defendants’ Motion, 3 (citing Perez Declaration, Ex. 11).
On October 24, 2012, the parties held a preliminary case management call with the arbitrator. Plaintiffs’ Motion, 4 (citing Os-til Declaration, ¶ 15). Plaintiffs requested and expected the arbitrator to dismiss the matter for lack of jurisdiction. Id. (citing Ostil Declaration, ¶ 15). Plaintiffs contend that their counsel stated Plaintiffs were reserving the right to seek relief in federal court. Id. (citing Ostil Declaration, ¶ 15). Defendants disagree, arguing that Plaintiffs’ counsel never suggested that the arbitrator lacked jurisdiction to decide the bifurcation issue during the October 24, 2012 telephonic conference. Defendants’ Motion, 4 (citing Perez Declaration, ¶ 18). The arbitrator wanted briefing on the jurisdictional issue. Plaintiffs’ Motion, 4-5 (citing Ostil Declaration, ¶ 16). In addition, Defendants contended that the jurisdictional issue should be decided along with the merits. Id. at 5 (citing Ostil Declaration, ¶ 16). Plaintiffs contended that jurisdiction was a threshold matter that should be determined first. Id. (citing Ostil Declaration, ¶ 16). The parties agreed to a briefing schedule that would resolve only the bifurcation of the issues. Id. (citing Ostil Declaration, ¶ 16). In a letter date November 6, 2012, prior to briefing, Plaintiffs informed the arbitrator and Defendants that they were refusing to participate in any further arbitration proceedings including briefing the issue of bifurcation and submitting the issue of jurisdiction to the arbitrator. Id. (citing Os-til Declaration, ¶ 17, Ex. N).
C. Plaintiffs’ Contentions
In their Motion, Plaintiffs argue that this Court should issue a preliminary injunction stopping the arbitration proceedings during the pendency of this action. Plaintiffs argue that (1) Plaintiffs are likely to succeed on the merits; (2) Plaintiffs will likely suffer irreparable harm if Defendants are not enjoined from pursuing arbitration; (3) the balance of hardships favors issuance of an injunction; and (4) issuance of a preliminary injunction serves the public interest. Plaintiffs’ Motion, 6-18.
Plaintiffs make two alternative arguments as to their likelihood of success on the merits. On one hand, Plaintiffs argue that Defendants failed to timely request review of their decision under ERISA § 4219(b). Id. at 6 (citing 29 U.S.C. § 1399). Plaintiffs contend that defendants were required to request review within 90 days of receiving the Fund’s assessment of liability. Id. at 7 (Citing ERISA § 4219(b)(2)(A); 29 U.S.C. § 1399(b)(2)(A)). Under this argument, Defendants December 14, 2011 letter did not satisfy the requirements of a request for review set forth in ERISA § 4219(b)(2)(A) because (1) it did not ask the plan sponsor to review any specific matter; (2) it did not identify any inaccuracies in the determination of the amount of unfunded vested benefits allocable to the employer and (3) it did not provide any additional relevant information. Id. at 7-8 (citing 29 U.S.C. § 1399(b)(2)). By failing to request review, Plaintiffs argue that Defendants lost their right to arbitrate their objections. Id. at 8. If arbitration is not timely initiated, Plaintiffs contend that
In the alternative, Plaintiffs argue that, even treating the December 14, 2011 letter as a request for review, Defendants were required to initiate arbitration within 60 days of the earlier of: (a) 120 days after the request for review; or (b) the date that the employer is notified of the plan sponsor’s response to the request for review. Id. at 7-8 (citing ERISA § 4221(a)(1)(A) and (B); 29 U.S.C. § 1401(a)(1)(A) and (B)). Plaintiffs contend that the earlier event was that described in “(a).” Id. at 8. Thus, the window for initiating arbitration was open for 60 days beginning 120 days after Defendants’ request for review. Id. (citing ERISA § 4221(a); 29 U.S.C. § 1401(a)). Plaintiffs conclude that Defendants were required to initiate arbitration between April 12, 2012 and June 11, 2012. Id. Because they argue arbitration was not timely initiated, Plaintiffs argue that the amount they demanded is due and owing.
Moreover, Plaintiffs argue that Defendants cannot excuse these deadlines either by equitable tolling or by manufacturing ambiguity in the record. Plaintiffs’ Reply, 3-8. First, Plaintiffs contend that the only ambiguity that Defendants can attempt to produce in the record is the date of the purported December 15, 2011 phone call. Id. at 3. Plaintiffs argue that any apparent ambiguity is the result of an inadvertent error by counsel in drafting the May 30, 2012 letter. Id. at 2-3. In any event, Plaintiffs state that the date of the conversation is irrelevant to the statutory deadlines. Id. at 3. Second, Plaintiff contends that Defendants cannot establish the affirmative defense of equitable tolling, even if the defense exists under ERISA, because Defendants cannot show that extraordinary circumstances prevented them from exercising their rights. Id. at 4-8 (citing Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal,
Plaintiffs argue that they are likely to suffer irreparable harm absent issuance of a preliminary injunction because they will be forced to participate in futile arbitration proceedings. Plaintiffs’ Motion, 15 (citing Monavie, LLC v. Quixtar Inc.,
Plaintiffs contend that the balance of hardships tips in their favor because they face the irreparable harm described above while Defendants will suffer virtually no harm from an injunction preventing them from continuing the arbitration. Id. Moreover, Plaintiffs contend that compelling
Finally, Plaintiffs state that the issuance of an injunction is in the public interest because Congress crafted ERISA to expeditiously resolve disputes over withdrawal liability. Plaintiffs’ Motion, 17-18 (citing ILGWU Nat’l Ret. Fund v. Levy Bros. Frocks, Inc.,
Opposing Defendants’ Motion, Plaintiffs also argue that they have not waived their objection to arbitration by their limited participation in arbitration proceedings. Plaintiffs’ Opposition, 11-17. Relying on Nagrampa v. MailCoups, Inc.,
D. Defendants’ Contentions
Defendants argue that the Court should compel arbitration for two alternative reasons. Defendants’ Motion, 6-8. First, Defendants contend that their arbitration request was timely. Id. at 6. Defendants argue that further evidence must be adduced to determine whether Plaintiffs waived the deadline to demand arbitration or whether the deadline to demand arbitration should be equitably tolled. Defendants’ Opposition, 7. In support of this argument, Defendants contend that Plaintiffs’ May 30, 2012 letter requesting documents indicated that Plaintiffs were continuing to review Defendants’ factual assertions, thus apparently agreeing to waive the statutory deadline. Id. (citing 29 C.F.R. § 4221.3(b) (“[t]he parties may, however, agree at any time to waive or extend the time limits for initiating arbitration”)). Defendants stress that the May 30, 2012 letter requests several documents, reserved the right to request additional documents, and reminded Defendants that their continuing deadlines to make withdrawal payments are not affected, but did not remind Defendants of their
Second, Defendants argue that Plaintiffs have already submitted their claim to arbitration and therefore cannot challenge the authority of the arbitrator to act after receiving an unfavorable result. Defendants’ Motion, 6 (citing Nghiem v. NEC Elec., Inc.,
In their Reply, Defendants specify their position that Plaintiffs’ submitted the issue of timeliness to the arbitrator. Defendants’ Reply, 4-8. Defendants note that in Plaintiffs’ August 31, 2012 Answer, and in the September 18, 2012 letter, Plaintiffs requested the arbitrator decide the issue of jurisdiction. Id. at 2. Defendants also note that Plaintiffs only withdrew from arbitration because the arbitrator did not to summarily dismiss the case, effectively because the arbitrator decided that summary dismissal was inappropriate. Id. at 7-8.
In their Opposition, Defendants argue that a preliminary injunction, is inappropriate, even assuming the matter is properly before the court, because (1) Plaintiffs have not made a clear showing that they are likely to succeed on the merits; (2) Plaintiffs cannot establish a likelihood of irreparable injury; (3) the balance of the equities favors a denial of Plaintiffs’ Motion; and (4) a preliminary injunction is not in the public interest. Defendants’ Opposition, 6-11.
First, to support their argument that Plaintiffs are unlikely to succeed on the merits, Defendants rely on the same two arguments put forward in Defendants’ Motion and outlined above. Id. at 6-7. Defendants stress that ambiguities in the rec
Second, Defendants contend that Plaintiffs cannot establish a likelihood of irreparable injury because Plaintiffs are alleging monetary harm. Id. at 8 (citing California Pharmacists Ass’n v. Maxwell-Jolly,
Third, Defendants argue that the balance of the equities tips in their favor because Plaintiffs have not substantiated their injury allegations. Id. at 9-10. In addition, Defendants state that they will be deprived of the benefit of the arbitrator’s decision to brief the bifurcation issue after Defendants expended resources in preparing for arbitration. Id.
Fourth, Defendants argue enjoining arbitration is contrary to ERISA’s policies in favor of arbitration. Id. at 10 (citing 29 U.S.C. § 1401(a)(1)). Moreover, Defendants contend that equitable policy cannot allow an entity to seek to escape the jurisdiction of a tribunal after having received an adverse decision from that tribunal. Id. at 10-11 (citing Ficek,
III. ANALYSIS
A. Legal Standard: Preliminary Injunction
Federal Rule of Civil Procedure 65 permits the issuance of a preliminary injunction to preserve the positions of the parties until a full trial can be conducted. LGS Architects, Inc. v. Concordia Homes,
Plaintiffs have demonstrated a likelihood of success on the merits, a likelihood of irreparable injury in the absence of a preliminary injunction, that the balance of equities tips in their favor, and that the public interest will be served by granting a preliminary injunction. Plaintiffs’ Motion is granted.
1. Likelihood of Success on the Merits
Plaintiffs contend that they are likely to succeed on the merits of their claim that Defendants are not entitled to arbitrate their withdrawal liability because Defendants failed to timely initiate arbitration. Defendants contend that they timely initiated arbitration, that additional evidence may impact the deadlines for initiating arbitration, and that Plaintiffs waived their objection to arbitration by participating therein. For the reasons discussed below, the Court finds that Plaintiffs are likely to succeed on the merits,
a. Initiating Arbitration Under ERISA
i. Background Law
Pursuant to the MPPAA, the plan sponsor is obligated to notify the employer of the amount of withdrawal liability, the schedule for liability payments, and to demand payment. 29 U.S.C. § 1399(b)(1). No later than ninety days after receiving the above-described notice, “the employer — (i) may ask the plan sponsor to review any specific matter relating to the determination of the employer’s liability and the schedule of payments, (ii) may identify any inaccuracy in the determination of the amount of unfunded vested benefits allocable to the employer, and (in) may furnish additional relevant information from the plan sponsor.” 29 U.S.C. § 1399(b)(2)(A). “After a reasonable review of any matter raised, the plan sponsor shall notify the employer of — (i) the plan sponsor’s decision, (ii) the basis for the decision, and (iii) the reason for any change in the determination of the employer’s liability or schedule of liability payments.” 29 U.S.C. § 1399(b)(2)(B). “Either party may initiate ... arbitration proceeding^] within a 60-day period of the earlier of — (A) the date of notification to the employer under section 1399(b)(2)(B) of this title, or (B) 120 days after the date of the employer’s request under section 1399(b)(2)(A) of this title.” 29 U.S.C. § 1401(a)(1). The relevant regulations provide that “[t]he parties may, however, agree at any time to waive or extend the time limits for initiating arbitration.” 29 C.F.R. § 4221.3(b).
Pursuant to 29 U.S.C. § 1401(a)(1), “[a]ny dispute over withdrawal liability as determined under the enumerated statutory provisions shall be arbitrated.” Allyn,
The Third and Seventh Circuits have held that whether arbitration was timely initiated may properly be decided by the court. See, Robbins,
Although the Ninth Circuit has not directly addressed the issue, it is worth noting that, pursuant to section 1401(a)(1), “[ajny dispute between an employer and the plan sponsor ... concerning a determination made under sections 1381 through 1399 ... shall be resolved through arbitration.” Allyn,
In light of Congress’ decision to explicitly require arbitration of disputes arising under only sections 1381 through 1399 and the policy in favor of judicially enforcing the statutory deadlines, the Court concludes that it must resolve the issue of timeliness. See also Operating Engineers’ Pension Trust Fund v. Fife Rock Prods. Co.,
ii. Application of Law to Facts
Defendants did not timely initiate arbitration. In their December 7, 2011 letter, Plaintiffs satisfied their initial burden of notifying Weldway that they had assessed withdrawal liability. The letter listed the amount of the liability, the payment schedule, and demanded payment by check mailed to a specified address in accordance with the payment schedule. See 29 U.S.C. § 1399(b)(1); Trento Declaration, Ex. F. The date of receipt was, at the latest, December 14, 2011, the date Defendants responded to Plaintiffs’ letter. Defendants were required to request review within ninety days of their receipt of the December 7, 2011 letter. See 29 U.S.C. § 1399(b)(2). The ninety day window closed on March 13, 2012, at the latest. The only communications in that window were the December 14, 2011 letter and the December 15, 2011, phone call between the Fund’s counsel and Weldway’s principal. See Perez Declaration, Ex. 14 (October 19, 2012 letter from Weldway’s counsel to the arbitrator stating that no communications occurred between Plaintiffs and Defendants between December 16, 2011 and May 30, 2012).
First, if neither communication constituted a request for review then Defendants failed to satisfy their obligation to request review. See 29 U.S.C. § 1399(b)(2). Thus, Defendants would not be entitled to initiate arbitration.
Second, assuming Defendants requested review on December 15, 2011, they were required to initiate arbitration during the sixty day window between 120 days and 180 days of that request. See 29 U.S.C. § 1401(a)(1)(B). The window closed on June 12, 2012. Defendants were not entitled to wait until sixty days after Plaintiffs notified them of the denial of their request for review, because that date was later than June 12, 2012. See 29 U.S.C. § 1401(a)(1)(A).
The record provides no indication that the parties agreed to waive or extend the time limits for initiating arbitration. Defendants, based on their characterization of the facts, imply that Plaintiffs waived or extended the statutory deadlines because they did not request documents to facilitate their review until May 30, 2012, shortly before the deadline for initiating arbitration based on the request for review date. But there is no indication in the record that Plaintiffs agreed to waive or extend the time limits for initiating arbitration. Moreover, Defendants were not precluded from initiating arbitration prior to the conclusion of Plaintiffs’ review. Indeed, they were required to do so. See 29 U.S.C. § 1401(a)(1); see also Central States, Southeast and Southwest Areas Pension Fund v. Louisville Auto Rail Servs., Inc.,
b. Equitable Tolling of the Statutory Deadlines
i. Legal Background
The Ninth Circuit has not addressed whether equitable tolling applies to the statutory deadlines for initiating arbitration under the MPPAA. The Circuits that have addressed the issue are split. See Bowers on Behalf of NYSA-ILA Pension Trust Fund v. Transportacion Maritima Mexicana, S.A.,
“Generally, a litigant seeking, equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way.” Pace,
ii. Application of Law to Facts
Even assuming the doctrine of equitable tolling applies to the statutory deadlines to initiate arbitration under the MPPAA, Defendants have not established that they are entitled to this affirmative defense. Defendants are presumed to be aware of the law — here, that their “request for review,” if made, commenced the running of a time limit within which they must demand arbitration. There were no extraordinary circumstances that prevented Defendants from submitting the withdrawal issue to arbitration. Quite simply, there was nothing preventing Defendants from initiating arbitration before the statutory deadline. Equitable tolling is an affirmative defense on which Defendants bore the burden of establishing their likelihood of success. See Gonzales,
c. Waiver of Objection to Arbitration
i. Legal Background
Participation in arbitration may, in some circumstances, waive the right to object to arbitration See Ficek,
In Nagrampa, the Ninth Circuit characterized the relevant inquiry as whether the party “intentionally relinquished or abandoned [its] right to arbitration.” Nagrampa,
ii. Application to Facts
Plaintiffs have not waived their objection to arbitration. Plaintiffs’ participation in arbitration was limited. In chronological order, Plaintiffs participated in selecting an arbitrator, submitted an answering statement with a counterclaim, agreed to wait for the selected arbitrator to be available, submitted a letter addressing incorrect factual allegations made in Defendants answer, and participated in a telephonic case management conference. Perez Declaration, ¶¶ 16-18, Exs. 8-11, 13 The Plaintiffs’ answer in the arbitration contested the arbitrator’s jurisdiction. Id. at Ex. 9 (“[t]he arbitrator has no jurisdiction to hear this matter or to render a decision on the merits”). According to the letter from the AAA, Plaintiffs would have lost their right to participate in selecting an arbitrator and to make their answering statement, in which they included their counterclaim, had they not done so by August 31, 2012. Id. at Ex. 7. At the case management conference, Plaintiffs argued that the arbitrator lacked jurisdiction and that the issue of jurisdiction should be decided prior to any proceedings on the merits. The parties dispute whether Plaintiffs stated that the arbitrator lacked jurisdiction to decide any issues during the case management conference. Compare Perez Declaration, ¶ 18; with Ostil Declaration, ¶ 16. In any event, as a result of the case management conference, the parties agreed to a briefing schedule to address only the issue of bifurcation. After the case management conference, Plaintiffs withdrew from the arbitration, expressing their view that the matter should have been summarily dismissed for lack of jurisdiction. Perez Declaration, Ex. 15.
This case is much closer to Nagrampa than it is to those where the Ninth Circuit has found that the plaintiff waived its objection to arbitration. As in Nagrampa, Plaintiffs “forcefully objected to arbitrability” at the outset. See Nagrampa,
This case is distinguishable from those cited by Defendants where the plaintiffs had waived their objection to arbitration. Unlike Daniel, there have been no hearings on the merits where evidence was presented. See Daniel,
2.Irreparable Harm to Plaintiffs
A plaintiff satisfies the irreparable harm requirement by demonstrating that irreparable injury is likely in the absence of an injunction. Winter,
3.Balance of the Equities
The court must identify the harms that a preliminary injunction may cause to Defendants, and weigh those harms against Plaintiffs’ threatened injury. Los Angeles Memorial Coliseum Comm’n v. Nat’l Football League,
As discussed above, denial of the preliminary injunction would irreparably harm Plaintiffs. Granting the preliminary injunction will force Defendants to defend the case in this forum. Although Defendants argue that they will also be deprived of the favorable ruling of an arbitrator, the fruit of months of effort, the only issue decided by the arbitrator was to request briefing on bifurcation. Defendants have not put forward any argument why they will endure any hardship establishing their defenses in court as opposed to in an arbitral forum. The balance of the equities tips in Plaintiffs favor.
4.The Public Interest
The public interests at stake weigh in favor of granting a preliminary injunction. “Congress intended that disputes over withdrawal liability would be resolved
Thus, contrary to Defendants argument, the relevant portions of ERISA do not favor arbitration for its own sake. Rather, the statutory utilizes arbitration as a tool for its broader public policy goal of expeditiously resolving disputes such as this one. To achieve that public policy, the statutory deadlines must be enforced. Therefore, the public interest weighs in favor of granting a preliminary injunction in this case.
C. Motion to Compel Arbitration
Defendants’ Motion is denied because Defendants failed to timely initiate arbitration and Plaintiffs did not waive their objection to arbitration, as explained in section III.B.l, above.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion for a Preliminary Injunction is GRANTED and Defendants’ Motion to Compel Arbitration is DENIED.
IT IS SO ORDERED.
Notes
. Plaintiffs request judicial notice of four documents, two date stamped printouts California Secretary of State Website and two date stamped printouts from the California Contractor's State Licensing Board Website. Defendants do not object and the documents are matters of public record. Judicial notice of those four documents is granted. Defendants requested their reasonable attorneys' fees in opposing Plaintiffs' Motion. As Plaintiffs’ Motion is granted, that request is denied.
. Plaintiffs note that the Fund’s Withdrawal Liability Procedures, of which Defendants were provided a copy, require the employer to request review in writing. See Trento Declaration, Ex. D. However, even if oral requests