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International Corrugated and Packing Supplies, Inc. v. Lear Corp.

United States District Court, W.D. Texas, El Paso Division

February 25, 2018




         Presently before the Court is Defendants Lear Corporation and Lear Mexican Seating Corporation's (collectively "Defendants") "Motion to Reconsider December 21, 2016, Memorandum [Opinion] and Order Regarding Arbitration" ("Motion to Reconsider") (ECF No. 48) filed on February 10, 2017. For the reasons that follow, the Court DENIES Defendants' Motion to Reconsider.

         I. BACKGROUND

         Plaintiff, a Texas corporation, sells packaging materials that its customers use to ship products. Notice of Removal at 1, ECF No. 1; see also PL's Resp. Defs.' Mot. Compel Arbitration at 2, ECF No. 23. Defendants are Delaware corporations with their principal places of business in Michigan and are suppliers of seats and electrical components to automobile manufacturers. Defs.' Mot. Compel Arbitration at 2, 6, ECF No. 19. From approximately April 2007 through November 2014, Defendants purchased packaging materials from Plaintiff. Id. at 2. The parties' dispute is based on payments allegedly owed by Defendants to Plaintiff for the purchase of those materials. See Id. at 2-5.

         Currently at issue is whether the Court should compel arbitration to resolve this dispute. See Id. at 1-10. Defendants argue that the Court should compel arbitration based on an arbitration clause contained in Defendants' March 1, 2006, Purchase Order Terms and Conditions (the "Terms and Conditions"), which were purportedly incorporated by reference into various purchase orders through a statement on the purchase orders and a link to Defendants' website where the Terms and Conditions could be found. Id. at 7-8. The arbitration clause in the Terms and Conditions states:

All disputes arising under or in connection with any Order or any other document pertaining to any Order shall be finally settled by arbitration in Southfield, Michigan, before a single arbitrator appointed by the American Arbitration Association ("AAA") which arbitration shall be conducted under AAA's commercial arbitration rules then in effect at the time of the Order provided, however, that discovery shall be permitted in accordance with the United States Federal Rules of Civil Procedure.

Id., Ex. 2 ¶ 51. It is undisputed that Plaintiff did not sign the purchase orders or the Terms and Conditions containing the arbitration clause. See PL's Resp. Defs.' Mot. Compel Arbitration at 2-3; Defs.' Reply Defs.' Mot. Compel Arbitration at 2-4, ECF No. 25; Defs.' Mot. Reconsider at 6-10.

         On August 22, 2016, Defendants filed a Motion to Compel Arbitration. On December 21, the Court issued a Memorandum Opinion and Order denying the Motion to Compel Arbitration because Defendants failed to meet their burden to establish the existence of an agreement to arbitrate.[1] Mem. Op. & Order at 6-12, ECF No. 42. On February 10, 2017, Defendants sought reconsideration to address issues the Court raised in its decision regarding how and when the underlying contracts were formed. See Defs.' Mot. Reconsider at 2 ("First, Lear provides evidence that confirms for the Court... [how] the contract was formed----- Second, Lear lays to rest the Court's concerns that [International Corrugated and Packing Supplies, Inc.] may have not had proper notice of the Lear Terms and Conditions before it accepted Lear's offer by shipping the goods at issue, thus forming the contract at issue."). By its Order dated February 16, 2017, the Court denied Defendants' Motion to Reconsider under Federal Rule of Civil Procedure 54(b) using a standard analogous to that of Rule 59, the rule governing motions to alter orders post-judgment. Order at 2-3, 6, ECF No. 64. On August 9, 2017, the Fifth Circuit vacated and remanded the Court's denial of Defendants' Motion to Reconsider to allow the Court to reconsider the motion in light of the new standard announced in Austin v. Kroger Texas, L.P., 864 F.3d 326 (5th Cir. 2017) (per curiam). Inl'l Corrugated & Packing Supplies, Inc. v. Lear Corp., No. 17-50139, 2017 WL 3432027, at *2 (5th Cir. Aug. 9, 2017) (per curiam) ("The district court did not have the benefit of our opinion in Austin clarifying the difference between these standards. Rather than engage in a proper Rule 54(b) analysis in the first instance, we conclude that the district court should have the opportunity to do so applying the proper standards.").


         While the Federal Rules of Civil Procedure do not specifically provide for a motion for reconsideration in the context of interlocutory orders, courts generally assess whether a motion for reconsideration is proper under Federal Rule of Civil Procedure 54(b). See Lavespere v. Niagara Mack & Tool Works, Inc., 910 F.2d 167, 185 (5th Cir. 1990) (discussing Fed.R.Civ.P. 54(b)), abrogated on other grounds by Little v. Liquid Air Corp, 37 F.3d 1069, 1075 n.14 (5th Cir. 1994) (en banc) (per curiam). Under Rule 54(b), "any order or other decision, however designated, that adjudicates fewer than all claims or the rights and liabilities of fewer than all the parties ... may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." Fed.R.Civ.P. 54(b). The Fifth Circuit interprets this to mean that "[u]nder Rule 54(b), the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law." Austin, 864 F.3d at 336 (5th Cir. 2017) (internal quotation marks omitted) (quoting Lavespere, 910 F.2d at 185).

         III. ANALYSIS

         By the instant motion, Defendants now seek to meet their burden of proof to establish the existence of an agreement to arbitrate. See Defs.' Mot. Reconsider at 1-10. Defendants contend that they have provided evidence that shows a course of dealing between the parties that proves that there were enforceable agreements governing the purchase of Plaintiff s packaging materials. Id. at 2-6. Further, Defendants assert that the arbitration clause from the Terms and Conditions was incorporated by reference into those enforceable agreements. Id. at 6-8. Thus, Defendants argue that they have established the existence of an agreement to arbitrate. Therefore, Defendants aver that the Court should compel arbitration.

         The Federal Arbitration Act ("FAA") requires the Court to enforce an arbitration agreement in the same manner that it would enforce any other contract. See 9 U.S.C. §§ 1-16; Specialty Healthcare Mgmt, Inc., v. St. Mary Par. Hosp., 220 F.3d 650, 654 (5th Cir. 2000). Specifically, the FAA provides that:

A party aggrieved by the alleged failure . . . 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 ... for an order directing that such ...

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