United States District Court, N.D. Texas, Dallas Division
HELEN JIA, an individual, and SARAH SORMILLON, an individual, and all those similarly situated
NERIUM INTERNATIONAL, LLC, et al.
MEMORANDUM OPINION AND ORDER
GREN SCHOLER, UNITED STATES DISTRICT JUDGE.
the Court is Defendants Nerium International, LLC, Jeff
Olson, Renee Olson, and Amber Olson Rourke's
("Defendants") Motion to Reopen Case and for
Temporary Restraining Order and Preliminary Injunction
Staying Class Arbitration [ECF No. 147]. Defendants ask the
Court to reopen the case to either (1) clarify the
Court's September 18, 2018, order granting
Defendants' motion to compel arbitration on an individual
basis, or, in the alternative, (2) issue a temporary
restraining order and preliminary injunction staying the
class arbitration. See Mot. 1. For the reasons that
follow, the Court grants in part and denies in part the
Court previously entered a Memorandum Opinion and Order in
this case, and will not revisit the factual dispute
underlying this action here. See ECF No. 144
("Mem. Op. & Order").
December 19, 2017, Defendants "move[d] for an order
compelling Plaintiffs Helen Jia . .. and Sarah Sormillon
(collectively, 'Plaintiffs') to arbitrate their
claims on an . . .individual basis in the arbitration
proceedings which are already underway before the American
Arbitration Association [('AAA'])." ECF No. 71
("Mot. to Compel Arbitration") at 1. On September
18, 2018, the Court granted the motion to compel arbitration
and provided that "the arbitrator [will] decide whether
a given claim must be arbitrated" and that "[a]ny
challenges to the enforceability or scope of the Arbitration
Policy must be decided by the arbitrator." Mem. Op.
& Order 16-17. After the Court administratively closed
the case pending arbitration, Plaintiffs allegedly filed
three arbitrations before the AAA. See Mot. 3.
Plaintiffs' third demand was for, among other things,
"a determination as to the arbitrability of the claims
on a class basis." ECF No. 148 ("Defs.'
first two arbitrations, Defendants moved for a summary
adjudication of the class waiver provision, seeking a
determination that Plaintiffs' claims needed to be
arbitrated individually. See Id. at 289, 302. On
June 24, 2019, Arbitrator James J. Juneau (the
"Arbitrator") entered an order in the first of the
two cases denying Defendants' motion for a summary
adjudication of the class waiver provision as moot, because
Jia was "no longer [asserting] any claims ... in this
arbitration proceeding ... on a class-wide, class action or
multiple complaining-party basis." Id. at 467.
The Arbitrator did not overrule Defendants' objections to
class arbitration, instead finding that these "should
more properly be raised and adjudicated separately in th[e]
proceeding" where Plaintiffs were asserting class action
Plaintiffs' third demand for arbitration, Defendants
objected to the filing of the class arbitration as
administratively improper on April 26, 2019. See
Mot. 3. The AAA responded to Defendants' argument by
letter on July 9, 2019, stating that Plaintiffs "met the
filing requirements by filing a demand for class
arbitration" but that "the parties' contentions
have been made a part of the file and will be forwarded to
the arbitrator upon appointment, at which time the parties
may submit their jurisdictional or arbitrability arguments to
the arbitrator for determination." Defs.' App. 469.
Thereafter on August 8, 2019, the AAA reaffirmed the
positions articulated in its July 9, 2019, letter, and
Defendants filed the present Motion. See Mot. 1;
Defs.' App. 472, II. ANALYSIS
Subject Matter Jurisdiction
the [Federal Arbitration Act ('FAA')J, jurisdiction
by the courts to intervene into the arbitral process prior to
issuance of an award is very limited." Gulf Guar.
Life Ins. v. Conn. Gen. Life Ins., 304 F.3d 476, 486
(5th Cir. 2002) (citing Larry's United Super, Inc. v.
Werries, 253 F.3d 1083, 1085 (8th Cir. 2001)).
"Even if some default occurs in the arbitral process,
courts may not intervene 'beyond the determination as to
whether an agreement to arbitrate exists and enforcement of
that agreement."' Salas v. GE Oil &
Gas, 857 F.3d 278, 280 (quoting Gulf Guar. Life
Ins., 304 F.3d at 487). "Certain threshold
questions of arbitrability, however, are typically reserved
for courts to decide, absent 'clear and unmistakable'
language in the arbitration agreement to the contrary."
20/20 Commc'ns, Inc. v. Crawford, No. 18-10260,
2019 WL 3281412, at *2 (5th Cir. July 22, 2019) (citing
Henry Schein, Inc. v. Archer & White Sales,
Inc., 139 S.Ct. 524, 530 (2019)). Thus, for example, the
Court may not "hear pre-award 'disputes over the
qualifications of an arbitrator to serve, "' but may
"hear a motion to appoint an arbitrator."
Salas, 857 F.3d at 281 (first quoting Gulf Guar.
Life Ins., 304 F.3d at 491; and then citing Adam
Techs. Int'l S.A. de C. V. v. Sutherland Glob. Servs.,
Inc., 729 F.3d 443, 447-49 (5th Cir. 2013)).
Defendants challenge the propriety of a class action
arbitration Plaintiffs begun against them before the AAA.
See Mot. 1. The law in the Fifth Circuit is
"that class arbitrability is a gateway issue for courts,
not arbitrators, to decide, absent clear and unmistakable
language to the contrary." 20/20 Commc'ns,
2019 WL 3281412, at *2. Generally, stipulating that the
Commercial Arbitration Rules of the AAA will govern the
arbitration of disputes constitutes such "clear and
unmistakable" evidence. Arnold v. Homeaway,
Inc., 890 F.3d 546, 552 (5th Cir. 2018) (citing
Petrofac, Inc. v. Dyn-McDermott Petroleum Operations
Co., 687 F.3d 671, 674-75 (5th Cir. 2012)). Where the
parties stipulate that the rules of the AAA will govern the
arbitration, but limit that stipulation to the terms of the
arbitration agreement and expressly prohibit class
arbitration, however, the Fifth Circuit has instructed that
the stipulation does not overcome "the legal presumption
. . . that courts, not arbitrators, must decide the issue of
class arbitration." 20/20
Commc'ns, 2019 WL 3281412, at *5.
Fifth Circuit's decision in 20/20 Communications
is directly on point. In 20/20
Communications, the arbitration agreement included
three provisions that vested the arbitrator with various
[(1)] If Employer and Employee disagree over issues
concerning the formation or meaning of this Agreement, the
arbitrator will hear and resolve these arbitrability issues.
[(2)] The arbitrator selected by the parties will administer
the arbitration according to the National Rules for the
Resolution of Employment Disputes (or successor rules) of the
[AAA] except where such rules are inconsistent with this
Agreement, in which case the terms of this Agreement will
govern. .. . [(3)] Except as provided below, Employee and
Employer, on behalf of their affiliates, successors, heirs,
and assigns, both agree that all disputes and claims between
them . . . shall be determined exclusively by final and
2019 WL 3281412, at *4 (sixth alteration in original)
(emphases omitted). Although these provisions delegated
significant responsibility to the arbitrator, the Fifth
Circuit first noted that these provisions contained exception
clauses that subjected any grant of power to the terms of the
arbitration agreement. Id. "And even putting
aside the exception clauses, none of these provisions [spoke]
with any specificity to the particular matter of class
arbitrations. The class arbitration bar, by contrast,
specifically prohibited] arbitrators from arbitrating
disputes as a class action. . . ." Id. at *5
(citing Baton Rouge Oil & Chem. Workers Union v.
ExxonMobil Corp., 289 F.3d 373, 377 (5th Cir. 2002)).
The Fifth Circuit thus held that the provisions at issue did
"not clearly and unmistakably overcome the legal
presumption-reinforced as it is here by the class arbitration
bar-that courts, not arbitrators, must decide the issue of
class arbitration." Id.
20/20 Communications, the arbitration provisions at
issue in this case provide for all disputes to be resolved in
accordance with the rules of the AAA. See Mem. Op.
& Order 2-3 ("[A]ll disputes, claims or causes of
action. . . shall be settled totally and finally by
arbitration . . . in accordance with the Commercial
Arbitration Rules of the [AAA]." (quoting ECF No. 75
(Defs.' App. in Supp. of Mot. to Compel 065 §
11.09(a))); see also Id. at 3 ("Any and all
disputes regarding, or related to, this agreement. .. shall
be resolved by binding arbitration administered by the [AAA]
and conducted under its rules ... as is more particularly set
forth in Section 11.09 of the NERIUM INTERNATIONAL Policies
and Procedures Manual." (quoting Defs.' App. in
Supp. of Mot. to Compel 073 § 12)). Nonetheless, these
provisions do not directly address whether the arbitrator may
decide issues of class arbitrability. Moreover, the
arbitration provision contains a class arbitration bar:
"The arbitration shall be conducted before a single
arbitrator and shall not be conducted on a class-wide, class
action or multiple complaining-party basis."
Id. at 3 (quoting Defs.' App. in Supp. of Mot.
to Compel 065 § 11.09(a)). The Court follows, therefore,
binding Fifth Circuit precedent and holds that the provisions
at issue do "not clearly and unmistakably overcome the
legal presumption-reinforced as it is ...