Mohammad Alim v. KBR, Incorporated ( 2014 )

Case: 13-11094 Document: 00512653746 Page: 1 Date Filed: 06/05/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-11094 FILED
Summary Calendar June 5, 2014
Lyle W. Cayce
Clerk
MOHAMMAD Z. ALIM,
Plaintiff - Appellant
v.
KBR, INCORPORATED,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:11-CV-1746
Before WIENER, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
Mohammad Z. Alim appeals the district court’s denial of his motion to
remand and motion to vacate the underlying arbitration award, as well as the
district court’s grant of KBR, Inc.’s (“KBR”) motion to compel arbitration. We
AFFIRM.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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I. Factual and Procedural History
As part of Alim’s employment with KBR, Alim agreed to the Halliburton
Dispute Resolution Plan (“DRP”), 1 which provided that all claims against KBR
related to Alim’s employment must be submitted to arbitration. Following his
termination, Alim filed an arbitration demand with the American Arbitration
Association (“AAA”), alleging discrimination, retaliation, and breach of his
employment contract. Alim’s state court petition challenging the results of the
first arbitration was ultimately successful when the arbitration award was
vacated by a Texas appellate court due to evident partiality of the arbitrator.
Alim v. KBR (Kellogg, Brown & Root)–Halliburton, 331 S.W.3d 178, 180 (Tex.
App.—Dallas 2011, no pet.).
Thereafter, Alim filed an amended petition in his state court proceeding,
asserting breach of employment contract, violation of United Arab Emirates
Federal Law Number 8 (“UAE labor law claim”), 2 discrimination in violation
of Title VII, breach of arbitration agreement, and fraud claims. Twenty-nine
days later, KBR removed the case to federal court and filed a motion to dismiss
Alim’s UAE labor law claim based on a lack of subject matter jurisdiction. The
district court denied the motion, concluding that it had supplemental
jurisdiction over Alim’s UAE labor law claim. Alim filed a motion to remand,
which the district court denied.
KBR then filed a motion to compel arbitration and to stay Alim’s Title
VII claim. The district court granted this motion, ordering Alim’s breach of
employment contract, breach of arbitration agreement, UAE labor law, and
fraud claims to arbitration and staying his Title VII claim.
1 During Alim’s employment, KBR was a subsidiary of Halliburton, Inc., and used
Halliburton’s DRP and rules.
2 Alim worked for KBR in Dubai, United Arab Emirates, among other places.
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Alim’s claims proceeded to arbitration with a JAMS arbitrator. He
granted KBR’s motion to dismiss Alim’s breach of arbitration agreement and
fraud claims. He then decided in KBR’s favor with respect to Alim’s UAE labor
law and breach of employment contract claims, concluding that Alim was
terminated for valid reasons and had been fully compensated for his overtime
work. Alim filed a motion to vacate the arbitration award, which the district
court denied. The district court also granted summary judgment on the Title
VII claims and entered a final judgment. 3 Alim timely appealed.
II. Discussion
A. Motion to Remand
The district court denied Alim’s motion to remand, in which he argued
that KBR did not timely remove because it “knew for years that Alim was
seeking relief under Title VII.” Reviewing this decision de novo, we affirm. See
Woods v. Tex. Aggregates, L.L.C., 459 F.3d 600, 601 (5th Cir. 2006). KBR’s
removal period was not triggered when it may have known of a potential Title
VII claim; instead, the removal statute provides that the thirty-day removal
period began when KBR received a pleading setting forth a removable claim.
See 28 U.S.C. § 1446(b); see also 28 U.S.C. § 1441(a). Here, KBR filed its notice
of removal within thirty days of Alim’s filing of his amended petition, which
was the first petition to contain a removable claim. 4 Therefore, KBR timely
removed.
3 Although Alim’s notice of appeal referenced the summary judgment order, he makes
no arguments regarding the Title VII claims, so they are waived. Askanase v. Fatjo, 130 F.3d
657, 668 (5th Cir. 1997).
4 Alim’s reliance on his petition to vacate is misplaced. The well-pleaded complaint
rule provides that a defendant can remove a case based on federal question jurisdiction “only
when a federal question is presented on the face of [a] plaintiff’s properly pleaded complaint.”
Terrebonne Homecare, Inc. v. SMA Health Plan, Inc., 271 F.3d 186, 188 (5th Cir. 2001)
(citation and internal quotation marks omitted). Here, Alim’s petition to vacate contained no
reference to Title VII or any other removable federal claim, and therefore it could not trigger
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B. Motion to Compel Arbitration
Applying a de novo standard of review, we conclude that the district court
correctly compelled Alim’s fraud, contract, and UAE labor law claims to
arbitration. See Am. Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 536 (5th Cir.
2003). In response to KBR’s motion to compel arbitration, Alim urged that the
DRP was unenforceable. 5 In assessing the enforceability of an arbitration
agreement, we apply the contract law of the state (Texas, in this case) that
governs the agreement. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944
(1995). Contract defenses, “such as fraud, duress, or unconscionability, may
be applied to invalidate arbitration agreements without contravening § 2 [of
the Federal Arbitration Act].” Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681,
686-87 (1996).
Alim’s arguments concerning the enforceability of the DRP rely
primarily on a study conducted by Dr. Alexander Colvin, which suggests that
arbitration agreements between employers and employees are inherently
unfair and systematically biased against employees. However, we have twice
previously rejected the use of Colvin’s study in almost identical situations. See
Diggs v. Citigroup, Inc., No. 13-10138, 2014 WL 54637, at *2 (5th Cir. Jan. 8,
the start of KBR’s removal period. Similarly, Alim’s reliance on his arbitration complaint,
opening arbitration statement, and arbitration award—which he notes were incorporated in
the petition to vacate by its reference to the arbitration record—is also misplaced. Even if
there was adequate information in these documents to suggest that Alim desired to make a
claim based on a federal statute, these documents are not pleadings or summons filed in state
court as described in § 1446(b)(1).
5 Alim also argued that his fraud and breach of arbitration agreement claims pertain
to conduct after his termination and therefore fall outside the scope of the DRP. However,
the DRP’s definition of a dispute that is subject to arbitration does not contain any temporal
limitations, but rather broadly includes “all legal and equitable claims” between the parties.
As such, Alim’s claims fall within the scope of the DRP. See 9 U.S.C. § 2; see also Moses H.
Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983) (explaining that “any
doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration”).
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2014) (unpublished) and Ameser v. Nordstrom, Inc., 442 F. App’x 967, 969 (5th
Cir. 2011) (unpublished). 6 As we explained in Diggs, this study was produced
in 2009 for use in a matter involving different parties engaged in post-
arbitration litigation. See Diggs, 2014 WL 54637, at *2. Colvin made no
attempt to explain the implications of his study to the facts of the case sub
judice. The district court did not reversibly err in failing to grant relief based
upon Colvin’s study.
Alim presents no evidence that the DRP was procured through fraud or
mutual mistake because he has presented no evidence of a material
misrepresentation concerning the fairness of the arbitration proceeding or any
mistake of fact concerning the same. 7 See Kevin M. Ehringer Enters., Inc. v.
McData Servs. Corp., 646 F.3d 321, 325 (5th Cir. 2011) (claim for fraudulent
inducement under Texas law requires showing that the defendant made a
material misrepresentation); Johnson v. Conner, 260 S.W.3d 575, 581 (Tex.
App.—Tyler 2008, no pet.) (mutual mistake under Texas law requires showing
a misunderstanding of a material fact). Similarly, Alim’s argument that the
DRP is unenforceable because it is substantively unconscionable fails. Again,
Alim relies solely on Colvin’s study in support of this claim and therefore has
failed to meet his burden of showing that the DRP “is so one-sided that it is
unconscionable under the circumstances existing when the parties made the
contract.” See In re FirstMerit Bank, N.A., 52 S.W.3d 749, 757 (Tex. 2001).
6 Although these cases are unpublished and therefore not controlling precedent, we
cite to them for their persuasive value as they address similar arguments based on Colvin’s
study. See 5TH CIR. R. 47.5.4; Ballard v. Burton, 444 F.3d 391, 401 n.7 (5th Cir. 2006).
7 Alim also argued to the district court that KBR should not be permitted to enforce
the DRP based on prior breach. He does not raise this issue on appeal, and it is therefore
waived. See Douglas W. ex rel. Jason D.W. v. Houston Indep. Sch. Dist., 158 F.3d 205, 211
n.4 (5th Cir. 1998) (“[F]ailure to provide any legal or factual analysis of an issue on appeal
waives that issue.”).
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Alim further argues that the DRP is unenforceable because it violates
public policy by undermining the enforcement of employment statutes.
However, Alim did not waive his substantive rights under any employment
statutes when he agreed to the DRP. To the extent Alim suggests that he
cannot effectively pursue his substantive rights through arbitration because
such a forum is inherently unfair in favor of employers, his argument lacks
merit as the only evidence he presents in support of this allegation is Colvin’s
study. This argument that arbitration is generally an unfair process also flies
in the face of numerous cases holding that federal policy favors arbitration in
a wide variety of contexts, including employment cases. See, e.g., Jones v.
Halliburton Co., 583 F.3d 228, 235 (5th Cir. 2009) (observing in the context of
Halliburton’s employment dispute resolution program that “[i]t goes without
saying that there is a strong federal policy in favor of arbitration”).
Alim also argues that KBR should be equitably estopped from enforcing
the DRP based on its alleged lack of disclosure concerning its previous contact
with the first arbitrator. The district court correctly ruled to the contrary
under the facts presented here.
Finally, Alim argues that the district court erred by sua sponte
compelling his UAE labor law claim to arbitration. However, he did not object
to the arbitration of this claim in the district court, but rather suggested in his
response to KBR’s motion to dismiss that his UAE labor law claim should be
arbitrated if the court held that there is subject matter jurisdiction over this
claim. 8 Alim cannot argue on appeal that this claim was improperly sent to
8 Although neither of the parties addresses whether we have subject matter
jurisdiction over Alim’s UAE labor law claim on appeal, we must examine the basis for our
own jurisdiction. See Hill v. City of Seven Points, 230 F.3d 167, 169 (5th Cir. 2000). In its
motion to dismiss, KBR argued that the Dubai Labor Department, not United States federal
courts, has the exclusive jurisdiction to adjudicate Alim’s UAE labor law claim. However, as
the district court observed in denying KBR’s motion, we have previously “reject[ed] outright
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arbitration when he represented to the district court that arbitration of the
claim would be proper. See LeMaire v. La. Dep’t of Transp. & Dev., 480 F.3d
383, 387 (5th Cir. 2007).
C. Motion to Vacate
Alim appeals the district court’s denial of his motion to vacate the JAMS
arbitration award. 9 Although our review of the district court’s decision is de
novo, our review of an arbitration award is “exceedingly deferential.” Petrofac,
Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671, 674 (5th Cir.
2012). Alim argues vacatur is appropriate because the second arbitrator was
evidently partial and the JAMS arbitration award was tainted by fraud or
undue means. See 9 U.S.C. § 10(a). Alim has waived his evident partiality
argument because he was aware of both bases on which he claims evident
partiality prior to the second arbitration hearing and failed to raise the
the notion that the law of a foreign country can unilaterally curtail the power of our federal
courts to hear a dispute even though the dispute involves rights fixed by the laws of another
nation.” See Randall v. Arabian Am. Oil Co., 778 F.2d 1146, 1150 (5th Cir. 1985). Indeed,
our jurisdiction can only be dictated by the Constitution, the laws of the United States, or a
“treat[y] or agreement[] with [a foreign country] that would require our courts to refrain from
exercising jurisdiction.” Id. The parties have pointed to no such treaty or agreement that
would curtail our jurisdiction. Therefore, having original jurisdiction under 28 U.S.C. § 1331,
we have supplemental jurisdiction over Alim’s UAE labor law claim pursuant to 28 U.S.C.
§ 1367(a).
9 Alim argues that the district court erred in not granting him leave to conduct
additional discovery concerning KBR’s previous JAMS arbitrations, including those with the
second arbitrator here. While Alim made two passing references to this discovery request in
his motion to vacate, we cannot conclude that the district court abused its discretion in not
granting Alim leave to conduct additional discovery because Alim failed to explain, much less
demonstrate, that his arguments necessitated further discovery because they “implicated
factual questions that cannot be reliably resolved without some further disclosure.” See
Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364
F.3d 274, 305 (5th Cir. 2004) (citation and internal quotation marks omitted) (holding in the
context of an arbitration award confirmation proceeding that the decision as to whether to
allow additional discovery is “an entirely practical one” involving a balancing of the need for
additional information with its effect on the arbitration process).
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argument before the second arbitration hearing. See Bernstein Seawell & Kove
v. Bosarge, 813 F.2d 726, 732 (5th Cir. 1987).
Alim urges that the JAMS arbitration award was procured fraudulently
or through undue means because (1) the DRP was procured through fraud; (2)
JAMS refused to release contact information related to the second arbitrator’s
most recent cases; and (3) the second arbitrator based his finding concerning
overtime pay on perjured testimony. These arguments lack factual and legal
merit.
AFFIRMED.
8