Manuel Mendoza v. Fred Haas Motors, Limited ( 2020 )

Case: 20-20123 Document: 00515548015 Page: 1 Date Filed: 09/01/2020
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
September 1, 2020
No. 20-20123 Lyle W. Cayce
Summary Calendar Clerk
Manuel Mendoza, individually and on behalf of all
others similarly situated,
Plaintiff—Appellee,
versus
Fred Haas Motors, Limited, a Texas Corporation,
Defendant—Appellant.
Appeal from the United States District Court
for the Southern District of Texas
USDC 4:19-CV-4119
Before Higginbotham, Jones, and Costa, Circuit Judges.
Per Curiam:*
This appeal arises from a class action suit alleging violations of the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Fred
Haas Motors, Ltd. (“Fred Haas”) moved to compel arbitration pursuant to
*
Pursuant to 5th Circuit Rule 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opinion should not be published and is not precedent except under the limited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 Circuit Rule 47.5.4.
Case: 20-20123 Document: 00515548015 Page: 2 Date Filed: 09/01/2020
No. 20-20123
the agreement signed by Manuel Mendoza (“Mendoza”). The district court
denied the motion. This court’s precedent requires respect for the parties’
clear statement to delegate the question of arbitrability to an arbitrator.
Accordingly, we REVERSE and REMAND the district court’s order.
I
In May 2015, Mendoza purchased a car from Fred Haas Toyota World
in Spring, Texas. He signed two pertinent documents while finalizing this
sale: an “Arbitration Agreement” and a “Personal Information Notice.” 1
The Arbitration Agreement provides that:
Buyer/lessee and dealer agree that all claims, demands,
disputes, or controversies of every kind or nature that may arise
between them concerning any of the negotiations leading to the
sale, lease or financing of the vehicle, terms and provisions of
the sale, lease or financing agreement, arrangements for
financing, purchase or insurance, purchase of extended
warranties or service contracts, the performance or condition
of the vehicle, or any other aspect of the vehicle and its sale,
lease or financing shall be settled by binding arbitration
conducted pursuant to the provisions of 9 U.S.C. Section 1 et
seq. and according to the Commercial Rules of the American
Arbitration Association. Without limiting the generality of the
foregoing, it is the intention of the buyer/lessee and the dealer
to resolve by binding arbitration all disputes between them
concerning the vehicle, its sale, lease or financing, and its
condition, including disputes concerning the terms and
conditions of the sale, lease or financing, the condition of the
vehicle, and damage to the vehicle, the terms and meanings of
any of the documents signed or given in connection with the
sale, lease or financing, any representations, promises or
1
The Arbitration Agreement and Personal Information Notice are signed and
dated May 18th, 2015 and May 19th, 2015, respectively.
2
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No. 20-20123
omissions made in connection with negotiations for the sale,
lease, or financing of the vehicle, or any terms, conditions, or
representations made in connection with the financing, credit
life insurance, disability insurance, and vehicle extended
warranty or service contract purchased or obtained in
connection with the vehicle. Buyer/lessee agree that this
agreement also governs any and all claims, demands, disputes
or controversy involving any trade vehicle in connection with
the transaction involving the parties hereto. Buyer/lessee and
dealer agree, covenant and contract that there shall be no class
arbitration between the parties and that the only parties to any
disputes or controversies to be arbitrated as more particularly
described herein shall be the Buyer/lessee and the dealer.
Beginning in the spring of 2019, Mendoza alleges that Fred Haas sent
four prerecorded voicemail messages to his phone. Claiming that the calls
were unsolicited marketing messages, Mendoza filed a class action suit in the
Southern District of Texas asserting violations of the TCPA. Fred Haas
moved to compel arbitration based on the Arbitration Agreement, arguing
that the Personal Information Notice was prior written consent and any
dispute over the meaning of the document is subject to arbitration.
Furthermore, Fred Haas contends that the agreement delegates questions of
arbitrability to the arbitrator. The district court denied the motion in an
unelaborated order and Fred Haas filed this interlocutory appeal pursuant to
9 U.S.C. § 16(a).
II
This Court reviews a ruling on a motion to compel arbitration de novo.
Kubala v. Supreme Prod. Servs., Inc., 830 F.3d 199, 201 (5th Cir. 2016). The
analysis proceeds in two steps. First is the question “whether the parties
entered into any arbitration agreement at all.” Id. (italics in original). The
second question is whether “this claim is covered by the arbitration
agreement.” Id. (italics in original). The court typically makes both
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determinations. Id. (citing Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d
211, 214 (5th Cir. 2003)). The analysis changes when the parties include a
delegation clause giving the arbitrator primary authority to rule whether a
specific claim is subject to arbitration. First Options of Chi., Inc. v. Kaplan,
514 U.S. 938, 942, 115 S. Ct. 1920, 1923 (1995). “[P]arties can agree to
arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties
have agreed to arbitrate or whether their agreement covers a particular
controversy.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68–69,
130 S. Ct. 2772, 2777 (2010).
When delegation is concerned, the second step of analysis shifts and
the inquiry becomes “whether the purported delegation clause is in fact a
delegation clause—that is, if it evinces an intent to have the arbitrator decide
whether a given claim must be arbitrated.” Archer & White Sales, Inc. v.
Henry Schein, Inc., 935 F.3d 274, 279 (5th Cir. 2019), cert. granted, 2020 WL
3146679 (June 15, 2020) (quoting Kubala, 830 F.3d at 202). Courts should
not assume intent “unless there is ‘clear and unmistakable’ evidence.” First
Options, 514 U.S. at 944, 115 S. Ct. at 1924. Incorporating the American
Arbitration Association (“AAA”) rules 2 into the agreement “presents clear
and unmistakable evidence that the parties agreed to arbitrate arbitrability.”
Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671, 675
(5th Cir. 2012). When the delegation is valid, the court must grant the
motion to compel. Archer & White, 935 F.3d at 279 (citing Kubala, 830 F.3d
at 202).
2
Rule 7(a) states that “[t]he arbitrator shall have the power to rule on his or her
own jurisdiction, including any objections with respect to the existence, scope, or validity
of the arbitration agreement or to the arbitrability of any claim or counterclaim.” AM.
ARBITRATION ASS’N, COMMERCIAL ARBITRATION RULES AND MEDIATION
PROCEDURES 13 (2013), https://www.adr.org/sites/default/files/Commercial%20Rules.
pdf.
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It is undisputed that both Fred Haas and Mendoza are parties to the
Arbitration Agreement and the Agreement states “all claims . . . shall be
settled by binding arbitration conducted pursuant to the provisions of
9 U.S.C. Section 1 et seq. and according to the Commercial Rules of the
American Arbitration Association.” This language follows a similar
structure of other agreements found to incorporate the AAA Rules. 3 With
both steps of the analysis satisfied, the motion to compel arbitration must be
granted.
Mendoza’s arguments to the contrary are unconvincing. First,
Mendoza misstates this Circuit’s rule on who decides the question of
arbitrability. Generally, the question of arbitrability is a judicial
determination for the court, “[u]nless the parties clearly and unmistakably
provide otherwise”. AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S.
643, 649, 106 S. Ct. 1415, 1418 (1986) (emphasis added). As noted above, the
parties here did, clearly and unmistakably, provide otherwise, thus removing
the decision from the court.
Second, Mendoza argues that Fred Haas limited the delegation to
“claims regarding the sale, lease, financing of the vehicle, performance, or
condition of the vehicle.” Mendoza raises this “carve-out” argument in the
first instance on appeal. This Court “‘may affirm the district court’s
decision on any basis presented to the district court’ and argued in the district
court.” U.S. Sec. & Exch. Comm’n v. Kahlon, 873 F.3d 500, 504 (5th Cir.
2017) (quoting Am. Family Life Assurance Co. of Columbus v. Biles, 714 F.3d
3In Crawford, the Court found the clause “all disputes . . . will be exclusively settled
by arbitration before a single arbitrator in accordance with the Rules of the American
Arbitration Association” sufficient to incorporate the AAA Rules for delegation purposes.
Crawford Prof’l Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249, 256, 262–63 (5th Cir.
2014).
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887, 896 (5th Cir. 2013)). Mendoza waived this argument by failing to
present it to the district court. Nonetheless, it fails. To the extent the
“carve-out” exception exists,4 the language in Archer & White expressly
attempted to exempt certain claims by stating “[a]ny dispute . . . (except for
actions seeking injunctive relief and disputes related to trademarks, trade
secrets, or other intellectual property of Pelton & Crane), shall be resolved
by binding arbitration in accordance with the arbitration rules of the
American Arbitration Association.” Archer & White, 935 F.3d at 277. Here,
Mendoza argues that including “terms and meanings of any of the
documents” in the second sentence of the agreement excludes it from the
first. This reading is contrary to the language used by the parties. The second
sentence opens “Without limiting the generality of the foregoing,”
indicating the parties’ intention that certain enumerated claims be included
in the first sentence, not exempted from arbitration.
In granting Fred Haas’s motion to compel arbitration, we express no
views on the scope of the arbitration agreement or the merits of the
underlying dispute. We are simply respecting the parties’ decision to
delegate the threshold question of arbitrability to the arbitrator. The order of
the district court is REVERSED and this matter is REMANDED with
direction for the district court to refer the dispute to arbitration.
4
The Supreme Court granted certiorari for Archer & White Sales, Inc. v. Henry
Schein, Inc. on the issue whether a provision in an arbitration agreement that exempts
certain claims form arbitration negates an otherwise clear and unmistakable delegation of
questions of arbitrability to an arbitrator. Henry Schein, Inc. v. Archer & White Sales, Inc.,
2020 WL 3146679 (June 15, 2020); 935 F.3d 274 (5th Cir. 2019).
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