Dina Abdurahman v. Prospect CCMC LLC

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
Nos. 20-3459, 20-3466
______________
DINA ABDURAHMAN
v.
PROSPECT CCMC LLC, DBA Crozer Chester Medical
Center; DORIAN JACOBS, Medical Doctor
PROSPECT CCMC LLC, DBA Crozer Chester Medical
Center,
Appellant 20-3459
DINA ABDURAHMAN
v.
PROSPECT CCMC LLC, DBA Crozer Chester Medical
Center; DORIAN JACOBS, Medical Doctor
DORIAN JACOBS, Medical Doctor,
Appellant 20-3466
______________
On Appeal from United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2:20-cv-03609)
District Judge: Honorable Chad F. Kenney
______________
Argued November 9, 2021
Before: HARDIMAN, MATEY, SCIRICA, Circuit Judges.
(Filed: July 28, 2022)
Paul C. Lantis [ARGUED]
Tara Param
Littler Mendelson
1601 Cherry Street
Three Parkway, Suite 1400
Philadelphia, PA 19102
Counsel for Defendant - Appellant Prospect CCMC
LLC, DBA Crozer Chester Medical Center
Nicholas C. Needle [ARGUED]
Andrew S. Gallinaro
Conrad O’Brien
1500 Market Street
West Tower, Suite 3900
Philadelphia, PA 19102
Counsel for Defendant - Appellant Dr. Dorian Jacobs
Julie A. Uebler [ARGUED]
Console Mattiacci Law
1525 Locust Street
9th Floor
Philadelphia, PA 19102
Counsel for Plaintiff - Appellee
OPINION OF THE COURT
MATEY, Circuit Judge.
Three corporations, comprised of two siblings, Crozer
Chester Medical Center (“CCMC”) and Prospect Health
Access Network (“Prospect”), and a parent, Crozer Keystone
Health System (“Crozer Keystone”), entered into several
agreements with emergency medicine resident Dr. Dina
Abdurahman, including an employment contract between
Abdurahman and CCMC. Sophisticated entities, the
corporations drafted the forms and designated the
counterparties. Abdurahman’s termination led her to sue
CCMC, and CCMC promptly moved to arbitrate. Except
Abdurahman signed an arbitration agreement with Prospect,
not CCMC. A case of scrivener’s error, savvy separation, or
2
something in between? We need not solve that riddle because
the arbitration agreement with Prospect cannot stretch to
govern Abdurahman’s employment with CCMC. So we will
affirm the decision of the District Court denying the motion to
compel arbitration.
I.
Start with who is who, and what is what. Crozer
Keystone owns healthcare companies that operate as wholly
owned subsidiaries. One, Prospect, employs professionals
working at hospitals. Another, CCMC, is a hospital. CCMC
hired Abdurahman as an emergency medical resident. In
preparation, Abdurahman signed a stack of new-hire
paperwork. Within it, an at-will employment agreement with
Crozer Keystone and an arbitration agreement with Prospect.
Several weeks later, Abdurahman signed a residency
agreement with CCMC.
Dr. Dorian Jacobs was an employee of Prospect. She
also worked as CCMC’s Director of Toxicology and, in that
role, supervised Abdurahman. Abdurahman alleged that
Jacobs sexually harassed her; Jacobs claimed the opposite and
informed a CCMC Human Resources employee that
Abdurahman had assaulted her. The dispute continued to
escalate until Abdurahman was fired.
Abdurahman then filed a complaint with the
Pennsylvania Human Relations Commission and the Equal
Employment Opportunity Commission, alleging
discrimination by CCMC. After the latter issued a Right to Sue
letter, Abdurahman filed suit in Commonwealth Court against
CCMC and Jacobs.1 The Defendants removed, and then moved
to dismiss, relying on Abdurahman’s arbitration agreement
with Prospect. The District Court declined, and CCMC and
1
Abdurahman alleged that CCMC violated Title VII,
Title IX, 42 U.S.C. § 1981, and the Pennsylvania Human
Relations Act (“PHRA”). She also brought a defamation claim
against CCMC and Jacobs, along with a PHRA claim against
Jacobs individually.
3
Jacobs appeal. Agreeing with the District Court, we will
affirm.2
II.
We begin with two threshold questions.3 First, is there
a valid arbitration agreement between the parties? See
CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 172 (3d
Cir. 2014). And second, does the dispute “fall with[in] the
language of” that agreement? Id. (quoting John Hancock Mut.
Life Ins. Co. v. Olick, 151 F.3d 132, 137 (3d Cir. 1998)). If the
answer to both questions is yes, we must “enforce [the
agreement] according to [its] terms.” Id. (quoting AT&T
2
The District Court had jurisdiction under 28 U.S.C.
§§ 1331 and 1367. We have jurisdiction under 9 U.S.C. § 16.
Because Abdurahman “responded to [CCMC’s and Jacobs’s]
motion to compel arbitration with additional facts sufficient to
place the agreement to arbitrate in issue,” we review the motion
to dismiss as one for summary judgment. Guidotti v. Legal
Helpers Debt Resol., LLC, 716 F.3d 764, 776 (3d Cir. 2013).
On de novo review, summary judgment is appropriate only if
“‘there is no genuine dispute as to any material fact’ and,
viewing the facts in the light most favorable to [Abdurahman],
[CCMC and Jacobs] ‘[are] entitled to judgment as a matter of
law.’” Shuker v. Smith & Nephew, PLC, 885 F.3d 760, 770 (3d
Cir. 2018) (quoting Fed. R. Civ. P. 56(a)). Although the usual
course is to move for a stay and an order compelling
arbitration, moving to dismiss is fine when all claims are
arbitrable. Seus v. John Nuveen & Co., 146 F.3d 175, 179 (3d
Cir. 1998), overruled on other grounds by Green Tree Fin.
Corp.-Ala. v. Randolph, 531 U.S. 79 (2000).
3
And a super-threshold question: whether the
arbitration agreement delegates “gateway questions,” such as
the scope of the agreement, to an arbitrator. Rent-A-Ctr., W.,
Inc. v. Jackson, 561 U.S. 63, 68–70 (2010) (citations omitted).
But we do “not assume that the parties agreed to arbitrate
[gateway questions] unless there is clear and unmistakable
evidence that they did so.” First Options of Chi., Inc. v.
Kaplan, 514 U.S. 938, 944 (1995) (cleaned up). Finding no
such evidence, we conclude that the parties did not.
4
Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)).4
CCMC’s claim fails on the first threshold question, and
Jacobs’s fails on the second.5
A. There is No Arbitration Agreement Between CCMC
and Abdurahman
All agree that Prospect, not CCMC, signed the
arbitration agreement with Abdurahman. Even so, CCMC
argues that it should be able to enforce the agreement for two
reasons: agency principles and equitable estoppel. Neither
succeeds.
1. Agency
Relying on Pritzker v. Merrill Lynch, Pierce, Fenner &
Smith, Inc., CCMC says it can enforce the agreement because
it has an agency relationship with Prospect, the signatory. 7
F.3d 1110, 1121 (3d Cir. 1993). But Pritzker hurts, not helps,
CCMC’s argument. There, we permitted a corporation to
enforce an arbitration provision in an agreement signed by its
sibling where the non-signatory had to perform “certain
services” related to the agreement. Id. at 1122. Here, the
arbitration agreement does not even mention CCMC—never
mind obligate it to perform “services.” Nor does CCMC
identify any other agreement obligating it to act on Prospect’s
behalf. And what is more, the Pritzker plaintiffs brought claims
against both the signatory and non-signatory, alleging conduct
that “demonstrate[d] that [the non-signatory’s] interests [were]
directly related to, if not predicated upon, [the signatory’s]
conduct.” Id. This made the “community of interest” between
the defendants “material to [that] decision.” Kaplan v. First
Options of Chi., Inc., 19 F.3d 1503, 1515 (3d Cir. 1994).
4
We apply Pennsylvania law to both threshold
questions. See Kirleis v. Dickie, McCamey & Chilcote, P.C.,
560 F.3d 156, 160 (3d Cir. 2009).
5
Abdurahman also argues the CCMC residency
agreement trumps the arbitration agreement with Prospect. See
Jaludi v. Citigroup, 933 F.3d 246, 253 (3d Cir. 2019). But the
agreements deal with different subjects, so the residency
agreement does not supersede. See id. at 256.
5
Abdurahman does not bring claims against Prospect, nor does
she allege that CCMC’s liability is “predicated upon”
Prospect’s conduct.
Pivoting, CCMC contends that “Abdurahman’s alleged
harm is predicated on the relationship between CCMC and
Prospect.” (Opening Br. at 16 (emphasis altered).) CCMC
argues that Jacobs—a Prospect employee—“acted as an agent
of CCMC” in supervising Abdurahman. (Opening Br. at 17.)
But CCMC gets things backwards. Pritzker held that
arbitration terms may bind agents where they bind those
agents’ principals. 7 F.3d at 1121–22; see also Provenzano v.
Ohio Valley Gen. Hosp., 121 A.3d 1085, 1097 (Pa. Super. Ct.
2015) (applying Pennsylvania law). That means CCMC must
show that it was an agent of Prospect—the party “bound” by
the arbitration agreement. 7 F.3d at 1121. At best, though,
CCMC’s argument shows the reverse—that Prospect acted as
CCMC’s agent—and we have never held this is sufficient. See
E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber &
Resin Intermediates, S.A.S., 269 F.3d 187, 199 (3d Cir. 2001)
(“the rationale of Pritzker does not apply with equal force”
where appellants sought “to hold a principal to an agent’s
agreement”).
Indeed, Pritzker teaches that an agency relationship—
without more—is not enough. There, the arbitration clause
“govern[ed] ‘all controversies which may arise between [the
parties].’” 7 F.3d at 1114. In holding that the non-signatory was
bound to arbitrate, we noted that the agreement “was broad
enough in scope to encompass claims against agents of the
[signatory].” Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435,
444 (3d Cir. 1999) (discussing Pritzker). And specifically, “we
found that where the principal is bound to arbitration and the
complaints arise out of the agent’s conduct on behalf of that
principal, the agent is bound by the principal’s agreement to
arbitrate disputes.” E.I. DuPont, 269 F.3d at 199 (discussing
Pritzker). In sum, the non-signatory was not bound to arbitrate
all disputes; instead, it was only bound to arbitrate disputes
arising from actions it made on behalf of the signatory, as
dictated by the specific contours of their relationship.
Because CCMC was not Prospect’s agent, and a mere
agency relationship is insufficient, agency principles do not
6
permit CCMC to enforce the arbitration agreement between
Prospect and Abdurahman.
2. Estoppel
CCMC alternatively argues Abdurahman must arbitrate
her claims because “equitable estoppel principles squarely
apply here and bind Appellants to the Arbitration Agreement.”
(Opening Br. at 18.) That is, some flavor of estoppel should
connect CCMC to Prospect and, once created, should also
create a fresh contractual duty for Abdurahman. We see no
reason to depart from standard estoppel principles, a list that
does not include the configuration, and the contracts, here.
We have invoked the concept of equitable estoppel to
hold a non-signatory may not embrace some contractual terms
while denying others, say an arbitration clause. E.I. DuPont,
269 F.3d at 200. Moreover, under Pennsylvania law,
arbitration may be compelled by a non-signatory when there is
an “obvious and close nexus between the non-signatories and
the contract or the contracting parties” and the claims against
them “stem[] from the same incident and implicate[] identical
legal principles.” Dodds v. Pulte Home Corp., 909 A.2d 348,
351–52 (Pa. Super. Ct. 2006). An “obvious and close nexus”
may arise from “the relationship between a signatory . . . and a
non-signatory,” Provenzano, 121 A.3d at 1097, or the
relationship between a non-signatory and the contract, Dodds,
909 A.2d at 351.6
None of this aids CCMC’s cause. Perhaps Abdurahman
alleges that CCMC violated the residency agreement. But the
residency agreement lacks an arbitration clause. So there is
nothing in that contract to estop Abdurahman from repudiating.
And a sibling corporate relationship, without more, cannot
6
A standard “essentially the same as the test described
in DuPont.” White v. Sunoco, Inc., 870 F.3d 257, 263 n.5 (3d
Cir. 2017). In DuPont, we looked for a “close relationship
between the entities involved,” based on the “relationship of
the alleged wrongs to the nonsignatory’s obligations and duties
in the contract and the fact that the claims were intimately
founded in and intertwined with the underlying contract
obligations.” E.I. DuPont, 269 F.3d at 199 (cleaned up).
7
establish the “obvious and close nexus” necessary to invoke
estoppel. There are, rather, two contracts with two sets of
signatories, and both can be performed without conflict or
inequity.
CCMC does not really disagree but sees something
unfair in leaving the parties to their deals. First, CCMC argues,
Abdurahman could have sued Prospect, pulling the entire
dispute into the arbitration agreement. As a result, CCMC
seeks a new rule of law: a presumption that if (at least in the
eyes of a defendant) a plaintiff declines to name a party whose
presence might implicate arbitration, then a court should
interpret the agreements as if the plaintiff did. We decline the
invitation.
To begin, no authority supports CCMC’s idea.7 And we
fail to see how CCMC’s rule could work. CCMC does not
argue Prospect is a necessary party, and has not moved to join
Prospect as a defendant. In that circumstance, the federal rules
follow the common law practice that the plaintiff, not the
defendant, controls the complaint. See Lincoln Prop. Co. v.
Roche, 546 U.S. 81, 91 (2005) (citing 16 J. Moore et al.,
Moore’s Fed. Prac. § 107.14[2][c], p. 107–67 (3d ed. 2005)).
Departing from that standard to demand courts pierce the
7
CCMC relies on non-precedential decisions that cut
against, not in favor of, its proposed standard. Requiring a
plaintiff to sue the signatory to an arbitration agreement just
because a non-signatory wants to arbitrate is quite different
than permitting a named non-signatory to invoke agency and
estoppel grounds for joining in arbitration. See, e.g., Arnold v.
Arnold Corp., 920 F.2d 1269, 1281 (6th Cir. 1990). So too a
complaint that alleges both named defendants violated the
same law through concerted misconduct, facts far from the
combination of named and unnamed parties and multiple
agreements here. See Noye v. Johnson & Johnson Servs., Inc.,
765 F. App’x 742, 747–48 (3d Cir. 2019). And there is no risk
here of “simultaneous litigation and arbitration” of the same
factual claims because there is no separate claim against
Prospect, and no arbitrable claim against Jacobs. See Caparra
v. Maggiano’s Inc., 2015 WL 5144030, at *8 (E.D. Pa. Sept. 1,
2015).
8
pleadings and determine, somehow, whether other parties and
grounds might have been added and whether their absence is
tied, in some way, to an intent to avoid arbitration, is
unreasonable. Nor is it necessary to avoid an unreasonable
interpretation of the parties’ agreement. CCMC could have
drafted a contract directing disputes to arbitration. See Stolt-
Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 682
(2010). That it did not does not require rewriting the law to
conform to its expectation.
Second, CCMC argues that Abdurahman’s claims
actually arise under the arbitration agreement. Following the
facts backward, CCMC reasons since her employment with
CCMC hinged on signing all the paperwork, including the
arbitration agreement with Prospect, then everything that
happened during her employment relates back to that contract,
and into arbitration. That argument borrows from common law
causation, not contract. True, at some point, Abdurahman’s
employment claims collapse into the moment she accepted her
job at CCMC. But her claims are not “intimately founded in
and intertwined with [any] underlying contract obligation[].”
E.I. DuPont, 269 F.3d at 199 (quotation omitted). That is
because the Prospect arbitration agreement creates no duties,
and imposes no obligations, other than arbitrating all disputes
with Prospect.
Taken together, equitable estoppel does not permit
CCMC to control the allegations in, or parties to,
Abdurahman’s suit. As a result, it cannot compel arbitration
under Abdurahman’s agreement with Prospect.
B. The Claim Against Jacobs is Outside the
Arbitration Agreement
Abdurahman’s claims against Jacobs require additional
analysis because Jacobs was an employee of Prospect, so
Jacobs is bound by, and may enforce, the arbitration
agreement. See Pritzker, 7 F.3d at 1121. So we move to the
second threshold question: whether the dispute “fall[s] with[in]
the language of” the agreement. CardioNet, 751 F.3d at 172
(quoting John Hancock Mut. Life Ins. Co., 151 F.3d at 137). It
does not.
9
Abdurahman and Prospect agreed to arbitrate disputes
“arising out of or relating to [the] Arbitration Agreement, . . .
[Abdurahman’s] employment with [Prospect], or the
termination of [Abdurahman’s] employment.” (App. at 196.)
Broad language, but not boundless because the agreement is
limited to disputes arising from Abdurahman’s “employment
with” Prospect. (App. at 196.) And Prospect never employed
Abdurahman, CCMC did. There is no way to squeeze
Abdurahman’s defamation and PHRA claims into the
contractual language, so they may proceed in court. See
CardioNet, 751 F.3d at 172.
III.
The Appellants fail to establish their entitlement to
judgment as a matter of law. We will affirm the District Court’s
order denying the motion to dismiss in favor of arbitration.
10