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Eder v. Northern Arizona Consolidated Fire District #1

United States District Court, D. Arizona

October 29, 2019

Wayne Eder, Plaintiff,
Northern Arizona Consolidated Fire District #1, et al., Defendants.


          Honorable John J. Tuchi, United States District Judge.

         At issue is Defendants' Motion to Dismiss and Compel Arbitration (Doc. 30, Mot.), to which Plaintiff filed a Response (Doc. 35, Resp.) and Defendants[1] filed a Reply (Doc. 37, Reply). Because the parties' briefs were adequate for the Court to resolve the issues raised in Defendants' Motion, the Court declined to hold oral argument on the briefs. See LRCiv 7.2(f). For the reasons that follow, the Court grants Defendants' Motion.

         I. BACKGROUND

         Plaintiff is a former Fire Chief of the Northern Arizona Consolidated Fire District #1 (“NACFD”). Mike Collins, Erik Berg, Carl Hays, John Bryant, and Jim Bailey (together, “Board Members”), were members of NACFD's Board of Directors during the period in which the events leading to this action took place. (Doc. 1, Compl.)

         Plaintiff's cause of action stems from the termination of his contract of employment as Fire Chief in May 2018. He alleges that, while he was on temporary medical leave, the Board Members held an unauthorized and illegal meeting in which they voted to terminate him prior to the expiration of his contractual employment term, which was set to either lapse or renew in December 2018. (Compl. at 3.) In connection with this meeting and his resulting termination, Plaintiff alleges nine counts against either NACFD, the Board Members, or both: (1) wrongful termination; (2) breach of contract; (3) breach of good faith and fair dealing; (4) defamation; (5) intentional infliction of emotional distress; (6) respondeat superior; (7) conspiracy; (8) intentional interference with contractual relations; and (9) violation of due process under 42 U.S.C. § 1983.

         Plaintiff and the NACFD, through Chairperson Patricia Lewin, signed an employment agreement (“the Agreement”) embodying the terms of Plaintiff's employment as Fire Chief. (See Mot. Ex. A.) The Agreement contained an arbitration clause, which is the subject Defendants' Motion. In relevant part, the provision states: “The parties to this Agreement agree to resolve all disputes arising out of or relating to this Agreement through arbitration to the extent allowed by law. In any event, the parties hereto waive any rights to a trial by jury.” (Mot. Ex. A at 6.)

         Pursuant to this provision, Defendants moved this Court to either dismiss the action in accordance with the arbitration provision or, alternatively, stay the case and compel arbitration. The Court subsequently requested supplemental briefing from the parties to aid in resolution of Defendants' Motion. (Doc. 38.) Both parties submitted additional briefing. (Docs 39, 40.) The Court now grants the Motion and dismisses the claims against Defendants.

         II. ANALYSIS

         To resolve a motion to compel arbitration under the Federal Arbitration Act, a district court must determine (1) whether the parties entered into a valid agreement to arbitrate, and (2) whether the arbitration agreement encompasses the dispute at issue. Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). Neither party disputes the validity of the Agreement or whether the Agreement encompasses the dispute. The Court therefore need not engage in discussion of those two requirements. Accordingly, the only issue for the Court to resolve is the threshold one: whether the Agreement is within the scope of the Federal Arbitration Act (“FAA”). See 9 U.S.C. §§ 1 et seq. If it is, the Court must order arbitration. Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 720 (9th Cir. 1999).

         The “party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.Hoffman v. Citibank, 546 F.3d 1078, 1082 (9th Cir. 2008). Any doubts concerning the scope of an arbitration agreement should be resolved in favor of arbitration. Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983).

         1. The Arizona Choice of Law Provision

         Plaintiff first argues that the FAA does not apply because the Agreement contains a choice of law provision calling for Arizona law. Paragraph 13 of the Agreement recites: “This Agreement shall be governed by and construed in accordance with the laws of the state of Arizona, in full force and effect as of the date of execution.” (Mot. Ex. A at 6.) However, the Ninth Circuit Court of Appeals has enunciated a strong presumption that federal law-specifically, the FAA-supplies the rules of arbitration that govern an agreement to arbitrate. Sovak v. Chugai Pharm. Co., 280 F.3d 1266, 1269 (9th Cir. 2002). “[A] general choice-of-law clause within an arbitration provision does not trump” this presumption. Id. at 1270. Thus, in the absence of the parties manifesting a “clear intent” to have a state's arbitration laws govern, the parties' choice of law provision pertains only to the state substantive law that governs the construction and interpretation of the Agreement-not to its arbitrability. Id. Because the Agreement's Arizona choice of law provision is general and lacks a specific reference to application of Arizona's arbitration laws, the FAA governs the issue of arbitrability.

         2. Scope of the FAA

         Enacted almost a century ago, the FAA reflects a strong federal policy favoring arbitration. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). The Act carries preemptive force as well, “withdr[awing] the power of the states to require a judicial forum for the resolution of claims that the contracting parties agreed to resolve by arbitration.” Southland Corp. v. Keating, 465 U.S. 1, 10 (1984). Accordingly, the statute lays out a sweeping command of validity, irrevocability, and enforceability of an agreement to arbitrate within “any maritime transaction or a contract evidencing a transaction involving ...

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