United States District Court, D. Idaho
CHRISTOPHER E. JOHNSON, Plaintiff,
CACH, LLC, and MANDARICH LAW GROUP, LLP, Defendants.
MEMORANDUM DECISION AND ORDER
LYNN WINMILL CHIEF U.S. DISTRICT COURT JUDGE
Court has before it Plaintiff's Motion to Reopen Case or,
Alternatively, for Appointment of Arbitrators (Dkt. 50).
Additionally, Plaintiff has filed a Motion to Strike
Defendant's Response (Dkt. 53). For the reasons discussed
below, the Motion to Reopen is denied, and the Motion to
Strike is deemed moot.
December 16, 2016, the Court granted Defendant's Motion
to Dismiss by ordering all claims to arbitration. (Dkt. 27).
The Order enforced the underlying contractual agreement
between Johnson and Bank of America, which contained a
provision stating: “The arbitration shall be conducted
by the National Arbitration Forum (‘NAF'). . . . If
the NAF is unable or unwilling to act as arbitrator, we may
substitute another nationally recognized, independent
arbitration organization that uses a similar code of
procedure.” (Dkt. 11-2). On September 25, 2017, the
Court denied Johnson's motion for reconsideration.
Subsequently, Johnson filed his claim for arbitration with
the NAF before learning that the forum no longer arbitrates
claims involving private individuals or consumers. (Dkt.
50-1). Johnson now offers the current unavailability of NAF
as an expansion to the factual record, and argues that such
unavailability entirely voids the arbitration agreement.
Court has “distilled various grounds for
reconsideration of prior rulings into three major grounds for
justifying reconsideration: (1) an intervening change in
controlling law; (2) the availability of new evidence or an
expanded factual record; and (3) the need to correct a clear
error or to prevent manifest injustice.” Gray v.
Carlin, 2015 WL 75263, at *2 (D. Idaho Jan. 6, 2015). Johnson
challenges the Court's order on ground two.
Federal Arbitration Act (“FAA”) provides that
written agreements to arbitrate disputes arising out of
transactions involving interstate commerce “shall be
valid, irrevocable, and enforceable, save upon such grounds
as exist at law or in equity for the revocation of any
contract.” 9 U.S.C. § 2. The purpose of the FAA is
to “reverse the longstanding judicial hostility to
arbitration agreements . . . and to place arbitration
agreements upon the same footing as other contracts.”
Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20, 24 (1991). To that end, the FAA divests the district
court of its discretion and requires it to resolve any doubts
in favor of compelling arbitration. Dean Witter Reynolds,
Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84
L.Ed.2d 158 (1985).
parties no longer dispute the application of the FAA. Rather,
Plaintiff contends that the unavailability of the
agreement's designated arbitrator dooms the arbitration
clause in its entirety. Under the FAA, the answer to this
question turns on whether the selected arbitrator is integral
to the agreement. Reddam v. KPMG LLP, 457 F.3d 1054,
1061 (9th Cir.2006) overruled on other grounds in
Atl. Nat'l Trust LLC v. Mt. Hawley Ins. Co., 621
F.3d 931, 940 (9th Cir.2010). Section 5 of the FAA provides:
If in the agreement provision be made for a method of naming
or appointing an arbitrator or arbitrators or an umpire, such
method shall be followed; but if no method be provided
therein, or if a method be provided and any party thereto
shall fail to avail himself of such method, or if for any
other reason there shall be a lapse in the naming of an
arbitrator or arbitrators or umpire, or in filling a vacancy,
then upon the application of either party to the controversy
the court shall designate and appoint an arbitrator or
arbitrators or umpire, as the case may require, who shall act
under the said agreement with the same force and effect as if
he or they had been specifically named therein; and unless
otherwise provided in the agreement the arbitration shall be
by a single arbitrator.
the arbitration clause selects merely the rules of a specific
arbitral forum, as opposed to the forum itself, and another
arbitral forum could apply those rules, the unavailability of
the implicitly intended arbitral forum will not require the
court to condemn the arbitration clause. Reddam, 457
F.3d at 1059-61.
the Ninth Circuit has not explicitly defined what establishes
a chosen arbitral forum as “integral” within a
contract, it suggested that the “integral forum”
determination should be approached similarly to how it
approaches forum selection clauses which choose a particular
court as the litigation arena. Id. There, selection
of a specific forum is not treated as exclusive of all other
forums unless the parties have expressly stated it so.
Id. at 1061 (citing Pelleport investors, Inc. v.
Budco Quality Theatres, Inc., 741 F.2d 273, 280
(9th Cir.1984); N. Cal. Dist. Council of Laborers v.
Pittsburgh-Des Moines Steel Co., 69 F.3d 1034, 1036-37
(9th Cir.1995); Hunt Wesson Foods, Inc. v. Supreme Oil
Co., 817 F.2d 75, 76-78 (9th Cir.1987)). Thus, the Ninth
Circuit has strongly implied that, at a minimum, for the
selection of an arbitrator to be deemed integral, the
arbitration clause must include an “express
statement” clearly indicating that the selection of the
arbitral forum is mandatory and exclusive, rather than
Reddam, the Washington district court in Carideo
v. Dell, Inc. found that the parties' selection of
the National Arbitration Forum (“NAF”) was
expressly stated as the exclusive forum and, thus, integral
to the arbitration agreement. Carideo, 2009 WL
3485933, at *5-6 (W.D.Wash. Oct. 26, 2009). The arbitration
clause there provided that the parties' claims
“[s]hall be resolved exclusively and finally
by binding arbitration administered by the National
Arbitration Forum (NAF) under its code of
procedure…” Id. at *6, fn. 2 (emphasis
added). Thus, the agreement clearly and unequivocally limited
its selection of arbitral forum to NAF while simultaneously
excluding all other arbitral forums from acting in place of
contrast, the Selby v. Deutsche Bank Trust Co.
Americas court found that, although the agreement
expressly stated the NAF as the selected forum for
arbitration, there was no evidence suggesting the designation
of NAF as exclusive. 2013 WL 1315841 at *11 (S.D.Cal. Mar.
28, 2013). The court noted that while the language of the
agreement did state that arbitration “shall . . . be
conducted by the [NAF], ” and that “all aspects
of any arbitration . . . shall be conducted under the NAF
Code of Procedure, ” the agreement nonetheless did not
include language that designated the NAF as the
“exclusive or sole forum for arbitration.”
Id. Similarly, a Michigan district court held that
the NAF's unavailability to arbitrate the case did not
render the agreement ...