Virk v. Maple-Gate Anesthesiologists, P.C.

15-513-cv Virk v. Maple-Gate Anesthesiologists, P.C. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. 1 At a stated term of the United States Court of Appeals 2 for the Second Circuit, held at the Thurgood Marshall United 3 States Courthouse, 40 Foley Square, in the City of New York, 4 on the 1st day of July, two thousand sixteen. 5 6 PRESENT: DENNIS JACOBS, 7 GUIDO CALABRESI, 8 REENA RAGGI, 9 Circuit Judges. 10 11 - - - - - - - - - - - - - - - - - - - -X 12 AMARJIT S. VIRK, M.D., 13 Plaintiff-Appellant, 14 15 -v.- 15-513-cv 16 17 MAPLE-GATE ANESTHESIOLOGISTS, P.C. and 18 JON GRANDE, M.D., 19 Defendants-Appellees. 20 - - - - - - - - - - - - - - - - - - - -X 21 22 FOR APPELLANT: GERALD T. WALSH, Zdarsky, 23 Sawicki & Agostinelli LLP, 24 Buffalo, New York. 25 26 FOR APPELLEES: ROBERT C. WEISSFLACH, Harter 27 Secrest & Emery LLP, Buffalo, 28 New York. 1 1 2 Appeal from a judgment of the United States District 3 Court for the Western District of New York (Skretny, J.). 4 5 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED 6 AND DECREED that the judgment of the district court be 7 AFFIRMED IN PART and VACATED AND REMANDED IN PART with 8 instructions to stay the action pending arbitration. 9 10 Plaintiff Dr. Amarjit S. Virk appeals from the judgment 11 of the United States District Court for the Western District 12 of New York (Skretny, J.), granting defendants’ motion to 13 compel arbitration and dismissing Virk’s complaint alleging 14 breach of contract and unlawful discrimination in connection 15 with Virk’s termination from his employment. We assume the 16 parties’ familiarity with the underlying facts, the 17 procedural history, and the issues presented for review. 18 19 Defendants’ motion to compel arbitration sought either 20 a stay or dismissal. Now, however, they challenge appellate 21 jurisdiction on the ground that the district court lacked 22 discretion to dismiss and was instead required to stay the 23 action pending the outcome of arbitration, an order from 24 which no appeal would lie. See 9 U.S.C. § 16(b)(1)-(2). 25 They rely on Katz v. Cellco Partnership, 794 F.3d 341 (2d 26 Cir. 2015), which was decided after the conclusion of 27 proceedings below. Accordingly, defendants ask us to vacate 28 the dismissal of Virk’s complaint and remand with 29 instructions to enter a stay, and to decline to reach the 30 substance of Virk’s appeal. 31 32 We agree that the district court lacked discretion to 33 dismiss the case under Katz as well as the plain language of 34 9 U.S.C. § 3. See § 3 (“[T]he court . . . , upon being 35 satisfied that the issue involved in such suit or proceeding 36 is referable to arbitration under such an agreement, shall 37 on application of one of the parties stay the trial of the 38 action until such arbitration has been had . . . .” 39 (emphasis added)); see generally Katz, 794 F.3d 341 (holding 40 that district courts lack discretion to dismiss, rather than 41 stay, an action when all claims are referred to arbitration 42 and a stay requested by any party).1 We therefore vacate 1 Cf. Benzemann v. Citibank, N.A., 622 F. App’x 16, 18 (2d Cir. 2015) (summary order) (concluding that dismissal in favor of arbitration was not error where no party requested a stay). 2 1 the dismissal of the case and remand with instructions to 2 enter a stay pending the outcome of arbitration.2 3 4 However, because we have undoubted appellate 5 jurisdiction over the district court’s final order 6 dismissing the case, see id. § 16(a)(3); Green Tree Fin. 7 Corp.-Ala. v. Randolph, 531 U.S. 79, 82, 85-89 (2000), we 8 may review the grant of the motion to compel arbitration, as 9 was done in Katz itself, 344 F.3d at 344 (affirming district 10 court’s grant of motion to compel arbitration while vacating 11 and remanding dismissal of case). 12 13 We review de novo the grant of an order compelling 14 arbitration. Cohen v. UBS Fin. Servs., Inc., 799 F.3d 174, 15 177 (2d Cir. 2015). A court adjudicating a motion to compel 16 arbitration applies ”a standard similar to that applicable 17 for a motion for summary judgment,” considering whether 18 there is any “triable issue of fact” as to the making of an 19 agreement to arbitrate. Bensadoun v. Jobe-Riat, 316 F.3d 20 171, 175 (2d Cir. 2003); see 9 U.S.C. § 4 (“[U]pon being 21 satisfied that the making of the agreement for arbitration 22 or the failure to comply therewith is not in issue, the 23 court shall make an order directing the parties to proceed 24 to arbitration in accordance with the terms of the 25 agreement.”). “In deciding whether a dispute is arbitrable, 26 we must answer two questions: (1) whether the parties agreed 27 to arbitrate, and, if so, (2) whether the scope of that 28 agreement encompasses the claims at issue.” Holick v. 29 Cellular Sales of N.Y., LLC, 802 F.3d 391, 394 (2d Cir. 30 2015).3 2 Virk points out that defendants did not file a cross- appeal. Defendants likely lacked standing to cross-appeal, having sought either a stay or dismissal. See Deposit Guar. Nat’l Bank, Jackson, Miss. v. Roper, 445 U.S. 326, 333 (1980) (“A party who receives all that he has sought generally is not aggrieved by the judgment affording the relief and cannot appeal from it.”). We have jurisdiction to review the district court’s judgment compelling arbitration and dismissing Virk’s claims, and we may exercise our discretion to correct the error identified by defendants. See Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953, 955-56 (10th Cir. 1994). 3 The dicta of Ragone v. Atlantic Video at Manhattan Center, 595 F.3d 115 (2d Cir. 2010), raises issues that do not bear upon whether there is an agreement to arbitrate or 3 1 As the district court determined, Virk raised no issue 2 of fact regarding his agreement to arbitrate.4 Virk does 3 not dispute that he agreed to arbitrate future claims when 4 he signed the 2000 Employment Agreement; and he has shown no 5 evidence that would create a “substantial issue” as to 6 whether that agreement was terminated or superseded by 7 another. Almacenes Fernandez, S.A. v. Golodetz, 148 F.2d 8 625, 628 (2d Cir. 1945); see also Doctor’s Assocs., Inc. v. 9 Jabush, 89 F.3d 109, 114 (2d Cir. 1996). 10 11 The 2000 Employment Agreement stated that its term 12 “shall continue until termination as provided in Article 9 13 of this Agreement,” and any amendment was required to be “in 14 writing, signed by both parties.” J.A. 9 ¶ 2; J.A. 4 ¶ 12. 15 If the agreement had been intended to terminate 16 automatically upon Virk attaining shareholder-employee 17 status, it could have stated as much--but it does not. And 18 the only written, signed amendment put into the record by 19 either party is an undated “Non-Compete, Non-Solicitation, 20 and Non-Disclosure Agreement,” signed by Virk, that amends 21 any prior employee agreement but specifically limits its 22 superseding effect to non-compete, non-solicitation, and 23 non-disclosure provisions.5 J.A. 99. Virk submitted no 24 evidence to support his allegation that the unsigned 2005 25 draft employment agreement (which bears the name of a 26 different employee) ever went into effect with respect to 27 any shareholder-employee; and defendants submitted evidence 28 that it did not. His partial performance theory is flawed 29 because he relies on compensation he received in 2004-- 30 before the 2005 draft agreement was circulated in August 31 2005. Finally, Virk has not demonstrated that the corporate 32 by-laws are, as he contends, incompatible with the 2000 the scope of such an agreement. Issues of arbitrability related to Ragone are reserved for the arbitrator in the first instance. See infra pages 5-7. 4 Virk does not challenge the district court’s determination that his claims are within the scope of the arbitration clause. 5 The lack of an arbitration clause in the Non-Compete, Non-Solicitation, and Non-Disclosure Agreement is unsurprising, given that the arbitration clause in the 2000 Employment Agreement specifically excluded any claims relating to “the Non-Competition During Employment Clause . . . and the Covenant Not to Compete” in the agreement. J.A. 12 ¶ 16. 4 1 Employment Agreement such that the 2000 Employment Agreement 2 was silently terminated upon Virk’s attaining shareholder 3 status.6 4 5 The parties to the 2000 Employment Agreement were Virk 6 and Maple-Gate Anesthesiologists, P.C. In district court 7 proceedings, Virk did not respond to defendants’ argument 8 that the arbitration agreement also applies to Virk’s claims 9 against the individual defendant because Dr. Grande’s 10 potential “liability arises out of the same misconduct 11 charged against” the entity. See Roby v. Corp. of Lloyd’s, 12 996 F.2d 1353, 1360 (2d Cir. 1993); see also, e.g., 13 Hirschfeld Prods. v. Mirvish, 673 N.E.2d 1232, 1233 (N.Y. 14 1996). The district court compelled arbitration with 15 respect to all of Virk’s claims. We will not consider 16 Virk’s challenge to this ruling, which is made for the first 17 time in his appellate reply brief. See In re Nortel 18 Networks Corp. Sec. Litig., 539 F.3d 129, 132-33 (2d Cir. 19 2008) (arguments not presented to the district court are 20 considered forfeited); Norton v. Sam’s Club, 145 F.3d 114, 21 117-18 (2d Cir. 1998) (issues raised for the first time in a 22 reply brief are not adequately preserved for review). 23 24 Finally, Virk relies on Ragone v. Atlantic Video at 25 Manhattan Center, 595 F.3d 115 (2d Cir. 2010), to argue that 26 the arbitration agreement is unenforceable as applied to his 27 Title VII and Americans with Disabilities Act claims because 28 administrative exhaustion of these claims could take longer 29 than the six-month limitations period set forth in the 30 arbitration clause. In dicta, Ragone supposed that it was 31 “at least possible that [the plaintiff] would be able to 32 demonstrate” that a 90-day limitations period and a fee- 33 shifting provision contained in the parties’ arbitration 34 agreement “were incompatible with her ability to pursue her 35 Title VII claims in arbitration, and therefore void” under 6 For example, Virk contends that the termination provisions in the 2000 Employment Agreement are inconsistent with the by-laws. But he points to by-laws governing procedures for purchase or redemption of shares upon death or disqualification of shareholders. J.A. 147. These procedures are not by their terms inconsistent with a contractual clause providing for other contingencies. Furthermore, the termination provisions are materially similar to those contained in the draft 2005 agreement, which Virk argues applied during his 2005-2013 shareholder- employment. See J.A. 11 ¶ 9; J.A. 80 ¶ 12. 5 1 the Federal Arbitration Act’s “effective vindication” 2 doctrine. Id. at 126; see Am. Express Co. v. Italian Colors 3 Rest., 133 S. Ct. 2304, 2310-11 (2013) (discussing 4 “‘effective vindication’ exception” to required enforcement 5 of arbitration agreements). The Ragone panel did not have 6 occasion to determine whether the plaintiff had in fact made 7 such a showing, because the defendants agreed to waive 8 enforcement of those provisions in arbitration. 9 10 Virk has not sustained his burden to show that he would 11 be unable to vindicate his statutory rights in arbitration. 12 Cf. Green Tree, 531 U.S. at 90-92 (a party seeking to 13 invalidate an arbitration agreement under effective 14 vindication doctrine on ground that arbitration would be 15 prohibitively expensive bears burden to show likelihood of 16 incurring such costs). First, it is not clear that Virk 17 would be required to exhaust administrative remedies prior 18 to arbitration. Title VII and the ADA provide that within 19 90 days of receipt of a right-to-sue letter, “a civil action 20 may be brought . . . .” 42 U.S.C. § 2000e-5(f)(1) (emphasis 21 added); see id. § 12117(a). It does not, by its terms, 22 require exhaustion before engaging in private arbitration. 23 And even if it would otherwise apply to an arbitration, the 24 district court explained that “an arbitration provision that 25 requires an employment discrimination claim to be arbitrated 26 before statutory exhaustion procedures could possibly be 27 completed is easily construed as reflecting the parties’ 28 agreement to waive such requirement, as well as any defense 29 based on that requirement.” Virk v. Maple-Gate 30 Anesthesiologists, P.C., 80 F. Supp. 3d 469, 480 (W.D.N.Y. 31 2015); see Sole Resort, S.A. de C.V. v. Allure Resorts 32 Mgmt., LLC, 450 F.3d 100, 104 (2d Cir. 2006) (“Arbitration 33 is entirely a creature of contract. The rules governing 34 arbitration, its location, the law the arbitrators will 35 apply, indeed, even which disputes are subject to 36 arbitration, are determined entirely by an agreement between 37 the parties.”). Second, the arbitrator would seem to be the 38 appropriate party to determine these issues and related 39 ones, including: whether the exhaustion requirement applies; 40 whether the parties’ contract should be construed to waive 41 that requirement; whether Virk’s EEOC filing should be 42 considered to have “commenced” the arbitration under the 43 agreement, J.A. 12 ¶ 16; and whether the six-month statute 44 of limitations should be enforced (with respect to Virk’s 6 1 federal discrimination claims or otherwise7). See Howsam v. 2 Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002) (the 3 arbitrator should decide “procedural,” “gateway” questions 4 of arbitrability such as applicability of time limitation). 5 6 For the foregoing reasons, and finding no merit in 7 Virk’s other arguments, we hereby AFFIRM the district 8 court’s judgment compelling arbitration, VACATE the district 9 court’s dismissal of the action, and REMAND with 10 instructions to stay the action pending arbitration. 11 12 FOR THE COURT: 13 CATHERINE O’HAGAN WOLFE, CLERK 14 15 16 17 7 Virk argues that one requirement of the 2000 Employment Agreement--that the employee abide by Kaleida Health policies and procedures--is inconsistent with the six-month limitations period because hearings held in accordance with those procedures may take a year or longer. Virk can raise such an argument in arbitration in response to defendants’ stated intention to defend the arbitration on grounds of untimeliness. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84-85 (2002). 7