Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01788/USCOURTS-azd-2_09-cv-01788-3/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Maxwell Monsanto, 

Plaintiff, 

vs.

DWW Partners, LLLP, an Arizona limited

liability partnership, d/b/a Right Honda;

DWW AZ, Inc., an Arizona corporation,

d/b/a Right Honda; David Wilson

Automotive Group, a California

corporation, d/b/a Right Honda, 

Defendants. 

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No. CV-09-01788-PHX-FJM

ORDER

The court has before it defendant DWW AZ, Inc.’s Motion to Stay the Court’s

January 15, 2010 Orders Pending Resolution of Appeal (doc. 40), plaintiff Maxwell

Monsanto’s response (doc. 43), and defendant’s reply (doc. 48).

On January 15, 2010, we held a scheduling conference and entered Orders compelling

arbitration and staying this case until June 1, 2010 (doc. 30), and setting June 4, 2010

disclosure deadlines (doc. 29). We explained that one of the goals of arbitration is to resolve

disputes more efficiently than litigation. Thus, we crafted a schedule with sufficient time for

the parties to arbitrate their dispute in good faith and deadlines to ensure that our ability to

manage the parties’ case efficiently would not be compromised in the name of efficiency.

In a motion for reconsideration (doc. 35), defendant argued that our Orders were inconsistent

Case 2:09-cv-01788-FJM Document 49 Filed 05/10/10 Page 1 of 4
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with the parties’ arbitration agreements. It contended that the agreements require an

unlimited time in which to pursue arbitration. We denied defendant’s motion because the

parties’ agreements do not call for unlimited arbitration and the Federal Arbitration Act

(“FAA”), 9 U.S.C. §§ 1-16, does not mandate it. Moreover, we explained that our case

management deadlines were designed to comply with the Civil Justice Reform Act, 28

U.S.C. §§ 471-82, which encourages early, firm trial dates. Defendant then filed an appeal

on the theory that our Order granting a stay was, in fact, a refusal to grant a stay. Compare

9 U.S.C. § 16(b)(1) (disallowing an appeal from an interlocutory order granting an FAA stay)

with 9 U.S.C. § 16(a)(1)(A) (allowing an appeal from an order refusing an FAA stay).

Defendant now moves for a stay pending the resolution of its appeal. Of course, this

case is already stayed until June 1, 2010, which suggests that defendant’s appeal is on infirm

ground at the outset. See 9 U.S.C. § 16(b)(1). As plaintiff points out, in the non-FAA

context of an appeal from an order compelling expedited arbitration on the grounds that it

was an injunction, the United States Court of Appeals for the Ninth Circuit found that “for

purposes of appealability, an order compelling efficient arbitration is no different from an

order compelling arbitration.” Abernathy v. S. Cal. Edison, 885 F.2d 525, 529 (9th Cir.

1989). Even where an appeal on the issue of arbitrability is permitted, it does not

automatically divest a district court of jurisdiction. Britton v. Co-op Banking Group, 916

F.2d 1405, 1411-12 (9th Cir. 1990) (appeal from an order denying a motion to compel

arbitration). Instead, a district court may, in its discretion, enter a stay pending appeal. Id.

at 1412. While the parties agree that Britton does not squarely address the proper standard

to apply here, they disagree on the case’s significance.

Relying on language in Britton suggesting that a substantial question on appeal is

necessary for a stay pending appeal, id., defendant contends that a substantial question is

sufficient for a stay. Plaintiff contends that a stay pending an appeal on the issue of

arbitrability is presumptively inappropriate after Britton. Neither contention is persuasive.

Britton does not hold that the general standard for a stay pending appeal is inapplicable in

the context of arbitration, and it cites a case applying it with approval. Id. (citing C.B.S.

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Employees Fed. Credit Union v. Donaldson, Lufkin & Jenrette Sec. Corp., 716 F. Supp. 307

(W.D. Tenn. 1989)). Therefore, we will apply the general standard: “(1) whether the stay

applicant has made a strong showing that he is likely to succeed on the merits; (2) whether

the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will

substantially injure the other parties interested in the proceeding; and (4) where the public

interest lies.” Nken v. Holder, __ U.S. __, __, 129 S. Ct. 1749, 1761 (2009) (quoting Hilton

v. Braunskill, 481 U.S. 770, 776, 107 S. Ct. 2113, 2119 (1987)). In Nken, the United States

Supreme Court acknowledged that these factors substantially overlap with the preliminary

injunction factors from Winter v. Natural Resources Defense Council, Inc., __ U.S. __, __,

129 S. Ct. 365, 376-77 (2008), which were applied to a stay pending appeal in the Ninth

Circuit before Nken. Humane Soc’y of the U.S. v. Gutierrez, 558 F.3d 896, 896 (9th Cir.

2009).

To carry its burden, defendant must first show a strong likelihood of success on the

merits and irreparable harm, which are the most critical factors. Nken, __ U.S. at __, 129 S.

Ct. at 1761-62. It asserts that a district court may not limit the length of a stay pending

arbitration based on “such discretionary considerations” as efficient case management,

Motion at 12, because the FAA requires arbitration agreements to be enforced in accordance

with their terms. Defendant relies on Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 105

S. Ct. 1238 (1985), in which the Court rejected a doctrine disfavoring the arbitrability of

otherwise arbitrable claims intertwined with nonarbitrable claims, even though the result was

inefficient proceedings. The Court reasoned that a “conflict between two goals of the

[FAA]–enforcement of private agreements and encouragement of efficient and speedy

dispute resolution” did not require favoring the latter in order to conform with the intent of

Congress. Id. at 221, 1242.

Here, enforcement of the parties’ agreements does not conflict with the FAA’s goal

of efficiency because the parties did not agree to unlimited arbitration. Indeed, our Orders

promote the efficiency goals of the FAA and the Civil Justice Reform Act, which are not

merely discretionary considerations worthy of short shrift. Thus, defendant cannot show a

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strong likelihood of success on appeal. Moreover, any harm defendant suffers from its

failure to proceed with arbitration in good faith would be self-inflicted. It would not result

from our Orders. Because defendant fails to carry its burden on the threshold factors for a

stay pending appeal, we deny its motion.

We note that both parties accuse each other of failing to arbitrate. Plaintiff blames the

failure on defendant’s demand that he agree to dismiss his case before defendant pays the

costs of arbitration. Defendant blames plaintiff for failing to pay the costs of an unlimited

arbitral process. It is readily apparent that the parties do not intend to arbitrate their dispute

under their agreements. This is further support for our approach putting a time limit on

alternative dispute resolution.

IT IS THEREFORE ORDERED DENYING defendant DWW AZ, Inc’s Motion

to Stay the Court’s January 15, 2010 Orders Pending Resolution of Appeal (doc. 40).

DATED this 7th day of May, 2010.

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