Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca11-14-11549/USCOURTS-ca11-14-11549-0/pdf.json

Parties Involved:
Aventura Limousine & Transportation Service, Inc.
Appellee
Rodney Schatt
Appellant
Scott Tinkler
Appellee

Document Text:

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 14-11549

________________________

D.C. Docket No. 1:10-cv-22353-MGC

RODNEY SCHATT, 

individually and on behalf of all

persons similarly situated,

 Plaintiff-Appellant,

 versus

AVENTURA LIMOUSINE & TRANSPORTATION 

SERVICE, INC., 

agent of 

d/b/a/ Aventura Limousine and Aventura 

Worldwide, 

SCOTT TINKLER, 

 Defendants-Appellees.

________________________

Appeal from the United States District Court

for the Southern District of Florida

________________________

(March 16, 2015)

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Before HULL and DUBINA, Circuit Judges, and BOWEN,

* District Judge.

PER CURIAM:

Plaintiff Rodney Schatt, a limousine driver, appeals the vacatur of an interim

arbitral award secured against his former employer. After careful review, we hold 

that the district court was without jurisdiction to vacate the interim award.1

I. BACKGROUND

On July 29, 2010, plaintiff Rodney Schatt filed an amended complaint

against defendants Aventura Limousine & Transportation Service, Inc., and Scott 

Tinkler (collectively, “Aventura”). Schatt’s suit claims he and others were 

misclassified as independent contractors and denied overtime pay by Aventura in 

violation of the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 201 et seq.

A. Compelling Arbitation

On August 30, 2010, defendant Aventura filed a motion to compel 

arbitration and stay proceedings until completion of arbitration or, in the 

alternative, to dismiss the action. The parties had previously executed an 

agreement stating:

The parties agree that any dispute, claim, or controversy 

arising out of or relating to this Agreement, the breach, 

 *

Honorable Dudley H. Bowen, Jr., United States District Judge for the Southern District 

of Georgia, sitting by designation.

 

1

Although originally scheduled for oral argument, this appeal was removed from the oral 

argument calendar by unanimous agreement of the panel. See 11th Cir. R. 34-3(f).

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termination, enforcement, or validity thereof, or any 

other matter regarding the legal relationship between 

[Aventura], [Schatt], or its employees, including the 

determination of the scope or applicability of this 

agreement to arbitrate, shall be determined by a single 

arbitrator in proceedings administered by the American 

Arbitration Association, pursuant to its Commercial 

Arbitration Rules.

Aventura argued then that the district court “ha[d] no jurisdiction to determine the 

scope of the issues subject to arbitration, in that the parties also have agreed that 

both the applicability and the scope of the arbitration agreement [we]re to be 

determined by an arbitrator.” 

On November 30, 2010, Aventura prevailed on this argument. District 

Court Judge Marcia Cooke granted Aventura’s motion to compel arbitration and 

stayed the litigation, ordering the clerk to close the case and denying any pending 

motions as moot.

The dispute then proceeded to arbitration before an American Arbitration 

Association arbitrator. 

B. New Counsel and the Arbitral Hearing 

In October 2011, Schatt hired new counsel, attorneys Richard Celler and 

Stacey Schulman of the firm Morgan & Morgan, P.A., to represent him in the 

arbitration. Celler and Schulman at that time also represented other plaintiffs in 

related FLSA actions against Aventura.

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From January 16 through January 18, 2012, arbitrator Sheila Cesarano

conducted a three-day hearing, which both parties and the district court termed the 

“final hearing” or “final arbitration hearing.” The hearing addressed the central 

dispute as to liability, whether Schatt was an employee as defined by the FLSA 

rather than an independent contractor as Aventura argued. Following the hearing, 

Cesarano required each party to submit proposed findings of fact and conclusions 

of law along with final briefs by February 28, 2012. 

C. The Motion to Disqualify

On February 24, 2012, defendant Aventura filed a motion in the district 

court to disqualify Morgan & Morgan and its lawyers as well as a motion to stay 

the arbitration pending resolution of the motion to disqualify. Specifically, 

Aventura alleged that Richard Celler violated several of the Florida Bar Rules of 

Professional Conduct in his representation of Schatt and other plaintiffs in their 

FLSA claims against Aventura. In addition to an array of unprofessional and 

hostile behavior, Celler allegedly engaged in ex parte communications with the 

defendant designed to undermine defense counsel. 

D. The Interim Award on Liability

On March 28, 2012, while the disqualification motions were pending, the

arbitrator issued the “Interim Award on Liability.” The arbitrator found for

plaintiff Schatt, determining: (1) “as a matter of law, that [Schatt] was an employee 

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as defined by the FLSA,” rather than an independent contractor, and (2) that Schatt 

“should have been paid overtime for hours worked over forty (40) hours in a 

workweek.”2

Immediately following this finding the arbitrator addressed the issue of 

damages. The Interim Award stated: “[b]ecause the issue of liability was bifurcated 

from the issue of damages, I will set another hearing via separate Order, as to 

damages, if necessary, as discussed below.” (emphasis added). Further explaining 

this, the arbitrator determined that “[t]he amount of wages owed [Schatt] as well as 

the amount of liquidated damages and reasonable attorneys’ fees and costs shall be 

determined at a separate hearing . . . absent the parties agreeing to the amounts in 

question.” The arbitrator “urged [the parties] to confer regarding damages to avoid 

the necessity of a hearing” and concluded by stating that the Interim Award would

“remain in full force and effect until such time as a final Award is rendered.” 

E. The Disqualification Dispute

On April 10, 2012, the district court granted defendant Aventura’s motion to 

stay the arbitration pending resolution of the disqualification motion. Given Celler 

 

2

Aventura filed a motion with the arbitrator to stay the arbitration proceedings. On or

about February 27, 2014, the arbitrator denied this motion for a stay, noting that “the briefing 

schedule in this matter will remain as is” and that as no court order had then stayed the 

arbitration, the arbitrator would “continue with administration.” Importantly, post-hearing briefs 

were due February 28, 2012, the following day. On March 8, 2012, the arbitrator confirmed to 

the parties that the hearing was concluded, the arbitral record was closed, and that the arbitrator 

would render the award on liability by March 30, 2012. 

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and Morgan & Morgan’s representation of other plaintiffs in similar actions, 

Aventura filed similar motions in those cases. 

On April 11, 2012, Aventura filed a motion to consolidate its 

disqualification motion in this case with a nearly identical motion in Robson

Coelho v. Aventura Limousine & Transportation Service, Inc., Case No. 1:10-cv23228-MGC (S.D. Fla.), also before District Court Judge Cooke. Both the 

disqualification and consolidation motions were referred to a magistrate judge. 

On April 12, 2012, the magistrate judge granted the consolidation motion 

but deferred ruling on the disqualification motion pending the resolution of yet 

another related disqualification motion, this one in Bedoya v. Aventura Limousine 

& Transportation Service, Inc., 861 F. Supp. 2d 1346 (S.D. Fla. 2012), before 

District Court Judge Cecilia Altonaga. 

In Bedoya, following several evidentiary hearings, District Court Judge 

Altonaga ruled that the gravity of the professional misconduct warranted 

disqualification of Celler, Schulman, and the Morgan & Morgan firm representing 

plaintiff Bedoya in that action. Id. at 1373. Specifically, Judge Altonaga found 

that: (1) Celler’s ex parte communication with defendant Scott Tinkler about 

defense counsel compromised defendants’ attorney-client relationship and affected 

the proceedings in Bedoya; (2) Morgan & Morgan’s ex parte communication with, 

and securing of an affidavit from, Michael Goetz (who had an employment 

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relationship with Aventura) was both improper and went to “an issue central to” 

the Bedoya case; and (3) that Celler’s lack of professionalism as evidenced by a 

variety of inappropriate and hostile behaviors also worked to compromise the 

Bedoya case. Id. at 1356-58, 1370-71. 

On May 16, 2012, District Court Judge Altonaga granted the motion to 

disqualify in Bedoya. Id. Because Judge Altonaga was not presented with any 

legal question beyond disqualification in Bedoya, she did not comment on the 

effect of such disqualification, either in the Bedoya action or, critically, in this 

case.

F. Withdrawal and New Counsel

On May 21, 2012, citing Judge Altonaga’s order, Stacey Schulman, on 

behalf of herself and Morgan & Morgan, filed a motion to withdraw as counsel for 

plaintiff Schatt in this action. Though not explicitly requesting it, the motion to 

withdraw, in a footnote, indicated that “the stay [of arbitration] may no longer be 

necessary” given counsel’s withdrawal.

On the same day, Aventura responded in partial opposition to Schulman’s 

motion to withdraw to address the stay of arbitration. Aventura “vehemently

oppose[d] any lifting of the stay” and argued that for the case to continue at that 

time would be “ludicrous.” 

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On May 31, 2012, new counsel Brian Lerner filed a notice of appearance on 

behalf of plaintiff Schatt. 

G. Motion to Lift the Stay of Arbitration

On June 8, 2012, attorney Lerner filed a motion to lift the stay of the 

arbitration on behalf of plaintiff Schatt. The motion argued that “the stay of 

arbitration should be lifted in conjunction with the Court granting the pending 

motion to withdraw by Morgan & Morgan, with any remaining issues to be 

litigated addressed by the arbitrator.” The motion further acknowledged 

Aventura’s opposition to lifting of the stay, but argued that any issues arising from 

Morgan & Morgan’s representation of Schatt were “for the arbitrator to decide” 

and that Aventura’s arguments to the contrary were merely an attempt “to unwind 

the arbitration.” 

On the same day, Aventura filed a response, arguing that lifting of the stay 

would be inappropriate given the attorney misconduct that gave rise to the 

withdrawal. Aventura argued: “By seeking to continue the arbitration proceedings 

herein, and thus take advantage of the Interim Award, Plaintiff is indeed 

attempting to profit from his counsel’s misconduct.” 

On June 9, 2012, Schatt’s new counsel Lerner filed a reply. 

H. Motion to Vacate the Interim Award of Liability

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On June 18, 2012, Aventura filed a motion for dismissal of the action with 

prejudice or, in the alternative, for vacatur of the Interim Award. The motion also 

sought attorney’s fees as a sanction for the earlier misconduct. In sum, Aventura 

“maintain[ed] that by virtue of the all-consuming acts of attorney misconduct that 

tainted the arbitration, the Interim Award cannot be permitted to stand, and 

Plaintiff may not otherwise profit by virtue of the misconduct that already has 

caused Defendants to suffer greatly.” Relevant to this appeal, Aventura wrote:

In the instant case, there already is an “Interim Award” 

that has been rendered by the arbitrator. To the extent 

that award is deemed to be a “final” award for purposes 

of the Federal Arbitration Act, the law recognizes that 

even a “final” award may be set aside by a district court.

In addition, Aventura argued that, if vacatur of the Interim Award were to be 

granted, the matter should be reassigned to “a different arbitrator than that already

involved because to remand to the same arbitrator would preserve an advantage in 

favor of Plaintiff that would just be unfair.” 

On June 21, 2012, the magistrate judge, after a hearing on the motion to 

withdraw, issued an order “adopt[ing] the findings of fact and conclusions of law 

contained in Judge Altonaga’s order in Bedoya,” granting Schulman and Morgan 

& Morgan’s motion to withdraw as plaintiff Schatt’s counsel, and denying as moot 

Aventura’s motion to disqualify counsel. The magistrate judge’s order did not 

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address issues raised by either plaintiff Schatt’s motion to lift the stay of arbitration 

or by defendant Aventura’s motion to dismiss or vacate the Interim Award.

On July 5, 2012, Schatt filed his response to Aventura’s motion. In his 

response, he argued that, in line with the arbitration agreement, the issues raised by 

Aventura’s motion were “subject to determination by the arbitrator” and that, as a 

result, Aventura’s motion was “not properly before” the district court. 

Further, plaintiff Schatt argued that defendant Aventura’s motion for vacatur 

of the Interim Award could not be decided by the district court because the Federal 

Arbitration Act (the “FAA”) allows review of “final arbitration awards only, but 

not of interim or partial rulings.” With respect to the jurisdiction of the district 

court to vacate the Interim Award, Schatt characterized Aventura’s motion as an 

improper interlocutory appeal of a non-final award.

On July 19, 2012, Aventura filed its reply. Regarding the finality of the 

Interim Award, Aventura argued that its motion for vacatur was procedurally 

proper because “the ‘Interim Award’ issued by the arbitrator [was], in fact, a ‘final’

award and, therefore, properly subject to a motion to vacate.” Stating that “titles 

do not control,” Aventura maintained that because (1) only the “subsidiary matter 

of damages” remained to be determined and (2) “there [was] no claim or defense 

left to try,” the Interim Award should be read as final. 

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On June 25, 2013, District Court Judge Cooke held a hearing on plaintiff 

Schatt’s motion to lift the stay of arbitration and on defendant Aventura’s motion 

to vacate the arbitral award. 

I. The District Court Order

On April 8, 2014, twenty-two months after Schatt sought to lift the stay of 

arbitration and Aventura sought to dismiss the action or vacate the arbitral award, 

the district court entered an omnibus order. The district court denied Schatt’s 

motion to lift the stay and granted in part and denied in part Aventura’s motion to 

dismiss or vacate. The district court denied the motion to dismiss the case, granted 

the vacatur motion, ordered the Interim Award vacated, and directed the parties to 

a new arbitration before a new arbitrator.

In analyzing the vacatur motion, the district court found that “[t]he Interim 

Award at issue here [was] sufficiently ‘final’ for review because the arbitrator 

resolved the issue of liability, leaving only the amount of damages for a later 

determination.” The district court further found that “[s]uch calculations do not 

prevent the award from being set aside under Sections 10 and 12 of the FAA.” 

After establishing, in its view, the authority to act on the vacatur motion, the 

district court found that the Interim Award fell within the statutory grounds for 

vacatur of an arbitral award because it was “procured by corruption, fraud, or 

undue means.” Adopting District Court Judge Altonaga’s findings in the Bedoya

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action, the district court found that the attorney misconduct in this action 

sufficiently affected the action to undermine the fairness of the award rendered.

On the same day the omnibus order was issued, plaintiff Schatt filed notice 

of this appeal. 

II. STANDARD OF REVIEW

This Court reviews de novo the district court’s legal conclusions underlying 

an order vacating an arbitration award while reviewing its findings of fact for clear 

error. Offshore Marine Towing, Inc. v. MR23, 412 F.3d 1254, 1255 (11th Cir.

2005). We also review de novo the district court’s determination of whether it has 

subject matter jurisdiction. Gupta v. McGahey, 709 F.3d 1062, 1064-65 (11th Cir.

2013).

III. DISCUSSION

We begin, as we must, by determining whether the district court had 

jurisdiction to vacate the Interim Award. It is beyond debate that the district court

had initial subject-matter jurisdiction over the FLSA action. It falls to us, however, 

to determine if the Interim Award was a “final” arbitration award under the 

meaning of the FAA. After careful review, we hold that it was not, and therefore 

the district court was without jurisdiction to vacate the Interim Award.

Defendant Aventura, the appellee here, declined to file a responsive brief in 

this appeal, instead “relying solely on the reasoning of the district court order 

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below as well as the findings by the district court in Bedoya . . . .” Plaintiff Schatt, 

in his opening brief, advances arguments to which Aventura attempts no response. 

Although we decide the question of the district court’s jurisdiction against the 

backdrop of our prior precedent, the wisdom of our sister circuits, and with a 

fidelity to the language, structure, and purpose of the FAA, we note that the 

appellee here could not have been less helpful in accomplishing this task. See

Lansdale v. Air Line Pilots Ass’n Int’l, 430 F.2d 1341, 1342 (5th Cir. 1970)

(“Appellee did not file a brief so we are without the benefit of argument to support 

the district court’s position.”);

3 United States v. Varmado, 342 F. App’x 437, 440 

(11th Cir. 2009) (“The [appellee] did not file a brief in this appeal, so we can only 

guess what the [appellee] thinks about that defense at this point in the 

proceedings.”).

A. The Language of the FAA

The validity of an arbitration agreement is generally governed by the FAA, 9 

U.S.C. § 1 et seq., enacted in 1925 to reverse the longstanding judicial hostility 

toward arbitration. Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 

(11th Cir. 2005). The FAA embodies a liberal federal policy favoring arbitration 

agreements. Id. (quotations omitted). The FAA’s clear purpose is “to relieve 

 3

Although we do not here cite a holding, this Court adopted as binding precedent all Fifth 

Circuit decisions prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 

(11th Cir. 1981) (en banc).

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congestion in the courts and to provide parties with an alternative method for 

dispute resolution that is speedier and less costly than litigation.” Id. (alterations 

adopted).

Section 10 of the FAA allows the district court to vacate an arbitral award 

under a set of statutorily-prescribed circumstances. Specifically, § 10 reads: 

(a) In any of the following cases the United States court 

in and for the district wherein the award was made may 

make an order vacating the award upon the application of 

any party to the arbitration—

(1) where the award was procured by corruption, fraud, 

or undue means;

(2) where there was evident partiality or corruption in the 

arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in 

refusing to postpone the hearing, upon sufficient cause 

shown, or in refusing to hear evidence pertinent and 

material to the controversy; or of any other misbehavior 

by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so 

imperfectly executed them that a mutual, final, and 

definite award upon the subject matter submitted was not 

made.

9 U.S.C. § 10.

Courts interpreting this statutory provision commonly understand this to

mean that the FAA allows review of final arbitral awards only, but not of interim

or partial rulings. See Folse v. Richard Wolf Med. Instruments Corp., 56 F.3d 603, 

605 (5th Cir. 1995) (“By its own terms, § 10 [of the FAA] authorizes court action 

only after a final award is made by the arbitrator.”); Michaels v. Mariforum 

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Shipping, S.A., 624 F.2d 411, 414 (2d Cir. 1980) (holding that § 10 “has no 

application to an interim award that the arbitrators did not intend to be their final 

determination on the issues submitted to them”). This limited review is consistent 

with the long-held principle that review of arbitral awards is “among the narrowest 

known to the law.” Del Casal v. Eastern Airlines, Inc., 634 F.2d 295, 298 (5th Cir. 

1981).

B. As Applied to This Case

Here, the Interim Award on Liability clearly established that the arbitrator’s 

work was not complete. The order itself states that a separate hearing would be 

required if the parties failed to agree on backpay, liquidated damages, and 

attorney’s fees and costs. 

As plaintiff Schatt argues, the issue of backpay, in particular, demonstrates 

that the Interim Award cannot be viewed as final. An arbitral hearing on damages 

is necessary to determine which of Schatt’s hours worked are compensable under 

the FLSA. The calculation of damages, to be set for a separate hearing, was 

necessary to render the arbitral result final. See Savers Prop. & Cas. Ins. Co. v. 

Nat'l Union Fire Ins. Co. of Pittsburg, Pa., 748 F.3d 708, 719 (6th Cir. 2014) 

(“Here, the arbitration panel issued an interim award resolving only the matter of 

liability; the panel retained jurisdiction to compute [claimant’s] damages. Under 

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these circumstances, the arbitration was not complete because there was no ‘final’

award.”).

Further, the cases cited by the district court do not support its ultimate 

conclusion. The district court’s order cited several cases where the only issue 

remaining to be determined was attorney’s fees. See, e.g., In re Rollins, Inc., 552 F. 

Supp. 2d 1318, 1324 (M.D. Fla. 2004) (award “disposed of all of the Respondent’s 

Counts, Petitioners’ Counterclaim, and awarded damages” with the only issue 

remaining being attorney’s fees); Cont’l Cas. Co. v. Staffing Concepts, Inc., No. 

8:09-CV-02036-T-23, 2011 WL 7459781, at *4 (M.D. Fla. Dec. 20, 2011) report 

and recommendation adopted, No. 8:09-CV-2036-T-23AEP, 2012 WL 715652 

(M.D. Fla. Mar. 5, 2012) (award decided “all of the claims and defenses of both 

parties” with only issue remaining being attorney’s fees); Nu-Best Franchising, 

Inc. v. Motion Dynamics, Inc., No. 805CV507T27TGW, 2006 WL 1428319, at *4 

(M.D. Fla. May 17, 2006) (award “determined liability, damages and entitlement 

to attorneys’ fees and administrative expenses” with the only issue remaining being 

amount of attorney’s fees). Unlike these cases, Schatt’s ongoing arbitration 

involved far more remaining work than merely the calculation of attorney’s fees.

Because the Interim Award was not a final arbitral award, it was not 

properly under review by the district court. As we decide that the district court 

was without jurisdiction to vacate the Interim Award, we do not reach or comment 

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upon the district court’s reasoning in deciding to vacate the award. We do stress, 

however, that approaching five years have passed since plaintiff Schatt initially 

filed his FLSA claim and accordingly we counsel against further delay.

IV. CONCLUSION

For the foregoing reasons, we reverse the district court’s vacatur of the 

Interim Award and remand the case, directing the district court to lift the stay of 

arbitration and to compel the parties to return to the prior arbitration. Nothing 

herein precludes any party from making a motion to the prior arbitrator regarding 

the effect, if any, of the disqualification of plaintiff’s counsel.

REVERSED and REMANDED.

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