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26 ORDER - 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

SUNITA BALLARD, TASHA BOWEN,

DEBRA DOYLE, ERIKA FORBES,

REBECCA KLINGMAN, DEVRA SAWYER

a\k\a ALANI WORRELL, LISA SIMMONS,

and CINDY WELLS, 

Plaintiffs,

v.

CORINTHIAN COLLEGES, INC., a Delaware

corporation, ELTON EDUCATION, INC., a

Washington corporation d/b/a BRYMAN

COLLEGE; TIMOTHY ALLEN; a

Washington State resident,

Defendants.

Case No. C06-5256 FDB

ORDER GRANTING CORINTHIAN 

 COLLEGES INC.’S MOTION FOR A 

 STAY PENDING ARBITRATION

This matter comes before the Court on Corinthian Colleges, Inc.’s Motion for a Stay of the

Action Pending Arbitration. After reviewing all materials submitted by the parties and relied upon

for authority, the Court is fully informed and hereby grants the motion staying this action pending

resolution of the issues referred to arbitration.

INTRODUCTION AND BACKGROUND

Plaintiffs in this action plead jointly the exact same facts claiming that the education they
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26 ORDER - 2

received at the Tacoma campus of Corinthian Colleges, Inc. (hereafter, Corinthian) has no value

because the school’s medical assistance program from which they graduated was not at the time of

their attendance, programmatically accredited. This lack of accreditation did not allow the graduates

to sit for a certification exam. Plaintiffs allege they were misled by disclosures and that there were

deficiencies in the quality of the education. This action is related to and mirrors three other cases

currently before this Court, Fisher et al v. Corinthian Colleges, Inc., C05-5412; Reed v. Corinthian

Colleges, Inc., et al., C05-5601; and Anderson et al. V. Corinthian Colleges Inc., et al., C06-5157.

Although all plaintiffs in the related cases plead essentially identical claims, a number of the

Plaintiffs signed enrollment agreements containing an arbitration clause, while others signed

enrollment agreements without an arbitration clause. In each of the related cases, this Court has

ordered those Plaintiffs who signed arbitration agreements submit to arbitration. In the instant case,

by Order dated June 28, 2006, this Court granted Corinthian’s motion to compel arbitration of the

claims filed by plaintiff Debra Doyle and dismissed her claims from this action. In Fisher et al., C05-

5412, this Court determined that twenty-one select plaintiffs were subject to arbitration provisions

contained in their written enrollment agreements. The Court entered an Order dated August, 9, 2005,

compelling said plaintiffs to submit their claims to arbitration and dismissing their claims from the

action pursuant to the terms of the arbitration provisions. Subsequently, an additional plaintiff was

found to be subject to arbitration and dismissed from the action by Stipulated Order of Dismissal. In

Fisher et al., this Court also granted the same relief sought in the instant case. The Court entered an

Order staying the action pending resolution of arbitration of the claims of the twenty-two signatories

to arbitration clauses.

DISPOSITION

The Federal Arbitration Act, 9 U.S.C. §§ 1-16, reflects a “liberal federal policy favoring

arbitration agreements.” Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24

(1983). Section 3 of the FAA effectuates this policy by favoring arbitration over litigation. It
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26 ORDER - 3

provides:

If any suit or proceeding be brought in any of the courts of the United States upon any

issue referable to arbitration under an agreement in writing for such arbitration, the

court in which such suit is pending, upon being satisfied that the issue involved in such

suit or proceeding is referable to arbitration under such an agreement, shall on

application of one of the parties stay the trial of the action until such arbitration has

been had in accordance with the terms of the agreement, providing the applicant for

the stay is not in default in proceeding with such arbitration.

9 U.S.C. § 3. A court must stay an action pursuant to Section 3 where the action is brought by a

signatory to an arbitration agreement against another signatory to that agreement, on claims subject

to that agreement. Javitch v. First Union Secs., Inc., 315 F.3d 619, 624 (6th Cir. 2003).

A court has discretion to stay an action brought by a signatory to an arbitration agreement

against a nonsignatory to the agreement, based on its inherent powers, and a stay may be appropriate

“where the pending proceeding is an arbitration in which issues involved in the case may be

determined.” Nederlandse Erts-Tankersmaatschappij, N.V. v. Isbrandtsen Co., 339 F.2d 440, 441

(2nd Cir. 1964). Even though a nonsignatory may not invoke Section 3 in moving to stay an action

pending arbitration, a district court has discretion to stay third party litigation involving common

questions of fact within the scope of an arbitration agreement to which the third party is not a

signatory. AgGrow Oils, L.L.C. v. National Union Fire Ins. Co., 242 F.3d 777, 782 (8th Cir. 2001). 

See also, IDS Life Ins. Co. v. SunAmerica, Inc., 103 F.3d 524, 530 (7th Cir. 1996)(though only a

party to an arbitration is entitled to a Section 3 stay, nonsignatories may be entitled to a stay “under

the doctrine of abstention applicable to parallel proceedings in judicial and arbitral fora.”). The

Supreme Court has stated:

In some cases, of course, it may be advisable to stay litigation among the

non-arbitrating parties pending the outcome of the arbitration. That decision is one left

to the district court (or to the state trial court under applicable state procedural rules)

as a matter of its discretion to control its docket.

Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 20, nt 23 (1983).

A stay is justified when a nonsignatory lawsuit depends upon the same facts and is inherently
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26 ORDER - 4

inseparable from the arbitrable claims. Hill v. GE Power Sys., Inc., 282 F.3d 343, 347 (5th Cir.2002).

Courts should also consider whether an independent action by nonsignatories would involve

significant expense and inconvenience. WorldCrisa Corp. v. Armstrong, 129 F.3d 71, 76 (2nd

Cir.1997). A decision about whether to grant a stay should be consider whether litigation by a party

not bound by an arbitration provision may impair an arbitrator's consideration of claims against a

party that is compelled to arbitrate. Subway Equipment Leasing Corp. v. Forte, 169 F.3d 324, 329

(5th Cir. 1999); Kroll v. Doctor's Associates, Inc., 3 F.3d 1167, 1171 (7th Cir.1993).

 This Court has discretion to stay proceedings against parties and non-parties to an arbitration

when the resolution of the civil proceeding would involve a common question of law or fact within

the scope of the arbitration agreement. As previously noted on numerous occasions, the claims

asserted in the complaint are brought by Plaintiffs jointly and are grounded in identical facts and legal

theories. Simultaneous prosecution of the claims in arbitration and this litigation would clearly be a

waste of judicial resources. In addition, given the interdependence of the claims, simultaneous

litigation of such claims in separate forums would likely lead to a duplication of effort, as well as the

risk of inconsistent decisions and inefficiencies. Although Plaintiffs briefly assert that there is no

appropriate reason to stay these proceedings, the Court is convinced otherwise. Further, the Court

finds imposition of a stay will present no significant judice to Plaintiffs.

ACCORDINGLY,

IT IS ORDERED:

Corinthian Colleges, Inc.’s Motion for Stay of Action Pending Arbitration [Dkt. #15] is

GRANTED, and this case is STAYED pending resolution of the issues referred to arbitration.

 DATED this 16th day of August, 2006.AFRANKLIN D. BURGESS

UNITED STATES DISTRICT JUDGE