Opinion ID: 3010878
Heading Depth: 2
Heading Rank: 2

Heading: The Nature of the Dispute

Text: Having found that Prudential has standing to seek enforcement of the arbitration agreement against the plaintiffs, the next step in the analysis is to identify the nature of the dispute at issue and the scope of the arbitration clause. Because arbitration clauses are fundamentally a creature of contract law, the critical focus is on a clear intention to arbitrate a specific claim or dispute between the parties. In the court's undertaking to determine the parties' intent, the analytical tools of ordinary contractual interpretation become relevant. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (citations omitted). It is important to note that the Federal Arbitration Act provides the authority for the enforcement of arbitration clauses as a matter of federal law and, as such, federal policies govern. Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24 (1982). The Federal Arbitration Act reflects a pervasive federal interest in promoting arbitration and encouraging courts to uphold arbitration clauses. See id. The underpinnings of this strong federal policy in favor of arbitration have been exhaustively reviewed by the Supreme Court, and need not be reiterated here. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24-26 (1991); Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219-220 (1985); Moses 10 H. Cone, 460 U.S. at 24-25. However, we will emphasize certain settled principles of federal arbitration law that are relevant here. Any inquiry into the scope of an arbitration clause must necessarily begin with the presumption that arbitration applies. In considering the nature of the dispute and the scope of the arbitration clause, this court must operate under a presumption of arbitrability in the sense that `[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'  AT&T Technologies, 475 U.S. at 650 (quoting Warrior & Gulf, 363 U.S. at 582-83). Thus, when it cannot be said with positive assurance that the parties have clearly and unequivocally excepted a certain dispute from arbitration, the court must compel arbitration. A necessary corollary of this axiomatic rule in favor of arbitration is that doubts in interpreting the precise scope of the arbitration agreement are to be resolved in favor of arbitration. Moses H. Cone, 460 U.S. at 24. While this approach is not a mandate for courts to ignore explicit textual agreements or to reshape the parties' obvious intent, it nevertheless weighs genuine ambiguities against the resisting party. Painewebber Inc. v. Hartmann, 921 F.2d 507, 512-13 (3d Cir. 1990). With these principles in mind, we turn to the nature of the disputes here in order to determine whether they fall within the scope of the relevant arbitration clause. The plaintiffs have alleged various state violations -- employment, contractual, and tortious in nature -- based on their discharge in retaliation for their refusal to participate in the alleged fraudulent insurance practices of Prudential. Several plaintiffs have also alleged RICO violations in which the requisite predicate acts of racketeering activity involve Prudential's insurance fraud. These plaintiffs allege that RICO standing under 18 U.S.C. S 1964(c) stems from the injury caused by wrongful employment termination. No party contests the employment nature of the plaintiffs' claims. Indeed, all the causes of action set forth revolve around the damage suffered through Prudential's decision 11 to terminate employment or intentionally interfere with the plaintiffs' business expectations as insurance agents. Unique to these claims, however, is the involvement of Prudential's insurance business in the dispute. The plaintiffs cannot recover under their various theories of liability without necessarily implicating the illegal nature of Prudential's insurance practices. To this extent, the grievances cited by the plaintiffs are accurately described as arising out of the employment or termination of employment, but they nevertheless implicate the legality of certain insurance practices. We cannot simply ignore, as some other courts seem to have done, the insurance aspects of this case. See, e.g., Metropolitan Life Ins. Co. v. Lindsay, 920 S.W.2d 720 (Tex. App. Ct. 1996); Prudential Ins. Co. Of America v. Shammas, 865 F.Supp. 429, 432 (W.D. Mich. 1993); Trumbetta v. Metropolitan Life Ins. Co., 1994 WL 481152 (E.D. Pa. 1994) (unreported disposition). Rather, we identify the issues raised by the plaintiffs in order to determine whether they fall within the intended scope of arbitration.