Court Opinion

ID: 9412239
Source: CourtListenerOpinion
Date Created: 2023-07-28 21:02:01.296868+00
Date Added: 2024-06-11T16:41:36.632478
License: Public Domain

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                                           UNPUBLISHED

                              UNITED STATES COURT OF APPEALS
                                  FOR THE FOURTH CIRCUIT

                                               No. 21-2345

        LAWRENCE BAILEY; WILLIAM ESTRADA, on behalf of themselves and all
        others similarly situated,

                    Plaintiffs – Appellants,

        v.

        THOMPSON CREEK WINDOW COMPANY, a Maryland Corporation; RICK
        WUEST,

                    Defendants – Appellees.

        Appeal from the United States District Court for the District of Maryland, at Greenbelt.
        Lydia Kay Griggsby, District Judge. (8:21-cv-00844-LKG)

        Submitted: October 5, 2022                                      Decided: July 27, 2023

        Before RICHARDSON, QUATTLEBAUM, and RUSHING, Circuit Judges.

        Affirmed by unpublished per curiam opinion.

        ON BRIEF: Christopher Le, BOIESBATTIN LLP, Fairfax, Virginia; Elaine A. Ryan,
        AUER RYAN P.C., Maricopa, Arizona; Karl J. Protil, Jr., SHULMAN, ROGERS,
        GANDAL, PORDY & ECKER, P.A., Potomac, Maryland; Tim Bosson, BOSSON
        LEGAL GROUP, PC, Fairfax, Virginia, for Appellants. John A. Bourgeois, Bradley M.
        Strickland, KRAMON & GRAHAM, P.A., Baltimore, Maryland; Diane J. Zelmer,
        BERENSON LLP, Jupiter, Florida, for Appellees.
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        Unpublished opinions are not binding precedent in this circuit.

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        PER CURIAM:

               Lawrence Bailey and William Estrada each bought windows from Thompson Creek

        Window Company. Thompson Creek markets its windows as being ENERGY STAR-

        certified, a moniker attached to windows that meet a certain, government-set, energy

        efficiency standard. But, according to Bailey and Estrada, Thompson Creek windows are

        not ENERGY STAR-certified. So Bailey and Estrada sued them in federal court, in a class

        action lawsuit, for various Maryland state law torts.

               The trouble with suing Thompson Creek in federal court is that Bailey and Estrada

        had promised not to do that when they bought their windows. When purchasing the

        windows, they both signed contracts that contained an arbitration agreement. In a section

        labeled “Additional Terms and Conditions,” there was a subsection titled “Arbitration of

        Disputes.” That section explained that “Contractor and Owner(s) agree that any and all

        disputes . . . arising under or relating to this Agreement . . . shall be subject to binding

        arbitration . . . [except that] Contractor retains the option to use judicial or non-judicial

        relief to enforce the monetary obligation represented by this Agreement.” J.A. 65. In case

        there was any ambiguity, that subsection also included, in bold, a paragraph reiterating that

        “[b]oth Contractor and Owner(s) are hereby agreeing to choose arbitration.” J.A. 65.

               The district court dismissed the suit, finding it must be arbitrated. It rejected the

        plaintiffs’ argument that the arbitration provision was unenforceable because it lacked

        consideration and because it was unconscionable. Plaintiffs now appeal, raising those same

        two arguments. We agree with the district court and so affirm.

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        I.     The Arbitration Agreement Is Supported by Consideration

               Arbitration is voluntary. Parties must consent to the process to be bound by the

        process. Cheek v. United Healthcare of Mid– Atl., Inc., 378 Md. 139, 146 (2003); Curtis

        G. Testerman Co. v. Buck, 340 Md. 569, 579 (1995) (“[A] party cannot be required to

        submit any dispute to arbitration that it has not agreed to submit.”). 1 One way to consent is

        by agreeing in advance, in writing, to route future claims through arbitration. When parties

        do this, it is known as an arbitration agreement. See Cheek, 378 Md. at 146–47.

               Under Maryland law, arbitration agreements must be supported by consideration to

        be enforceable. Id. at 147; see also Noohi, 708 F.3d at 606–07. When checking for

        consideration, courts do not weigh each side’s benefits from the bargain. Harford Cty. v.

        Town of Bel Air, 348 Md. 363, 383 (1998). The agreement does not have to be equal to be

        enforceable. Id. (“[I]t is well settled that the Courts of Law . . . will not inquire into the

        adequacy of the value exacted for the primes so long as it has some value.”). But each

        party must exchange mutual promises that obligate them to act. If a party fails to promise

        to do anything, their consideration is illusory and the contract is unenforceable. Walther

        v. Sovereign Bank, 386 Md. 412, 432–34 (2005).

               The arbitration agreements between Bailey and Thompson Creek and Estrada and

        Thompson Creek were supported by consideration. If a party agrees to arbitrate some

        claims, they are obligated to do so. So they have provided consideration. Cheek, 378 Md.

               1
                We apply Maryland contract law to this dispute. See Noohi v. Toll Bros., Inc., 708
        F.3d 599, 607 (4th Cir. 2013).

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        at 144. And if both parties agree to arbitrate, then both parties have provided consideration

        and the agreement is enforceable (barring any other valid objection). All parties to the

        Thompson Creek arbitration agreements promised to arbitrate some claims.              So the

        agreement had enough consideration to be enforceable.

               Bailey and Estrada fight this conclusion by arguing that Thompson Creek’s promise

        to submit to arbitration is illusory because Thompson Creek was allowed to sue purchasers

        in court to “enforce the monetary obligation represented by the” window purchase

        agreement. See J.A. 65. Since, according to them, these are the only claims Thompson

        Creek might plausibly bring, Thompson Creek has not truly agreed to bring any claims in

        arbitration. Therefore, according to Bailey and Estrada, Thompson Creek has not agreed

        to be bound by anything at all.

               This argument fails because it mistakes the nature of consideration. The question is

        not whether Thompson Creek has agreed to give up its ability to bring a certain class of

        claims. It is whether Thompson Creek has agreed to arbitrate any claims at all—no matter

        who brings them or how likely those claims were to be brought. See, e.g., Cheek, 378 Md.

        at 149 (declaring an arbitration agreement unenforceable because the seller’s promised

        performance was “entirely optional” and so not a “real promise at all”); Walther, 386 Md.

        at 433 (finding arbitration clause supported by consideration because both parties were

        “bound to arbitrate certain disputes”); Noohi, 708 F.3d at 610 (applying Maryland law to

        find no consideration because the arbitration provision bound only plaintiffs to arbitration).

        And it has. Along with its own claims unrelated to enforcing monetary obligations,

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        Thompson Creek has agreed to arbitrate all claims brought by purchasers against

        Thompson Creek. 2 That is all the consideration Maryland law requires.

        II.    The Arbitration Agreement Is Not Unconscionable

               An arbitration agreement, like all contracts, is unenforceable if they are

        unconscionable. Walther, 386 Md. at 425–26. There is a procedural and substantive aspect

        to unconscionability. Id. at 425–27. Since the district court addressed only substantive

        unconscionability, and since we agree with its determination, we need not address

        procedural unconscionability.

               The arbitration agreement is not substantively unconscionable. An arbitration

        agreement is substantively unconscionable when it is “so one-sided as to oppress or

        unfairly surprise an innocent party” or when “there exists an egregious imbalance in the

        obligations and rights imposed.” Id. at 431. Here, the parties agreed to arbitrate certain

        claims and Thompson Creek reserved the right to bring others in court. Thompson Creek

        may have gotten the better of that bargain, but that does not render the agreement

        unconscionable. See id. at 433 (“We do not find that the exceptions to the arbitration

        agreement, which allow [the defendant] to litigate certain specific claims instead of having

               2
                  Thompson Creek’s promise to arbitrate some claims distinguishes its arbitration
        agreement from those at issue in Cheek and Noohi. In Cheek, the defendant reserved the
        right to alter the agreement at any time, for any reason. Cheek, 378 Md. at 149. So it was
        not obligated to arbitrate any claims and had provided no consideration. Likewise, in
        Noohi, only the plaintiff agreed to arbitration; the defendant made no promises at all.
        Noohi, 708 F.3d at 610. Conversely, Thompson Creek has provided consideration because
        it promised to arbitrate some claims and is bound to do so if those claims arise.

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        to submit them to arbitration, are so unfairly oppressive as to make the agreement

        unconscionable.”). So the district court was correct to hold it enforceable.

                                                                                       AFFIRMED.

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