Court Opinion

ID: 6322422
Source: CourtListenerOpinion
Date Created: 2022-03-11 18:00:26.592138+00
Date Added: 2024-06-11T09:20:49.639016
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                ______________

                                       No. 20-1933

                                     ______________

                                   SCOTT A. HAUSE,

                                                  Appellant

                                             v.

                        CITY OF SUNBURY; DAVID PERSING
                                 ______________

             APPEAL FROM THE UNITED STATES DISTRICT COURT
               FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
                      (D.C. Civ. Action No. 4-17-cv-02234)
                     District Judge: Honorable Yvette Kane
                                ______________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                 December 16, 2021
                                  ______________

           Before: GREENAWAY, JR., KRAUSE, and PHIPPS, Circuit Judges.

                            (Opinion Filed: March 11, 2022)

                                     ______________

                                        OPINION*
                                     ______________

       *
        This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
GREENAWAY, JR., Circuit Judge.

       Scott Hause, a former police officer in the City of Sunbury, Pennsylvania, filed a

complaint against the City of Sunbury and Sunbury’s Mayor, David Persing (collectively,

Appellees), claiming he was terminated from his position in violation of the Age

Discrimination in Employment Act (“ADEA”) and in violation of his First Amendment

right to freedom of association. The District Court dismissed his complaint, pursuant to

Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Although the

District Court allowed Hause to file an amended complaint, it also failed to state a claim.

No further leave to amend was permitted. Hause sought reconsideration of that decision,

which the District Court denied. Hause seeks review of the District Court’s decisions.

For the reasons set forth below, we will vacate the District Court’s decisions and remand

for further proceedings consistent with this opinion.

A. Background1

       The factual allegations in the first amended complaint are sparse. Hause asserts

that he was a police officer in Sunbury for thirteen years. He was qualified for his

position based on his certifications and training, and had received satisfactory

performance evaluations and several commendations. He had, however, been disciplined

       1
        The facts are drawn from the first amended complaint. As we are reviewing a
motion to dismiss, we accept the facts in the complaint as true. Klotz v. Celentano
Stadtmauer & Walentowicz LLC, 991 F.3d 458, 462 (3d Cir. 2021) (“When reviewing a
Rule 12(b)(6) motion, we accept as true all factual allegations in the complaint and view
those facts in the light most favorable to the non-moving party.”).
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once.

        From January 2014 until his termination on September 1, 2016, Hause served as

president of the Sunbury Police Officers Association (“SPOA”), “a collective bargaining

unit . . . representing law enforcement officers employed by Sunbury.” App. 43-44. In

that position, he engaged in renegotiating the collective bargaining agreement between

Sunbury and the SPOA in 2015. At issue during the renegotiations were various benefits

for officers with over 20 years of service, including longevity. When the renegotiations

reached an impasse, Sunbury and the SPOA engaged in binding arbitration, which

resulted in an award that maintained for the officers some of the benefits.

        According to Hause, following the arbitration hearing, “Sunbury embarked on a

policy and course of conduct to terminate, harass and intimidate every bargaining

unit member over the age of 40, including Hause, entitled to receive longevity . . . and

other benefits related to time in service.” App. 45. Essentially, Sunbury “create[ed] a

hostile work environment based on age and terminat[ed] Hause based on his age” in

violation of the ADEA, App. 43, and retaliated against him for his association with the

SPOA, in violation of the First Amendment.

        Appellees moved to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6),

arguing that Hause failed to state a claim. Alternatively, the motion sought to compel

arbitration, pursuant to 9 U.S.C. §§ 3 and 4. In addition, Appellees filed a motion asking

the District Court to take judicial notice of an arbitration opinion and award resolving a

grievance filed by Hause alleging that Sunbury violated the CBA when it terminated him.
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The District Court granted the motion to dismiss and denied the motion to take judicial

notice, and declined to consider the motion to compel.

       As allowed by the District Court, Hause filed an amended complaint. Again,

Appellees moved to dismiss, or, in the alternative, to compel arbitration. Appellees also

renewed their motion to take judicial notice of the arbitration award. The District Court

granted the motion to dismiss, denied Hause an opportunity to amend, denied the motion

to take judicial notice, and found the motion to compel arbitration was moot.

B. Discussion2

       We review a district court’s decision dismissing a complaint de novo. Klotz v.

Celentano Stadtmauer & Walentowicz LLC, 991 F.3d 458, 462 (3d Cir. 2021).

       In this case, our de novo review revealed an issue we must address before

considering the motion to dismiss. That issue is the resolution of the motion to compel

arbitration. The Federal Arbitration Act provides that when a party moves to compel

arbitration, and provided, of course, that the court has jurisdiction to begin with,3 “[t]he

court shall hear the parties, and upon being satisfied that the making of the agreement for

       2
         The District Court had jurisdiction pursuant to 28 U.S.C. § 1331. We have
jurisdiction pursuant to 28 U.S.C. § 1291.
       3
         As the Supreme Court observed in Moses H. Cone Memorial Hospital v.
Mercury Construction Corporation, Section 4 of the FAA “provides for an order
compelling arbitration only when the federal district court would have jurisdiction over a
suit on the underlying dispute; hence, there must be diversity of citizenship or some other
independent basis for federal jurisdiction before the order can issue.” 460 U.S. 1, 26 n.
32 (1983).

                                              4
arbitration or the failure to comply therewith is not in issue, the court shall make an order

directing the parties to proceed to arbitration in accordance with the terms of the

agreement.” 9 U.S.C. § 4.

       The Supreme Court has commented that, “[b]y its terms, the [Federal Arbitration]

Act leaves no place for the exercise of discretion by a district court, but instead mandates

that district courts shall direct the parties to proceed to arbitration on issues as to which

an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S.

213, 218 (1985). While we have not ruled precedentially that a motion to compel

arbitration must be resolved prior to taking other action in a case, other circuits have done

so. See, e.g., Reyna v. Int’l Bank of Com., 839 F.3d 373, 378 (5th Cir. 2016) (“Upon a

motion to compel arbitration, a court should address the arbitrability of the plaintiff’s

claim at the outset of the litigation.”); Sharif v. Wellness Int’l Network, Ltd., 376 F.3d

720, 726 (7th Cir. 2004) (District Court erred when “the court refused to consider the

merits of the motion to compel arbitration because of the pending venue challenge”).

       In short, what we draw from the clear language of the statute, the comments from

the Supreme Court, and the holdings of other circuits is that, at least in the typical case,

courts should rule on a motion to compel arbitration before resolving the case on

alternative, nonjurisdictional grounds.

       While a much-delayed motion to compel arbitration may result in a loss of a

party’s ability to enforce an arbitration agreement, see Gray Holdco, Inc. v. Cassady, 654

F.3d 444, 451 (3d Cir. 2011), Appellees here moved at the same time to dismiss or
                                               5
alternatively to compel arbitration. Without any issue in that respect, only a pure

question of law remains: whether the District Court should have addressed the motion to

compel arbitration before the contemporaneously-filed motion to dismiss under Rule

12(b)(6). Although neither party has raised the question of the prioritization of the

motion to compel arbitration on appeal, we can rule on this question since it is a pure

question of law that requires correction. Barna v. Bd. of Sch. Dirs. of Panther Valley Sch.

Dist., 877 F.3d 136, 148 (3d Cir. 2017) (noting that declining to decide a forfeited “pure

question of law” “would problematically permit the District Court’s pure legal error to

stand uncorrected”). Since “[i]t is the general rule, of course, that a federal appellate

court does not consider an issue not passed upon below,” Singelton v. Wulff, 428 U.S.

106, 120 (1976), we will remand so that the District Court can decide the issue in the first

instance.

C. Conclusion

       For the reasons set forth above, we will vacate the decision of the District Court

and remand this case for further proceedings consistent with this opinion.

                                              6