Court Opinion

ID: 9376991
Source: CourtListenerOpinion
Date Created: 2023-03-06 17:00:25.019412+00
Date Added: 2024-06-11T17:17:11.005435
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        MAR 6 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

CITY OF LAUREL, MISSISSIPPI, obo                No.    22-15476
itself and all other similarly situated,
                                                D.C. No.
                Plaintiff-Appellee,             3:21-cv-00124-LRH-CLB

 v.
                                                MEMORANDUM*
CINTAS CORPORATION NO. 2,

                Defendant-Appellant.

                   Appeal from the United States District Court
                            for the District of Nevada
                    Larry R. Hicks, District Judge, Presiding

                     Argued and Submitted February 14, 2023
                            San Francisco, California

Before: MILLER, SANCHEZ, and MENDOZA, Circuit Judges.
Dissent by Judge MILLER.

      Cintas Corporation No. 2 (“Cintas”) appeals the district court’s order

denying Cintas’s motion to stay proceedings and compel arbitration of the City of

Laurel’s (the “City”) breach of contract claims. We have jurisdiction under 9

U.S.C. § 16(a)(1)(A) and, reviewing de novo, we affirm.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      The parties are familiar with the facts of this case, so we need not recite

them here other than to state that there are two contracts at issue. The first

contract, which incorporates an arbitration agreement, is the Master Agreement

between Cintas and the lead public agency. The second contract, the “piggyback”

agreement, is between Cintas and the City. Both contracts contain nearly identical

provisions delineating how Cintas will deal with participating public agencies such

as the City (collectively the “PPA Provisions”). Neither party disputes that a valid

arbitration agreement exists between Cintas and the lead public agency, only

whether the same agreement exists between Cintas and the City.

      Under the Federal Arbitration Act, the court is limited to “determining (1)

whether a valid agreement to arbitrate exists, and, if it does, (2) whether the

agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic

Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “[A]rbitration is a matter of

contract,” Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 564 (9th Cir. 2014)

(quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)), and “a

party cannot be required to submit to arbitration any dispute which he has not

agreed so to submit,” United Steelworkers of Am. v. Warrior & Gulf Navigation

Co., 363 U.S. 574, 582 (1960). To determine whether an agreement to arbitrate

exists, we apply state contract law. Knutson, 771 F.3d at 565. Applying

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Mississippi contract law,1 we conclude there is no valid arbitration agreement

between Cintas and the City.

                                           I.

      First, we agree with the district court that the dispute resolution terms in the

PPA Provisions displace the arbitration agreement incorporated into the Master

Agreement. The PPA Provisions indicate an intent to allow Cintas and

participating public agencies to negotiate certain terms, such as inspection and

delivery. As to dispute resolution, the PPA Provisions do not mention arbitration

and instead state that Cintas and the City must resolve disputes “directly between

them in accordance with and governed by the laws of the State in which [the City]

exists.” If this language meant nothing more than arbitration, it would be

superfluous in light of the arbitration agreement incorporated into the Master

Agreement. See Jones v. Miss. Insts. of Higher Learning, 264 So. 3d 9, 22 (Miss.

Ct. App. 2018) (recognizing courts must avoid interpreting a contract in a way that

would render provisions “redundant and superfluous”). Had Cintas and the City

wished to submit their disputes to arbitration, they could have included language to

this effect in the piggyback agreement that directly governs their relations.

Instead, as the district court concluded, arbitration terms are notably absent from

1
 Cintas argues that Maryland law governs the interpretation of the Master
Agreement, but both parties agree that the two states provide the same interpretive
rules for purposes here.

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this agreement. Cf. Chisom v. Roemer, 501 U.S. 380, 396 n.23 (1991) (“[S]ilence

in this regard can be likened to the dog that did not bark.”).

                                            II.

      Second, we cannot accept Cintas’s position that we must harmonize the

contract language by applying the arbitration agreement to the City’s dispute with

Cintas. The arbitration agreement lies within a disputes provision containing terms

that clearly apply only to Cintas and the lead public agency. Given this structure,

we decline to excise the arbitration agreement and apply it to the instant dispute.

See Epperson v. SOUTHBank, 93 So. 3d 10, 17 (Miss. 2012) (“[T]he courts do not

have the authority to modify, add to, or subtract from the terms of a contract . . . .”

(quoting Wallace v. United Miss. Bank, 726 So. 2d 578, 584 (Miss. 1998))); cf.

Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1713 (2022) (“[A] court may not

devise novel rules to favor arbitration over litigation.”).

      AFFIRMED.

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                                                                               FILED
City of Laurel, Mississippi v. Cintas Corporation No. 2, No. 22-15476           MAR 6 2023
                                                                           MOLLY C. DWYER, CLERK
MILLER, Circuit Judge, dissenting:                                           U.S. COURT OF APPEALS

      The parties’ agreement makes this dispute subject to arbitration. I would

therefore reverse the judgment of the district court and remand with instructions to

grant the motion to compel arbitration.

      In interpreting a contract, we must “read the contract as a whole, so as to

give effect to all of its clauses.” Facilities, Inc. v. Rogers-Usry Chevrolet, Inc., 908

So. 2d 107, 111 (Miss. 2005). Here, the contract consists of three separate

documents. First, there is the 2017 Facilities Solutions Agreement (FSA) between

the City and Cintas, which the court refers to as the “piggyback” agreement.

Second, there is the 2012 Master Agreement. Although the City was not a party to

the Master Agreement, the FSA expressly incorporates it, in a section the court

refers to as the “PPA Provisions,” by stating that Cintas “agrees to extend the same

terms, covenants agreed to under the Master Agreement with Lead Public Agency

Harford County Public Schools to other government agencies . . . that, in their

discretion, desire to access the Master Agreement.” Third, the Master Agreement

in turn incorporates parts of a request for proposals (RFP) that was previously

issued by Harford County Public Schools. Specifically, it incorporates the RFP’s

dispute-resolution provision by stating that “[d]isputes will be settled as per the

stipulations contained within” that document.

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      The City emphasizes that the FSA contains its own dispute-resolution

provision: “Any disputes between a Participating Public Agency and Supplier will

be resolved directly between them in accordance with and governed by the laws of

the State in which the Participating Public Agency exists.” Based on that provision,

the City invites us to ignore the dispute-resolution provision of the RFP. But we

may not ignore any part of the contract. Rather, our obligation is to harmonize the

contract by giving effect to every part of it. And we can easily harmonize all of the

terms at issue.

      The RFP’s dispute-resolution provision contains three parts. First, it says

that “[e]xcept as otherwise provided in these contractual documents,” disputes

“shall be referred to the Harford County Public Schools Supervisor of Purchasing.”

As the parties agree, that makes no sense as applied to an agreement with the City,

which has no relationship to Harford County Public Schools. Not surprisingly, the

FSA’s dispute-resolution provision expressly displaces it by specifying that

disputes “will be resolved directly between” the parties.

      Second, the RFP says that the contract shall be governed by Maryland law. It

would be strange to apply Maryland law to an agreement between two parties

neither of which has any connection to Maryland. And here too, the FSA expressly

displaces the provision by stating that it is “governed by the laws of the State in

which the Participating Public Agency exists,” in this case, Mississippi.

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         Third, and crucially, the RFP provides for arbitration, stating that “[a]ll

disputes shall be decided by a single arbitrator” under the rules of the American

Arbitration Association. Unlike the other two parts of the RFP’s dispute-resolution

provision, there is nothing surprising about the City and Cintas deciding to resolve

disputes by arbitration. Nor is anything in the FSA inconsistent with their agreeing

to do so. In particular, the FSA’s statement that disputes “will be resolved directly

between them” is entirely consistent with resolving disputes through arbitration.

Had the parties wished to displace the RFP’s arbitration clause, they could easily

have written the FSA to say “resolved directly between them in any court having

jurisdiction,” but they did not. Because nothing in the FSA displaces the arbitration

clause that the parties agreed to incorporate, I would enforce it according to its

terms.

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