Court Opinion

ID: 6331784
Source: CourtListenerOpinion
Date Created: 2022-04-14 18:00:23.566913+00
Date Added: 2024-06-11T09:23:14.603612
License: Public Domain

Case: 21-51089    Document: 00516279938       Page: 1     Date Filed: 04/14/2022

          United States Court of Appeals
               for the Fifth Circuit                            United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                                                   April 14, 2022
                               No. 21-51089
                                                                  Lyle W. Cayce
                             Summary Calendar                          Clerk

   Kenneth Newman, Individually and on Behalf of All Others Similarly
   Situated,

                                                          Plaintiff—Appellee,

                                    versus

   Plains All American Pipeline, L.P.,

                                                                     Defendant,

   Cypress Environmental Management-TIR, L.L.C.,

                                                        Intervenor—Appellant.

                 Appeal from the United States District Court
                      for the Western District of Texas
                           USDC No. 7:19–CV-244

   Before Stewart, Clement, and Ho, Circuit Judges.
Case: 21-51089      Document: 00516279938           Page: 2     Date Filed: 04/14/2022

                                     No. 21-51089

   Per Curiam:*
          Plaintiffs-Appellants are a putative class of inspectors who signed an
   employment agreement with Cypress Environmental Management-TIR,
   L.L.C. (“Cypress”), a pipeline-inspection staffing firm. That employment
   agreement contained an arbitration provision. Plaintiffs sued Plains All
   American Pipeline, L.P. (“Plains”), the client company to which Cypress
   staffed the Plaintiffs, for alleged Fair Labor Standards Act (“FLSA”)
   violations. The inspectors did not sue Cypress, but the district court allowed
   it to voluntarily intervene. When Plains moved to compel arbitration under
   the Plaintiffs’ employment agreement with Cypress, we affirmed the district
   court’s denial of that motion. Newman v. Plains All Am. Pipeline, L.P.
   (Newman I), 23 F.4th 393 (5th Cir. 2022). In so holding, we rejected Plains’s
   contention that the Plaintiffs agreed to arbitrate the question of the
   arbitration agreement’s enforceability. That issue, we held, “remains a
   question for courts,” not for arbitrators. Id. at 397–98. We also held that,
   because the Plaintiffs agreed to arbitrate with Cypress, they could not be
   forced to arbitrate their claims in the instant suit against Plains.
          Here before us again are the Plaintiffs and Cypress, except this time
   Cypress has moved to compel arbitration of the inspectors’ FLSA claims
   against Plains. We AFFIRM the district court’s denial of that motion too.
                                           I
          Cypress challenges the district court’s denial of its motion to compel
   arbitration on three bases. It contends that the district court erred when it
   (1) rejected that Plaintiffs were required to arbitrate the applicability of their
   arbitration agreement to Plains, (2) concluded that Cypress was not an

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

                                           2
Case: 21-51089        Document: 00516279938              Page: 3       Date Filed: 04/14/2022

                                          No. 21-51089

   aggrieved party, and (3) declined to apply the delegation clause, forum-
   selection clause, and scope provisions in the employment agreement to the
   Plaintiffs’ dispute with Plains. “We review the denial of a motion to compel
   arbitration de novo.” Id. at 398.
           As to the first issue, we firmly answered this question in Newman I:
   “When a court decides whether an arbitration agreement exists, it
   necessarily decides its enforceability between parties.” Id. Again, there is no
   distinction between those two questions, they are “two sides of the same
   coin.” Id. Because the arbitration agreement that the Plaintiffs signed
   governs only employment disputes arising with Cypress, neither Plains nor
   Cypress can force the Plaintiffs to arbitrate the claims in this suit, which were
   brought against Plains.
           As to the second issue, the district court did not err when it found that
   Cypress was not an aggrieved party under the arbitration agreement. Under
   the FAA, only an aggrieved party has the right to seek enforcement of the
   arbitration agreement. See 9 U.S.C. § 4. Cypress is not an aggrieved party
   because it was not “aggrieved by the alleged failure, neglect, or refusal of
   another to arbitrate under a written agreement for arbitration.” Id. There
   can be no dispute that the Plaintiffs signed an arbitration agreement only as
   to their claims against Cypress. Because Newman’s FLSA claims are against
   Plains, the Plaintiffs have not violated the arbitration agreement and Cypress
   is not an aggrieved party. 1
           Finally, the district court correctly rejected application of the forum-
   selection clause, delegation clause, and scope provisions of the employment

           1
             In its briefing, Cypress expressly forfeited reliance on either estoppel or third-
   party beneficiary theories. And even if it had not, we are bound by our previous holding
   that Plains could not establish application of third-party beneficiary or estoppel. See
   Newman I, 23 F.4th at 401–08.

                                                3
Case: 21-51089      Document: 00516279938             Page: 4   Date Filed: 04/14/2022

                                       No. 21-51089

   agreement to the Plaintiffs’ dispute with Plains. Again, any dispute about
   whether the Plaintiffs must arbitrate with Plains is a dispute over the existence
   of an agreement to arbitrate with Plains, not over the scope provisions or
   delegation clause in the arbitration agreement. See Newman I, 23 F.4th at 398
   (“The parties cannot delegate disputes over the very existence of an
   arbitration agreement.” (quoting Lloyd’s Syndicate 457 v. FloaTEC, L.L.C.,
   921 F.3d 508, 514 (5th Cir. 2019) (cleaned up)). Similarly, because Cypress
   is not an aggrieved party, the forum-selection clause does not apply.
                                   *        *         *
          We AFFIRM.

                                            4