Court Opinion

ID: 6498982
Source: CourtListenerOpinion
Date Created: 2022-07-11 00:00:24.401397+00
Date Added: 2024-06-11T09:11:14.988382
License: Public Domain

Case: 21-50606     Document: 00516387625          Page: 1    Date Filed: 07/08/2022

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

                                                                               FILED
                                                                            July 8, 2022
                                   No. 21-50606                           Lyle W. Cayce
                                                                               Clerk

   Derek Rodgers,

                                                            Plaintiff—Appellant,

                                       versus

   United Services Automotive Association, also known as
   USAA,

                                                            Defendant—Appellee.

                  Appeal from the United States District Court
                       for the Western District of Texas
                            USDC No. 5:19-CV-620

   Before King, Elrod, and Southwick, Circuit Judges.
   Per Curiam:*
          Derek Rodgers appeals the judgment of the district court confirming
   an arbitration award and denying his motion to vacate. We affirm.

          *
            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   opinion should not be published and is not precedent except under the limited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.
Case: 21-50606      Document: 00516387625          Page: 2    Date Filed: 07/08/2022

                                    No. 21-50606

                                          I.
          Derek Rodgers, represented by counsel, filed a complaint against his
   former employer, the United Services Automotive Association (“USAA”),
   alleging that he was wrongfully terminated in violation of the Family Medical
   Leave Act (“FMLA”). Specifically, he claimed that USAA terminated him
   because he took several months of FMLA leave.
          After filing his complaint, Rodgers also filed a motion to refer the case
   to arbitration. The district court granted the motion and administratively
   closed the case. During the arbitration proceedings, Rodgers remotely
   deposed USAA employee relations advisor Erin Redmond. While Redmond
   was being deposed, Rodgers’s attorney discovered that Redmond was texting
   with USAA’s attorney. Counsel for both parties then, off the record,
   contacted the arbitrator and reached an agreement that Redmond would be
   required to keep her phone out of reach for the remainder of the deposition.
   Both USAA’s counsel and Redmond immediately deleted the text messages.
   Redmond then testified that USAA may have stored Rodgers’s termination
   memo in an internal system called Documentum, but she was not sure.
   Separately, USAA produced the termination memo to Rodgers.
          After discovery, USAA filed a motion for summary judgment.
   Rodgers filed a response through his attorney, but also personally sent a letter
   to the arbitrator complaining that USAA had withheld unspecified relevant
   records stored in Documentum. USAA objected to considering the letter,
   arguing that it was an inappropriate ex parte communication. The arbitrator
   granted USAA’s motion for summary judgment, finding that Rodgers could
   not show a prima facie case of wrongful termination under the FMLA because
   he could not show he was treated differently from employees who did not
   take FMLA leave; she further noted that she did not consider the ex parte
   letter in making this determination.

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                                         No. 21-50606

               After the arbitrator granted USAA’s motion for summary judgment,
   USAA filed a motion to confirm the arbitration award in the district court.
   Rodgers’s counsel then sought, and was granted, a motion to withdraw.
   Proceeding pro se, Rodgers filed a motion to vacate the arbitration award. In
   his motion to vacate, Rodgers argued that vacatur under 9 U.S.C. § 10(a)(1)
   was appropriate because the award was procured by undue means, first
   because the arbitrator considered Redmond’s deposition testimony despite
   the texting between Redmond and USAA’s attorney and second because the
   arbitrator failed to consider the allegedly withheld Documentum evidence
   that Rodgers raised in his ex parte letter. He further argued that the arbitrator
   exceeded her powers, entitling him to vacatur under 9 U.S.C. § 10(a)(4), by
   finding Rodgers could not demonstrate a prima facie case because the
   arbitrator failed to take into account the allegedly withheld evidence. 1
           The district court granted the motion to confirm the arbitration award
   and denied Rodgers’s motion to vacate. It explained that Rodgers was not
   entitled to vacatur under § 10(a)(1) because he could not show that the
   improper behavior of USAA was “not discoverable by due diligence before
   or during the arbitration hearing.” It further found no error in the arbitrator’s
   decision to strike the ex parte letter, and it concluded that Rodgers was not
   entitled to relief under § 10(a)(4) because he failed to plead how the
   arbitrator actually exceeded her powers.
           Rodgers, proceeding pro se, now timely appeals these holdings.

           1
             Rodgers also argued that he was entitled to vacatur under § 10(a)(3), but he does
   not brief that argument on appeal and thus it need not be considered. See United States v.
   Davis, 603 F.3d 303, 307 n.5 (5th Cir. 2010).

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                                    No. 21-50606

                                         II.
          “[F]ederal courts have ‘an independent duty to examine the basis of
   [their] jurisdiction.’” Biziko v. Van Horne, 981 F.3d 418, 420 (5th Cir. 2020)
   (quoting Feld Motor Sports, Inc. v. Traxxas, L.P., 861 F.3d 591, 595 (5th Cir.
   2017)). Both this circuit and others have recognized that, when a district
   court with jurisdiction over a case refers the case to arbitration and orders it
   administratively closed, the court retains jurisdiction over the case; in turn,
   we have jurisdiction to review the district court’s subsequent decision to
   vacate or confirm an arbitration award after it reopens the case. See Positive
   Software Sols., Inc. v. New Century Mortg. Corp., 476 F.3d 278, 279–81 (5th
   Cir. 2007) (en banc) (reviewing a district court’s decision to vacate an
   arbitration award after it submitted the matter to arbitration and stayed the
   case); Freeman v. Pittsburgh Glass Works, LLC, 709 F.3d 240, 246–49 (3d Cir.
   2013); Davis v. Fenton, 857 F.3d 961, 962–63 (7th Cir. 2017); Dodson Int’l
   Parts, Inc. v. Williams Int’l Co. LLC, 12 F.4th 1212, 1227–28 (10th Cir. 2021).
          That is precisely what happened here. The district court had subject-
   matter jurisdiction over the initial complaint, which brought FMLA claims
   against the defendant. See Gilbert v. Donahoe, 751 F.3d 303, 310–11 (5th Cir.
   2014). It administratively closed the case pending arbitration but retained its
   jurisdiction to review the outcome. Thus, it had jurisdiction to review the
   arbitration award and confirm or vacate it, and we in turn have jurisdiction to
   review that decision.
                                         III.
          We review a district court’s confirmation of an arbitration award de
   novo. Rainier DSC 1, L.L.C. v. Rainier Cap. Mgmt., L.P., 828 F.3d 362, 364
   (5th Cir. 2016). That said, “[j]udicial review of an arbitration award is
   extraordinarily narrow and this [c]ourt should defer to the arbitrator’s
   decision when possible.” Antwine v. Prudential Bache Sec., Inc., 899 F.2d 410,

                                          4
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                                            No. 21-50606

   413 (5th Cir. 1990). A district court may vacate an arbitration award only
   when (1) “the award was procured by corruption, fraud, or undue means”;
   (2) “there was evident partiality or corruption in the arbitrator[]”; (3) the
   arbitrator was guilty of misconduct by, inter alia, refusing to consider certain
   evidence; or (4) the arbitrator exceeded his or her powers. 9 U.S.C.
   § 10(a)(1)–(4); Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349, 352–58 (5th
   Cir. 2009). On appeal, Rodgers argues the district court erred in denying his
   motion to vacate the arbitration award under § 10(a)(1) and (4).
           As a preliminary matter, Rodgers argues for the first time on appeal
   that the arbitration clause in his employment agreement was deficient, that
   his letter to the court was not truly an ex parte communication, 2 and that the
   arbitrator violated the rules of professional conduct. Because these
   arguments are raised for the first time on appeal, we need not consider them.
   Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1163 (5th Cir. 1992).
           Rodgers points to three violations under § 10(a)(1). He argues that the
   award must be vacated as procured by undue means because USAA’s
   counsel coached Redmond via text message in her deposition, Redmond did
   not sign her deposition transcript, and USAA allegedly withheld records
   from Documentum. But a party alleging that an arbitration award was
   procured through undue means “must demonstrate that the improper
   behavior was . . . not discoverable by due diligence before or during the
   arbitration hearing.” In re Trans Chem. Ltd. & China Nat’l Mach. Imp. & Exp.
   Corp., 978 F. Supp. 266, 304 (S.D. Tex. 1997), aff’d and adopted by 161 F.3d

           2
              Rodgers did challenge the letter’s ex parte classification in his reply brief before
   the district court. However, “[a]rguments raised for the first time in a reply brief, even by
   pro se litigants . . . are [forfeited].” United States v. Jackson, 426 F.3d 301, 304 n.2 (5th Cir.
   2005); see also Jones v. Cain, 600 F.3d 527, 540–41 (5th Cir. 2010). In any case, the
   argument is inadequately briefed and thus is forfeited. See Davis, 603 F.3d at 307 n.5.

                                                   5
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                                    No. 21-50606

   314, 319 (5th Cir. 1998). All three of these issues were either discovered or
   discoverable at the time of the arbitration hearing. First, Rodgers and his
   counsel did discover the alleged coaching at the time and worked to rectify it.
   Second, they could have readily noticed that the deposition transcript was
   not signed. Third, they learned of the Documentum database on September
   16, 2020, four months prior to the hearing. Thus, they could have
   investigated, and indeed did investigate, whether USAA had produced
   everything relevant within that database. It follows that Rodgers does not
   show any undiscoverable improper behavior to support his § 10(a)(1) claims.
          Rodgers also seems to argue that the district court erred when it found
   that the arbitrator did not “exceed [her] powers” for the purposes of
   § 10(a)(4) when she found that Rodgers did not establish a prima facie case.
   Rodgers contends that the district court misapplied the law when it
   confirmed the arbitration award that found Rodgers did not meet his burden
   of proof. It did so, he posits, by failing to speculate favorably about the
   contents of the allegedly withheld documents.
          For an arbitrator to exceed her powers, however, it is not enough for
   her to render an error in law or fact. See Citigroup Glob. Mkts., 562 F.3d at
   352–53 (explaining that awards may be affirmed despite an erroneous
   conclusion of law or finding of fact). Rather, she must exceed the powers
   granted to her by the arbitration agreement. See Apache Bohai Corp. LDC v.
   Texaco China BV, 480 F.3d 397, 401 (5th Cir. 2007), overruled on other grounds
   by Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 584–86 (2008).
   Rodgers’s argument merely contends that the arbitrator (and district court
   in confirming the award) made errors in law and fact, and his argument does
   not even attempt to explain how she exceeded her powers as outlined in the
   arbitration agreement. Therefore, he failed to support his § 10(a)(4)
   argument, and the district court properly confirmed the award.

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                               No. 21-50606

                                   IV.
           For the foregoing reasons, the judgment is AFFIRMED.

                                    7