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SPINETTI v. SERVICE CORP. INTERN.

November 15, 2001

MARYANN SPINETTI, PLAINTIFF,
V.
SERVICE CORPORATION INTERNATIONAL AND SERVICE CORPORATION INTERNATIONAL OF PENNSYLVANIA D/B/A LAFAYATTE MEMORIAL PARK, DEFENDANTS.



The opinion of the court was delivered by: Ambrose, District Judge.

OPINION and ORDER OF COURT

SYNOPSIS

Following her termination from employment. Plaintiff commenced suit against her former employers, arguing that she was fired because of age and gender discrimination. Accordingly, she asserted claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq., and under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a). The Employer believes that Spinetti is contractually obligated to resolve these claims through an arbitration process, and has filed a Motion to Dismiss and Compel Arbitration (Docket No. 4). Spinetti argues that the arbitration agreement is unenforceable. I agree that the agreement to arbitrate is unenforceable insofar as it subjects Spinetti to paying half of the costs of arbitration and to paying her own attorney's fees and costs, regardless of whether she ultimately prevails. The Motion to Dismiss and Compel Arbitration is granted, subject to the severing of these two provisions.

OPINION

Plaintiff Mary Ann Spinetti ("Spinetti") worked for more than ten years as an employee of Service Corporation international and Service Corporation International of Pennsylvania d/b/a Lafayatte Memorial Park ("Lafayatte"). On October 24, 2000, however, her employment ended. Lafayatte claims to have fired Spinetti because she assaulted another employee. Spinetti denies the allegation. Believing the alleged assault to be mere pretext for age and gender discrimination, Spinetti filed suit. She asserts claims under ADEA and Title VII.

Lafayatte maintains that, under these terms of the Agreement, Spinetti is obligated to arbitrate her discrimination claims. Spinetti counters that the Agreement is unenforceable both because the cost of arbitrating her claims would be so expensive as to prohibit her from effectively asserting her rights, and because the Agreement deprives her of her statutory right to recover attorney's fees and costs should she prevail. I agree with both of Spinetti's contentions. Lafayatte's Motion to Dismiss or Compel Arbitration is granted, subject to the severing of these two provisions.

STANDARD OF REVIEW*fn1

Summary judgment may only be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with any affidavits, show that there is no genuine issue as to any material facts and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A fact is material when it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rule 56 mandates the entry of judgment, after adequate time for discovery and upon motion, against the party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

In considering a motion for summary judgment, the Court must examine the facts in the light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the nonmoving party. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the nonmovant's burden of proof at trial. Celotex, 477 U.S. at 322, 106 S.Ct. 2548. Once the moving party satisfies its burden, the burden shifts to the non-moving party, who must go beyond its pleadings, and designate specific facts by the use of affidavits, depositions, admissions, or answers to interrogatories showing that there is a genuine issue for trial. Id. at 324, 106 S.Ct. 2548.

ANALYSIS

I. Payment of One-Half of Costs and Fees Associated With Arbitration

As stated above, the Agreement obligates Spinetti to pay one-half of the costs associated with arbitration. The discrete issue before me is whether such an agreement is unenforceable. Neither the United States Supreme Court nor the Third Circuit Court of Appeals have resolved this matter and, in past years, other federal courts have reached different conclusions. See Shankle v. B-G Maintenance Mgmt. of Colorado, 163 F.3d 1230 (10th Cir. 1999); Paladino v. Avnet Computer Technologies, Inc., 134 F.3d 1054 (11th Cir. 1998) and Cole v. Burns Intern. Security Services, 105 F.3d 1465 (D.C.Cir. 1997) (all finding such clauses to be unenforceable), as compared to: Koveleskie v. SBC Capital Markets, Inc., 167 F.3d 361 (7th Cir. 1999), cert denied, 528 U.S. 811, 120 S.Ct. 44, 145 L.Ed.2d 40 (1999), Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, 170 F.3d 1 (1st Cir. 1999), and Arakawa v. Japan Network Group, 56 F. Supp.2d 349 (S.D.N.Y. 1999) (all finding such clauses to be enforceable).

Yet the Supreme Court's recent decision on a closely-related issue provides much guidance and clarification. In Green Tree Financial Corp. v. Randolph, 531 U.S. 79, 82, 121 S.Ct. 513, 517, 148 L.Ed.2d 373 (2000), the Court addressed, in part, "whether an arbitration agreement that does not mention arbitration costs and fees is unenforceable because it fails to affirmatively protect a party from potentially steep arbitration costs." Although the Court answered the question in the negative, it declined to adopt a per se rule. Rather, it acknowledged that, "[i]t may well be that the existence of large arbitration costs could preclude a litigant such as Randolph from effectively vindicating her federal statutory rights in the arbitral forum." Green Tree, 531 U.S. at 90, 121 S.Ct. at 522. Because the record did not contain any evidence of ...


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