United States District Court, W.D. Pennsylvania
Barry Fischer, United States District Judge.
before the Court is Defendant's Motion to Dismiss
Plaintiff's Amended Complaint to Confirm Arbitration
Award and supporting briefing, (Docket No. );
Plaintiff's response in opposition, (Docket No. );
and Defendant's reply, (Docket No. ). After careful
consideration of the parties' submissions; the
contractual agreement between the parties; the
arbitrator's opinion and award; the Federal Arbitration
Act (“FAA”); the American Arbitration
Association's (“AAA”) Optional Appellate
Arbitration Rules; the Consumer Arbitration Rules;
Defendant's pending appeal of the arbitration award
before the AAA; the standards governing motions to dismiss
set forth by the Supreme Court in Bell Atl. Corp. v.
Twombly, 550 U.S. 544 (2007), and Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009), and as articulated in
Third Circuit precedent, see, e.g., Connelly v.
Lane Const. Corp., 809 F.3d 780, 790 (3d Cir. 2016); and
for the following reasons, Defendant's Motion to Dismiss
(Docket No. ), is GRANTED, without prejudice to
Plaintiff's right to challenge a final award.
of background, Plaintiff signed a Signature Student Loan
Application and Promissory Note (“the Note”) on
February 23, 2007. (Docket No. 6-3). Section Q of the Note
ARBITRATION AGREEMENT - READ CAREFULLY
You and I agree that either party may elect to arbitrate -
and require the other party to arbitrate - any Claim under
the following terms and conditions. This Arbitration
Agreement is part of the Signature Student Loan Promissory
(Id. at 5) (emphasis in original). On May 27, 2016,
Plaintiff filed an action against Defendant before the AAA,
alleging violations of the Telephone Consumer Protection Act,
47 U.S.C. § 227, et seq. (“TCPA”).
(Docket No. 6-2). On May 11, 2017, the arbitrator concluded
that Defendant had violated the TCPA and awarded Plaintiff
$309, 000.00, to be reduced by $15, 702.95 as an offset of
the amount due on the loan, for a total award of $293,
297.05. (Docket No. 6-4 at 9). After Defendant filed an
application for a modification of the award, the arbitrator
corrected his mathematical errors on June 21, 2017, and
awarded Plaintiff $300, 000.00, to be reduced by $15, 702.95,
for a total award of $284, 297.05. (Docket No. 6-6).
Q.7 of the Note states:
EFFECT OF ARBITRATION AWARD - Any court with jurisdiction may
enter judgment upon the arbitrator's award. The
arbitrator's award will be final and binding, except for:
(A) any appeal right under the Federal Arbitration Act, 9
U.S.C. §§ 1 et seq. (the “FAA”); and
(B) Claims involving more than $50, 000. For Claims involving
more than $50, 000, any party may appeal the award to a
three-arbitrator panel appointed by the Administrator, which
will reconsider de novo any aspect of the initial award that
is appealed. The panel's decision will be final and
binding, except for any appeal right under the FAA.
(Docket No. 6-3 at 6). On May 16, 2017, Defendant's
counsel sent an e-mail to Plaintiff's counsel stating
that Defendant intended to appeal the award to a
three-arbitrator panel. (Docket No. 8-1). On June 5, 2017,
Defendant filed its AAA appeal under Case No.
01-16-0002-0590-02. (Docket No. 8-3). On June 29, 2017, the
AAA sent a letter to Plaintiff and Defendant, wherein it
acknowledged that the filing requirements had been met and
stated that the Consumer Arbitration Rules are applicable.
(Docket No. 8-4).
support of its Motion to Dismiss, Defendant argues that
Plaintiff's action before this Court is premature because
its appeal is pending before the AAA. (Docket No. 8 at 8-11).
Citing Rule A-1 of the AAA Optional Appellate Rules,
Plaintiff contends that Defendant's appeal is barred
because the arbitration agreement between the parties was a
standardized form contract that is non-negotiable or
substantially non-negotiable. (Docket No. 11 at 6-7). In
reply, Defendant asserts that Rule A-1 does not prohibit the
filing of AAA appeals and that the AAA's Consumer
Arbitration Rules apply to its appeal. (Docket No. 14 at
federal law and the law in effect when the Note was signed
strongly favor arbitration and the enforcement of arbitration
agreements. “In enacting the FAA and providing for the
enforcement of arbitration agreements through the federal
courts, Congress intended to ‘reverse the longstanding
judicial hostility to arbitration agreements . . . and to
place arbitration agreements upon the same footing as other
contracts.'” Berkery v. Cross Country
Bank, 256 F.Supp.2d 359, 364 (E.D. Pa. Apr. 11, 2003)
(quoting Green Tree Fin. Corp.-Ala. v. Randolph, 531
U.S. 79, 89 (2000)). Section 9 of the FAA provides:
If the parties in their agreement have agreed that a judgment
of the court shall be entered upon the award made pursuant to
the arbitration, and shall specify the court, then at any
time within one year after the award is made any party to the
arbitration may apply to the court so specified for an order
confirming the award, and thereupon the court must grant such
an order unless the award is vacated, modified, or corrected
as prescribed in sections 10 and 11 of this title.
9 U.S.C. § 9. The United States Court of Appeals for the
Third Circuit follows the “complete arbitration
rule.” Union Switch & Signal Div. Am. Standard,
Inc. v. United Elec., Radio & Mach. Workers,
Local 610, 900 F.2d 608, 611 (3d Cir. 1990). Pursuant to
the complete arbitration rule, “a district court should
not entertain such a lawsuit challenging [an] arbitration
award until the arbitration is complete and the award is
final.” Verizon Pa. LLC v. Communs. Workers of Am.,
Local 1300, 216 F.Supp.3d 530, 538 (E.D. Pa. Oct. 20,
2016) (citing Union Switch & Signal Div. Am.
Standard, Inc., 900 F.2d at 610).
“‘Generally, an arbitrator's decision is
considered final when the arbitrator has completed his
determination of every issue submitted by the
parties.'” Id. (quoting Millmen's
Local 550, United Bhd. of Carpenters & Joiners v.
Well's Exterior Trim, 828 F.2d 1373, 1376 (9th Cir.
to this well-settled law, the Court finds that
Plaintiff's action is premature. Plaintiff opposes
Defendant's motion on the basis that Rule A-1 of the AAA
Optional Appellate Rules prohibits an appeal. As Defendant
has pointed out, however, after Defendant filed its appeal,
the AAA sent a notice to the parties wherein it
“acknowledge[d] that the filing requirements have been
met” and stated that “[t]he Consumer Arbitration
Rules have been applied to this matter.” (Docket No.
8-4 at 1). More significantly, it is not for this Court to
determine which rules apply to Defendant's appeal and
whether the same is permissible. See AAA Optional
Appellate Arbitration Rules, Rule A-13, Docket No. 11-6 at 9
(effective Nov. 1, 2013) (stating that “[t]he appeal
tribunal shall interpret and apply these rules insofar as
they relate to the appeal tribunal's powers and
duties”); AAA Consumer Arbitration Rules, Rule 53,
Docket No. 11-4 at 32 (effective Sept. 1, 2014) (stating that
“[t]he arbitrator shall interpret and apply these Rules
as they relate to the arbitrator's powers and
duties”). Thus, the Court will grant Defendant's
motion. See, e.g., Verizon Pa. LLC, 216
F.Supp.3d at 531 (granting motion to dismiss and finding that
arbitration was not final because the defendant had filed
suit seeking to vacate the award); see also Hulley
Enters. v. Russian Fed'n, 211 F.Supp.3d ...