United States District Court, D. Hawaii
ORDER DENYING DEFENDANT'S MOTION TO COMPEL
C. Kay Sr., United States District Judge
reasons set forth below, the Court DENIES Defendant Hawaiian
Telcom, Inc.'s Motion to Compel Arbitration, ECF No. 54.
those facts pertinent to the resolution of the instant Motion
are set forth herein.
August 15, 2017, Plaintiff Saeed Khosravi-Babadi
(“Plaintiff”) filed a Complaint against Hawaiian
Telcom, Inc. (“Defendant”), as well as Hawaiian
Telcom Communications, Inc., Vito Nozza, and a number of Doe
defendants. ECF No. 1. The Complaint asserted claims arising
out of Title VII, 42 U.S.C. § 1981, and Hawai`i state
law, stemming from the unlawful discrimination Plaintiff
allegedly suffered while he was employed by Defendant.
See generally id.
Hawaiian Telcom Communications, Inc., and Vito Nozza filed a
motion to partially dismiss (“MTPD”) on October
16, 2017. ECF No. 10. On January 19, 2018, while the MTPD was
pending, the parties stipulated to the dismissal from the
action, with prejudice, of Hawaiian Telcom Communications,
Inc. and Vito Nozza, as well as of Plaintiff's claim for
adverse impact. ECF No. 21. In its January 22, 2018 Order on
the MTPD, the Court dismissed Plaintiff's claim for
national origin discrimination under 42 U.S.C. § 1981
(insofar as he was asserting one), but otherwise left
Plaintiff's § 1981 claim, and his other claims,
intact. ECF No. 25 at 16.
filed its Answer to the Complaint on February 5, 2018,
wherein it did not assert the existence of an arbitration
agreement between the parties as an affirmative defense.
See generally ECF No. 26.
September 11, 2018, Defendant for the first time produced to
Plaintiff an arbitration agreement (“Arbitration
Agreement” or “Agreement”) signed by
Plaintiff on July 30, 2012, wherein Plaintiff agreed, inter
alia, that “any legal claim [he] may have arising out
of or relating to [his] employment shall be resolved through
final and binding arbitration.” Second Declaration of
Richard M. Rand (“Second Rand Decl.”), ECF No.
79-1 ¶ 3; Arbitration Agreement, ECF No. 79-3 at
1001; Second Rand Decl. ¶ 2;
Plaintiff's Deposition Excerpt (“Pl.'s Dep.
Excerpt”), ECF No. 79-2 at 991 (Plaintiff verified that
the arbitration agreement bore his signature). The
Arbitration Agreement was “Exhibit B” to an offer
letter (“Offer Letter”), ECF No. 79-3 at 993-95,
which also included as “Exhibit A” a
“Business Protection Agreement” that provided
for, inter alia, the protection of confidential information,
ECF No. 79-3 at 996- 1000. Plaintiff signed all three
documents on July 30, 2012. See ECF No. 79-3 at 995,
1000, 1001; Pl.'s Dep. Excerpt at 990- 91 (confirming
that the documents bear Plaintiff's signature). In
response to Defendant's repeated inquiries as to whether
Plaintiff would stipulate to arbitration, Plaintiff asserted
that Defendant had waived the right to arbitration. First
Declaration of Richard M. Rand (“First Rand
Decl.”), ECF No. 54-4 ¶¶ 1-3.
September 20, 2018, Defendant moved for leave to amend its
Answer to include, inter alia, its eighth affirmative
defense: that “Plaintiff's claims are subject to
arbitration.” ECF No. 49-7 at 5; see also
First Amended Answer, ECF No. 80 at 5. That motion was
granted on November 30, 2018, see ECF No. 75, and
Defendant filed its First Amended Answer on December 7, 2018,
ECF No. 80.
filed the instant Motion to Compel Arbitration
(“Motion”) on September 27, 2018, ECF No. 54,
together with a memorandum in support (“MCA”),
ECF No. 54-1. Plaintiff filed his Opposition to the Motion on
November 29, 2018. ECF No. 73. Defendant filed its Reply on
December 6, 2018. ECF No. 79. The Court held a hearing on
Defendant's Motion on Thursday, December 20, 2018.
provided in the Federal Arbitration Act (“FAA”),
written arbitration agreements “evidencing a
transaction involving commerce . . . shall be valid,
irrevocable, and enforceable, save upon such grounds as exist
at law or equity for the revocation of any contract.” 9
U.S.C. § 2. “The FAA embodies a clear federal
policy in favor of arbitration.” Simula, Inc. v.
Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999).
“[A]ny doubts concerning the scope of arbitrable issues
should be resolved in favor of arbitration, whether the
problem at hand is the construction of the contract language
itself or an allegation of waiver, delay, or a like defense
to arbitrability.” Moses H. Cone Mem. Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).
“The standard for demonstrating arbitrability is not
high, ” and arbitration agreements “are to be
rigorously enforced.” Simula, Inc., 175 F.3d
at 719. “Employment contracts, except for those
covering workers engaged in transportation, are covered by
the FAA.” E.E.O.C. v. Waffle House, Inc., 534
U.S. 279, 289 (2002) (citation omitted).
substantive law governs the question of arbitrability.”
Simula, Inc., 175 F.3d at 719. Under the FAA, a
district court considering a motion to compel arbitration
must consider “(1) whether a valid agreement to
arbitrate exists and, if it does, (2) whether the agreement
encompasses the dispute at issue.” Lee v. Intelius
Inc., 737 F.3d 1254, 1261 (9th Cir. 2013) (citation and
internal quotation marks omitted).
determine whether the parties have agreed to arbitration, a
district court must apply “ordinary state-law
principles that govern the formation of contracts.”
Norcia v. Samsung Telecomms. Am., 845 F.3d 1279,
1283 (9th Cir. 2017) (quoting First Options of Chi., Inc.
v. Kaplan, 514 U.S. 938, 944 (1995)). Under Hawai`i law,
valid arbitration agreement: (1) must be in writing; (2) must
be unambiguous as to the intent to submit disputes or
controversies to arbitration; and (3) requires bilateral
consideration. Gabriel v. Island Pac. Acad.,
Inc., 140 Haw. 325, 334, 400 P.3d 526, 535 (2017)
(citing Douglass v. Pflueger Haw., Inc., 110 Haw.
520, 531, 135 P.3d 129, 140 (2006)). “The party seeking
to compel arbitration carries the initial burden of
establishing that an arbitration agreement exists between the
parties.” Siopes v. Kaiser Found. Health Plan,
Inc., 130 Haw. 437, 446, 312 P.3d 869, 878 (2013)
(citation omitted). “If this initial burden is met, the
burden then shifts to the opposing party to present evidence
on its defenses to the arbitration agreement.”
Id. (citation and internal quotation marks omitted);
see also S. Glazer's Wine and Spirits, LLC v.
Denyer, Civ. No. 17-00407 JMS-RLP, 2017 WL 6417810, at
*3 (D. Haw. Dec. 15, 2017).
purposes of deciding a motion to compel arbitration, the
Court may properly consider documents outside the
pleadings.” Xinhua Holdings Ltd. v. Elec. Recyclers
Int'l, Inc., No. 1:13-CV-1409 AWI SKO, 2013 WL
6844270, at *5 (E.D. Cal. Dec. 26, 2013) (collecting cases),
aff'd sub nom. Clean ...