Miller v. AT&T

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

HOT SPRINGS DIVISION

PAUL F. MILLER PLAINTIFF

v. Case No. 6:18-cv-6008

AT&T d/b/a SOUTHWESTERN

BELL TELEPHONE COMPANY;

AT&T d/b/a/ DIRECTV, LLC; JAMS;

and RANDALLS DEFENDANTS

ORDER

Before the Court is the Report and Recommendation filed on May 15, 2018, by the

Honorable Barry A. Bryant, United States Magistrate Judge for the Western District of Arkansas.

(ECF No. 32). Judge Bryant recommends that the Court grant Separate Defendants Southwestern

Bell Telephone Company; DirecTV, LLC; and Randall Stephensons’ (the “Telecommunications

Defendants”) Motion to Confirm Arbitration Award (ECF No. 8) and dismiss this case with

prejudice. Plaintiff Paul F. Miller filed objections. (ECF No. 33). Plaintiff also filed a supplement

to his objections. (ECF No. 34). The Telecommunications Defendants filed a response to

Plaintiff’s objections and supplement. (ECF No. 37). The Court finds the matter ripe for

consideration.

I. BACKGROUND

On February 4, 2016, Plaintiff filed suit in the District Court of Garland County, Arkansas,

alleging various claims against multiple defendants. Plaintiff alleged that on May 31, 2015, he

saw an advertisement in the Hot Springs Sentinel-Record for bundled DirecTV television and

AT&T Internet and telephone services, known as the “Ultimate Bundle,” for a discounted monthly

rate of $54.94. The advertisement stated that the “Ultimate Bundle” was available to new,

approved customers only. Plaintiff alleged that he accepted the offered “Ultimate Bundle,” but

when he paid the advertised rate of $54.94 per month, the defendants eventually terminated his

service. Prior to trial, the Garland County District Court dismissed all of Plaintiff’s claims for lack

of jurisdiction, except for a breach-of-contract claim. Plaintiff’s breach-of-contract claim

proceeded to trial, and the district court entered judgment as a matter of law against Plaintiff after

finding that he failed to establish a prima facie case and failed to establish damages. Accordingly,

the district court dismissed Plaintiff’s case.

On July 21, 2016, Plaintiff sought a de novo appeal to the Circuit Court of Garland County,

Arkansas. On October 12, 2016, the circuit court entered an order granting the defendants’ motion

to dismiss and dismissing Plaintiff’s claims with prejudice. Plaintiff subsequently pursued an

appeal to the Arkansas Court of Appeals and filed a mandamus petition with the Arkansas Supreme

Court. The appeal and the mandamus petition were both dismissed.

On May 15, 2017, Plaintiff filed an arbitration demand with Separate Defendant JAMS

(“JAMS”), the alternative dispute resolution service with which DirecTV’s 2015 Residential

Customer Agreement required arbitration of disputes. Plaintiff asserted claims related to “the

purchase or lease of consumer telecommunication services,” against various respondents,

including the Telecommunications Defendants. JAMS appointed Karen B. Willcutts

(“Willcutts”), an attorney and former judge, as the arbitrator. On January 10, 2018, Willcutts

issued an order granting the respondents’ motion for summary adjudication, finding in the

respondents’ favor. Specifically, Willcutts found that Plaintiff’s claims were barred by the

doctrines of res judicata and collateral estoppel, and even if they were not, the claims failed on the

merits as a matter of law. Willcutts also sanctioned Plaintiff $250, the amount of his filing fee,

finding that he behaved vexatiously during the arbitration and had asserted several frivolous claims

that could only have been brought for purposes of harassment.1

On January 12, 2018, Plaintiff filed this lawsuit against Defendants. Plaintiff asks the

Court to vacate the arbitration award pursuant to 9 U.S.C. § 10(a). Specifically, Plaintiff argues

that Willcutts’ application of res judicata and collateral estoppel constituted plain error of law, and

that JAMS’ arbitration agreement provides that arbitrators have no authority to make errors of law.

On March 16, 2018, the Telecommunications Defendants filed a Motion to Confirm Arbitration

Award, arguing that Plaintiff has failed to demonstrate cause under 9 U.S.C. § 10 to warrant

vacatur of the arbitral award, and that accordingly, the Court should confirm the award. (ECF No.

8). The Court referred this case to Judge Bryant to make a Report and Recommendation.

On May 15, 2018, Judge Bryant issued the instant Report and Recommendation,

recommending that the Court grant the Telecommunications Defendants’ Motion to Confirm

Arbitration Award and dismiss Plaintiff’s case with prejudice. Specifically, Judge Bryant found

no basis for vacating the arbitral award because the arbitration clause is valid and the issues

determined in the arbitration did not fall outside the scope of the arbitration clause. On May 29,

2018, Plaintiff timely filed objections to the Report and Recommendation. On June 6, 2018,

Plaintiff filed a supplement to his objections. On June 12, 2018, the Telecommunications

Defendants filed a response to Plaintiff’s objections and supplement.2 (ECF No. 37).

II. DISCUSSION

Pursuant to 28 U.S.C. § 646(b)(1), the Court will conduct a de novo review of all issues

related to Plaintiff’s specific objections.

1 Willcutts also found Plaintiff’s status as an attorney, the escalating rhetoric in his filings, and the fact that he

previously pursued similar groundless claims in Arkansas state court against individuals affiliated with AT&T and

DirecTV to be aggravating factors further supporting sanctions.

2 The Telecommunications Defendants’ response, which they did not seek leave to file, addresses Plaintiff’s objections

to the Report and Recommendation and argues that the Court should adopt the Report and Recommendation in toto

and dismiss this case.

Plaintiff argues in his objections that the Report and Recommendation erred in failing to

recommend vacatur of the arbitral award on the basis that Willcutts was a partial arbitrator.

Plaintiff also argues that the arbitration agreement materially limited Willcutts’ power, as it

provided that she could not make any error of law, which he contends she did by applying the

doctrine of res judicata “to a decision from a court lacking jurisdiction,”3 thereby rendering the

arbitration award void. (ECF No. 33). Plaintiff also argues that the Report and Recommendation

committed error in reciting contract law.

In his supplement, Plaintiff argues that the recent June 4, 2018, United States Supreme

Court opinion in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, No. 16-111,

is relevant to show Willcutts’ partiality, as her behavior during the arbitration is analogous to the

behavior of the Colorado Civil Rights Commission in Masterpiece, demonstrating that she was

biased against the elderly. He also argues that the “JAMS Policy on Consumer Arbitrations

Pursuant to Pre-Dispute Clauses Minimum Standards of Procedural Fairness” was not followed.

(ECF No. 34). Plaintiff also states that Willcutts’ failure to address Plaintiff’s specific issues is

evidence of a breach of the neutrality owed to the parties.

The Court will now separately address all issues related to Plaintiff’s specific objections.

A. Vacatur of Arbitration Award

The Court will first address Plaintiff’s objection that the Report and Recommendation erred

by failing to recommend vacatur of the arbitration award on the basis that Willcutts was a biased

arbitrator.

A federal court’s review of an arbitral award is extremely limited. See Major League

Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001). An underlying arbitral award is

3 Plaintiff later clarifies this statement by stating that Willcutts based the arbitral award on prior dismissals where the

state forum stated it had no jurisdiction over the claim.

entitled to an “extraordinary level of deference.” Boise Cascade Corp. v. Paper Allied-Indus.,

Chem. & Energy Workers (PACE), Local 7-0159, 309 F.3d 1075, 1080 (8th Cir. 2002). According

to this narrow and deferential standard, a federal court may not set aside an arbitral award even if

the court may “have interpreted the agreement differently or because the arbitrator erred in

interpreting the law or in determining the facts.” Hoffman v. Cargill, Inc., 236 F.3d 458, 462 (8th

Cir. 2001). So long as the arbitrator has even arguably construed the underlying contract and acted

within her scope of authority, the award should be confirmed. Boise Cascade Corp., 309 F.3d at

1080.

“However, an arbitrator’s decision is not totally free from judicial review.” Id. Federal

courts may vacate an arbitral award pursuant to 9 U.S.C. § 10 in any of the following cases:

(1) where the award was procured by corruption, fraud, or undue means; (2) where

there was evident partiality or corruption in the arbitrators; (3) where the arbitrators

were guilty of misconduct in refusing to postpone the hearing, or in refusing to hear

evidence material to the controversy, or of any other misbehavior; or (4) where the

arbitrators exceeded their powers, or so imperfectly executed them that a mutual,

final, and definite award upon the subject matter was not made.

9 U.S.C. § 10(a) (footnote added); Val-U Const. Co. of S. D. v. Rosebud Sioux Tribe, 146 F.3d

573, 578-79 (8th Cir. 1998). Federal courts may not vacate an arbitral award pursuant to 9 U.S.C.

§ 10 for any other unenumerated reason. See Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S.

576, 586-87 (2008); Med. Shoppe Int’l, Inc. v. Turner Investments, Inc., 614 F.3d 485, 489 (8th

Cir. 2010).

Plaintiff states in his objections that Willcutts was biased and displayed evident partiality

during the arbitration. Although Plaintiff does not elaborate on this statement in his objections, he

states in his response to the Separate Defendants’ Motion to Confirm Arbitration Award that

Willcutts deliberately procrastinated and refused to provide a quick and inexpensive arbitration,

thereby demonstrating her partiality. Plaintiff argues further that Willcutts was biased against the

elderly. Plaintiff also argues that Willcutts’ failure to conduct a one-day hearing before ruling on

the respondents’ motion for summary adjudication constituted blatant prejudice.

A party seeking to vacate an arbitral award because of a partial neutral faces “a high burden

of demonstrating objective facts inconsistent with impartiality.” Brown v. Brown-Thill, 762 F.3d

814, 820 (8th Cir. 2014). “Typically, courts find partiality in cases where the arbitrator has a

preexisting relationship with one of the parties to the dispute.” Free Country Design & Const.,

Inc. v. Proformance Grp., Inc., No. 09-06129-CV-SJ-DGK, 2011 WL 6032928, at *2 (W.D. Mo.

Dec. 5, 2011) (citing Commonwealth Coatings Corp. v. Cont’l Cas. Co., 393 U.S. 145 (1968)).

Courts must “accord even greater deference to the arbitrator’s decisions on procedural matters than

those bearing on substantive grounds.” Stroh Container Co. v. Delphi Indus., Inc., 783 F.2d 743,

749 (8th Cir. 1986). However, vacatur is proper if the movant can demonstrate that the arbitrator

took action that “so affect[ed] the rights of a party that it may be said that he was deprived of a fair

hearing.” Grahams Serv. Inc. v. Teamsters Local 975, 700 F.2d 420, 422-23 (8th Cir. 1982); see

also El Dorado Sch. Dist. No. 15 v. Cont’l Cas. Co., 247 F.3d 843, 848 (8th Cir. 2001) (stating

that “each party must be given the opportunity to present its arguments and evidence”).

Upon consideration, the Court finds that Plaintiff has failed to overcome the “high burden”

of demonstrating partiality. Plaintiff offers no evidence that Willcutts had a preexisting

relationship with the arbitration respondents or that she is biased against the elderly. Instead, he

argues that Willcutts failed to provide a quick and inexpensive arbitration and failed to grant him

a hearing before granting the respondents’ motion for summary adjudication. On August 22, 2017,

Willcutts held a preliminary scheduling conference with all parties to the arbitration to establish a

briefing schedule and, based on the discussion with the parties, entered a scheduling order allowing

for dispositive motions. On September 14, 2017, Willcutts temporarily suspended the briefing

schedule to allow Plaintiff the opportunity to file a motion discussing jurisdictional issues he

wished to raise.4 After resolving the jurisdictional issues, the parties completed dispositive

briefing on December 11, 2017, and Willcutts issued the arbitration award on January 10, 2018.

Considering the plethora of documents filed by Plaintiff throughout the arbitration and his desire

to amend the briefing schedule to allow for separate briefing on jurisdictional issues, the Court

cannot find that the length of the arbitration demonstrates Willcutts’ partiality.

Although Willcutts admonished Plaintiff over his filing habits on several occasions,

instructing him to only file documents relating to motions or in response to motions, there is no

indication that Plaintiff was deprived of the opportunity to fully brief and present his case.

Willcutts established a dispositive-motion briefing schedule based on discussions with the parties

and amended the schedule to allow Plaintiff to raise jurisdictional issues. It appears that Plaintiff

received an opportunity to file whatever documents he wished and to brief all issues, so long as he

did so in accordance with the scheduling order. It also appears that Willcutts considered all

documents filed by Plaintiff, including unauthorized ones.5 Plaintiff makes no attempt to explain

how a one-day hearing would have substantially benefited his ability to present his case or

otherwise would have materially affected Willcutts’ decision. Accordingly, the Court finds that

Plaintiff’s reliance on Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, No. 16-

111, is misplaced. Plaintiff has failed to establish sufficient cause to warrant vacatur of the arbitral

award pursuant to 9 U.S.C. § 10(a) on the grounds of partiality.6

4 The parties fully briefed the jurisdictional issues and on October 31, 2017, Willcutts found that the tribunal had

jurisdiction over the parties and claims submitted by Plaintiff, and that JAMS was the proper forum for the arbitration

pursuant to the 2015 DirecTV Residential Customer Agreement that Plaintiff relied on when submitting his arbitration

demand.

5 For instance, the arbitral award references Plaintiff’s unauthorized “Notice of 2nd Modification of Claim” when

discussing his statement of claims. (ECF No. 1-2, p. 4).

6 In response to the Motion to Confirm Arbitration Award, Plaintiff made other arguments for vacatur of the arbitral

B. Application of Res Judicata

Plaintiff argues that the Report and Recommendation erred by failing to recommend

vacatur on the basis that Willcutts exceeded the scope of her arbitral authority when she found that

the doctrine of res judicata barred Plaintiff’s claims in the arbitration.7 Plaintiff argues that this

was an error of law because res judicata cannot be applied using a decision from a court lacking

jurisdiction.

Although Willcutts found in the arbitral award that Plaintiff’s claims were barred by the

doctrines of res judicata and judicial estoppel, she also conducted a lengthy, alternative analysis

of Plaintiff’s claims, finding that they all failed on the merits as a matter of law if res judicata and

judicial estoppel did not apply. Assuming arguendo for the sake of this Order that Willcutts

erroneously applied the doctrine of res judicata, the error was harmless because she also found

that Plaintiff’s claims alternatively failed on the merits. Plaintiff makes no mention of Willcutts’

alternative merits-based determinations, and the Court would not disturb them in any event. See

Boise Cascade Corp., 309 F.3d at 1080 (stating that “federal courts are not authorized to reconsider

the merits of an arbitral award”). Accordingly, the Court finds no reason to depart from the Report

and Recommendation on this basis.

award under 9 U.S.C. § 10, including that Willcutts committed misconduct and that the award was obtained through

fraud and undue means. Plaintiff did not raise these arguments in his objections to the Report and Recommendation,

and thus, the Court considers them waived. Assuming arguendo that they were not waived, the Court would find that

these arguments fail to demonstrate sufficient grounds for vacatur. Plaintiff provides no evidence or substantial

argument in support of these claims, instead making only speculative and conclusive statements. The Court finds this

unpersuasive, considering the “extraordinary level of deference” given to arbitral awards. Boise Cascade Corp, 309

F.3d at 1080.

7 Plaintiff also appears to argue that Willcutts improperly decided claims that were outside of her scope of authority.

9 U.S.C. § 11(b) allows courts to modify or correct an arbitral award when the arbitrator decided “a matter not

submitted to them.” However, Plaintiff does not ask the Court to act under 9 U.S.C. § 11. Instead, he invokes only 9

U.S.C. § 10. Therefore, the Court will not consider this argument because it falls outside of and requests relief not

available under 9 U.S.C. § 10. See Med. Shoppe Int’l, 614 F.3d at 489 (instructing that courts may only vacate an

arbitral award under 9 U.S.C. § 10 for the reasons enumerated in section 10).

C. Recital of Contract Law

Plaintiff asserts that the Report and Recommendation erred by reciting contract law. At

one point in the Report and Recommendation, Judge Bryant stated that the parties do not dispute

that a valid arbitration agreement existed, and that Plaintiff failed to demonstrate that the issues

determined during the arbitration fell outside the scope of that arbitration agreement. In doing so,

Judge Bryant cited caselaw regarding the essential elements of a contract or arbitration agreement.8

Although this discussion may not have ultimately been necessary, the Report and

Recommendation nonetheless reached the correct outcome, for the reasons discussed above.

Accordingly, the Court finds no reason to depart from the Report and Recommendation on the

basis that it cited contract law regarding the validity of an arbitration agreement.

D. Supplemental Arguments

In his supplement, Plaintiff asserts additional arguments for vacatur of the arbitral award.

Plaintiff states that Willcutts did not follow the “JAMS Policy on Consumer Arbitrations Pursuant

to Pre-Dispute Clauses Minimum Standards of Procedural Fairness.” (ECF No. 34). However,

Plaintiff does not specify what portion of this policy Willcutts failed to follow. Similarly, Plaintiff

argues that Willcutts failed to address Plaintiff’s specific issues, thereby breaching the duty of

neutrality owed to the arbitration parties, but again, he does not specify what issues she failed to

address. Plaintiff also asserts that an audio recording of an August 18, 2017, arbitration hearing

order demonstrates Willcutts’ hostility toward him when compared to her September 14, 2017,

scheduling order.9 Plaintiff does not state what in the audio recording demonstrates Willcutts’

8 The Report and Recommendation contains no other citations or discussion related to contract law.

9 On June 6, 2018, Plaintiff filed a motion for leave to conventionally file the audio recording, stating that the Court’s

CM/ECF electronic filing system does not allow the electronic filing of evidence in a digital format. (ECF No. 35).

The next day, Plaintiff mailed a thumb drive containing the audio recording to the Clerk of Court’s office in Fort

Smith, Arkansas. Although the Court has not granted Plaintiff leave to submit this evidence, the Court nonetheless

reviewed the audio recording. In the recording, Willcutts and the parties to the arbitration can be heard discussing

hostility toward him, and upon review of the recording, the Court finds nothing in the recording

that justifies vacatur of the arbitral award. Remaining mindful of the “extraordinary level of

deference” given to arbitral awards, Boise Cascade Corp, 309 F.3d at 1080, the Court finds that

Plaintiff’s conclusory supplemental arguments are insufficient to cause the Court to depart from

the Report and Recommendation.

IV. CONCLUSION

Upon de novo review of the Report and Recommendation, and for the reasons discussed

above, the Court finds that Plaintiff’s objections offer neither law nor fact which would cause the

Court to deviate from the result suggested by Judge Bryant’s Report and Recommendation.

Accordingly, the Court hereby overrules Plaintiff’s objections and adopts the Report and

Recommendation (ECF No. 32) to the extent that it recommends that the Court grant Separate

Defendants Southwestern Bell Telephone Company; DirecTV, LLC; and Randall Stephensons’

Motion to Confirm Arbitration Award and dismiss this case with prejudice. The Motion to

Confirm Arbitration Award (ECF No. 8) is hereby GRANTED. Plaintiff’s case is DISMISSED

WITH PREJUDICE.

IT IS SO ORDERED, this 18th day of June, 2018.

/s/ Susan O. Hickey

Susan O. Hickey

United States District Judge

Plaintiff’s claims, the jurisdictional issue Plaintiff wished to assert, and conclude by agreeing upon a briefing schedule

that Willcutts intended to finalize in a written order.