The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ELLIOT SIEGEL,
Plaintiff, MEMORANDUM & ORDER
21-CV-4032 (JS)(SIL)
-against-
YAAKOV MILSTEIN, AVROHOM Y.
SOROTZIN, and J Synergy Green,
Inc.,
Defendants.
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APPEARANCES
For Plaintiff: Bryan Goldstein, Esq.
Krause & Associates
45 Broadway, 27th Floor
New York, New York 10006
For Defendants: Tanner Bryce Jones, Esq.
Jones Law Firm, P.C.
1270 Avenue of the Americas, 7th Floor
New York, New York 10020
SEYBERT, District Judge:
Plaintiff Elliot Siegel (“Plaintiff”) commenced this
action against Defendants Yaakov Milstein (“Milstein”), Avrohom Y.
Sorotzin (“Sorotzin”), and J Synergy Green, Inc. (“JSG,” and
together with Milstein and Sorotzin, the ”Defendants”), alleging
claims arising under New York State law, the Fair Labor Standards
Act, and the Wage Theft Prevention Act due to Defendants’ breach
of Plaintiff’s employment contract. (See Compl., ECF No. 1-1, at
¶¶ 6-55.) Currently pending before the Court are: (1) Defendants’
motion to compel arbitration (Defs. Mot. Compel, ECF No. 7);
(2) Plaintiff’s motion for leave to file a sur-reply to the motion
to compel (Pl. Mot., ECF No. 20); (3) Defendants’ objections to
Magistrate Judge Locke’s Order denying their motion to stay
discovery pending the resolution of the motion to compel
arbitration (Defs. Objs., ECF No. 17); and (4) Defendants’ motion
for this Court to expedite its decision on their objections to
Judge Locke’s Order (Defs. Mot. Expedite, ECF No. 19).
For the following reasons, Defendants’ motion to compel
arbitration is DENIED and Plaintiff’s motion for leave to file a
sur-reply is GRANTED, in part, to the extent the Court will
consider the arguments raised in Plaintiff’s motion as its sur-
reply. Defendants’ objections to Judge Locke’s Order are OVERRULED
and their motion to expedite is DENIED as moot.
PROCEDURAL BACKGROUND
On July 17, 2021, Defendants removed this action from
the Supreme Court of the State of New York, County of Nassau.
(Removal Notice, ECF No. 1.) On September 20, 2021, Defendants
filed a motion to compel arbitration to Beis Din, a type of Jewish
religious tribunal. (See Defs. Mot. Compel at 1.) According to
Defendants, the parties have a written agreement to arbitrate this
matter. (See Defs. Mem., ECF No. 7-3, at 3.) Although Defendants
admit that the Arbitration Agreement (the “Agreement”) is not
signed, they contend that the Agreement is enforceable based upon
a series of emails and text messages between the parties which
evidence their intent to arbitrate. (See Arbitration Agreement,
Ex. A, ECF No. 7-4, attached to Jones Decl.; Emails & Text Msgs.,
Ex. B, ECF No. 7-5, attached to Jones Decl.) Plaintiff opposes
the motion, arguing that despite several attempts, the parties did
not reach an agreement to arbitrate because they did not agree
which Beis Din would hear their dispute. (See Pl. Opp’n, ECF No.
13-5, at 7.) Defendants submitted a reply (see Defs. Reply, ECF
No. 18), and Plaintiffs submitted a letter motion for leave to
file a sur-reply. (See Pl. Mot.)
After Defendants filed their motion to compel
arbitration, they filed a motion to Judge Locke requesting a stay
of discovery pending this Court’s resolution of the motion to
compel. (See Defs. Stay Mot., ECF No. 11.) Judge Locke held an
Initial Discovery Conference on October 13, 2021 and denied
Defendants’ motion for a stay because he “d[id] not believe that
there’s an agreement to arbitrate . . . [and] believe[d] that the
defendants will be unsuccessful in their motion” to compel before
this Court. (See Min. Order, ECF No. 14; Transcript, ECF No. 16,
at 5:20-23.) Judge Locke then implemented a schedule for the
completion of discovery in this case. Among other deadlines, the
schedule provides for Rule 26 disclosures to be served by November
3, 2021, initial discovery requests to be served by November 17,
2021, and responses to those requests to be served by December 20,
2021. (Id.)
On October 25, 2021, Defendants filed objections to
Judge Locke’s order denying the motion for a stay. (See Defs.
Objs.) According to Defendants, courts commonly grant stays of
discovery during the pendency of a motion to compel arbitration.
(Id. at 1-2.) Three days later, on October 28, 2021, Defendants
filed a motion for this Court to consider the objections on an
emergency basis and to issue a decision prior to November 3, 2021,
the deadline for Rule 26 disclosures to be served. (See Defs.
Mot. Expedite at 1.) Plaintiff has yet to file a response to
either the Defendants’ objections or the motion to expedite.
ANALYSIS
I. Motion to Compel Arbitration
A. Legal Standard
When analyzing a motion to compel arbitration, the Court
applies “a standard similar to that applicable for a motion for
summary judgment.” Meyer v. Uber Techs., Inc., 868 F.3d 66, 74
(2d Cir. 2017) (internal quotation marks and citation omitted).
Under the summary judgment standard, the court considers “all
relevant, admissible evidence submitted by the parties and
contained in pleadings, depositions, answers to interrogatories,
and admissions on file, together with . . . affidavits, and draws
all reasonable inferences in favor of the non-moving party.” Id.
(internal quotation marks and citations omitted). “[W]here the
undisputed facts in the record require the matter of arbitrability
to be decided against one side or the other as a matter of law,
[courts] may rule on the basis of that legal issue and avoid the
need for further court proceedings.” Id. (internal quotation marks
omitted).
The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et
seq., expresses the strong federal policy favoring arbitration.
Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115, 121 (2d Cir.
2010). The FAA states that arbitration agreements “shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.” 9 U.S.C. §
2; see also Ragone, 595 F.3d at 121. In keeping with this policy,
the Court resolves any doubts in favor of arbitration and enforces
privately negotiated arbitration agreements in accordance with
their terms. See Collins & Aikman Prods. Co. v. Bldg. Sys., Inc.,
58 F.3d 16, 19–20 (2d Cir. 1995). Under the FAA, arbitration must
be compelled where (1) a valid agreement to arbitrate exists, and
(2) the agreement encompasses the claims at issue. Bank Julius
Baer & Co. Ltd. v. Waxfield Ltd., 424 F.3d 278, 281 (2d Cir. 2005),
abrogated on other grounds by Granite Rock Co. v. Int’l Bhd. Of
Teamsters, 561 U.S. 287 (2010).
B. Analysis
The sole issue raised by the parties is whether there is
an enforceable agreement to arbitrate. “[A] party cannot be
required to submit to arbitration any dispute which he has not
agreed so to submit.” AT&T Techs. v. Commc’ns Workers of Am., 475
U.S. 643, 648 (1986) (internal quotation marks and citation
omitted). “Arbitration under the [FAA] is a matter of consent,
not coercion, and parties are generally free to structure their
arbitration agreements as they see fit.” Volt Info. Scis., Inc.
v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468, 479
(1989). “‘When deciding whether the parties agreed to arbitrate
a certain matter,’ a district court must ‘apply ordinary state-
law principles that govern the formation of contracts.’” Medrite
Care, LLC v. Medrite 243 LLC, No. 20-CV-3456, 2020 WL 3962010, at
*2 (S.D.N.Y. July 13, 2020) (quoting First Options of Chicago,
Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). District courts
consider the parties’ “expressed words and deeds” in deciding
whether a contract was formed. Kolchins v. Evolution Markets,
Inc., 31 N.Y.3d 100, 106 (N.Y. 2018) (quoting Brown Bros. Elec.
Contrs. v. Beam Constr. Corp., 41 N.Y.2d 397, 399 (N.Y. 1977)).
“To create a binding contract, there must be a
manifestation of mutual assent sufficiently definite to assure
that the parties are truly in agreement with respect to all
material terms.” Express Indus. & Terminal Corp. v. N.Y. State
Dep’t of Transp., 93 N.Y.2d 584, 589 (N.Y. 1999). “In considering
whether a binding contract exists, ‘the first step is to determine
whether there is a sufficiently definite offer such that its
unequivocal acceptance will give rise to an enforceable
contract.’” Kolchins, 31 N.Y.3d at 106 (quoting Brown Bros. Elec.,
41 N.Y.2d at 399). “It is black letter law that the offeror
controls the terms of acceptance. Thus, a purported acceptance
that modifies the terms of the offer is ‘equivalent to a rejection
and counteroffer.’” Medrite Care, 2020 WL 3962010, at *2 (quoting
Robison v. Sweeney, 753 N.Y.S.2d 583, 586 (N.Y. App. Div. 3d Dep’t
2003) (internal citation omitted)).
Defendants are moving to compel arbitration pursuant to
a written instrument titled “Arbitration Agreement.” The
pertinent parts of the Agreement provide:
We the undersigned hereby agree to submit to
binding arbitration all the controversies
(claims and counter claims) between the
undersigned parties including but not limited
to the following controversy: Any and all
disputes between them.
We further agree that the controversy be heard
and determined by a panel of three arbitrators
[“the Beis Din”], selected by the Bais Havaad
Rabbinical court.
(See Arbitration Agreement at 1 (alteration in original)). It is
an undisputed fact that the Agreement was never signed by the
parties. Although an unsigned arbitration agreement may be
enforceable under certain circumstances, see Genesco, Inc. v. T.
Kakiuchi & Co., Ltd., 815 F.2d 840, 846 (2d Cir. 1987), the Court
finds that the Agreement is not a binding contract between the
parties under New York law.
Plaintiff initiated discussions between the parties to
arbitrate and to do so before a particular rabbinical panel, the
“Bais Havaad Rabbinical Court.” At Plaintiff’s request, three
summonses to arbitrate before the Bais Havaad were sent to
Defendants between January 20, 2021 and February 8, 2021. (See
Summonses, Ex. A, ECF No. 13-2, attached to Goldstein Decl.) In
email correspondence provided to the Court, Rabbi Dovid Housman,
the administrator of the Bais Havaad, asked Defendants to sign the
Arbitration Agreement three times, on February 22, 2021, March 24,
2021, and April 20, 2021. (See Emails & Text Msgs. at 7-8.) On
each of those dates, Defendants asked Rabbi Housman for additional
time to review the matter. (See id. at 5-6, 8.) Rabbi Housman
became frustrated with Defendants’ requests to delay the case,
stating that “[t]his . . . has been proceeding for several months”
and “to now require another few weeks absent an explanation, hardly
appears sincere.” (Id. at 4.) It was not until then that
Defendants proposed two Beis Dins as alternatives to the Bais
Havaad, the “Tzedek Umishpat” or the “Machon Leoraha,” and advised
Plaintiff that “[i]f you want to go to Beis Din[,] you have to
choose one of th[o]se options.” (Id. at 3-4.) Plaintiff promptly
rejected Defendants’ proposal, stating those “choices do not
work.” (Id.)
The Arbitration Agreement that Defendants ask the Court
to enforce specifically states that the signatories agree for their
case to be heard by a panel of arbitrators selected by the Bais
Havaad. (See Arbitration Agreement at 1.) However, Defendants
concede they objected to Plaintiff’s proposal because they “did
not want to give up their right to select their own arbitrator.”
(See Defs. Reply at 5.) As such, Defendants responded to
Plaintiff’s offer to arbitrate before the Bais Havaad by declining
to proceed before that tribunal and offering to proceed before the
Tzedek Umishpat or the Machon Leoraha instead. Put differently,
Defendants changed or qualified the terms of Plaintiff’s offer to
arbitrate before the Bais Havaad which constitutes a rejection and
counteroffer pursuant to New York law. See Medrite Care, 2020 WL
3962010, at *3 (“[F]or an acceptance to be effective, it must
comply with the terms of the offer and be clear, unambiguous and
unequivocal.” (quoting King v. King, 617 N.Y.S.2d 593, 594 (N.Y.
App. Div. 3d Dep’t 1994))).
Defendants contend that a specific, arbitral forum or a
particular Beis Din does not need to be selected for an arbitration
agreement to be enforceable pursuant to Jewish law. (See Defs.
Reply at 2-7.) The Court disagrees. In Medrite Care, LLC v.
Medrite 243 LLC, the court found that even if the parties had an
agreement to arbitrate before a Beis Din, their agreement to
arbitrate was unenforceable because they had not agreed to which
Beis Din would hear their dispute. See Medrite, 2020 WL 3962010,
at *1-4. The Medrite plaintiffs served the defendants with a
summons to appear before a Beis Din but the defendants responded
by serving their own summons to appear before their preferred Beis
Din. Id. at *1-2. The court found that the parties had not agreed
to all material terms but rather had competing offers and “an
agreement to agree[] to proceed before a forum ‘left for future
negotiations.’” Id. at *4. As such, the Medrite court determined
that there was no “manifestation of mutual assent” because the
parties did not agree to all material terms and denied the
defendants’ motion to compel arbitration. Id. Here, for similar
reasons, the Court finds the competent evidence demonstrates that
the parties’ colloquy fell short of an agreement to arbitrate
because they did not reach an agreement as to the material term of
which Beis Din would arbitrate their dispute. Accordingly,
Defendants’ motion to compel arbitration is DENIED.
II. Defendants’ Objections to Judge Locke’s Order and
the Motion to Expedite
A. Legal Standard
Pursuant to Federal Rule of Civil Procedure 72(a), a
party has the option of objecting to a magistrate judge’s order
concerning any nondispositive pretrial matter. See FED. R. CIV. P.
72(a). The district judge “must consider timely objections and
modify or set aside any part of the order that is clearly erroneous
or is contrary to law.” Id. “Under this highly deferential
standard of review, a district court may reverse the order only if
‘on the entire evidence,’ the district court is ‘left with the
definite and firm conviction that a mistake has been committed.’”
Gray v. City of New York, No. 10-CV-3039, 2013 WL 3093345, at *2
(E.D.N.Y. June 18, 2013) (quoting Easley v. Cromartie, 532 U.S.
234, 242 (2001)). “[A] party seeking to overturn a discovery order
bears a heavy burden.” AP Links, LLC v. Global Golf, Inc., No.
08-CV-1730, 2011 WL 888261, at *4 (E.D.N.Y. Mar. 14, 2011)
(citation omitted).
B. Analysis
As a preliminary matter, the Court is considering
Defendants’ objections to Judge Locke’s October 13, 2021 Order
here to conserve judicial resources and due to the Court’s inherent
authority to manage its docket “with a view toward the efficient
and expedient resolution of cases.” See Dietz v. Bouldin, 136 S.
Ct. 1885, 1892 (2016). Therefore, the Court need not address the
merits of Defendants’ motion to expedite its decision on the
objections and DENIES that motion as MOOT.
Notwithstanding, Defendants lodged objections to Judge
Locke’s Order denying the motion to stay discovery pending this
Court’s ruling on the motion to compel arbitration. Judge Locke
determined that it was unlikely Defendants’ motion to compel
arbitration would be granted; therefore, he ordered that discovery
must proceed. In light of the Court’s decision to deny the motion
to compel arbitration, Judge Locke’s Order is neither clearly
erroneous nor contrary to law. See Kwik Ticket Inc. by Shamah v.
Spiewak, No. 20-CV-1201, 2020 WL 5658723, at *2 (E.D.N.Y. Sept.
23, 2020) (“The mere existence of a motion to compel arbitration
is an insufficient basis to stay discovery, much less the entire
litigation.”). Although the Court is sympathetic to Defendants’
argument that they “seek to honor their own religious values” by
proceeding before a Jewish tribunal (see Defs. Objs. at 8), the
Court cannot enforce an arbitration agreement where one does not
exist.
CONCLUSION
For the stated reasons, IT IS HEREBY ORDERED that
(1) Defendants’ motion to compel arbitration (ECF No. 7) is DENIED;
(2) Plaintiff’s motion for leave to file a sur-reply to the motion
to compel arbitration (ECF No. 20) is GRANTED in part;
(3) Defendants’ objections to Judge Locke’s October 13, 2021 Order
(ECF No. 17) are OVERRULED; and (4) Defendants’ motion to expedite
(ECF No. 19) is DENIED as moot.
SO ORDERED.
/s/_____________________
Joanna Seybert, U.S.D.J.
Dated: November 1, 2021
Central Islip, New York