Delirium TV LLC v. Tran Dang

Opinion issued April 9, 2024

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-23-00383-CV

———————————

DELIRIUM TV, LLC, Appellant

V.

TRAN DANG, Appellee

On Appeal from the 11th District Court

Harris County, Texas

Trial Court Case No. 2022-50674

OPINION

Appellant Delirium TV, LLC (Delirium) takes this interlocutory appeal from

the trial court’s denial of its motion to compel arbitration. See TEX. CIV. PRAC. &

REM. CODE § 171.098(a)(1) (authorizing this interlocutory appeal). In five issues,

Delirium asks us to consider whether (1) appellee Tran Dang properly invoked the

protections of the Ending Forced Arbitration of Sexual Assault and Sexual

Harassment Act of 20211 (EFAA or the Act), (2) Dang’s initiation of separate

arbitration proceedings constitutes an election to arbitrate under the EFAA, (3) Dang

can maintain a “parallel” lawsuit in Texas along with arbitration proceedings in

California, (4) the trial court abused its discretion in refusing to stay the state court

litigation in light of Dang’s pending arbitration claims, and (5) the trial court abused

its discretion in denying Delirium’s motion to compel arbitration and motion to stay.

We affirm.

Background

In January 2022, Dang was contacted on social media by a casting director

with Kinetic Content, LLC (Kinetic), who identified Kinetic as the producer of the

reality television program Love Is Blind. Dang contends that following several

interviews, she was hired by Delirium and Kinetic for the fifth season of Love is

Blind on or about April 17, 2022. According to Dang, filming took place from April

18, 2022 to May 14, 2022.

As part of the casting process, on February 7, 2022, Dang executed a

“Participant Release Agreement” (the Agreement) with Delirium. The Agreement

identified Dang as a “participant” in “LOVE IS BLIND – SEASON 5” (the Program)

1

Pub. L. No. 117-90, 136 Stat. 26 (2022) (codified at 9 U.S.C. §§ 401–02).

2

and named Delirium as the Program’s producer. The Agreement also contained an

arbitration provision, which provided, in relevant part:

68. Both Producer, on behalf of itself and Network, and I

acknowledge, understand and agree that if any dispute, controversy or

claim arising out of or relating to this Agreement, the breach of any

term hereof, or any effort by any party to enforce, interpret and/or

construe, rescind, terminate or annul this Agreement, or any provision

thereof, including without limitation the applicability of this arbitration

provision, and any and all disputes or controversies relating in any

manner to my appearance on or participation in and in connection with

the Program that are not otherwise barred or released pursuant to the

terms of this Agreement (collectively “Matters”) cannot be resolved

through direct discussions, the parties agree to endeavor first to resolve

the Matters by mediation conducted in the County of Los Angeles and

administered by JAMS. (Notwithstanding the foregoing, if any party

files suit in court, the other party or parties need not demand mediation

to enforce the right to compel arbitration.) If any Matter is not otherwise

resolved through direct discussions or mediation, as set forth above,

then the parties agree that it shall be resolved by binding arbitration

conducted in accordance with the Streamlined Arbitration Rules and

Procedures of JAMS, through its Los Angeles, California office or its

Houston, Texas office, as Producer may elect.

69. In agreeing to arbitration, the parties acknowledge that we have

waived the right to a jury trial.

In August 2022, Dang sued fellow participant Thomas Smith, Kinetic, and

Delirium, alleging that Smith sexually assaulted Dang during filming. Dang further

contended that Kinetic and Delirium, as entities involved in the development and

production of the series and the employers of Dang and Smith, were liable under

theories of respondeat superior and vicarious liability. In addition to her claims for

3

civil assault, Dang also asserted causes of action for false imprisonment and

negligence against Kinetic and Delirium.

In November 2022, Delirium filed a motion to compel mediation and motion

to compel arbitration with its original answer. In the arbitration motion, Delirium

argued that it (1) had a valid arbitration agreement with Dang, and (2) Dang’s claims

were within the arbitration provision’s broad scope. In a footnote, Delirium

summarily contended that the provisions of the EFAA were inapplicable to Dang’s

suit, but if they did apply, the trial court should abate the nonarbitrable claims

pending resolution of the arbitrable ones.

Dang opposed the motion to compel arbitration, arguing that her state law tort

claims were exempted from arbitration under the EFAA. Dang argued that her wage

claims, which were at the time the subject of a separate arbitration proceeding, were

separate and distinct from her tort claims. Dang further contended that her tort claims

(assault, negligence, and false imprisonment) all arose from the assault allegedly

perpetrated by Smith and “ignore[d], minimize[d], and exploit[ed]” by Kinetic and

Delirium.

On February 1, 2023, Dang made a demand for arbitration to JAMS,

“alleg[ing] causes of action against [Delirium] and [Kinetic] for damages resulting

from [their] evading the mandatory minimum wage and overtime provisions of the

4

Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. (‘FLSA’).”2 Dang alleged that

Delirium and Kinetic owed her wages and overtime for her time spent on call while

filming Love is Blind. Dang contended that she was “willfully detained on non-

discretionary call 24 hours a day during filming and production of Love is Blind

under [Delirium and Kinetic].”

Following Dang’s arbitration demand, Delirium filed a “Supplement to its

Motion to Compel Arbitration and Brief in Support,” arguing that because Dang’s

arbitration demand “allege[d] identical operative facts as those asserted in [her]

lawsuit” and because her lawsuit’s allegations “touch[ed] matters covered by the

parties’ arbitration agreement, all of [Dang’s] claims must also be arbitrated

regardless of the causes of action alleged.” Delirium further argued that even if some

of Dang’s claims were not subject to arbitration, the trial court must nevertheless

stay all proceedings pending the resolution of the arbitration.

On May 10, 2023, the trial court signed an order summarily denying

Delirium’s motion to compel arbitration without stating the basis for the denial. This

appeal followed.

2

Before making a demand in arbitration, Dang initiated a claim with the Texas

Workforce Commission (TWC) for her alleged unpaid wages. However, TWC

determined that it was preempted from ruling on the dispute because it was subject

to a valid arbitration agreement.

5

Applicability of the EFAA to Dang’s Claims

In five issues, Delirium contends that the trial court erred in denying its motion

to compel arbitration. We first consider the application of the EFAA to Dang’s

claims. The question of whether the parties’ arbitration agreement is enforceable as

to Dang’s assault claims appears to involve an issue of first impression for any

court—the interpretation of the term “sexual assault dispute” as defined in the

EFAA.

A. The FAA and the EFAA

Courts have consistently recognized a “national policy favoring arbitration.”

See, e.g., Preston v. Ferrer, 552 U.S. 346, 353 (2008) (quoting 9 U.S.C. § 2); Stage

Stores, Inc. v. Gunnerson, 477 S.W.3d 848, 854 (Tex. App.—Houston [1st Dist.]

2015, no pet.) (quoting Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 588

(2008)). Nevertheless, “the FAA’s[3] mandates in support of its ‘liberal federal policy

favoring arbitration agreements’ may be ‘overridden by a contrary congressional

command.’” Johnson v. Everyrealm, Inc., 657 F. Supp. 3d 535, 558 (S.D.N.Y. 2023)

(quoting CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012)). Recently,

Congress created an exemption from arbitration for sexual assault and sexual

harassment claims by enacting the EFAA. The EFAA provides that:

Notwithstanding any other provision of this title, at the election of the

person alleging conduct constituting a sexual harassment dispute or

3

Federal Arbitration Act, 9 U.S.C. §§ 1–402.

6

sexual assault dispute, . . . no predispute arbitration agreement . . . shall

be valid or enforceable with respect to a case which is filed under

Federal, Tribal, or State law and relates to the sexual assault dispute or

the sexual harassment dispute.

9 U.S.C. § 402(a). The EFAA applies only to any dispute or claim that arises or

accrues on or after the date of the enactment of the EFAA and does not have

retroactive effect. Johnson, 657 F. Supp. 3d at 550 (citing Pub. L. No. 117-90, § 3,

136 Stat. 26, 28 (2022)). The EFAA was enacted on March 3, 2022. Id. Under the

EFAA, a “sexual assault dispute” refers to “a dispute involving a nonconsensual

sexual act or sexual contact, as such terms are defined in section 2246 of title 18 or

similar applicable Tribal or State law, including when the victim lacks capacity to

consent.” 9 U.S.C. § 401(3). Whether the EFAA applies to a dispute is a question

for the courts, rather than an arbitrator. Id. § 402(b).

B. Standard of Review

We review a trial court’s order denying a motion to compel arbitration for

abuse of discretion. Wagner v. Apache Corp., 627 S.W.3d 277, 283 (Tex. 2021);

Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). A trial court abuses its

discretion if it acts in an arbitrary or unreasonable manner or acts without reference

to guiding rules or principles. Taylor Morrison of Tex., Inc. v. Skufca, 650 S.W.3d

660, 676 (Tex. App.—Houston [1st Dist.] 2021, no pet.) (citing Downer v.

Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985)). We defer to the

trial court’s factual determinations if they are supported by the evidence, but we

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review the court’s legal rulings de novo. Henry, 551 S.W.3d at 115. A trial court has

no discretion in determining what the law is, which law governs, or how to apply the

law. Skufca, 650 S.W.3d at 676.

C. The Parties’ Burdens

A party seeking to compel arbitration under the FAA must establish: (1) the

existence of a valid, enforceable arbitration agreement; and (2) that the claims at

issue fall within the agreement’s scope.4 In re FirstMerit Bank, N.A., 52 S.W.3d 749,

753 (Tex. 2001) (orig. proceeding). Once the questions of validity and scope are

resolved affirmatively, the court considers whether any federal statute or policy

“renders the claims nonarbitrable.” Mendez v. New Bell Gen. Servs., L.P., 727 F.

Supp. 2d 585, 589 (W.D. Tex. 2010) (quoting Sherer v. Green Tree Servicing LLC,

548 F.3d 379, 381 (5th Cir. 2008)). “The party seeking to invalidate an arbitration

agreement bears the burden of establishing its invalidity,” as well as other defenses

to arbitration such as unconscionability, fraud, duress, or waiver. Gonzales v. Brand

Energy & Infrastructure Servs., Inc., No. H-12-1718, 2013 WL 1188136, at *2 (S.D.

Tex. Mar. 20, 2013) (citing Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294,

297 (5th Cir. 2004)); In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex.

1999) (orig. proceeding), abrogated on other grounds, In re Halliburton Co., 80

S.W.3d 566, 571 (Tex. 2002) (orig. proceeding).

4

On appeal, the parties do not contest the applicability of the FAA.

8

D. Analysis

On appeal, the parties do not challenge the validity of the arbitration provision

within the Agreement, nor do they argue that the claims at issue do not fall within

the arbitration provision’s scope. Rather, Delirium contends that the trial court erred

in applying the EFAA to exempt Dang’s claims from arbitration.5 Specifically,

Delirium argues that because Dang did not plead a plausible claim for sexual assault

(against either Smith or Delirium), the EFAA does not apply to her claims against

Delirium.

We begin by reviewing the relevant facts asserted in Dang’s complaint. Under

the heading titled “Defendant Thomas Smith,” Dang outlines the following:

32. On or around May 3, 2022, while Love is Blind was being

filmed, Smith sexually assaulted [Dang] throughout the night. Amongst

other acts—and certainly by no means is the forthcoming list

exhausting—Smith forcefully and without [Dang’s] consent:

a. Incessantly groped [Dang];

b. Exposed himself in the nude to [Dang] without consent; and

5

Although the trial court’s order denying the motion to compel arbitration did not

state the basis for its decision, this was the only argument raised by Dang in her

opposition to the motion to compel arbitration. Therefore, this is the only ground

before us in reviewing the trial court’s denial of the motion. See Hearthshire

Braeswood Plaza Ltd. P'ship v. Bill Kelly Co., 849 S.W.2d 380, 390 (Tex. App.—

Houston [14th Dist.] 1993, writ denied) (noting that if trial court does not make

findings of fact or conclusions of law, then appellate court must affirm judgment if

there is evidence to support it on any legal theory raised by prevailing party, but

because nonmovant did not raise unconscionability as defense to arbitration, it could

not have been relied upon by trial court in denying motion to compel arbitration).

9

c. Forcibly and repeatedly made sexual contact with [Dang]

without her consent and over her express objections.

33. Due to Delirium TV and Kinetic Content’s 24-hour

surveillance of [Dang] and Defendant Smith, most if not all of these

traumatic acts were filmed by the production crew and within their

knowledge.

34. [Dang] reported Smith’s conduct to Delirium TV and

Kinetic Content producers the next morning following her assault.

[Dang] detailed the assault and reported that she was uncomfortable

being around Smith.

35. Delirium TV and Kinetic Content producers made

attempts to mask [Dang’s] sexual assault by characterizing it as a lack

of attraction on the part of [Dang]. When [Dang] insisted an assault

took place, Defendants Delirium TV and Kinetic Content questioned

whether the problem was really one of communication and swept aside

her concerns. Upon information and belief, Defendants took no

corrective action. Delirium TV and Kinetic Content ratified and

condoned the mistreatment for the sake of reality television.

Later, Dang’s complaint asserts the following under her cause of action styled

“Assault (Battery) – Bodily Injury and Offensive Contact”:

41. [Dang] incorporates by reference, as if fully set forth

herein, the statutory language of Texas Penal Code §§ 22.01, 22.011

describing the felonies of “Assault” and “Sexual Assault.” [Dang]

alleges that she was the victim of the aforementioned crimes that

Defendant Smith committed against [Dang] on or about May 3, 2022

and that said crimes have caused [Dang’s] damages alleged in this

Petition.

42. On or about May 3 and May 4, 2022, Defendant Smith

intentionally, knowingly, or recklessly made physical contact with

[Dang’s] person causing bodily injury—that is, physical pain, illness,

or impairments of [Dang’s] physical condition—and [Dang] did not,

and could not, consent to the harmful physical contact.

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43. Alternatively, Defendant Smith intentionally or

knowingly caused to be made physical contact with [Dang] when

Defendant knew, or reasonably should have believed, that [Dang]

would regard the contact as offensive and provocative. Indeed, said

physical contact was offensive, provocative, and committed by Smith

despite never having consent from [Dang].

....

45. Defendants Delirium TV and Kinetic Content are liable

for the crimes, assault, battery, and sexual assault of which [Dang] is a

victim because they participated in the tortious and felonious acts

directly themselves through the actions of their vice-principal.

46. Defendant Smith was acting under the supervision of

Defendants Delirium TV and Kinetic Content when these unlawful,

offensive, and provocative acts occurred.

47. Accordingly, Delirium TV and Kinetic Content are

responsible for Defendant Smith’s conduct under the doctrines of

respondeat superior and vicarious liability. Bodily injury and offensive

contact to [Dang] were direct and proximate causes of [Dang’s] severe

mental anguish, pain, and emotional distress, for which each and every

Defendant is liable.

As noted above, the EFAA defines a “sexual assault dispute” as one involving

a “nonconsensual sexual act or sexual contact, as such terms are defined in section

2246 of title 18[6] or similar applicable Tribal or State law, including when the victim

6

18 U.S.C. § 2246 includes the following definitions:

(2) the term “sexual act” means–

(A) contact between the penis and the vulva or the penis and the anus,

and for purposes of this subparagraph contact involving the penis

occurs upon penetration, however slight;

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lacks the capacity to consent.” 9 U.S.C. § 401(3). Here, Dang has plainly alleged

that Smith sexually assaulted her and made sexual contact with her without her

consent. Dang specifically asserts, in the context of her assault allegation, that Smith

“[i]ncessantly groped” her and “[f]orcibly and repeatedly made sexual contact” with

her “without her consent and over her express objections.” Further, Dang’s

complaint specifically references “the statutory language of Texas Penal Code

§§ 22.01, 22.011” (assault and sexual assault).7 Dang alleged that she was the victim

(B) contact between the mouth and the penis, the mouth and the vulva,

or the mouth and the anus;

(C) the penetration, however slight, of the anal or genital opening of

another by a hand or finger or by any object, with an intent to

abuse, humiliate, harass, degrade, or arouse or gratify the sexual

desire of any person; or

(D) the intentional touching, not through the clothing, of the genitalia

of another person who has not attained the age of 16 years with an

intent to abuse, humiliate, harass, degrade, or arouse or gratify the

sexual desire of any person;

(3) the term “sexual contact” means the intentional touching, either directly

or through the clothing, of the genitalia, anus, groin, breast, inner thigh,

or buttocks of any person with an intent to abuse, humiliate, harass,

degrade, or arouse or gratify the sexual desire of any person[.]

18 U.S.C. § 2246.

7

Under Texas Penal Code section 22.011(a)(1), a person commits the offense of

sexual assault if the person intentionally or knowingly:

(A) causes the penetration of the anus or sexual organ of another person by

any means, without that person’s consent;

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of these specifically enumerated offenses, and that Smith committed these offenses

against her on or about May 3, 2022.

Delirium seems to argue that because Dang did not specify what body parts

were involved in the alleged assault, Dang cannot invoke the provisions of the

EFAA. Delirium cites no case law to support this contention. Rather, Delirium

focuses on a decision from a New York federal district court, which interpreted the

meaning of “sexual harassment dispute” as defined by the EFAA. See Yost v.

Everyrealm, Inc., 657 F. Supp. 3d 563 (S.D.N.Y. 2023). The Yost court held that the

plaintiff must plausibly plead a claim for sexual harassment before the EFAA can

be applied to bar arbitration of the claim. Id. at 580–82. Ultimately, the court

determined that the plaintiff’s pleadings fell short, because her allegations did not

demonstrate that the defendant’s offending conduct was keyed to a protected

characteristic of the plaintiff under the New York City Human Rights Law. Id. at

580. However, the Yost court specifically limited its holding to the construction of

the term “sexual harassment dispute” in the EFAA. See id. at 584 n.14 (noting that

(B) causes the penetration of the mouth of another person by the sexual organ

of the actor, without that person’s consent; or

(C) causes the sexual organ of another person, without that person’s consent,

to contact or penetrate the mouth, anus, or sexual organ of another person,

including the actor[.]

TEX. PENAL CODE § 22.011(a)(1).

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although EFAA “also applies to ‘sexual assault dispute[s],’” court’s “discussion as

to the EFAA’s proper construction [was] framed solely in terms of ‘sexual

harassment dispute[s]’” because plaintiff did not allege sexual assault). While

illustrative, the Yost court’s discussion does not guide our analysis of the term

“sexual assault dispute.”

We note that the EFAA’s definition of “sexual harassment dispute” includes

additional terms not found in the definition of “sexual assault dispute.” For example,

a “sexual harassment dispute” is one “relating to conduct that is alleged to constitute

sexual harassment” under applicable laws. See 9 U.S.C. § 401(4) (emphasis added).

By contrast, a “sexual assault dispute” is a “dispute involving a nonconsensual

sexual act or sexual contact” as those terms are defined under relevant laws. Id.

§ 401(3). The Yost court focused on the word “alleged” in the definition of “sexual

harassment dispute,” noting that “the term adds a legal dimension to the required

allegation.” Yost, 657 F. Supp. 3d at 584–85. Congress could have similarly defined

a “sexual assault dispute” to include this “relating to” or “alleged to” language, but

it did not. As the Yost court observed, “Congress’s decision to add those qualifying

words is significant.” Id. at 585 (citing United States v. Bedi, 15 F.4th 222, 226 (2d

Cir. 2021)).

Delirium essentially asks us to require that Dang establish Smith’s criminal

liability before her claims can be exempted from arbitration pursuant to the EFAA.

14

But that is not what the Act requires. Dang has pleaded that Smith “[i]ncessantly

groped” her and “forcibly and repeatedly made sexual contact” with her “without

her consent and over her express objections.” Looking to the definitions in section

2246 (referenced in the EFAA’s definition of “sexual assault dispute”), Dang’s

allegations, if true, would constitute “sexual contact” as defined by the statute, so

long as Smith touched Dang’s “genitalia, anus, groin, breast, inner thigh, or

buttocks” with the requisite intent. See 18 U.S.C. § 2246(3).

Considering Dang’s use of the words “incessantly,” “groped,” and “sexual

contact,” along with her references to the section of the Texas Penal Code pertaining

to sexual assault and repeated assertions that Smith’s conduct was nonconsensual,

we hold that her complaint pertains to a “sexual assault dispute” as defined by the

EFAA, and that the EFAA therefore invalidates the arbitration provision at issue.

See United States v. Price, 980 F.3d 1211, 1242 n.5 (9th Cir. 2019) (order)

(Wardlaw, J., concurring) (noting that in context of section 2246, “[t]he term ‘sexual

contact’ is defined as ‘intentional’ touching, i.e., groping”); Blatt v. Pambakian, No.

20-55084, 2021 WL 4352329, at *1 (9th Cir. Sept. 24, 2021) (citing dictionary

definitions and noting that “average reader would understand ‘groped and sexually

harassed’ [as used in news article made the basis of anti-SLAPP motion] to mean, at

a minimum, that [defendant] touched [plaintiff] against her will for his sexual

15

pleasure and engaged in some sort of additional, uninvited sexual behavior—verbal,

physical, or both”).

We further reject any argument by Delirium that the EFAA does not apply to

Dang’s claims against Delirium because Smith, not Delirium, assaulted Dang, and

Delirium is not liable for Smith’s actions. Delirium focuses on whether an

employment relationship between the parties existed, or whether Delirium owed a

duty to Dang at all. Delirium’s arguments in this regard ignore the plain language of

the EFAA, which states that:

[A]t the election of the person alleging conduct constituting a . . . sexual

assault dispute, . . . no predispute arbitration agreement . . . shall be

valid or enforceable with respect to a case which is filed under Federal,

Tribal, or State law and relates to the sexual assault dispute[.]

9 U.S.C. § 402(a). Nothing in this language requires a certain relationship to exist

between the parties before the arbitration agreement is invalidated by the EFAA.

Nor does the Act specify anything about how the assault must have occurred, or who

perpetrated the assault. See Famuyide v. Chipotle Mexican Grill, Inc., No. 23-1127,

2023 WL 5651915, at *1, *4 (D. Minn. Aug. 31, 2023) (denying Chipotle’s motion

to compel arbitration of employee’s suit pursuant to EFAA; allegations related to

Chipotle’s handling of employee’s reports of sexual assault and sexual harassment

perpetrated by coworker).8 Rather, the EFAA requires (1) “alleg[ations of] conduct

8

We may rely on federal decisions and decisions from other states as persuasive

authority. See Little v. Delta Steel, Inc., 409 S.W.3d 704, 718 (Tex. App.—Fort

16

constituting a . . . sexual assault dispute,” and (2) “a case which is filed under

Federal, Tribal, or State law and relates to the sexual assault dispute.” 9 U.S.C. §

402(a). If those requirements are met, then “no predispute arbitration agreement . . .

shall be valid or enforceable with respect to [such] a case.” Id.

Further, the question of whether Delirium is ultimately liable for Smith’s

alleged conduct is not the proper inquiry in our review of the trial court’s denial of

Delirium’s motion to compel arbitration. We are concerned with the arbitrability of

Dang’s claims, not their merits. See AT&T Techs., Inc. v. Commc’ns Workers of Am.,

475 U.S. 643, 649 (1986) (“[I]n deciding whether the parties have agreed to submit

a particular grievance to arbitration, a court is not to rule on the potential merits of

the underlying claims.”); Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th

Cir. 2002) (“When conducting this two-pronged [arbitrability] analysis, courts must

not consider the merits of the underlying action”). As a result, beyond addressing

whether Dang has sufficiently invoked the EFAA, we do not consider Delirium’s

arguments relating to Dang’s failure to state a claim against Delirium.9

Worth 2013, no pet.); Sanchez v. Southampton Civic Club, Inc., 367 S.W.3d 429,

435 (Tex. App.—Houston [14th Dist.] 2012, no pet.).

9

For example, Delirium contends that Dang only makes “[g]lobal allegations . . .

against multiple defendants” and “fail[ed] to allege specific acts of misconduct by

Delirium.” These questions are beyond the scope of our analysis.

17

Having determined that Dang’s claims against Delirium are exempted from

arbitration by the EFAA, we overrule Delirium’s first issue.10

Election of Arbitration

In its second and third issues, Delirium contends that the trial court erred in

denying its motion to compel arbitration because Dang made an election to pursue

certain claims in arbitration. As outlined above, after filing her lawsuit against

Smith, Kinetic, and Delirium, Dang made a demand in arbitration for unpaid wages

from Delirium and Kinetic pursuant to the FLSA. Delirium argues that regardless of

the EFAA’s application to Dang’s claims, she is estopped from or has waived her

right to contest arbitration of the instant suit because she has initiated a separate

arbitration proceeding against Delirium.

A. Dang’s Lawsuit Predated her Arbitration Demand

As a threshold matter, we reject any effort by Delirium to reframe the timeline

of events as it pertains to Dang’s filing of her lawsuit and demand for arbitration.

Dang first filed suit alleging tort claims against Smith, Delirium, and Kinetic.

Months later, she made a demand in arbitration against Delirium and Kinetic for

unpaid wages and overtime. Thus, she did not make any “election” to pursue

10

Delirium argued to the trial court that even if the EFAA applied to Dang’s civil

assault claims, the negligence and false imprisonment claims were nevertheless

subject to being compelled to arbitration. Delirium appears to have abandoned this

argument on appeal.

18

arbitration prior to the filing of her lawsuit. Rather, as the EFAA permits, Dang

elected to seek resolution of her tort claims relating to the sexual assault dispute in

litigation. See 9 U.S.C. § 402(a) (stating that predispute arbitration agreements are

not valid or enforceable with respect to lawsuits relating to sexual assault disputes

“at the election of the person alleging conduct constituting . . . a sexual assault

dispute”). Only after those tort claims were pending in litigation did Dang initiate a

separate arbitration proceeding concerning her federal law wage claims.

B. Dang’s Wage Claims are Unrelated to her Tort Claims

The case of Mera v. SA Hospitality Group, LLC, cited by Delirium, actually

supports separation of Dang’s wage claims from her tort claims, contrary to

Delirium’s arguments. See 675 F. Supp. 3d 442 (S.D.N.Y. 2023). In that case, an

employee filed suit against his former employer, asserting FLSA wage claims and

violations of New York state labor and human rights laws arising from allegedly

unpaid wages and a hostile work environment created by sexual orientation

discrimination. Id. at 444. The employer moved to compel the entire case to

arbitration pursuant to an agreement between the parties. Id.

After determining that the employee had pleaded a sexual harassment dispute

within the scope of the EFAA, the district court then concluded that the parties’

arbitration agreement was unenforceable only as applied to the employee’s claims

made pursuant to New York state human rights laws. Id. at 446–48. The court found

19

that because the employee’s “wage and hour claims under the FLSA and the [New

York Labor Law] [did] not relate in any way to the sexual harassment dispute, they

must be arbitrated, as the [parties’ agreement] requires.” Id. at 448. However, the

Mera court ruled that the employee was not required to arbitrate his state law human

rights claims, because those did relate to the sexual harassment dispute. Id.; see also

KPMG LLP v. Cocchi, 565 U.S. 18, 22 (2011) (per curiam) (determining that “when

a complaint contains both arbitrable and nonarbitrable claims, the [FAA] requires

courts to compel arbitration of pendent arbitrable claims when one of the parties files

a motion to compel, even where the result would be the possibly inefficient

maintenance of separate proceedings in different forums” (internal quotations

omitted)); Sabatelli v. Baylor Scott & White Health, 832 Fed. Appx. 843, 847 (5th

Cir. 2020) (noting that “when some claims are arbitrable and others are not, it is not

unusual to have separate litigation before an arbitrator and a judge”). The Mera court

then stayed proceedings as to the FLSA and state labor law claims only—it did not

stay the claims related to the sexual harassment dispute. Mera, 675 F. Supp. 3d at

448.

C. Other Cases Cited by Delirium are Distinguishable

Delirium cites two other cases to support its argument that Dang must arbitrate

her tort claims because she elected to arbitrate her wage claims. Both cases are

factually distinguishable. For example, the case of Nghiem v. NEC Electronic, Inc.,

20

25 F.3d 1437 (9th Cir. 1994) concerned an employee who first initiated arbitration

against his former employer, and while arbitration was pending, filed a lawsuit in

state court on “substantially the same issues.” Id. at 1439. Ultimately, the arbitrator

rendered a decision in favor of the employer. Id. The trial court granted the

employer’s motion to confirm the arbitration award and dismissed the employee’s

suit in its entirety. Id. On appeal, the Ninth Circuit Court of Appeals affirmed, noting

that “[o]nce a claimant submits to the authority of the arbitrator and pursues

arbitration, he cannot suddenly change his mind and assert lack of authority [of the

arbitrator].” Id. at 1440. Relying on United States Supreme Court precedent, the

court determined that the employee’s election of arbitration amounted to a waiver of

any objection he had to arbitration. Id.

Similarly, in Mays v. Lanier Worldwide, Inc., an Alabama federal district

court held that the plaintiff had waived any right to object to the jurisdiction of the

arbitrator where he previously “voluntarily initiated binding arbitration” and

“active[ly] participat[ed] in the full arbitration proceedings.” 115 F. Supp. 2d 1330,

1342 (M.D. Ala. 2000).

Both of these cases relied upon by Delirium are factually distinguishable from

the present case because, here, Dang did not file suit after obtaining an unfavorable

result in arbitration. Unlike the plaintiffs in both Nghiem and Mays, Dang first filed

suit in state court concerning her tort claims, and then initiated arbitration against

21

Delirium for her federal wage claims. These are two distinct proceedings concerning

different claims, although both are brought against Delirium.

We disagree with Delirium’s contention that “the key issues in both

proceedings revolve around the allegation that [Dang] was falsely imprisoned as a

result of her alleged employment.” Although Dang does allege certain identical facts

in both proceedings, the “key issue” in Dang’s lawsuit is the alleged sexual assault,11

while the focus of her arbitration demand is Delirium’s alleged failure to adequately

compensate her for her time spent on call during the filming and production of Love

is Blind. Dang’s arbitration demand does not mention Smith or the assault. Because

these are separate and distinct proceedings, with different factual allegations and

claims, the trial court correctly denied Delirium’s motion to compel Dang’s tort

claims to arbitration with her federal wage claims. See, e.g., KPMG, 565 U.S. at 22

(contemplating “separate proceedings in different forums” if not all of plaintiff’s

claims are subject to arbitration); Mera, 675 F. Supp. 3d at 448 (ordering arbitration

of wage claims but denying motion to compel arbitration of sexual harassment

claims, pursuant to EFAA).

We overrule Delirium’s second and third issues.

11

As Delirium acknowledges elsewhere in its briefing, Dang argued in response to

Delirium’s motion to compel arbitration that “each and every claim alleged in this

lawsuit is predicated on allegations that a sexual assault occurred while [Dang] was

working for [Kinetic and Delirium] and while they were orchestrating the situation

that enabled the assault.”

22

Stay of Proceedings

Lastly, Delirium argues that the trial court erred in denying its motion to stay

the litigation proceedings pending the outcome of the FLSA arbitration. We review

a trial court’s order on a motion to stay arbitration for an abuse of discretion.

Prestonwood Tradition, LP v. Jennings, 653 S.W.3d 436, 441 (Tex. App.—Dallas

2022, no pet.) (citing Henry, 551 S.W.3d at 115).

A. No Mandatory Stay

Delirium first contends that, pursuant to Section 3 of the FAA, a stay of

Dang’s lawsuit was mandatory. Section 3 provides as follows:

If any suit or proceeding be brought in any of the courts of the United

States upon any issue referable to arbitration under an agreement in

writing for such arbitration, the court in which such suit is pending,

upon being satisfied that the issue involved in such suit or proceeding

is referable to arbitration under such an agreement, shall on application

of one of the parties stay the trial of the action until such arbitration has

been had in accordance with the terms of the agreement, providing the

applicant for the stay is not in default in proceeding with such

arbitration.

9 U.S.C. § 3; see also In re Merrill Lynch Tr. Co. FSB, 235 S.W.3d 185, 195 (Tex.

2007) (orig. proceeding) (noting that FAA “require[s] courts to stay litigation of

issues that are subject to arbitration”) (emphasis added). We have already

determined that the claims presented in Dang’s lawsuit are not subject to arbitration,

given the applicability of the EFAA. Further, it does not appear, at least at this early

stage in the litigation, that the state law tort claims at issue in this litigation and the

23

federal wage claims pending in arbitration are so closely related that proceeding with

the lawsuit would be detrimental to the arbitration.12 The Mera case is again

instructive here. After determining that the EFAA only rendered the arbitration

agreement unenforceable as to the claims made pursuant to New York state human

rights laws, it ordered a stay of the litigation as to the wage-and-hour claims only,

which were being compelled to arbitration—it did not stay the claims relating to the

sexual harassment dispute. 675 F. Supp. 3d at 448.

Delirium attempts to distinguish Mera, arguing that the court there did not

stay the human rights law claims because “those claims were entirely unrelated” to

the plaintiff’s wage dispute. Delirium contends that unlike the claims in Mera,

Dang’s claims have “overlapp[ing] factual contentions” and similarly concern

“issues such as her alleged working conditions, employment status and false

imprisonment.” Dang’s arbitrable and nonarbitrable claims may be more closely

related than those in Mera, particularly with respect to her false imprisonment and

negligence claims. Questions concerning Dang’s employment status may arise in

12

See AgGrow Oils, L.L.C. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 242 F.3d 777,

783 (8th Cir. 2001) (remanding case to trial court for consideration of discretionary

stay, noting that issues such as “the risk of inconsistent rulings, the extent to which

parties will be bound by the arbitrators’ decision, and the prejudice that may result

from delays” are “properly committed in the first instance to the [trial] court’s

discretion” and must be weighed in determining whether to order stay and

parameters of such stay); Courtland Bldg. Co. v. Jalal Fam. P’ship, Ltd, 403 S.W.3d

265, 276 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (remanding case to trial

court for consideration of whether litigation of claims not ordered to arbitration

should be stayed).

24

both the wage-and-hour arbitration and the trial court’s resolution of the false

imprisonment or negligence claims. But the crux of Dang’s lawsuit concerns the

assault allegedly perpetrated by Smith, and whether the environment created by

Delirium and Kinetic allowed that assault to happen. And whether Delirium or

Kinetic owed some duty to Dang to protect her from Smith turns on Smith’s

relationship with the corporate defendants, not Dang’s, at least with respect to her

vicarious liability claims. See F.F.P. Operating Partners, L.P. v. Duenez, 237

S.W.3d 680, 686 (Tex. 2007) (noting that “[g]enerally in Texas, the doctrine of

vicarious liability, or respondeat superior, makes a principal liable for the conduct

of his employee or agent”); Vecellio Ins. Agency, Inc. v. Vanguard Underwriters Ins.

Co., 127 S.W.3d 134, 138 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (stating

that “[v]icarious liability is liability placed upon one party for the conduct of another,

based solely upon the relationship between the two”).

This is not a situation where “litigation must be abated to ensure that an issue

two parties have agreed to arbitrate is not decided instead in collateral litigation.”

See In re Merrill Lynch Trust Co. FSB, 235 S.W.3d at 195–96 (granting mandamus

in response to trial court’s failure to stay litigation between plaintiff and Merrill

Lynch affiliate entities while arbitration between plaintiff and Merrill Lynch

proceeded; the court assumed for purposes of its decision that same issues were to

be decided in both proceedings). Rather, in this case, Dang agreed to arbitrate her

25

wage dispute, but she did not assert any wage-related claims in her lawsuit. See

Courtland Bldg. Co. v. Jalal Fam. P’ship, Ltd., 403 S.W.3d 265, 276 (Tex. App.—

Houston [14th Dist.] 2012, no pet.) (“To determine whether litigation of the

[nonarbitrable] claims should be stayed, it is necessary to know whether litigation of

those claims would undermine issues to be resolved in arbitration, or whether the

arbitration would resolve matters that are material to the litigation of those issues.”).

B. Dang’s Interest in Litigating Her Claims

We must also consider Congress’s intentional carve-out of sexual assault

disputes from arbitration through the EFAA in assessing whether Dang’s lawsuit

asserting such a claim should be stayed pending resolution of a separate arbitration

proceeding. Though it does not appear that any court has addressed this exact issue,13

13

The case of In re Merrill Lynch & Co., Inc., 315 S.W.3d 888 (Tex. 2010) (orig.

proceeding) (per curiam), though similar, is distinguishable. There, the Texas

Supreme Court addressed the trial court’s discretion to stay one MetroPCS

subsidiary’s (Communications) litigated claims against Merrill Lynch while

compelling arbitration of identical claims against Merrill Lynch brought by a

different subsidiary (Wireless). Id. at 889. Communications’s agreement with

Merrill Lynch did not contain an arbitration clause, but Wireless’s agreement did.

Id. at 889–90. The court held that Communications’s claims should be stayed

because failure to do so “would create duplicative litigation” and “could moot the

contemplated arbitration between Wireless and Merrill Lynch, destroying [Merrill

Lynch]’s bargained-for rights.” Id. at 890–92.

We acknowledge the court’s holding in In re Merrill Lynch & Co. but determine it

is distinguishable from the present case for at least one important reason: the

litigation and arbitration in that case admittedly concerned “identical claims with

virtually identical facts.” Id. at 889. Although the claims here may involve some

related questions, they are not identical.

26

a Texas federal district court considered an analogous question in Vuoncino v.

Forterra, Inc., No. 21-cv-01046-K, 2022 WL 868274 (N.D. Tex. Feb. 28, 2022).

Vuoncino concerned claims brought by a former employee for breach of contract,

wrongful discharge, violations of a Florida whistleblower statute, and the

whistleblower provision of the Sarbanes-Oxley Act (SOX). Id. at *2. The defendants

moved to compel arbitration of all the employee’s claims but his SOX claim,

acknowledging that arbitration of that claim was prevented by the statute. Id.; see

also 18 U.S.C. § 1514A(e)(2) (exempting all SOX whistleblower claims from

“predispute arbitration agreement[s]”). After determining that the state law claims

were subject to arbitration, the court ruled that those claims must be stayed, pursuant

to the mandatory stay provisions of section 3 of the FAA. See Vuoncino, 2022 WL

868274, at *6; 9 U.S.C. § 3. However, the court did not order a stay as to the

remaining, nonarbitrable SOX claim. Vuoncino, 2022 WL 868274, at *8.

First, the court considered cases within the Fifth Circuit that applied the test

for a discretionary stay in non-signatory arbitration cases in different factual

contexts.14 Id. at *6. For example, the Vuoncino court noted that some federal district

14

Texas courts employ a similar test. See, e.g., In re Devon Energy Corp., 332 S.W.3d

543, 548 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (orig. proceeding) (stating

that “a non-signatory party’s claims may be subject to the mandatory stay [outlined

in section 3 of the FAA] if the issues presented in the nonparty-party litigation if

litigated would have rendered the arbitration redundant and thwarted the federal

policy favoring arbitration”) (internal quotations omitted).

27

courts applied this test in cases where (as here) all defendants had an arbitration

agreement with the plaintiff,15 but some of the plaintiff’s claims were nonarbitrable

for procedural or policy reasons. Id. at *7 (citing Kindred Hosps. Ltd. P’ship v. Cigna

Health & Life Ins. Co., No. 17-CV-866-A, 2018 WL 10561987, at *1 (N.D. Tex.

May 8, 2018) (staying claim that was “inherently inseparable from the claims the

court . . . determined to be arbitrable”); Jones v. Halliburton Co., 625 F. Supp. 2d

339, 356 (S.D. Tex. 2008), aff’d and remanded, 583 F.3d 228 (5th Cir. 2009) (“In

this case, the claims to be arbitrated and those to be litigated involve many of the

same operative facts, and allowing the litigation of the nonarbitrable claims to

proceed could have a significant impact on the arbitration. The Court therefore

reluctantly concludes that it should stay litigation of Plaintiff's nonarbitrable claims

during the pendency of the parties’ arbitration.”)).

However, the Vuoncino court concluded that this test did not necessarily

support a stay of the plaintiff’s SOX claim. Id. For example, the court pointed out

that while some of the plaintiff’s claims shared a “nucleus of operative facts” with

the SOX claim, another claim had “no significant factual overlap” and was “easily

separable” from the SOX claim. Id.

15

Of course, Smith did not have an arbitration agreement with Dang, but he is not a

party to this appeal.

28

After reviewing district court decisions from courts outside the Fifth Circuit

considering the same question, some denying a stay of SOX claims and others

granting one, the court identified “two competing interests”: “the interest of a SOX

plaintiff to have immediate access to a federal forum” as guaranteed by the statute;

and “the interest of an arbitrating party in its right to a meaningful arbitration, as

expressed by the Fifth Circuit and embodied in the FAA.” Id. at *7–8 (internal

quotations omitted). Ultimately, the court concluded that the plaintiff’s “interest in

having a direct path to a federal forum for his SOX claim outweigh[ed] Defendants’

interest in enforcing its contractual right to arbitrate [the plaintiff’s] other claims.”

Id. at *8.

The court emphasized SOX’s “explicit carve-out of predispute arbitration

agreements,” which “evinced a clear intention to preclude a waiver of judicial

remedies for the statutory rights at issue.” Id. (internal quotations omitted).

Ultimately, the court concluded that a stay of the SOX claim would disregard this

express congressional intention.16 Id.

16

In so holding, the Vuoncino court noted that although the defendants’ contractual

rights to arbitration were somewhat diminished by its decision, they were at least

assured that their arbitrable claims would proceed to arbitration. Id. The court also

pointed out that the defendants could still avail themselves of the opportunity to

have a court resolve legal issues related to the SOX claim, such as any arguments

that the claim failed as a matter of law. Id.

29

The Vuoncino court’s reasoning applies to Congress’s enactment of the EFAA

and express carve-out of sexual assault disputes from arbitration. See 9 U.S.C. § 401.

The stated purpose of the EFAA is to “empower sexual harassment [and sexual

assault] claimants to pursue their claims in a judicial, rather than arbitral, forum.”

Yost, 657 F. Supp. 3d at 586 (citing H.R. Rep. No. 117-234, at 3–4 (2022)). We

therefore hold that the trial court’s denial of Delirium’s motion to stay was not an

abuse of its discretion, given this important consideration. See Prestonwood

Tradition, 653 S.W.3d at 441; see also In re Merrill Lynch Trust Co. FSB, 235

S.W.3d at 195 (noting trial court’s “wide discretion” to say when party’s “day in

court” will be). We overrule Delirium’s fourth and fifth issues.17

Conclusion

Having overruled each of Delirium’s issues, we affirm the trial court’s order

denying Delirium’s motion to compel arbitration and motion to stay.

Amparo Monique Guerra

Justice

Panel consists of Justices Kelly, Hightower, and Guerra.

17

Our resolution of this issue does not prevent the trial court from revisiting the issue

of a stay later in the litigation proceedings, should it determine in its discretion that

one is warranted. See Metro. Life Ins. Co. v. Lindsay, 920 S.W.2d 720, 726 & n.7

(Tex. App.—Houston [1st Dist.] 1996, no writ) (reversing denial of motion to

compel arbitration pursuant to FAA and stating that although record did not support

appellant’s contention that trial court also abused discretion by refusing

to stay litigation among non-arbitrating parties pending outcome of arbitration,

nothing in opinion prohibited trial court from reconsidering stay on remand).

30