# Petition for Writ of Certiorari — Captain D's, LLC v. Smith (No. 07-799)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2007

## Text

Supreme Court, U.8.
( ( ) FILED
No. ___ 07-799DEC12 2007
OFFICE OF THE CLERK

IN THE
Supreme Court of the Gnited States

CAPTAIN D’s, LLC
Petitioner,
Vv.

TAMMY SMITH, by and through her father and
next friend, ALVIN CHRISTOPHER SMITH,
Respondent.

On Petition for a Writ of Certiorari to the
Mississippi Supreme Court

PETITION FOR A WRIT OF CERTIORARI

BRADLEY F. HATHAWAY *
CAMPBELL DELONG, LLP
923 Washington Avenue
Greenville, MS 38701
(662) 335-6011

* Counsel of Record Counsel for Petitioner

ELST ns aC i a ek al
WicsSoOn-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20002

QUESTIONS PRESENTED

Whether the Mississippi Supreme Court erred
when, after finding that a valid and enforceable
agreement to arbitrate existed between the
_ parties, it held that as a matter of law certain
common law tort claims arising out of an alleged
sexual assault incident on a minor in the
workplace are unsuitable for arbitration under
the Federal Arbitration Act (“FAA”).

Where a party’s federal rights under the FAA
turn on an antecedent application of state-law to
the arbitration clause itself; which is interwoven .
with federal substantive law, whether a state
court can nullify a party’s right to arbitration by
manipulating state-law principles in order to
single out particular types of grievances as being
unsuitable for arbitration.

Whether the Fourteenth Amendment’s proce-
dural protections extend to preclude a depri-
vation of rights afforded under the FAA without
due process being afforded.

(1)

il
RULE 14.1(b) STATEMENT

The following were parties to the proceedings
before the Mississippi Supreme Court:

1. Captain D’s, LLC; Defendant-Appellee; Peti-
tioner on Review.

2. Tammy Smith (by and through her father
and next friend, Alvin Christopher Smith);
Plaintiff-Appellant; Respondent on Review.

RULE 29.6 CORPORATE
DISCLOSURE STATEMENT

There is no parent corporation or publicly held
corporation owning 10% or more of the stock of
Captain D’s, LLC, Petitioner herein.

TABLE OF CONTENTS

QUESTIONS PRESENTED .....................00eeeeeeee
RULE 14.1(b) STATEMENT.........................ce0008

RULE 29.6 CORPORATE DISCLOSURE
I siAbtinhidatkieininisditisnintadsinninkinjicansininen

TABLE OF AUTHORITIES ......................ccseeseees
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OPINIONS BELOW. ....... ie saat cuehicneaahbn ina peiaasonin

BASIS FOR JURISDICTION ...............cccccceeeees |

RELEVANT CONSTITUTIONAL AND
STATUTORY PROVISIONS ............2000..00000.s¢s

STATEMENT OF THE CASE ......................cc000
A. Factual Backgroun .............0:.cccseeeeeeees

eg ERE MRD EE Meee

REASONS FOR GRANTING THIS PETITION
RE PII caicnlbiadnstdinintesnaencenguuseetaiiiinteiihdasenonie

APPENDIX A - Mississippi Supreme Court
re ie a riceininnsdscdsincssasiseriindeaniceen

APPENDIX B - Mississippi Trial Court Judg-

APPENDIX C —- Mississippi Supreme Court
Order Denying Motion for Rehearing .............

APPENDIX D —- U.S.C.A. Const. Art. VI, cl. 2 ...
APPENDIX E - U.S. Const. Amend. XIV, § 1....
APPEL F ~ OU BCA, O Binccsnsesscscicccsenanecssees

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10
27

lV
TABLE OF CONTENTS—Continued
Page

APPENDIX G- Employment Dispute Resolu-
RR aR ea Eee en ee ee 29a

APPENDIX H - Motion of Appellee Captain
D’s, LLC, for Rehearing Before the Missis-
Ie Re I a haiicsicscicsinendisccssicescccncdarscns 32a

Vv

TABLE OF AUTHORITIES
CASES Page
Anglin v. Gulf Guaranty, 956 So. 2d 853
I Ts le 19

Armstrong v. Manzo, 380 U.S. 545, 550-
551, 85 S. Ct. 1187, 14 L. Ed. 2d 62
SO NEEETEES e ee 26
AT&T Technologies, Inc. v. Communi-
cations Workers of America, 475 U.S.
643, 106 S. Ct. 1415, 89. L. Ed. 2d 648

a ina ssn usiispnhecsnenaonan 21
Bank One, N.A. v. Shumake, 281 F.3d 507

is inc annknesenbenenasvesannsnes 13, 23
Bradley. v. Harris Research, Inc., 275 F.3d

LE 5 23

Braidfoot v. William Carey College, 793
So. 2d 642, 144 Lab. Cas. P 59,343, 157

Ed., Law Rep. 432 (Miss. App. 2001)....... 19
Buchman v. BASF Corp., 107 Fed. Appx.
ENE, MD sicsnasscnnssnsnyscadarsecanssasess 13

Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440, 126 S. Ct. 1204, 163 L. Ed.

seis bnccasicagedninsnaninsaanend 12, 14
Caley v. Gulfstream Aerospace Corp., 428

F.3d 1359 (11th Cir. 20085)...............0cssesee. 23
Centennial Ins. Co. v. Ryder Truck Rental,

Inc., 149 F.3d 378 (5th Cir. 1998) ............ 13

Chelsea Square Textiles, Inc. v. Bombay
Dyeing and Mfg. Co., Lid., 189 F.3d 289
SE CD 5s ssscandatnanancndodanensteuannendec 22
Cogswell v. Merrill Lynch, Pierce, Fenner
& Smith, Inc., 78 F.3d 474 (10th Cir.

vi

TABLE OF AUTHORITIES—Continued

Page
Cooper v. Lawson, 264 So. 2d 890 (Miss.
STI iicliatilnhdneidiubsnetaisinngnanansnideniasiecthésteisseace 18
Dean Witter Reynolds Inc. v. Byrd, 470
U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d
TSE a a 16
Ekstrom v. Value Health, Inc., 68 F.3d
BE Is ME IID ccnscnsccncensvacasaccocesoncnse 23
Enterprise Irrigation District v. Farmers
Mutual Canal Co., 243 U.S. 157, 37 S.
Ct. 318, 61 L. Ed. 644 (1917).................... 18
Ferrara v. Walters, 919 So. 2d 876 (Miss.
a wnissananeninsese 22
Gibson v. Neighborhood Health Clinics,
Inc., 121 F.3d 1126 (7th Cir. 1997) .......... 23
Gilmer v. Interstate/Johnson Lane Corp,
500 U.S. 20, 111 S. Ct. 1647, 114 L. Ed.
Cee ceclane 14, 26
Goss v. Lopez, 419 U.S. 565, 95 S. Ct. 729,
I I a ccninvctacccesacevnccaseusocess 25
Green Tree Financial Corp.-Alabama uv.
Randolph, 531 U.S. 79, 121 S. Ct. 513,
iid lass sdnceannacenconcee 14, 15
Gregory v. Interstate/Johnson Lane Corp.,
188 F.3d 501 (4th Cir. 1999)..................... 23
Grigson v. Creative Artists Agency, 210
ae ee Cites CAT. BGO)... ..ccccccccccccccccccesess 13
Gulf Ins. Co. v. Neel-Schaffer, 904 So. 2d
EAE CT 19

Indiana ex rel. Anderson v. Brand, 303
U.S. 95, 58 S. Ct. 443, 82 L. Ed. 685
a AIT ee a 12
Irving Trust Co. v. Day, 314 U.S. 556, 62
So. 2d 398, 86 L. Ed. 452 (1942)............... 12

Vil
TABLE OF AUTHORITIES—Continued

Leverett v. State, 197 So. 2d 889 (Miss.

Mastrobuono v. Shearson Lehman Hutton,
Inc., 514 U.S. 52, 115 S. Ct. 1212, 131 L.
as iat cca Bi a

Medtronic Ave, Inc. v. Advanced Cardio-
vascular Systems, Inc., 247 F.3d 44 (3rd
ice Nacdutadiitieclcek dadsbdeiateahicision

Meyer v. State of Nebraska, 262 U.S. 390,
43 S. Ct. 625, 67 L. Ed. 1042 (1923).........

Miss. Farm Bureau Mut. Ins. Co. uv.
Walters, 908 So. 2d 765 (Miss. 2005) .......

Mitsubishi Motors Corp., v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614, 105 S. Ct.

3346, 87 L. Ed. 2d 444 (1985).............. 11-12, 16

Moses H. Cone Memorial Hospital v.
Mercury Construction Corp., 460 U.S. 1,
103 S. Ct. 927, 74 L. Ed. 2d 765

(CN shibacssesteindtstnkincssunncensciaphntaddeiia 2,11,

Mullane v. Central Hanover Bank & Trust
Co., 339 U.S. 306, 70 S. Ct. 652, 94 L.
Ue

PaineWebber Inc. v. Elahi, 87 F.3d 589
CI I I aia a,

Perry v. Thomas, 482 U.S. 483, 107 S. Ct.
2520, 96 L. Ed. 2d 426 (1987)...................

Phelps v. Board of Education of West New
York, 300 U.S. 319, 57 S. Ct. 483, 81 L.
as

Phillips Petroleum Co. v. Shutts, 472 U.S.
797, 105 S. Ct. 2965, 2974-2975, 86 L.
Be ee I icaik ced edacsniciiias meena ctvccscakenus

14, 16

26
22

15

12

vill
TABLE OF AUTHORITIES—Continued
Page

Prima Paint Corp. v. Flood & Conklin
Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801,

18 L. Ed. 2d 1270 (1967)........... rte 8, 12, 15, 24
Qualcomm Inc. v. Nokia Corp., 466 F.3d
SE ks Bs UE wicsinsctnnsssvninesnnstacdaxeaas 23

Rodriguez de Quijas v. Shearson/American
Express, Inc., 490 U.S. 477, 109 S. Ct.

1917, 104 L. Ed. 526 (1989)....................... 15.
Rogers-Dabbs Chevrolet-Hummer, Inc. uv.
Blakeney, 950 So. 2d 170 (Miss. 2007)..... 20

Royer Homes of Miss., Inc. v. Chandeleur
Homes, Inc., 857 So. 2d 748 (Miss. 2003) . 22

Ryan’s Family Steak Houses, Inc. v.
Regelin, 735 So. 2d 454 (Ala. 1999).......... 23, 24

Salary Policy Employee Panel v. Tennessee
Valley Auth., 731 F.2d 325 (6th Cir.

Schroeder v. City of New York, 371 U.S.
208, 212-213, 83 S. Ct. 279, 282-283, 9
Fig EE iibtncitisicdcwwinidsntdedcencnanaias 26

Shearson/American Express Inc. _ v.
McMahon, 482 U.S. 220, 107 S. Ct.
2332, 96 L. Ed. 2d 185 (1987)................... 14

Southland Corp. v. Keating, 465 U.S. 1,

104 S. Ct. 852, 79 L. Ed. 2d 1

De iainicctidi cialis niealnebdunsdmonatihic 1, 12, 15, 24
Speedee Cash of Mississippi, Inc. v.
Williams, 915 So. 2d 1061 (Miss. 2005)... 19

Stark v. Sandberg, Phoenix & von
Gontard, P.C., 381 F.3d 793 (8th Cir.

State Auto. Mut. Ins. Co. v. Glover, 253
Miss. 477, 176 So. 2d 256 (1965).............. 22

ix
TABLE OF AUTHORITIES—Continued
Page

United Steel Workers of America ov.
Warrior & Gulf Navigation Co., 363 U.S.
574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409
AERA ct ee Oa TE 18, 21
Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford, Jr. Uni-
versity, 489 U.S. 468, 109 S. Ct. 1248,
103 L. Ed. 2d 488 (1989)............ 2, 11, 15, 24-25
Washington Mut. Fin. Group, LLC v.
Bailey, 364 F.2d 260 (5th Cir. 2004)........ 12, 13
Waters v. Gnemi, 907 So. 2d 307 (Miss.

er aveabeddadevedeuce 18
STATUTES
U.S. Const., art. VI, cl. 2......... Latte TN 3
U.S. Const. Amend. XIV, § 1........................ 4, 25
ee. sonnenecauenesed 4, 14, 24
ET SF MIPTEIID .. « ccccccossncséiscncccocsccnsccssocens 3
EE a en 3
OTHER AUTHORITIES

Wechsler, The Appellate Jurisdiction of the
Supreme Court: Reflections on the Law
and the Logistics of Direct Review, 34
Wash. & Lee L. Rev. 1043 (1977)............. 15-16

IN THE

Supreme Court of the United States

No.

CAPTAIN D’s, LLC
Petitioner,
Vv.

TAMMY SMITH, by and through her father and
next friend, ALVIN CHRISTOPHER SMITH,
Respondent.

On Petition for a Writ of Certiorari to the
Mississippi Supreme Court

PETITION FOR A WRIT OF CERTIORARI

INTRODUCTION

It is firmly-settled that the FAA, enacted pursuant
to the Commerce Clause, is substantive federal law
enforceable in state courts and applicable to state
common law causes of action. Southland Corp. v.
Keating, 465 U.S. 1, 11-12, 104 S. Ct. 852, 858-859,
79 L. Ed. 2d 1 (1984). Though the enforcement of
the federal rights granted under the FAA may, in
appropriate circumstances, involve state-law prin-
ciples of contract interpretation, protecting and pre-
serving these federal rights relies on an interwoven
and overarching application of federal substantive
law to ensure that the state-law principles are not

2

manipulated to disguise the singling out of arbitra-
tion for suspect status, thus nullifying the FAA. See
Moses H. Cone Memorial Hospital v. Mercury Con-
struction Corp., 460 U.S. 1, 24-25, 103 S. Ct. 927,
74 L. Ed. 2d 765 (1983) (cited in Volt Information
Sciences, Inc. v. Board of Trustees of Leland Stanford,
Jr. University, 489 U.S. 468, 475, 109 S. Ct. 1248, 103
L. Ed. 2d 488 (1989)). Indeed, it is this Court which
must provide protection against “a state court’s con-
struction of a contract in such a way as to preclude
enforcement of a federal right.” Volt, 489 U.S. at 482
(Brennan, J., dissenting).

These principles play leading roles in this petition
as the Mississippi Supreme Court refused to give
“equal-footing” status to the parties’ valid agreement
to arbitrate and, in so doing, created a substantive
rule of law which stands in conflict with decisions of
this Court and which now must be followed by the
U.S. Court of Appeals for the 5th Circuit in diversity
cases; namely, that common law tort claims are non-
arbitrable where they arise out of a sexual assault
incident in the workplace, notwithstanding the plain
and unambiguous language of the arbitration agree-
ment.

OPINIONS BELOW

The Mississippi Supreme Court’s decision is re-
ported at 963 So. 2d 1116, 100 Fair Empl. Prac. Cas.
(BNA) 1745, 154 Lab. Cas. P. 60,433, 26 IER Cases
385. App., infra, la-17a. The Mississippi Supreme
Court handed down its original decision on June 14,
2007, and denied rehearing on September 13, 2007.
App., infra, 25a. The judgment of this state court
of last resort operated to reverse the December 13,
2005, decision of the Circuit Court of Alcorn County,
Mississippi. App., infra, 18a-24a.

3
BASIS FOR JURISDICTION

This petition comports with the conditions pre-
scribed by the governing statute for the Court's
acceptance of jurisdiction over an appeal; namely,
that the appeal be taken from a “[flinal judgment .. .
of the highest court of a State in which a decision
could be had.” 28 U.S.C. § 1257(a). The jurisdiction
of the United States Supreme Court is invoked in
a timely and proper manner. The order of the state
supreme court denying Petitioner’s motion for rehear-
ing was entered on September 13, 2007, and this
petition is being submitted within the ninety (90) day
time period allowed by the statute for the taking of
an appeal to this Court. 28 U.S.C. § 2101(c).

RELEVANT CONSTITUTIONAL AND
STATUTORY PROVISIONS

The constitutional and statutory provisions in-
volved in this case are the Supremacy Clause of the
United States Constitution; the Fourteenth Amend-
ment to the United States Constitution; and § 2 of
the Federal Arbitration Act (“FAA”) which provide,
respectively:

This Constitution, and the Laws of the United
States which shall be made in Pursuance thereof;
and all Treaties made, or which shall be made,
under the Authority of the United States, shall
be the supreme Law of the Land; and the Judges
in every State shall be bound thereby, any Thing
in the Constitution or Laws of any State to the
Contrary notwithstanding.

U.S. Const., art. VI, cl. 2 (App., infra, 26a);

No State shall . . . deprive any person of life,
liberty, or property, without due process of law;

a

nor deny to any person within its jurisdiction the
equal protection of the laws.

U.S. Const. Amend. XIV, § 1 (App., infra, 27a); and

A written provision in any.. . contract evidenc-
ing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out
of such contract or transaction, or the refusal to
perform the whole or any part thereof, or an
agreement in writing to submit to arbitration
an existing controversy arising out of such a
contract, transaction, or refusal, 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. App., infra, 28a.

STATEMENT OF THE CASE

The genesis of this appeal is the Mississippi
Supreme Court’s ad hoc singling out of certain claims
as being unsuitable for arbitration by refusing to
enforce the plain and unambiguous terms of a valid
arbitration agreement entered into by and between
employer and employee, where the employee’s com-
mon law tort claims against employer stemmed from
an alleged sexual assault by the employer’s manager.
The decision of the state court does violence to the
Constitution of the United States of America and to
the FAA. .

A. Factual Background

Petitioner Captain D’s, LLC, owns and operates
several hundred seafood restaurants across the United
States as well as in several countries. Throughout its
restaurants, Captain D’s and its employees univer-
sally enter into a stand-alone arbitration agreement,

5

conspicuously titled “EMPLOYEE DISPUTE RESO-
LUTION PLAN.”

On February 3, 2004, Respondent, Tammy Smith,
was a 17-year-old applicant for a job at a Captain D’s
restaurant in Corinth, Mississippi. In connection
with securing employment there, Smith executed the
stand-alone arbitration agreement, which provided in
relevant part:

[Bloth Captain D’s and I agree to settle any and
all previously unasserted claims, disputes,
or controversies arising out of or relating to
my application for employment, employment
and/or cessation of employment with Cap-
tain D’s, exclusively by final and binding
arbitration before a neutral arbitrator. By
way of example only, such claims include claims
under federal, state and local statutory or
common law, such as the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act
of 1964, as amended, including the amendments
of the Civil Rights Act of 1991, the Americans
with Disabilities Act, the Family Medical Leave
Act, the law of contract and law of tort. |

App., infra, 29a-31a (emphasis added). Smith’s Grand-
mother, Pat. Spencer, also executed the Arbitration
Agreement as Smith’s guardian. Jd.

B. Proceedings Below

Unmoved by the covenant formed by the arbi-
tration agreement, on August 17, 2004, Smith filed
suit against Captain D’s and her supervising man-
ager Christopher Lee Howell in the Circuit Court of
Alcorn County, Mississippi. The significant allega-
tions of Smith’s lawsuit accused Howell of sexually
assaulting and raping her while on the restaurant
premises, while she was working and while she was

6

under his supervision as her manager. Separately,
Smith’s lawsuit charged Captain D’s with common
law tort claims of negligent hiring, negligent super-
vision and negligent retention of Howell, seeking a
judgment of compensatory and punitive damages
from Captain D’s on these claims.

In the state trial court, Captain-D’s promptly filed
a notice of election of binding arbitration and moved
to compel Smith’s claims against it to arbitration
consistent with the mandates of the FAA which
subjected Smith’s claims to that forum. Separate
Defendant Howell, proceeding pro se, answered the
lawsuit in the trial court but did not join in Captain
D’s motion or otherwise seek arbitration of the sepa-
rate claims against him.

Smith resisted arbitration by claiming, foremost,
that she was not bound to the agreement due to her
status as a minor and, secondarily, that the costs
of arbitration were prohibitive, rendering the agree-
ment unconscionable. Smith raised no challenge to
the scope of the arbitration clause. |

In December of 2005, the Mississippi trial court’
granted Captain D’s motion to compel arbitration and
directed the parties to arbitrate those claims which
Smith leveled at Captain D’s. The trial court—which
had received briefing, evidence and argument on
the issues presented—found that it was “apparent
[{Smith’s} real contention is that [she], due to her
minority status, should not be bound by the arbi-
tration agreement.” App., infra, 19a. The trial court
rejected this defense, reasoning that Congress’s dec-

' At that time, the trial court was presided over by the
Honorable Sharion R. Aycock. Judge Aycock is now a United
States District Judge in the Northern District of Mississippi.

7

laration of a national policy favoring arbitration,
together with ordinary principles at law or in equity
for the revocation of any contract, commanded a find-
ing of arbitrability. Jd. at 19a and 23a.

Smith perfected an appeal from the trial court’s
decision to the Mississippi Supreme Court. Smith’s
“rape claim” against Howell was not part of the trial
court’s ruling and neither Howell nor Smith’s claims
against him were joined in her appeal. On appeal,
Smith attacked the validity of her arbitration agree-
ment on three limited grounds: 1) her minority status
permitted her to disavow the arbitration agreement;
2) the arbitration agreement was unconscionable;
and 3) Captain D’s had waived its right to arbitra-
tion.” Again, Smith raised no challenge to the scope
of the arbitration clause.

The Mississippi Supreme Court, in a divided
ruling, reversed the trial court’s decision compelling
arbitration and directed that Smith’s claims against
Captain D’s would be tried in a court of law. App.,
infra, la-17a. Significantly, the majority of the court
readily determined a valid, binding arbitration
agreement did in fact exist between the parties. Not
ending its analysis with the issues raised by the
party resisting arbitration, however—and taking an
unprecedented measure—the court presumed to
consider, sua sponte, whether Smith’s claims -were
within the scope of the arbitration agreement, despite
the critical fact that Smith never raised such a
defense to arbitration and, accordingly, the trial
court had never considered or passed upon such a
defense—much less had Captain D’s been afforded

? Smith raised the defense of waiver for the first time or
appeal.

8

the right to meet and rebut the defense. See Leverett
v. State, 197 So. 2d 889, 890 (Miss. 1967) (hold-
ing, “[t]he [Mississippi] Supreme Court is a court of
appeals, it has no original jurisdiction; it can only try
questions that have been tried and passed upon by
the court from which the appeal is taken. Whatever
remedy appellant has is in the trial court, not in this
court. This court can only pass on the question after
the trial court has done so.”) (quoting Collins v. State,
159 So. 865 (1935)).

Even so, the Mississippi Supreme Court correctly
found that the language of the arbitration agree-
ment—namely, the language: “any and all previously
unasserted claims, disputes, or controversies arising
out of or relating to my . . . employment”—made it a
broad arbitration provision under federal substantive
law (citing Prima Paint Corp. v. Flood & Conklin
Mfg. Co., 388 U.S. 395, 406, 87 S. Ct. 1801, 18 L. Ed.
2d 1270 (1967)), “capable of expansive reach.” Still,
the majority summarily concluded from there that
“(w)hile recognizing the breadth of the language in
the arbitration provision, we unquestionably find
that a claim of sexual assault neither pertains to nor
has as connection with [Smith’s] employment.”

Recognizing the violence done to Captain D’s
rights by the majority, Justice Dickinson, in dissent,
observed:

The majority and I are in agreement that
Tammy Smith and Captain D’s entered a valid,
binding arbitration agreement. There were no
other issues raised by the parties and briefed to
the trial court or to this Court on appeal. Thus,
the majority today takes the unusual step of
deciding an . . . appeal on an issue never raised
or briefed by either party, and not discussed by
the trial court.

9

The Mississippi Supreme Court was never called
upon, Justice Dickinson pointed out, to decide the
issue vel non of whether a “rape claim” arises out of
or relates to employment, and noted that “in its zeal
to separate what it calls “[Smith’s] rape claim” from
the scope of her arbitration agreement, the majority
fails to absorb the fact that [Smith] filed no rape
claim against Captain D’s.” Smith’s claims against
Captain D’s sounded in common law tort theories of
“negligent hiring, negligent supervision, and negligent
retention.” A fortiori, Justice Dickinson quipped that
“[ilt could be argued that (Smith’s] claims against
Captain D’s so clearly related to her employment that
[Smith’s] counsel didn’t even bother raising the issue
with the trial court or here. One would think that if
[Smith’s] counsel concluded the argument had any
merit whatsoever, it would have at least been raised
and argued.” Justice Dickinson concluded, “[b]ecause
the majority decides this appeal on an issue never
raised; ignores the need for a factual determination;
and simply decides as a matter of law that [Smith’s]
claims do not relate to her employment, I respectfully
dissent.” App., infra, 12a-17a (emphasis added).

Captain D’s moved for rehearing by the Mississippi
Supreme Court. On rehearing, Captain D’s asserted:
1) the court arbitrarily singled out Smith’s claims as
being suspect for the arbitration process by judicially
creating an ad hoc exception to ordinary rules of
state-law which denied Captain D’s its federal rights
under the FAA; 2) the court, in conflict with decisions
of this Court, eschewed applicable federal substan-
tive laws of arbitrability:in declaring that, notwith-
standing the unambiguous language of the arbi-
tration agreement, certain types of claims, in its
judgment, were simply unsuitable for arbitration;
and 3) the court decided an important federal ques-

10

tion in a way that conflicted with the decision of.
other state and federal courts, including at least one
state court of last resort. App., infra, 32a-52a.

Captain D’s motion for rehearing was denied on
September 13, 2007, without a written opinion. Peti-
tion for writ of certiorari now follows.

REASONS FOR GRANTING THIS
PETITION FOR WRIT

The Mississippi Supreme Court, in conflict with
decisions of this Court and at least one state
court of final resort, violated the Moses H. Cone
principle by singling out certain types of griev-
ances as being unsuitable for arbitration, with-
out regard for federal policy to the contrary,
thereby displaying suspicion for that forum and
deepening the uncertainty in the 5th Circuit
Court of Appeals as to the extent to which state-
law must be followed where it has been manipu-
lated or used as a pretense to deny a party’s
federal rights to arbitration.

Further, the instant ruling is the most recent
in a developing line of cases in which the
Mississippi Supreme Court has substituted its
judgment for that. of Congress in passing the
FAA by declaring certain types of claims as being
unsuitable for arbitration, displaying suspicion
for arbitration as being an appropriate forum for
dispute resolution.

Finally, the Mississippi Supreme Court violated
Captain D’s Fourteenth Amendment guarantees
of due process.

There exists no controversy to the fact that the
FAA governs this case and would mandate arbi-
tration of the parties’ dispute if its application had
not been thwarted by the Mississippi Supreme

11

Court’s creation of a rule of law that common law tort
claims arising out of an alleged sexual assault
incident involving a minor in the workplace are
not suitable for arbitration. As a threshold matter, it
is respectfully submitted that the Moses H. Cone
principle of due regard being given “to the federal
policy favoring arbitration and that ambiguities as to
the scope of the arbitration clause itself are to be
resolved in favor of arbitration” makes this Court’s
review plain, notwithstanding that the decision at
issue ostensibly turned on judicial construction of
an arbitration agreement. See Volt Information
Sciences, Inc. v. Board of Trustees of Leland Stanford,
Jr. University, 489 U.S. 468, 475-476, 109 S. Ct.
1248, 103 L. Ed. 2d 488 (1989) (citing Moses H. Cone
Memorial Hospital v. Mercury Construction Corp.,
460 U.S. 1, 24-25, 103 S. Ct. 927, 74 L. Ed. 2d 765
(1983)). In contrast to this Court’s resolution in Volt
that it would not revisit a lower court’s judicial
interpretation of a choice-of-law provision in an arbi-
tration agreement as “[t]here is no federal policy
favoring arbitration under a certain set of rules,” the
case sub judice involves the arbitration clause itself
and thus unquestionably invokes the clearly-favored
federal policy of ensuring “the enforceability, according
to their terms, of private agreements to arbitrate.”
_ Id. at 476.

Captain D’s concedes, as it must, that the in-
terpretation of private agreements is generally
regarded as being within the domain of state-law.
Overarching that general proposition, however, is the
federal directive that courts—indeed, state courts—in
determining whether parties agreed to arbitrate a
dispute, must apply the “federal substantive law of
arbitrability.”. Mitsubishi Motors Corp. v. Soler
Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S. Ct.

12

3346, 87 L. Ed. 2d 444 (1985) (citing Moses H. Cone
Mem. Hosp., 460 U.S. at 24, 103 S. Ct., at 941; Prima
Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S.
395, 400-404, 87 S. Ct. 1801, 1804-1806, 18 L. Ed. 2d
1270 (1967); Southland Corp. v. Keating, 465 U.S. 1,
12, 104 S. Ct. 852, 859, 79: L. Ed. 2d 1 (1984)). The
“equal-footing” guaranty of § 2 of the FAA—namely,
that arbitration agreements be treated like all other
contracts—is, above all, a federal substantive com-
mand. Buckeye Check Cashing, Inc. v. Cardegna, 546
U.S. 440, 447, 126 S. Ct. 1204, 163 L. Ed. 2d 1038
(2006).

As the case below represents, where “the existence
or the application of a federal right turns on a
logically antecedent finding on a matter of state law,”
(Volt, 489 U.S. at 484 (Brennan, J., dissenting)), it
enables a so-inclined court to mask disfavor for
arbitration under the guise of “state-law.” Where
that occurs, higher scrutiny cannot be escaped. A
state court’s emasculation of federal rights com-
mands ancillary review “in order that the consti-
tutional mandate may not become a dead letter.”
Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 100,
58 S. Ct. 443, 82 L. Ed. 685 (1938); see also Phelps v.
Board of Education of West New York, 300 U.S. 319,
322-323, 57 S. Ct. 483, 484-485, 81 L. Ed. 674 (1937);
Irving Trust Co. v. Day, 314 U.S. 556, 561, 62 So. 2d
398, 401, 86 L. Ed. 452 (1942).

It is this dance between principles of federal
substantive law and those of state-law in the
arbitration context which has created uncertainty in
the U.S. Court of Appeals for the 5th Circuit (the
federal circuit for Mississippi), which cries out to
be settled. See Washington Mut. Fin. Group, LLC
v. Bailey, 364 F.3d 260 (5th Cir. 2004) (Miss.). In

13

Bailey, Judge Jolly, writing for the 5th Circuit, noted
that “[iln determining whether a party should be
compelled to arbitrate its claims against another, we
acknowledge that whether a court should apply state
law or ‘the federal law of arbitrability,’ (citation
omitted), is often an uncertain question.” Bailey, 364
F.3d at 267 n.6.

The call to quiet the uncertainty within the
equation is underscored by the Mississippi Supreme
Court effectively creating a state rule of law which
singles out certain grievances as being unsuitable for
arbitration—despite the validity of the agreement
to arbitrate—which the 5th Circuit, sitting in diver-~
sity, will now be required to follow under the Erie
doctrine. See Bailey, 364 F.3d at 264 (holding, “in
determining whether the parties agreed to arbitrate
a certain matter, courts apply the contract law of the
particular state that governs the agreement... .
[meaning] Mississippi law applies here.”); Buchman
v. BASF Corp., 107 Fed. Appx. 378 (5th Cir. 2004)
(Miss.) (holding, Mississippi substantive lew applies
to breach of contract dispute where court is sitting
in diversity); Centennial Ins. Co. v. Ryder Truck
Rental, Inc., 149 F.3d 378, 382 (5th Cir. 1998) (Miss.)
(holding, in diversity case involving interpretation of
contract, “we start four resolution of the case] by
determining whether or not any final decisions of
the Mississippi Supreme Court are dispositive.”).
Superimposed, however, on the 5th Circuit’s Erie
obligations are the intertwined considerations of
federal substantive law for which the federal court
is also required to account. See Bank One, N.A. v.
Shumake, 281 F.3d 507, 513 (5th Cir. 2002) (“the
FAA reflects a strong policy favoring the enforcement
of arbitration clauses”); Grigson v. Creative Artists
Agency, 210 F.3d 524, 526 (5th Cir. 2000) (“Arbi-

14

tration is favored in the law.”) (citing Moses H. Cone
Memorial Hospital v. Mercury Construction, 460 U.S.
1, 24-25, 103 S. Ct. at 942, 74 L. Ed. 2d 765 (1983)).
Conflict and uncertainty are thus deepened where
unchecked state-law says one thing, but federal
substantive law would compel a differe at.

It has been established, for example, that it is a
rule of federal substantive law which places the
burden of proving certain claims are unsuitable for
arbitration squarely on the shoulders of the party
resisting arbitration. Gilmer v. Interstate/Johnson
Lane Corp, 500 U.S. 20, 26, 111 S. Ct. 1647, 114
L.Ed.2d 26 (1991); Shearson/American Express Inc.
v. McMahon, 482 U.S. 220, 227, 107 S.Ct. 2332, 96
L.Ed.2d 185 (1987); see also Green Tree Financial
Corp.-Alabama, supra, 531 U.S. at 92, 121 S. Ct. at
522 (“We have held that the party seeking to avoid
arbitration bears the burden of establishing that
Congress intended to preclude arbitration of the statu-
tory claims at issue.”). The Mississippi Supreme
Court relieved Smith altogether of this burden as she
never claimed (much less proved) that her claims
were not contemplated for arbitration by the terms of
the agreement.

It is also a rule of federal substantive law—
universally applied—that courts may not invalidate
arbitration agreements under state laws applicable
only to arbitration provisions. Buckeye Check Cash-
ing, Inc. v. Cardegna, 546 U.S. 440, 447, 126 S. Ct.
1204, 163 L. Ed. 2d 1038 (2006); 9 U.S.C. §2. A
necessary extension of this federal substantive rule
is the preemption of discriminatory or pretextual
application of ordinary principles of state-law to the
interpretation of arbitration agreements. This Court
has consistently “rejected generalized attacks on

15

arbitration that rest on ‘suspicion of arbitration as a
method of weakening the protections afforded in the
substantive law to would-be complainants.” Green
Tree Financial Corp.-Alabama v. Randolph, 531 U.S.
79, 90, 121 S. Ct. 513, 521, 148 L. Ed. 2d 373 (citing
Rodriguez de Quijas v. Shearson/American Express,
Inc., 490 U.S. 477, 481, 109 S. Ct. 1917, 104 L. Ed.
526 (1989); Prima Paint, 388 U.S. at 404; Southland
Corp. v. Keating, 465 U.S. at 16-17, n. 11, 104 S. Ct.
at 862, n. 11.

- As Justice Brennan noted in his dissent in Volt, “in
order to guard against arbitrary denials of federal
claims, a state court’s construction of a contract in
such a way as to preclude enforcement of a federal
right is not immune from review in this Court as-to
its ‘adequacy.” Volt, 489 U.S. at 468, 482 (Brennan,
J., dissenting). This is consistent with the holding in
Perry v. Thomas, wherein this Court observed “[a]
court may not, then, in assessing the rights of liti-
gants to enforce an arbitration agreement, construe
that agreement in a manner different from that in
which it otherwise construes nonarbitration agree-
ments under state law. Nor may a court rely on the
uniqueness of an agreement to arbitrate as a basis
for a state-law holding that enforcement would be
unconscionable, for this would enable the court to
affect what we hold today the state legislature can-
not.” Perry v. Thomas, 482 U.S. 483, 492, n. 9, 107 S.
Ct. 2520, 96 L. Ed. 2d 426 (1987).

The instant case therefore calls for review to
preclude ad hoc applications of state-law rules from
being used as an artificial aegis to scrutiny and to
ensure that federal rights are not “nullified by the
manipulation of state law.” Volt, 489 U.S. at 484
(citing Wechsler, The Appellate Jurisdiction of the

16

Supreme Court: Reflections on the Law and the
Logistics of Direct Review, 34 Wash. & Lee L. Rev.
1043, 1052 (1977)). The Moses H. Cone principle
should be applied to resolve this matter; for that
principle limits state-law by paying full homage to
the fact that arbitration is strictly a matter of private
contract, the interpretation of which is ordinarily a
question of state-law, while insisting that state-law is
not manipulated to denude a party of its federal
rights to arbitration. Moses H. Cone, 460 U.S. at 24.
In other words, the analysis cannot begin and end
with state-law. The Supremacy Clause reserves
no room for state rule of law to remain wholly
unchecked. U.S. Const., art. VI, cl. 2. Indeed, “[t]he
FAA requires that a court determining a question of
arbitrability not stop at the application of state-law
rules for construing the parties’ intentions, but that it
also take account of the command of federal law that
‘those intentions [be] generously construed as to the
issues of arbitrability.” Volt, 489 U.S. at 468, 487
(Brennan, J., dissenting) (quoting Mitsubishi Motors,
supra, 473 U. S. at 626, 105 S. Ct. at 3354) ee
added).

In the case below, Smith, the party resisting
arbitration, made narrow. and limited challenges
to the validity of the agreement to arbitrate. The
Mississippi Supreme Court in fact found, favorably to
Captain D’s, that Smith entered into a valid, binding
arbitration agreement—thereby rejecting her claim
that the contract could be invalidated. At this point,
the Mississippi Supreme Court was required to
rigorously enforce the agreement. See Dean Witter
Reynolds Inc. v. Byrd, 470 U.S. 213, 221, 105 S. Ct.
1238, 1242, 84 L. Ed. 2d 158 (1985). Instead,
the court presumed to undertake consideration of
whether Smith’s common law tort claims were out-

17

side the scope of the arbitration agreement, not-
withstanding that 1) Smith never challenged the
scope of the arbitration agreement;’ and 2) Smith had
implicitly taken the position at the trial court level
that her claims against Captain D’s were within the
scope of the arbitration agreement.* To get there, the
Mississippi Supreme Court jettisoned stare decisis
and took the unprecedented step of refusing to
enferce ordinary state-law principles, granting Smith
dispensation which weakened—indeed, eviscerated—
the protections afforded to Captain D’s under §2 of
the FAA. Demonstrating judicial disfavor (or, per-
haps, distrust) toward the arbitration process for
Smith’s claims in this case, the Mississippi Supreme
Court created a principle of state-law which flowed
directly from the fact that a contract to arbitrate was
at issue. It cannot escape observation, either, that:
the underlying incident from which Smith’s claims
were taken involved a shocking allegation of rape of a

*The corollary to this was that Captain D’s was never
afforded the fundamental opportunity to meet, defend and rebut
such a challenge.

* At the trial court level, Smith had argued that “but for the
intentional tort exclusion, this case would fall under the
[Mississippi] Workers’ Compensation Act.” For a claim to “fall
under the [Mississippi] Workers’ Compensation Act” it must
“arise out of and in the course of employment.” Miss. Code.
Ann. § 71-3-7. Much more, then, than simply not contesting
that her claims fell outside the scope of the arbitration agree-
ment, Smith actually conceded the point that her claims “arose
out of” her employment—a position totally consistent with not
challenging the scope of the agreement. As the subject arbitra-
tion agreement unambiguously covered all “claims, disputes, or
controversies arising out of or relating to [Smith’s] .. .
employment . .. with Captain’s D’s,” there was never a case
or controversy concerning the scope of the agreement. App.,
infra, 36a-37a.

18

minor. That notwithstanding, “a motion to compel
arbitration should not be denied ‘unless it may be
said with positive assurance that the arbitration
clause is not susceptible of an interpretation that
covers the asserted dispute.” United Steel Workers of
America v. Warrior & Gulf Navigation Co., 363 U.S.
574, 582-83, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960).

When Justice Dickinson outed the majority for
taking “the unusual step of deciding an . . . appeal
on an issue never raised,” what he was observing
was the over-reaching but calculated desire of the
majority to “separate . . . [Smith’s] rape claim from
the scope of the arbitration agreement.” This sin-
gular observation reveals the arbitrary reluctance of
the majority to submit Smith’s claims to arbitration
and belies any assertion that the Mississippi Supreme
Court’s decision rested on a non-federal and inde-
pendent state ground. See Enterprise Irrigation
District v. Farmers Mutual Canal Co., 243 U.S. 157,
164, 37 S. Ct. 318, 61 L.Ed. 644 (1917).

Prior to taking on the arbitrability of Smith’s
claims, no other state rule of law had been applied
more consistently or rigorously by the Mississippi
Supreme Court than the rule that an issue not raised
before the lower court and only raised for the first
time on appeal is deemed waived and procedurally
barred. See, e.g,, Waters v. Gnemi, 907 So. 2d 307,
{ 39 (Miss. 2005) (holding, “[w]e have been consistent
in holding that we need not consider matters raised
for the first time on appeal, which practice would
have the practical effect of depriving the trial court of
the opportunity to first rule on the issue, so that we
can then review such trial court ruling under the
appropriate standard of review); Cooper v. Lawson,
264 So. 2d 890, 890 (Miss. 1972) (applying procedural

19

bar, refusing to consider matters not raised by
appellant); Leverett v. State, 197 So. 2d 889, 890
(Miss. 1967) (holding, “[t]he Supreme Court is a court
of appeals, it has no original jurisdiction; it can only
try questions that have been tried and passed upon
by the court from which the appeal is taken.
Whatever remedy appellant has is in the trial court,
not in this court. This court can only pass on the
question after the trial court has done so.”) (quoting
Collins v. State, 159 So. 865 (1935)).

In other contract cases reviewed by the Mississippi
Supreme Court, it has without fail refused to en-
tertain defenses which were not asserted at the trial
court level. See, e.g., Braidfoot v. William Carey
College, 793 So. 2d 642, | 47, 144 Lab. Cas. P 59,343,
157 Ed., Law Rep. 432 (Miss. App. 2001) (holding
“it is a rule of almost universal application that
questions of whatever nature not raised in the
trial court and preserved for review will not be
noticed on appeal); Anglin v. Gulf Guaranty, 956 So.
2d 853, I 26 (Miss. 2007) (the Mississippi Supreme
Court refused to consider a defense to a contract of
insurance which was raised for the first time on
appeal, proclaiming, [t]his Court has been consistent
in holding that we need not consider matters raised
for the first time on appeal.”).

The Mississippi Supreme Court has heretofore even
applied the procedural bar when reviewing grants or
denials of arbitration. See, e.g., Gulf Ins. Co. v. Neel-
Schaffer, 904 So. 2d 1036, J 32 (Miss. 2004) (firmly
stating that defense to arbitration on grounds of
substantive unconscionability was barred based on
fact that it was raised for first time during appeal);
Speedee Cash of Mississippi, Inc. v. Williams, 915 So.
2d 1061, J 6 and 7 7 (Miss. 2005) (holding, in review

20

of. party's defense to arbitration on grounds of
unconscionability, “there is absolutely nothing in the
record to show that this claim was raised before the
[trial] court... [t]herefore, we must treat the issue of
unconscionability as one never presented to the
circuit court and apply the procedural bar.”).

Thus, the conclusion flowing from the case at hand
is that this is not so much a case of categorical
hostility toward the arbitration process as it is a case
of disfavor for arbitrating certain types of claims,
which is equally offensive to the FAA. By refusing to
apply the procedural bar “on an issue never raised”
by Smith, the Mississippi Supreme Court displayed a
peculiar bias against arbitration of certain types of
claims, substituting its judgment for the parties’
consent to arbitration. See Mastrobuono v. Shearson
Lehman Hutton, Inc., 514 U.S. 52, 57-58, 115 S. Ct.
1212, 131 L. Ed. 2d 76 (1995) (FAA assures that
parties’ agreements to arbitrate will be enforced
according to their terms “even if a rule of state law
would otherwise exclude such claims from
arbitration” (emphasis added)).

This case is not the first in which the Mississippi
Supreme Court has determined that certain claims
are, in its judgment, not suitable for arbitration. See
Rogers-Dabbs Chevrolet-Hummer, Inc. v. Blakeney,
950 So. 2d 170 (Miss. 2007). There, the state
supreme court, despite the plain language of the
agreement, denied arbitration of certain types of
claims by resolving that “no reasonable person”
would have agreed to submit claims to arbitration
where the underlying incident involved a fraudulent.
scheme. Rogers-Dabbs, 950 So. 2d at 177. One can
only conclude from the Rogers-Dabbs case and the
instant case that the more alarming the underlying

21

incident at issue is, the less suitable the case is
for arbitration in the judgment of the Mississippi
Supreme Court. This is a perilous precedent if
left unchecked and a prelude to what is to come of
arbitration in this state. The inclination and oppor-
tunity to judicially legislate what types of claims
should and should not be arbitrated, without regard
to ordinary state-law principles of contract inter-
pretation, represents a clear and present danger that
arbitration in Mississippi will not be given “equal-
footing” with other private agreements.

In addition to removing the procedural bar and
relieving Smith of her federally mandated burden of
proving a defense (raised for her by the court) to
arbitration, the Mississippi Supreme Court disre-
garded federal substantive law relative to the scope
of the arbitration agreement at issue. Where parties
have entered into an agreement to arbitrate, the
court must afford a presumption of arbitrability and
“[aln order to arbitrate the particular grievance
should not be denied unless it may be said with
positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the
asserted dispute. Doubts should be resolved in favor
of coverage.” AT&T Technologies, Inc. v. Commu-
nications Workers of America, 475 U.S. 643, 650, 106
S. Ct. 1415, 89 L. Ed. 2d 648 (1986). This presump-
tion has been said to be “particularly applicable”
where the arbitration clause is found to be broad—
just as the Mississippi Supreme Court found the
clause to be in the instant matter. In such cases,
“liln the absence of any express provision exclud-
ing a particular grievance from arbitration, . .
only the most forceful evidence of a purpose to
exclude the claim from arbitration can prevail.”
Id. (citing Warrior & Gulf Navigation Co., supra,

22

363 U.S. at 584-85 (emphasis added). As Justice
Dickinson aptly pointed out in regard to the major-
ity’s exclusion of Smith’s grievances from arbitration,
“[t]his Court, of course, never examined the facts
because we .. . were given no facts to examine.”

Nor did the Mississippi Supreme Court’s decision
include any of the ordinary state-law tenets of con-
tract construction in excluding Smith’s claims from
arbitration. Under Mississippi law, when interpret-
ing any contract—regardless of whether it contains
an arbitration clause—the court must “accept the
plain meaning of [it] as the intent of the parties
where no ambiguity exists.” Ferrara v. Walters, 919
So. 2d 876, 882 (Miss. 2005). It has further been
written that the court is not to be concerned with
what the parties may have intended, “but with what
they said, since the words employed are by far the
best resource for ascertaining the intent and assign-
ing meaning with fairness and accuracy.” Royer
Homes of Miss., Inc. v. Chandeleur Homes, Inc., 857
So. 2d 748, 752 (Miss.2003) (also holding that “[t}]he
reviewing court is not at liberty to infer intent con-
trary to that emanating from the text at issue.”); see
also, Miss. Farm Bureau Mut. Ins. Co. v. Walters, 908
So. 2d 765, 769 (Miss. 2005); State Auto. Mut. Ins. Co.
v. Glover, 253 Miss. 477, 176 So. 2d 256, 258 (1965)). -
By declining to appraise Captain D’s FAA rights with
general state-law principles and in a manner which
also honored the federal policy favoring arbitration,
the decision of the Mississippi Supreme Court stands
in conflict with every U.S. Circuit Court of Appeals.
See, e.g., PaineWebber Inc. v. Elahi, 87 F.3d 589 (1st
Cir. 1996); Chelsea Square Textiles, Inc. v. Bombay
Dyeing and Mfg. Co., Ltd., 189 F.3d 289 (2nd Cir.
1999); Medtronic: Ave, Inc. v. Advanced Cardio-
vascular Systems, Inc., 247 F.3d 44 (3rd Cir. 2001);

23 -

Gregory v. Interstate/Johnson Lane Corp., 188 F.3d
501 (4th Cir. 1999); Bank One, N.A. v. Shumake, 281
F.3d 507 (5th Cir. 2002); Salary Policy Employee
Panel v. Tennessee Valley Auth., 731 F.2d 325 (6th
Cir. 1984); Gibson v. Neighborhood Health Clinics,
Inc., 121 F.3d 1126 (7th Cir. 1997); Stark v. Sandberg,
Phoenix & von Gontard, P.C., 381 F.3d 793 (8th Cir.
2004); Bradley v. Harris Research, Inc., 275 F.3d 884 -
(9th Cir. 2001); Cogswell v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 78 F.3d 474 (10th Cir. 1996);
Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359
‘(11th Cir. 2005); Ekstrom v. Value Health, Inc., 68
F.3d 1391 (D.C. Cir. 1995); Qualcomm Inc. v. Nokia
Corp., 466 F.3d 1366 (Fed. Cir. 2006).

The Mississippi Supreme Court, instead, “skillfully
and smoothly” resolved that “the question of ‘scope’ is
narrowed to whether [Smith’s] rape claim arises out
of or relates to ‘[Smith’s] application for employment
with Captain D’s,’ so as to subject [her] sexual
assault claim to arbitration,” ruling that it did
not. This holding represented an inappropriate co-
mingling of Smith’s claims against Captain D’s with
her claims of sexual assault, which were stated inde-
pendently against Captain D’s manager, Christopher
Howell. In addition to the deepening tension this
ruling (together with the ruling in Rogers-Dabbs,
supra) will create within the 5th Circuit when it is
called upon to follow Mississippi law, the Mississippi
Supreme Court’s refusal to distinguish the common
law tort claims flowing between the parties to the
arbitration agreement (Smith and Captain D’s) from
the independent claims of rape and sexual assault
flowing between non-parties to the agreement (Smith
and Howell), stands in conflict with the Alabama
Supreme Court’s decision in Ryan’s Family Steak
Houses, Inc. v. Regelin, 735 So. 2d 454 (Ala. 1999).

24

There, the parties—a restaurant-employer and six (6)
of its employees—had agreed in writing to resolve
any “employment-related disputes” by arbitration.
Regelin, 735 So. 2d at 455. Subsequently,.the em-
ployees sued their employer for, inter alia, negligent
training and supervision. Id. These claims arose out
of sexually inappropriate conduct which occurred in
the workplace. Id. The restaurant-employer moved
to compel arbitration and the plaintiffs resisted it.
Id. at 456-57. The Alabama Supreme Court properly
reviewed the arbitrability issue under 9 U.S.C. §2
and federal substantive law applicable thereto, find-
ing that the employees had agreed to submit all
“employment-related disputes”’ to arbitration and
thus the claims were directed to arbitration. Id. 457.
Accordingly, in Alabama, where Captain D’s has
restaurants, Smith’s claims would be arbitrable
under the FAA, but not in Mississippi. The con-
flicting results in the different states cannot be
attributed to differing principles of state-law. It can
only be said that the conflict arises directly from a
state-law principle that takes its meaning precisely
from the fact that a contract to arbitrate is at issue.
This does not comport with the requirement of § 2 of
the FAA. See Prima Paint, 388 U.S. at 404, 87 S. Ct.
at 1806; Southland Corp. v. Keating, 465 U.S. at 16-
17, n. 11, 104S. Ct. at 862, n. 11.

The FAA was specifically enacted “to overrule the
judiciary’s long-standing refusal to enforce agree-
ments to arbitrate,” (citation omitted) and to place
such agreements “upon the same footing as other
contracts” (citation omitted). Volt, supra, 489 US.

* This is substantially similar language to the Captain D’s-
Smith arbitration agreement, i.e., “arising out of or relating to
... employment.” '

25

468 at 478. With a proper application of federal law
in this case, the state court’s judgment would have
been different.

Finally, Captain D’s had a legitimate claim of
entitlement to freely contract with Smith to have
claims between them arbitrated without worry or
danger that the state would infringe on that right
without procedural due process being afforded. Meyer
vu. State of Nebraska, 262 U.S. 390, 399 43 S. Ct. 625,
67 L. Ed. 1042 (1923) (recognizing the right of the
individual to contract as a liberty guaranteed by the
Fourteenth Amendment to the Constitution); U.S.
Const. Amend. XIV, § 1. The Due Process Clause of
the Fourteenth Amendment thus required that any
deprivation of Captain D’s rights to contract for
arbitration with Smith be preceded by adequate
notice and an opportunity to be heard on same so
that it could fully enjoy such rights. See Goss v.
Lopez, 419 U.S. 565, 95 S. Ct. 729, 42 L. Ed. 725
(1975). The Mississippi Supreme Court acted in
derogation to the guarantees of due process by taking
away Captain D’s contract rights based on “an issue
never raised or briefed by [Smith] and not discussed
by the trial court.” (Dickinson, J., dissenting) App.,
infra 14a. Heretofore, the Mississippi Supreme Court
had assured litigants that it would not consider
“questions of whatever nature” which had not been
timely raised at the trial court level. See cases on the
procedural bar, supra. Without any notice to Captain
D’s and after the parties had fully litigated the
narrow issues joined in the case, the Mississippi
Supreme Court changed the rules mid-game and took
away Captain D’s contract rights without advance
notice that the scope of the arbitration agreement
would be called into question such that Captain D’s
could come in and duly defend.

26

As this Court wrote in Mullane v. Central Hanover
Bank & Trust Co., 339 U.S. 306, 70 S. Ct. 652, 94 L.
Ed. 865 (1950), the right to be heard ensured by the |
guarantee of due process “has little reality or worth
unless one is informed that the matter is pending and
can choose for himself whether to appear or default,
acquiesce or contest.” Id. at 314; Phillips Petroleum
Co. v. Shutts, 472 U.S. 797, 812, 105 S. Ct. 2965,
2974-2975, 86 L. Ed. 2d 628 (1985); Schroeder v. City
of New York, 371 U.S. 208, 212-213, 83 S. Ct. 279,
282-283, 9 L. Ed. 2d 255 (1962).

That Captain D’s—after the fact of the ruling—
filed a motion seeking reconsideration of the Mis-
sissippi Supreme Court’s decision and challenged the
basis thereof did not cure the deprivation of due
process which had already occurred. Had due process
been afforded as the Constitution requires, Smith
would have had the burden of proving she did not
agree to arbitrate the claims at issue (see Gilmer,
supra, 500 U.S. at 26) and Captain D’s would have
had fair opportunity to meet, defend and rebut the
challenge. See Armstrong v. Manzo, 380 U.S. 545,
550-551, 85 S. Ct. 1187, 14 L. Ed. 2d 62 (1965) (hold-
ing that “whatever constitutional infirmity resulted
from the failure to give the petitioner notice [was not]
cured by the hearing subsequently afforded to him
upon his motion to set aside the decree.”). Merely
having the chance to convince the majority to re-
examine their already fixed view of the case on
rehearing is not due process. The right of a party to
protect its freedom to contract under § 2 of the FAA is
wholly devalued unless fair notice is given ahead of
time that the right is imperilled. The Mississippi
Supreme Court’s decision flies in the face of this
paramount guarantee.

27
CONCLUSION

For the foregoing reasons, the Court should grant
this petition for writ of certiorari.

Respectfully submitted,

BRADLEY F. HATHAWAY *
CAMPBELL DELONG, LLP
923 Washington Avenue
Greenville, MS 38701
(662) 335-6011

* Counsel of Record Counsel for Petitioner

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386010_0395%3A1. Public record. Not legal advice.