Opposition Brief — Hill v. Hilliard

No. 97-450 ~

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1996

JANED.HILL, - - - - - - - Petitioner,

versus

J.J.B. HILLIARD, Vi Lao

INC.,EtAlL, - - - - - Respondents.

On Petition for Writ of Certiorari

To the Kentucky Court of Appeals

RESPONDENT BRAB’S BRIEF IN OPPOSITION

ELEANORE M. GARBER

First Trust Centre, 600N

200 S. Fifth Street

Louisville, Kentucky 40202

(502) 585-5100

Counsel for Respondent,

W. William Brab

October 14, 1997

WESTERFIELD-BONTE CO... 619 W. KENTUCKY-P.O. BOX 3251, LOUISVILLE, KY.

i

TABLE OF CONTENTS

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TABLE OF AUTHORITIES ................:cccccceseseeeeees

STATEMENT OF THE CASE ......................0000005

The question presented is highly misleading,

biased and fails to state a clear federal issue ...

REASONS FOR DENYING THE WRIT .............

A. This Court is not the proper forum to

promulgate a new national policy rejecting

all mandatory arbitration..................ccsse0

B. The issue of “knowing and voluntary”

waiver of a judicial forum was never raised

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C. This Petition presents no unsettled Question

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PAGE

il

TABLE OF AUTHORITIES

PAGE

Cases:

Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 13

2 Re I a 4

Gilmer v. Interstate/Johnson Lane Corp.

ee Pn EP IIE cxensecsesnnetnnsnasemenseninaaiicensnnusniinconias 4,5,7

Hill v. California, 401 U.S. 797 (1971).................. 6

In re Lamkin, 355 U.S. 59 (1957)............ccccccseeeeeees 6

Keene Corp. v. United States, 508 U.S. 200

ERNIE xsea:schessienncettisinstiniictninnaneneaplieniaidindinaianimaeaaaiaitiasS. 5

6

6

ID cccstsccsscenccensmeennepmatiaeitiemeieincetbaiiiia i mteaats

Perry v. Thomas, 482 U.S. 480 (1987) ................... 4,

Prudential Insurance Co. v. Lai 42 F.3d 1299

(12th Cir., 1994) cert. denied, 116 S.Ct. 61

STII csanscthcasnicaessannablandamaaauarunsieinicainabhaentaaambnaioen ce

Regional Jail Authority v. Tackett, Ky., 770

Sis, BE BE LD eccissiceshistencntintninemeiietiiensiinbameniciedts

Scherk v. Alberto-Culver Co., 417 U.S. 506

SUITED nntteatsachinesianaatinnteabanabiiemtiigalant east eal

Smoot’s Case, 15 Wall 36 (18738) .............cccc eee eee eens

Southland Corp. v. Keating 465 U.S. 1 (1984) ......

Transportation Cabinet v. Cassity, Ky., 912

S.W. 2d 48 (1995, Amended, 1996) ....................

Williams v. Georgia, 349 U.S. 75 (1955)................

Statutes Cited:

Federal Arbitration Act (FAA), 9 U.S.C.

Rs Bee I: ensasiasaciicnaicentithamsceceinunnsdentmbadiahaiaabianniiiatis 3,4,5

RE RS ee eee ere 6

Se es SIDA. III sinnncchieinsinsieciecehieceiineeCaimenseniachintehaitiahiceiitn 5

Age Discrimination in Employment Act

(ADEA) 29 U.S.C. sec. 621 .............ccccccccceccsenceess

ao nH

me OF

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No. 97-450

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1996

JANED.Hn1L, - - - - - - - - -. Petitioner,

v.

J.J.B. Hm.iarp, W.L. Lyons, Inc., Et Al., - Respondents.

On Petition For Writ Of Certiorari

To The Kentucky Court Of Appeals

RESPONDENT BRAB'S BRIEF IN OPPOSITION

STATEMENT OF THE CASE

This petition is one of two petitions seeking this Court’s

review of a decision of the Kentucky Court of Appeals.

The Kentucky trial court below dismissed claims of Jane

Hill, petitioner, (“Hill”, hereinafter) of assault and battery

and intentional infliction of emotional distress along with

Kentucky statutory claims of discrimination in employment

against all respondents, including W. William Brab, her

supervisor (“Brab” hereinafter). That court determined that

all claims arose out of Hill’s employment and were subject

to mandatory arbitration pursuant to the Federal Arbitra-

tion Act. The Court of Appeals vacated the trial court

order as to dismissal of the claims of assault and battery

and false imprisonment against Brab and remanded same

2

for trial, but affirmed the remainder of the trial court’s

order.

In a separate petition (No. 96-459), Brab seeks review

of a portion of the Court of Appeals decision in view of

conflicting state and federal court decisions determining

which types of claims against a supervisor should be sub-

ject to mandatory arbitration. In this petition, Hill objects

to the policy of mandatory arbitration in general and con-

tests the conclusion of the Kentucky Court of Appeals that

all of Hill’s claims against the employer and most of the

claims against her supervisor arose out of her employment.

As set forth below, there is no cause for this Court’s

review of Hill’s contentions. The question presented is

misleading, biased and fails to state a clear federal issue.

Furthermore, this Court is not the proper forum to pro-

mulgate a new national policy rejecting all mandatory ar-

bitration. Additionally, the issue of “knowing and

voluntary” waiver of a judicial forum, obliquely smuggled

into this petition, was never raised in the Kentucky trial

or appellate courts. Finally, the lower federal courts and

states’ highest courts have enforced, with virtual unanim-

ity, mandatory arbitration agreements in the context of

statutory civil rights claims of discrimination in employ-

ment.

The question presented is highly misleading, biased

and raises no clear federal issue.

Petitioner has presented a highly misleading and loaded

question. No citizen of the state of Kentucky or of the

United States who claims to have been raped waives a

judicial forum by reporting the allegation to an employer.

Rape is a serious crime. Hill had unrestricted access to the

criminal justice system and a right to a jury trial and

chose not to avail herself of same.

3

The question as presented suggests that Hill is a proven

victim and that Brab has been found criminally or civilly

culpable of rape. There has been not been one scintilla of

evidence presented in any forum supporting any of Hill’s

allegations, just as no evidence has been adduced to date

supporting Brab’s allegation of slander per se.

Hill’s question as framed fails to notify this Court of

any specific federal statute, rule or regulation underpin-

ning a clear federal issue requiring this Court’s attention.

REASONS FOR DENYING THE WRIT

A. This Court is not the proper forum to promulgate

a new national policy rejecting all mandatory

arbitration.

Respondent Brab submits that this case does present

an important issue concerning the application of the Fed-

eral Arbitration Act (FAA), 9 U.S.C. sec. 1 et seg., to claims

brought against a supervisor during the course of an em-

ployment relationship. This Court is not the proper forum,

however, to address the apparent issue discussed in this

petition.

Hill’s main thrust herein appears to be a frontal as-

sault on sections 2, 3, and probably section 4 of the FAA

which provide for the enforcement, through the state and

federal courts, of mandatory arbitration agreements within

the coverage of the Act. Hill does not suggest or imply

that the FAA is unconstitutional on its face or in its appli-

cability to this case. Instead, she alludes to “a vigorous

and growing rejection of mandatory arbitration” as a policy

by such organizations as the National Association of Secu-

rity Dealers (NASD), the Equal Employment Opportunity

Commission (EEOC), the National Academy of Arbitrators

and others (Petition, pp. 5-7). Hill argues, rhetorically, that

voluntary, post-dispute arbitration is “probably faster and

cheaper” than mandatory arbitration and lacks the proce-

dural disadvantages to employees versus employers (Peti-

4

tion, pp. 8-10.) It is difficult to ascertain from the petition

exactly what adjudicatory function she asks this Court to

perform in furthering the purported growing consensus

against all mandatory arbitration.

The FAA was enacted by Congress in 1925, 43 Stat.

883, and then reenacted and codified in 1947 as Title 9 of

the United States Code. This Court stated in Perry v. Tho-

mas, 482 U.S. 483,489-490, (1987) as follows:

As we stated in [Southland Corp. v.] Keating, [465

U.S. 1, 10, 16 (1984)] “in enacting sec. 2 of the [FAA]

Congress declared a national policy favoring arbitra-

tion and withdrew the power of the states to require a

judi- cial forum for the resolution of claims which the

contracting parties agreed to resolve by arbitration.

Congress intended to foreclose state legislative at-

tempts to undercut the enforceability of arbitration

agreemen:s. [cites omitted]. Section 2, therefore, em-

bodies a clear federal policy of requiring arbi-

tration wmiess the agreement to arbitrate is not part

of a contract evidencing interstate commerce or is re-

vocable “upon such grounds as exist at law or in eq-

uity for the revocation of any contract.”

(Emphasis added).

In Gilmer v. Interstate/Johnson Lane Corp. 500 U.S.

20 (1991) this Court held that the FAA compels enforce-

ment of arbitration clauses in a securities registration agree-

ment involving a claim of discrimination under the Age

Discrimination in Employment Act (ADEA), 29 U.S.C. sec.

621. In that decision, this Court noted that the purpose of

the enaction oi the FAA was “to reverse the long-standing

judicial hostility to arbitration agreements that had ex-

isted at commen law and had been adopted by the Ameri-

can courts ...”, Id at 1651, citing Dean Witter Reynolds

Inc. v. Byrd, 470 U.S. 213, 219-220 (1985) and Scherk v.

Alberto-Culver Co., 417 U.S. 506, 510 n.4 (1974). This

Court has explcitly recognized the prerogative of Congress

5

to determine national policy concerning enforcement of ar-

bitration agreements and has done so in more cases than

can be cited here.

Accordingly, Brab submits that the proper forum for

Hill and for others who now oppose mandatory arbitration

as a policy is Congress. Justice David Souter wrote the

following in Keene Corp v. United States, 508 U.S. 200, 217

(1993) (decision affirming the dismissal, for lack of juris-

diction, of a complaint filed in United States Court of Fed-

eral Claims):

We have said nothing until now about [Plaintiff's] sev-

eral policy arguments, and now can only answer that

Keene addresses the wrong forum. It may well be, as

Keene argues that [28 U.S.C. sec. 1500 (1988 ed., Supp.

IV] operates in some instances to deprive plaintiffs of

an opportunity to assert rights that Congress has gen-

erally made available to them. . . . But the “proper

theater” for such arguments, as we told another dis-

appointed claimant many years ago “is the halls of

Congress for that branch of government has limited

the jurisdiction of the Court of Claims.” Smoot’s Case,

15 Wall 36, 45 (1873).

The authority of a state or federal court to enforce an

arbitration agreement derives from the FAA. The proper

branch of government for Hill to seek redress in repealing

all or part of the FAA is “the halls of Congress”, not this

Court.

B. The Issue of “knowing and voluntary waiver” of

a judicial forum was never raised or decided in

the state courts.

The petition states that this Court’s decision in Gilmer

v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) did

not address the issue of a knowing and voluntary waiver of

an employee's right to go to court (Petition, p. 9). Neither

has Petitioner until now. While this precise issue was

6

properly raised and addressed in Prudential Insurance Co.

v. Lai, 42 F. 3d 1299 (12th Cir., 1994), cert. denied 116 S.

Ct. 61 (1995), cited in the petition, this petitioner never

raised this issue in the Kentucky courts. She has ob-

liquely attempted to smuggle a “knowing and voluntary

waiver” issue into this petition (petition, pp. 9-12) but this

Court cannot consider it here for the first time. Reaffirm-

ing its longstanding practice in Perry v. Thomas, 482 U.S.

480, 493 (1987), this Court declined to address the ques-

tion of whether an arbitration agreement constituted an

unconscionable, unenforceable contract of adhesion where

the issue was not decided by the lower courts.

A federal claim cannot be considered by this Court,

under 28 U.S.C. sec. 1257, unless it has been either raised

in the state court or considered and resolved by the state

court. McGoldrick v. Compagnie Generale, 309 U.S. 430,

434 (1940); Hill v. California, 401 U.S. 797, 805 (1971). A

litigant must follow state procedures in raising the federal

question. Jn re Lamkin, 355 U.S. 59 (1957). When re-

quired by state practice, the federal question must be raised

before the trial court. Williams v. Georgia, 349 U.S. 375,

382-83 (1955.) The rule in Kentucky is that the Kentucky

appellate courts are without authority to review issues not

raised in or decided by the trial court. Regional Jail Au-

thority v. Tackett, Ky., 770 S.W. 2d 225, 228 (1989); Trans-

portation Cabinet v. Cassity, Ky 912 S.W. 2d 48, 51 (1995,

amended, 1996).

Hill never complained at the trial court level, either by

sworn testimony or affidavit, that she did not voluntarily

or knowingly waive her right to go to court. Furthermore,

she never raised this issue before the Kentucky Court of

Appeals or the Kentucky Supreme Court. The Kentucky

courts have been afforded no opportunity to consider this

issue and it is not properly before this court.

7

C. This Petition has not presented an unsettled

question of Federal law. -

Following Gilmer, the Courts have overwhelmingly en-

forced mandatory arbitration of employment disputes in-

volving statutory civil rights claims and other claims, as

petitioner explicitly concedes (petition, p. 5). Petitioner

cites no conflict in the courts, either within the federal

appeals courts or among the states’ highest courts or be-

tween the federal and state courts. The Kentucky Court of

Appeals decision, upholding the deferral to arbitration of

all of the statutory claims against her supervisor and all of

her claims against her employer, was in accordance with

the holding of Gilmer and its many progeny.

Petitioner first sought redress for all of her claims be-

fore the Equal Employment Opportunity Commission

(EEOC). The sole domain of the Equal Employment Op-

portunity Commission is claims of discrimination arising

in employment. Subsequently, Petitioner filed this action

in the Kentucky circuit court. She now submits that none

of the claims she brought before the EEOC arose out of her

employment. Her complaint belies her present posture. The

courts have virtually, uniformly upheld mandatory arbi-

tration of the types of claims raised in this action and the

petition should be denied.

CONCLUSION

Because this petition has raised nothing for this Court

to decide, the petition should be denied.

8

Respectfully submitted,

ELEANORE M. GARBER

First Trust Centre, 600

200 South Fifth Street

Louisville, KY 40202

(502) 585-5100

Counsel for Respondent,

W. William Brab

Dated: October 14, 1997