Motion to Stay Arbitration Denied After Colorado River Analysis
Emmanuel Roy was a driver for Uber and other ride-sharing companies. He brought suit in the Spokane County Superior Court, claiming that he was wrongfully terminated, first by Uber and then by the other companies, based on false allegations of drunk driving. Uber filed a motion to compel arbitration, which was granted. Uber than claimed that the Federal Arbitration Act (FAA) applied, and the state court agreed.
The Supreme Court then decided Bissonnette, which we discussed here and here, holding that the scope of the § 1 exemption form the scope of the FAA was not limited to “transportation workers” in the transportation industry. Mr. Roy claimed that the Court’s decision in Bissonnette required reconsideration of whether he could be subject to arbitration under the FAA. He petitioned the federal District Court in the Eastern District of Washington to order his arbitration agreement with the ride-sharing companies null and void or at least stay the arbitration pending a ruling on a certified question of whether Bissonnette superseded a prior Ninth Circuit decision.
Colorado River Expedition, 1872
In Roy v. Uber Technologies, Inc., the Court denied Mr. Roy’s motion to stay arbitration and granted defendants’ motion to dismiss all of Mr. Roy’s claims with prejudice. It’s not that Mr. Roy is wrong about the impact of Bissonnette on his claim, although the Court does not think that Bissonnette applies to Mr. Roy, who is an independent contractor and not an employee. Rather, Uber asked the Court to exercise its discretion under the Colorado River doctrine to decline jurisdiction over a case for damages proceeding in state court.
Under Colorado River, a Court considers the following factors:
(1) which court first assumed jurisdiction over any property at stake;
(2) the inconvenience of the federal forum;
(3) the desire to avoid piecemeal litigation;
(4) the order in which the forums obtained jurisdiction;
(5) whether federal law or state law provides the rule of decision on the merits;
(6) whether the state court proceedings can adequately protect the rights of the federal litigants;
(7) the desire to avoid forum shopping; and
(8) whether the state court proceedings will resolve all issues before the federal court.
Despite the multiple factors, the Court’s reasoning is pretty direct. New cases come out all the time. That is no reason to move from state court to federal court. Piecemeal litigation is not the solution; Mr. Roy can raise his arguments in the state court. Because the state court is perfectly capable of protecting Mr. Roy’s rights, his attempt at collateral litigation in the federal forum smacks of forum shopping. With multiple Colorado River factors strongly favoring dismissal and only factor five favoring allowing the case to proceed, the District Court chose to deny Mr. Roy’s motion to say arbitration and dismiss the case with prejudice.