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Gina Balasanyan; Nune Albandian, On Behalf of Themselves All Others v. Ordstrom

May 30, 2012

GINA BALASANYAN; NUNE ALBANDIAN, ON BEHALF OF THEMSELVES ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
ORDSTROM, INC., A WASHINGTON CORPORATION; AND DOES 1-100, INCLUSIVE, DEFENDANTS. GINO MARAVENTANO; AND NEESHA KURJI, PLAINTIFFS,
v.
ORDSTROM, INC., A WASHINGTON CORPORATION; AND DOES 1-100, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Jeffrey T. Miller United United States District istrict Judge

JM

PENDING APPEAL ORDER DENYING MOTION TO STAY

I. BACKGROUND

This is a consolidated class action suit in which current and former Nordstrom, Inc. ("Nordstrom") employees allege that the company violated wage and hour laws by requiring salespersons to perform assignments that cannot lead to making sales, such as stocking, taking inventory, and marketing.

In March, an order from this court denied Nordstrom's motion to compel arbitration, reasoning that Defendant had engaged in improper class communications. The same order consolidated these two cases, Balasanyan v. Nordstrom, 11cv2609, and Maraventano v. Nordstrom, 10cv2671.

Nordstrom now moves to stay the consolidated case pending the Ninth Circuit's review of this court's denial of the motion to compel arbitration. Both the Maraventano Plaintiffs and the Balasanyan Plaintiffs oppose the motion. For the reasons stated below, the motion is DENIED.

II. LEGAL STANDARD AND DISCUSSION

The parties for the most part agree on the standard for granting a stay pending appeal. The court will generally examine four factors:

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

Golden Gate Restaurant Ass'n v. City and County of San Francisco, 512 F.3d 1112, 1115 (9th Cir. 2008) (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). Courts employ a "sliding scale" analysis for the first two factors such that a party can succeed by showing either (1) a probability of success on the merits and a mere possibility of irreparable injury or (2) simply that serious legal questions are raised, but that the balance of hardships tips sharply in its favor. Golden Gate at 1115-16. See also Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th Cir. 2011) (upholding sliding scale approach in alien's petition for stay of removal pending further hearing and noting Supreme Court's approval of flexible approach in cases requesting a stay pending petitions for writs of certiorari).

A. Likelihood of Success on the Merits

Perhaps the most significant dispute between Nordstrom and Plaintiffs concerns Nordstrom's chances of success on appeal. Nordstrom's brief cites several reasons it believes it will succeed, which are discussed in turn below.1

1. Methods for Preclusion of Enforcement

The Federal Arbitration Act ("FAA") unmistakably calls for enforcement of arbitration agreements "save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Nordstrom refers to this clause and Supreme Court precedent to argue that the court must enforce its arbitration agreement unless (1) Congress "has declared [the type of dispute] non-arbitrable," or (2) there is a traditional contract defense precluding enforcement. Def. Mtn. at 7. Nordstrom argues that by relying on its power to control class communications under Fed. R. Civ. P. 23 to deny the motion to compel arbitration, the court violated precedent because it relied on neither of the two acceptable bases for invalidation of an arbitration agreement.

Nordstrom fails to sufficiently demonstrate that the FAA's phrase "such grounds as exist at law or in equity for the revocation of any contract" precludes the court from using a Federal Rule of Civil Procedure to invalidate an arbitration agreement on the same basis as would be used for any type of contract. It first cites CompuCredit Corp. v. Greenwood, 132 S.Ct. 665, 669 (2012), which explains that courts must enforce arbitration agreements according to their terms "even when the claims at issue are federal statutory claims, unless the FAA's mandate has been overridden by a contrary congressional command." (internal quotation marks omitted).

Some of the arguments are minor and/or fail to significantly advance Nordstrom's argument that the motion to compel arbitration should have been granted. For example, its first argument is that the FAA allows parties to agree to arbitrate existing disputes. Neither Plaintiffs nor the court has contended that the FAA does not allow submission of an existing controversy to arbitration as a general matter.

Nordstrom also includes a section focusing on the fact that the court's order stated that the arbitration agreement attempted to induce putative class members into "forfeiting their rights." Order at 7. It provides no reason why the court's use of this phrase should lead to reversal.

Nordstrom provides no argument as to how or why this statement is meant to limit the universe of methods by which a court can invalidate an arbitration agreement. It omits any discussion of the fact that the quotation from CompuCredit does not even make reference to traditional contract defenses, which clearly would also be an available method by which to invalidate an arbitration agreement even when federal statutory claims are at issue in the underlying case. Further, the party opposing arbitration in CompuCredit specifically argued that the substantive statute at issue in the case, the Credit Repair Organizations Act, precluded arbitration; thus, the Court was responding to that argument in addressing the question of whether that law constituted a "contrary congressional command." 2

Nordstrom's only other support for its proposition is AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1746 (2011). However, that case focuses on the principle that courts may not invalidate arbitration agreements on grounds that apply to arbitration agreements in a different manner than typical contracts. Indeed, the very page cited by Nordstrom emphasizes that the FAA's "saving clause" simply means that arbitration agreements cannot be invalidated "by defenses that apply only to arbitration." Concepcion at 1746. The Court found the arbitration agreement valid in that case because the state's requirement of the availability of classwide arbitration "interfere[d] with fundamental attributes of arbitration and thus create[d] a scheme inconsistent with the FAA." Id. at 1748. Nordstrom points to no part of the opinion purporting to limit courts' ...


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