Circuit City Stores, Inc., a Virginia Corporation v. Paul Mantor, an Individual
Docket: 04-55912
Court: Court of Appeals for the Ninth Circuit; August 3, 2005; Federal Appellate Court
Circuit City Stores, Inc. is involved in an appeal concerning the enforceability of an arbitration agreement with former employee Paul Mantor. This marks Mantor's second appeal; the prior appeal resulted in the reversal of a district court's order compelling arbitration, which was deemed unenforceable under California law. Mantor is now appealing a second order from the district court that again compels arbitration and dismisses his action. The Ninth Circuit Court has jurisdiction over this appeal as the district court's decision is considered final regarding arbitration under 9 U.S.C. § 16(a)(3).
Mantor was hired by Circuit City in 1992, prior to the establishment of its Associate Issue Resolution Program (AIRP) in 1995, aimed at reducing employee lawsuits. Although Circuit City encouraged participation in the AIRP, Mantor initially refused to sign the participation form. In 1998, after discussions with management regarding the implications of declining participation, he signed the AIRP form acknowledging receipt of relevant arbitration materials.
Mantor's lawsuit against Circuit City, initiated in October 2001 for employment-related claims following his termination, led to Circuit City filing a petition in federal court to compel arbitration of these claims. The district court initially granted this petition in December 2001, but the ongoing legal proceedings indicate a continued dispute over the arbitration agreement's validity.
Mantor appealed after the district court ordered arbitration, which was reversed by the Ninth Circuit on July 22, 2003, deeming the arbitration agreement unenforceable due to procedural and substantive unconscionability under California law. The case was remanded to allow continuation in state court, and the Supreme Court denied Circuit City’s petition for certiorari on January 26, 2004. Subsequently, on September 30, 2003, the Ninth Circuit issued an en banc opinion in EEOC v. Luce, Forward, Hamilton, Scripps, establishing that the Civil Rights Act of 1991 does not prevent employers from mandating arbitration for future Title VII claims, which overruled a previous decision in Duffield v. Robertson Stephens.
On February 5, 2004, Circuit City filed a 'renewed petition to compel arbitration,' arguing that the Luce, Forward ruling undermined the prior Mantor I decision regarding arbitration agreements under California law. On April 23, 2004, the district court granted this petition, prompting Mantor to appeal the order.
The Ninth Circuit reviews such orders de novo. It highlighted that Circuit City's petition lacked a basis in the Federal Rules of Civil Procedure, as there is no formal mechanism for a 'renewed petition to compel arbitration.' The court emphasized the importance of finality in judicial proceedings and noted that Circuit City's argument regarding intervening law was unmeritorious, leading to the conclusion that the classification of the petition was less critical than the implications for judicial efficiency.
Circuit City contends that the En Banc Decision in Luce, Forward represents a significant change in the understanding of procedural unconscionability within the Ninth Circuit and implies that it undermines the previous ruling in Mantor I, which deemed Circuit City's arbitration agreement procedurally unconscionable under California law. However, this argument has been rejected in Ingle v. Circuit City, where it was clarified that Luce, Forward does not overrule or diminish the authority of Ingle I. Consequently, the court reverses the district court's order that had granted Circuit City's renewed petition to compel arbitration, remanding the case for an order denying the petition and allowing the civil action to proceed in state court. The panel found the case suitable for decision without oral argument, and it notes the involvement of Honorable Louis F. Oberdorfer, sitting by designation. Additionally, references to Rule 59(e) and Rule 60(b) are made regarding motions to alter or amend judgments, outlining the conditions under which such motions may be granted.
