HomeServices - Petition For Writ of Certiorari
HomeServices - Petition For Writ of Certiorari
HomeServices - Petition For Writ of Certiorari
IN THE
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HOMESERVICES OF AMERICA, INC.,
BHH AFFILIATES, LLC, AND HSF AFFILIATES, LLC,
Petitioners,
v.
SCOTT BURNETT ET AL.,
Respondents.
ROBERT D. MACGILL
MATTHEW T. CIULLA
MACGILL PC
156 E. Market St.
Suite 1200
Indianapolis, IN 46204
Counsel for Petitioners
QUESTION PRESENTED
The signatories to a contract agreed to arbitrate
any claim or dispute arising out of the contract and
delegated to the arbitrator the power to determine
whether a dispute is subject to arbitration. The plain-
tiffs, who signed the contract, sued a nonsignatory
parent company asserting liability based on the non-
signatory’s relationship with its subsidiary, a signa-
tory. The nonsignatory defendant sought to compel
arbitration to determine whether the plaintiffs’ claims
are arbitrable.
The question presented is:
Whether the court must leave the question of ar-
bitrability to the arbitrator, as the First, Second,
Third, and Sixth Circuits have held, or whether the
court may decide the question of arbitrability for it-
self, notwithstanding the contract’s delegation of that
issue to the arbitrator, as the Fourth, Fifth, Eighth,
and Ninth Circuits have held.
ii
RELATED PROCEEDINGS
United States District Court (W.D. Mo.):
Sitzer et al. v. National Association of Realtors et
al.,
No. 4:19-cv-332-SRB (July 19, 2022)
(order denying second motion to compel arbi-
tration)
United States Court of Appeals (8th Cir.):
Burnett et al. v. National Association of Realtors
et al.,
No. 22-2664 (Aug. 2, 2023)
(judgment affirming denial of second motion
to compel arbitration)
Burnett et al. v. National Association of Realtors
et al.,
No. 22-8009 (June 2, 2022) (judgment deny-
ing permission to appeal from class-certifica-
tion decision)
Sitzer et al. v. National Association of Realtors et
al.,
No. 20-1779 (Sept. 10, 2021) (judgment af-
firming denial of first motion to compel arbi-
tration)
v
TABLE OF CONTENTS
Page
QUESTION PRESENTED...........................................i
PARTIES TO THE PROCEEDING AND
RULE 29.6 DISCLOSURE STATEMENT ........... ii
RELATED PROCEEDINGS ...................................... iv
TABLE OF AUTHORITIES ......................................vii
TABLE OF APPENDICES .......................................xii
PETITION FOR A WRIT OF CERTIORARI .............. 1
OPINIONS BELOW .................................................... 1
JURISDICTION .......................................................... 1
STATUTORY PROVISIONS INVOLVED ................. 1
STATEMENT .............................................................. 2
REASONS FOR GRANTING THE PETITION ....... 11
I. The Decision Below Exacerbates A Deep,
Acknowledged Conflict About Who Decides
Whether Nonsignatories May Enforce
Arbitration Agreements ....................................... 11
A. The First, Second, Third, and Sixth
Circuits correctly hold that the
arbitrator must decide .................................... 12
B. By contrast, the Fourth, Fifth, and Ninth
Circuits incorrectly usurp issues
delegated to the arbitrator ............................. 17
C. State courts are also divided .......................... 21
D. The conflict among the circuits is
outcome determinative ................................... 23
vi
TABLE OF AUTHORITIES
Page(s)
Cases
Anderton v. Practice-Monroeville, P.C.,
164 So. 3d 1094 (Ala. 2014) ................................. 22
Apollo Computer, Inc. v. Berg,
886 F.2d 469 (1st Cir. 1989) ............................ 3, 16
Arthur Andersen LLP v. Carlisle,
556 U.S. 624 (2009) .................................... 7, 29, 34
Becker v. Delek US Energy, Inc.,
39 F.4th 351 (6th Cir. 2022) ................................ 13
Bigge Crane & Rigging Co. v.
Entergy Arkansas, Inc.,
457 S.W.3d 265 (Ark. 2015) ................................. 22
Blanton v. Domino’s Pizza Franchising LLC,
962 F.3d 842 (6th Cir. 2020) .................. 3, 7, 13, 28
Boys Market, Inc. v.
Retail Clerks Union, Local 770,
398 U.S. 235 (1970) ................................................ 4
Brittania-U Nigeria, Ltd. v. Chevron USA, Inc.,
866 F.3d 709 (5th Cir. 2017) ................................ 20
Britton v. Co-op Banking Group,
916 F.3d 1405 (9th Cir. 1990) .............................. 35
Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440 (2006) .............................................. 27
Carroll v. Castellanos,
281 So. 3d 365 (Ala. 2019) ................................... 22
viii
Other Authorities
Katie Arcieri, Real Estate Verdict Spurs
‘Race to Courthouse’ Over Collusion,
Bloomberg Law (Nov. 8, 2023),
http://tinyurl.com/4ey2fa3m ................................ 32
Katherine H. Flynn, Not Open for Business:
A Review of South Carolina’s Arbitration
Venue Statute, and a Proposal for Reform,
66 S.C. L. Rev. 727 (2015).................................... 32
David Horton, Arbitration About Arbitration,
70 Stan. L. Rev. 363 (2018).................................. 31
Tamar Meshel, “A Doughnut Hole in the
Doughnut’s Hole”: The Henry Schein
Saga and Who Decides Arbitrability,
73 Rutgers L. Rev. 83 (2020) ............................... 12
Tamar Meshel, Closing the Enforcement Gap:
Third-Party Discovery Under the FAA and
the Federal Rules of Civil Procedure,
70 U. Kan. L. Rev. 1 (2021) .................................. 32
xii
TABLE OF APPENDICES
Page
APPENDIX A: Opinion of the U.S. Court of
Appeals for the Eighth Circuit (Aug. 2, 2023) .... 1a
APPENDIX B: Order of the U.S. District
Court for the Western District of Missouri
(July 19, 2022) .................................................... 17a
APPENDIX C: Order of the U.S. Court of
Appeals for the Eighth Circuit Denying
Rehearing (Sept. 7, 2023) .................................. 37a
PETITION FOR A WRIT OF CERTIORARI
STATEMENT
The Federal Arbitration Act (“FAA”) requires
courts to enforce arbitration agreements “according to
their terms,” including agreements that require arbi-
tration of “‘gateway’ questions” concerning whether a
particular claim must be arbitrated. Rent-A-Center,
West, Inc. v. Jackson, 561 U.S. 63, 67-69 (2010). “[I]f
a valid agreement exists, and if the agreement dele-
gates the arbitrability issue to an arbitrator, a court
may not decide the arbitrability issue.” Henry Schein,
Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 530
(2019).
In the decision below, the Eighth Circuit violated
that principle when it decided for itself whether the
plaintiffs’ antitrust claims against HomeServices are
subject to arbitration. There is no dispute that the
plaintiffs agreed to contracts that include mandatory
arbitration provisions.1 Those contracts require the
arbitrator, not the court, to resolve disputes about the
“interpretation” and “enforcement” of the contracts.
App. 3a-5a. But rather than enforce those provisions
by ordering arbitration, the Eighth Circuit inter-
preted the terms of the contracts under state law and
concluded that the contracts did not require the plain-
tiffs to arbitrate claims against HomeServices, the in-
direct parent of the real-estate brokerages that signed
arbitration agreements with the plaintiffs.
1
Because arbitrability as to the named plaintiffs was resolved at
an earlier stage of the proceeding, the decision below (and this
petition) concern solely the arbitrability of the unnamed class
members’ claims. For convenience, the petition refers to the un-
named class members as “the plaintiffs” unless otherwise noted.
3
2
Contec’s preliminary “relational sufficiency” inquiry stands in
some tension with this Court’s later pronouncement that “a court
may not decide an arbitrability question that the parties have
delegated to an arbitrator” even when the demand for arbitration
is allegedly “frivolous” or “wholly groundless.” Henry Schein, Inc.
v. Archer & White Sales, Inc., 139 S. Ct. 524, 530 (2019). In any
event, that relational-sufficiency inquiry places the Eighth Cir-
cuit in conflict with the Second because here, just as in Contec,
“there is * * * an undisputed relationship between [the] corpo-
rate form[s]” of HomeServices and its signatory subsidiary, there
is no dispute that the plaintiffs “signed the [arbitration] Agree-
ment[s],” and the antitrust claims arise from the very same
transaction that was the basis for the arbitration agreement.
398 F.3d at 209.
16
3
Newman and the decision of the Eighth Circuit below also cre-
ated intra-circuit conflicts in those courts. See Eckert/Wordell
Architects, Inc. v. FJM Properties of Willmar, LLC, 756 F.3d
1098, 1100 (8th Cir. 2014) (holding that “[w]hether a particular
arbitration provision may be used to compel arbitration between
a signatory and a nonsignatory is a threshold question of arbi-
trability” that is “for the arbitrator to decide”); Brittania-U Nige-
ria, Ltd. v. Chevron USA, Inc., 866 F.3d 709, 715 (5th Cir. 2017)
(holding that, “as in Contec, the language of the agreement
clearly and unmistakably delegates arbitrability, even with re-
gard to [the plaintiff’s] dispute with [nonsignatories]”).
21
4
Tug Hill’s petition asking this Court to resolve the split is pend-
ing as of the filing of this petition. See Tug Hill Operating, LLC
v. Rogers, No. 23-661 (U.S. filed Dec. 15, 2023).
22
5
The decision below recognized that adoption of these rules ef-
fected a delegation at least in some agreements, but nevertheless
applied the same improper gloss, cabining the delegation with
the court’s own interpretation of the contracts’ reference to “the
parties.” App. 12a, 14a.
28
6
This petition independently warrants this Court’s review and is
an appropriate vehicle for resolving this split because the plain-
tiffs do not dispute that they signed the agreements, because the
issue was squarely addressed below, because the issue was out-
come determinative, and because the court of appeals’ error re-
sulted in a $1.8 billion class verdict in a dispute that never
should have gone to litigation. If the Court grants the petition
in Tug Hill, petitioners request that the Court grant this case as
well or, in the alternative, hold this petition pending the outcome
in Tug Hill.
32
7
The district court’s conclusion that HomeServices waived its
right to arbitrate the unnamed class members’ claims poses no
bar to this Court’s review. App. 28a. The Eighth Circuit did not
endorse the district court’s waiver rationale when it affirmed,
and for good reason. A party does not waive its right to arbitrate
claims of unnamed class members by moving to compel arbitra-
tion shortly after class certification because it is “impossible in
practice to compel arbitration against speculative plaintiffs and
jurisdictionally impossible for [a] District Court to rule on those
motions before the class [is] certified.” Gutierrez v. Wells Fargo
Bank, NA, 889 F.3d 1230, 1238 (11th Cir. 2018). Indeed, shortly
after the Eighth Circuit issued its decision below, it held that “a
motion to bind parties who [are] not yet part of the case” is prem-
ature, so a party does not waive its right to arbitrate the claims
of unnamed class members when it moves to compel arbitration
“quickly after the class [is] certified.” H&T Fair Hills, Ltd. v.
Alliance Pipeline L.P., 76 F.4th 1093, 1099-1100 (8th Cir. 2023).
35
ROBERT D. MACGILL
MATTHEW T. CIULLA
MACGILL PC
156 E. Market St.
Suite 1200
Indianapolis, IN 46204
Counsel for Petitioners
February 2, 2024