Kwatinetz v. Mason

356 F. Supp. 3d 343
CourtDistrict Court, S.D. Illinois
DecidedDecember 20, 2018
Docket18-cv-6659 (JGK)
StatusPublished
Cited by8 cases

This text of 356 F. Supp. 3d 343 (Kwatinetz v. Mason) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kwatinetz v. Mason, 356 F. Supp. 3d 343 (S.D. Ill. 2018).

Opinion

I.

The following facts are taken from the declarations and exhibits submitted by the parties, and are undisputed unless otherwise noted.

The petitioners, Jeffrey Kwatinetz and O'Shea Jackson (a/k/a Ice Cube), are co-founders of Big3 Basketball LLC ("Big3"), a professional three-on-three basketball league. Respondent Roger Mason is a former National Basketball Association ("NBA") player and is the former President and Commissioner of Big3. Zimmerman Decl., Ex. A ¶¶ 4-5.

Big3 and Mason executed an employment agreement on November 24, 2016, under which Mason was to serve as Big3's President and Commissioner. Epstein Decl., Ex. 1. Kwatinetz signed the employment agreement on behalf of Big3. Id. at 20. Section 16 of the employment agreement provides: "The Company [Big3] and Executive [Mason] agree that in the event of any dispute or claim relating to or arising out of the employment relationship contemplated by this Agreement, Executive and the Company agree to an arbitration as provided below in this Section 16." Id. at 14.

On March 12, 2018, Big3 terminated Mason's employment. Zimmerman Decl., Ex. A ¶ 57. The following day, Mason filed an arbitration demand with the American Arbitration Association ("AAA") against Big3 and Kwatinetz. Epstein Decl. ¶ 4. Mason filed an amended arbitration demand on May 29, 2018, against Big3 and the petitioners, alleging various violations of the employment agreement, including retaliatory discharge, as well as defamation claims. Id. ¶ 6.

The parties disagree over whether the petitioners can be compelled to arbitrate. Big3 filed an answer to Mason's amended arbitration demand on July 13, 2018. Id. ¶ 7. However, because the petitioners are not signatories to the employment agreement, the petitioners contend that they are not subject to the jurisdiction of the arbitral forum. Therefore, the petitioners did not join Big3's answer to the demand but rather reserved their rights to contest AAA's jurisdiction over them in court. Id.

On July 13, 2018, the arbitrator held an initial case management conference with counsel and all of the parties named in Mason's amended arbitration demand. Id. ¶ 8. During that conference, counsel for *347Mason asserted that even though the petitioners were not parties to the employment agreement, the arbitration clause in the agreement is binding on the petitioners. Id. The petitioners disputed that they are bound by the arbitration clause, and they informed the arbitrator that they would file this petition in the Southern District of New York to enjoin the arbitration. Id.

II.

In deciding a motion to enjoin arbitration, courts apply a standard similar to that used to evaluate a motion for summary judgment. Boroditskiy v. European Specialties LLC, 314 F.Supp.3d 487, 492 (S.D.N.Y. 2018). Courts "consider all relevant, admissible evidence submitted by the parties and draw all reasonable inferences in favor of the non-moving party." Id. (quotation marks omitted). If the moving party has shown facts entitling it to an injunction against the pending arbitration, "the party opposing may not rest on a denial but must submit evidentiary facts showing that there is a dispute of fact to be tried." Veera v. Janssen, No. 05cv2145, 2005 WL 1606054, at *3 (S.D.N.Y. July 5, 2005) (quotation marks omitted).

A.

The parties disagree over whether the petitioners are subject to the pending arbitration.

"The FAA's primary purpose is to ensure that private agreements to arbitrate are enforced according to their terms." In re Am. Exp. Fin. Advisors Sec. Litig., 672 F.3d 113, 127 (2d Cir. 2011) (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of the Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (alterations accepted) ). Despite the policy in favor of arbitration embodied in the FAA, arbitration is "contractual by nature," and "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Thomson-CSF, S.A. v. Am. Arbitration Ass'n, 64 F.3d 773, 776 (2d Cir. 1995) (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) ); In re Am. Exp. Fin. Advisors Sec. Litig.

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356 F. Supp. 3d 343, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kwatinetz-v-mason-ilsd-2018.