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CarMax Auto Superstores, Inc. v. Sibley

United States District Court, D. Maryland

October 14, 2016

CARMAX AUTO SUPERSTORES, INC., Plaintiff,
v.
MONTGOMERY BLAIR SIBLEY, Defendant,
v.
LITTLER MENDELSON, P.C., ET AL., Third-Party Defendants.

          MEMORANDUM OPINION

          ROGER W. TITUS, UNITED STATES DISTRICT JUDGE

         As this Court explained in its Memorandum Opinion filed on July 13, 2016 (ECF No. 38), the Defendant, Montgomery Blair Sibley (“Sibley”), trained and previously licensed as an attorney, was suspended from the practice of law by three jurisdictions based on his pursuit of meritless and vexatious litigation. He has not been reinstated by any of these jurisdictions.

         In January 2011, Sibley transitioned from selling legal advice to selling used cars when he obtained employment as a sales consultant for CarMax. CarMax terminated Sibley's employment on May 6, 2016 after Sibley had formally requested arbitration in April 2016 for a number of grievances. After Sibley unequivocally and in writing communicated his intent to pursue his claims instead in litigation, CarMax filed a Petition on May 16, 2016, asking this Court to compel arbitration regarding all of Sibley's claims against it. ECF No. 1.

         On July 13, 2016, this Court addressed the nine motions previously filed by Sibley- warning him that the Court would not tolerate the type of vexatious and frivolous litigation that he had previously engaged in and which caused the loss of his licenses to practice law. ECF No. 38 at 15. On July 25, CarMax filed an Answer to the First Amended Counterclaims, ECF No. 41, and moved for summary judgment on its Petition and Sibley's Amended Counterclaim. ECF No. 42. On July 26, Sibley filed a Motion to Transfer Case and Consolidate Cases, ECF No. 43, and on August, 3, 2016 filed an “Opposition to Motion to Remand” and moved for jurisdictional discovery. ECF No. 44. On August 3, Sibley filed a Cross Motion for Summary Judgment on his counterclaims, ECF No. 45, and filed a Cross Motion for Summary Judgment on CarMax's Petition. ECF No. 46. The Court will now address all of the pending motions.

         I. Factual Background

         When Sibley applied for employment with CarMax, he executed a Dispute Resolution Agreement (“DRA”) in which he agreed to arbitrate any and all claims arising out of his employment by CarMax. ECF No. 1 at 3. He also received a copy of the CarMax Dispute Resolution Rules and Procedures (“DRRP”), which are incorporated by reference in the DRA. ECF No. 29-1 at 1-2. Sibley began to work as a Sales Consultant at CarMax store 7206 in Montgomery County, Maryland, on or about January 24, 2011. ECF No. 1 at 3.

         While still employed by CarMax, Sibley formally requested arbitration on April 12, 2016, pursuant to the terms of the DRA and DRRP. He alleged that “CarMax failed to provide fair and equal access to sales leads to Sibley and other Commissioned Employees.” ECF No. 8 at 7. “[T]he Arbitration Claim alleged: (i) Breach of Promise of Fair Sales Lead Access, (ii) Breach of Maryland Public Policy of Fair Sales Lead Access and (iii) Breach of Maryland Implied Covenant of Good Faith in Employment.” Id. at 7. On May 1, 2016, Sibley sent an e-mail through the CarMax corporate e-mail system to every CarMax Sales Associate. The e-mail addressed wages and working conditions. Id. Sibley asserted that he was anticipating bringing these issues up at the annual CarMax Shareholder's meeting in Richmond, Virginia scheduled for June 28, 2016. ECF No. 12 at 3.

         On May 6, 2016 CarMax terminated Sibley's employment. ECF No. 29-1 at 2. Four days later, Sibley sent a letter to CarMax's attorneys stating that he would be challenging the “substance of CarMax's answer to his arbitration claim, as well as certain provisions of the DRA and DRRP, in state court.” Id. He restated this intention in a May 13, 2016 letter in which he asked CarMax's attorneys if they would accept service on behalf of CarMax. Id. Three days later, CarMax brought its petition to compel arbitration. The day after this matter was initiated, May 17, 2016, Sibley signed and dated a charge against CarMax and submitted it to the National Labor Relations Board (“NLRB”). Sibley asserts that this charge has been docketed with the NLRB as CarMax Auto Super Stores, Inc., Case No. 05-CA-176501.[1] ECF No. 12 at 3. Notably, the claims asserted by Sibley in his arbitration demand are being actively arbitrated at this time. ECF No. 42-1 at 3.

         II. Analysis

         A. CarMax's Motion for Summary Judgment on Its Petition and Respondent's Amended Counterclaim

         The issue before the Court is whether CarMax may enforce the terms of the DRA and DRRP, ECF No. 1 at 7, including the class action waiver and confidentiality provisions. ECF No. 8 at 8. CarMax filed a Motion for Summary Judgment arguing “there is no genuine dispute as to any material fact relating to the enforceability of the Class Action Waiver Provision and the Confidentiality Provision, ” and it is entitled to judgment as a matter of law. ECF No. 42 at 1. Rule 56 of the Federal Rules of Civil Procedure allows the court to grant summary judgment “if the movant shows there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The movant may show there is no genuine issue of material fact through the pleadings, discovery, exhibits, and other materials. Fed.R.Civ.P. 56(c). Upon motion for summary judgment and a showing by the moving party that there is no genuine dispute of material fact, the opposing party must rebut this showing by going beyond the pleadings to “designate specific facts showing that there is a genuine issue for trial.” See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (citations omitted) (summarizing Fed.R.Civ.P. 56). To survive a motion for summary judgment, the standard requires more than “the mere existence of some alleged factual dispute between the parties.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986) (emphasis in original).

         Both the class action waiver and the confidentiality provisions are located in the DRRP. These are incorporated by reference into the DRA. ECF No. 1-2, at 1. The Class Action Waiver Provision is in DRRP Rule 9(f)(ii) and states that:

The Arbitrator shall not consolidate claims of different Associates into one proceeding, nor shall the Arbitrator have the power to hear an arbitration as a class action, collective action, or representative action. (A class action involves an arbitration or lawsuit where representative members of a large group who claim to share a common interest seek collective relief).

ECF No. 1-3, at 7. The DRRP's Confidentiality Provision is in DRRP Rule 9(g) and states that:

All aspects of an arbitration pursuant to these Dispute Resolution Rules and Procedures, including the hearing and record of the proceeding, shall be confidential and shall not be open to the public, except (i) to the extent both Parties agree otherwise in writing; (ii) as may be appropriate in any subsequent proceeding between the Parties, or (iii) as may otherwise be appropriate in response to a governmental agency or legal process. All settlement negotiations, mediations, and the results thereof shall be confidential. Nothing in this section shall be construed to restrict the right of an attorney to practice law.

ECF No. 1-3 at 7.

         The Court concludes that there is no genuine issue of material fact, and Sibley has not met his burden in presenting this Court with sufficient evidence of a genuine dispute over a material fact. See Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Sibley admits in his “Factual Allegations” that he “was required and did sign the ‘CarMax Dispute Resolution Agreement.'” ECF No. 46 at 1-2. This Court previously found jurisdiction on the basis of the Federal Arbitration Act when Sibley ‘“unambiguously manifest[ed] an intention not to arbitrate.”' ECF No. 38 at 8 (emphasis in original) (quoting PaineWebber Inc. v. Faragalli, 61 F.3d 1063, 1066 ...


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