Beasenburg v. Ultragenyx Pharm.

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Kimberly Beasenburg, Plaintiff, v. Ultragenyx Pharmaceutical, Inc., Defendant.

Civil Action No. 2:22-cv-4022-BHH

United States District Court, D. South Carolina, Charleston Division

September 15, 2023

ORDER

Bruce Howe Hendricks, United States District Judge.

This matter is before the Court upon Plaintiff Kimberly Beasenburg's (“Plaintiff”) complaint, which alleges that Defendant Ultragenyx Pharmaceutical, Inc. (“Defendant”) discriminated against her because of her religion, created a hostile work environment, and retaliated against her for her complaints about religious discrimination, all in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”). (ECF No. 1-1.) On November 18, 2022, Defendant filed a motion to dismiss, or in alternative, to compel arbitration. (ECF No. 8.) Plaintiff filed a response in opposition, and Defendant filed a reply. (ECF Nos. 14 and 15.)

In accordance with 28 U.S.C. § 636(b)(1)(B) and Local Civil Rule 73.02(B)(2)(g) (D.S.C.), the matter was referred to a United States Magistrate Judge for preliminary review. On February 13, 2023, Magistrate Judge Jacquelyn D. Austin issued a report and recommendation (“Report”) outlining the issues and recommending that the Court grant Defendant's motion, compel arbitration, and dismiss this action. (ECF No. 17.) Plaintiff filed objections to the Magistrate Judge's Report, and Defendant filed a response to Plaintiff's objections. (ECF Nos. 18 and 19.) For the reasons set forth herein, the Court overrules Plaintiff's objections and adopts in full the Magistrate Judge's Report, thereby granting Defendant's motion, compelling arbitration, and dismissing this action.

STANDARD OF REVIEW

The Magistrate Judge makes only a recommendation to the Court. The recommendation has no presumptive weight, and the responsibility to make a final determination remains with the Court. Mathews v. Weber, 423 U.S. 261 (1976). The Court is charged with making a de novo determination only of those portions of the Report to which specific objections are made, and the Court may accept, reject, or modify, in whole or in part, the recommendation of the Magistrate Judge, or recommit the matter to the Magistrate Judge with instructions. 28 U.S.C. § 636(b)(1). In the absence of specific objections, the Court reviews the matter only for clear error. See Diamond v. Colonial Life &amp Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (stating that “in the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'”) (quoting Fed.R.Civ.P 72 advisory committee's note).

DISCUSSION

As an initial matter, the Court notes that the Magistrate Judge included a thorough and accurate outline of the relevant background facts, and no party has objected to this portion of the Report. After review, the Court finds no clear error and adopts the Report's procedural history and background, repeating herein only the facts necessary to evaluate Plaintiff's objections.

In her Report, the Magistrate Judge carefully outlined the law that applies to Defendant's motion to compel arbitration explaining that the Federal Arbitration Act (“FAA”) provides that arbitration clauses in contracts involving interstate commerce “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. As the Magistrate Judge further explained, a district court must compel arbitration under the FAA and stay court proceedings if the parties have agreed to arbitrate their dispute. Id. §§ 2, 3. But, if the validity of the arbitration agreement is in issue, a district court must first decide if the arbitration clause is enforceable against the parties. Id. § 4. “‘[A]s a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.'” Drews Distrib., Inc. v. Silicon Gaming, Inc., 245 F.3d 347, 349 (4th Cir. 2001) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). Furthermore, although federal law governs the arbitrability of disputes, ordinary state-law principles resolve issues regarding the formation of contracts. Am. Gen. Life & Acc. Ins. Co. v. Wood, 429 F.3d 83, 87 (4th Cir. 2005).

As the Magistrate Judge also explained, a party seeking to compel arbitration must establish the following four elements: (1) the existence of a dispute between the parties; (2) a written agreement that includes an arbitration provision purporting to cover the dispute; (3) the relationship of the transaction, as evidenced by the agreement, to interstate or foreign commerce; and (4) the failure, neglect, or refusal of a party to arbitrate the dispute. Am. Gen. Life & Accident Ins. Co. v. Wood, 429 F.3d 83, 87 (4th Cir. 2005); see also Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir.1991); Energy Absorption Sys. v. Carsonite Int'l, 377 F.Supp.2d 501, 504 (D.S.C. 2005). “Motions to compel arbitration in which the parties dispute the validity of the arbitration agreement are treated as motions for summary judgment.” Rose v. New Day Fin., LLC, 816 F.Supp.2d 245, 251 (D. Md. 2011). “Accordingly, arbitration should be compelled where ‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Erichsen v. RBC Cap. Mkts., LLC, 883 F.Supp.2d 562, 566-67 (E.D. N.C. 2012) (quoting Fed.R.Civ.P. 56). “Defendant, as the party seeking to enforce the Agreement, bears the initial burden of ‘persuading this court that the parties entered into an enforceable arbitration agreement.'” Gordon v. TBC Retail Grp., Inc., No. 2:14-cv-03365-DCN, 2016 WL 4247738, at *5 (D.S.C. Aug. 11, 2016). “If defendant makes such a showing, then ‘the burden shifts to the plaintiff[s] to show that even though there was some written contract, [they] did not actually agree to it-because the[ir] signature was forged, the terms of the contract were misrepresented, or some other reason evincing lack of true agreement.” Id.

The Magistrate Judge next explained the law that applies to Defendant's motion to stay or dismiss, explaining that, pursuant to the FAA, a court must stay “any suit or proceeding” pending arbitration of “any issue referable to arbitration under an agreement in writing for such arbitration.” (9 U.S.C. § 3.) Nevertheless, as the Magistrate Judge outlined, the Fourth Circuit has held that if all of the claims asserted in a complaint are subject to arbitration, then dismissal of the complaint is also “an appropriate remedy.” (See ECF No. 17 at 11 (outlining the applicable law); Choice Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001).

After outlining the applicable law, the Magistrate Judge considered the specific arguments raised by Defendant in its motion as well as the arguments raised by Plaintiff in response to Defendant's motion. With respect to Plaintiff's arguments, the Magistrate Judge noted that “Plaintiff's arguments are cursory and not clearly set forth in her brief.”

(ECF No. 17 at 12 n. 2.) Nevertheless, the Magistrate Judge proceeded to carefully and painstakingly consider each of Plaintiff's arguments in light of the applicable law, ultimately finding, inter alia: (1) that Defendant satisfied its burden of showing that Plaintiff signed an arbitration agreement (“the agreement”) that requires arbitration of any and all legal disputes arising from Plaintiff's employment or termination from employment; (2) that the arbitration agreement was “agreed upon,” and that Plaintiff failed to demonstrate any basis for finding that she did not consent to arbitrate her claims or that she did not sign the agreement; (3) that the agreement is not unenforceable because it was offered as a condition of her employment; (4) that the agreement is supported by valid consideration; (5) that the agreement is not illusory; (6) that the agreement is not overly broad; (7) that the enforceability of the agreement is not governed by California law; (8) that the discovery limitations in the agreement are not grounds for finding the agreement unconscionable; (9) that the agreement was a separate, clearly and conspicuously marked document and that Plaintiff has offered no support to rebut the evidence submitted by Defendant to support her contention that she did not have access to the document, did not have a chance to review it, and was not given a copy of it; (10) that the agreement was not unilateral; (11) that the agreement clearly sets forth the applicable rules and procedures to be followed and is not unconscionable for any of the following reasons: because it refers to the JAMS rules; because it could require the payment of filing fees of up to $1,750.00; or because it limits the selection of an arbitrator; (12) that the agreement is susceptible of an interpretation that covers Plaintiff's claims; and (13) that the agreement relates to interstate commerce and is subject to the FAA. (See ECF No. 17 at 15-33.)

Based on the above findings, the Magistrate Judge recommended that the Court find the arbitration agreement valid and enforceable under the FAA and general contract law principles, and that the Court grant Defendant's motion to compel arbitration. The Magistrate Judge also recommended that the Court dismiss this action without prejudice because all of the claims asserted fall within the scope of the agreement.

In her objections to the Magistrate Judge's Report, Plaintiff effectively raises the same arguments she raised in response to Defendant's motion-all of which the Magistrate Judge carefully considered and rejected...