Cnty. of El Paso v. Jones

COUNTY OF EL PASO, TEXAS, Plaintiff,

v.LUTHER JONES, et al., Defendants.

EP-09-CV-119-KC

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS EL PASO DIVISION

SIGNED: May 31, 2013

ORDER

On this day, the Court considered Defendant Escobar's Motion for Partial Dismissal for Want of Prosecution, ECF No. 229, in the above-captioned case. For the reasons set forth below, Defendant Escobar's Motion is DENIED.

Additionally, pursuant to this Court's previous Order of January 28, 2010, ECF No. 198, in which the Court granted Defendants' Motion to Compel Arbitration, ECF No. 180, which Defendant Escobar had adopted and joined in his Response in Support, ECF No. 183, Plaintiff and Defendant Escobar are once again ORDERED to participate in binding arbitration under the terms of the parties' arbitration agreement. See Defs.' Mot. to Compel Arbitration, Ex. B ("Rule 11 Agreement") ¶ 6, ECF No. 180-2. Until the conclusion of the arbitration, this case will remain STAYED in its entirety. Finally, as a purely organizational measure, this case will be ADMINISTRATIVELY CLOSED unless and until a party moves to reopen the case.

I. BACKGROUND¹

Pursuant to this Court's Order of January 28, 2010, this case has been stayed for the pastthree years. As the parties were preparing to resume litigation, Defendant Escobar filed the instant Motion. See, e.g., Def. Escobar's Mot.; Joint Status Report, ECF No. 222; Joint Report of Parties' Planning Meeting, ECF No. 225. Because the parties have now made several arguments regarding the proper interpretation of the Court's Order of January 28, 2010, the Court will briefly revisit the two independent grounds upon which that Order was based. First, this Court ordered that this case should be stayed pending the arbitration of matters within the scope of the Rule 11 Agreement, to which certain parties to this litigation were signatories. Second, this Court ordered that this case should be stayed until the conclusion of certain criminal proceedings.

A. Stay of this Case Pending Arbitration

On December 18, 2009, three Defendants in this case filed a Motion to Compel Arbitration of disputes falling within the scope of the Rule 11 Agreement. See Defs.' Mot. to Compel Arbitration. As these three Defendants recounted in their Motion to Compel Arbitration, the County Court at Law No. 7 had previously issued an Order on May 27, 2009, compelling arbitration in a parallel state suit involving several of the parties to the federal lawsuit before this Court, one of whom was Defendant Escobar. See Defs.' Mot. to Compel Arbitration 5; see also id., Ex. C ("State Court's Order"), ECF No. 180-3. The State Court's Order had referred "all matters in dispute between all parties" in the parallel state suit "for resolution by binding arbitration" in accordance with the Rule 11 Agreement.² See State Ct.'s Order. The phrase used in the State Court's Order, "all matters in dispute between all parties," necessarily included allclaims raised by Plaintiff in the parallel state suit against Defendant Escobar. See id. In their Motion to Compel Arbitration filed in this Court, the three moving Defendants requested that all matters before this Court that also fell within the scope of the Rule 11 Agreement likewise "be arbitrated in the same arbitration process that has already been ordered in the State Court Action" in accordance with "the rules of comity and to avoid the trial of the same issues in multiple forums . . . ." Defs.' Mot. to Compel Arbitration 6.

Although Defendant Escobar was not originally a party to the Motion to Compel Arbitration filed by his three fellow Defendants in the federal lawsuit before this Court, Defendant Escobar had been a signatory to the Rule 11 Agreement and a party to the parallel state suit in which "all matters in dispute between all parties" had been referred to arbitration. See Rule 11 Agreement 2, 5; State Ct.'s Order 1. On December 21, 2009, Defendant Escobar filed with this Court a supplemental Response in Support, in which he "adopt[ed] and join[ed]" his fellow Defendants' Motion to Compel Arbitration under the Rule 11 Agreement, which Defendant Escobar explicitly "incorporated by reference" into his Response in Support. See Def. Escobar's Resp. in Supp. 2.

Plaintiff then filed its own Response on January 8, 2010, in which Plaintiff raised four arguments in opposition to Defendants' Motion to Compel Arbitration. Pl.'s Resp. to Defs.' Mot. to Compel Arbitration, ECF No. 193. In that Response, Plaintiff explicitly acknowledged that Defendant Escobar had adopted and joined Defendants' Motion to Compel Arbitration. Id. at 4-5, 10. However, Plaintiff made no objection to Defendant Escobar's adoption of the Motion to Compel Arbitration, and none of Plaintiff's four arguments in opposition related specifically to the prospect of arbitrating Plaintiff's claims against Defendant Escobar. See id. at 5-11. Rather, much like the State Court's Order of May 27, 2009, which referred "all matters indispute between all parties" to arbitration, Plaintiff made no distinction between the applicability of the arbitration clause to Plaintiff's claims against Defendant Escobar and the applicability of the arbitration clause to Plaintiff's claims against any other Defendant. See id.; State Ct.'s Order.

On January 28, 2010, after due consideration of Plaintiff's arguments in opposition, this Court granted Defendants' Motion to Compel Arbitration. See Order of January 28, 2010. This Order did not explicitly refer to Defendant Escobar's adoption of the Motion to Compel Arbitration in his Response in Support, although the Court did observe that the Rule 11 Agreement had been "signed by . . . [Defendant] Escobar, Counsel for the Assignees of Catalina Development . . . ." See id. at 4-13. Much like the State Court's Order of May 27, 2009, this Court's Order of January 28, 2010, made no distinction between the applicability of the arbitration clause to Plaintiff's claims against Defendant Escobar and the applicability of the arbitration clause to Plaintiff's claims against any other Defendant. See id.; State Ct.'s Order 1. Accordingly, the Court ordered "the above-captioned cause STAYED as to all Defendants . . . pending the arbitration pursuant to the arbitration clause contained in Defendants' Rule 11 Agreement with [Plaintiff]." Order of January 28, 2010.

B. Stay of this Case During Certain Criminal Proceedings

In its Order of January 28, 2010, this Court also ruled that this case should be stayed "as to all Defendants, pending the resolution of the related criminal matters with respect to Defendant Luther Jones . . . ." See id. at 14. This second and independent basis for the stay resulted in part from the Court's conclusion that "[f]orcing Jones to submit to discovery requests during the pendency of the criminal investigation and trial" created the potential for violations of Defendant Jones' "Fifth Amendment right 'not to answer official questions put to him in any [civil] proceeding . . . where the answers might incriminate him in future criminal proceedings.'"Id. at 3 (quoting Lefkowitz v. Turley, 414 U.S. 70, 77 (1973)). Accordingly, the Court ruled that "[t]he above-captioned cause will resume only after both the related criminal trial and the arbitration have ended." Id. at 14.

Nearly three years later, on September 24, 2012, Defendants—including Defendant Escobar—jointly urged the Court not to lift the stay imposed in its Order of January 28, 2010, until the conclusion of criminal proceedings against Defendant Jones. See Joint Status Report 1. Defendants reaffirmed their understanding that Defendant Jones' "Fifth Amendment privilege is still likely to prevent any other party from obtaining discovery from him" during the ongoing criminal proceedings against him. See id.

Additionally, Defendants—including Defendant Escobar—jointly advised the Court on two occasions that other criminal proceedings pending against other Defendants also justified leaving the Court's three-year-old stay in place. In Defendants' collective view, "[i]n addition to Mr. Jones's case, the still-pending federal criminal cases against [Defendant] Flores and [Defendant] Escobar (both still pending sentencing) may hamper or preclude active discovery efforts . . . ." Id. at 2; Joint Report of Parties' Planning Meeting 3 ("Defendants Flores and Escobar may or may not still exercise Fifth Amendment privileges as to evidence that may implicate them . . . ."). As stated explicitly in the Joint Status Report of September 24, 2012, "[t]he Defendants' position is that they are not at this moment able to meaningfully proceed, pending final resolution of the various criminal proceedings." Joint Status Report 2.

C. Defendant Escobar's Motion for Partial Dismissal

On January 28, 2013, Defendant Escobar filed a Motion for Partial Dismissal for Want of Prosecution, because Plaintiff had not yet initiated arbitration against Defendant Escobar during the three years since this Court granted Defendants' Motion to Compel Arbitration on January28, 2010. See Def. Escobar's Mot., ECF No. 229. In its Response, Plaintiff argues that its failure to initiate arbitration should be excused because meaningful discovery would have been impossible during the pendency of criminal proceedings against Defendant Escobar. Pl.'s Resp. 9-10, ECF No. 231. Because, in Plaintiff's view, "the arbitration requirement" imposed by the Rule 11 Agreement "also applies to Defendant Escobar," Plaintiff now asks this Court to deny Defendant Escobar's Motion for Partial Dismissal and "order [Plaintiff] and [Defendant] Escobar to proceed to arbitration" in accordance with this Court's Order of January 28, 2010. Id. at 8, 12

II. DISCUSSION

A. Standard

Under Rule 41(b) of the Federal Rules of Civil Procedure, "[i]f the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it." Fed. R. Civ. P....