Marriott Int'l, Inc. v. Danna

MARRIOTT INTERNATIONAL, INC., ET AL. v. DEON DANNA

CIVIL ACTION NO. 17-10590 SECTION "B"(3)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

August 22, 2018

ORDER AND REASONS

Defendant filed a motion to dismiss Plaintiffs' Amended Complaint for lack of subject matter jurisdiction and failure to state a claim. Rec. Doc. 36. Plaintiffs timely filed an opposition. Rec. Doc. 37. Defendant then sought, and was granted, leave to file a reply. Rec. Doc. 41.

For the reasons discussed below,

IT IS ORDERED that Defendant Deon Danna's motion to dismiss is GRANTED and Plaintiffs' claim against Defendant is DISMISSED.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Defendant worked at the Ritz Carlton in New Orleans from 2000 to 2010, when he was fired. Rec. Doc. 35 ¶ 17. In 2011, Defendant sued Ritz Carlton and its corporate parent, Marriott, in Louisiana state court, seeking damages for wrongful termination. Id. ¶ 18. The lawsuit is ongoing. Id. In 2013, Defendant was hired by the Sheraton in New Orleans. Id. ¶ 19. When Defendant applied for the Sheraton position, he signed an arbitration agreement. Id. ¶¶ 2-10. Plaintiffs allege that Defendant lied about his work history and educational qualifications on his employment application. See id. ¶¶ 28-30. In 2016, Marriott purchased Sheraton. Id. ¶ 12-14. In August 2017, Defendant resigned from his position at Sheraton after his lies were discovered. Id. ¶¶ 19-20.

On October 12, 2017, Plaintiffs filed a Complaint to compel arbitration. See Rec. Doc. 1. Defendant then filed a Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim. See Rec. Doc. 10. The Court granted Defendant's motion to dismiss on ripeness grounds because Plaintiffs' complaint sought to compel arbitration of claims that both parties agreed did not arise out of Defendant's employment at Sheraton. See Rec. Doc. 30.

The Court subsequently granted Plaintiffs leave to file an Amended Complaint, which seeks to compel arbitration of Plaintiffs' claims against Defendant. See Rec. Doc. 35. Specifically, Plaintiffs seek, via arbitration, a declaratory judgment that Defendant cannot obtain damages from Plaintiffs ever again (or at least through 2032). See id. ¶ 42. Defendant then filed the instant motion to dismiss, arguing that the Court lacks subject matter jurisdiction and that Plaintiffs' Amended Complaint fails to state a claim. See Rec. Doc. 36.

LAW AND ANALYSIS

Plaintiffs' Amended Complaint seeks to compel arbitration of their claims against Defendant. See Rec. Doc. 35. The Federal Arbitration Act (FAA) allows "[a] party aggrieved by the allegedfailure, neglect, or refusal of another to arbitrate under a written agreement for arbitration" to seek "an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C. § 4. Defendant argues that Plaintiffs' Amended Complaint should be dismissed for lack of subject matter jurisdiction and failure to state a claim. See Rec. Doc. 36. Because the Court concludes that there is no subject matter jurisdiction, the Court does not address the sufficiency of Plaintiffs' pleadings.

On a Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, the parties asserting jurisdiction bear the burden of "alleg[ing] a plausible set of facts establishing jurisdiction." Physician Hosps. of Am. v. Sebelius, 691 F.3d 649, 652 (5th Cir. 2012). A federal district court has jurisdiction over a complaint to compel arbitration when, "save for such [arbitration] agreement, [the district court] would have jurisdiction . . . [over] the subject matter of a suit arising out of the controversy between the parties." 9 U.S.C. § 4; see also Lower Colo. River Auth. v. Papalote Creek II, LLC, 858 F.3d 916, 923 (5th Cir. 2017) (The FAA "does not enlarge federal-court jurisdiction; rather, it confines federal courts to the jurisdiction they would have save for the arbitration agreement." (internal quotation marks and alteration omitted)).

"[A] party seeking to compel arbitration may gain a federal court's assistance only if, 'save for' the agreement, the entire, actual 'controversy between the parties,' as they have framed it, could be litigated in federal court." Lower Colo. River Auth., 858 F.3d at 923 (citing Vaden v. Discover Bank, 556 U.S. 49, 66 (2009)). Accordingly, "any of the reasons that a federal court may lack subject matter jurisdiction over the underlying dispute . . . would similarly prevent a district court from having jurisdiction to compel arbitration."¹ Id. at 923. Because Plaintiffs lack standing and have not pled a ripe controversy with Defendant, Plaintiffs' Amended Complaint must be dismissed. See Lower Colo. River Auth., 858 F.3d at 927; Sample v. Morrison, 406 F.3d 310, 312 (5th Cir. 2005) (per curiam) ("[S]tanding and ripeness are essential components of federal subject-matter jurisdiction.").

A. Standing

Constitutional standing "is an essential and unchanging part of the case-or-controversy requirement of Article III."² Lujan v.Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). Constitutional standing has three elements:

First, the plaintiff must have suffered an injury in fact—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.

Id. at 560-61 (internal quotation marks, citations, and alterations omitted).

Plaintiffs' underlying dispute concerns a declaratory judgment. "[W]hen a plaintiff is seeking injunctive or declaratory relief, a plaintiff must allege facts from which it appears there is a substantial likelihood that he will suffer injury in the future." Bauer v. Texas, 341 F.3d 352, 358 (5th Cir. 2003). The Supreme Court has "repeatedly reiterated that threatened injurymust be certainly impending to constitute injury in fact, and that allegations of possible future injury are not sufficient." Clapper v. Amnesty Int'l USA, 568 U.S. 398, 409 (2013) (internal quotation marks, citations, and alteration omitted). A "theory of standing, which relies on a highly attenuated chain of possibilities, does not satisfy the requirement that threatened injury must be certainly impending." Id. at 410.

The injury that Plaintiffs anticipate is an award of damages in Defendant's state lawsuit for wrongful termination. See Rec. Doc. 35 ¶ 40 ("[T]he disputes and claims described [in the Amended Complaint] consist of and are based on any damages or losses that Defendant is claiming against Marriott and/or Ritz-Carlton that allegedly arose or were sustained by Defendant on or after" the Defendant's employment at the Sheraton.), ¶ 42 (explaining declaration sought by Plaintiffs to protect against potential damages award). Plaintiffs do not allege that Sheraton is a party to Defendant's state lawsuit. See Rec. Doc. 35 ¶ 18. Therefore, Plaintiffs have not pled that Sheraton will incur damages liability in Defendant's state lawsuit, and accordingly have not pled an injury in fact as to Sheraton.

Regardless, the alleged injury will not arise unless Defendant prevails in his state lawsuit and is awarded damages. Courts are "reluctant to endorse standing theories that require guesswork as to how independent decisionmakers will exercise theirjudgment." Clapper, 568 U.S. at 413. Moreover, "[i]t is just not possible for a litigant to prove in advance that the judicial system will lead to any particular result." Whitmore v. Arkansas, 495 U.S. 149, 159 (1990).

This is problematic for Plaintiffs because, when "[t]he existence of one or more of the essential elements of standing depends on the unfettered choices made by independent actors not before the courts and whose exercise of broad and legitimate discretion the courts cannot presume either to control or to predict," Plaintiffs bear the burden of alleging facts making it plausible "that those choices have been or will be made in such manner as to produce causation and permit redressability of injury." Lujan, 504 U.S. at 562 (internal quotation marks and citations omitted). Plaintiffs' Amended Complaint does not allege facts that suggest Defendant will prevail in his state lawsuit and win an award of damages, therefore Plaintiffs have not established an "injury in fact" and lack standing to pursue the underlying dispute. See Clapper, 568 U.S. at 410; Whitmore, 495 U.S. at 159.

Even if such damages are sufficiently certain to satisfy the injury prong of the standing analysis, Plaintiffs have not demonstrated that those damages are causally related to Defendant's lies on his Sheraton employment application. Plaintiffs allege that "Defendant's wrongful acts and false statements in connection with his employment at the [Sheraton]severed any causal or other connection, nexus or link with any damages or losses allegedly caused by reason of the termination of Defendant's prior employment with the" Ritz Carlton. Rec. Doc. 35 ¶ 42 (referring to Defendant's pre-existing state lawsuit). Therefore, under the Lujan framework, Defendant's lies on his employment application are the "conduct complained of;" the lies allegedly entitle Plaintiffs to relief. Lujan, 504 U.S. at 560 ("[T]here must be a causal connection between the injury and the conduct complained of."). This allegation is also central to the viability of Plaintiffs' claim because it ties the putative dispute to the arbitration agreement that Defendant signed during the Sheraton hiring process. See Rec. Doc. 35 ¶¶ 2-10. Therefore, the potential future damages award "has to be fairly traceable to" Defendant's lies on his Sheraton employment application. Lujan, 504...