Scurtu v. International Student Exchange

523 F.Supp.2d 1313

Lina SCURTU, et al., Plaintiffs, v. INTERNATIONAL STUDENT EXCHANGE, et al., Defendants.

Civil Action No. 07-0410-WS-B.

United States District Court, S.D. Alabama, Southern Division.

October 19, 2007.

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Robert A. Ratliff, Robert A. Ratliff, P.C., Mobile, AL, for Plaintiffs.

Caroline Thomason Pryor, Carr, Allison, Pugh, Howard, Oliver & Sisson, P.C., Daphne, AL, Russell F. Van Sickle, Thomas Frederic Gonzalez, Beggs & Lane, Pensacola, FL, Thomas Jay Woodford, Jackson, Myrick LLP, Mobile, AL, for Defendants.

ORDER

WILLIAM H. STEELE, District Judge.

This matter comes before the Court on Defendants' Motion to Dismiss Complaint as to Defendants, Hospitality and Catering Management Services and Wendco of Alabama, Inc., or, in the Alternative, to Stay the Case and Compel Arbitration (doe. 11). The Motion has been briefed and is ripe for disposition.

I. Background.

On June 5, 2007, plaintiffs Lina Scurtu and Cornelia Grozav filed their Complaint (doe. 1) in this District Court against defendants International Student Exchange ("ISE"), Hospitality and Catering Management Services ("HCMS"), and Wendco Corp. ("Wendco").¹ The Complaint alleges that Scurtu and Grozav are both citizens of the Republic of Moldova, graduates of the Moldova Academy of Economic Study, and legal resident aliens living in Baldwin County, Alabama pursuant to the J-1 visa training program. (Complaint, ¶¶ 1-2, 10.) This lawsuit concerns the circumstances of their relocation to the United States pursuant to a foreign exchange program and their treatment by defendants after arriving in this country.

According to the Complaint, in spring 2006 both plaintiffs elected to participate in the J-1 visa training program, pursuant to which they would receive employment training in the United States and then return to their homeland. (Id., ¶ 10.) In June 2006, Scurtu entered into a contract with a Moldovan organization, nonparty The Association for Youth Exchange Programs, that served as an agent of defendants ISE and HCMS, to arrange for her to enroll in a training program in the United States. (Id., ¶ 11.) The Complaint alleges that Grozav entered into a similar contract with the same entity in October 2006. (Id., 14.) Each plaintiff is alleged to have paid in excess of $3,700 for applications and arrangements for the requisite visas, with additional payments for travel expenses. (Id., ¶¶ 12-13, 15-16.) The Complaint further alleges that HCMS undertook to locate a management training program for plaintiffs that would satisfy the J-1 requirements and afford plaintiffs an opportunity to develop competency in fast-food restaurant management, and also undertook to provide housing for plaintiffs at plaintiffs' expense. (Id., ¶¶ 17-18.) According to the Complaint, Scurtu executed a signed training plan with HCMS on September 20, 2006, with Grozav executing a like plan on October 25, 2006. (Id., ¶¶ 19-20.) Both plaintiffs were assigned to work for defendant Wendco at one of its fastfood restaurants in Baldwin County, Alabama.

The driving force of the Complaint is plaintiffs' contention that defendants did not make good on their promises to furnish plaintiffs with management training opportunities commensurate with the J-1 program. The Complaint alleges that neither plaintiff has "received anything that could even remotely be defined as management training.... Instead, Plaintiffs have been forced to labor as simple cashiers, food prep workers, and cleaning crew." (Id., ¶ 24.) As a result of this assignment, plaintiffs bring 13 causes of action against defendants, including four claims of breach of contract (one by each plaintiff against each of ISE and HCMS); four counts of fraud in the inducement (again, one by each plaintiff against each of ISE and HCMS); civil conspiracy; violation of Trafficking Victim Protection Reauthorization Act of 2003, which plaintiffs allege is actionable pursuant to 18 U.S.C. 1593; a statutory claim under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), pursuant to 18 U.S.C. §§ 1961-68; declaratory judgment; and punitive damages. Significantly, the Complaint is not styled as a putative class action complaint and no class allegations are set forth therein.²

Defendants HCMS and Wendco now seek to have plaintiffs' claims against them dismissed or stayed on the grounds that they are subject to binding arbitration provisions. In that regard, movants have submitted two substantively identical documents, each of which is slightly over one page in length, entitled "Agreement and Receipt for Foreign Exchange Program Workers" (the "Agreement"). The Agreement states that the signatory employee is being employed by HCMS, and that HCMS will assign the employee to work on a temporary basis in a Wendco restaurant. The Agreement contains a mutually binding arbitration clause, stating in part that "the parties agree that all legal claims or disputes covered by this Agreement must be submitted to binding arbitration and that binding arbitration will be the sole and exclusive final remedy for resolving any such claim or dispute. The parties also agree that any arbitration between the parties will not be arbitrated on a collective or class-wide basis." (Movants' Brief (doc. 12), at Exhs. A & B.) The scope of the Agreement is quite broad, encompassing "all legal claims, including: claims for wages or other compensation; claims for breach of any contract, covenant or warranty ...; tort claims (including, but not limited to, claims for physical, mental or psychological injury ...) ...; [and] claims for a violation of any other non-criminal federal, state or other governmental law, statute, regulation or ordinance ...." (Id.) With respect to disputes over the document itself, the Agreement sets forth the parties' agreement "that the arbitrator ... shall have the exclusive authority to resolve any dispute relating to the interpretation, arbitrability, applicability, enforceability or formation of this Agreement ...." (Id.) The Agreement also contains a severability clause, under which all of its provisions are deemed severable in the event that they are held unenforceable, such that the remaining provisions will be valid, binding and enforceable. Finally, the Agreement includes specific representations that the employee had carefully read it, that she understood its terms, that she had entered into it voluntarily, and that she had been given the opportunity to discuss it with counsel of her choosing. (Id.)

Both Scurtu and Grozav executed identical versions of the Agreement. Scurtu's signature on the Agreement is dated September 20, 2006, the very same date on which she executed a training plan with HCMS. Grozav's signature is dated October 25, 2006, the very same date on which she executed a training plan with HCMS. Other signatories to the Agreement were both HCMS and Wendco, the same entities that now seek to enforce the Agreement against Scurtu and Grozav.³

II. Analysis

A. Governing Legal Standard.

The Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. ("FAA") is "a congressional declaration of a liberal federal policy favoring arbitration agreements." Davis v. Southern Energy Homes, Inc., 305 F.3d 1268, 1273 (11th Cir.2002) (citation omitted). In that regard, "federal policy requires us to construe arbitration clauses generously, resolving all doubts in favor of arbitration." Becker v. Davis, 491 F.3d 1292, 1305 (11th Cir.2007); see also Musnick v. King Motor Co. of Fort Lauderdale, 325 F.3d 1255, 1258 (11th Cir.2003) (strong federal preference for arbitration of disputes expressed by Congress in FAA must be enforced wherever possible).

Under the FAA, parties are generally free to structure their arbitration agreements as they see fit. See Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478-79, 109 S.Ct. 1248, 103 L.E d.2d 488 (1989). "Generally, a court should enforce an arbitration agreement according to its terms, and no exception exists for a cause of action founded on statutory rights." Davis, 305 F.3d at 1273; see also Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir.2005) ("courts have consistently found that claims arising under federal statutes may be the subject of arbitration agreements and are enforceable under the FAA") (citation omitted). Simply put, "a court can decline to enforce an arbitration agreement under the FAA only if the plaintiffs can point to a generally applicable principle of contract law under which the agreement could be revoked," such as fraud, duress, or some other misconduct or wrongful act recognized by law for revocation of a contract. Caley, 428 F.3d at 1371; see also Dale v. Comcast Corp., 498 F.3d 1216, 1219 (11th Cir.2007) ("generally applicable contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements") (citation omitted); General Motors Corp. v. Stokes Chevrolet, Inc., 885 So.2d 119, 122 (Ala.2003) (similar).

In determining whether the parties agreed to arbitrate a particular dispute, courts consider: (1) whether there is a valid agreement to arbitrate; and (2) whether the dispute in question falls within the scope of that agreement. See Webb v. Investacorp, Inc., 89 F.3d 252, 258 (5th Cir.1996); Hudson v. Outlet Rental Car Sales, Inc., 876 So.2d 455, 457 (Ala.2003). To resolve these questions, courts apply state-law principles relating to ordinary contract formation and interpretation, construed through the lens of the federal policy favoring arbitration. See Caley, 428 F.3d at 1368 ("state law generally governs whether an enforceable contract or agreement to arbitrate exists"). "Thus, in determining whether a binding agreement arose between the parties, courts apply the contract law of the particular state that governs the formation of contracts," taking into account the federal policy favoring arbitration. Id.

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