United States ex rel. Dorsa v. Miraca Life Scis., Inc.

983 F.3d 885

UNITED STATES of America, EX REL. Paul DORSA, Plaintiff-Appellee,

v.MIRACA LIFE SCIENCES, INC., Defendant-Appellant.

No. 20-5007

United States Court of Appeals, Sixth Circuit.

Argued: October 22, 2020

Decided and Filed: December 30, 2020

ROGERS, Circuit Judge.

Paul Dorsa filed suit under the False Claims Act against Miraca Life Sciences, Inc., alleging unlawful retaliation. Miraca sought to dismiss the retaliation claim because Dorsa—a former Miraca executive—had agreed to binding arbitration as a provision of his employment agreement with the company. The district court denied Miraca's motion to dismiss because it found that the arbitration clause did not cover Dorsa's retaliation claim. Miraca appeals the district court's order and Dorsa seeks to dismiss the appeal. Because the district court's order was not a final order, and because the narrow provision of the Federal Arbitration Act that authorizes immediate appeals of certain interlocutory orders does not apply here, the court lacks jurisdiction.

Dorsa was working as an executive of Miraca when he learned of a purported scheme to defraud the government. On September 20, 2013, Dorsa filed a qui tam action under seal against Miraca, alleging two counts of violations of the False Claims Act ("FCA"), payment by mistake of fact, and unjust enrichment. Dorsa was fired on September 24, 2013, and his first amended complaint, filed under seal in November 2013, alleged an additional claim for retaliation under the FCA pursuant to 31 U.S.C. § 3730(h) ; so did his second amended complaint, which was filed under seal in March 2017. The United States intervened as a party in November 2018; the district court partially unsealed the case in January 2019; and Dorsa and the government dismissed the qui tam claims in May 2019.

Miraca then moved to dismiss the remaining retaliation claim "under Federal Rules of Civil Procedure 12(b)(1), (3), and (6), and the Federal Arbitration Act, 9 U.S.C. § 1 et seq ." Miraca argued that Dorsa had failed to state a cause of action through the retaliation claim because Dorsa had "agreed to resolve all claims ... arising out of his employment through binding arbitration." Miraca also argued in the alternative that, because of the arbitration agreement, the district court did not have subject matter jurisdiction over the claim, and the suit had been brought in an improper venue.

The district court denied the motion to dismiss. The employment agreement's arbitration clause requires that,

in the event of any dispute, claim or disagreement arising out of or in connection with this Agreement ... the parties shall first submit the dispute, claim or disagreement to non-binding mediation [and if that is unsuccessful,] ... then either party may submit the dispute, claim or disagreement to binding arbitration.

The district court held that the arbitration clause did not cover the FCA retaliation claim because "an FCA retaliation claim does not arise from, or have any connection with, an employment agreement , or any provision thereof, even if it may, as in the present case, have a connection with plaintiff's employment relationship ." Miraca subsequently filed a notice of appeal stating that it was appealing "as a matter of right pursuant to 9 U.S.C. § 16 ... the Opinion and Order denying [its] Motion to Dismiss[,] ... which declined to require Plaintiff to pursue his retaliation claim in arbitration."

Dorsa filed a motion to dismiss the appeal for lack of jurisdiction, arguing that neither 28 U.S.C. § 1291 nor 9 U.S.C. § 16, a provision of the Federal Arbitration Act ("FAA"), "suppl[ies] jurisdiction here because Miraca filed a Rule 12(b)(6) Motion to Dismiss and never asked the District Court for a stay or an order compelling arbitration." A three-judge panel of this court issued an order noting that "[t]he denial of Miraca's motion to dismiss is not a final order," but otherwise referring the motion to dismiss the appeal to the merits panel.

We lack jurisdiction over this appeal. The only possible source of appellate jurisdiction here is 9 U.S.C. § 16, which provides in subsections (a)(1)(A) and (B), respectively, that "[a]n appeal may be taken from an order" either "refusing a stay of any action under section 3 of this title," or "denying a petition under section 4 of this title to order arbitration to proceed." The former refers to orders refusing a party's request to stay proceedings "upon any issue referable to arbitration ... until such arbitration has been had." Id. § 3. The latter refers to orders denying a petition "for an order directing that ... arbitration proceed." Id. § 4.

The district court's order denied Miraca's motion to dismiss; it did not refuse a request to stay the action to allow for arbitration, nor deny a petition for an order directing the parties to arbitrate. Miraca argues that the district court's order had "the exact impact" as one "refusing to stay an action" or "denying a petition to order arbitration," but that is not enough to establish appellate jurisdiction. Even if we were to accept the premise that the order had the same impact as one refusing to stay the action or denying a petition to order arbitration, we have "not adopted a test for appealability that hinges on the practical effect of a district court's order." ATAC Corp. v. Arthur Treacher's, Inc. , 280 F.3d 1091, 1099 (6th Cir. 2002). In general, "statutes authorizing appeals are to be strictly construed." Perry Educ. Ass'n v. Perry Local Educators’ Ass'n , 460 U.S. 37, 43, 103 S.Ct. 948, 74 L.Ed.2d 794 (1983). In particular, appellate "[r]eview under § 16 is limited to those types of orders specified in [the] plain text of that section." Van Dusen v. Swift Transp. Co. , 830 F.3d 893, 898–99 (9th Cir. 2016) (relying on Green Tree Fin. Corp.-Alabama v. Randolph , 531 U.S. 79, 84, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) ). If an appellant did not ask the district court, even implicitly, for a stay or for an order compelling arbitration, a district court's order can hardly be a denial or refusal of such relief.

This conclusion is consistent with our prior opinions in Simon v. Pfizer, Inc. and Turi v. Main Street Adoption Services, LLP . We held in Simon that there was appellate jurisdiction under § 16. 398 F.3d 765, 771–72 (6th Cir. 2005). Although the defendant's briefing to the district court in Simon sought dismissal of the action, the defendant asked that court to "dismiss the Complaint in its entirety and compel plaintiff to proceed to arbitration ," or to, "[a]t a minimum, ... stay the action pending arbitration of all or any part of these claims." Mot. by Def. to Dismiss, Simon v. Pfizer, Inc. , No. 5:02-CV-60199-MOB (E.D. Mich. Nov. 12, 2002) (emphasis added). The court noted in Simon that the defendant was appealing "the District Court's refusal to enforce, through dismissal or stay , an agreement to arbitrate." Simon , 398 F.3d at 772 (emphasis added). Indeed, our decision in Taylor v. Pilot Corp. , 955 F.3d 572, 578 (6th Cir. 2020), focused on that language. Turi is similar: we determined that we had appellate jurisdiction, noting in our opinion that the defendant had argued to the district court "that all of the claims should be referred to an arbitrator." 633 F.3d 496, 500 (6th Cir. 2011) (emphasis added),¹ abrogated on other grounds by Henry Schein, Inc. v. Archer & White Sales, Inc. , ––– U.S. ––––, 139 S. Ct. 524, 202 L.Ed.2d 480 (2019). In an earlier, albeit unpublished, Taylor opinion, we observed, at least in passing, that in both Simon and Turi we had "recognized that the movant sought to compel arbitration." Taylor v. Pilot Corp. , 697 F. App'x 854, 861 (6th Cir. 2017). In short, Miraca cites no precedent in our court holding that there is appellate jurisdiction under the FAA where a defendant never sought a stay or an order compelling arbitration.

Other courts of appeals have applied a similarly strict view of § 16(a). Under Tenth Circuit law, if the defendant did not "caption the motion in the district court as one brought under the FAA §§ 3 or 4," "or [if] the court suspects that the motion has been mis-captioned in an attempt to take advantage of § 16(a)," then

the court must look beyond the caption to the essential attributes of the motion itself ... to determine whether it is plainly apparent from the four corners of the motion that the movant seeks only the relief provided for in the FAA, rather than any other judicially-provided remedy.

Conrad v. Phone Directories Co. , 585 F.3d 1376, 1385 (10th Cir. 2009) ; accord Wheeling Hosp., Inc. v. The Health Plan of the Upper Ohio Valley, Inc. , 683 F.3d 577, 585–86 (4th Cir. 2012) (applying the Conrad test). Adopting this approach, the Fourth Circuit noted that the standard from Conrad "strikes a balance between form and substance, and is in harmony with the other circuits to have considered the issue." Wheeling , 683 F.3d at 585 & n.2 (discussing Bombardier Corp. v. National R.R. Passenger Corp. , 333 F.3d 250, 253-54 (D.C. Cir. 2003) ; Wabtec Corp. v. Faiveley Transp. Malmo AB , 525 F.3d 135, 139–40 (2d Cir. 2008) ; and Fit Tech, Inc. v. Bally Total Fitness Holding Corp. , 374 F.3d 1, 5–6 (1st Cir. 2004) ). Since Conrad was decided, the courts of appeals in the Third and Ninth Circuits have also explicitly followed its approach. See Devon Robotics, LLC v. DeViedma , 798 F.3d 136, 145–47 (3d Cir. 2015) ; W. Sec. Bank v. Schneider Ltd. P'ship , 816 F.3d 587, 589–90 (9th Cir. 2016).

As the discussion of Simon and Turi above illustrates, this court's precedent has not required that the party seeking to enforce an arbitration clause and establish appellate jurisdiction have sought in the lower court "only the relief provided for in the FAA." Conrad , 585 F.3d at 1385 (emphasis added). As the Third Circuit held in Devon Robotics , "we do not read § 16 as barring jurisdiction where both a motion to compel arbitration and a motion to dismiss (or a motion for summary judgment) are made...