United States District Court, D. Nebraska
ARCTIC GLACIER U.S.A., INC., and ARCTIC GLACIER U.S.A., INC. SAVINGS AND RETIREMENT PLAN, Petitioners,
PRINCIPAL LIFE INSURANCE COMPANY, Respondent.
MEMORANDUM AND ORDER
F. Rossiter, Jr. United States District Judge
matter is before the Court on Arctic Glacier U.S.A., Inc.
(“Arctic Glacier U.S.A.”) and Arctic Glacier
U.S.A., Inc. Savings and Retirement Plan's (the
“Plan” and collectively, “Arctic
Glacier”) Petition to compel Principal Life Insurance
Company (“Principal”) to participate in
arbitration and other dispute-resolution procedures pursuant
to Section 4 of the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 1 et
seq. Although not signatories to the Service
and Expense Agreement (“Agreement”) between
Principal and Arctic Glacier International, Inc.
(“Arctic Glacier International”) that includes
the dispute-resolution procedures, Arctic Glacier U.S.A. and
the Plan contend they are nonetheless entitled to enforce
those procedures as, respectively, Arctic Glacier
International's corporate successor and a third-party
beneficiary of the Agreement. Principal moves to dismiss the
Petition (Filing No. 7), maintaining neither entity has any
rights to compel arbitration or otherwise enforce the
August 1, 2017, the Court entered an order giving the parties
an opportunity to supplement the record with additional
evidence related to the reported sale of Arctic Glacier
International's assets in 2012 and the parties'
relationship, if any, under the Agreement after that sale.
The parties have each filed an Index of Evidence in support
of their respective positions. Having thoroughly reviewed the
parties' submissions and the record evidence in this
case, the Court finds Arctic Glacier has the stronger
position, and that referral to arbitration is proper here.
The Right to Compel Arbitration
FAA § 4, “[a] party aggrieved by the
alleged failure, neglect, or refusal of another to arbitrate
under a written agreement for arbitration may petition . . .
for an order directing that such arbitration proceed in the
manner provided for in such agreement.” (Emphasis
added). “The purpose of the FAA is ‘to move the
parties to an arbitrable dispute out of court and into
arbitration as quickly and easily as possible.'”
Koch v. Compucredit Corp., 543 F.3d 460, 463 (8th
Cir. 2008) (quoting Moses H. Cone Mem'l Hosp. v.
Mercury Constr. Corp., 460 U.S. 1, 22 (1983)). The FAA
declares a “liberal federal policy favoring arbitration
agreements” and requires that “questions of
arbitrability must be” answered “with a healthy
regard for [that] policy.” Moses H. Cone Memorial
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).
“[A]ny doubts concerning the scope of arbitrable issues
should be resolved in favor of arbitration, whether the
problem at hand is the construction of the contract language
itself or an allegation of waiver, delay, or a like defense
to arbitrability.” Id. at 24-25.
“arbitration is a matter of contract and a party cannot
be required to submit to arbitration any dispute which he has
not agreed so to submit.” Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83 (2002) (quoting
Steelworkers v. Warrior & Gulf Nav. Co., 363
U.S. 574, 582 (1960)). “Ordinary contract principles
determine who is bound by . . . written [arbitration]
provisions and of course parties can become contractually
bound absent their signatures.” Daisy Mfg. Co. v.
NCR Corp., 29 F.3d 389, 392 (8th Cir. 1994) (quoting
A/S Custodia v. Lessin Int'l, Inc., 503 F.2d
318, 320 (2d Cir. 1974)). A party's agreement to
arbitrate can be implied from its conduct. Id.
“[A]s with any other contract, the parties'
intentions control, but those intentions are generously
construed as to issues of arbitrability.”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 626 (1985).
reviewing a petition to compel arbitration, the Court must
determine “(1) whether there is a valid arbitration
agreement and (2) whether the particular dispute falls within
the terms of that agreement.” Robinson v. EOR-ARK,
LLC, 841 F.3d 781, 783-84 (8th Cir. 2016) (quoting
Faber v. Menard, Inc., 367 F.3d 1048, 1052 (8th Cir.
2004)). The Court must grant a petition to compel arbitration
“if a valid arbitration clause exists which encompasses
the dispute between the parties.” 3M Co. v. Amtex
Sec., Inc., 542 F.3d 1193, 1198 (8th Cir. 2008).
case, Principal does not contest the validity or
enforceability of its Agreement with Arctic Glacier
International or the scope of the arbitration clause. Rather,
Principal contends the Petition should be denied and this
case dismissed because Arctic Glacier U.S.A. and the Plan are
not named as parties in the Agreement and have not otherwise
acquired any rights to enforce the arbitration provision. As
Principal sees it, “the parties' dispute resolution
procedure limits the Agreement to arbitrate to disputes
‘between the parties, '” and the Agreement
was never amended to make Arctic Glacier U.S.A. or the Plan
parties. Principal's arguments are overly simplistic and
miss the mark.
State Contract Law
contract law governs the threshold question of whether an
enforceable arbitration agreement exists between
litigants” and “the ability of nonsignatories to
enforce arbitration provisions.” Donaldson Co. v.
Burroughs Diesel, Inc., 581 F.3d 726, 731-32 (8th Cir.
2009). In other words, “a litigant who was not a party
to the relevant arbitration agreement may” compel
arbitration under § 4 “if the relevant state
contract law allows him to enforce the agreement.”
Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 632
(2009); accord Restoration Pres. Masonry, Inc. v. Grove
Europe Ltd., 325 F.3d 54, 62 n.2 (1st Cir. 2003)
(“A non-signatory may be bound by or acquire rights
under an arbitration agreement under ordinary state-law
principles of agency or contract.”).
parties agree that Nebraska contract law governs the
threshold arbitrability issues in this case. The parties have
not cited (and the Court has not found) a case in which a
Nebraska court has considered a nonsignatory's ability to
enforce an arbitration agreement executed by others. But
“‘traditional principles' of state law allow
a contract to be enforced by or against nonparties to the
contract through ‘assumption, piercing the corporate
veil, alter ego, incorporation by reference, third-party
beneficiary theories, waiver and estoppel.'”
Arthur Andersen, 556 U.S. at 631 (quoting 21 R.
Lord, Williston on Contracts § 57:19, p. 183 (4th ed.
2001)). Nebraska generally follows these traditional
principles. See, e.g., Earl v. Priority
Key Servs., Inc., 441 N.W.2d 610, 613 (Neb. 1989)
(corporate successor liability); Podraza v. New Century
Physicians of Neb., LLC, 789 N.W.2d 260, 267 (Neb. 2010)
the Agreement binds not only the “Parties” but
“also extend[s] to their respective successors and
assigns, ” Arctic Glacier contends Arctic Glacier
U.S.A.-as Arctic Glacier International's
successor-“has all rights that formerly belonged to
Arctic Glacier International under the Agreement, including
the right to enforce any dispute resolution
provisions.” As for the Plan, Arctic Glacier asserts it
is authorized to enforce the arbitration provisions as a
third-party beneficiary of the Agreement under Nebraska law.
The Court takes each argument in turn.