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Webb v. Farmers of North America, Inc.

United States Court of Appeals, Eighth Circuit

May 31, 2019

James Webb Plaintiff- Appellee
v.
Farmers of North America, Inc., A Delaware Company Defendant-Appellant James Mann Defendant

          Submitted: December 11, 2018

          Appeal from United States District Court for the Western District of Missouri - Kansas City

          Before SMITH, Chief Judge, WOLLMAN and GRASZ, Circuit Judges.

          SMITH, Chief Judge.

         Farmers of North America, Inc. ("Farmers") brings this interlocutory appeal of the district court's[1] rulings interpreting an arbitration agreement in an employment contract. As discussed herein, we do not reach the merits of the appeal and dismiss for lack of jurisdiction.

         I. Background

         James Webb sued Farmers for an alleged breach of the employment contract that he and Farmers had signed, along with some other related employment matters. Webb's employment contract with Farmers included an arbitration clause. The district court, upon review of the contract, found that the parties' dispute is subject to arbitration pursuant to the arbitration clause. Accordingly, the district court granted Farmers's motion compelling arbitration and stayed the proceeding pending the outcome of that arbitration.

         The arbitration clause states that the American Arbitration Association (AAA) rules will govern the arbitration. The parties agree to that general statement, but they disagree as to the effect of designating the AAA rules. Farmers asserts that the contract's inclusion of the AAA rules mandates that the AAA must also administer the arbitration.[2] Webb disagrees. He avers that the contract only requires AAA rules be applied, which a non-AAA arbitrator could do consistent with the contract. Reaching an impasse, Webb's lawyer wrote a letter to the district court (copying opposing counsel) seeking clarification on this question. The district court agreed with Webb's position and found that agreeing to arbitrate by AAA rules did not necessitate that AAA itself arbitrate the dispute. The court decided the contractual language in the arbitration clause was ambiguous "at the very least." Webb v. Farmers of N. Am., Inc., No. 4:16-cv-00080, 2017 WL 6813709, at *1 (W.D. Mo. Oct. 10, 2017). If Farmers "intended for all disputes to be presented to the AAA for arbitration," the district court explained, "[Farmers] ought to have used such language in the contract." Id. The district court then ordered the parties "to work together to find a mutually acceptable arbitrator." Id. at *2.

         Farmers filed this interlocutory appeal, arguing that the AAA rules, as applied through its contract with Webb, mandate that the AAA administer this arbitration. We decline to weigh in on the merits of Farmers's argument, however, because we lack jurisdiction over the appeal. Subject matter jurisdiction is a prerequisite for every appeal. For the reasons explained below, none of Farmers's asserted bases for jurisdiction suffice to enable this court's jurisdiction.

         II. Discussion

         Farmers asserts three bases for our jurisdiction: (1) the district court's order compelling arbitration was a final order pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. § 16(a)(3); (2) the district court's denial of Farmers's petition to arbitrate pursuant to the parties' agreement creates jurisdiction under 9 U.S.C. § 16(a)(1)(B); and (3) the collateral order doctrine applies. We address each in turn.

         A. 16(a)(3) "Final Decision"

         Farmers first asserts jurisdiction exists pursuant to §16(a)(3) of the FAA, which states "[a]n appeal may be taken from . . . a final decision with respect to an arbitration that is subject to this title." The Supreme Court has ruled that a "final decision with respect to an arbitration" under this statute is "a decision that ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment." Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 86 (2000) (cleaned up). When a district court enters a stay instead of a dismissal, that order is not appealable. Id. at 87 n.2. Here, the district court's decision stayed the case pending arbitration, but it did not dismiss the claims. See, e.g., ON Equity Sales Co. v. Pals, 528 F.3d 564, 569 (8th Cir. 2008). This appeal, like Pals, is not from a final decision. Id.

         B. 16(a)(1)(B) Denial of ...


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