Coffee Beanery Attempts to Stay Mandate Pending Supreme Court Petition
ANN ARBOR, Mich. (Blue MauMau) – On February 17, attorneys for The Coffee Beanery filed a motion to stay the mandate of the U. S. Sixth Circuit Court pending the filing of a petition to the U.S. Supreme Court. As reported on Blue MauMau last week, the U.S. Court of Appeals for the Sixth Circuit denied the franchisor’s petition for rehearing and rehearing en banc in the case brought by Richard Welshans and Deborah Williams of WW, LLC against Coffee Beanery, ordering the case back to court—not to arbitration. The Sixth Circuit had ruled that the arbitration award in Coffee Beanery’s favor be vacated on the grounds of manifest disregard of law.
Coffee Beanery’s motion to stay states that the Sixth Circuit’s decision constitutes a departure from other circuits’ decisions that have been confronted with the question of whether a finding of “manifest disregard” does not constitute a valid non-statutory ground for vacating under the Federal Arbitration Act, pointing to the renowned case of Hall Street v. Mattel. The motion also refers to the Alabama Supreme Court and U.S. Court of Appeals for the First Circuit in eliminating manifest disregard as an independent basis, and the Ninth Circuit adopting a different approach. It states that it likewise held that manifest disregard is not an independent ground for vacating and concludes that it survives only as a “shorthand for a statutory ground under FAA which states that the court may vacate ‘where the arbitrators exceeded their powers,’” citing Comedy Club, Inc. v. Improv West Assocs. (9th Circuit, Jan. 29, 2009).
Numerous district courts and state trial courts have also addressed the question of manifest disregard as an independent basis to vacate, according to their motion. It states, “Thus, this disagreement among the lower courts concerning the proper interpretation of the FAA raises a substantial question of law that merits review by the Supreme Court.”
Coffee Beanery motion argues that if the mandate is not stayed, this case will return to district court for further proceedings, including a possible trial, even though a legal issue that would resolve the case completely would be pending on a petition for a writ of certiorari in the Supreme Court. It states, “That would cause a waste of judicial resources and would force the parties to litigate in two courts simultaneously.”
The motion also explains that permitting the case to proceed in the district court also would defeat one of the key purposes of the parties’ arbitration agreement, which was to resolve the merits of their disputes before an arbitrator, not before a court.
In response to this latest motion, Harry M. Rifkin, Franchise & Business Law Group, attorney for the Welshans said, “They are just trying to throw up more roadblocks, but it is not going to stop the inevitable from happening. In my opinion, they could better spend their resources than in going for a long-shot petition for a writ of certiorari in the Supreme Court.” Rifkin said they knew they would eventually get their day in court, explaining, “That is what we have always wanted.”
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Related reading:
- Sixth Circuit Denies Coffee Beanery Petition for Rehearing
- Sixth Circuit Sends Coffee Beanery Franchisees to Court
- Coffee Beanery Franchisees Win on Appeal; Arbitration Decision Vacated
- Coffee Beanery Franchisees Uncover Arbitrator Bias
- Coffee Beanery Story To Be Presented to Congress
- Coffee Beanery Franchisees Uncover New Evidence
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