Noreen Gibbens v. OptumRx, Inc. ( 2019 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 19a0360n.06
Case No. 18-6292 FILED
Jul 15, 2019
DEBORAH S. HUNT, Clerk
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
DR. NOREEN GIBBENS, )
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE MIDDLE DISTRICT OF
OPTUMRX, INC. d/b/a HI ) TENNESSEE
HEALTHINNOVATIONS, )
)
Defendant-Appellee. )
)
BEFORE: SUHRHEINRICH, CLAY, and DONALD, Circuit Judges.
BERNICE BOUIE DONALD, Circuit Judge. After Dr. Noreen Gibbens voiced
concerns about the validity of her company’s products, her employer, OptumRx, Inc., demoted
her. Eventually, the working conditions became such that Gibbens resigned. She then sued her
employer, alleging retaliation in violation of (1) Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. § 2000, et seq. (“Title VII”), and (2) the Consumer Product Safety
Improvement Act, 15 U.S.C. § 2087 (“CPSIA”). Pursuant to the parties’ valid and binding
arbitration agreement, the district court ordered the parties into arbitration and stayed all
proceedings.1 Over a year later, Gibbens filed an arbitration demand. Based on the same facts
1
Gibbens challenges neither the validity of the agreement nor whether it applies to her claims.
Case No. 18-6292, Gibbens v. OptumRx, Inc.
underpinning her initial complaint, she alleged retaliation under (1) the Tennessee Public
Protection Act, Tenn. Code Ann. § 50-1-304 (“TPPA”), and (2) the CPSIA. The arbitrator
dismissed Gibbens’ claims with prejudice. He concluded that the TPPA claim was time-barred by
Tennessee’s one-year statute of limitations and that Gibbens failed to exhaust her administrative
remedies for the CPSIA claim. The district court confirmed the arbitrator’s award. Gibbens now
appeals, arguing that the arbitrator’s decision was in manifest disregard of the law. We disagree
and affirm the district court’s order confirming the award.
I.
BACKGROUND
Gibbens worked as a licensed audiologist for OptumRx, which provides a hearing-aid
benefit for Medicare Advantage members, from February 2012 until February 2016. As early as
2014, Gibbens voiced concerns about the validity of the hearing tests the company marketed. After
communicating her concerns to OptumRx, she filed a complaint with the Food and Drug
Administration based on “consumer protection and defective product concerns” in May 2015.
R. 1, PageID 4. Shortly thereafter, OptumRx demoted Gibbens “with no explanation.” Id. She
was then placed on a “corrective action plan” for “inappropriate behavior” such as “being overly
argumentative when presenting concerns or issues in response to constructive feedback.” Id.,
PageID 5. In February 2016, Gibbens resigned “due to working conditions being intolerable and
having significant impacts on her health, well-being, and professional reputation.” Id.
Gibbens filed a complaint against OptumRx in the Middle District of Tennessee on April
8, 2016. Believing she was constructively discharged based on her complaints about the
company’s hearing-test products, she alleged retaliation under Title VII and the CPSIA. Pursuant
to the parties’ valid and binding arbitration agreement, in which they agreed to resolve employment
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disputes through arbitration, the district court ordered Gibbens on June 13, 2016, to submit her
claims to arbitration and stayed all court proceedings pending the outcome of the arbitration.
On September 9, 2016, Gibbens’ attorney was suspended from the practice of law after
“fail[ing] to respond to the Board [of Professional Responsibility] regarding complaints of
misconduct, misappropriat[ing] funds and pos[ing] a threat of substantial harm to the public.”
R. 24-3, PageID 127. He was ordered to cease representing existing clients by October 9, 2016.
The Chancery Court of Sumner County, Tennessee, appointed a receiver attorney on December
22, 2016.
Gibbens filed an arbitration demand on July 19, 2017. Based on the same underlying facts
as her initial complaint, she alleged retaliation under the TPPA and the CPSIA. After considering
briefs from both parties, the arbitrator dismissed Gibbens’ claims with prejudice.
First, the arbitrator dismissed the TPPA claim as untimely because Gibbens filed the
arbitration demand more than a year after she suffered the alleged retaliatory firing in February
2016, which meant the claim was time-barred. In response to Gibbens’ argument that her claim
was saved by the “relation-back” doctrine under Federal Rule of Civil Procedure (“FRCP”) 15(c),
the arbitrator noted that it was unclear whether that relation-back doctrine applied, and that, even
if it did, Gibbens’ TPPA claim was still time-barred because Gibbens filed her arbitration demand
more than a year after the district court stayed the proceedings.
Second, the arbitrator dismissed the CPSIA claim after finding that Gibbens did not exhaust
her administrative remedies by filing a complaint with the Secretary of Labor. Although there was
not binding precedent governing this issue, the arbitrator noted that “the majority of courts
addressing . . . whether § 2807(b) require[s] exhaustion of administrative procedures prior to filing
a lawsuit have held that it is mandatory,” and that other sections of the federal regulations
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reaffirmed the exhaustion requirement. R. 24-1, PageID 104. The arbitrator therefore dismissed
the claim.
Gibbens filed a motion to vacate the arbitration award, arguing that the decision amounted
to a “manifest disregard of the law.” In turn, OptumRx filed a motion to confirm the award.
Finding that Gibbens did “not come close to establishing that the Arbitrator acted in manifest
disregard of the law[,]” the district court confirmed the arbitration award on November 13, 2018.
R. 27, PageID 218. Gibbens timely appealed.
II.
ANALYSIS
1. Standard of Review
When reviewing a district court’s decision to confirm an arbitration award, we review legal
questions de novo and factual findings for clear error. Merrill Lynch, Pierce, Fenner & Smith, Inc.
v. Jaros, 70 F.3d 418, 420 (6th Cir. 1995) (citing First Options of Chi., Inc. v. Kaplan, 514 U.S.
938, 947-48 (1995)).
“The Federal Arbitration Act (“FAA”) expresses a presumption that arbitration awards will
be confirmed.” Nationwide Mut. Ins. v. Home Ins., 429 F.3d 640, 643 (6th Cir. 2005) (citing
9 U.S.C § 9). Thus, “[w]hen courts are called on to review an arbitrator’s decision, the review is
very narrow; it is one of the narrowest standards of judicial review in all of American
jurisprudence.” Samaan v. Gen. Dynamics Land Sys., Inc., 835 F.3d 593, 600 (6th Cir. 2016)
(quoting Uhl v. Komatsu Forklift Co., 512 F.3d 294, 305 (6th Cir. 2008)). The FAA provides four
grounds upon which a court can vacate an arbitration award: (1) where the award was procured by
corruption, fraud, or undue means; (2) where an arbitrator evidenced partiality or corruption;
(3) where the arbitrators were guilty of misconduct; and (4) where the arbitrators exceeded their
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power. 9 U.S.C. § 10(a). Additionally, this court recognizes a fifth—perhaps collective
shorthand—ground for vacatur: an arbitrator’s manifest disregard of the law. E.g., Marshall v.
SSC Nashville Operating Co., 686 F. App’x 348, 353 (6th Cir. 2017) (“We have previously held
that despite the Supreme Court’s language in Hall Street Associates, the ‘manifest disregard’
doctrine remains a viable ground for attacking an arbitrator’s decision . . . .”); Coffee Beanery, Ltd.
v. WW, L.L.C., 300 F. App’x 415, 418–19 (6th Cir. 2008) (noting that in light of the ambiguous
holding of Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 585 (2008), “this court will
follow its well-established precedent here and continue to employ the ‘manifest disregard’
standard”).
For this court to find that the arbitrator manifestly disregarded the law, “[a] mere error in
interpretation or application of the law is insufficient. Rather, the decision must fly in the face of
clearly established legal precedent.” Jaros, 70 F.3d at 421 (internal citation omitted). A claimant
meets this standard by showing “(1) the applicable legal principle is clearly defined and not subject
to reasonable debate; and (2) the arbitrators refused to heed that legal principle.” Nationwide Mut.
Ins. Co. v. Home Ins. Co., 330 F.3d 843, 847 (6th Cir. 2003). Hence, “we may set aside the
arbitrator’s decision only if, after applying ‘clearly established legal precedent, . . . no judge or
group of judges could conceivably come to the same determination.” Elec. Data Sys. Corp. v.
Donelson, 473 F.3d 684, 691 (6th Cir. 2007) (quoting Jaros, 70 F.3d at 421). “Thus, to find
manifest disregard a court must find two things: the relevant law must be clearly defined and the
arbitrator must have consciously chosen not to apply it.” Dawahare v. Spencer, 210 F.3d 666, 669
(6th Cir. 2000) (citing M & C Corp. v. Erwin Behr GmbH & Co., 87 F.3d 844, 851 n. 3 (6th Cir.
1996)).
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2. TPPA Claim
Gibbens contends that the arbitrator manifestly disregarded the law when he determined
that the TPPA claim was time-barred. We disagree. The arbitrator’s decision that Gibbens’ TPPA
claim was time-barred was well-reasoned, logical, and did not contravene clearly defined law. It
therefore was not in manifest disregard of the law.
Under the AAA’s Employment Arbitration Rule 4(b)(i)(1) and the parties’ arbitration
agreement, Gibbens was required to file her arbitration demand within the applicable statute of
limitations. A retaliatory discharge claim under the TPPA has a one-year statute of limitations that
accrues when the claimant knows or should know of the alleged injury. Tenn. Code Ann. § 28-3-
104 (West); Wade v. Knoxville Utils. Bd., 259 F.3d 452, 460 (6th Cir. 2001) (citing Weber v.
Moses, 938 S.W.2d 387, 393 (Tenn. 1996)). Gibbens alleges that she was constructively
discharged in February 2016. Accordingly, under the applicable statute of limitations, she had
until February 2017 to file her TPPA claim. Gibbens did not allege violation of the TPPA until
she filed her arbitration demand on July 19, 2017, about seventeen months after the alleged injury.
Thus, unless the arbitrator flouted clearly established precedent in applying the one-year statute of
limitations, the arbitrator’s conclusion that Gibbens’ TPPA claim was time-barred was not in
manifest disregard of the law.
First, Gibbens argues that the arbitrator failed to apply clearly established law when he
declined to apply the “relation back” doctrine in FRCP 15(c). Under Rule 15, a plaintiff may
amend her pleading to add a new claim or defense that would otherwise be time-barred when the
amended pleading “relates back” to the original timely-filed pleading. Krupski v. Costa Crociere
S. p. A., 560 U.S. 538, 541 (2010). A pleading amendment “relates back” to the original pleading
when the new claim arises “out of the conduct, transaction, or occurrence set forth” in the original
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pleading. Mayle v. Felix, 545 U.S. 644, 656 (2005); see Fed. R. Civ. P. 15(c)(1)(B). Gibbens
contends that Rule 15 salvages her claim because it was “based upon the exact same facts and
parties found in her original complaint[,]” and transferring “her complaint to the arbitration is
simply a continuation of her claim filed in federal court but in a different venue.” Appellant’s Br.
at 21–22.
In considering this issue, the arbitrator surveyed relevant caselaw and accurately
determined that no authority controls the precise question of whether and how the relation-back
doctrine applies in this context. The arbitrator reasonably distinguished the cases Gibbens cited—
Boddy and Sessions—because “neither involved cases originally brought in a court, which were
subsequently stayed and ordered to proceed to arbitration.” R. 24-1, PageID 100-01 (citing Boddy
v. Dean, 821 F.2d 346 (6th Cir. 1987) and Sessions v. Rusk State Hosp., 648 F.2d 1066 (5th Cir.
1981)). Even so, the arbitrator considered what the effect would be if the relation-back doctrine
did apply. He looked to Flying Tiger Line, which counsels that when a plaintiff incorrectly brings
an action in court before filing an arbitration demand, the statute of limitations tolls for the period
between when the complaint is filed and when the court stays the matter pending arbitration. He
determined that “even if Claimant had asserted her TPPA claim in her original federal court action,
she failed to file her demand within the applicable statute of limitations period” because more than
a year passed between the court order staying the proceedings and Gibbens’ filing her arbitration
demand. R. 24-1, PageID 101 (citing Flying Tiger Line, Inc. v. Cent. States, Se. & Sw. Areas
Pension Fund, 659 F. Supp. 13, 18–19 (D. Del. 1986)). Thus, the arbitrator’s consideration of the
relation-back doctrine and subsequent conclusion that Gibbens’ TPPA claim was time-barred does
not—at all—indicate that he “must have consciously chosen not to apply [clearly defined law].”
Dawahare, 210 F.3d at 669. It therefore was not in manifest disregard of the law.
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Second, Gibbens contends that the arbitrator manifestly disregarded the law in declining to
apply equitable tolling to her TPPA claim for the time period between when her counsel was
suspended and new counsel was appointed. As a threshold matter, Gibbens did not raise this
argument during the arbitration proceedings. R. 24-1, PageID 101 n.2 (“In the instant case,
Claimant has raised no arguments with respect to equitable tolling.”). As such, this argument is
waived. Armco Emps. Indep. Fed’n., Inc. v. AK Steel Corp., 149 Fed. Appx. 347, 352 (6th Cir.
2005) (citing Nationwide Mut. Ins. Co. v. Home Ins. Co., 330 F.3d 843, 846 (6th Cir. 2003); AFL–
CIO v. United States Postal Serv., 751 F.2d 834, 841 n. 4 (6th Cir. 1985); and Order of Ry.
Conductors & Brakemen v. Clinchfield R.R. Co., 407 F.2d 985, 988 (6th Cir. 1969). Accordingly,
it is illogical to conclude that the arbitrator manifestly disregarded law that Gibbens never asked
him to consider.
Even if we consider this argument, however, Gibbens still does not prevail. The arbitrator
sua sponte considered whether equitable tolling applied and found that, even if the statute of
limitations were tolled for the time period in which Gibbens did not have an attorney, her claim
would still be time-barred. Gibbens’ attorney was suspended in September 2016 and was ordered
to stop representing clients by October 9, 2016. The Chancery Court of Sumner County,
Tennessee, appointed a receiver on December 22, 2016. Therefore, Gibbens went unrepresented
for three months, but she filed her TPPA claim seventeen months after the alleged constructive
discharge. Thus, the arbitrator’s decision not to apply equitable tolling—which Gibbens did not
raise and would not have saved her claim anyway—was reasoned and logical. Because the
arbitrator’s decision does not “fly in the face of clearly established legal precedent,” Jaros, 70 F.3d
at 421, it was not in manifest disregard of the law.
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3. CPSIA Claim
Next, Gibbens asserts that the arbitrator’s dismissal of her CPSIA claim for failure to
exhaust her administrative remedies was in manifest disregard of the law. She contends that
because 15 U.S.C. § 2087(b)(1) provides that a claimant “may, not later than 180 days after the
date on which such violation occurs, file . . . a complaint with the Secretary of Labor . . .[,]” the
exhaustion requirement is permissive rather than mandatory. Id. (quoting 15 U.S.C. § 2087(b)(1)).
She therefore argues that “an employee’s choice to file directly with the [f]ederal [c]ourt cannot
be grounds of dismissal for failing to exhaust administrative remedies.” Appellant Br. at 18–19.
The arbitrator’s decision to the contrary, however, was thorough, well-reasoned, and grounded in
the statutory text. Thus, it was not in manifest disregard of the law.
In evaluating whether administrative exhaustion is grounds for dismissal, the arbitrator
considered relevant precedent and found that “the majority of courts addressing the issue of
whether § 2087(b) require[s] exhaustion of administrative procedures prior to filing a lawsuit have
held that it is mandatory.” R. 24-1, PageID 104 (compiling cases). This conclusion was
reasonable. See Hall v. Wells Fargo & Co., No. EDCV 17-02465 JGB (KKx), 2018 WL 6016143,
at *4 (C.D. Cal. Feb. 22, 2018); Wilson v. E.I. Du Pont de Nemours & Co., No. CV 15-967-LPS,
2017 WL 960395, at *2 (D. Del. Mar. 13, 2017), aff’d sub nom., Wilson v. EI DuPont de Nemours
& Co., 710 F. App’x 57 (3d Cir. 2018); Jallali v. USA Funds, No. 11-62510-CIV, 2012 WL
3291873, at *5 (S.D. Fla. Aug. 13, 2012). The arbitrator also noted that one case, Parker, reached
a different conclusion than the majority of courts he surveyed. R. 24-1, PageID 103 (citing Parker
v. 4247 FX, Inc., No. CV 16-2710, 2017 WL 2002794, at *10 n.8 (E.D. Pa. May 12, 2017), appeal
dismissed, No. CV 17-2601, 2017 WL 7000263 (3d Cir. 2017)). Thus, rather than “consciously
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[choosing] not to apply [clearly defined law,]” Dawahare, 210 F.3d at 669, the arbitrator
considered the available precedent and reached a reasonable conclusion.
Further, the arbitrator examined related federal regulations and concluded that they
“reaffirmed” the exhaustion requirement. He found that the related regulations allowed a plaintiff
to bring a CPSIA-retaliation lawsuit in two limited circumstances: “if there has been no final
decision of the Secretary within 210 days of the filing of the complaint, or within 90 days after
receiving a written determination.” R. 24-1, PageID 106 n.5 (quoting 77 Fed. Reg. 40494, 40502
(July 10, 2012)). See 29 C.F.R. § 1983.114(a)(1)–(2). Thus, the arbitrator reasonably concluded
that the statute, despite its use of “may,” contemplates administrative exhaustion before a claimant
may file a lawsuit. Gibbens has not shown that the arbitrator “refused to heed” a clearly defined
legal principle, Jaros, 70 F.3d at 421, or that “no judge or group of judges could conceivably come
to the same determination,” Donelson, 473 F.3d at 691. Thus, the arbitrator’s decision was not in
manifest disregard of the law.
III.
CONCLUSION
For these reasons, we affirm the district court’s order granting OptumRx’s motion to
confirm the arbitrator’s award.
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