January 18, 2017
from the United States District Court for the Southern
District of Illinois. No. 3:15-cv-00433-MJR-SCW - Michael J.
Reagan, Chief Judge.
Wood, Chief Judge, and Posner and Hamilton, Circuit Judges.
Hunt worked as a truck driver in Nebraska. On July 1, 2010,
he signed an Independent Contractor Operating Agreement with
Moore Brothers, a small company located in Norfolk, Nebraska.
Three years later, Hunt and Moore renewed the Agreement.
Before the second term expired, however, relations between
the parties soured. Hunt hired Attorney Jana Yocum Rine to
sue Moore on his behalf. She did so in federal court, raising
a wide variety of claims, but paying little heed to the fact
that the Agreements contained arbitration clauses. Rine
resisted arbitration, primarily on the theory that the clause
was unenforceable as a matter of Nebraska law. Tired of what
it regarded as a flood of frivolous arguments and motions,
the district court granted Moore's motion for sanctions
under 28 U.S.C. § 1927 and ordered Rine to pay Moore
about $7, 500. The court later dismissed the entire action
has appealed from that order. We begin with a word about our
appellate jurisdiction. The district court's order of
dismissal represented its decision that this dispute belongs
in the arbitral forum selected by the parties, not the court.
Such a dismissal is analogous to one based on forum non
conveniens. Like a dismissal for lack of subject-matter
jurisdiction, it is final and appealable even though it is
said to be without prejudice. Manez v. Bridgestone
Firestone N. Am. Tire, LLC, 533 F.3d 578, 583-84 (7th
Cir. 2008); Chang v. Baxter Healthcare Corp., 599
F.3d 728, 732 (7th Cir. 2010). Manez explains why.
There we allowed a lawyer to appeal a sanctions order after
the underlying case had been dismissed "without
prejudice" on forum non conveniens grounds. The
critical point was that the U.S. court was finished with the
case; as we said, "the phrase 'without
prejudice' means that although the dismissal is
'final' in the sense that plaintiffs are finished
before the U.S. courts, they still are free to refile the
case in another, appropriate forum ... ."
Manez, 533 F.3d at 583-84. The same is true here.
The merits of this dispute will be resolved by the
arbitrators, and any remaining role for the court will
concern only the question whether the award should be
recognized and enforced. Because the judgment is thus final
for purposes of appeal, we have no need to consider whether
the sanctions order also qualifies as an appealable
collateral order under such cases as Mohawk Indus., Inc.
v. Carpenter, 558 U.S. 100 (2009), and Microsoft
Corp. v. Baker, 137 S.Ct. 1702 (2017). With our
jurisdiction secure, we may proceed to the merits.
relevant part of the arbitration clauses in the Agreements
reads as follows:
This Agreement and any properly adopted Addendum shall
constitute the entire Agreement and understanding between us
and it shall be interpreted under the laws of the State of
Nebraska. ... To the extent any disputes arise under this
Agreement or its interpretation, we both agree to submit such
disputes to final and binding arbitration before any
arbitrator mutually agreed upon by both parties.
Rine decided to take formal action on Hunt's part, she
ignored that language and filed a multi-count complaint in
federal court. The complaint was notable only for its
breadth: it accused Moore of holding Hunt in peonage in
violation of 18 U.S.C. § 1581 (a criminal statute), and
of violating the Racketeer Influenced and Corrupt
Organizations Act (RICO), 18 U.S.C. § 1962; the federal
antitrust laws, 15 U.S.C. §§ 1, 4, 14; the Illinois
Employee Classification Act, 820 ILCS 185/1 et seq.;
and for good measure, the Illinois tort of false
Relying on the Federal Arbitration Act (FAA), 9 U.S.C. §
1 et seq., Moore responded with a motion to compel
arbitration and to stay the litigation; it also sought the
appointment of an arbitrator pursuant to section 5 of the
FAA, 9 U.S.C. § 5. Rine objected on several grounds.
First, she asserted that Hunt had no obligation to comply
with the arbitration clause because Moore had materially
breached the Agreements. Second, she asserted that the
Agreements fell outside the scope of the FAA because Hunt was
a transportation worker. See 9 U.S.C. § 1; Circuit
City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001)
("Section 1 exempts from the FAA only contracts of
employment of transportation workers."). Third, Rine
resisted Moore's request for a court-appointed
arbitrator, noting that the clause provided for a person
"mutually agreed on by the parties."
district court made short shrift of Rine's arguments. It
rejected the assertion that an alleged breach of the
underlying contract relieves a party from an arbitration
agreement; by that reasoning no one would ever arbitrate a
contract dispute, because the arbitration agreement would go
up in smoke as soon as the dispute arose. Rine's effort
to bring Hunt under the transportation-worker exception also
failed, the court said, because the complaint conceded that
he was an "independent truck owner operator, " not
an employee. Rine prevailed only on her procedural argument
against a court-appointed arbitrator: the judge found this
step premature, and directed the parties to try to do this
themselves. They took some steps in that direction, but they
never agreed on anyone.
was the backdrop to Rine's ill-fated return to the
district court. Less than two months after the judge told the
parties to agree on an arbitrator, Rine filed a motion
reporting that their efforts had failed. This revealed, she
said, that the arbitration clause was nothing more than an
"agreement to agree/' unenforceable under Nebraska
law. The district court rejected this reasoning. It noted
that Rine should have raised this argument earlier and that
in any event it was wholly without merit. The FAA preempts
conflicting state law, and a delay in the selection of an
arbitrator does not affect the enforceability of an
arbitration clause. Green ...