United States District Court, District of Columbia
YOUNG N. CHO, Plaintiff,
MALLON & MCCOOL, LLC, et al., Defendant.
KETANJI BROWN JACKSON United States District Judge.
February 18, 2017, Plaintiff Young Cho filed an eleven-count
complaint in D.C. Superior Court alleging that Defendants
Steven McCool, Joseph Mallon, and Mallon & McCool, LLC
(collectively, “Defendants”) committed a series
of fraudulent and negligent acts while representing Cho in
previous legal proceedings, resulting in purportedly
excessive legal fees. (See generally Compl., Ex. 2
to Defs.' Notice of Removal, ECF No. 1-2.) Before this
Court at present is Cho's motion to stay the case and
compel arbitration pursuant to the Federal Arbitration Act, 9
U.S.C. §§ 3, 4. (See Pl.'s Mot. to
Compel Arbitration and Stay the Case (“Pl.'s
Mot.”), ECF No. 11-1, at 3.)For the reasons that follow,
this Court concludes that because Cho has forfeited any right
to arbitration that he may once have possessed, Cho's
Motion to Compel Arbitration and Stay the Case must be
DENIED. A separate Order consistent with this Memorandum
Opinion shall follow.
Federal Arbitration Act (“FAA”) authorizes
courts, under certain circumstances, to stay proceedings
referable to arbitration and/or compel the parties to
arbitrate pursuant to a valid written agreement. See
9 U.S.C. §§ 3, 4. Significantly for present
purposes, the D.C. Circuit has unequivocally emphasized that
the timing of a party's request to stay a case
pending arbitration matters: it has held that a defendant who
seeks a stay pending arbitration under Section 3 of the FAA
but “who has not invoked the right to arbitrate on the
record at the first available opportunity, typically
in filing his first responsive pleading or motion to dismiss,
has presumptively forfeited that right.” Zuckerman
Spaeder, LLP v. Auffenberg, 646 F.3d 919, 922 (D.C. Cir.
2011) (emphasis added); see also Id. at 924
(“By this opinion we alert the bar in this Circuit that
failure to invoke arbitration at the first available
opportunity will presumptively extinguish a client's
ability later to opt for arbitration.”). However, a
party still can “overcome the presumption of having
forfeit his right to a stay” if “his conduct in
litigation after the first responsive pleading imposed no or
little cost upon opposing counsel and the courts.”
Id. at 923; see also id.
it appears that “[t]he right to arbitration, like any
contract right, can be waived[, ]” even if it is not
forfeited. Nat 'l Found. for Cancer Research v. A. G.
Edwards & Sons, Inc., 821 F.2d 772, 774 (D.C. Cir.
1987). Such waiver can occur in several ways; for example,
through “active participation in a lawsuit[, ]”
or by taking other actions that are otherwise
“inconsistent with the arbitration right[, ]”
Khan v. Parsons Glob. Servs., Ltd., 521 F.3d 421,
424-25 (D.C. Cir. 2008) (internal quotation marks and
citations omitted). “In this circuit, the court views
the totality of the circumstances [in deciding whether] the
defaulting party has acted inconsistently with the
arbitration right.” Id. at 425 (alteration in
original) (internal quotation marks and citation omitted).
Compare Id. at 428 (finding that the defendant
waived its right to compel arbitration by filing a motion to
dismiss, or alternatively, for summary judgment or to compel
arbitration, because the defendant's actions were
“inconsistent with preserving the right to compel
arbitration” notwithstanding the otherwise
“limited extent of [the defendant's] litigation
activity[, ]” and because the plaintiffs had
“suffered significant prejudice”), with Davis
Corp. v. Interior Steel Equip. Co., 669 F.Supp. 32, 33,
34 (D.D.C. 1987) (holding that subcontractor did not waive
right to arbitration by filing an action in federal court to
protect against the statute of limitations, or by
participating in minimal discovery, where subcontractor
“consistently maintained that the dispute
should be subject to arbitration” (emphasis in
instant matter, Cho contends that a stay of this case in
order to arbitrate the pending attorneys' fees issues is
warranted because both Rule 4 of the Attorney/Client
Arbitration Board (“ACAB”) Rules and Rule XIII of
the Rules Governing the District of Columbia Bar (“Bar
Rules”) provide that a lawyer is deemed to have agreed
to arbitrate a fee dispute whenever a client requests
arbitration on that issue. (See Pl.'s Mot. at
4.) However, even assuming, arguendo, that the ACAB
and/or Bar Rules provide a valid basis for Cho to demand
arbitration under the FAA-which, by its express terms,
requires “an agreement in writing” that
expresses the parties' assent to arbitration, 9 U.S.C.
§ 3 (emphasis added); see also Id. §
4-Cho's motion to stay cannot be countenanced because Cho
has not previously asserted his right to arbitration in the
context of this proceeding, and has repeatedly acted
inconsistently with an intent to exercise any arbitration
right that he may have possessed.
timeline of Cho's protracted litigation belies any
suggestion that Cho invoked arbitration at the first
available opportunity. On February 22, 2016, Cho filed a
substantially similar eleven-count complaint in D.C. Superior
Court, which contained no reference to arbitration.
(See Compl., Dkt. No. 1-1, in Civ. Action No.
16-cv-0562, at 11-52.) After Defendants removed Cho's
case to this Court and filed two motions to dismiss, Cho once
again failed to request arbitration, and instead asked for an
extension of time to “prepare a response to
Defendants' two motions to dismiss” and to obtain
the necessary documentation in support thereof. (Pl.'s
Second Consent Mot. for Enlargement of Time, Dkt. No. 13, in
Civ. Action No. 16-cv-0562, at 2.) Cho then filed two
separate oppositions to Defendants' motions to dismiss
(see Pl.'s Mem. in Opp'n to Defs.' Mot.
to Dismiss Pursuant to Rule 12(b)(1), Dkt. No. 14, in Civ.
Action No. 16-cv-0562; Pl.'s Mem. in Opp'n to
Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(6), Dkt.
No. 15, in Civ. Action No. 16-cv-0562)-neither of which
invoked any right to arbitration-and shortly after
Defendants' motions to dismiss became ripe, Cho sought
leave to file two sur-replies in further opposition to
Defendants' motions; his motions for leave omitted any
reference to arbitration (see Pl.'s Mot. for
Leave to File Sur-Reply in Opp'n to Defs.' Mot. to
Dismiss Pursuant to Rule 12(b)(1), Dkt. No. 18, in Civ.
Action No. 16-cv-0562; Pl.'s Mot. for Leave to File
Sur-Reply in Opp'n to Defs.' Mot. to Dismiss Pursuant
to Rule 12(b)(6), Dkt. No. 19, in Civ. Action No.
16-cv-0562). Then, on October 13, 2016, Cho filed a notice of
voluntary dismissal of his case (see Pl.'s
Stipulation of Dismissal Without Prejudice, Dkt. No. 21, in
Civ. Action No. 16-cv-0562), yet he did not thereafter seek
to arbitrate his claims (see Defs.' Opp'n to
Pl.'s Mot., ECF No. 13, at 7).
four months later, on February 18, 2017, Cho initiated the
instant action in D.C. Superior Court (see Compl.)
and, once again, Defendants removed the case to this Court
and filed two motions to dismiss (see Defs.'
Mot. to Dismiss Pursuant to Rule 12(b)(1), ECF No. 3;
Defs.' Mot. to Dismiss Pursuant to Rule 12(b)(6), ECF No.
8). In response, Cho did not invoke a right to arbitration;
rather, he sought (and received) two extensions of time to
prepare oppositions to Defendants' motions. (See
Pl.'s First Consent Mot. for Enlargement of Time, ECF No.
10; Pl.'s Second Mot. for Enlargement of Time, ECF No.
12.) It was only after more than thirteen months had passed,
and after he had initiated two lawsuits, that Cho finally
filed the instant motion to stay the case and compel
arbitration. (See Pl.'s Mot.)
Court's view, there is no question that Cho has
presumptively forfeited his right to stay the case pursuant
to 9 U.S.C. § 3 by failing “to invoke arbitration
at the first available opportunity.”
Auffenberg, 646 F.3d at 924. To be sure, the
Auffenberg court articulated a forfeiture standard
applicable when the party requesting arbitration is the
defendant, and as a result, it is not entirely clear
from Auffenberg when a plaintiff's
“first available opportunity” to invoke
arbitration occurs. See also Id. at 922 (explaining
that a defendant's first available opportunity is
“typically in filing his first responsive pleading or
motion to dismiss”). But even assuming,
arguendo, that a plaintiff's first opportunity
to invoke arbitration in the course of litigation can arise
sometime after the filing of the complaint, it is clear on
the facts of this case that Cho did not invoke his right to
arbitrate at the earliest available opportunity; indeed,
Cho's prior lawsuit proceeded for nearly eight months
before Cho voluntarily dismissed that action, and even at
that point, Cho did not seek to arbitrate his
claims. (See Defs.' Opp'n to Pl.'s Mot.,
ECF No. 13, at 7.) Moreover, Cho took no steps to arbitrate
his claims in the four ensuing months (see id.), and
instead ultimately opted to initiate the instant action.
insists that this Court should discount this chronology
because he “regularly conferred with Defendants to
resolve the case by settlement[.]” (Pl.'s Reply
Mem. in Supp. of Pl.'s Mot. (“Pl.'s
Reply”), ECF No. 14, at 4.) But “that
representation is nowhere documented in the record[, ]”
and it is well established that “a court considering a
question of forfeiture is properly concerned only with
intentions placed upon the record.”
Auffenberg, 646 F.3d at 923. What the record in this
case does make crystal clear is that, by failing to
assert his right to arbitrate timely, Cho's litigation
activities have imposed substantial costs on Defendants and
on this Court, which is sufficient to defeat Cho's
contention that he is entitled to seek arbitration now.
See Id. (suggesting that a defendant can
“overcome the presumption of having forfeit his right
to a stay” if “his conduct in litigation after
the first responsive pleading imposed no or little cost upon
opposing counsel and the courts”).
and for what it is worth, the same facts that give rise to a
forfeiture finding as discussed above also demonstrate that
Cho has waived any right to arbitrate.Cho's active
participation in litigating his claims against these
defendants was vigorous and intentional, as described above.
Furthermore, Cho's current representation that he
initiated the February 2016 case “[i]n order to
preserve his claims under the statute of limitations”
(Pl.'s Reply at 4) is of no moment, because, regardless,
Cho actively prosecuted his claims, and did not
“consistently maintain that the dispute
should be submitted to arbitration.” Davis,
669 F.Supp. at 33 (emphasis in original).
Cho has failed to invoke arbitration at his first available
opportunity and has repeatedly acted inconsistently with any
right to arbitrate, he has forfeited any arbitration right he
may once have possessed such that his request for arbitration
at this juncture cannot be honored. Accordingly, as set forth
in the ...