Arbitration clause enforced against contractor

Where a woman agreed to arbitrate “any and all disputes between the Parties” when she signed on to a mobile app owned and administered by Walmart that allows independent contractors to provide shopping and delivery services for retailers and consumers, the agreement to arbitrate applied to the claims the woman brought against Walmart arising out of her visiting the store in her personal capacity.

Background

Kamille Smith and her husband Leonard Smith sued Walmart Inc., Wal-Mart Stores East LP and Jane Doe on behalf of themselves and their minor children, for defamation, false imprisonment and for allegedly violating the Civil Rights Act of 1964. The claims arise out of an April 2022 visit by the Smith family to their local Walmart, where they were stopped and detained by Jane Doe and others and accused of stealing. The case is before the court on Walmart’s motion to compel arbitration and stay proceedings and the Smiths’ motion to strike.

Motion to strike

Per Local Rule 11(b), Walmart should have either requested a hearing or otherwise indicated that both parties were content to submit their respective motions without a hearing. However, the court retains the authority to determine a motion without oral hearing pursuant to Fed. R. Civ. P. 78(b).

In this instance, the court has sufficient information to rule on the motion to compel based on the briefing, and the Smiths would not be prejudiced on the merits by the court not holding a hearing, as they likewise did not request one. The Smiths’ motion to strike is denied.

Motion to compel arbitration

In any dispute as to the enforceability of an arbitration provision, there are two “gateway matter[s]” that the court must address: (1) whether a valid agreement to arbitrate exists and (2) whether the terms of the agreement contemplate the factually pleaded legal issues presented in the complaint.

Prior to the incident in question, Ms. Smith had begun using the Spark Driver Platform, a mobile app owned and administered by Walmart that allows independent contractors to provide shopping and delivery services for retailers and consumers. As part of her agreement to provide services via the Spark Driver app, Ms. Smith signed an agreement containing an arbitration provision; that provision was in effect during the Walmart incident described above. Walmart has thus met its burden to demonstrate that it had an arbitration agreement with Ms. Smith.

The second question is whether the terms of the agreement contemplate the legal issues implicated in the Smiths’ complaint. The court finds that they do. Unlike most arbitration clauses, the agreement between Ms. Smith and Walmart is not limited to disputes arising under or relating to the contract itself. Rather, it applies to “any and all disputes between the Parties.”

Notably, although the arbitration provision provides an example list of claims that must be submitted to arbitration under the agreement, the provision is explicitly “not limited to” those enumerated claims. And none of the claims described in the section titled “Limitations on Application of This Arbitration Provision” are applicable here. Thus, Ms. Smith’s claims must be submitted to arbitration.

Ms. Smith argues that Walmart waited too long to bring its motion to compel and, as a result, has forfeited any right to arbitration by default. The court disagrees. Walmart timely moved to dismiss the Title II claim—which would have been necessary regardless of its right to arbitrate given that the arbitration provision only applies to Ms. Smith—and answered the complaint as to the other claims on the same day, asserting as a defense that there existed a binding arbitration agreement.

Although Walmart did not move to compel arbitration until six months after the complaint was filed (and five months after moving to dismiss/answering that complaint), “[n]either delay nor the filing of pleadings by the party seeking a stay will suffice, without more, to establish waiver of arbitration.” Discovery (to the extent any has been produced) is in its infancy. And Ms. Smith has not shown any prejudice.

Stay

The issues raised in Ms. Smith’s claims are essentially identical to the issues raised in Mr. Smith’s claims. Moreover, upon the resolution of arbitration, collateral estoppel (issue preclusion) might apply. Thus, it is appropriate to stay Mr. Smith claims against Walmart (also brought on behalf of the minor children) pending completion of the arbitration between Ms. Smith and Walmart.

Plaintiffs’ motion to strike denied. Defendant’s motion to compel arbitration granted.

Smith v. Walmart Inc., Case No. 7:22-cv-00568, Aug. 14, 2023. WDVA at Roanoke (Dillon). VLW 023-3-480. 13 pp.