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Raju v. Murphy

United States District Court, S.D. Mississippi, Northern Division

July 25, 2017

SESHADRI RAJU PLAINTIFF
v.
ERIN MURPHY; JOHN DOES 1-10 DEFENDANTS

          ORDER

          CARLTON W. REEVES UNITED STATES DISTRICT JUDGE.

         Before the Court is plaintiff's motion to compel arbitration. Having reviewed the briefing and applicable law, the Court is ready to rule.

         I. Factual and Procedural Background

         In June 2014, Seshadri Raju and Erin Murphy agreed to professionally associate and entered into a written Physician Employment Agreement. The Agreement contained an arbitration section.[1] Dr. Raju and Dr. Murphy worked together from September 2014 until February 2017.

         In March 2017, Dr. Raju filed this action in the Circuit Court of Hinds County, Mississippi. He sought compensatory damages, punitive damages, and attorneys' fees for alleged breach of contract, disclosure of confidential information, theft of copyrighted materials, gross negligence, malice, fraud, extortion, theft and embezzlement, among other claims.[2] In May 2017, Dr. Murphy removed the action to this Court and counterclaimed for breach of contract, conversion, tortious interference with contract, constructive discharge, negligence, and negligent as well as intentional infliction of emotional distress. She demands a trial by jury.

         Dr. Raju now seeks to enforce the arbitration clause contained in the Agreement. Dr. Murphy argues that Dr. Raju has waived the arbitration clause by choosing to litigate the merits of his claims in court.

         II. Law

         “The right to arbitrate a dispute, like all contract rights, is subject to waiver.” Nicholas v. KBR, Inc., 565 F.3d 904, 907 (5th Cir. 2009) (citing Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th Cir. 1986)). “Waiver will be found when the party seeking arbitration substantially invokes the judicial process to the detriment or prejudice of the other party.” Miller Brewing Co., 781 F.2d at 497.

         “What constitutes a waiver of arbitration is a fact-dependent inquiry.” Nicholas, 565 F.3d at 910 (citation omitted). “However, in light of the federal policy favoring arbitration, there is a strong presumption against finding a waiver of arbitration.” Al Rushaid v. Nat'l Oilwell Varco, Inc., 757 F.3d 416, 421-22 (5th Cir. 2014) (brackets, quotation marks and citation omitted).

         III. Discussion

         There is no dispute that the Agreement was executed by both parties, it contained an arbitration clause, and that arbitration clause would apply to these claims and counterclaims. Therefore, the analysis proceeds to the elements of waiver: substantial invocation of the judicial process and prejudice.

         A. Substantial Invocation of the Judicial Process

         The record suggests that Dr. Raju was initially uninterested in resolving this dispute through arbitration. “Indeed, short of directly saying so in open court, it is difficult to see how a party could more clearly evince a desire to resolve a dispute through litigation rather than arbitration, than by filing a lawsuit going to the merits of an otherwise arbitrable dispute.” Nicholas, 565 F.3d at 908 (brackets, ellipsis, and citation omitted). By commencing this suit, Dr. Raju unequivocally requested judicial resolution of his claims. Id. (“[T]he act of a plaintiff filing suit without asserting an arbitration clause constitutes substantial invocation of the judicial process . . . .”).[3]

         B. ...


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