United States District Court, S.D. Mississippi, Southern Division
BARRETT BARIA; et al. PLAINTIFFS
SINGING RIVER ELECTRIC COOPERATIVE also known as Singing River Electric Power Association DEFENDANT
MEMORANDUM OPINION AND ORDER GRANTING MOTION TO
COMPEL ARBITRATION, DENYING MOTION FOR LIMITED LIFTING OF THE
STAY ON DISCOVERY, AND ADMINISTRATIVELY CLOSING CASE
GUIROLA, JR., UNITED STATES DISTRICT JUDGE
THE COURT are the  Motion to Compel Arbitration filed by
Defendant Singing River Electric Cooperative and the 
Motion for Limited Lifting of the Stay on Discovery filed by
Plaintiffs Barrett Baria, Edward Zielinski, and Lorraine
Zielinski. The Motion to Compel Arbitration contends that
Plaintiffs have agreed, through their contracts with Singing
River, to arbitrate the claims alleged in this lawsuit.
Singing River thus asks for the Court to order Plaintiffs to
individually arbitrate their claims and to stay this case
pending arbitration. The Motion for Limited Lifting of the
Stay of Discovery seeks discovery into asserted issues of
fact surrounding whether there is a valid agreement to
arbitrate claims between Plaintiffs and Singing River. Both
motions are fully briefed. Having considered the submissions
of the parties, the record, and relevant law, the Court finds
that Singing River's Motion to Compel arbitration should
be granted and Plaintiffs' Motion to lift the stay of
discovery should be denied.
Singing River Electric Cooperative (“Singing
River” or “the Cooperative”) is a rural
electric cooperative providing electricity to tens of
thousands of Mississippi residents and businesses. It exists
as a non-profit corporation organized and created pursuant to
section 77-5-205 of the Mississippi Code. Such
“corporation(s) not organized for pecuniary
profit” can only be formed “for the purpose of
promoting and encouraging the fullest possible use of
electric energy by making electric energy available at the
lowest cost consistent with sound economy and prudent
management of the business of such corporations.” Miss.
Code. Ann. § 77-5-205.
putative class-action lawsuit, Plaintiffs - who are
ratepaying members of Singing River - allege that Singing
River has wrongfully withheld and continues to wrongfully
withhold patronage capital from current and former members
that, under Mississippi law, should have been disbursed to
the Cooperative's members. Despite Mississippi law's
requirement that electric cooperatives refund excess revenue
to its members, Plaintiffs claim that Singing River held
$149, 643, 679 of its members' money and had invested
another $60, 663, 747 in associated organizations at the end
of the 2016 calendar year. Plaintiffs say these sums of money
were roughly equal to 41% of Singing River's assets and
were, therefore, excessive.
filed their Complaint in the Circuit Court of Jackson County,
Mississippi on March 22, 2019. Singing River then removed the
case to federal district court and filed the instant Motion
to Compel Arbitration, invoking Section 4 of the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 4.
Thereafter, Plaintiffs responded to this Motion and filed
their Motion for Limited Lifting of the Stay of Discovery.
Motion to Compel Arbitration Standard of Review
2 of the FAA provides,
A written provision in any . . . contract evidencing a
transaction involving commerce to settle by arbitration a
controversy thereafter arising out of such contract or
transaction, or the refusal to perform the whole or any part
thereof, . . . shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.
9 U.S.C. § 2. “Under the Act, arbitration is a
matter of contract, and courts must enforce arbitration
contracts according to their terms.” Henry Schein,
Inc. v. Archer & White Sales, Inc., 139
S.Ct. 524, 529 (2019). Accordingly, the Supreme Court
“ha[s] held that parties may agree to have an
arbitrator decide not only the merits of a particular dispute
but also gateway questions of arbitrability, such as whether
the parties have agreed to arbitrate or whether their
agreement covers a particular controversy.”
Id. (citations and internal quotation marks
omitted). “An agreement to arbitrate a gateway issue is
simply an additional, antecedent agreement the party seeking
arbitration asks the federal court to enforce, and the FAA
operates on this additional arbitration agreement just as it
does on any other.” Rent-A-Ctr., W., Inc.
v. Jackson, 561 U.S. 63, 70 (2010).
party seeks to compel arbitration based on a contract's
arbitration clause, the Court engages in a two-step analysis.
Kubala v. Supreme Prod. Servs., Inc., 830
F.3d 199, 201 (5th Cir. 2016). At step one, “the court
must determine ‘whether the parties entered into
any arbitration agreement at all.'” IQ
Prod. Co. v. WD-40 Co., 871 F.3d 344, 348 (5th Cir.
2017) (quoting Kubala, 830 F.3d at 201).
“This first step is a question of contract formation
only - did the parties form a valid agreement to arbitrate
some set of claims.” This inquiry is for the court:
“Where the very existence of any [arbitration]
agreement is disputed, it is for the courts to
decide at the outset whether an agreement was
Lloyd's Syndicate 457 v. FloaTEC, L.L.C., 921
F.3d 508, 514 (5th Cir. 2019) (alterations in original)
(citations omitted). Only if the Court answers
“yes” to the first inquiry does the Court proceed
to the second step. “At step two, we engage in a
‘limited' inquiry: ‘[W]hether the
[parties'] agreement contains a valid delegation
clause.'” Id. (quoting IQ Prod.,
871 F.3d at 348). To do so, the Court asks only whether there
is “clear and unmistakable” evidence that the
parties' agreement delegates threshold issues. Henry
Schein, 139 S.Ct. at 530. “[I]f a valid ...