LOBSTER 207 LLC v. PETTEGROW et al

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
LOBSTER 207, LLC, 	)
)
Plaintiff 	)
)
v. 	) 	No. 1:19-CV-00552-LEW
)
WARREN B. PETTEGROW, et al., 	)
)
Defendants 	)
ORDER
Given Defendants’ indication that they do not object to Plaintiff’s Motion for Leave to
Amend the Complaint (ECF No. 146), the motion is GRANTED. Relatedly, Defendants’ request
(see ECF No. 164) for an enlargement of the deadline to answer the First Amended Complaint is
GRANTED. The time to answer is hereby enlarged to 21 days for all Defendants.
Defendant’s Motion for Leave to Amend Answer and Counterclaims, and to Join the
IAMAW, the MLU, and David Sullivan (ECF No. 154) is GRANTED. Defendants’ motion,
being timely, should be granted freely unless granting it would produce a manifest
injustice, such as undue delay or prejudice to the opposing party, or reward bad faith
conduct, or serve no purpose because the newly proposed claims are futile. Fed. R. Civ. P.
15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Plaintiff does not oppose the motion on
grounds of futility or undue delay, but rather contends the timing of the motion is
prejudicial to Plaintiff’s interest in achieving justice through a solitary proceeding and
avoiding potentially inconsistent outcomes in arbitral and judicial forums. Plaintiff’s
prejudice argument is unconvincing because it is not apparent that allowing the amendment
gives Warren Pettegrow an unfair advantage in this litigation. It is appropriate for the
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Defendants, including Warren Pettegrow, to present and thereby preserve all claims and
defenses available in this forum. The Motion to Amend is therefore GRANTED. In the
interest of parity, Plaintiff’s time to answer the amended counterclaims is enlarged to 21
days.
As for Plaintiff’s contention that the expanded counterclaims demonstrate the need
to stay the arbitration proceeding in favor of one unified action in this Court, Warren’s
assertion of claims against third parties is not a waiver of his right to arbitrate his
employment dispute with Lobster 207. Furthermore, staying the arbitration in order to give
primacy to this litigation is at odds with the Federal Arbitration Act, 9 U.S.C. § 2, which
states that agreements to arbitrate are “valid, irrevocable, and enforceable” absent grounds
to 	revoke 	the 	contract. 	No 	such 	ground 	exists. 	Finally, 	Lobster 	207 	might 	have
contemplated the possibility of multi-party litigation and included an exception to
arbitration under Warren’s Employment Agreement in the event of multi-party litigation,
but it did not do so.1 I am not persuaded that it is wise policy for a district court judge to
reformulate the balance selected by the contracting parties on the basis of some federal
common law principle that is not well established in precedent, assuming it would not be
a manifest abuse of discretion to do so for a reason other than fraudulent inducement or
waiver.2 Accordingly, Plaintiff’s renewed request to stay arbitration (ECF No. 165 at 8-10)
1 This kind of eventuality is foreseeable and there exist arbitration schemes that account for it. See, e.g.,
Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 476 & n.5 (1989)
(discussing how contracting parties’ choice-of-law allowed for application of such a stay). There is no
reason why Lobster 207 and Warren Pettegrow could not have considered and fashioned an arbitration
agreement of that kind.
2 For fraud in the inducement, see Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 377 (1st
Cir. 2011); for waiver, see Joca-Roca Real Estate, LLC v. Brennan, 772 F.3d 945, 948 (1st Cir. 2014).
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is DENIED.
Defendants’ Motion for Leave to File a Sur-Reply (ECF No. 174) is DENIED AS MOOT.
S O O RDERED.
Dated this 29th day of April, 2021.
/s/ Lance E. Walker
UNITED STATES DISTRICT JUDGE
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