Deleman v. HighLevel, Inc.

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF PENNSYLVANIA
JOHN MICHAEL DELEMAN,
Plaintiff,
v.
HIGHLEVEL, INC.,
Defendant.
CIVIL ACTION NO. 3:25-CV-01284
(MEHALCHICK, J.)
MEMORANDUM
Plaintiff John Michael Deleman (“Deleman”) initiated this action against Defendant
HighLevel, Inc. (“HighLevel”) on July 9, 2025, in the Luzerne County Court of Common
Pleas. (Doc. 1-2). On July 14, 2025, HighLevel removed this action to the Court. (Doc. 1).
On July 25, 2025, the Court granted HighLevel’s motion to compel arbitration and stayed
this action pending arbitration. (Doc. 41). Before the Court is Deleman’s third motion to lift
the stay. (Doc. 52). For the following reasons, Deleman’s motion is DENIED.
I. FACTUAL BACKGROUND
Deleman is a businessman who operates Elite Marketing Authority Co. (“EMA”), a
marketing SaaS business.1 (Doc. 1-2, at 3). HighLevel is a digital services provider and
platform which provides marketing agencies with various tools to design websites, manage
social media, manage client-relations, and manage client communications. (Doc. 1-2, at 3).
1 “SaaS” stands for “software as a service” and is a software distribution method in which
a service provider gives customers access through the internet to applications, usually ones
developed and owned by the provider. SaaS, Dictionary.Com, DICTIONARY.COM,
https://www.dictionary.com/browse/saas (last visited Apr. 30, 2026).
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Deleman and EMA utilized HighLevel’s platform and services beginning in 2019. (Doc. 22,
¶¶ 1, 15). On November 30, 2024, Deleman encountered HighLevel’s terms of service and
clicked a box accepting those terms of service to obtain a fifty percent discount on HighLevel’s
services. (Doc. 14-5, ¶¶ 1, 15; Doc. 22, ¶¶ 1, 15). HighLevel’s terms of service contained an
arbitration provision. (Doc. 14-6, at 51). On June 17, 2025, HighLevel terminated Deleman’s
account on the platform, blocked Deleman from accessing its platform, and ceased all services
it provided Deleman and EMA. (Doc. 10-9, at 3). On July 9, 2025, Deleman filed a complaint
alleging various claims against HighLevel under Pennsylvania law. (Doc. 1-2). On July 15,
2025, Deleman filed an emergency motion for a temporary restraining order and preliminary
injunction requesting the Court order HighLevel to reinstate Deleman’s accounts and enjoin
it from further interfering with Deleman’s business operations. (Doc. 3). On July 16, 2025,
HighLevel filed a motion to compel arbitration. (Doc. 14). On July 25, 2025, the Court issued
a memorandum and accompanying order denying Deleman’s motion for a temporary
restraining order and preliminary injunction, granting HighLevel’s motion to compel
arbitration, and staying this case pending the outcome of arbitration. (Doc. 40; Doc. 41).
Before filing the instant third motion to lift stay, Deleman filed two other motions to
lift the stay which the Court denied because there had not been a final decision by an arbitrator
in this case. (Doc. 42; Doc. 47; Doc. 48; Doc. 49, Doc. 51). On February 10, 2025, Deleman
filed the instant motion. (Doc. 52). On February 17, 2026, HighLevel filed a brief in
opposition. (Doc. 53). Deleman did not file a timely reply brief.
II. LEGAL STANDARD
“The decision to stay litigation . . . pending the outcome of a related arbitration is one
left to the discretion of the district court.” Commonwealth Ins. Co. v. Underwriters, Inc., 846 F.2d
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196, 199 (3d Cir. 1988). Whether to lift a stay is at the discretion of the Court and “‘[w]hen
circumstances have changed such that the court's reasons for imposing the stay no longer exist
or are inappropriate, the court may lift the stay.’” Sager v. Allied Interstate, LLC, No. 3:18-CV-
220, 2021 WL 9406785, at *2 (W.D. Pa. Dec. 21, 2021) (quoting Canady v. Erbe Elektromedizin
GmbH, 271 F. Supp. 2d 64, 74 (D.D.C. 2002)); see Piazza v. Young, No. 4:19-CV-00180, 2023
WL 1994388, at *2 (M.D. Pa. Feb. 14, 2023) (finding that district courts have discretion over
whether to lift stays and will grant a motion to lift a stay if the circumstances justifying the
stay have changed); see also McCall v. Avco Corp., No. 4:18-CV-01350, 2019 WL 2004358, at
*1 (M.D. Pa. May 7, 2019) (finding the same). “[W]here there are no new circumstances that
impose hardship on the [movant] or that change the court's earlier disposition imposing the
stay, the [movant]’s motion to lift [or modify] the stay should be denied.” KGaA v. Hopewell
Pharma Ventures, Inc., No. CV 22-1365, 2025 WL 894551, at *3 (D. Del. Mar. 24, 2025)
(internal citations and quotations omitted); see Piazza, 2023 WL 1994388, at *3 (denying a
motion to lift a stay where the circumstances around the stay had not changed).
III. DISCUSSION
Deleman avers that the Court should lift the stay because he attempted to proceed with
arbitration before the American Arbitration Association (the “AAA”), the AAA told him that
he could only proceed if he paid a filing fee of $8,700, the AAA denied his request for a fee
waiver, and the AAA administratively closed his arbitration matter after he did not pay the
fee. (Doc. 52, at 1-2). The Federal Arbitration Act (“FAA”) requires courts to stay a case
pending arbitration until “such arbitration has been had in accordance with the terms of the
agreement.” 9 U.S.C. § 3. Where a district court stays a matter pending arbitration, the court
should not lift the stay until the arbitrator makes a final determination. See Lloyd v. HOVENSA,
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LLC., 369 F.3d 263, 270 (3d Cir. 2004) (stating “if a district court determines that arbitration
of a claim is called for, the judicial system's interference with the arbitral process should end
unless and until there is a final award”); see also Wolf v. Nissan Motor Acceptance Corp., No. CIV.
10-3338, 2015 WL 733237, at *7 (D.N.J. Feb. 20, 2015) (denying a motion to lift stay after
the arbitrator concluded a party withdrew his arbitration request after not paying a fee because
the parties could return to arbitration). “‘[G]enerally, an arbitrator's decision is considered
final when the arbitrator has completed his determination of every issue submitted by the
parties.’” Verizon Pennsylvania LLC v. Commc'ns Workers of Am., 216 F. Supp. 3d 530, 534 (E.D.
Pa. 2016) (quoting Millmen Loc. 550, United Bhd. of Carpenters & Joiners of Am., AFL-CIO v. Wells
Exterior Trim, 828 F.2d 1373, 1376 (9th Cir. 1987)).
Under the relevant arbitration agreement, Deleman and HighLevel must engage in
arbitration “administered by the American Arbitration Association in accordance with
Commercial Arbitration Rules, then in effect. This arbitration provision is governed by the
Federal Arbitration Act. The arbitration proceedings shall be held in Dallas, Texas. Any
arbitration award may be entered in a court of competent jurisdiction.” (Doc. 14-6, at 53).
Courts must apply the AAA’s rules for arbitration where an arbitration agreement, like the
one at issue, states that the AAA’s rules govern. See Richardson v. Coverall N. Am., Inc., 811 F.
App’x 100, 103 (3d Cir. 2020). AAA Commercial Rule of Arbitration 55 provides that the
party seeking to initiate arbitration is responsible for paying administrative fees “subject to
final apportionment by the arbitrator in the award” and that the “AAA may, in the event of
extreme hardship on the part of any party, defer or reduce the administrative fees.” Commercial
Arbitration Rules and Mediation Procedures R-55, AAA,
https://www.adr.org/media/lwanubnp/2025_commercialrules_web.pdf (last accessed
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April 27, 2026) (“AAA Rule 55”). The AAA fee schedule establishes set ranges of
administrative fees based on award a party seeks. Commercial Arbitration Rules And Mediation
Procedures Administrative Fee Schedule, AAA
https://www.adr.org/media/pfubh1we/2025_commercial-arbitration-fee-schedule.pdf (last
accessed April 27, 2026) (“AAA Fee Schedule”). The AAA also provides a fee waiver form
for individuals and small businesses. American Arbitration Association Affidavit In Support
of Administrative Fees Hardship Waiver – Small Business Owner, AAA
https://www.adr.org/media/dfbhevx1/2025_support_of_hardship_waiver_of_fees_busines
s.pdf (last accessed April 27, 2026) (“AAA Waiver Form”).
The arbitrator is responsible for interpreting the AAA’s procedural rules, and Courts
should not interfere with arbitration proceedings based on speculation as to how the arbitrator
will interpret procedural matters. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84
(2002) (stating “procedural questions which grow out of the dispute and bear on its final
disposition are presumptively not for the judge, but for an arbitrator, to decide” (citations and
internal quotations omitted)); see also Wolf, 2015 WL 733237, at *7 (finding that courts must
defer to AAA arbitrators on procedural issues such as the payment of administrative fees and
that a court may not speculate as to how the AAA arbitrator will rule on challenges to the
imposition of a fee); see also Viatech Inc. v. DCS Corp., No. CIV. 14-4603, 2014 WL 5089740,
at *3 (D.N.J. Oct. 9, 2014) (noting that the arbitrator, not the Court, is responsible for
interpreting and applying the AAA’s procedural rules).
Deleman contends that the Court should lift the stay because he filed a request for
arbitration, the AAA demanded payment of a $8,700 fee as a condition precedent to
arbitration, the AAA denied his request for waiver, and the AAA closed his arbitration
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proceedings after he could not pay the fee. (Doc. 52, at 5). Deleman submits a letter from the
AAA administratively closing his arbitration matter. (Doc. 52-1). In the letter, the AAA
informed Deleman that “the filing requirements [to initiate arbitration] have not been met.
The filing deficiency has not been cured. Accordingly, we have administratively closed our
file.” (Doc. 52-1, at 2). The AAA further informed Deleman that he could resubmit the matter
should he provide “requisite information along with the appropriate filing fee.” (Doc. 52-1,
at 2). Thus, the AAA letter explicitly informs Deleman that he may resubmit his request and
lifting the stay would be premature because there has yet to be a final determination by an
arbitrator. (Doc. 52-1, at 2); see Lloyd, 369 F.3d at 270 (noting that a court should not interfere
with arbitration proceedings until an arbitrator makes a final determination); see also Wolf v.
Nissan Motor Acceptance Corp., 2015 WL 733237, at *7 (declining to lift a stay where the parties
could return to arbitration after resolving a dispute over arbitration fees).
Deleman contends that even if there is not a formal final arbitration determination,
arbitration is not available “in practice.” (Doc. 52, at 3). Deleman further argues that if the
Court does not lift the stay, it should order HighLevel to pay the arbitration fees because it
was HighLevel who moved to compel arbitration and Deleman cannot realistically proceed
due to the high fees. (Doc. 52, at 4-5). In support of his contention that court action is required
because arbitration is not practically available, Deleman presents 1) an AAA waiver form
asserting his business has zero assets, zero income, and he has only $1,467 in total assets, 2)
a declaration from himself declaring that the AAA’s fee schedule requires him to pay a $8,700
fee, and 3) the denial letter’s statement that if he “decide[s] to resubmit this matter, [me must]
provide all the requisite information along with the appropriate filing fee.” (Doc. 52-1, at 2;
Doc. 52-2; Doc. 52-3). The Court cannot find that the AAA’s fee schedule prohibits Deleman
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from proceeding with arbitration or order HighLevel to pay the fee because it is for the AAA,
not the Court, to determine whether Deleman must pay a $8,700 fee if he were to refile or
whether to waive or defer the fee requirement. See Howsam, 537 U.S. at 84; see also Wolf, 2015
WL 733237, at *7; see also Viatech Inc., 2014 WL 5089740, at *3. Based on the Court’s review
of the AAA rules, and Deleman’s filings, the AAA may not necessarily require Deleman to
pay $8,700 if he were to refile.
The AAA emphasized to Deleman that not only should future filings be accompanied
by “the appropriate filing fee” but that it must have “all requisite information” which indicates
that Deleman’s filing was also deficient due to a missing information. (Doc. 52-1, at 2).
Further, the letter requested that Deleman submit the “appropriate filing fee” upon refiling,
not $8,7000 specifically. (Doc. 52-1, at 2). It is possible that if Deleman submits further
information or modifies his request, the required fee could change. To that end, the AAA’s
waiver form states that the AAA may deny submissions due to “incomplete and misleading
information” and allows applicants space to explain financial factors they wish to consider.
AAA Waiver Form. Looking to Deleman’s filings, he appears to have submitted incomplete
and inconsistent information. (Doc. 52-3). For example, Deleman states both that he has zero
dollars of gross pay/wages and take-home pay after taxes but that he also makes
approximately $150 per month. (Doc. 52-3, at 2). The Court further notes that the AAA fee
schedule only requires petitioners to pay an administrative fee of over $8,000 where a
petitioner raises a claim of over one million dollars. See AAA Fee Schedule. Deleman’s
complaint alleges that he is entitled to over a million dollars because prior to HighLevel
removing him from its platform, his business was making up to $18,802 a month. (Doc. 1-2,
at 4). Deleman’s form does not explain the discrepancy between the assets listed in his form
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and the profits he claims to have made in his complaint. (Doc. 52-3). Per the AAA’s letter to
Deleman, Deleman remains free to resubmit his request for arbitration and provide more
complete information. (Doc. 52-1, at 2). Under the AAA’s rules and fee schedule, the AAA
may reduce the fees required if Deleman reduces the amount of damages sought or provides
complete information showing why the AAA should reduce or defer his administrative fees
and explaining the discrepancy between the amount of assets he claims he has versus the
amount of revenue he claims he was making in his complaint. See AAA Rule 55 (stating “[t]he
AAA may, in the event of extreme hardship on the part of any party, defer or reduce the
administrative fees”); see also AAA Fee Schedule (setting the amount of fees required based
on the amount sought). The decision to defer or reduce fees is for the AAA to determine upon
Deleman’s resubmission, and the Court may not speculate as to how the AAA will interpret
its own rules. See Howsam, 537 U.S. at 84; see also Wolf, 2015 WL 733237, at *7; see also Viatech
Inc., 2014 WL 5089740, at *3. Accordingly, the Court DENIES Deleman’s motion to lift the
stay and DIRECTS the parties to return to arbitration. (Doc. 52). The Court further DENIES
Deleman’s alternative request for the Court to order HighLevel to pay the arbitration fees.
(Doc. 52, at 4-5). The Court further advises Deleman that this is the third time he has
attempted to lift the stay prior to a final determination by an arbitrator and that he should
only re-request the Court lift the stay after a final determination by an arbitrator.
An appropriate Order follows.
BY THE COURT:
Dated: May 5, 2026 s/ Karoline Mehalchick
KAROLINE MEHALCHICK
United States District Judge
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