Smidansky v. DCT Texas LLC et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
William Smidansky,
Plaintiff,
v.
DCT Texas LLC, et al.,
Defendants.
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Civil Action No. 4:25-cv-00365
MEMORANDUM AND RECOMMENDATION
This is a Fair Labor Standards Act (“FLSA”) case that was resolved
through arbitration. 	Invoking 9 U.S.C. § 10(a)(4) of the Federal Arbitration
Act (“FAA”), Plaintiff William Smidansky petitioned to vacate two of the
arbitrator’s 	rulings. 	Dkt. 	47. 	After 	carefully 	considering 	the 	petition,
Defendants DCT Texas LLC’s, Matthew O’Donnell’s, and Mike Pierce, Jr.’s
response, Dkt. 52, Smidansky’s reply, Dkt. 54, and the applicable law, it is
recommended that the petition (Dkt. 47) be denied.
Background
Smidansky worked for Defendants as a delivery driver for a Papa John’s
franchise. 	Dkt. 47 at 2-3; Dkt. 52 at 8. 	As a term of his employment,
Smidansky agreed to resolve “any and all legal claims” through arbitration.
See Dkt. 47-10 at 4 (arbitration agreement). The arbitration agreement states
United States District Court
Southern District of Texas
ENTERED
January 26, 2026
Nathan Ochsner, Clerk
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that 	any 	such 	arbitration 	“shall 	be 	governed 	by 	the 	AAA’s 	Employment
Arbitration Rules and Mediation Procedures.” See Dkt. 47-10 at 3.
Smidansky initiated an arbitration proceeding, alleging that Defendants
violated the Fair Labor Standards Act, 29 U.S.C. § 001, et seq. The arbitration
agreement empowered the arbitrator to “grant any legal relief the parties may
be entitled to receive under the law.” Dkt. 47-10 at 4. The relevant AAA rule
also required the arbitrator to “maintain the confidentiality of the arbitration”
and authorized the arbitrator “to make appropriate rulings to safeguard that
confidentiality, unless the parties agree otherwise or the law provides to the
contrary.” Dkt. 52-1 at 19 (Rule 23 of AAA Employment Arbitration Rules and
Mediation Procedures).
After the parties submitted their briefs, see Dkt. 47-3 (Smidansky’s
brief); Dkt. 52-2 (Defendants’ response), the arbitrator entered a scheduling
order that included a confidentiality requirement. 	See Dkt. 47-4 at 11. 	As
stated in the order, “all aspects of this arbitration shall be kept confidential …
including but not limited to the existence of this arbitration and all allegations,
claims, defenses, and materials exchanged in discovery.” Id.
Smidansky later accepted an offer of judgment for a specified amount,
plus “costs and reasonable attorneys’ fees … as determined by the Arbitrator.”
See Dkt. 52-3. 	He petitioned for attorneys’ fees and costs, see Dkt. 47-1, and
the 	parties 	briefed 	the 	issue, 	see 	Dkt. 	47-7 	(Defendants’ 	response), 	47-2
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(Smidansky’s reply). 	The arbitrator awarded only about a third of the sum
that Smidansky had requested. Compare Dkt. 47-1 at 18 (Smidansky’s brief),
with Dkt. 47-9 at 6-7 (award).
Smidansky filed a petition to vacate both the confidentiality ruling and
the attorneys’ fee award, but did so in the Eastern District of Texas. 	Dkt. 2.
Defendants moved to dismiss the petition for lack of subject matter jurisdiction
and, alternatively, for improper venue. Dkt. 10. That court denied the motion
to dismiss, concluding that jurisdiction was proper, see Dkt. 28 at 5-6, but
agreed that venue was improper, id. at 7-8. 	It therefore transferred the case
to this District. Dkt. 28; see Dkt. 29 (notice of transfer).
After the case was transferred, Smidansky amended his petition to
vacate. 	Dkt. 47. 	Defendants responded, Dkt. 52, and Smidansky replied,
Dkt. 54. The petition is ripe for resolution.
Analysis
Despite asserting that the arbitrator exceeded her powers, Smidansky’s
petition merely complains that the arbitrator reached the wrong result on
issues that the arbitrator was authorized to resolve. As explained below, there
is no valid basis to disturb the arbitrator’s rulings.
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I. 	This 	Court 	should 	not 	revisit 	the 	transferor 	court’s
jurisdictional ruling.
Before reaching the merits, the Court addresses Defendants’ invitation
to revisit an issue that was addressed by the Eastern District of Texas.
Specifically, Defendants argued that the parties are not diverse and federal
question jurisdiction does not exist. See Dkt. 10 at 1-4. They maintained that
Badgerow v. Walters, 596 U.S. 1, 4-5, 8-11 (2022), precludes courts from
“looking through” a petition to vacate an arbitral award by relying on the
nature of the underlying claim to assert that arises under federal law. See id.
at 3. The transferor court, however, concluded that “[t]his case does not require
the Court to look through to the underlying employment dispute” because
Smidansky complains “that the arbitrator did not use the lodestar method to
calculate the reasonable attorney’s fees amount” required by the FLSA. 	See
Dkt. 28 at 5 (December 27, 2024 order).
Now, 	before 	this 	Court, 	Defendants 	reprise 	those 	contentions 	that
subject-matter jurisdiction is lacking. 	See Dkt. 52 at 11-16. 	But they fail to
acknowledge a legal barrier to revisiting the issue.
Under the law of the case doctrine “when a court decides upon a rule of
law, that decision should continue to govern the same issues in subsequent
stages in the same case.” Christianson v. Colt Indus. Operating Corp., 486 U.S.
800, 815-16 (1988) (quotation omitted); see also Prospect Energy Corp. v. Dallas
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Gas Partners, LP, 761 F. Supp. 2d 579, 585 (S.D. Tex. 2011) (applying doctrine
to decisions made before transfer). 	This rule “promotes the finality and
efficiency of the judicial process by protecting against the agitation of settled
issues.” 	Christianson, 486 U.S. at 816 (quotation omitted). 	So federal courts
“should be loathe to” revisit decisions of its own or a coordinate court “in the
absence of extraordinary circumstances such as where the initial decision was
clearly erroneous and would work a manifest injustice.” 	Id. at 817 (quotation
omitted). There is no “jurisdiction exception” to the doctrine. See Free v. Abbott
Lab’ys, Inc., 164 F.3d 270, 272 (5th Cir. 1999) (declining to reconsider subject
matter jurisdiction).
Defendants contend that the Eastern District of Texas’s jurisdictional
analysis was “unpersuasive.” 	Dkt. 52 at 14. 	But simply disagreeing with the
district judge’s reasoning is not an “extraordinary circumstance” warranting a
second bite. This Court should decline to revisit the transferor court’s finding.
II. 	Smidansky 	has 	not 	shown 	that 	the 	arbitrator 	exceeded 	her
powers.
Turning to the merits, Smidansky contends that the arbitrator exceeded
her powers by declining to award the full sum of attorneys’ fees and costs and
ordering that the proceeding remain confidential. 	See Dkt. 47 at 14-35.
Defendants respond that Smidansky’s arguments falter under the FAA’s
extremely limited review. See Dkt. 52 at 16-26. Defendants are correct.
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The Court will vacate an arbitrator’s decision “only in very unusual
circumstances.” 	Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 568 (2013)
(quotation omitted). 	Of the FAA’s four enumerated grounds for vacatur,
Smidansky invokes only the instance “where the arbitrators exceeded their
powers, or so imperfectly executed them that a mutual, final, and definite
award upon the subject matter submitted was not made.” 	See 9 U.S.C.
§ 10(a)(4). “A party seeking relief under that provision bears a heavy burden.”
Oxford Health, 569 U.S. at 569.
“Under this section, merely ‘convincing a court of an arbitrator’s error—
even his grave error—is not enough.” U.S. Trinity Energy Servs., L.L.C. v. Se.
Directional Drilling, L.L.C., 135 F.4th 303, 308 (5th Cir. 2025) (quoting Oxford
Health, 569 U.S. at 572). 	Instead, “[t]he question is whether the arbitrator’s
award was so unfounded in reason and fact, so unconnected with the wording
and purpose of the [arbitration agreement] as to manifest an infidelity to the
obligation of an arbitrator.” 	Timegate Studios, Inc. v. Southpeak Interactive,
L.L.C., 713 F.3d 797, 802 (5th Cir. 2013) (quotations omitted). 	Put another
way, Section 10(a)(4) does “not provide a backdoor for a party to seek judicial
review of the arbitrator’s interpretations.” Trinity Energy Servs., 135 F.4th at
310. This is because “[t]he potential for ... mistakes is the price of agreeing to
arbitration.” Oxford Health, 569 U.S. at 572-73.
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In 	his 	petition, 	Smidansky 	contends 	that 	the 	arbitrator
(1) “contravene[ed] the FLSA’s mandate” for a “fully-compensatory fee award,”
and (2) exhibited “manifest disregard for the law.” See Dkt. 47 at 14 (Count I),
31 (Count II). 	But those arguments merely complain that the arbitrator
reached the wrong conclusion when determining what sum to award. 	That is
not enough to show that the arbitrator exceeded her powers.
Notably, Smidansky’s position that he was automatically entitled to the
full measure of attorneys’ fees does not comport with the FLSA, which limits
recovery to a “reasonable” figure. 	Compare Dkt. 47 at 15, with 29 U.S.C.
§ 216(b). 	Even federal courts have reduced fee awards after considering
multiple factors. 	See, e.g., Saizan v. Delta Concrete Prods. Co., 448 F.3d 795,
800-03 (5th Cir. 2006) (per curiam) (affirming reduced FLSA fee award).
But because this issue was resolved by the arbitrator, it does not matter
whether the fee award was wrong. 	Settled law holds that “[a]n arbitration
award may not be set aside for a mere mistake of fact or law.” 	Cooper v.
WestEnd Cap. Mgmt., L.L.C., 832 F.3d 534, 546 (5th Cir. 2016) (quotation
omitted). 	And 	Smidansky’s 	interrelated 	complaint 	that 	the 	arbitrator
committed “manifest disregard of the law” is legally foreclosed. See Dkt. 47 at
31-32. 	The Fifth Circuit has squarely rejected that theory as a basis for
vacatur. See Trinity, 135 F.4th at 309-10 (explaining that “manifest disregard
of the law” as a basis to vacate under § 10(a)(4) would contravene Supreme
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Court precedent and “forc[e] us to conduct a less deferential review of a panel’s
award than the FAA contemplates”).
Smidansky’s challenge to the confidentiality order is similarly flawed.
He contends that the order violated the National Labor Relations Act, the
FLSA, and the AAA’s rules. 	Dkt. 47 at 32 (Count III), 33 (Count IV). 	But he
cites 	no 	authority 	suggesting 	that 	confidentiality 	orders 	in 	arbitration
proceedings are invalid, much less that entry of such an order would warrant
vacatur. 	Rather, 	the 	AAA’s 	Employment 	Arbitration 	Rules—which 	the
arbitration agreement incorporates, see Dkt. 47-10 at 3—empower arbitrators
“to 	make 	appropriate 	rulings 	to 	safeguard” 	the 	confidentiality 	of 	the
arbitration. See Dkt. 52-1 at 19.
More fundamentally, Smidansky already made those arguments to the
arbitrator, see Dkt. 47-3, and the arbitrator rejected them, see Dkt. 47-5 at 4
(admonishing Smidansky and his counsel to comply with their confidentiality
obligations in Dkt. 47-4 at 11 ¶ 15(K)). 	Smidansky’s continued disagreement
misses the point. Because the arbitrator was at least “arguably construing or
applying the contract,” her decision “must stand.” 	Oxford Health, 569 U.S. at
569 (quotation omitted). 	Smidansky’s petition to vacate that decision should
be denied.
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Recommendation
For the foregoing reasons, it is RECOMMENDED that Plaintiff William
Smidansky’s amended petition to vacate the arbitrator’s award of attorneys’
fees and costs and the arbitrator’s confidentiality order (Dkt. 47) be DENIED,
and that this case be DISMISSED WITH PREJUDICE.
The parties have fourteen days from service of this Report and
Recommendation to file written objections. 28 U.S.C. § 636(b)(1); Fed.
R. 	Civ. 	P. 	72(b). 	Failure 	to 	file 	timely 	objections 	will 	preclude
appellate review of factual findings and legal conclusions, except for
plain error. 	Ortiz v. City of San Antonio Fire Dep’t, 806 F.3d 822, 825
(5th Cir. 2015).
Signed on January 26, 2026, at Houston, Texas.
______________________________
Yvonne Y. Ho
United States Magistrate Judge
_______________________________________
Y	Yvvvoon	n	nne Y. H	Hooo
U	United States Magistrate Judge
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