United States District Court, N.D. Oklahoma
DR. WILLIAM BEN JOHNSON, Plaintiff,
DENTSPLY SIRONA INC., Defendant.
OPINION AND ORDER
V. EAGAN, UNITED STATES DISTRICT JUDGE
before the Court is defendant Dentsply Sirona Inc.'s
(Dentsply) motion (Dkt. # 37) to confirm the arbitrator's
ruling on defendant's motion for a preliminary
is a business that manufactures, markets, and sells
endodontic products for the dental industry. Dkt. # 16-4, at
22. Plaintiff is an endodontist and “well recognized
and respected figure in the dental and endodontic
business.” Id. The parties entered into an
agreement, effective June 1, 2007 (2007 Agreement), under
which plaintiff would perform consulting services for
defendant for ten years and receive annual compensation.
Id. at 23-25. Defendant would also pay plaintiff
royalties for inventions assigned to defendant under the 2007
Agreement. Id. at 25-27. Plaintiff agreed not to
disclose any confidential information about defendant's
business affairs and not to work in competition with
defendant for three years after the termination of the 2007
Agreement, which expires on December 31, 2017. Id.
at 27-28; Dkt. 35-1, at 2. The 2007 Agreement also contains a
dispute resolution clause that states:
Any dispute or claim relating to this Agreement, other than a
claim for equitable relief[, ] or any amendment thereof,
including without limitation as to its existence, validity,
enforceability, interpretation, performance, breach or
damages, including claims in tort, whether arising before or
after the termination of this Agreement, shall be settled
only by binding arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association
(“Rules”); provided, however, that: (a) the
arbitration shall take place in Chicago, Illinois; (b) there
shall be one (1) arbitrator, who shall be selected under the
normal procedures prescribed in the Rules; (c) subject to
legal privileges each party shall be entitled to discovery in
accordance with the Federal Rules of Civil Procedure; (d) at
the arbitration hearing each party may present evidence as
prescribed by the arbitrator; (e) the arbitrator shall not
have the power to award punitive damages; (f) the arbitrator
shall issue a written decision explaining the basis of such
decision; (g) such decision shall be final, binding and
enforceable in any court of competent jurisdiction; (h) the
parties shall share equally any fees and expenses of the
arbitrator and of the American Arbitration Association.
Dkt. # 16-4, at 30.
12, 2016, plaintiff initiated this suit in the District Court
for Tulsa County, State of Oklahoma, seeking a declaration
that the confidentially and non-compete provisions of the
2007 Agreement are unenforceable and an injunction against
defendant from seeking to enforce either provision. Dkt. #
2-1. On August 8, 2016, defendant removed the suit to this
Court on the basis of diversity jurisdiction under 28 U.S.C.
§ 1332(a)(1). Dkt. # 2. Plaintiff moved to remand to
Tulsa County, arguing that this Court does not have subject
matter jurisdiction because the amount in controversy does
not exceed $75, 000 as required under 28 U.S.C. §
1332(a). Dkt. # 23. In response, defendant moved to dismiss,
stay, and/or transfer this proceeding, arguing that the 2007
Agreement binds the parties to resolve plaintiff's claims
in arbitration. Dkt. # 16. On October 7, 2016, this Court
entered an opinion (Dkt. # 33), concluding that it has
jurisdiction over this action and that plaintiff's claim
is arbitrable under the 2007 agreement. The Court stayed this
action pending arbitration, and entered an administrative
closing order (Dkt. # 34), directing the Court Clerk to close
this case pending either an order of the Court reopening the
action, or until this case is dismissed with prejudice by
stipulation of the parties.
19, 2017, the arbitrator issued a ruling (Dkt. # 35-1) on
defendant's motion for a preliminary injunction (the
Ruling). The arbitrator concluded that, for the purposes of
defendant's motion, the 2007 agreement is valid and in
effect. Id. at 2. In addition, he concluded that, in
order to prevent irreparable harm to defendant, it was
necessary to enjoin plaintiff from breaching the 2007
agreement's confidentiality and non-compete provisions,
as plaintiff has already taken actions benefitting
defendant's competitors and has engaged in other conduct
against defendant's best interests. Id. at 3.
Accordingly, the arbitrator granted defendant a preliminary
injunction prohibiting plaintiff from competing with
defendant, revealing any of defendant's confidential
information, or intentionally taking action inconsistent with
defendant's best interests. Id.
Ruling, the arbitrator stated three things that are
particularly relevant to the resolution of the instant
motion. First, that there will be a final evidentiary
hearing, scheduled for “later this year;”
according to the parties, this hearing is now set for
sometime in December 2017. Id. at 2; Dkt. # 37, at
2. Second, the arbitrator stated, “[a]ll rulings herein
are tentative and based on the record presented thus far.
Although some of these conclusions may be less likely to
change than others, all of them are subject to revision after
the final, evidentiary hearing.” Dkt. # 37, at 2.
Finally, the arbitrator stated that at the initial hearing,
“[plaintiff] stated that he had no intention of
violating the 2007 agreement.” Id. at 3. This
fact, the arbitrator continued, “eliminates any
hardship the injunction might otherwise impose on [plaintiff]
given that the final evidentiary hearing is scheduled to take
place before the 2007 agreement expires.” Id.
August 11, 2017, defendant filed with this Court a motion to
the lift the stay and reopen the case (Dkt. # 35), which the
Court granted in an earlier order (Dkt. # 36), and a motion
to confirm the arbitrator's ruling for a preliminary
injunction (Dkt. # 37), which is currently before the Court.
Federal Arbitration Act (FAA), 9 U.S.C. § 1 et
seq. (1925), “creates the ‘federal
substantive law of arbitrability . . . .'”
Moses H. Cone Mem'l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 24 (1983). The “principal
purpose” of the FAA is to “ensure that private
arbitration agreements are enforced according to their
terms.” Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior University, 489 U.S.
468, 478 (1989). The 2007 Agreement provides that any
arbitration will take place pursuant to the Commercial
Arbitration Rules of the American Arbitration Association
(AAA Commercial Rules). Dkt. # 16-4, at 30. Pursuant to Rule
37, the “arbitrator may take whatever interim measures
he or she deems necessary, including injunctive relief,
” and “interim measures may take the form of an
interim award . . . .” Am. Arbitration Ass'n,
Commercial Arbitration Rules and Mediation Procedures R.
37(a) (Oct. 1, 2013); Dkt. # 42-1, at 25. Pursuant to Rule
47, the “arbitrator may grant any remedy or relief that
the arbitrator deems just or equitable and within the scope
of the agreement of the parties, ” and “[in]
addition to a final award, the arbitrator may make other
decisions including interim, interlocutory, or partial
rulings, orders, and awards.” Id. R.
47(a)-(b); Dkt. # 42-1, at 29.
9-11 of the FAA, “provide for expedited judicial review
to confirm, vacate, or modify arbitration awards.”
Hall Street Associates, L.L.C. v. Mattel, Inc., 552
U.S. 576, 758 (2008). Section 9 provides, in pertinent part:
If the parties in their agreement have agreed that a judgment
of the court shall be entered upon the award made pursuant to
the arbitration. . .then at any time within one year after
the award is made any party to the arbitration may apply to
the court . . . for an order confirming the award, and
thereupon the court must grant such an order unless the award