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PolyOne Corp. v. Westlake Vinyls, Inc.

United States District Court, W.D. Kentucky, Paducah

July 30, 2018

POLYONE CORPORATION, PLAINTIFF
v.
WESTLAKE VINYLS, INC., DEFENDANT

          MEMORANDUM OPINION AND ORDER

          Thomas B. Russell, Senior Judge United States District Court

         This matter comes before the Court on Plaintiff PolyOne Corporation's Motion for Temporary Restraining Order and Preliminary Injunction. [R. 4.] Defendant Westlake Vinyls, Inc. responded, [R. 26], and PolyOne replied, [R. 30.] Fully briefed, this matter is ripe for adjudication. For the following reasons, PolyOne's Motion for Temporary Restraining Order and Preliminary Injunction, [R. 4], is DENIED.

         BACKGROUND

         The history of the relationship between the parties is laid out in this Court's Memorandum Opinion in PolyOne Corporation v. Westlake Vinyls, Inc, No. 5:17-CV-157-TBR, 2018 WL 2437241 (W.D. Ky. May 30, 2018). According to PolyOne, it filed an arbitration demand on May 17, 2017 “seeking to allocate liability for certain environmental costs related to the Westlake Chemical Facility in Calvert City, Kentucky pursuant to the December 19, 2007, Settlement and Release Agreement to resolve the parties' prior litigation in this Court.” [R. 1 at 1 (PolyOne Complaint).] A seven-week arbitration hearing is scheduled to begin on August 6, 2018. [Id.] On July 10, 2018, PolyOne filed the Motion for a Temporary Restraining Order and Preliminary Injunction, [R. 4], that is currently before the Court.

         STANDARD

         To determine whether a preliminary injunction should issue under Federal Rule of Civil Procedure 65(a), the Court weighs four factors: “(1) whether the movant has a strong likelihood of success on the merits, (2) whether the movant would suffer irreparable injury absent a stay, (3) whether granting the stay would cause substantial harm to others, and (4) whether the public interest would be served by granting the stay.” Ne. Ohio Coal. for Homeless & Serv. Employees Int'l Union, Local 1199 v. Blackwell, 467 F.3d 999, 1009 (6th Cir. 2006). “These factors are not prerequisites that must be met, but are interrelated considerations that must be balanced together.” Mich. Coal. of Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153 (6th Cir. 1991). “For example, the probability of success that must be demonstrated is inversely proportional to the amount of irreparable injury the movants will suffer absent the stay.” Blackwell, 467 F.3d at 1009. The party seeking the preliminary injunction bears the burden of justifying such relief. McNeilly v. Land, 684 F.3d 611, 615 (6th Cir. 2012) (citing Granny Goose Foods, Inc. v. Bhd. of Teamsters & Auto Truck Drivers Local No. 70, 415 U.S. 423, 441 (1974)).

         DISCUSSION

         PolyOne argues that each of the four preliminary injunction factors weigh in its favor. [R. 4-1 at 8 (PolyOne TRO Memo).] Westlake disagrees. [See generally R. 26 (Westlake Response).] The Court will address each factor in turn.

         A. Whether the movant has a strong likelihood of success on the merits

         PolyOne argues there is a strong likelihood it can show that the arbitration provisions of the 2007 Settlement Agreement, (“the 2007 Agreement”), are invalid and unenforceable. [R. 4-1 at 8.] In support of this assertion, PolyOne first contends that Section 6.3 of the Agreement, labelled “Complaint for Judicial Determination, ” is unenforceable pursuant to the Supreme Court's holding in Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008). [Id. at 9.] In Hall Street, the Supreme Court faced the question of “whether statutory grounds for prompt vacatur and modification may be supplemented by contract.” Hall St. Assocs., 552 U.S. at 578. There, the two parties entered an arbitration agreement with the following provision:

[t]he United States District Court for the District of Oregon may enter judgment upon any award, either by confirming the award or by vacating, modifying or correcting the award. The Court shall vacate, modify or correct any award: (i) where the arbitrator's findings of facts are not supported by substantial evidence, or (ii) where the arbitrator's conclusions of law are erroneous.

Id. at 579. The Court held that “§§ 10 and 11[1] respectively provide the FAA's exclusive grounds for expedited vacatur and modification” rather than a contract provision that expands judicial review following arbitration. Id. at 584.

         PolyOne contends that two of the provisions under Section 6 of the Agreement, Sections 6.1 and 6.3, “unambiguously conflict with the more limited grounds for review of an arbitrator's award set forth in Sections 10 and 11 of the FAA, ” making Section 6.3 unenforceable. [R. 4-1 at 11.]

         In response, amongst several arguments, Westlake contends that PolyOne waived the right to challenge the validity of the arbitration clause. [R. 26 at 24.] PolyOne retorts that “participating in an arbitration is not sufficient to support waiver, ” and it did not intentionally waive its current argument because it did not learn of the Tenth Circuit's ruling in Citizen ...


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