United States District Court, W.D. Kentucky, Paducah
B. RUSSELL JUDGE.
matter comes before the Court on Defendant Westlake Vinyls,
Inc.'s Motion to Dismiss, [R. 35]. Plaintiff PolyOne
Corporation responded, [R. 41], and Westlake replied, [R.
42]. Fully briefed, this matter is ripe for adjudication. For
the reasons stated herein, Westlake's Motion to Dismiss,
[R. 35], is GRANTED.
factual background and procedural history of this case is
well known to the Court. Further detail concerning the
relationship between these parties can be found 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). In short, the ongoing
dispute between the parties arises from the 2007 Settlement
and Release Agreement (“2007 Settlement
Agreement”), which contains the arbitration provision
that is currently at issue. On October 31, 2017, PolyOne
filed an Amended Complaint regarding arbitration of a
different provision of the 2007 Settlement Agreement, and on
May 30, 2018, this Court granted Westlake's Motion to
Dismiss the matter. See Id. The Court noted in its
Memorandum Opinion, that PolyOne stated that it filed a
Demand for Arbitration on May 19, 2017 and a Cross-Notice of
Arbitration on or around September 19, 2017. Id. at
10, 2018, PolyOne filed a Complaint for Declaratory and
Injunctive Relief and Petition to Enjoin Arbitration with
this Court, [R. 1]. PolyOne pleaded that due to the Tenth
Circuit's holding on February 6, 2018, in Citizen
Potawatomi Nation v. Oklahoma, 881 F.3d 1226 (10th Cir.
2018), the arbitration provision of the 2007 Settlement
Agreement is invalid. [Id.] PolyOne further noted in
its Complaint that a seven-week arbitration hearing was
scheduled to begin on August 6, 2018, in Louisville,
Kentucky. [R. 1 at 2.] On the same day the Complaint was
filed, PolyOne filed a Motion for Temporary Restraining
Order, [R. 4], which was denied by this Court, [R. 38].
Thereafter, Westlake filed a Motion to Dismiss pursuant to
Federal Rule of Civil Procedure 12(b)(6), which is currently
before the Court.
complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). In order to survive a
motion to dismiss under Rule 12(b)(6), a party must
“plead enough ‘factual matter' to raise a
‘plausible' inference of wrongdoing.”
16630 Southfield Ltd. P'ship v. Flagstar
Bank, F.S.B., 727 F.3d 502, 504 (6th Cir. 2013) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A
claim becomes plausible “when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007)). When
considering a Rule 12(b)(6) motion to dismiss, the Court must
presume all of the factual allegations in the complaint are
true and draw all reasonable inferences in favor of the
non-moving party. Total Benefits Planning Agency, Inc., 552
F.3d at 434 (citing Great Lakes Steel, 716 F.2d at 1105).
“The court need not, however, accept unwarranted
factual inferences.” Id. (citing Morgan v.
Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir.
1987)). Should the well-pleaded facts support no “more
than the mere possibility of misconduct, ” then
dismissal is warranted. Iqbal, 556 U.S at 679. The Court may
grant a motion to dismiss “only if, after drawing all
reasonable inferences from the allegations in the complaint
in favor of the plaintiff, the complaint still fails to
allege a plausible theory of relief.” Garceau v.
City of Flint, 572 Fed.Appx. 369, 371 (6th Cir. 2014)
(citing Iqbal, 556 U.S. at 677- 79). The Court may properly
consider documents as part of the pleadings if the document
is “referred to in the complaint and is central to the
plaintiff's claim.” DBI Investments,
LLC v. Blavin, 617 Fed.Appx. 374, 376 (6th Cir. 2015)
(quoting Greenberg v. Life Ins. Co. of Va., 177 F.3d
507, 514 (6th Cir.1999)). Furthermore, “[a] court that
is ruling on a Rule 12(b)(6) motion may consider materials in
addition to the complaint if such materials are public
records or are otherwise appropriate for the taking of
judicial notice.” New England Health Care Employees
Pension Fund v. Ernst & Young, LLP, 336 F.3d 495,
501 (6th Cir. 2003), holding modified by Merck & Co.
v. Reynolds, 559 U.S. 633, 130 S.Ct. 1784, 176 L.Ed.2d
there is a fair amount of briefing between the parties, many
of the arguments remain the same as they appeared in the
briefs regarding PolyOne's Motion for Temporary
Restraining Order and Preliminary Injunction, [R. 4; see also
R. 26 (Westlake's Response to PolyOne's Motion for
TRO)]. Westlake, once again, asserts that PolyOne's claim
cannot succeed based on res judicata, the equitable doctrines
of waiver and judicial estoppel, etc. The Court stands by its
previous observation that PolyOne has waived the right to
challenge the validity of the arbitration clause of the 2007
Settlement Agreement, [See R. 38 at 4].
is the intentional relinquishment or abandonment of a known
right' leaving no correctable error in its wake.”
Williams v. Port Huron Sch. Dist., 455 Fed.Appx.
612, 623 (6th Cir. 2012) (Moore, J. dissenting) (quoting
United States v. Olano, 507 U.S. 725, 733, 113 S.Ct.
1770, 123 L.Ed.2d 508 (1993)). “Waiver requires
‘knowledge of the right and intent to waive that right,
either by action or omission.'” CFE Racing
Prod., Inc. v. BMF Wheels, Inc., 793 F.3d 571, 587 (6th
Cir. 2015). Here, Westlake argues that PolyOne waived any
right to challenge the validity of the arbitration clause of
the 2007 Settlement Agreement by twice initiating arbitration
against Westlake and allegedly conceding the validity of the
arbitration agreement in the October 2017 lawsuit. [R. 35-6
at 26.] PolyOne retorts that it did not commit waiver because
the basis for its objection to the arbitration provision
comes from a recently decided case by the Tenth Circuit,
i.e., Potawatomi. PolyOne believes that “the Potawatomi
court made new law, ” therefore, its delay in objecting
to Section 6 of the 2007 Agreement is justified. [R. 41 at
18.] The parties dispute whether the basis for PolyOne's
argument actually derives from Potawatomi, or from the
Supreme Court's holding in Hall St. Assocs., L.L.C.
v. Mattel, Inc.,  decided in 2008-one year after the parties
agreed to the 2007 Settlement Agreement.
Street and Potawatomi
Street, the Supreme Court faced the question of
“whether statutory grounds for prompt vacatur and
modification may be supplemented ...