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Haro v. NCR Corp.

October 18, 2006

DAVID D. HARO, PLAINTIFF,
v.
NCR CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Thomas M. Rose United States District Judge

Judge Thomas M. Rose

ENTRY AND ORDER OVERRULING NCR'S MOTION FOR RELIEF FROM JUDGMENT (Doc. #24)

This Court compelled Plaintiff David D. Haro ("Haro") to arbitrate his claims under the Arbitration Agreement that he had entered into with Defendant NCR Corporation ("NCR"). Arbitration was compelled in an Order entered on July 26, 2005, at docket number 16 (the "Order"). However, the cost-sharing clause in the Arbitration Agreement was found to be unenforceable with regard to Haro's claims and was severed from the Agreement.

Now before the Court is NCR's motion for relief from the Order pursuant to Fed.R.Civ.P. 60(b). This motion is now fully briefed and ripe for decision.

In its motion, NCR seeks relief based upon new evidence that it has discovered. Rule 60(b) provides that the court may relieve a party from a final judgment, order or proceeding for, among other reasons, newly discovered evidence which by due diligence could not have been discovered in time. Fed.R.Civ.P. 60(b).

To obtain relief on newly discovered evidence, the moving party must meet two requirements. DRG, Inc. v. Talent Tree, Inc., 119 Fed.Appx. 702, 704 (6th Cir. 2004). First, the moving party, NCR in this case, must have exercised due diligence in obtaining the new evidence. Id. (citing Good v. Ohio Edison Co., 149 F.3d 413, 423 (6th Cir. 1998)). Second, the moving party must show that the new evidence is "material and controlling and clearly would have produced a different result if presented before the original judgment." Id.

The new evidence identified by NCR is that Haro was employed at the time of the Order and allegedly capable of paying his share of the arbitration costs. The Order found the cost-sharing provision in the Arbitration Agreement unenforceable, because, in part, Haro was receiving no income and was paying living expenses out of his personal savings at the time. Haro received a $73,313 annual salary from NCR prior to the termination of his employment.

The remaining relevant facts are best set forth in a chronological list as follows: 01/19/05 Haro submits to the Court an affidavit dated 01/18/05 that he is currently receiving no income and has monthly living expenses of $2,987.26 03/28/05 Haro is employed by Rexnord Corporation 07/26/05 The Order compelling arbitration and severing the cost-sharing provision of the Arbitration Agreement was entered by the Court, and the Court's decision was based, in part, on Haro's 01/18/05 Affidavit 08/22/05 Haro demands that NCR arbitrate his claims and the class claims 09/07/05 NCR acknowledges arbitration demand 02/01/06 Arbitrator appointed by the American Arbitration Association ("AAA") 02/16/06 AAA Pre-Hearing Order #1 issued establishing a briefing schedule on the claim and on class certification 02/17/06 AAA requests $8,000 deposit for anticipated arbitrator compensation 06/06/06 AAA Pre-Hearing Order #4 issued regarding various discovery matters 06/29/06 NCR first learns that Haro was, at one time, employed by Rexnord at a $54,000-55,000 annual salary. This was learned during Haro's Deposition 07/01/06 E-mail from Haro to his counsel indicating that he was employed by Rexnord beginning 03/28/05 07/11/06 NCR asks about Haro's employment with Rexnord in a letter to Haro's counsel 07/14/06 Haro's counsel responds that the affidavit was accurate when submitted on 01/19/05 and remained so for "months after its submission to the court." Haro's counsel further indicates that "I consider the matter closed.." 07/24/06 NCR files motion for relief from the Order Having set forth the relevant facts, the analysis turns to NCR's motion.

NCR has met the first requirement that it must have exercised due diligence to obtain relief pursuant to Rule 60(b). NCR first learned that Haro was employed by Rexnord beginning March 28, 2005, during Haro's deposition on June 29, 2006.*fn1 Within two weeks, NCR contacted Haro's counsel regarding Haro's employment at Rexnord and within four weeks of learning of Haro's employment, NCR filed the instant motion informing the Court of Haro's employment. Finally, Haro assumes for purposes of NCR's motion that NCR could show that it exercised due diligence on this issue.

The second requirement to obtain relief pursuant to Rule 60(b) is that the new evidence is "material and controlling and clearly would have produced a different result if presented before the original judgment." In this case, the new evidence is that Haro was employed and earning $54,000 to $55,000 at the time the Court determined that the cost-sharing provision in the Arbitration Agreement was unenforceable. To determine if this new evidence would have produced a different result, the cost-sharing provision in the Arbitration Agreement must again be examined in light of the new evidence.

Cost sharing provisions are evaluated on a case-by-case basis. Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 659 (6th Cir. 2003). During the evaluation, potential litigants are given an opportunity to demonstrate that the potential costs of arbitration are enough to deter them and similarly situated individuals from seeking to vindicate their rights in the arbitral forum. Id. at 663.

If the cost-sharing effectively prevents the vindication of a plaintiff's rights, those rights cannot be subject to mandatory arbitration. Id. at 658. Said another way, "employers should not be permitted to draft arbitration agreements that deter a substantial number of potential litigants from seeking any forum for the vindication of their rights." Id.

Class of Potential Litigants

The first step of the analysis is to define the class of potential litigants by job description and socioeconomic background. In this case, Haro has presented evidence that the class of potential litigants is former NCR employees over the age of forty who have been released from employment since January 2004 due to ...


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