NO CV IN THE FIFTH COURT OF APPEALS DALLAS, TEXAS IN RE PETITION OF KATE MOSELEY

Transcription

1 ACCEPTED 225EFJ FIFTH COURT OF APPEALS DALLAS, TEXAS 11 October 3 P5:07 Lisa Matz CLERK NO CV IN THE FIFTH COURT OF APPEALS DALLAS, TEXAS IN RE PETITION OF KATE MOSELEY REPLY IN SUPPORT OF PATTON BOGGS' APPEAL AND MANDAMUS PETITION Rod Phelan Texas Bar No Samara L. Kline Texas Bar No Jessica B. Pulliam Texas Bar No BAKER BOTTS L.L.P Ross Avenue, Suite 600 Dallas, Texas (214) Telephone (214) Facsimile ATTORNEYS FOR APPELLANT/RELATOR DAL01:

2 TABLE OF CONTENTS INTRODUCTION...1 ARGUMENT...3 I. Like the trial court's denial of the motion to compel arbitration, the Reponse ignores but does not dispute the evidence establishing an arbitrable "controversy or claim."...3 II. III. IV. A. Conceding a "controversy or claim" triggers arbitration, Moseley erroneously contends those terms are confined to "lawsuit."...3 B. Moseley's 202 Petition does not disprove the existence of a controversy or claim...5 C. Moseley's argument about her EEOC Charge misses the point...7 D. The Response mistakenly likens Moseley's settlement demands to "routine" discussions of "severance," as if that disproves the existence of a "controversy or claim."...7 E. Moseley "asserted" and gave "notice" of a controversy or claim....8 Rule 202 does not trump Texas arbitration law...10 A. The TAA does not allow the pre-arbitration merits discovery that the trial court ordered...10 B. Moseley's reliance on an inapplicable Ohio rule is misplaced...10 C. Moseley's contention that the court lacked jurisdiction to compel arbitration ignores the plain language of the TAA...11 D. Mandamus is appropriate to address the trial court's sanctioning of Moseley's misuse of Rule Preemption: The Response ignores the reach of the Federal Arbitration Act...14 A. Moseley's contention that the FAA does not apply is incorrect...14 B. Moseley's argument that the FAA preempts only laws "specifically targeting" arbitration is wrong The district court's decision undermines longstanding precedent favoring arbitration and creates incentives to misuse judicial processes...16 CONCLUSION AND PRAYER...17 DAL01: i

3 TABLE OF AUTHORITIES CASES Page(s) Ascendant Anesthesia PLLC v. Abazi, S.W.3d, No CV, 2011 WL (Tex. App. Dallas Aug. 2, 2011, no pet. h.)... 4 AT&T Mobility LLC v. Concepcion, 131 S.Ct (2011)... 15, 16 Austin Commercial Contractors, L.P. v. Carter & Burgess, Inc., S.W.3d, No CV, 2011 WL (Tex. App. Dallas Aug. 15, 2011, no pet. h.)... 9 Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., 860 F.2d 1420 (7th Cir. 1988) ECF North Ridge Assocs., L.P. v. Orix Capital Markets, L.L.C., 336 S.W.3d 400 (Tex. App. Dallas 2011, pet. filed)... 8 Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002)... 9 Hundere v. Tracy & Cook, 494 S.W.2d 257 (Tex. Civ. App. San Antonio 1973, writ ref'd n.r.e.)... 4 In re Bill Heard Chevrolet, No CV, 2005 WL (Tex. App. Houston [14th Dist.] Oct. 27, 2005, orig. proceeding) In re Contractor's Supplies, No CV, 2009 WL (Tex. App. Tyler Aug , orig. proceeding)... 6 In re D. Wilson Constr. Co., 196 S.W.3d 774 (Tex. 2006)... 4 DAL01: ii

4 In re Denton, No CV, 2009 WL (Tex. App. Waco Feb. 25, 2009, orig. proceeding) (mem. op.) In re Houston Pipe Line Co., 311 S.W.3d 449 (Tex. 2009) In re Jorden, 249 S.W.3d 416 (Tex. 2008)... 4 In re Rockafellow, No CV, 2011 WL (Tex. App. Amarillo July 19, 2011, orig. proceeding)... 6 In re Southwest Securities, Inc., No CV, 2000 WL (Tex. App. Dallas June 14, 2000, orig. proceeding) In re Wagner, No CV, 2002 WL (Tex. App. Tyler April 12, 2002, orig. proceeding)... 6 In re Wolfe, 341 S.W.3d 932 (Tex. 2011) Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266 (Tex. 1992) Payne v. Edmonson, 712 S.W.2d 793 (Tex. App. Houston [1st Dist.] 1986, writ ref'd n.r.e)... 4 Preston v. Ferrer, 552 U.S. 346 (2008) Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967)... 4 Schrieber v. Federal Express Corp., No. 09-CV-128-JHP-PJC, 2010 WL (N.D. Okla. Mar. 18, 2010)... 8 White v. Equity, Inc., 899 N.E.2d 205 (Ohio App. 10th Dist. 2008) STATUTES TEX. CIV. PRAC. & REM. CODE DAL01: iii

5 RULES TEX. R. CIV. P , 3, 6, 7, 9, 10, 11, 12, 13, 16, 17 TEX. R. CIV. P OHIO CIV. R. 34(D) OTHER AUTHORITIES American Heritage College Dictionary 82 (3d ed. 1993)... 9 Webster's II New College Dictionary 67 (2d ed. 2001)... 8 DAL01: iv

6 INTRODUCTION Ms. Moseley does not dispute that she agreed with Patton Boggs to arbitrate all "controversies and claims" arising from her former partnership. (Response 2.) Her Appellee's Brief and Response to Mandamus ("Response") rests on an argument that no claim or controversy exists, despite undisputed evidence that she (i) charged Patton Boggs with gender discrimination before the EEOC (App. E); (ii) initiated a district court proceeding with a verified petition seeking pre-suit discovery and alleging a series of unjustified "failures" on the firm's part with respect to her compensation and promotion (App. B. at 2 6); and (iii) authorized her lawyer to demand from Patton Boggs threequarters of a million dollars in settlement based on the purported strength of her "case." (App. F, H.) On this record, the trial court erred in denying the motion to compel arbitration and stay the 202 proceeding. The sole ground for that ruling was the erroneous conclusion that "Rule 202 is not a claim, it is an investigation of a claim." (3 RR 58:21-22). Under well-established law, the undisputed evidence of a broad arbitration agreement and a controversy and claims, which that agreement covered afforded the district court no discretion to deny the motion to compel arbitration. The district court also had no discretion to order discovery under Rule 202, since any discovery rulings should be made by the arbitrator according to the rules the parties agreed to those promulgated by JAMS. Moseley's Response does not address the evidence of arbitrable claims and controversies. It does not mention her $750,000 and $690,000 settlement demands. DAL01:

7 (App. F. at 1; App. H.) It does not mention her counsel's asserted confidence in the "strength of Ms. Moseley's case." (App. H at 1.) It does not explain how what was a strong "case" when Moseley wanted to settle could have become both "theoretical/hypothetical" and "non-existent" when Moseley wanted to avoid arbitration. (Response 12.) It does not reveal how she could demand three-quarters of a million dollars if (a) no "controversy" existed, (b) she was not making a "claim," and (c) she was saying she needed pre-suit discovery to decide whether to sue. The Response also fails to contest these legal and factual matters: The presumption favoring arbitration requires courts to construe agreements in favor of arbitration. (Appellant's Br. 6; Pet. for Writ of Mandamus ("Mandamus") 7-8, 13.) On the other hand, there is no presumption in favor of discovery under Texas Rule of Civil Procedure 202. Instead, Rule 202 must yield to discovery limits that would apply in the anticipated litigation. (Appellant's Br. 20; Mandamus 20.) The Texas Arbitration Act (TAA) required an order compelling arbitration because Patton Boggs filed an application showing an agreement to arbitrate and Moseley's refusal. (Appellant's Br ) The TAA does not allow pre-arbitration merits discovery. (Appellant's Br ; Mandamus 19-20, 22.) The parties agreed to submit their entire controversy including discovery to an arbitrator, not a court. (Appellant's Br. 2, 13; Mandamus 3, 11.) The trial court did not and could not make the findings required by Rule 202 that the benefit of the requested discovery outweighs the burden. (Mandamus 10.) Each of these points further compels the relief sought by Patton Boggs. DAL01:

8 ARGUMENT I. Like the trial court's denial of the motion to compel arbitration, the Reponse ignores but does not dispute the evidence establishing an arbitrable "controversy or claim." A. Conceding a "controversy or claim" triggers arbitration, Moseley erroneously contends those terms are confined to "lawsuit." Contrary to Moseley's assertion (Response 3), Patton Boggs contends that both a controversy and a claim exist: "While a 'controversy' is enough to require arbitration, Moseley's EEOC Charge and ambitious settlement demand left no doubt that 'claims' underlie this 'controversy.'" (Appellant's Br. 7; see also 2 RR 18:18-23.) Conceding the Court must give plain and ordinary meaning to "controversy or claim" (Response 11-12), Moseley says both words can only mean lawsuit. See, e.g., (Response 4) (a "controversy" exists only if parties "seek judicial resolution of their grievances"). She asks the Court to hold that no controversy or claim can exist unless and until she sues. Her threat to sue, her demand letter, expressions of confidence in her "case," an EEOC Charge, her demand for discovery on each of several listed grievances not enough, Moseley says, to arbitrate. Each of Moseley's arguments requires the Court either to read "controversy" out of the arbitration agreement or to construe "claim" to mean a filed suit. 1 In short, she says, 1 See (Response 4) ("by filing the Rule 202 Petition, Moseley is not 'seek[ing] judicial resolution....'") (emphasis added); (Response 7) ("Contrary to PB's unsupported contention, a charge filed with the EEOC is not a complaint seeking relief.") (emphasis added); (Response 11) ("Moseley is not required to present other evidence as to why she chose not to assert or file a purported claim....'") (emphasis added); (Response 13) ("In re Houston is completely inapposite to this proceeding because Moseley... did not file a lawsuit or any claims against PB....") (emphasis in original); (Response 13 n.6) ("Obviously, the TAA does not prevent 'all [possible] discovery," only discovery of the merits of asserted claims....") (emphasis in original); (Response 18) ("Here, the trial court necessarily did not, and could not, 'delay' in determining arbitrability as Moseley has yet to assert any claims....") (emphasis in DAL01:

9 until she sues, there is nothing to arbitrate no matter what she does short of suing. Common sense tells us that a "controversy" and "claim" always exist before anyone sues. Moseley's arguments not only ignore common sense, but also binding precedent: (1) Arbitration clauses must be construed in favor of arbitration. (Appellant's Br ) (citing In re D. Wilson Constr. Co., 196 S.W.3d 774, 783 (Tex. 2006); Ascendant Anesthesia PLLC v. Abazi, S.W.3d, No CV, 2011 WL , at *3 (Tex. App. Dallas Aug. 2, 2011, no pet. h.)); (2) Agreements to arbitrate "any controversy or claim" are broad. Id. at 15 (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398 (1967)); and (3) Texas law "has never required that a plaintiff know all the essential facts before a cause of action exists." In re Jorden, 249 S.W.3d 416, 422 (Tex. 2008); see also (2 CR 349) (citing Payne v. Edmonson, 712 S.W.2d 793, 798 (Tex. App. Houston [1st Dist.] 1986, writ ref'd n.r.e) (negotiations before suing constituted a dispute); Hundere v. Tracy & Cook, 494 S.W.2d 257, (Tex. Civ. App. San Antonio 1973, writ ref'd n.r.e.) (dispute existed when a client discharged an attorney over disagreements concerning the proper amount of fee agreement)). Moseley would have the Court conclude that until her lawyer found himself at the courthouse handing a petition and filing fee to the clerk, no controversy or claim exists. Implausible on its face, that argument takes being the "master of her complaint" (Response 11) too far. original); (Response 24) ("Moseley has not asserted any arbitrable claims, and only desires to investigate potential claims.") (emphasis added). DAL01:

10 B. Moseley's 202 Petition does not disprove the existence of a controversy or claim. Moseley mounted only one defense to the existence of a claim or controversy a reference to her 202 Petition. (Response 10; Appellant's Br ) The Response contends the 202 Petition is not an attempt to obtain "judicial resolution" of her claims. (Response 4.) This argument misses the point. Regardless of how Moseley or the trial court characterize the 202 Petition, the relevant question is whether, in light of all the evidence (not just the 202 Petition), an arbitrable "controversy or claim" exists. Patton Boggs contends a controversy and claim existed with or without the 202 Petition, which only made their existence more apparent. Straining credulity, Moseley asks the Court to find that the 202 Petition is "evidence that there is not a 'controversy or claim.'" (Response 11.) She implies that by stopping short of suing, she disproved the existence of the very controversy and claims she was stirring up, touting, and trying to settle. But nowhere in the 202 Petition did Moseley swear, as the Response contends, "there is not an arbitrable 'controversy or claim.'" (Response 3.) Instead, the 202 Petition actually confirms and describes the controversy and claim. Moseley swore she had "reason to believe" Patton Boggs' "actions, inactions and/or omissions... were without justification." (Appellant's Br. 2-3 (citing App. B at 5 16.)) The conduct Moseley has "reason to believe" was unjustified includes nine specifically enumerated allegations against Patton Boggs. (Appellant's Br. 3 (citing App. B at 2 6.)) DAL01:

11 Thus, Moseley's contention that "[her] affidavit supporting her Rule 202 Petition... is all that is required" to avoid arbitration runs counter to the plain implication of that Petition she thinks she has a bunch of claims and wants discovery on them. (App. B. at 2 6.) So it is with every plaintiff. That a claimant hoping to catch her target unprepared seeks early, one-way discovery no more disproves the existence of a controversy than do her settlement demands and expressions of confidence in her "case." In any event, Moseley's 202 Petition (which she neither offered in evidence nor asked the trial court to judicially notice) does not prove the absence of a controversy or claim. (Response 10) (citing In re Wagner, No CV, 2002 WL (Tex. App. Tyler April 12, 2002, orig. proceeding) (not designated for publication)). Departing from its earlier opinion in Wagner, the Tyler Court of Appeals recently held that a verified 202 petition is not competent evidence to support the findings required by the Rule. In re Contractor's Supplies, No CV, 2009 WL , at *5-6 (Tex. App. Tyler Aug , orig. proceeding) (granting petition for writ of mandamus challenging trial court's order requiring deposition under Rule 202). Likewise, the Amarillo Court of Appeals has recognized that a 202 petition is not competent evidence to support 202 relief. In re Rockafellow, No CV, 2011 WL , at *4-5 (Tex. App. Amarillo July 19, 2011, orig. proceeding) (trial court's order granting pre-suit deposition improper because petitioner's Rule 202 petition was not competent evidence to prove that trade secret information was "necessary for a fair adjudication" of petitioner's claims). DAL01:

12 The principal question on this appeal is whether 202 relief is improper because Moseley has a "controversy" with or "claim" against Patton Boggs. The allegations in the 202 Petition are merely one more reason the answer is "yes." C. Moseley's argument about her EEOC Charge misses the point. Moseley's argument that her EEOC Charge "is not a complaint seeking relief" sidesteps the issue. (Response 7-8.) The issue is not whether the EEOC Charge is a complaint but whether the Charge is evidence the parties have a "controversy" or disputed "claim." In the Charge, Moseley raised the controversy by asserting her belief that she was "denied equity partner and a share of the firm's profits" on account of her gender and by describing the evidence on which her belief is based. (App. E.) Patton Boggs' defense of these allegations further evidences the "controversy." (App. J at 2 5.) Moseley's counsel's settlement letter, which confidently referred to the merits of her "EEOC complaint," also evidences an arbitrable dispute. (App. H at 1.) D. The Response mistakenly likens Moseley's settlement demands to "routine" discussions of "severance," as if that disproves the existence of a "controversy or claim." The Response does not address Moseley's ambitious settlement demands. Moseley does not explain her counsel's comment, in seeking to settle her claims, that he is "quite confident in the strength of [her] case." (App. H at 1.) She does not attempt to address the inconsistency between this evidence and her suggestion that her claims are "hypothetical" and "non-existent." (Response 12.) Instead, Moseley says she was merely engaged in the "routine practice" of "initiating discussions over severance packages and other departure issues." (Response DAL01:

13 5.) This, she says, does not prove a "controversy or claim." Moseley did not offer any evidence of this "routine." She did not tell the trial court her settlement demands were only an attempt to get "severance" pay. She did not say she had no claims. She did not say no controversy existed. Her counsel offered no evidence that his demands and assertions were merely part of the "routine practice" of discussing "severance and other departure issues." (Response 5.) The severance argument is nonsense. Moseley's settlement demands came months after she resigned from Patton Boggs. (App. J at 1 4; App. F; App. H.) Demanding $750,000 to settle (1) a charge of sex discrimination preventing her from becoming an equity partner and (2) complaints about money owed under her lateral partnership agreement is not a "routine" discussion of "departure issues." This much is plain even from the only authority Moseley cites on this point a federal case deciding a motion in limine. Schrieber v. Federal Express Corp., No. 09-CV-128-JHP-PJC, 2010 WL (N.D. Okla. Mar. 18, 2010). Here as in Schrieber, Moseley's post-resignation communications evidence her attempt to settle claims. See id. at *2-3. E. Moseley "asserted" and gave "notice" of a controversy or claim. The evidence leaves no doubt that Moseley has "asserted" a controversy or claim against Patton Boggs. As Moseley concedes, (Response 11), the agreement including the word "assert" should be given its "plain, ordinary, and generally accepted meaning." ECF North Ridge Assocs., L.P. v. Orix Capital Markets, L.L.C., 336 S.W.3d 400, 407 (Tex. App. Dallas 2011, pet. filed). This is the common definition of "assert": "1. To state or express positively; 2. To defend or maintain." Webster's II New College DAL01:

14 Dictionary 67 (2d ed. 2001); see also The American Heritage College Dictionary 82 (3d ed. 1993) ("3. To put (oneself) forward boldly or forcefully in an effort to make an opinion known."). Short of suing, it is hard to imagine how Moseley could have "stated" the controversy and claims any more "positively." Id. She demanded $750,000 and then $690,000 to settle a "case" about which her counsel claimed to be "quite confident." (App. F; App. H at 1.) She detailed her allegations in both her EEOC Charge and her Rule 202 Petition. (App. B at 2 6; App. E.) Moseley undoubtedly "asserted" a controversy or claim against Patton Boggs. Moseley's argument that she avoided arbitration by failing to give notice as required by the arbitration agreement likewise fails. (Response 8-9.) She gave notice by asserting her controversies and claims. If Moseley wants to delay arbitration by disputing she gave such notice, that issue is for the arbitrator, not the court, to decide. Austin Commercial Contractors, L.P. v. Carter & Burgess, Inc., S.W.3d, No CV, 2011 WL , at *4 (Tex. App. Dallas Aug. 15, 2011, no pet. h.) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, (2002)). Moseley incorrectly argues that Patton Boggs' witness testified Moseley has yet to give notice of her claim. The cited testimony concerns Patton Boggs' notice of its claim against Moseley, which Patton Boggs has submitted to arbitration. (2 RR 23:5-24:7; 27:24-28:23.) After Moseley filed her EEOC Charge and her Rule 202 Petition, the parties discussed settlement. They have been unable to resolve their dispute. Their agreement requires the controversy and claims to be arbitrated. DAL01:

15 II. Rule 202 does not trump Texas arbitration law. A. The TAA does not allow the pre-arbitration merits discovery that the trial court ordered. Presuming pre-suit discovery is an unfettered right, Moseley fails to address the Texas Supreme Court's holding that Rule 202 must not be used as "an end-run around discovery limitations that would govern the anticipated suit." In re Wolfe, 341 S.W.3d 932, 933 (Tex. 2011). Rule 202 yields when the discovery requested would not be permitted in the anticipated action. (Appellant's Br ) The TAA's prohibition against court-ordered merits discovery is just the kind of discovery limitation to which Rule 202 must yield. Moseley does not contest the Texas Supreme Court's holding that the TAA bars a trial court from "order[ing] discovery as to the merits of [an] underlying [arbitrable] controversy." In re Houston Pipe Line Co., 311 S.W.3d 449, 451 (Tex. 2009). Instead, Moseley contends that Houston Pipe Line is inapplicable because she has not filed a lawsuit. Moseley is incorrect. The prohibition on pre-arbitration merits discovery is not limited to filed lawsuits. It extends to "underlying controvers[ies]," no matter what proceeding is before the trial court. Id. (TAA does not permit "discovery as to the merits of the underlying controversy"). The trial court's order granting discovery on the merits of the "underlying controversy" was error. B. Moseley's reliance on an inapplicable Ohio rule is misplaced. Moseley's only support for her argument that Texas Rule 202 trumps a party's right to arbitrate is an Ohio case addressing an Ohio rule of procedure. (Response 20); DAL01:

16 see White v. Equity, Inc., 899 N.E.2d 205 (Ohio App. 10th Dist. 2008). Unlike Texas Rule 202, the Ohio rule allows pre-suit discovery only when (1) the discovery is necessary to ascertain the identity of a potential adverse party; (2) the petitioner is otherwise unable to bring the contemplated action; and (3) the petitioner made reasonable efforts to obtain the information voluntarily. See White v. Equity, Inc., 899 N.E.2d at 208; OHIO CIV. R. 34(D). Thus, the Ohio court's reasoning was confined to a situation where the identity of the potential adverse party was unknown. That reasoning is inapplicable to Texas Rule 202, which allows pre-suit discovery only upon a showing (and findings) that the "likely benefit... outweighs the burden and expense of the procedure." TEX. R. CIV. P (a)(2). Unlike the Ohio plaintiff, Moseley knows her adversary. She has filed an EEOC charge against Patton Boggs and, in her 202 petition, she has listed her claims against Patton Boggs. C. Moseley's contention that the court lacked jurisdiction to compel arbitration ignores the plain language of the TAA. The TAA gave the trial court jurisdiction to compel arbitration. Under the TAA, when a party files an "application" for arbitration showing an agreement to arbitrate and the opponent's refusal, the trial court must stay the "proceeding." Not just a trial any "proceeding." TEX. CIV. PRAC. & REM. CODE ; see also In re Bill Heard Chevrolet, No CV, 2005 WL , at *1 (Tex. App. Houston [14th Dist.] Oct. 27, 2005, orig. proceeding) (mem. op., not designated for publication) (staying Rule 202 order and remanding with instructions that trial court must decide motion to compel arbitration). DAL01:

17 In asserting the trial court lacked jurisdiction to compel arbitration, Moseley cites only dicta from In re Southwest Securities, Inc., No CV, 2000 WL , at *2 (Tex. App. Dallas June 14, 2000, orig. proceeding) (not designated for publication). In Southwest Securities, as here, the district court allowed 202 discovery despite an arbitration agreement. Rejecting Moseley's argument that the dispute was not ripe for arbitration the court granted mandamus relief requiring the discovery order be vacated and the 202 order stayed pending arbitration. Southwest Securities, 2000 WL , at *2. Respectfully, the dicta in Southwest Securities regarding jurisdiction to compel arbitration was incorrect. The unpublished (and non-binding) decision cites no authority and does not address the TAA mandate and jurisdictional grant requiring a court to stay "proceedings" pending arbitration. It grants the very stay it says, in dicta, the trial court lacked jurisdiction to grant. It does not address preemption by the FAA. And it is unreasoned. The only case deciding the jurisdictional question is In re Bill Heard Chevrolet, 2005 WL , at *1. The Fourteenth Court of Appeals' reasoned decision in that case amply explains a trial court's jurisdiction to grant a motion to compel arbitration in a 202 proceeding. The question, again, is whether the evidence shows a controversy or claim. It does. Moseley disputes none of it. She put on no evidence of her own. The trial court erred by failing to exercise its jurisdiction to stay the Rule 202 proceeding and compel arbitration. DAL01:

18 D. Mandamus is appropriate to address the trial court's sanctioning of Moseley's misuse of Rule 202. Moseley does not address the trial court's failure to make the findings required by Rule 202 that "the likely benefit of allowing the petitioner to take the requested deposition to investigate a potential claim outweighs the burden or expense of the procedure." TEX. R. CIV. P Moseley's argument that "mandamus is unwarranted" ignores binding authority that mandamus is the only way to challenge a 202 order allowing pre-suit discovery against the petitioner's adversary in the anticipated action. In re Denton, No CV, 2009 WL , at *1 (Tex. App. Waco Feb. 25, 2009, orig. proceeding) (mem. op.); (Mandamus 27 n.10.) Moseley's attempt to minimize the substantial harm to Patton Boggs (Response 23-24) ignores two things. First, Patton Boggs bargained for arbitration of all controversies including discovery. (Appellant's Br. 2.) An arbitrator should decide whether Moseley can get a discovery head start by taking three depositions and getting the documents compelled by the trial court. Second, the JAMS arbitration default rule is one deposition per side, but the trial court gave Moseley three. (Mandamus 16.) Finally, Moseley's argument that Rule 202 allows document discovery is inconsistent with the text of the Rule. The only discovery allowable in a 202 proceeding is that which Rule 202 describes. Rule 202 permits depositions, not document discovery. Tex R. Civ. P ("A person may petition the court for an order authorizing the taking of a deposition on oral examination or written questions....") (emphasis added). Rule DAL01:

19 205.1 does not, as Moseley contends, expand the pre-suit discovery allowable under Rule 202. Rule only lists "a court order under Rule[] 202" as one of the methods for obtaining discovery from nonparties. TEX. R. CIV. P The trial court's order granting document discovery was an abuse of discretion and mandamus is appropriate. III. Preemption: The Response ignores the reach of the Federal Arbitration Act. A. Moseley's contention that the FAA does not apply is incorrect. Moseley contends the FAA is inapplicable because the arbitration agreement did not waive her right to "pre-suit discovery." (Response 14.) Having agreed to arbitrate, Moseley had no right to sue so how could she have a right to "pre-suit discovery"? Moseley agreed to arbitrate all claims and controversies, including discovery on those claims and controversies. Her argument that she did not agree to let the arbitrator decide discovery is contrary to the plain language of the arbitration clause and the directive to construe such clauses broadly. (Appellant's Br. 2, 15; Mandamus 3, ) By agreeing to arbitrate, she waived any right to obtain state-court merits discovery before arbitrating. Moseley cites only Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., 860 F.2d 1420 (7th Cir. 1988), and misstates its holding. The opinion does not say a court cannot compel arbitration prior to suit unless the arbitration agreement specifically restricts pre-suit discovery. (Response 14.) Chicago Typographical stands for the proposition that non-justiciable, hypothetical claims cannot be sent to arbitration. A union asserted that the Sun-Times might do something the union believed would breach a labor contract. Chicago Typographical Union, 860 F.2d at Because the arbitration agreement did not contemplate advisory opinions concerning future events, the court DAL01:

20 denied the motion to compel arbitration. Id. at Just as the trial court here should have done, the Chicago Typographical court examined the parties' correspondence to determine whether evidence of a "disagreement" or "controversy" existed. See id. at Unlike Chicago Typographical, the evidence here shows that Moseley's controversy with and claims against Patton Boggs are not hypothetical. Here, the controversy and claims arise from events that have already occurred. (App E; App. H.) B. Moseley's argument that the FAA preempts only laws "specifically targeting" arbitration is wrong. Moseley argues that the FAA only preempts laws that "specifically target[] or disproportionately affect[]" arbitration. That argument is incorrect. Any state law, rule, or decision that "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress" is preempted. AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1753 (2011). The FAA preempts generally applicable laws. In Preston v. Ferrer, 552 U.S. 346, 356 (2008), the Court held that the FAA preempts a California law granting the labor commissioner exclusive jurisdiction to hear disputes involving talent agencies. The law affected litigation and arbitration equally. Id. Moseley correctly notes that one subpart of the California law "directly targeted arbitration." (Response 16 n.8.) But Preston focused primarily on whether the generally applicable part of the statute posed an "obstacle" to arbitration. Preston, 552 U.S. at DAL01:

21 In Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 271 (Tex. 1992), the court held that the FAA preempted a DTPA nonwaiver provision to the extent it "prevented or restricted enforcement of" an arbitration agreement. Nothing in the DTPA or the Tipps opinion suggests the nonwaiver provision specifically targeted arbitration. By its terms, the nonwaiver provision affected litigation and arbitration equally. Moseley's misconstruction of the preemption cases is contrary to the "national policy favoring arbitration" embodied by the FAA, which "ensure[s] that private arbitration agreements are enforced according to their terms." AT&T Mobility LLC, 131 S.Ct. at If Moseley's view were correct, the FAA would only preempt those laws where the "intent" of the legislature to "target or undercut arbitration rights" was apparent. (Response 16.) Generally applicable laws would be spared, no matter what their effect on the FAA and its objectives. But the FAA "created a body of federal substantive law which [is] applicable in state and federal courts." Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006). This body of federal law does not yield to contrary state law under any circumstances. As applied by the trial court, Rule 202 posed an "obstacle" to Congress's objectives by allowing court-ordered discovery on the merits of the arbitrable controversy. AT&T Mobility LLC, 131 S.Ct. at The FAA preempts the trial court's erroneous application of 202. IV. The district court's decision undermines longstanding precedent favoring arbitration and creates incentives to misuse judicial processes. The logical result of the district court's decision is to incentivize strategic manipulation of judicial processes. This is neither a "personal aspersion" nor a "baseless DAL01:

22 attack." (Response ) The record amply illustrates that by incentivizing litigants to misuse Rule 202, the decision below undermines longstanding precedent and statutory law favoring arbitration. The parties undisputedly have a binding arbitration agreement. (App. D.) Raising issues under the partnership agreement containing the arbitration clause, Moseley never identified a non-arbitrable claim. Nevertheless, by filing a Rule 202 petition, she sought and obtained an order compelling one-way discovery against Patton Boggs. (App. B.) While Moseley purported to be merely investigating a potential claim, id. at 2 5, she touted her case and demanded large sums to settle. (App. H, F.) When Patton Boggs' settlement offer was less than what Moseley believed her "strong case" was worth, Moseley told the court she had no obligation to arbitrate because she had no claims or controversies and was merely investigating. (2 RR 31:15-22; 37:21-25; 3 RR 38:16-20, 41:12-16.) Nothing on the face of Rule 202 or cases construing it suggests that the Rule was intended to operate in this fashion. Under the trial court's reasoning, however, any potential claimant under an arbitration agreement could employ the same strategy, thereby multiplying judicial proceedings and undermining arbitration agreements in contravention of Texas law. This result demonstrates plain error. CONCLUSION AND PRAYER We end where we began: The central question is whether Moseley has asserted a claim against or controversy with Patton Boggs. Because she has, the trial court erred in granting pre-"suit" discovery. Arbitration was required. The trial court allowed Rule 202 to trump the Texas and Federal Arbitration Acts. DAL01:

23 It granted 202 relief without making the findings required by that Rule. It granted document discovery despite that Rule 202 allows only for depositions. Rule 202 governs pre-suit depositions. It does not permit pre-arbitration depositions. Patton Boggs asks this Court to reverse the trial court's order denying the motion to compel arbitration and stay the Rule 202 proceedings, render judgment granting that motion, grant the petition for writ of mandamus, direct the trial court to vacate its 202 order and deny the 202 Petition, and grant such further relief as the law allows. Respectfully submitted, Rod Phelan Samara L. Kline Jessica B. Pulliam BAKER BOTTS L.L.P Ross Avenue, Suite 600 Dallas, Texas Telephone Facsimile ATTORNEYS FOR APPELLANT/RELATOR DAL01:

24 CERTIFICATE OF SERVICE On October 3, 2011 a true copy of this Reply in Support of Patton Boggs' Appeal and Mandamus Petition was served via hand delivery and on counsel of record for all parties: R. Rogge Dunn Joshua J. Iacuone CLOUSE DUNN LLP 1201 Elm Street, Suite 5200 Dallas, Texas Telephone Facsimile Jessica B. Pulliam DAL01: