Tillman Transp., LLC v. MI Bus. Inc., No. 23-1777 (6th Cir. 2024)
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The plaintiff, Tillman Transportation, LLC, and the defendant, MI Business, Inc. (operating as affiliate companies RDT and RDF) entered into three trucking contracts, each of which included arbitration clauses. After the contracts were terminated, disputes arose between the parties, leading to this lawsuit and a separate ongoing arbitration. The defendants moved to compel arbitration, arguing that the Federal Arbitration Act (FAA) requires enforcement of the arbitration clauses. Tillman contended that it was exempt from compulsory arbitration under Section 1 of the FAA.
The district court granted the defendants’ motion to compel arbitration, ruling that Section 1 of the FAA, which exempts "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce" from the FAA's general policy favoring arbitration, did not apply to the arbitration clauses in the contracts because Tillman, as a limited liability company in contract with another corporate entity, did not qualify for the Section 1 exemption.
Tillman appealed this decision. The United States Court of Appeals for the Sixth Circuit affirmed the district court's decision. The Sixth Circuit held that the Section 1 exemption did not apply to an agreement between two corporate entities. Thus, the exemption did not apply to Tillman, a limited liability company. The court also noted that Tillman had waived certain arguments by failing to raise them in its initial brief on appeal.
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