#MeToo/#TheyLied Settlements, Arbitration, and Rescission

Reiterman v. AbidToday’s Eleventh Circuit decision (in which Judge Gerald Bard Tjoflat joined Judges Elizabeth Branch, Britt Grant) involves a sexual assault case that led to a lawsuit and then to a settlement agreement calling to arbitrate. Now, the question is whether the settlement agreement was annulled so that Abid (the libel plaintiff) can sue again.

{We do not comment on any background facts. Reiterman’s merits are not up for review. For context purposes only, we summarize the facts of the merits dispute as they have been presented by the parties to this Court on appeal.}

Abid and Reiterman met for the first time in 2014. They were both from Tampa, Florida. Reiterman, at the time, was an LSAT tutor for TestMasters. Abid was one Reiterman’s student, and they briefly dated. Abid then accused Reiterman, after their relationship was ended. After this accusation, the Tampa Police Department began an investigation and declined to bring Reiterman to trial. After reviewing the case, Abid requested that Florida Attorney General’s Office intervene.

Abid is alleged to have engaged in an anonymous, pervasive internet campaign to damage Reiterman’s reputation. She wrote several blogposts accusing Reiterman sexually assaulting multiple females. Each one of the blog posts was apparently written by another woman. District Court later described this as “remarkably large and powerful, in effect trying to destroy Reiterman with the most graphic terms as racist and serial rapist.” Reiterman was severely damaged by these allegations while at Harvard Law School, 2015-2018. They continue to affect his ability to find work.

Reiterman sued Abid for defamation in the Middle District, Florida on April 4, 2018. Abid said that she was not involved in the online campaign. Reiterman and Abid immediately entered into settlement negotiations. In June 2018, both parties accepted the 2018 Settlement Agreement, which was challenged in this appeal. The agreement was, Inter aliaThe parties agreed to exchange mutual releases regarding all their claims against each other. Reiterman would also pay Abid a fixed amount per month.[a]Arbitration will settle any dispute or claim, relating or not, arising from or concerning this contract.

Reiterman discovered evidence that Abid had been responsible for most or all of the blogposts after the 2018 Settlement Agreement was signed. This contradicts what Abid stated in the settlement negotiations. Reiterman also discovered that three blogposts had been posted following the settlement agreement. This led him to suspect Abid. Reiterman wrote to Abid via his lawyer on April 3, 2019. The letter explained that Abid had made their 2018 Settlement Agreement null and void and Reiterman was thus relieved from his obligations. Reiterman asked Abid to return all payments Reiterman made up until now and advised Abid that he would sue her if Abid did not agree with his demands.

Reiterman’s April 10, 2010 letter was personally answered by Abid via email. Abid replied to Reiterman’s letter on April 10th by email.[s]Since Mr. Reiterman has accused me of breaching the settlement agreement and feels he does not have an obligation, I’ll mirror his belief and cease to honor the agreements. Abid went on to detail the actions she planned to take after she had been released under the 2018 Settlement Agreement. She included publishing the book that she claims she wrote about Reiterman’s sexual assault, and speaking with politicians in 2020’s presidential race. Abid was brought to the Middle District in Florida by Reiterman on September 19, 2019.

Abid sought new counsel after which she waived service. She then moved the District Court for an order authorizing arbitration using the arbitration clause of the 2018 Settlement Agreement. Reiterman opposed the motion, claiming that the parties had mutually agreed to rescind the 2018 Settlement Agreement through their April 2019 communications….

Take a look at [an]The District Court heard evidence from Krista Baughman (Reiterman’s attorney), who was the one who wrote Reiterman’s April 2019 letter. The Court found Baughman’s credibility credible and established that both parties wanted to cancel the 2018 Settlement Agreement. Although Abid stated that she didn’t intend to cancel the 2018 Settlement Agreement via her 2019 email, her testimony was not credible. Instead, she claimed that she intended to retract the agreement through her 2019 email. The Court denied Abid’s request to compel arbitration because the 2018 Settlement Agreement had been rescinded by the parties. Abid timely appealed this order….

According to Abid, courts need to decide whether parties entered into a contract that contained an arbitration clause prior to requiring arbitration. The court’s inquiry is a sign of the contract’s existence. It is correct, too, that the arbitrator should decide whether an arbitration clause in a contract is valid or invalid under state law.

Abid’s argument is flawed when it tries to make a mutual rescission a state law ground, rendering the contract null or voidable. A subsequent mutual rescission, on the other hand, is an agreement by the parties not to be bound by any previous contract. Since arbitration is “simply an issue of contract between two parties”, the parties can freely decide to let go of certain of their contractual obligations. Any disputes about whether the parties later agreed to rescind their earlier contract are disputes about whether a new agreement was formed—and courts decide contract formation disputes, not arbitrators.

Furthermore, compelling arbitration after the parties have agreed to rescind their arbitration agreement would deprive the parties of the benefit of their subsequent bargain and encourage gamesmanship….

The District Court was not clear in concluding the parties had intended to mutually cancel their 2018 Settlement Agreement via their April 2019 communications. It based its factual findings largely on credibility determinations made by the witnesses. Baughman was deemed credible, and Abid not credible. Federal Rule of Civil Procedure52(a), allows courts reviewing to discredit the factual findings of trial courts only when they clearly are wrong. The “”[w]The determinations of credibility of witnesses are the basis of hen findings. Rule 52(a), however, requires even more deference from the trial court to make such findings. Only the trial judge is able to see the subtle differences in tone and demeanor that can have an impact on listener understanding and belief of what was said. …

Notice: In this case, I filed an intervention in the District Court to undo the settlement agreement. The court also granted me my motion to intervene. The only thing I participated in was the open record question.