Delgado v. Donald J. Trump For President, Inc.

Background

Arlene Delgado alleged that the defendants violated the New York State Human Rights Law and the New York City Human Rights Law by discriminating against her based on sex and pregnancy, retaliating against her, removing her campaign responsibilities, and interfering with potential employment. She also asserted breach-of-contract, promissory-estoppel, and tortious-interference claims.

Before she began working for the campaign, Delgado signed a consulting agreement without an arbitration clause. After she started, the campaign presented her with another document, called the “Agreement,” which she says she was instructed to sign. She alleged that the campaign did not sign it and that she received no consideration for it. The Agreement contained provisions concerning nondisclosure, nondisparagement, noncompetition, and related subjects, along with an arbitration provision covering disputes “arising under or relating to” those provisions.

Delgado alleged that after she disclosed her pregnancy, senior campaign officials stripped her of campaign responsibilities and arranged for her removal from the list of incoming White House personnel. She also alleged that defendants persuaded third parties not to hire her. The opinion states that another defendant, Trump for America, Inc., had been dismissed from the case with prejudice before this order.

Motion to Amend

Under Federal Rule of Civil Procedure 15, courts generally should allow amendments when justice requires, unless the amendment was unduly delayed, made in bad faith, would unfairly prejudice the other side, or would be futile. An amendment is futile if the proposed claim could not survive a motion to dismiss for failure to state a plausible claim.

The court granted Delgado leave to add a prima-facie-tort claim. Under New York law, that claim requires intentional harm, special damages, lack of justification, and conduct that would otherwise be lawful. The court held that this claim could be pleaded as an alternative to Delgado’s discrimination and retaliation claims. It also found that Delgado plausibly alleged that, if discrimination and retaliation were not the reasons for defendants’ conduct, the sole motivation could have been an intent simply to harm her.

The court also granted leave to add a declaratory-judgment claim asking the court to declare the Agreement “null and void.” The court concluded that Delgado’s allegations—that the Agreement was insufficiently definite and was not signed by both parties—concerned contract formation. Because those allegations were colorable and not frivolous, the court held that the proposed claim was not futile. The court also allowed additional facts supporting the tortious-interference claim.

The court denied Delgado’s request to have the amended complaint accepted retroactively. It found that there had been no judicial delay and that this was not an exceptional case warranting retroactive relief. Overall, Delgado’s motion to amend was GRANTED in part, and DENIED in part.

Permanent Injunction

Delgado sought a permanent injunction preventing the defendants from compelling arbitration. The court held that the initial complaint only tangentially alleged facts related to that requested injunction and that the court could not issue injunctive relief concerning matters that had not actually been pleaded. The motion for a permanent injunction was therefore DENIED without prejudice to renewal after the amended complaint was filed.

Motion to Compel Arbitration

The defendants asked the court to require arbitration of Delgado’s breach-of-contract and promissory-estoppel claims, which arose from an alleged settlement reached through mediation. The court explained that arbitration is based on consent through a contract, and that courts generally decide threshold questions about whether the parties agreed to arbitrate unless there is clear and unmistakable evidence that they delegated that question to an arbitrator.

The court rejected the defendants’ argument that the Agreement’s broad language and reference to American Arbitration Association rules required arbitration. It held that the Agreement’s arbitration clause was limited to disputes arising under or relating to the Agreement’s five substantive areas, rather than all disputes between the parties. The private nature of the mediation did not bring Delgado’s settlement-related claims within that clause, and the settlement document provided to the court did not refer to the Agreement.

The court concluded that Delgado’s breach-of-contract and promissory-estoppel claims were outside the Agreement’s arbitration scope. The defendants’ motion to compel arbitration was therefore DENIED as to those claims. Because the amended complaint had not yet been filed, the portion of the motion seeking arbitration of the permanent-injunction issue was DENIED without prejudice to renewal.

Disposition

Judge Analisa Torres ordered Delgado to refile the proposed amended complaint by April 1, 2022. The court terminated the motions concerning amendment, the permanent injunction, and arbitration.