Law Office of Morgan Fletcher Benfield PLLC v. Next Level Marketing

• Court: District Court, W.D. Washington
• Decided: May 4, 2023
• Docket: 3:22-cv-05681
• Status: Unknown

Opinion

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5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT TACOMA 7 LAW OFFICES OF MORGAN CASE NO. C22-5681 BHS 8 FLETCHER BENFIELD PLLC, ORDER 9 Plaintiff, v. 10 NEXT LEVEL MARKETING, 11 Defendant. 12

13 This matter comes before the Court on Defendant Next Level Marketing’s Motion 14 to Dismiss and Compel Arbitration, Dkt. 15. 15 The factual and procedural background of this case is detailed in the Court’s 16 recent order granting Next Level’s motion to compel in part and reserving ruling in part. 17 See Dkt. 22. In short, Plaintiff Law Office of Morgan Fletcher Benfield PLLC hired Next 18 Level to perform marketing and pay-per-click services for the benefit of the firm’s 19 website. Dkt. 15 at 4. The parties’ contract contains the following arbitration clause: “The 20 parties to this Agreement will submit all disputes arising under this Agreement to 21 arbitration in Fort Lauderdale, Florida . . . .” Id., Ex. A, ¶ 23. Benfield alleges that Next 22 1 Level purposely crashed the law firm’s website in retaliation after it terminated the 2 company, violating the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030,

3 committing conversion, and violating Washington’s Consumer Protection Act (“CPA”). 4 Dkt. 16-1. 5 Next Level moves to compel arbitration under the arbitration clause in the parties’ 6 contract. Dkt. 15. Benfield moved to amend its complaint in response, adding conversion 7 and CPA claims. Dkt. 16. The Court granted Benfield’s motion to amend and granted 8 Next Level’s motion to compel arbitration as to Benfield’s CFAA claim. Dkt. 22. It

9 reserved ruling on Next Level’s motion to compel arbitration of Benfield’s two new 10 claims and ordered the parties to provide supplemental briefing on that issue. Id. 11 Next Level timely filed its opening brief, Dkt. 24, and Benfield did not respond. 12 Next Level has also moved to dismiss Benfield’s two new claims. See Dkt. 23. “Except 13 for motions for summary judgment, if a party fails to file papers in opposition to a

14 motion, such failure may be considered by the court as an admission that the motion has 15 merit.” Local Rules, W.D. Wash. LCR 7(b)(2). 16 Next Level argues that Benfield’s CPA and conversion claims arise under the 17 agreement because they “require both an interpretation of the Agreement and an analysis 18 of the parties’ performance—or lack thereof—under the Agreement.” Dkt. 24 at 3–7. It

19 argues in the alternative that even if the claims do not “arise under” the Agreement, they 20 are so intertwined with Benfield’s CFAA claim that they should be arbitrated, or the 21 Court should enter a stay. Id. at 7–8. 22 1 Arbitration agreements are treated like other contracts; “there is no strong federal 2 policy favoring enforcement of arbitration agreements.” Armstrong v. Michaels Stores,

3 Inc., 59 F.4th 1011, 1014 (9th Cir. 2023) (internal quotation omitted) (discussing Morgan 4 v. Sundance, Inc., 142 S. Ct. 1708, 1713–14 (2022)). “[T]he phrase ‘arising under’ in an 5 arbitration agreement should be interpreted narrowly.” Cape Flattery Ltd. v. Titan 6 Maritime, LLC, 647 F.3d 914 (9th Cir. 2011). The phrase relates to only those claims 7 involving “the interpretation and performance of the contract itself.” Mediterranean 8 Enters., Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464 (9th Cir. 1983). “The fact that [a]

9 tort claim would not have arisen ‘but for’ the parties’ . . . agreement is not 10 determinative.” Tracer Research Corp. v. Nat’l Env’t Servs. Co., 42 F.3d 1292, 1295 (9th 11 Cir. 1994). It depends on whether resolution of the dispute would require interpretation of 12 the contract. Id. 13 The Court agrees with Next Level that adjudication of Benfield’s CPA and

14 conversion claims require interpretation of the parties’ contract and therefore “arise 15 under” the Agreement. Like its CFAA claim, the viability of Benfield’s conversion and 16 CPA claims depend on whether Next Level was authorized to access the website or had 17 ownership of the website at the time. See Dkt. 24 at 3–7; see also Dkt. 22 at 5–7. Thus, 18 the claims “arise under” the parties’ Agreement.

19 Therefore, it is hereby ORDERED that Defendant Next Level Marketing’s 20 Motion to Compel Arbitration, Dkt. 15, is GRANTED and its Motion to Dismiss 21 Benfield’s Second Amended Complaint, Dkt. 23, is DENIED as moot. The Clerk is 22 DIRECTED to stay this action pending arbitration. The parties are ORDERED to 1 proceed with arbitration in accordance with the terms of the Agreement and to file a 2 JOINT STATUS REPORT in 90 days or within two weeks of the completion of

3 arbitration, whichever is sooner. 4 Dated this 4th day of May, 2023. A 5 6 BENJAMIN H. SETTLE 7 United States District Judge

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