McConnell & Malek Enterprises v. Proof Mark, Inc

• Court: District Court, N.D. California
• Decided: February 27, 2023
• Docket: 3:23-cv-00010
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MCCONNELL & MALEK Case No. 23-cv-00010-LJC ENTERPRISES, 8 Plaintiff, ORDER STAYING ARBITRATION 9 v. Re: Dkt. No. 25 10 PROOF MARK, INC, 11 Defendant.

13 Before the Court is Plaintiff McConnell & Malek Enterprise’s (MME) Ex Parte 14 Emergency Motion to Stay Arbitration before the American Arbitration Association (AAA). Dkt. 15 25. On May 18, 2022, MME and Defendant Proof Mark, Inc (PMI) signed a Professional Service 16 Agreement (PSA) containing an arbitrability clause. MME now challenges the arbitrability of this 17 dispute, including whether the PSA is a binding contract and whether the PSA mandates 18 arbitration. See Dkt. 25 at 4. PMI, on the other hand, filed a demand with the AAA on January 9, 19 2023, initiating the arbitration process in Houston, Texas. Dkt. 27-1 at 1-2; Dkt. 27-2 at 1. MME 20 asserts the arbitration is imminent, but the AAA states it “will abide by any court order issued” 21 regarding the arbitration’s timing. Dkt. 25-2 at 1. 22 Having read the papers filed by the parties and carefully considered their arguments and 23 the relevant legal authority, the Court temporarily STAYS the arbitration before the AAA to allow 24 for this Court to determine, pursuant to Federal Arbitration Agreement (FAA), whether the dispute 25 in this action is subject to a private agreement by the parties to seek resolution through arbitration. 26 This Court has jurisdiction to review the enforceability of arbitration provisions. See, e.g., 27 9 U.SC. § 2; Oberstein v. Live Nation Ent., Inc., 2023 WL 1954688, at *5 (9th Cir. 2023) (stating 1 a court’s role under the FAA is to determine “whether a valid arbitration agreement exists and, if 2 so, whether the agreement encompasses the dispute at issue”) (internal quotation marks omitted). 3 In general, gateway disputes, such as whether a party is “bound by a given arbitration clause” or 4 || whether an arbitration clause is a binding contract that “applies to a particular type of 5 controversy,” are “for judicial determination unless the parties clearly and unmistakably provide 6 otherwise.” See Shivkov v. Artex Risk Sols., Inc., 974 F.3d 1051, 1065 (9th Cir. 2020) □□□□□□□□□ 7 quotation marks omitted) (addressing class action). “[A]rbitration is strictly a matter of consent . . 8 . aparty cannot be required to submit to arbitration any dispute which he has not agreed so to 9 submit.” Casa del Caffe Vergnano S.P.A. v. ItalFlavors, LLC, 816 F.3d 1208, 1211 (9th Cir. 10 || 2016) Ginternal citations and quotation marks omitted). “[I]t is well settled that where the dispute 11 at issue concerns contract formation, the dispute is generally for the courts to decide.” Id. (internal 12 || citation and quotation marks omitted). Given that MME is clearly disputing that this dispute 5 13 should be subject to arbitration, the arbitration to take place in Houston, Texas is temporarily 14 || enjoined and stayed pending this Court’s resolution of the enforceability and validity of the PSA’s 3 15 arbitration provision. a 16 IT IS SO ORDERED. 2 17 |) Dated: February 27, 2023

19 Ls, | hartry—— L . CIS OS 20 United States Magistrate Judge 21 22 23 24 25 26 27 28