OAKBERRY SD UTC, LLC v. OAKBERRY ACAI, INC.; GEORGIOS PUCCETTI FRANGULIS; OAKBERRY USA LLC; RENATO HAIDAR FILHO; HUGO PANNUNZIO

• Court: District Court, S.D. California
• Decided: October 30, 2025
• Docket: 3:23-cv-01883
• Status: Unknown

Opinion

1 2 3

5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 OAKBERRY SD UTC, LLC, a ) Case No.: 23cv1883-BEN (MSB) 12 California limited liability company, ) ) ORDER GRANTING MOTION TO Plaintiff, 13 ) REMAND ACTION TO STATE 14 v. ) COURT ) 15 OAKBERRY ACAI, INC., a Florida ) corporation; GEORGIOS PUCCETTI 16 FRANGULIS, an individual; ) ) 17 OAKBERRY USA LLC, a Delaware ) limited liability company; RENATO 18 HAIDAR FILHO, an individual; HUGO ) ) 19 PANNUNZIO, an individual; ) OAKBERRY CALIFORNIA LLC, a 20 California limited liability company; ) ) 21 JOAO PAULO BIANCHINI, an ) individual; and RAFAEL WELLISCH, an 22 ) individual, ) 23 Defendants. ) 24

25 I. INTRODUCTION 26 Plaintiff Oakberry SD UTC, LLC brings this breach of contract suit against the 27 above captioned Defendants. The Court previously stayed this action after compelling 28 1 the parties to arbitrate their dispute. Afterwards, the parties engaged in arbitration 2 proceedings with the American Arbitration Association’s International Centre for Dispute 3 Resolution (“ICDR”). The parties have returned after the ICDR terminated the 4 proceedings. Currently before the Court is Plaintiff’s Motion to Remand Action to State 5 Court. After considering the papers submitted and applicable law, the Court GRANTS 6 the Motion. 7 II. BACKGROUND 8 On August 26, 2021, a written contract was signed between Oakberry SD UTC, 9 LLC (Plaintiff) and Oakberry Acai Inc (Defendant) and Georgios Puccetti Frangulis 10 (Defendant). Among other things, the contract was framed as an agreement whereby 11 Plaintiff would “license” the Oakberry trademark and other operational and intellectual 12 property from the Defendants for the purposes of maintaining a single acai stand within a 13 shopping center. Within two years there was a falling out. 14 On September 11, 2023, Plaintiff filed suit against Defendants in the Superior 15 Court of California, County of San Diego alleging: (1) violation of the California 16 Franchise Investment Law, California Corporation Code sections 31000, et seq.; (2) 17 breach of contract; (3) intentional misrepresentation/fraudulent concealment; (4) violation 18 of the California Business & Professions Code, sections 17200, et seq.; (5) unjust 19 enrichment; and (6) declaratory relief. 20 Plaintiff generally alleges that it intended to enter into a trademark licensing 21 agreement with Defendants, when in reality, the contract was a franchising agreement 22 between businesses. Plaintiff alleges that Defendants failed to make certain franchising 23 business disclosures, required by the relevant California state laws. Plaintiff contends 24 that Defendants unilaterally terminated the original trademark licensing agreement when 25 Plaintiff refused to sign a new franchise disclosure document. Plaintiff contends 26 Defendants thus breached the trademark licensing agreement, causing Plaintiff to incur 27 damages. 28 Before Plaintiff filed suit in San Diego, California, Defendants Oakberry Acai and 1 Frangulis initiated arbitration proceedings with the ICDR in Miami, Florida. Once the 2 California state court case was filed, Defendants removed the case to this Court. 3 Thereafter, Defendants filed a Motion to Compel Arbitration and Dismiss or Stay the 4 Action. This Court granted Defendants’ Motion to Compel Arbitration and the litigation 5 was stayed pending a decision in arbitration. 6 A second arbitration was initiated before the ICDR, in San Diego, California. At 7 the onset of arbitration, Plaintiff’s counsel informed the Tribunal that Plaintiff was unable 8 to pay the $6,600 filing fee. An email exchange ensued between Plaintiff’s counsel, 9 Defendants’ counsel, and the ICDR Vice President, addressing Plaintiff’s failure to pay 10 the arbitration filing fee. Therein, the ICDR Vice President advised Plaintiff’s counsel of 11 cost-saving measures that could reduce Plaintiff’s arbitration costs generally, including 12 filing a waiver for the filing fee, reducing the size of the Tribunal to a single arbitrator, 13 finding a pro-bono arbitrator, presenting the case on documents only, or limiting the 14 arbitrators’ hourly rate. 15 In an email exchange, months later, between Plaintiff’s counsel and the Director of 16 ICDR, the Director of ICDR informed Plaintiff’s counsel that Plaintiff’s counterclaim 17 would be dismissed for not paying the $6,600 filing fee. Plaintiff then paid the filing fee. 18 A procedural hearing was held before the Tribunal where the arbitration process was laid 19 out, and the parties presented their claims and defenses. There, Plaintiff objected to 20 arbitral jurisdiction, mainly the existence and validity or the arbitration agreement and the 21 arbitrability of the claims. The parties stipulated to delegate all jurisdictional questions to 22 the Arbitrators. However, the Arbitrators did not rule on the jurisdictional questions 23 because Plaintiff next failed to pay its first deposit. Plaintiff then asked the Tribunal to 24 ask Defendants to cover Plaintiff’s arbitrator’s fees. The Tribunal asked Defendants and 25 Defendants chose not to. 26 Shortly thereafter, the Tribunal suspended the arbitration for thirty (30) days in 27 accordance with Article 39(5) of the ICDR Procedures. The Tribunal informed the 28 parties that the arbitration would terminate in accordance with Article 39(5) if payment 1 was not received. On January 25, 2025, the arbitration was terminated by the Tribunal in 2 accordance with Article 39(5) of the ICDR Procedures. 3 III. LEGAL STANDARD 4 A motion to remand challenges the removal of an action. Moore-Thomas v. 5 Alaska Airlines, Inc., 553 F.3d 1241, 1244 (9th Cir. 2009). Generally, a state civil action 6 may be removed only if, at the time of its removal, it is one that initially could have been 7 brought in federal court. See 28 U.S.C. § 1441(a). Any doubt about removal is to be 8 resolved in favor of remand because federal courts are ones of limited jurisdiction, and 9 the removal statute is strictly construed. Moore-Thomas, 553 F.3d at 1244 (citing Gaus 10 v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)). The removing defendant must 11 overcome the "strong presumption against removal jurisdiction" and establish that 12 removal is proper. Hunter v. Phillip Morris USA, 582 F.3d 1039, 1042 (quoting Gaus, 13 980 F.2d at 566. 14 IV. DISCUSSION 15 A. Arbitration 16 The parties entered into an international commercial agreement. See Doc. No. 1-9 17 at 361. The agreement falls under The United Nations Convention on the Recognition 18 and Enforcement of Foreign Arbitral Awards (“the Convention”), pursuant to Chapter 2 19 of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 201-208. See Doc. No. 10 at 4, ¶7- 20 19. The FAA governs the enforceability of arbitration agreements in contracts. Similar 21 to the FAA the Convention governs arbitration provisions in international commercial 22 agreements. Mullis v. J.P. Morgan Chase & Co., No. 3:24-cv-1334-JES-MSB, 2025 WL 23 1532877, at *3 (S.D. Cal. May 29, 2025) (citations omitted). The court’s role in 24 addressing a question of arbitrability generally is “limited to determining (1) whether a 25 valid agreement to arbitrate exists, and if it does, (2) whether the agreement encompasses 26 the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys. Inc., 207 F.3d 1126, 1130 27 (9th Cir. 2000) (citations omitted). If the court finds that both requirements are met, the 28 FAA requires it to enforce the provision in accordance with its terms. Id. However, the 1 requirements of Sections 3 and 4 of the FAA that act as parallel devices for enforcing an 2 arbitration agreement must also be met. See 9 U.S.C. §§ 3-4. 3 The parties were ordered by this Court to arbitrate. Doc. No. 10. The arbitration 4 terminated before a decision on the merits was reached after which the parties returned to 5 this Court. See Doc. No. 16. Plaintiff contends arbitration “has been had” pursuant to 6 Section 3 of the FAA. See Doc. No. 16 at 8 ¶14. Defendants contend Plaintiff “failed, 7 neglected, or refused” to arbitrate under Section 4 of the FAA. See Doc. No. 17 at 6 ¶19. 8 Considering the interaction between Sections 3 and 4 of the FAA is critical in 9 determining whether the parties abided by this Court’s order to arbitrate.1 10 Here, there is no dispute that an arbitration agreement exists, that it is enforceable 11 and binds the parties, and that it encompasses the underlying dispute. The question is 12 how Section 4 applies in the scenario where arbitration was initiated, but the proceeding 13 was terminated before a final decision due to nonpayment of arbitration fees. Plaintiff 14 contends arbitration “has been had” pursuant to Section 3 of the FAA despite the 15 termination. Defendants contend Plaintiff “failed, neglected, or refused” to arbitrate 16 under Section 4 of the FAA by not paying the required fees or attempting to arrange 17 alternative payments. 18 First, a determination is made as to whether the Tribunal acted within the scope of 19 its discretion under the parties’ arbitration agreement. Second, a determination is made 20 as to whether Plaintiff’s conduct during arbitration was carried out in good faith. 21 I. Whether Arbitration Has “Been Had” 22 Generally, the FAA reflects a “fundamental principle that arbitration is a matter of 23 contract.” AT & T Mobility LLC v. Conception, 563 U.S. 333, 339 (2011). As such, 24 courts look to the parties’ agreement to determine how the parties agreed to proceed with

25 1 Under Section 3 of the FAA, the court must stay civil proceedings “until such 26 arbitration has been had.” 9 U.S.C. § 3. Section 4 of the FAA reads, “[a] party aggrieved 27 by the alleged failure, neglect or refusal of another to arbitrate under a written agreement for arbitration” may “petition any United States district court ... for an order directing that 28 1 arbitration. See Greco v. Uber Techs., Inc., No. 4:20-cv-02698-YGR, 2020 WL 2 5628966, at *3 (N.D. Cal. Sept. 3, 2020). The Ninth Circuit has considered whether 3 arbitration has “been had in accordance with the terms of the [arbitration] agreement” 4 where the parties incorporated arbitral rules, and those rules resulted in an arbitration to 5 terminate due to non-payment of arbitration fees. 6 In Tillman, the Ninth Circuit addressed the meaning of “has been had,” as 7 referenced in Section 3 of the FAA. Tillman v. Tillman, 825 F.3d 1069, 1073 (9th Cir. 8 2016). The court found that parties whose arbitration was terminated due to non-payment 9 of fees “had” arbitration in accordance with the terms. Id. In that case, the arbitration 10 agreement “explicitly incorporated the AAA's rules.” Id. Those rules allowed the 11 arbitrator to terminate proceedings without a decision on the merits. Id. The court 12 reasoned that “parties have the right under the FAA to choose the rules under which their 13 arbitration will be conducted,” and because the parties “chose rules that allowed the 14 arbitrator to terminate their arbitration in the event of nonpayment,” such termination 15 satisfies the parties' agreement. Id. at 1076. The court concluded that because the “steps 16 were followed,” the arbitration “had ‘been had’ pursuant to the agreement.” Id. 17 Like the parties in Tillman who incorporated the AAA’s rules, the Parties here also 18 incorporated the AAA rules. Not only were those rules incorporated directly into the 19 contract, but the Parties explicitly stipulated to the use of AAA’s ICDR Rules. Doc. No. 20 16-1 at 3 ¶18-20. The ICDR Rules, like the AAA Rules in Tillman, allowed the 21 arbitrator to terminate proceedings without a decision on the merits. Plaintiff argues that 22 this stipulation supersedes any conflicting provisions in the underlying contract. 23 Defendants argue that the Tribunal had no power to allocate fees “during” the arbitration. 24 The Parties stipulated to Procedural Order No. 1 from the ICDR, in which section 25 37 reads “the Arbitrators may fix and allocate costs among the parties in their Final 26 Award.” This section supports Plaintiff’s contention that the arbitrators had the authority 27 to alter the fees and costs during arbitration, while reserving the right to “fix” and 28 “allocate” fees and costs after arbitration. As a matter of fact, the Arbitrators did just that 1 when they asked Defendants if they were willing to front Plaintiff’s costs. Defendants 2 were aware that, if they prevailed in the arbitration, any costs they advanced on Plaintiff’s 3 behalf would be recoverable through the Final Award. 4 Defendants emphasize the language of the underlying agreement. In their brief, 5 Defendants argue that in the Parties’ agreement Section 11.2.3, they “expressly agreed 6 that ‘each Party shall bear its own costs during the conduct of the arbitration, including 7 with respect to the fees of the Arbitrator.’” See Doc. No. 17 at 7 ¶3-9. However, 8 Defendants do not include the entire sentence. A complete reading of Section 11.2.3 is, 9 “each party shall bear its own costs during the conduct of the arbitration, including with 10 respect to the fees of the Arbitrators, in proportion to the arbitration tribunal’s 11 determination.” Id. The last part of the sentence provides the Tribunal with authority to 12 alter the “costs during the conduct of the arbitration” pursuant to the Parties own 13 agreement. 14 It is important to examine how the ICDR concluded this arbitration. According to 15 Procedural Order No. 2 from the ICDR—which addressed the termination—the Tribunal 16 terminated the arbitration pursuant to Rule 39(5). See Doc. No. 16-3, at 7 . Under Rule 17 39(5), it does not list Plaintiff’s failure to pay the arbitration fees as a withdrawal, but 18 instead as a termination of the entire proceeding for “parties” failing to pay arbitration 19 fees. Id. 20 The Tribunal could have decided that Plaintiff defaulted under Rule 29. Or the 21 Tribunal could have terminated the arbitration under Rule 39(3), which reads: “Failure of 22 a party asserting a claim or counterclaim to pay the required fees or deposits shall be 23 deemed a withdrawal.” See Doc. No. 16-3, at 106-110. But the Tribunal did neither. In 24 addition, Defendants requested the Tribunal to continue with arbitration without 25 Plaintiff’s counterclaim. The Tribunal rejected their proposal. Instead, the arbitration 26 termination under ICDR Rule 39(5) appears to be based upon Defendants not covering 27 Plaintiff’s arbitration fees. For these reasons, the Court finds that arbitration has “been 28 had” pursuant to the Parties agreement and Section 3 of the FAA. 1 II. Failure, Neglect, or Refusal 2 While the arbitration proceeded in conformity with the terms of the Parties’ 3 agreement, Plaintiff must also show that he made a good-faith effort to arbitrate. 4 A party cannot manipulate its way back into court by withholding payments 5 despite its ability to pay. Tillman, 825 F.3d at 1075-76. In such a situation, “the district 6 court probably could … compel arbitration under the FAA’s provision allowing such an 7 order in the event of a party’s ‘failure, neglect, or refusal’ to arbitrate.” See id. (quoting 9 8 U.S.C. § 4). The Ninth Circuit considered “failure, neglect, or refusal of another to 9 arbitrate” based on failure to pay arbitration fees in Lifescan, Inc. v. Premier Diabetic 10 Services, Inc., 363 F.3d 1010, 1011 (9th Cir. 2004) (“What happens when a party to an 11 arbitration is unable to pay its pro-rata share of the arbitration fees?”). 12 In Lifescan, the parties began arbitration, but before the final hearing, one party 13 failed to pay their arbitration fees. Id. The arbitrators gave the paying party the option of 14 advancing the fees owed by the non-paying party. Id. The paying party refused, and 15 arbitration was terminated pursuant to the authority granted to the arbitrators via the 16 AAA. Id. The district court held that the nonpaying party’s failure to pay amounted to 17 its “failure, neglect, or refusal” to arbitrate and granted the paying party’s motion to 18 compel arbitration. The Ninth Circuit reversed. 19 Plaintiff argues that Lifescan is analogous to the present case because of the 20 procedural steps taken by the arbitrators and the parties’ agreement to abide by them. 21 Like the arbitration in Lifescan, which was terminated according to the arbitrators’ rules, 22 the arbitrators here terminated the arbitration based on ICDR Rule 39. The paying party 23 in Lifescan declined to cover the nonpaying party’s costs, like the Defendants declined to 24 cover the Plaintiff’s costs in this arbitration. 25 To distinguish Lifescan, Defendants claim that Plaintiff insisted on selecting an 26 expensive arbitrator, unlike the plaintiff in Lifescan. However, Defendants offer no 27 factual support for this distinction. The Lifescan opinion does not mention the actual cost 28 of arbitrators. 1 Nevertheless, Defendants contend that from the very start of the arbitration, 2 Plaintiff took every possible step to “derail” the proceeding. In support, Defendants offer 3 the following three arguments: (1) Plaintiff failed to provide convincing evidence of its 4 inability to pay for arbitration fees, since it was being represented by two law firms and 5 continuing business operations; (2) Plaintiff unnecessarily prolonged the proceedings; 6 and (3) Plaintiff intentionally chose an expensive arbitrator. See Doc. No. 17. 7 Defendants argue that this conduct amounts to a failure, neglect, or refusal to arbitrate. 8 Id. 9 This Court previously found that Plaintiff did not present sufficient evidence to 10 prove its inability to pay arbitration fees. See Doc. No. 10, at 11 ¶1-11. However, this 11 Court’s previous determination was preliminary and does not constrain the Tribunal’s 12 procedural autonomy.2 It may be that Plaintiff did not submit additional evidence to the 13 Tribunal regarding its inability to pay. However, the Tribunal had the authority to 14 request such information—but, as Plaintiff points out, it did not. Instead, the ICDR Vice 15 President advised Plaintiff’s counsel of cost-saving measures that could reduce Plaintiff’s 16 arbitration costs generally, including seeking a waiver for the filing fee, reducing the size 17 of the Tribunal to a single arbitrator, finding a pro-bono arbitrator, presenting the case on 18 documents only, or limiting the arbitrators’ hourly rate within a certain range. 19 Plaintiff accepted the suggestions of ICDR Vice President, stating that a fee waiver 20 had been submitted, that it was willing to proceed with a single arbitrator, and that it had 21 attempted to find a pro bono arbitrator. Although it was unable to secure a pro bono 22 arbitrator, Plaintiff eventually paid the filing fee. It was not until after discovering that 23 the arbitrator’s fees would likely exceed $140,000 that Plaintiff failed to make further 24 payments. 25 Next, Defendants argue that Plaintiff prolonged the arbitration proceedings in an 26

27 2 The FAA “leaves no place for the exercise of discretion by a district court but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as which the arbitration 28 1 effort to increase costs. Specifically, Defendants claim that Plaintiff “insisted on 2 additional preliminary briefing regarding the arbitrators’ jurisdiction,” repeating 3 arguments previously raised before this Court. However, according to the arbitration 4 schedule, these preliminary hearings addressed legitimate concerns raised by Plaintiff— 5 such as the applicable choice of law and the selection of the arbitrator. These issues were 6 reasonable and appropriate to raise and cannot be characterized as mere “tactics,” as 7 Defendants suggest. 8 As to the selection of arbitrators, the parties’ contentions are heavily intertwined, 9 with each side arguing that they were the ones who elected to have one arbitrator. 10 Plaintiff does admit to challenging Defendant’s selection of having a Brazilian arbitrator 11 as the sole arbitrator. Plaintiff offered to use another judge who it believed was 12 “impartial,” insinuating that the Brazilian arbitrator would not be impartial because one 13 or more Defendants reside in Brazil. However, the issue of selecting an arbitrator is a 14 reasonable and appropriate issue to raise during the preliminary stage of arbitration; it 15 should not be viewed as an attempt to “derail” the proceedings. 16 Additionally, Defendants argue that Plaintiff’s hiring of two law firms and 17 continued operations without paying royalties indicate sufficient funds to cover 18 arbitration fees. This is not persuasive. According to Plaintiff, the law firms work on a 19 contingency basis, meaning Plaintiff is not paying legal fees out of pocket. Regarding 20 Plaintiff’s ongoing business operations, Plaintiff asserts that “a small business can be 21 operational and yet entirely unable to amass an extra $140,000+.” Both of Defendants’ 22 arguments rest on the assumption that Plaintiff intentionally withheld payment. 23 However, there is no basis for such a conclusion. Plaintiff is not personally funding legal 24 expenses and operates a single acai stand in a mall. Doc. No. 7-1, at 2 ¶1-4. 25 This Court directed Plaintiff to submit financial documents covering the last two 26 years. Those documents have now been filed under seal and the Court has reviewed 27 these financials. Having reviewed these documents, the Court hereby finds that Plaintiff 28 is unable to pay for its share of the arbitration costs. For these reasons, like the district 1 court in Tillman that made an express finding that one party was unable to pay for her 2 share of the arbitration, this Court finds that Plaintiff has not “failed, refused, or rejected” 3 to arbitrate due to its inability to pay. 825 F.3d at 1076 (“Here, however, the district 4 court found that Tillman had exhausted her funds and was ‘unable to pay for her share of 5 arbitration.’”). 6 B. Jurisdiction 7 Having determined that arbitration has been had pursuant to the parties’ agreement, 8 but that it did not resolve the claims on its merits, the Court turns to whether it retains 9 jurisdiction to adjudicate the remaining claims. A court has discretion to remand when 10 the basis for federal jurisdiction no longer applies. See Carnegie-Mellon Univ. v. Cohill, 11 484 U.S. 343, 351 (1998). 12 Defendants argue that this Court continues to have original jurisdiction pursuant to 13 “the FAA, and specifically 9 U.S.C. 205.” Doc No. 17, at 6. Defendants are correct. 14 This Court retains original jurisdiction. See Day v. Orrick, Herrington & Sutcliffe, LLP, 15 42 F.4th 1131, 1138 (9th Cir. 2022).3 However, the purpose of granting federal courts 16 with subject matter jurisdiction under the Convention is to effectuate recognition and 17 enforcement of arbitration agreements. See 9 U.S.C. 201-208; see also Republic of 18 Ecuador v. Chevron Corp., 638 F.3d 384, 391 n.6 (2d. Cir. 2011). Recognition and 19 enforcement refer to facilitating the arbitration process necessary to arrive at an 20 arbitration award. Day, 42 F.4th at 1139 (citation modified). 21 Here, the Parties have already arbitrated in accordance with their agreement. And 22 because the arbitration did not result in a decision on the merits, the arbitration provision 23 no longer has an effect on the outcome of the case. As a result, the Court has no further 24 role in facilitating arbitration which has already been had. Therefore, the federal claim 25 that formed the basis of federal jurisdiction is extinguished. Only supplemental 26 jurisdiction remains with respect to the remaining state law claims -- jurisdiction which 27 3 Sections 203 and 205 are to be read consistently as conferring subject-matter 28 1 the Court now declines to assert. See 28 U.S.C. § 1367(c).4 2 When all federal claims are eliminated before trial, “the balance of factors ... will 3 point toward declining to exercise jurisdiction over the remaining state law claims. 4 Acri v. Varian Associates, 114 F.3d 999, 1001 (9th Cir. 1997) (“The Supreme Court has 5 stated, and we have often repeated, that ‘in the usual case in which all federal-law claims 6 are eliminated before trial, the balance of factors ... will point toward declining to 7 exercise jurisdiction over the remaining state-law claims.’”). 8 Here, the § 1367(c) factors weigh in favor of remand to the state court. First, the 9 Complaint is the only pleading on file. No discovery has been conducted. Plaintiff 10 contends the case will not be ready for trial for at least a year. Second, there is no reason 11 to believe that judicial proceedings would be any less fair in state court than in federal 12 court. Third, the San Diego Superior Court and the United States District Court for the 13 Southern District of California are both located in San Diego. Fourth, as a matter of 14 comity, Plaintiff’s claims are state law claims, so the state law should be applied by a 15 California state judge. In totality, the factors weigh in favor of remand to the state court. 16 Lastly, Defendants argue that this Court has diversity jurisdiction because JP, 17 Wellisch, and Oak Brothers (“CA Defendants”) were fraudulently joined. And because 18 they were fraudulently joined, their citizenship should not be considered in any diversity 19 jurisdiction analysis. Defendants base their argument on Plaintiff’s Complaint; arguing 20 that “the Complaint does not even allege CA Defendants were in any way involved in the 21 negotiation of the TLA or execution of any franchise agreement or FDD.” Doc. No. 17, 22 at 14 ¶20-22. However, the facts as alleged in the Complaint do not support their 23 contention. 24 25 4 28 U.S.C. § 1367(c) provides: The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if: (1) the claim raises a novel or complex 26 issue of State law; (2) the claim substantially predominates over the claim or claims over 27 which the district court has original jurisdiction; (3) the district court has dismissed all claims over which it had original jurisdiction; (4) in exceptional circumstances, there are 28 1 Plaintiff alleges in its Cause of Action 3 that the CA Defendants were “principals 2 || and/or officers of Oak Brothers, developed, formulated, perpetrated, carried out, and/or 3 || directed the intentional misrepresentation ... to their own finical benefit.” Doc. No. 1-8, 4 20 192-99. This allegation pertains to when the Defendants, allegedly, “concealed or 5 || failed to disclose facts relating to the purpose and effect of the FDD in order to induce 6 || Plaintiff to execute the Franchise documents.” Id. Not only does the Complaint allege sufficient facts to include the CA Defendants, but the Defendants’ own prior assertions 8 || contradict themselves. In its Motion to Compel Arbitration, Defendants argued that Plaintiff should be directed to arbitrate with the CA Defendants because the claims were 10 || “inextricably intertwined” with those against the other Defendants. Doc. No. 3, at 11. 11 For these reasons, this Court is not persuaded to retain jurisdiction. CONCLUSION 13 Plaintiff's Motion to Remand Action to State Court is GRANTED. 14 IT IS SO ORDERED. "

DATED: October 30, 2025 16 ON. ROGER T. BENITE 7 United States District Judge 18 19 20 21 22 23 24 25 26 27 28 -13-