Chorley Enterprises, Inc. v. Dickey's Barbecue Restaurant

Filing

PUBLISHED AUTHORED OPINION filed. Originating case number: 1:14-cv-01650-GLR. [999634557]. [14-1799, 14-1800, 14-1833, 14-1834]

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1799

CHORLEY ENTERPRISES, INC., a Maryland Corporation; MATTHEW
CHORLEY; CARLA CHORLEY,
Plaintiffs - Appellees,
v.
DICKEY’S BARBECUE RESTAURANTS, INC., a Texas corporation;
ROLAND DICKEY, JR.; JERREL DENTON,
Defendants - Appellants.
----------------------JAMES STROTHER CROCKETT, JR.,
Court-Assigned Amicus Counsel.

No. 14-1800

JUSTIN TROUARD; JESSICA CHELTON,
Plaintiffs - Appellees,
v.
DICKEY’S BARBECUE RESTAURANTS, INC., a Texas corporation;
ROLAND DICKEY, JR.; JERREL DENTON,
Defendants - Appellants.
-----------------------

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JAMES STROTHER CROCKETT, JR.,
Court-Assigned Amicus Counsel.

No. 14-1833

CHORLEY ENTERPRISES, INC., a Maryland Corporation; MATTHEW
CHORLEY; CARLA CHORLEY,
Plaintiffs - Appellants,
v.
DICKEY’S BARBECUE RESTAURANTS, INC., a Texas corporation;
ROLAND DICKEY, JR.; JERREL DENTON,
Defendants - Appellees.
----------------------JAMES STROTHER CROCKETT, JR.,
Court-Assigned Amicus Counsel.

No. 14-1834

JUSTIN TROUARD; JESSICA CHELTON,
Plaintiffs - Appellants,
v.
DICKEY’S BARBECUE RESTAURANTS, INC., a Texas corporation;
ROLAND DICKEY, JR.; JERREL DENTON,
Defendants - Appellees.
-----------------------

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JAMES STROTHER CROCKETT, JR.,
Court-Assigned Amicus Counsel.

Appeals from the United States District Court for the District
of Maryland, at Baltimore and Greenbelt.
Paul W. Grimm,
District Judge. (1:14-cv-01650-GLR; 8:14-cv-01703-PWG)

Argued:

March 26, 2015

Decided:

August 5, 2015

Before DIAZ, FLOYD, and THACKER, Circuit Judges.

Vacated and remanded by published opinion.
Judge Floyd wrote
the opinion, in which Judge Diaz and Judge Thacker joined.

ARGUED: Roger Brian Kaplan, GREENBERG TRAURIG, LLP, Florham
Park, New Jersey, for Appellants/Cross-Appellees. Russell James
Gaspar, COHEN MOHR LLP, Washington, D.C., for Appellees/CrossAppellants.
James Strother Crockett, Jr., SPILMAN, THOMAS &
BATTLE, PLLC, Charleston, West Virginia, as Court-Assigned
Amicus Counsel.
ON BRIEF: Aaron Van Nostrand, GREENBERG
TRAURIG, LLP, Florham Park, New Jersey, for Appellants/CrossAppellees.
Andrew K. Wible, C. Patteson Cardwell, IV, COHEN
MOHR LLP, Washington, D.C., for Appellees/Cross-Appellants.
Sarah B. Smith, SPILMAN, THOMAS & BATTLE, PLLC, Charleston, West
Virginia, for Amicus Curiae.

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FLOYD, Circuit Judge:
This appeal arises from a franchise dispute.
national

franchisor

of

quick-service

Dickey’s, a

barbeque

restaurants,

claims several of its franchisees in Maryland breached their
franchise agreements by running their restaurants poorly.

The

franchisees in turn claim that Dickey’s misrepresented start-up
and other costs in violation of Maryland franchise law, thus
never giving them a chance to succeed.

At this stage in the

proceeding, however, we must decide only whether the parties’
claims should be arbitrated, as Dickey’s argues, or heard in
federal court in Maryland, as the franchisees contend.
This

issue

agreements.

is

governed

by

the

parties’

franchise

On one hand, the agreements require arbitration of

all claims “arising out of or relating to” the agreements.
553.

On

the

other

hand,

the

agreements

state

that

J.A.
the

agreements “shall not require” the franchisees to waive their
“right to file a lawsuit alleging a cause of action arising
under

Maryland

Franchise

Law

in

any

jurisdiction in the State of Maryland.”

court

of

competent

J.A. 555.

The district court held that these provisions create an
ambiguity

that

only

a

jury

can

resolve.

In

doing

so,

the

district court appeared to conclude that the agreements set up
an “either/or” scenario: either all the parties’ claims must go
forward

in

arbitration,

or

they
4

must

all

proceed

in

federal

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For the reasons set forth below, we will reverse.
of

law,

provisions

the

clear

requires

Dickey’s

must

Maryland

Franchise

that

and

proceed

the

in

Law

unambiguous
common

law

arbitration,

claims

must

language
claims

while

in

of

these

asserted

the

proceed

As a

by

franchisees’
the

Maryland

district court.
We recognize that requiring the parties to litigate in two
different

forums

conflicting
Federal
where,

as

here,

but

instructions

stay

to

inefficient,

and

could

this

is

mandated

Act,

the

not

be
But

results.

Arbitration

claims,

only.

may

which

requires

agreements

others.

compel

outcome

call

piecemeal

for

of

to

by

the

litigation

arbitration

Accordingly,

arbitration

lead

the

we

of

reverse

common

law

some
with

claims

We leave it to the district court’s discretion whether to
the

franchisees’

Maryland

Franchise

Law

claims

pending

conclusion of the arbitration.

I.
Dickey’s Barbeque Restaurants, Inc. (Dickey’s), is a Texasbased franchisor

of

quick-service

restaurants

specializing

in

barbequed meats, with franchises operating throughout the United

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Both sets of plaintiffs in this collective appeal –

Justin Trouard and Jessica Chelton (“Trouard and Chelton”), and
Matthew

and

Carla

Enterprises,

Inc.

“Franchisees”)

–

Chorley
(“the

and

their

Chorleys”)

previously

operated

company,

Chorley

(collectively,

Dickey’s

the

restaurants

in

Maryland under franchise agreements signed in 2012. 2

A.
The

Franchisees’

respective

relationships

with

Dickey’s

soured shortly after they opened their restaurants.
According
franchise

to

agreement

Dickey’s,

the

by,

other

among

Chorleys
things,

violated
failing

to

their
pass

certain food safety inspections and receiving numerous customer
complaints. 3

As a result, Dickey’s sent several “notices of

operational deficiencies” to the Chorleys throughout 2013 and
early 2014.
fraudulently

In response, the Chorleys asserted that Dickey’s
misrepresented

the

operating

costs

and

estimated

profits during negotiations for the franchise in violation of

1

For ease of reference, we refer to Dickey’s as the
“Franchisor” when using its possessive form.
2 The Chorleys also signed a development agreement granting
them the right to open an additional restaurant, but this
lawsuit was filed before they exercised that right.
3 Because this appeal turns on the terms of the parties’
agreements rather than the specifics of their allegations, we
provide only a high-level summary of the parties’ allegations
here.
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the Maryland Franchise Registration and Disclosure Law, Md. Code
Bus. Reg. §§ 14-201 to 14-233 (2015) (the “Maryland Franchise
Law”).
Despite initially exploring whether the dispute could be
mediated,
against

Dickey’s
the

ultimately

Chorleys

in

brought

Texas

on

arbitration
May

1,

proceedings

2014.

In

the

arbitration demand, Dickey’s asserted three common law claims.
Count I sought a declaratory order finding that the Chorleys
breached

their

franchise

declaratory

order

finding

development

agreement;

and

agreement;
that

the

Count

Count

Chorleys

III

sought

II

sought

breached
damages

a

their

for

the

court

in

Chorleys’ breach of both agreements.
The

Chorleys

then

brought

suit

in

federal

Maryland, seeking to enjoin the arbitration and asking the court
to

declare

the

arbitration

provisions

unenforceable.

The

Chorleys also brought affirmative claims for relief under the
Maryland

Franchise

Law

against

Dickey’s,

its

owner,

and

its

director of business development (collectively “Dickey’s” or the
“Franchisor”).
injunctive

Dickey’s

relief,

and

in

also

turn
filed

opposed
a

the

cross-motion

arbitration of all the Chorleys’ claims.

motion
to

for

compel

In the alternative,

Dickey’s sought to stay those claims pending arbitration.
Trouard and Chelton had a similar history with Dickey’s.
Dickey’s

contends

that

Trouard
7

and

Chelton

mismanaged

their

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while

Trouard

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and

Chelton

assert

that

Dickey’s

violated the Maryland Franchise Law by misrepresenting start-up
costs and estimated potential sales and profits.
initially

discussed

ultimately

filed

mediating

arbitration

contract and fraud claims. 4

their
in

The parties

dispute,

Texas,

but

alleging

Dickey’s
breach-of-

Trouard and Chelton then filed suit

in Maryland, seeking to enjoin the arbitration and requesting
affirmative relief under the Maryland Franchise Law.

Dickey’s

opposed

filed

the

motion

for

injunctive

relief,

and

again

a

cross-motion to compel arbitration or, in the alternative, to
stay the action.
The district court consolidated the Franchisees’ lawsuits
for

purposes

arbitrations

of

deciding

these

are

currently

being

preliminary
held

in

motions.

abeyance

The

pending

a

final decision on the motions for preliminary injunctions and
the cross-motions to compel arbitration.

B.
Both below and here on appeal, the parties’ arguments hinge
on

the

interplay

virtually

between

identical

two

provisions

franchise

in

agreements:

4

the
(i)

Franchisees’
the

dispute

In its fraud claim, Dickey’s alleges that Trouard and
Chelton falsified sales reports in an effort to misrepresent
their restaurant’s financial performance.
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provisions

in

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Article

27

and

(ii)

the

Maryland-

specific provisions in Article 29.
Article
requires

27,

the

which

parties

contains

to

first

proceeding to arbitration.

the

“Arbitration

mediate

their

Clause,”

claims

before

If mediation fails to resolve the

disputes within 90 days after the mediator has been appointed,
either party is entitled to seek arbitration at the office of
the

American

Arbitration

Association

located

nearest

Franchisor’s corporate headquarters in Plano, Texas.

to

the

In the

Arbitration Clause, the parties also agreed to arbitrate “all
disputes, controversies, claims, causes of action and/or alleged
breaches or failures to perform arising out of or relating to
this Agreement (and attachments) or the relationship created by
this Agreement.”

J.A. 553. 5

Notwithstanding

this

Arbitration

Clause,

the

agreements

also provide that the “STATE SPECIFIC PROVISIONS” in Article 29
“CONTROL.”

J.A.

555.

And

Article

29.1,

the

“Inconsistent

Provisions Clause,” provides that Maryland law “shall govern and
control

any

agreement,

contrary

and

that

or
any

inconsistent
such

provisions”

inconsistent

of

the

provisions

are

“modified and amended” so that they comply with Maryland law.
Id.

Finally, Article 29.2(4), the “Maryland Clause,” states
5

The Chorleys’ development agreement contains a virtually
identical arbitration clause. Id. at 585.
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that the “provisions of this Agreement shall not require you to
waive your right to file a lawsuit alleging a cause of action
arising under Maryland Franchise Law in any court of competent
Id. 6

jurisdiction in the State of Maryland.”
The

Maryland

Clause

is

similar

(but

not

identical)

to

Section 02.02.08.16(L)(3) of the Code of Maryland Regulations
(the “Regulation”).
the

Maryland

Under the Regulation, a franchisor violates

Franchise

Law

if

it

requires

a

franchisee

to

“[w]aive the franchisee’s right to file a lawsuit alleging a
cause of action arising under the Maryland Franchise Law in any
court of competent jurisdiction in this State.”

Md. Code Regs.

02.02.08.16(L)(3) (2015).

C.
During
presented

the
opposing

district

court

proceedings,

interpretations

6

Similarly, a “Maryland
development agreement provides:

of

these

Addendum”

to

the
clauses.

the

Any
provision
of
this
Agreement
which
designates jurisdiction or venue outside of
the State of Maryland or requires you to
agree to jurisdiction or venue in a forum
outside of the State of Maryland is void
with respect to any claim arising under the
Maryland
Franchise
Registration
and
Disclosure Law.
J.A. 597.
10

parties
The

Chorleys’

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claimed
with

the

that

the

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Maryland

Arbitration

Clause

Clause,

thus

fundamentally
rendering

the

Arbitration Clause void such that all of the parties’ claims
must proceed in the district court.

Dickey’s took a different

view, arguing that the Maryland Clause is consistent with the
Arbitration Clause because the Maryland Clause merely preserves
the

Franchisees’

right

to

bring

a

claim

under

Franchise Law in either arbitration or in court.

the

Maryland

Alternatively,

assuming the Franchisees’ interpretation was correct, Dickey’s
argued that the Federal Arbitration Act, (FAA), 9 U.S.C. § 1 et
seq.,

would

preempt

the

Maryland

Clause

as

an

invalid

prohibition on arbitration.
The district court concluded that both parties’ readings of
the

Arbitration

and

Maryland

Clauses

rendering the agreements ambiguous.
that

under

Clause

the

could

J.A. 32.

Franchisor’s

function

in

were

thus

The district court noted

interpretation,

harmony

plausible,

with

the

the

“Arbitration

Maryland

Clause.”

The court also recognized that under the Franchisees’

“view, the Maryland Clause . . . control[s], and [its] language
refers to litigation only, not arbitration.”

Id.

these

reasoned

conflicting

interpretations,

the

court

Faced with
that

a

jury must determine exactly which claims, if any, the parties

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arbitrate. 7

Thus,

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the

district

court

denied

the

parties’ respective motions without prejudice and ordered a jury
trial on the meaning of the franchise agreements. 8
Dickey’s then timely appealed the denial of its motions to
compel, and the Franchisees cross-appealed from the denial of
their motions for preliminary injunctive relief.

II.
Before we can address the merits, we must determine whether
we have jurisdiction over these appeals.

We ordinarily review

only final decisions from the district courts.

Rota-McLarty v.

Santander Consumer USA, Inc., 700 F.3d 690, 696 (4th Cir. 2012).
And there is no dispute that the order at issue is not final.
Thus, we typically would not have jurisdiction over the parties’
interlocutory appeals, absent an exception to the final order
doctrine.

7

Because the jury could have ultimately agreed with the
Franchisor’s interpretation of the respective clauses, the
district court did not reach the Franchisor’s alternative
argument that the FAA preempts the Maryland Clause.
8 Although the district court also held that the Chorleys’
development agreement was similarly ambiguous “as to whether
[the Chorleys] agreed to litigate Maryland Franchise Act claims
as opposed to arbitrate them,” the court concluded that the
Maryland Addendum was unambiguous with respect to venue. Thus,
assuming a jury found arbitration appropriate under that
agreement, the district court held that any such arbitration
must take place in Maryland, not Texas.
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A.
Section 16 of the FAA provides just such an exception.
U.S.C. § 16. 9

9

That section authorizes interlocutory appeals from

a district court’s refusal to either stay litigation pending
arbitration under Section 3 of the FAA or compel arbitration
under Section 4 of the FAA.
BMO

Harris

Bank,

N.A.,

9 U.S.C. § 16(a)(1); see Dillon v.

787

F.3d

707,

713

(4th

Cir.

2015)

(stating that under Section 16, “an order that favors litigation
over

arbitration

is

immediately

appealable,

interlocutory in nature” (ellipsis omitted)).
that

the

Franchisor’s

motions

to

compel

even

if

It is undisputed

expressly

sought

to

enforce the Arbitration Clause under Sections 3 and 4 of the
FAA.

The

motions.

district

court’s

order

also

expressly

denied

the

Thus, on the surface at least, this Court appears to

have jurisdiction under 9 U.S.C. § 16(a)(1).
The
matter

Court-appointed

is

not

as

amicus

disagrees,

straightforward

as

it

arguing
seems.

that
The

this

amicus

reasons that Section 16(a)(1) applies only when a district court
makes a final decision as to whether any or all of the claims
between the parties must proceed to arbitration.
district

court

after

jury

a

reserved
trial,

a

the

final
amicus

9

ruling

on

contends

Because the

the

motions

the

order

until

is

not

The parties agree that the Arbitration Clause is governed
by the FAA.
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appealable.

In

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essence,

the

amicus

believes

an

interlocutory appeal under Section 16 is always premature if a
district

court

orders

a

jury

trial

under

Section

4

before

deciding a motion to compel.
Although

we

appreciate

the

amicus’s

views,

interpretation is contrary to the FAA’s plain language.

this
Section

16(a)(1)(b) provides for interlocutory appeals of orders denying
arbitration without stating whether those orders must be final.
A

separate

subsection,

Section

16(a)(3),

provides

for

interlocutory review of any “final decision with respect to an
arbitration.”

9

U.S.C.

§

16(a)(3).

If

Section

16(a)(1)(b)

applies only to final orders, as the amicus contends, Congress
would have said as much, as it did in Section 16(a)(3).

See

Sandvik AB v. Advent Int’l Corp., 220 F.3d 99, 102-03 (3d Cir.
2000) (finding it significant “that Congress decided to use the
word ‘final’ in one part of the statute, but declined to do so
in

the

section

that

declares

that

orders

compel arbitration are indeed appealable”).
so,

of

course,

because

grafting

a

denying

motions

to

Congress did not do

finality

requirement

onto

Section 16(a)(1)(b) would read that section out of the statute
by making it redundant with Section 16(a)(3).

See id.

The amicus’s interpretation would also frustrate the very
purpose
Congress

of

Section

created

16.

appellate

As

we

have

jurisdiction
14

previously
over

recognized,

non-final

orders

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denying motions to compel arbitration “to effectuate a strong
policy favoring arbitration.”
(quotation omitted).

Rota-McLarty, 700 F.3d at 696

Refusing to hear an appeal until after a

jury trial would not further this policy.

That is especially

true where, as here, the arbitration agreements can be construed
on their face as a matter of law, thereby making a jury trial
unnecessary.
In short, the district court expressly “denied” the motions
to compel arbitration “without prejudice.”

J.A. 35.

As we have

previously held, and we reiterate again today, that is “all that
is necessary to grant us appellate jurisdiction in this case.”
Snowden v. Checkpoint Check Cashing, 290 F.3d 631, 636 (4th Cir.
2002); see also Quilloin v. Tenet HealthSystem Phila., Inc., 673
F.3d 221, 228 (3d Cir. 2012) (“[T]here can be no doubt that we
have the authority to review an appeal from the District Court's
order denying a motion to compel arbitration, irrespective of
the fact that the order was denied without prejudice.”). 10

10

The amicus contends a different result is warranted under
Chase v. Sidney Frank Importing Co., Inc., 133 F.3d 913, 1998 WL
3609 (4th Cir. 1998) (per curiam). In that unpublished opinion,
we concluded that an appeal was not ripe for review when the
district court denied a motion to compel upon determining that
additional factual development was necessary to decide the
defendant’s
claim
that
the
arbitration
clause
had
been
fraudulently induced.
Amicus’s reliance on Chase is misplaced
for several reasons. Unlike in Chase, no further factual issues
remain here – the Arbitration Clause may be construed as a
matter of law.
Additionally, Chase – which as an unpublished
(Continued)
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B.
The Franchisees also contend we have jurisdiction to hear
their

cross-appeal

authorizes

under

interlocutory

injunctions.”

28

U.S.C.

appeals

of

We are not so sure.

§

1292(a)(1),

orders

“refusing

which
.

.

.

The Franchisees fail to

address Section 16(b)(4) of the FAA, which expressly prohibits
immediate

review

arbitration.

9

of

interlocutory

U.S.C.

§

orders

16(b)(4).

refusing

Several

of

to

enjoin

our

sister

circuits have concluded that Section 16(b)(4) trumps 28 U.S.C.
§ 1292(a)(1), thus precluding immediate review of such orders.
See Accenture LLP v. Spreng, 647 F.3d 72, 74-75 (2d Cir. 2011)
(collecting cases).

Section 16(b)(4) may also preclude us from

exercising pendant appellate jurisdiction over the Franchisees’
cross-appeal under Swint v. Chambers County Commission, 514 U.S.
35, 50-51 (1995) (suggesting that appellate courts may exercise
jurisdiction over non-appealable issues that are “inextricably
intertwined” with a question that is the proper subject of an
immediate appeal).
We

decline

to

decide

these

issues,

however,

because

resolution of the Franchisor’s appeal will necessarily decide

decision is not binding on this Court – appears to have been
wrongly decided, and is against the weight of published
authority holding that all orders denying motions to compel
arbitration are immediately appealable under the FAA.
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the issue presented by the Franchisees’ cross-appeal: whether
arbitration may proceed in Texas.

Indeed, the appeal and cross-

appeal

same

present

two

sides

of

the

coin:

the

Franchisor’s

appeal asserts that all the parties’ claims should be arbitrated
in

Texas;

the

Franchisees’

arbitrations in Texas.
limb

as

to

the

cross-appeal

seeks

to

enjoin

the

We need not step out on a jurisdictional

Franchisees’

cross-appeal

when

deciding

the

Franchisor’s appeal – which we clearly have jurisdiction over –
will resolve all the issues raised by the parties.

Accordingly,

we dismiss the cross-appeal as moot.

III.
A.
Having

concluded

Franchisor’s

appeal,

contentions.

The

district

court

concluding

that
we

that

Clause ambiguous.

turn

central

properly
the

we
to

issue

refused

Maryland

have
the

jurisdiction
merits

before
to

Clause

of

us

compel

over

the

is

parties’

whether

arbitration

renders

the

We review this issue de novo.

Bros., Inc., 708 F.3d 599, 605 (4th Cir. 2013).

the

the
after

Arbitration

Noohi v. Toll
“We also review

de novo questions of state contract law concerning the validity
of the parties’ arbitration agreement.”

Muriithi v. Shuttle

Express, Inc., 712 F.3d 173, 178 (4th Cir. 2013).

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background,

Section

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2

of

the

FAA,

its

“primary

substantive provision,” Moses H. Cone Mem’l Hosp. v. Mercury
Constr.

Corp.,

460

U.S.

1,

24

(1983),

makes

agreements

to

arbitrate “valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any
contract.”

9 U.S.C. § 2.

Sections 3 and 4 in turn “provide[]

two parallel devices for enforcing an arbitration agreement: a
stay of litigation in any case raising a dispute referable to
arbitration, 9 U.S.C. § 3, and an affirmative order to engage in
arbitration, § 4.”
We

will

Moses H. Cone, 460 U.S. at 22.

compel

arbitration

under

Section

4

if:

(i)

the

parties have entered into a valid agreement to arbitrate, and
(ii)

the

dispute

arbitration
omitted).

in

agreement.

question

falls

Muriithi,

within

712

F.3d

the
at

scope
179

of

the

(citation

“The issue whether a dispute is arbitrable presents

primarily a question of contract interpretation, requiring that
we give effect to the parties’ intentions as expressed in their
agreement.”

Id.

If we conclude that the parties intended to

arbitrate a dispute, we must enforce that agreement according to
its terms.
(2012).

CompuCredit Corp. v. Greenwood, 132 S. Ct. 665, 669

At the same time, it is well-settled that a “party

cannot be required to submit to arbitration any dispute which he
has not agreed to so submit.”

Levin v. Alms & Assocs., Inc.,

634 F.3d 260, 266 (4th Cir. 2011) (quotation omitted).
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B.
In determining the parties’ intent, we apply ordinary state
law

principles

governing

the

formation

of

contracts.

First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
And

under

ambiguous

applicable
contract

evidence.”

if

Maryland
there

Law, 11

is

no

we

may

factual

“construe

dispute

in

an
the

Pacific Indem. Co. v. Interstate Fire & Cas. Co.,

488 A.2d 486, 489 (Md. 1985); see also Sierra Club v. Dominion
Cove Point LNG, L.P., 216 Md. App. 322, 334 (Md. Ct. Spec. App.
2014) (stating that “the mere fact that the parties disagree as
to

the

meaning

does

not

necessarily

render

[a

contract]

ambiguous” when it could only have one meaning as a matter of
law).

In

the

proceedings

below,

neither

party

disputed

any

facts: they simply offered conflicting interpretations of the
relevant

agreements.

Notwithstanding

the

district

court’s

decision to hold a jury trial then, this is precisely the type
of issue we can decide as a matter of law.

11

Although the “Governing Law” provisions state that the
franchise agreements “shall be governed by and construed in
accordance with the laws of the State of Texas,” J.A. 553, the
parties agree that Maryland law applies.
The district court
also applied Maryland law in its order, and both parties cite to
Maryland law on appeal.
Accordingly, we will also apply
Maryland law here.
Cf. Cargill, Inc. v. Charles Kowsky Res.,
Inc., 949 F.2d 51, 55 (2d Cir. 1991) (finding waiver of
Massachusetts choice of law provision when both parties relied
on New York law before district court and on appeal).
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district

court

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concluded

that

Section

4

of

the

FAA

requires a jury trial whenever the parties present conflicting
interpretations of an agreement.

The right to a jury trial

under Section 4 of the FAA, however, is not automatic.

Rather,

the party seeking a jury trial must make an unequivocal denial
that

an

arbitration

sufficient

facts

in

agreement

exists

support.

—

and

Oppenheimer

must
&

Co.,

also
Inc.

show
v.

Neidhardt, 56 F.3d 352, 358 (2d Cir. 1995); see also Manning v.
Energy Conversion Devices, Inc., 833 F.2d 1096, 1103 (2d Cir.
1987). 12
Not just any factual dispute will do.

Rather, the party

requesting a jury trial under Section 4 must provide sufficient
evidence in support of its claims such that a reasonable jury
could return a favorable verdict under applicable law.
standard

is

akin

to

the

burden

on

summary

judgment.

This
See

Oppenheimer, 56 F.3d at 358 (comparing Fed. R. Civ. P. 56(c),
(e) to the level of sufficient evidentiary facts needed for jury
trial under 9 U.S.C. § 4).

In other words, to obtain a jury

12

Although we have not previously addressed the standard
for obtaining a jury trial under Section 4, we find the Second
Circuit’s approach persuasive and so expressly adopt it here.
Cf. Glass v. Kidder Peabody & Co., 114 F.3d 446, 456 (4th Cir.
1997) (recognizing that the Second Circuit’s decisions are
“preeminent in arbitration law.”).
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trial, the parties must show genuine issues of material fact
regarding the existence of an agreement to arbitrate. 13
Here, the Franchisees requested a jury trial, but did not
dispute any material facts.
not

entitled

to

a

jury

Accordingly, the Franchisees are

trial

under

Section

4

of

the

FAA.

Rather, we will decide whether the parties intended to arbitrate
their disputes as a matter of law based on the plain language of
the agreements.

C.
1.
We first consider whether the parties intended to arbitrate
the Franchisor’s common law claims.

This question is governed

by the Arbitration Clause, Ford v. Antwerpen Motorcars, ___ A.3d
___, No. 68, 2015 WL 3937607, at * 3 (Md. July 13, 2015), which
indicates

that

the

Franchisees

agreed

to

arbitrate

“all

disputes, controversies, claims, causes of action and/or alleged
breaches or failures to perform arising out of or relating to

13

The policy behind the FAA supports this standard.
If
parties could request and receive jury trials merely by
advancing conflicting interpretations of contractual language
without any supporting extrinsic evidence, it would frustrate
the very policies that the FAA is meant to promote – the swift
and inexpensive alternative resolution of disputes outside of
the judicial forum.
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this Agreement (and attachments) or the relationship created by
this Agreement.”

J.A. 553.

The Franchisor’s breach of contract claims clearly “arise
out of or relate to” the Franchise Agreements, and thus fall
squarely within the Arbitration Clause.

See Am. Recovery Corp.

v. Computerized Thermal Imaging, 96 F.3d 88, 93 (4th Cir. 1996);
see also Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S.
395,

398

(1967)

arbitration

of

(labeling
“any

as

“broad”

controversy

relating to this Agreement”).

or

a

clause

claim

that

arising

required

out

of

or

Similarly, the Franchisor’s claim

that Trouard and Chelton fraudulently falsified sales reports
falls within the scope of the Arbitration Clause because that
claim arises directly from the franchise relationship created by
the agreement.

See Long v. Silver, 248 F.3d 309, 318 (4th Cir.

2001)

that

(holding

fraud

claims

must

be

arbitrated

when

a

“significant relationship” exists between those claims and the
contract in which the arbitration clause is contained).
agreements’

plain

language

then,

it

seems

clear

By the

that

the

Franchisees have agreed to arbitrate the Franchisor’s common law
claims.

2.
The Franchisees make several unavailing arguments to avoid
this

result.

First,

the

Franchisees
22

contend

that

Dickey’s

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cannot arbitrate its dispute because it failed to first seek
mediation as required by Article 27 of the franchise agreements.
According to the Franchisees, mediation is a condition precedent
to invoking the arbitration provision, and so the motions to
compel should be denied for this reason alone.
As

the

arbitrators

Supreme
–

not

Court

courts

has
–

recently

must

decide

re-affirmed,
whether

precedent to arbitrability has been fulfilled.

a

however,
condition

BG Group PLC v.

Republic of Arg., 134 S. Ct. 1198, 1207-08 (2014); see also
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85-6 (2002).14
Accordingly, the Franchisees’ argument must be decided by the
arbitrator, not the court.
the

Franchisees

have

no

Should the arbitrator decide that
duty

to

arbitrate

because

Dickey’s

failed to satisfy the mediation condition precedent, the parties
may then seek relief in court under the FAA.

14

See 9 U.S.C. §§ 9-

Several circuits, including our own in an unpublished
opinion, have refused to compel arbitration when the requesting
party failed to comply with a precondition to arbitration. See
Perdue Farms Inc. v. Design Build Contracting Corp., 263 F.
App’x 380, 383 (4th Cir. 2008) (“Where a condition precedent to
arbitration is not fulfilled, a party to a contract does not
have a right to arbitration.”); HIM Portland LLC v. Devito
Builders Inc., 317 F.3d 41, 44 (1st Cir. 2003) (refusing to
compel arbitration because “[u]nder the plain language of the
contract, the arbitration provision of the agreement is not
triggered until one of the parties requests mediation”);
Kemiron-Atl. Inc. v. Aguakem Int’l Inc., 290 F.3d 1287, 1291
(11th Cir. 2002) (same).
All of these cases either predate,
conflict with, or do not consider Howsam and BG Group, however,
and thus do not control here.
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(providing

procedure

for

Pg: 24 of 39

parties

to

seek

confirmation,

vacatur, or correction of an arbitration decision).

But that

possibility is irrelevant at this stage in the proceeding.

3.
The

Franchisees

next

argue

that

Article

29

“voids” the Arbitration Clause in its entirety.
they

point

Maryland

to

language

Clause

applies

in

to

the

common

law

J.A. 555.

claims,

the

contrary to the Maryland Clause.
do

not

implicate

because

that

the

Clause

Maryland
only

agreements

“notwithstanding

Agreement in the contrary.”
as

the

“trumps”

In support,

stating
anything

that
in

We disagree.

Arbitration

or

the

th[e]

At least

Clause

is

not

Indeed, the common law claims
Clause

applies

to

in

the

claims

first

instance,

“aris[ing]

under

Maryland Franchise law,” and the Franchisor’s claims clearly do
not arise under that Law.

J.A. 555.

Read together then, the

Arbitration and Maryland Clauses demonstrate that the parties
agreed to arbitrate all disputes except for the narrow carve-out
for Maryland Franchise Law claims as set forth in the Maryland
Clause. 15

15

A similar analysis applies to the Chorleys’ development
agreement.
The Maryland Addendum in the development agreement
only requires Maryland venue for “any claim arising under the
Maryland Franchise Registration and Disclosure Law.”
J.A. 597.
The Franchisor’s breach of contract claims do not arise under
(Continued)
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Franchisees

seek

to

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conjure

a

conflict

between

the

Maryland Clause and the Arbitration Clause by asserting that
they will be forced to raise their Maryland Franchise Law claims
as affirmative defenses in the arbitration.
Franchisees,

a

ruling

in

arbitration

on

According to the
their

affirmative

defenses under the Maryland Franchise Law could hypothetically
have

preclusive

effect

on

the

proceedings as to those claims.

Maryland

district

court

As the argument goes, such a

ruling would effectively negate their right to bring suit in
Maryland court under the Maryland Clause.
We

reject

this

reasoning.

As

an

initial

matter,

the

Maryland Clause only states that the Franchisees have a right to
“file

a

lawsuit”

bringing

Maryland

Franchise

Law

claims

in

Maryland court; it does not say the Franchisees also have a
right to bring all “affirmative defenses” based on the Maryland
Franchise

Law

in

court.

By

its

plain

language

then,

the

Maryland Clause does not apply to the Franchisees’ affirmative
defenses.

And as set forth above, where the Maryland Clause is

not implicated, the Arbitration Clause controls.

that law. Accordingly, to the extent those claims are based on
the development agreement, they may be arbitrated in Texas.
Conversely, the Chorleys’ Maryland Franchise Law claims under
the development agreement may go forward in Maryland court,
because the Maryland Addendum states that the Arbitration Clause
is “void” as to those claims.
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Moreover, the FAA requires the exact piecemeal litigation
the

Franchisees

seek

to

avoid

potential for conflicting results.

here,

notwithstanding

the

KPMG LLP v. Cocchi, 132 S.

Ct. 23, 26 (2011) (per curiam) (“[W]hen a complaint contains
both

arbitrable

and

nonarbitrable

claims,

the

Act

requires

courts to compel arbitration of pendent arbitrable claims when
one of the parties files a motion to compel, even where the
result would be the possibly inefficient maintenance of separate
proceedings in different forums.”); see also In re Cotton Yarn
Antitrust Litig., 505 F.3d 274, 285 (4th Cir. 2007) (“[F]ederal
law requires piecemeal resolution when necessary to give effect
to

an

arbitration

agreement.”).

Accordingly,

we

will

not

determine the preclusive effect of a hypothetical award at this
stage.
We note that if the parties had wanted to avoid potentially
conflicting

results

–

and

thorny

questions

regarding

the

preclusive effect of a potential award 16 – they could have agreed

16

Arbitration awards generally have the same preclusive
effect as court orders, but only to the extent the parties agree
that the issues could be decided in arbitration.
Cf.
Dean
Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 222 (1985) (“[I]t
is far from certain that arbitration proceedings will have any
preclusive effect on the litigation of nonarbitrable federal
claims.”). As explained below, the Franchisees did not agree to
arbitrate their Maryland Franchise Law claims.
Thus, even if
the arbitrator rejects the Franchisees’ affirmative defenses,
that ruling arguably may not preclude the district court from
reaching a contrary result on the Maryland Franchise Law claims.
(Continued)
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on a single forum for all their claims.

But they did not.

We

will not rewrite their agreements to save them from their own
self-imposed, inefficient arbitration procedures.

Accordingly,

we reverse with instructions for the district court to compel
arbitration of the common law claims.

D.

Whether

the

parties

also

agreed

to

arbitrate

the

Franchisees’ Maryland Franchise Law claims is another matter.

1.
Unlike the Franchisor’s common law claims, the Franchisees’
claims

directly

implicate

the

Maryland

Clause.

Again,

that

Clause states that nothing in the agreements shall “require you
to waive your right to file a lawsuit alleging a cause of action
arising under Maryland Franchise Law in any court of competent
jurisdiction in the State of Maryland.”

J.A. 555.

Reading the

Arbitration Clause as mandating arbitration of the Franchisees’
Maryland Franchise Law claims would necessarily “require” them
to

“waive”

their

right

to

file

such

claims

in

competent jurisdiction in the State of Maryland.”

a

“court

of

By its plain

For the reasons set forth above, however, we will not decide
this hypothetical question here.
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then,

the

Pg: 28 of 39

Maryland

Clause

conflicts

with

the

Arbitration Clause as to the Franchisees’ Maryland Franchise Law
claims.

And

because

the

Maryland

Clause

applies

“notwithstanding anything in th[e] Agreement in the contrary,”
id., we conclude that it trumps the more general Arbitration
Clause as to Maryland Franchise Law claims, thus allowing the
Franchisees to file those claims in Maryland court.

2.
Dickey’s disagrees, asserting that the Maryland Clause does
not mean what it says.

In its view, the Maryland Clause merely

preserves the Franchisees’ right to pursue a claim – in court or
in

an

arbitration

support,

Dickey’s

–

under

cites

the

three

Maryland

cases

Franchise

In

holding

purportedly

Law.

that

“words such as ‘lawsuit,’ ‘sue’ and ‘court’ do not negate [an]
arbitration

provision,

but

merely

preserve[]

the

right

of

a

franchisee to pursue a claim – in court or in arbitration –
under Maryland Franchise Law.”

App. Br. at 32 (citing Holmes v.

Coverall

365

N.

Am.,

649

A.2d

(Md.

1994);

Zaks

v.

TES

Franchising, No. 3:01CV2266JBA, 2004 WL 1553611 (D. Conn. July
9, 2004); and CompuCredit, 132 S. Ct. at 669).
these cases is misplaced.

Its reliance on

As set forth below, none of these

cases addresses language even remotely similar to the Maryland
Clause.
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First, Holmes is readily distinguishable because it held
only

that

the

Maryland

Franchise

Law

neither

prohibits

arbitration nor requires Franchise Law claims to be brought in
649 A.2d at 368. 17

Maryland.

But the text of the Maryland

Clause controls here, not the text of the Maryland Franchise
Law.

And

the

two

are

fundamentally

different.

Unlike

the

Maryland Franchise Law, the Maryland Clause does not merely use
the words “sue” and “court” in creating a cause of action. 18
Instead,

it

Agreement,”

expressly
including

states
the

that

the

Arbitration

“provisions
Clause,

of

the

“shall

not

require” the Franchisees to waive their “right to file a lawsuit
alleging a cause of action arising under the Maryland Franchise
Law in any court of competent jurisdiction in this State.”

J.A.

555.
In short, Holmes establishes that the Maryland Franchise
Law grants franchisees a right to sue for violations of that
Law, but does not say where that suit must take place; whereas
17

Although Holmes addressed a predecessor version of the
Maryland Franchise Law, the differences between it and the
current version are minor and do not impact the analysis here.
18 The Maryland Franchise Law’s “Civil Liability” section
grants a franchisee the right to “sue” under the Law to “recover
damages sustained by the grant of the franchise,” but does not
state whether that suit must be brought in arbitration or in
court. Md. Code Bus. Reg. § 14-227(b). It also states that a
“court may order the person who sells or grants a franchise to:
(1) rescind the franchise; and (2) make restitution to the
person who buys or is granted a franchise.”
Id. § 14-227(c)
(emphasis added).
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the Maryland Clause goes one step further and expressly grants
franchisees a right to file that suit in Maryland.

Accordingly,

neither Holmes nor the Maryland Franchise Law shed any light on
the meaning of the Maryland Clause.
Dickey’s

next

cites

Zaks

for

the

proposition

that

Maryland Franchise Law does not prohibit arbitration.

the

In doing

so, Dickey’s again conflates the Maryland Franchise Law with the
Maryland Clause.
the

parties

Zaks is also inapposite because, unlike here,

there

executed

an

addendum

to

their

agreement

expressly stating that the arbitration provision overrode any
provision permitting suit in Maryland.

Zaks, 2004 WL 1553611,

at

the

*2

(“Notwithstanding

Franchise

Agreement

following

terms

Franchise

Agreement

to

and

anything

which

this

conditions
requires

to

Addendum

shall

binding

contrary
is

control:

in

the

attached,
.

.

the

.

The

arbitration.”).

The

opposite is true here: to the extent they conflict, the Maryland
Clause controls “notwithstanding” the Arbitration Clause.

J.A.

555.
Dickey’s also contends that Compucredit, 132 S. Ct. at 669
construed

language

similar

to

that

in

the

Maryland

Clause.

According to Dickey’s, the Supreme Court held that statutory
language purportedly prohibiting “the waiver” of “the right to
sue”

in

“court

actions”

only

established

30

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private

right

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action that could be brought in either arbitration or court.
App. Br. at 36.
In

Dickey’s overstates Compucredit’s holding.

Compucredit,

the

Supreme

Court

considered

whether

a

federal statute – the Credit Repair Organizations Act (CROA), 15
U.S.C. §1679 et seq. – precludes arbitration of claims alleging
violations of that statute.

The plaintiffs contended that “the

right to sue” language in the CROA’s disclosure provision, 15
U.S.C.

§

1679c(a),

arbitration.
Dickey’s

a

right

to

sue

in

court,

not

The Supreme Court disagreed, but not because, as

contends,

arbitration.

created

that

Instead,

language
the

Court

could

be

held

that

read
the

to

permit

disclosure

provision was entirely irrelevant because it does not “provide[]
consumers with a right to bring an action in a court of law,”
but rather provides only “the right to receive the [disclosure]
statement, which is meant to describe the consumer protections
that the law elsewhere provides.”

132 S. Ct. at 669-70.

In

contrast, the Maryland Clause does not merely provide notice of
rights that are provided elsewhere; rather, as a contractual
commitment, it expressly creates the right itself. 19

19

Upon concluding that § 1679c(a) was irrelevant, the Court
then turned to the CROA’s civil liability provision, § 1679g,
which creates a private cause of action for violations of the
statute. § 1679g uses terms like “action,” “class action,” and
“court” in describing the cause of action.
The Supreme Court
concluded that this language only established a private right of
action that could be brought in either arbitration or court.
(Continued)
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If anything, Compucredit supports the Franchisees’ position
that the parties were free to select a Maryland court forum,
notwithstanding the default position that Maryland Franchise Law
claims can be brought in arbitration:
[J]ust as the contemplated availability of
all judicial forums may be reduced to a
single forum by contractual specification,
so also can the contemplated availability of
judicial action be limited to judicial
action
compelling
or
reviewing
initial
arbitral adjudication.
The parties remain
free to specify such matters, so long as the
guarantee of [the CROA’s civil liability
provision]--the guarantee of the legal power
to impose liability--is preserved.
132 S. Ct. at 671 (emphasis in original).

In the same way,

here, Dickey’s and the Franchisees were free under the Maryland
Franchise Law to arbitrate or litigate claims arising under the
Law.

But,

expressly

by

chose

agreeing
to

to

litigate

the

Maryland

those

Clause,

claims

arbitrating all other claims in Texas).

in

the

Maryland

parties
(while

This choice is wholly

consistent with Compucredit, which expressly notes that parties
remain free to agree to forum-selection clauses, notwithstanding

This holding is analogous to Holmes – both the CROA and the
Maryland Franchise Law use words like “court” and “action” in
describing their respective private statutory causes of action.
In contrast to the CROA and the Maryland Franchise Law, however,
the Maryland Clause goes further and expressly states that
Franchisees have the right to file a suit in “any court of
competent jurisdiction in this State.”
Both the Maryland
Franchise Law and the CROA lack this specific forum-selection
language. Accordingly, Compucredit does not control this case.
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liability

provisions

Pg: 33 of 39

using

words

such

as

“court”

and

“action.”
Finally,

Dickey’s

argues

that

the

Regulation

does

not

prohibit arbitration, and therefore the Maryland Clause must not
either.

Again, we disagree.

Although some of the language in

the Clause tracks the Regulation, they are not identical.

Both

the Regulation and the Clause consist of a single sentence, but
they differ in one fundamental respect: they contain different
subjects.

In the Regulation, the subject is the franchisor: it

is the franchisor who may not require the franchisee to waive
their litigation rights.

But in the Clause, the subject is the

agreement itself: the “provisions of the agreement” cannot be
read to require that franchisees waive their litigation rights.
This distinction matters.
the

subject

is

the

As the district court held, when

“franchisor”

as

in

the

Regulation,

the

Franchisees remain free to agree to arbitrate Maryland Franchise
Law claims – the Regulation only prohibits forced or involuntary
waivers. 20

But

when

the

subject

20

is

the

“provisions

of

the

The district court made the distinction between voluntary
and involuntary waivers in an effort to read the Regulation as
consistent with the Maryland Franchise Law as required by
Maryland administrative law principles.
See J.A. 28 (citing
Lussier v. Md. Racing Comm’n, 684 A.2d 804 (Md. 1996)).
The
district court made this distinction in the context of rejecting
the Franchisees’ argument that the Arbitration Clause conflicted
with the Inconsistent Provisions Clause. The Franchisees do not
rely on the Inconsistent Provisions Clause on appeal, however,
(Continued)
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agreement” as in the Maryland Clause, the parties have already
reached

an

agreement

as

to

arbitration.

And

here,

that

agreement consists of both the Maryland and Arbitration Clauses,
which demonstrate that the parties intended to arbitrate all
claims except for Maryland Franchise Law claims.
Put differently, under the district court’s interpretation
of

the

Regulation,

the

Franchisees

were

free

to

waive

their

right to file suit in Maryland, as long as that waiver were
voluntary.
Franchisees

But
did

the
not

Maryland
agree

to

Clause
waive

demonstrates

that

right

in

that
the

instance, at least as to their Franchise Law claims.
both

parties

agreed

to

litigate

those

claims

in

the
first

Rather,
Maryland.

Accordingly, we will not compel arbitration of the Franchisees’
Maryland Franchise Law claims.

3.
Alternatively,
Clause

does

Dickey’s

prohibit

contends

arbitration

of

that
the

then the Clause is preempted by the FAA.
not

reach

this

issue

because

arbitrability question to a jury.

it

if

the

Maryland

Franchisees’

claims,

The district court did

referred

the

threshold

Because we have decided this

so
we
need
not
determine
whether
the
district
court’s
distinction between voluntary and involuntary waivers was
correct.
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question in the Franchisees’ favor as a matter of law, we will
address this alternative preemption argument here.
It is well established that the FAA “pre-empts application
of

state

laws

unenforceable.”

which

render

arbitration

agreements

Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S.

468, 472 (1989).

Thus, where “state law prohibits outright the

arbitration of a . . . claim . . . [t]he conflicting rule is
displaced by the FAA.”

Marmet Health Care Ctr., Inc. v. Brown,

132 S. Ct. 1201, 1203-1204 (2012) (citing AT&T Mobility LLC v.
Concepcion, 131 S. Ct. 1740, 1747 (2011)); Saturn Distr. Corp.
v. Williams, 905 F.2d 719, 722 (4th Cir. 1990).
Our

decision

in

Saturn

is

particularly

instructive.

There, Saturn — an automobile distributor — brought an action
for declaratory and injunctive relief, claiming that the FAA
preempted a Virginia statute prohibiting arbitration of claims
arising out of auto dealership agreements.
Saturn

submitted

Commissioner

of

its
the

dealer

905 F.2d at 721.

agreement

Department

of

Motor

to

the

Vehicles,

Virginia
but

the

Commissioner refused to approve it in light of its arbitration
clause.

We

concluded

that

the

Virginia

conflicted with the FAA and was thus preempted.

statute

plainly

Id. at 722.

Unlike in Saturn, however, the Maryland Clause is not a
state law prohibiting arbitration.

Rather, it is a contractual

provision prohibiting arbitration.

And it is generally well-

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settled that when a “party to a contract voluntarily assumes an
obligation

to

proceed

preemption

doctrine

under

does

not

certain
apply

state
to

liability for breach of that agreement.”

laws,

shield

a

traditional
party

from

Epps v. JP Morgan

Chase Bank, N.A., 675 F.3d 315, 326 (4th Cir. 2012) (citing Am.
Airlines v. Wolens, 513 U.S. 219, 228 (1995)); see also Coll.
Loan Corp. v. SLM Corp., 396 F.3d 588, 598 (4th Cir. 2005)
(where

parties

standards

in

to

their

an

agreement

bargained-for

voluntarily
private

assume

contract,

a

federal
party’s

argument that enforcement of the agreement is preempted by that
federal law “boils down to a contention that it was free to
enter into a contract that invoked a federal standard as the
indicator of compliance, then to proceed to breach its duties
thereunder
. . .

and

to

shield

its

breach

by

pleading

preemption.

[F]ederal supremacy does not mandate such a result.”). 21

21

Dickey’s contends that these cases establish that “statemandated contract provisions are preempted if they contravene
federal law.”
App. Br. at 51.
None of these cases actually
held as much.
Instead, they held only that parties cannot
incorporate state law in their agreements, and then later seek
to shield themselves from that law by pleading preemption. They
did not address the inverse scenario — that is, whether stateimposed contractual commitments are preempted. The Franchisor’s
citation to Wells Fargo Home Mortg., Inc. v. Neal, 922 A.2d 538
(Md. 2007), is particularly misplaced, because that decision
does not even address preemption.
Rather, it decided only
whether a borrower could bring a breach of contract claim based
on a lender’s purported failure to comply with federal
regulations allegedly incorporated in the borrower’s deed of
trust. And even if Neal did support the Franchisor’s argument,
(Continued)
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As the Third Circuit recently recognized, these cases have a
“salutary ‘you’ve made your own bed, now lie in it’” quality.
Del. & Hudson Ry. Co. v. Knoedler Mfrs., Inc., 781 F.3d 656,
667-68 (3d Cir. 2015).
Although none of these cases address FAA preemption, their
reasoning applies equally here.
from

carving

out

wholesale

FAA preemption prevents states

exceptions

Concepcion, 131 S. Ct. at 1747.
parties

from

agreeing

specific claims.

to

to

arbitration.

See

It does not prevent private

litigate,

rather

than

arbitrate,

Again, the parties were free under Maryland

Franchise Law to either arbitrate or litigate the Franchisees’
claims.

See Holmes, 649 A.2d at 368; see also Muriithi, 712

F.3d at 179 (compelling arbitration of Maryland Franchise Law
claims).

As set forth in the Maryland Clause, they agreed to

litigate the Maryland Franchise Law claims in Maryland.

Nothing

in the FAA preempts or prohibits the parties from making that
choice.
Dickey’s argues this law does not apply because it did not
voluntarily

include

the

Maryland

Clause

in

the

agreements.

Rather, Dickey’s asserts that both Maryland law and the Maryland
Commissioner of Securities forced it to include the Clause in

preemption is a matter of federal not state law, and so Neal
does not control here.
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the agreements as a condition precedent to doing business in
Maryland. 22
anything.

We

disagree.

Dickey’s

was

not

forced

to

do

If Dickey’s did not want to include the Maryland

Clause, it had several options.
to do business in Maryland.

It could have simply declined

Or, like the dealer in Saturn, it

could have filed a declaratory action challenging the Maryland
Commissioner

of

Securities’

position

Maryland Clause in its agreements.

before

including

the

See Saturn, 905 F.2d at 721;

see also Sec. Indus. Assoc. v. Connolly, 883 F.2d 1114 (1st Cir.
1989) (finding that FAA preempted state law which was required
to be incorporated in contracts, but only where challengers sued
for a declaratory order before incorporating the provision in
their contracts).
Dickey’s did neither, however.

Instead, it chose to add

the Maryland Clauses to its agreements so that it could reap the
benefits of conducting its franchise business in Maryland.

It

then waited nearly two years after including the Maryland Clause
in

its

franchise

agreements

before

purported required inclusion of them.
22

challenging

the

state’s

Simply put, Dickey’s had

In support, Dickey’s cites a declaration executed by the
attorney who drafted the franchise agreements.
Neither the
declaration nor the parties’ briefing cites the applicable law
mandating inclusion of the Maryland Clause in the agreements,
and our research has not revealed any such law.
The parties
also dispute whether the declaration constitutes inadmissible
hearsay.
Because we conclude the declaration is irrelevant in
the first instance, we need not address these issues.
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multiple options other than agreeing to the Maryland Clause.

In

this scenario, we are comfortable holding Dickey’s to the terms
of the agreements.

IV.
Finally, Dickey’s requests that we stay the Franchisees’
Maryland

Franchise

Law

claims

in

the

district

court

pending

conclusion of the arbitration on its common law claims.

The

district court did not decide this issue because it did not
decide whether arbitration should proceed at all.
grant

such

a

stay

is

a

matter

within

the

Whether to

district

court’s

discretion, Am. Recovery Corp., 96 F.3d at 97, so we leave it to
the district court to decide this matter in the first instance
on remand.

V.
For the foregoing reasons, we vacate the district court’s
order and remand for further proceedings.
VACATED AND REMANDED

39