Healthy Choice SGH, LLC v. ABP Corporation

Filing 27

MEMORANDUM AND ORDER signed by Senior Judge William B. Shubb on 10/15/15 ORDERING that Defendant ABP Corporation's Motion to lift the stay and dismiss the proceedings without prejudice be, and the same hereby 23 is GRANTED. CASE CLOSED. (Mena-Sanchez, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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HEALTHY CHOICE SGH, LLC,
Plaintiff,

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v.

MEMORANDUM AND ORDER RE: MOTION
TO LIFT STAY AND DISMISS THE
PROCEEDINGS WITHOUT PREJUDICE
CIV. NO. 2:14-2370 WBS DAD

ABP CORPORATION,

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Defendant.

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HEALTHY CHOICE SM, LLC,
Plaintiff,

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CIV. NO. 2:14-2371 WBS DAD

v.
ABP CORPORATION,
Defendant.

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----oo0oo---Defendant ABP Corporation (“ABP”) brings this motion to

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lift the stay of proceedings in these two actions and dismiss,

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without prejudice, the Complaints filed by plaintiffs Healthy

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Choice SGH, LLC (“Action I”) and Healthy Choice SM, LLC (“Action
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II”).

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and café chain, entered into franchise agreements with plaintiffs

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to operate Au Bon Pain franchises in Sacramento, California.

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(Mot. at 2-3 (Action I Docket No. 23-1).)

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contained mandatory arbitration and venue provisions requiring

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the parties to arbitrate all franchise disputes in Massachusetts

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before the American Arbitration Association (“AAA”).

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ABP, the owner and franchisor of the Au Bon Pain bakery

The agreements

(Id.)

On October 8, 2014, plaintiffs brought their actions in
this district, asserting various claims against ABP relating to
(Actions I & II Docket Nos. 1.)1

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their franchise agreements.

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ABP then filed a petition in the District Court for the District

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of Massachusetts to compel plaintiffs to arbitrate their claims,

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and it concurrently moved this court to stay plaintiffs’ actions

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pending the District of Massachusetts’s decision.

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Docket No. 8.)

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motion to stay and ordered ABP to submit a Status Report

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following the District of Massachusetts’s decision that addressed

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the arbitrability of the issues raised in plaintiffs’ Complaints

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and the status of any pending arbitration.

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No. 20; Action II Docket No. 13.)

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(Action I

On February 25, 2015, the court granted ABP’s

(See Action I Docket

On June 9, 2015, Massachusetts District Judge William

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G. Young granted ABP’s petition, ruled that plaintiffs were

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estopped from objecting to the arbitration of their franchise

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disputes, and ordered all such disputes to binding arbitration in

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Boston, Massachusetts before AAA Arbitrator Frederick E.

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Connelly, Jr., Case No. 01-14-0001-3684.

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2014.

(See ABP’s Status

The court consolidated the actions on December 18,
(See Action I Docket No. 9; Action II Docket No. 7.)
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Report ¶¶ 6-7, Ex. A (Action I Docket Nos. 21 to 21-1); Dolan

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Decl. ¶¶ 2-3, Ex. A (Action I Docket Nos. 23-2 to 23-3).)

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a preliminary hearing before Arbitrator Connelly on July 17,

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2015, plaintiffs and ABP agreed to a discovery and briefing

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schedule and set the arbitration hearing for January 25 through

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January 29, 2016 in Boston, Massachusetts.

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Ex. A.)

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Bryan Dillon, also represents plaintiffs in those arbitration

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proceedings.

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During

(Dolan Decl. ¶¶ 2-3,

Plaintiffs’ attorney of record in the actions here,

(Id. ¶ 2, Ex. A at 2.)

ABP now moves to lift the stay and dismiss, without

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prejudice, the proceedings in this district.

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Plaintiffs have submitted a statement of non-opposition to ABP’s

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motion.

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plaintiffs do not dispute, that all of plaintiffs’ claims here

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are subject to Judge Young’s order and are presently being

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resolved in the arbitration proceedings in Massachusetts.

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Decl. ¶¶ 2-3; Mot. at 4, 6, 10.)

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opposition demonstrates their assent to these affirmations.

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(Action I Docket No. 26.)

(See Mot.)

ABP represents, and

(Dolan

Plaintiffs’ statement of non-

A district court has the discretion to dismiss a

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proceeding when “the arbitration clause [is] broad enough to bar

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all of the plaintiff’s claims.”

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Inc., 864 F.2d 635, 638 (9th Cir. 1988); see Green v. Ameritech

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Corp., 200 F.3d 967, 973 (6th Cir. 2000) (finding that “the

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weight of authority clearly supports dismissal of the case when

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all of the issues raised in the district court must be submitted

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to arbitration”).

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franchise agreements provide that “any dispute, claim or

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controversy arising out of or relating to” the franchise

Sparling v. Hoffman Constr. Co.,

The arbitration clauses in plaintiffs’

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agreements, “the breach [t]hereof, the rights and obligations of

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the parties [t]hereto, or the entry, making, interpretation or

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performance of either party under” the franchise agreements

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“shall be settled by arbitration administered by the American

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Arbitration Association” and “shall take place before a sole

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arbitrator . . . in Boston, Massachusetts,” whose decision “shall

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be final and binding.”

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¶ 14.3 (Action I Docket No. 8-3).)

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(Mot. to Stay Dolan Decl. ¶ 3, Ex. A

The actions here assert identical claims relating to

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plaintiffs’ franchise agreements.

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failed to register its franchise offers and to provide required

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franchise disclosure documents in violation of Federal Trade

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Commission regulations, 16 C.F.R. § 436.2; the California Unfair

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Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq.; and the

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California Franchise Investment Law, Cal. Corp. Code §§ 31000 et

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seq.

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arbitration clauses in plaintiffs’ franchise agreements cover all

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of the issues raised in these matters, the court may dismiss both

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actions.

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The Complaints allege that ABP

(See Actions I & II Docket Nos. 1.)

Because the

See Sparling, 864 F.2d at 638.
Even without the arbitration provisions mandating

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dismissal, the franchise agreements also contain forum clauses

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stating that plaintiffs “irrevocably submit[] to the jurisdiction

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of the courts of the Commonwealth of Massachusetts in any suit,

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action or proceeding arising out of or relating to [the franchise

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agreements] or any other dispute between the [the parties], and

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[the parties] irrevocably agree that all claims in respect of any

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such suit, action or proceeding must be brought and/or defended

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therein except with respect to matters which are under the
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exclusive jurisdiction of the Federal Courts of the United

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States, which shall be brought and/or defended in the Federal

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District Court for the District of Massachusetts sitting in

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Boston, Massachusetts.”

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Because the parties have agreed to a particular forum, dismissal

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is also appropriate in order to give effect to the parties’

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contractual intent.

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(Mot. to Stay Dolan Decl. Ex. A ¶ 14.4.)

IT IS THEREFORE ORDERED that defendant ABP
Corporation’s motion to lift the stay and dismiss the proceedings

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without prejudice be, and the same hereby is, GRANTED.

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actions are hereby DISMISSED without prejudice.

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Dated:

October 15, 2015

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These