United States District Court, D. Arizona
Murray Snow Chief United States District Judge.
before the Court is the Motion to Dismiss and Compel
Arbitration of Defendants Maxim Media Marketing, Inc. and
Darrin Ramage (Doc. 10). For the following reasons the motion
Gravestone Entertainment LLC produces horror films. In 2012,
Gravestone entered licensing agreements with Defendant Maxim
Media Marketing, Inc. for two of its films, “15: The
Mind of a Serial Killer, ” and “The
Innocent.” Under the agreements, Maxim had exclusive,
worldwide rights to promote, distribute, and sell the films
for five years. A year later, however, the parties'
relationship had decayed. Maxim released the rights to the
films to Gravestone in July 2013, and the licensing
agreements were terminated.
license agreements each contained an identical arbitration
clause, which in pertinent part stated that:
[a]ny controversy or claim arising out of or related to this
Agreement and to any part of it, including, but not limited
to this Paragraph on arbitration, and to the performance,
breach, interpretation or enforceability hereof, and all
claims of fraud in the inducement of this Agreement and all
claims for rescission of this Agreement, or any part of this
Agreement, shall be settled by arbitration.
(Doc. 10 at 2.)
2019, Gravestone brought this copyright infringement action
against Maxim, alleging that Maxim had continued to
distribute the two films after the termination of the
licensing agreement. Maxim now moves to dismiss and compel
arbitration, arguing that the arbitration clauses of the two
agreements bind the parties to arbitrating Gravestone's
to dismiss and compel arbitration are properly brought under
Federal Rule of Civil Procedure 12(b)(1), which allows a
defendant to challenge the plaintiff's assertion that a
court has subject matter jurisdiction over a claim.
Fed.R.Civ.P. 12(b)(1); ROI Properties Inc. v. Burford
Capital Ltd., No. CV-19-003300-PHX-DJH, 2019 WL 1359254,
at *2 (D. Ariz. Jan. 14, 2019) (citing Doe v.
Schachter, 804 F.Supp. 53, 56 (N.D. Cal. 1992)).
Federal Arbitration Act (“FAA”) governs the
enforceability of arbitration agreements in contracts
involving interstate commerce. Kramer v. Toyota Motor
Corp., 705 F.3d 1122, 1126 (9th Cir. 2013) (citing 9
U.S.C. §§ 1 et seq.). The FAA broadly provides that
written agreements to arbitrate disputes arising out of
transactions involving interstate commerce “shall be
valid, irrevocable, and enforceable” except upon
grounds that exist at common law for the revocation of a
contract. 9 U.S.C. § 2. Absent a valid contract defense,
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 to which an arbitration agreement has been
signed.” Chiron Corp. v. Ortho Diagnostic Sys.,
Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). The district
court's role under the FAA is “limited to
determining (1) whether a valid agreement to arbitrate exists
and, if it does, (2) whether the agreement encompasses the
dispute at issue.” Id.
court deciding a motion to compel arbitration must first
decide whether and to what extent the parties agreed to
arbitrate.” Bonner v. Michigan Logistics,
Inc., 250 F.Supp.3d 388, 394-95 (D. Ariz. 2017) (citing
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 628 (1985)). The question of
arbitrability is governed by federal substantive law. See
Collins v. D.R. Horton, Inc., 252 F.Supp.2d 936, 939 (D.
Ariz. 2003) (“[T]he Ninth Circuit establishes that
‘federal substantive law governs the question of
arbitrability.'”) (quoting Simula, Inc. v.
Autoliv, Inc., 175 F.3d at 716, 719 (9th Cir. 1999)).
Where the arbitrability of a dispute is in question, a court
must look to the terms of the contract. See Chiron
Corp., 207 F.3d 1130. “Any doubts concerning the
scope of arbitrable issues should be resolved in favor of
arbitration.” Simula, 175 F.3d at 719 (quoting
Moses H. Cone Mem'l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 20 (1983)).