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Charging Bison LLC v. Interstate Battery Franchising & Development Inc

United States District Court, N.D. Texas, Dallas Division

April 7, 2017

CHARGING BISON, LLC, Plaintiff,
v.
INTERSTATE BATTERY FRANCHISING & DEVELOPMENT, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          A. JOE FISH Senior United States District Judge.

         Before the court is the motion of the plaintiff Charging Bison, LLC (“Charging Bison”) to stay the proceeding between the parties currently pending before JAMS, an arbitration service. See generally Plaintiff's Motion for Stay of Pending JAMS Arbitration (“Motion”) (docket entry 12).

         I. BACKGROUND

         On February 25, 2013, Charging Bison and the defendant Interstate Battery Franchising & Development, Inc. (“Interstate Battery”) entered into a franchise agreement for an Interstate All Battery Center franchise in Cheyenne, Wyoming. Motion ¶ 1; see also Interstate All Battery Center Franchise Agreement (“Agreement”) (docket entry 13). Charging Bison still operates this battery center, and the franchise agreement is still in effect. Defendant's Response to Plaintiff's Motion for Stay of Pending JAMS Arbitration (“Response”) at 2 (docket entry 14). The franchise agreement included, in pertinent part, the following provisions. Paragraph 34:

Effectiveness and Governing Law. . . . This Agreement and any claim or controversy arising out of, or relating to, rights and obligations of the parties under this Agreement, and any other claim or controversy between the parties, shall be governed by, interpreted and construed under, and determined pursuant to the laws of the State of Texas, without regard to Texas conflict of laws principles.

Paragraph 35.A. (“¶ 35A”):

Claims Subject to Arbitration. During the term of this Agreement, any claim or controversy between the parties hereto arising out of or related to this Agreement, the relationship between Franchisor and Franchisee, or Franchisee's operation of the franchised business shall be submitted to arbitration in accordance with Section 35.B. below, unless excepted from mandatory arbitration by Section 35.C. . . .

Paragraph 35.B. (“¶ 35B”):

Rules Applicable in Arbitration. Any arbitration between the parties shall be conducted pursuant to the then- prevailing Comprehensive Arbitration Rules and Procedures of . . . JAMS . . . .[*]
(2) . . . Section 34 above shall apply in the arbitration proceeding; provided, however, that neither the Texas Arbitration Act nor Texas rules of arbitration shall apply in or to any arbitration proceeding governed by this Section 35.

Paragraph 35.C. (1) (“¶ 35C”):

Claims Not Subject to Arbitration. The following claims, disputes, and actions shall not be subject to mandatory arbitration under Section 35.A. above . . . any claim or dispute involving the propriety of any termination of this Agreement . . . .

Agreement at 44-46.

         Charging Bison contends that it entered into the franchise agreement after receipt and consideration of Interstate Battery's Franchise Disclosure Document (“the FDD”), and that it relied upon the FDD in its decision to proceed with the purchase of the Interstate Battery franchise. Motion ¶ 2. Thereafter, “[a]fter several years of operating the Franchise, Charging Bison discovered that the FDD contained materially misleading statements, skewed figures, and misrepresentations of the financial strength and revenues of the then existing Interstate Battery franchises.” Id. ΒΆ 3. A dispute then arose between Charging Bison and Interstate Battery regarding Charging Bison's right to terminate ...


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