Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-00717/USCOURTS-casd-3_08-cv-00717-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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 "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under

a written agreement for arbitration may petition any United States district court which, save for such

agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter

of a suit arising out of the controversy between the parties, for an order directing that such arbitration

proceed in the manner provided for in such agreement.. . . " 9 U.S.C. ¶ 4. 

- 1 - 08CV0717

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

TRANSCORE, LP, dba TRANSCORE, a

Delaware limited partnership,

Plaintiff,

CASE NO. 08CV0717-LAB (RBB)

ORDER GRANTING MOTION TO

DISMISS

[Dkt No. 4]

vs.

NORTHERN LAKES DATA CORP., a

Minnesota corporation; and DOES 1

through 10, inclusive, 

Defendants.

This matter is before the court on defendant Northern Lakes Data Corporation's

("NLDC") Motion to Compel Arbitration And Stay Or Dismiss ("Motion") in this diversity

breach of contract action NLDC removed from San Diego County Superior Court. NLDC

contends the claims in plaintiff TransCore, LP's ("TransCore") Complaint are subject to

mandatory arbitration. TransCore filed a Response to the Motion. NLDC filed no Reply.

Pursuant to Civil Local Rule 7.1(d)(1), the court finds the issues presented appropriate for

decision on the papers and without oral argument. 

When a party moves to compel arbitration, the court makes two inquiries. First, it

determines whether there is a valid agreement to arbitrate. If so, it then determines whether

the agreement encompasses the dispute at issue. 9 U.S.C. § 4;1 Simula, Inc. v. Autoliv, 175

F.3d 716, 719-20 (9th Cir. 1999); see also Republic of Nicaragua v. Standard Fruit Co.. 937

Case 3:08-cv-00717-LAB-RBB Document 7 Filed 06/18/08 Page 1 of 4
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 The parties' Agreement paragraph 9 recites their mutual commitment to submit any

controversy, claim, or dispute that might arise associated with their Agreement, should good faith

negotiations fail, to "final and binding" arbitration "in accordance with the JAMS Comprehensive

Arbitration Rules and Procedures or JAMS Streamlined Arbitration Rules and Procedures then in

effect," with the arbitration expressly designated to take place in the Commonwealth of Pennsylvania.

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F.2d 469, 477-78 (9th Cir. 1991). The court must enforce the arbitration agreement

according to its terms if both those criteria are met. See Simula, 175 F.3d at 720. 

NLCD's FED. R. CIV. P. ("Rule") 12(b) Motion is based on the terms of the parties'

written agreement and the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1, 3, pursuant to

which NLDC asserts this court lacks subject matter jurisdiction and TransCore thus fails to

state a claim upon which relief can be granted. NLDC asks the court to stay all further

proceedings pending the outcome of the arbitration or, alternatively, to dismiss this action

with prejudice because all TransCore's claims must be decided through binding arbitration.

NLDC's counsel provides a Declaration along with its Motion representing, in pertinent part:

In accordance with the arbitration provisions set forth in

Paragraph 9 of the Master Subcontract Agreement, No.

ZH810212, entered into in September 2006 betweenTransCore,

LP and Northern Lakes Data Corp. . . ., NLDC has commenced

an arbitration proceeding in the Commonwealth of Pennsylvania

regarding the disputes between it and TransCore.[2]

Swierzewski Decl. ¶ 2, Exh. A (JAMS Demand For Arbitration). Counsel declares he sent

and served the Demand on April 25, 2008, the same date he filed this Motion.

In deciding motions to dismiss under Rule 12(b), the court may consider not only the

face of the pleading but also any documents attached to or necessarily relied on for the

claims asserted. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006), citing Warren v. Fox

Family Worldwide, Inc., 328 F.3d 1136, 1141 n. 5 (9th Cir. 2006). "A court may consider

evidence on which the complaint 'necessarily relies' if: (1) the complaint refers to the

document; (2) the document is central to the plaintiff's claim; and (3) no party questions the

authenticity of the copy attached to the 12(b)(6) motion." Id. (citations omitted). All those

criteria are satisfied here. The Complaint alleges NLDC and TransCore entered a Master

Subcontract Agreement effective September 16, 2006, attached as an Exhibit to the

Complaint ("Agreement"), and NLD relies on the same Agreement in support of its Motion.

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- 3 - 08CV0717

"The court may treat such a document as 'part of the complaint, and thus may assume that

its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).' " Id., quoting

United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 

The terms of the Agreement were intended to control separately executed Scope of

Work ("'SOW") agreements between the parties describing particular work to be performed.

In its First Cause of Action For Breach of Contract/Promissory Estoppel, TransCore alleges

the parties negotiated a SOW whereby NLDC agreed to provide software and services to

TransCore in support of TransCore's October 12, 2007 Standard Contract for work it was to

perform for the San Diego Association of Governments ("SANDAG"). TransCore alleges

NLDC repudiated its SOW obligations, refused to perform, and demanded to renegotiate

material SOW terms. TransCore seeks through this litigation to compel NLDC to perform

its SOW obligations, contending NLDC is uniquely positioned to provide the software and

services TransCore needs to perform its work for SANDAG, so that legal remedies are

inadequate. Compl. ¶ 11. TransCore's Second Cause of Action seeks declaratory relief to

enforce the parties' Agreement ¶ 9 arbitration commitment. The Complaint alleges NLDC

took the position the SOW is not subject to the Agreement, whereas TransCore insists their

dispute must be resolved under the Agreement terms, including the arbitration provision, and

seeks a judicial declaration of the parties' rights and obligations to that effect. 

Any dispute that may have existed over whether the obligation to arbitrate governs

the issues presented in the Complaint appears to have been resolved. The Complaint

asserts the parties must arbitrate the SOW dispute. NLDC's Motion asks the court to order

TransCore "to honor its written agreement to arbitrate," and either to suspend any further

proceedings in this action until that arbitration is complete, or to dismiss this action because

all the claims asserted in TransCore's Complaint are covered by a "valid agreement to

arbitrate." Mot. P&A 2:2-4, 3:10. TransCore's Second Cause of Action for a declaration

NLDC must arbitrate the SOW dispute is thus mooted by NLDC's Motion to compel the

arbitration and by its submission to JAMS.

\\

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- 4 - 08CV0717

In its Response to the Motion, TransCore unsurprisingly states: "TRANSCORE does

not object to this matter being Ordered to Arbitration pursuant to the Master Agreement."

Resp. 3:9-11. However, it asks the court to "fashion[] an Arbitration Order which eliminates

any question of the Arbitrator's jurisdiction of issues under the Master Agreement and

particularly the SANDAG issues. . . ." Resp. 3:11-16. The court finds it may not render any

opinion on the merits or the scope of the subject matter giving rise to TransCore's Complaint

without impermissibly intervening in matters both sides now concede they are contractually

required to address through arbitration. No issue remains for the court to decide that would

not impinge on the JAMS arbitration proceeding NLDC has already initiated without the need

for any Order of this court. 

For all the foregoing reasons, IT IS HEREBY ORDERED defendant's Motion To

Dismiss is GRANTED, its alternative Motion To Stay and its Motion To Compel Arbitration

are DENIED AS MOOT, terminating this action in its entirety, and the hearing presently

scheduled for June 23, 2008 is accordingly off-calendar.

IT IS SO ORDERED.

DATED: June 18, 2008

HONORABLE LARRY ALAN BURNS

United States District Judge

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