Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-02599/USCOURTS-caed-2_07-cv-02599-1/pdf.json

Nature of Suit Code: 196
Nature of Suit: Franchise
Cause of Action: 28:2201 Declaratory Judgement

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

SACRAMENTO DIVISION

Ben & Jerry’s )

Franchising, Inc., et )

al. ) 

 )

 Plaintiffs, )

 )

 )

 v. )

 )

 )

Mehrdad Porghavami, et )

al. ) 

 )

 Defendants. )

 )

________________________)

CV 07-2599-LEW-KJM

ORDER

Currently before this Court is Cross-Defendant Ben

& Jerry’s of California, Inc.’s Motion to Dismiss

Cross-Complainant’s Complaint Pursuant to Rule

12(b)(1). Having considered all papers and arguments,

THE COURT NOW FINDS AND RULES AS FOLLOWS:

///

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As a preliminary matter, the Court treats the

Motion to Dismiss Cross-Complainant’s Complaint

Pursuant to Rule 12(b)(1) as a motion to stay and to

compel arbitration. See Morris v. Morgan Stanley &

Co., 942 F.2d 648, 653 (9th Cir. 1991) (a valid

arbitration agreement “does not oust the court’s

jurisdiction of the action, though the parties have

agreed to arbitrate.”); see also SEIU, Local 707 v.

Connex-ATC, 181 L.R.R.M. 2044, *6 (N.D. Cal. 2006)

(construing motion to dismiss for lack of subject

matter jurisdiction as motion to compel arbitration).

A party cannot avoid arbitration after having

agreed to arbitrate merely by asserting violation of a

federal law, unless Congress has evinced an intention

to preclude arbitration in the specific federal law

asserted. Gilmer v. Interstate/Johnson Lane Corp., 500

U.S. 20, 26 (1991).

The federal laws that Porghavami cites do not

preclude arbitration.

In addition, state laws cannot preclude arbitration

because of the Supremacy Clause. Southland Corp. v.

Keating, 465 U.S. 1, 15 (1984) (“In creating a

substantive rule [i.e. Federal Arbitration Act]

applicable in state as well as federal courts, Congress

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intended to foreclose state legislative attempts to

undercut the enforceability of arbitration

agreements.”).

In addition, Porghavami’s argument regarding

enforceability of the contracts is irrelevant because

Porghavami’s allegations of Ben & Jerry’s of

California, Inc.’s (“BJCA”) misrepresentations are

regarding the contract as a whole, and not as to the

arbitration clause. 

It is well settled that there is a “separate

enforceability of arbitration provisions,” and that “a

challenge to the validity of the contract as a whole,

and not specifically to the arbitration clause, must go

to the arbitrator.” Buckeye Check Cashing, Inc. v.

Cardegna, 546 U.S. 440, 449 (2006).

Porghavami’s claims against BJCA arises from two

asset purchase agreements between the parties. Both

agreements had an arbitration clause stating that the

“parties agree that any and all disputes arising under

or relating to this Agreement shall be submitted to

binding arbitration . . .”

Therefore, a valid agreement to arbitrate exists,

and the agreement encompasses the dispute between the

parties. 

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In summary, to the extent that BJCA seeks to

dismiss Cross-Complainant’s Complaint pursuant to Rule

12(b)(1), the Motion is DENIED.

The Court construes BJCA’s Motion to Dismiss as a

motion to stay the action and compel arbitration.

To the extent that BJCA seeks to compel

arbitration, the motion is GRANTED as to BJCA, and the

action as to BJCA is STAYED pending arbitration.

IT IS SO ORDERED. 

 HONORABLE RONALD S.W. LEW

 Senior U.S. District Judge

DATED: March 13, 2008 

Case 2:07-cv-02599-JAM -KJM Document 31 Filed 03/14/08 Page 4 of 4