Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-6_04-cv-06157/USCOURTS-arwd-6_04-cv-06157-0/pdf.json

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

---

IN THE UNITED STATES DISTRICT COI'RT

WESTERN DISTRICT OF ARKANSAS

HOT SPRINGS DIVISION

PRM ENERGY SY$TEMS. INC .

Civil No. 04-6157 6.,05-6061

PI,AINTIFF

DEFENDATiITS

PLAINTIFFS

DEFENDNNT

PRIMENERGY, L.L.C., A N

oklahoma Limited liability

company, and .individuals DON

R. MELLOET and w,N. (BILL)

SCOTE

and

ENERGY PROCESS TECHNOLOGTES .

INC., an Oklahoma Corporation r

and PRIMENERGY, L.IJ,C,. an

Oklaholna Limited L,iabilitv

Cofirpany

v ,

PBM ENERGY SYSTEI{S, INC.

an Arkansas Corl)oration

QBDER

Now on t.h:i.s 15th day of Novembtf,

cfins.idErat i rr t-he f olf owi rrg motions :

2 0 05, rome on for

Pr'i.menergy's Motion To Dismise Firat Am6nded ComPlaint

of Defendant Prinenergy I L.L.C. (do(rrlment #28);

Motion To DismisB FirBt A$end€d compLeint Qf Defendant3

Scott And Me]Lott (document 1+?9) I

Defenddflts' Motion To Stay conEidetation Of Pfaintifffs

First R6vised Motion And Applicatiofl For PErtj.aI

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 1 of 23 PageID #: <pageID>
Confirmation Afld Partial vacation Afld Partial

Modification of, Arbitration A$afd Or In The Alternative

To TransfeE Such Motion To The Northern District Of

Oklahoma (document #37); end

PRM EnErgy SytitcrllE;' Motion For Leave To File

Counterclaim And Join Affiliated Cofporations (ctocument

#7 irr r-:;lse number 05-6061),

and from said mor-ions, rhe supportitrg documentar-ion, the responscs

t-hqas1-o, and the variou$ pleadings filed in ttlcser corrsolidated

cases, ttrri Cour L. finds and orders as fol.LowsI

1. ThesE t.Jn$(Jlidat-ed cases arisc ouL c-rf a business

r,rl rti anehi r^rhi rh h-re .r.-'r,r:r'*f Frl nr:n1, .li -rnrl rnrrr.h

Iirigation. The parr-ies invofvccl irr I.hese disFutes arc:

* PRM Energy Syst ern5, Inc. ("FRM") 

, an Arkansas

rn-----r-i rrn irr l-ho hrrei nr..:.: ,rf: I i.,5heind 1--ntr.r,f 4 :n,-l l-Fl-laF-l--1,

rf;Lating to t-ltc qaslfication of Lri ma$s (soLid or liqr.:i.d o rgani c )

materiilf i i r'r 1.. o gaseor.ls f orrrrs of energy.

" Frimenergy, Inc., an Oklahorna corporation fornrcd by Ron

Bailey, Sr. (a princip.al of PlitM), Ron Eailcy, ,1r., and Don R .

MeIlorr, l:.o develoF and Lruilcl gasificdtj.on t-echnology.

- Prirnenergy/ I-.I., C. , an Oklahorna -limitecl J. iabiliry

L:o lparly ("Primencrgy"), the succ+s5o1:- entity to pt.imenergy/ lnc.

]\Taifl-,-r rt i lav h:e ,rnrr .rr"rrjar' .rhi rr i nrorr..:t iF '.}riE-F^F.r" .'1'r^la i -

-.,-- Lr.y rra- *-ry v^--r.--!r--!F

sa-icl Lr.r b-. wholly Owued by Unargv Process Tcchnology, Inc.

-2"

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 2 of 23 PageID #: <pageID>
[]F.'TI, arr Qk.Iahoma corpor.ation owrrecl by M-.IIott.

tl.N. (BilL) Scott/ ,rn Okiahoma resident, FrLrfli.derr[: o f

F rlimenerqy.

2. :l i.rrc:e 2004, the parties havc been invnlved in Iirig,-rtion

and arbitr.ation ovcr t.he i r mIf-ua] business dcali rLgs, The

following LrvcrlL5. iel- forrh in chronolorlica l rrder, are relevant

to Irtrtd i. nq isslres:

* on November L2, 2004t, Frimenergy clernancJecl that FRIVerrgag-- in arbitr;rt-iorr, purslranL to certain corlt.raa.:r-s between rhe

f !,ro -nrflrrr.ri +Fi. TFF En- - arri rrrr {1 ,5al i.nc Were Subnitl.ed f(lr

arlr i L. r:at-ic-rn:

-- whrLh+r PRM was Entit.l,ed to coLlEct rcryaJLies on two

ovni rnrl rri1.ailf c .

-- if so, lr]r.t L rlaF lhe amount of SDch royaftiesi

-- whetllcr PRM had provirlcrj any protected j. format-lon

wittl rtgar.l to the expi.rrr.l patents;

wl-rEthLrr PRII violatcd d contr,rct

n I i r-rfl +a ,1r -n1- i rln

a

-TaFane se corrrpany (TSK ) a

I i cll rt Er t ,'

i i +- urh,rr rrnrn Fr i mrrnotarr' .r rl;:r,rra,.lFc. :n.l

what con5titutes ttrt {jont-inuing "Li.cense Technoloqy"

]rolnnnirl"r f A ]]FM'j

On Noveftber 23, 2004, EFTI f iled ijui l.: allainst PRM in the

-tCase 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 3 of 23 PageID #: <pageID>
urr i [.ed $[af-es District Court f or ttrc North*or'rr District of Oklahoma

("Case 04-888"1. The Comp_ainr. in Case 04-888 loucJhr: a declarat_ory

I udgment tlrat EPTT was r-he owner of two unLrxpi r fj.J pdr-ent-s, Unired

Sr.ates F.ltenr No. 6,11.2,50b (Lhe " 1505 Patent") a d Un.iLed Stales

Fcrterlt No. {i,530,978 (the *'978 Par-cnt-.")r allEging that the

al=rFlications for tlrcsr: PitLenLE h;d been .rssiqncd tO EPTI, brrt- r-har

FRM was clalming ownership thcrcof,

* On DecembBr 30, 2004, FRM flled $uil-. 1n the United

States District. CourL for t-he West€rn Llistrict of AI.kansas against

I. rr\-r.L ILULL \

irr Case 04-615? .elLeged an on-going hindirrg .lrbitrdti.or'r o r

a:ar-, '-:..tuJI r1'.:pr11-4-.1; l^dr '. -6F -l-o ----i.'- .Jrtd iI:.f ted rh.rr rht,

FurFosc of f i ) -irrg Case 04-615? was "t-o establislr jur:i.sr.licti n over

thii acr.ion, to as5erL: claims outsiLlc l,he jurisdiction of Lhe

d rf'jrraror and to t:oIl applicable staL.ut.es of fimitation." Counts

weI.e st.fted For hreach of cont-ract, fraud, conspirrrcy,

rj,:;rrrr-rrnriprirrn .,1 i-ir.l'i cF/.--f e. ,_r'{Air -nmlrFl-i -i 

LL'{ J.{t/t/! rr -. :'rC

F i

t-ortious intcr fefence wirh br.r:i rret.q expecrancy, Tne relief souqht

i*.--.-rlr'1 rz:r'rrr-q iri --.r.i.ir,re Fn!--r.r.*,r:rf Of "rhe tcrrrns Of rhe

F r'h: . t F- tl1n nr.l..r1F.l irfl r,rr--F1.l- l .r o+'rdi n.f . 

" n-d ^r!t.n,anqel-orrr ;iF.l

urvL.LLlJ I F!..rrlrrrrYt

11r1h i 1- i vr. r'l r,x:dEE

t Orr .Tanuary 24, 2005, FF-14 fil-cri a Mol"ion 'lo DismiBs in

Ca.',:e 04-888' dl. leging thrt th{j DigtIict Cor.rrL:1;here had rto sr.rtlject

m,tf i-,=r irrrisrJi.l-i.)n o\/rir EFTITs clain Lr(:i{tause there \'.ra 5 no flase o r

-4-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 4 of 23 PageID #: <pageID>
--Ff Fr1rr.1r'c, h-f ...65h ERM a d EPTT,

a On March B, 2005/ the Ar:bi l-rator issu+tl a partial

(l+iision in ttlc n rblLration, in whj.ch he held [hat FRM and

Frimenorrrv ,r rc inint owrtr_1r3 Ol the t505 Pal:ent- and thL: '918

PattnL.,

* Th€ Arllitraf-ion was tried on March 29 arrd April 1, 2005.

* On Apri} 22, 2005/ thc Arlrii:rator issued his Final

I{u] ing And Awcrril ( l.:he "Arbitratiorr Award" ) .

* Th.at sdrn,j (layr ApriI 2?, 2005, Primcr)er.gy oFened yct

ar]other cdrie in the Unitcd States Distric[ Court for the Northerr,

District oJl QkLahoma aqainrit PRM ("Cdse 05-222") | filing r n

APpl.Lcar-ion and M.rt,i|]n To Conf irrr flncl Partiall y Medif y Arbitrirtien

Award. The App Lirrarion n,:rtedr in a f oorrrot--., th€ cxi.sf,ence o f

a.lasE 04-888 and Frirncrr{jfgy's int+rrl..io11 to ask that th€ two

Okl ahornd Lraies b€ conEolidated.

On April 28. 2005, Primenerc;y filed a $e(rond Amendccl

Lrr..\ti,-r1-i-h Z\r'rt M-1- i-n 'l'o Confirm Arbil-fation Awir rrj in Casc 05-

't11 

rn +h i L- tsi l i n^ Ei;fr6h6r-\, r,i t hilrou i l-c: aarl i +r rr.r'rrrec.f fnr !tr4rl!,

n-r';Fi-.:Fr-- -.,,4 i-c-Fnd .,i.nu'v arkrrd ror conf i.rmattOn of Lite

A r:tJit rat ion Award. '

* Orr April 29, 2005, "rn C)r.Jer w.as crrl.+red in CaEe 04-888.

dtnyino FRV's motiorl Lo disnisi for latk of subiecr. mattcr

Frrn..-.r1crf! .lid, hov,a1_c1 , hedqe iLJ b,lli {rn

seekrng L'nnfirrr !icrr, "wnivin! nl)y rightf jrr

!:;1r:tinlly n.:'djfy the F.iJr I itlrling an,:l Awaxd,

nodil i(:ir':1,rf - 

"

the itEue, stEtirrj that i t. was noL,

the evenl tFRMI moves L.r vnL'Efe

to re.lucst any lrlredlflc vncFt!oIr

L,y

-5-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 5 of 23 PageID #: <pageID>
:,1r j q.li -l- i r'h iri(T rlr;11- *p!iM,.. rr r'r- rm,5nr rhil- f l.,a ,'1i ehrrl- a L.rr!.- !r!qF,uLr

h-f wr' n - 1.+ ir;rf ioe l-1;1.; l)(l*. .i i i 1 .J j (r ; l- e .l f rirl hrr fh.E ;rrhi i--.rr': ^rprocEedings iIl Arkansas shouLd bc sLrhmirted to the Courr in a

tr-1-i/1r\ f rr. cr1hfrf,rrr i,,r'!,1,rai, l "

' On May 3, 2005, [,FTI i.r]ecl a motior] ieeking t o

con..,:.)li,late Llcrsr: 0b-222 into C.1si1 04-BgB. .rllegj rrg t-har the two

cases invulve{:l rjommon qr.lc$ti onFj of Iaw ilfic-l f act.

t On May 11 

, 2005, FRM f :i.Ied a Motion Fnr Modificatiorl n n.J

C(rrrection Of ,\r^'ard with thc Arhilrator.'r

* on May 12, 2005. FRM filect its Answcr in Case 04-888,

Among oL.her defensesr FRM assertcd the fol-lowirlqt

(a) thi-r L. lth-ore was tlo case or corltroversy betwFien FRM

hrrd EPTI whrn Case 04-888 was filed;

(lr) th.lr thr: Qklahoma c'rurt did nor have subject rndtte]

irrriqriil-finn ar.rrrrq+ rhe l-iri.r u.rc n.rl- riria .lrrF l-fr ihF tran.lin. ,.--.- . 

-. - *-.. J

a rhlt- rat ior) ,'

(c) thar rlrci -ase was barlr-ad by irsLr+ preclusion, Iaw o t

the cd$e. col.IatL-raf estilpptlr and rc.5 judiccrta based on th+

Ar Lr ri [. rat ion Awa rd;

(d) thi-r l-. t-he cf d i rn was irar:red by "the defense .rl

drbitratiorr anr.l award hecause Lhe ownErsl)ip of th(j U,S. FatcntF,

was dccided by a Fin.rl Rr.rIing alrd Award i n the Arbitlation

!AlLlro gh fhe CErtificEle sf SL.rvicp $n Lhjs docrxneflL in{ljcnr.es iL wnE filed olr

Apr:I II. ?0{J5f Lha L'arrrt- b*licves ttrat date iF in error, nnil iJlxt the dacrrrrellt wiE

&ct!nIIy I.Ll+ci,rr1 t4ay 1I, 2005, The Fjrr,'rI Arhrtr Liorl A'Fnrd w:rG rrot ren,lered ur1tll AFril

f2, :t]05, nnd Ltrr! i,aqtei Lrf IRM/J notion coirLain the subs.rllrt .laf.e L,I M,ry 11, 2005.

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 6 of 23 PageID #: <pageID>
!'ranrrngr loinl owncr:;l:1p j.rr tt)e FaL.enr.F t-o PRM/ alrhough suclr

awar.J i.t sjuhject- to a Motion for Modifir:at.ion arr(t Correcl-ion o f

Qn May 16, ?005, Fltl/l iriI,..l. .in Case 04-6I57, a I4otior)

Far Confirmatlon And Modificatiotl OI At.l)if-r'at-ion Aw.1rd. WhiLe

sccmincl f-o r'{:qu+$1.. tjenfil.mation and modificationr i-hi.s moi:ion

-l-f -;. 1 - 

w :r.:kr..l -lr{' alj ur.L 1.O defer Conf irr j 5a nr.l .r.rr.l i Frri r'- f }.a

Arbitration Awarrir becdu$e l-:h,A is.cue cf modificatiO w{r$ L:hefl

pcnrlinq be l'r) r:e l-.he Arhit-rator .

* Al.jo on May 16/ 2005/ PRM f iled d Mor-i or'l To Dismiss o r

Transfcr Or Corrsol.iclate Action in Cas+ Q1-222. Transfer was

!i-r.Tlrf t- l- lrlil trn ilFd Sf-at----s District COrrrL. fOr f.he Western

Lllstrict of n rjkansas/ and consolidal-i.Jn was sought witlr CaSe 04-

{j157,

* on May 20, 2005, PRM filEd a Motion Fnr Slrmmary JudgmEnt

in 04-888, alleging that t.o Lhe -.xtent that tflere r,/.ra s any case o r

controv+rsy hetween ljFlT arrd pRM over ownrtrrstr j.p of Patent \ 978 ancl

Fat.ent \505/ tlrat. displlte was rriiolved in the Arbitr'dl.ion.

* on 'June 22, 2005, the Arbitrdto r' qlenied PRM, s Mot i ort P.rr'

Mod:i l'ic:,tt-ion And Corrci{il.ion of Award.

* On JuIy 21, 2005, FRM again rTroved, in case 04-615?, for

conf i rfird Lion./ modi f icat-i. orr,/ vacation of tlre Arbitration Awa r tl.

t Orr JuIy 29. 2005, Frimenergy. ScoLl. and Mellott rnoved.

irr Case 04-61 5l / f or a st.1y of consider.rtiolr of FRM' s motion f'or

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 7 of 23 PageID #: <pageID>
r:onf ir:mat.iorr/mLrd.rf ication/vacatiorr, Or t-.rarLsler of the case to the

United States District Collrt for the Northcrn fJi $t,r'i (::t- o f

Oklallofirir.. Thc:ir mol- joil n()L.e(lr apt.1y, l-hat- "It-]he sitLlation is on€

in limbo. "

On AuguEt 1, 2005, Case 05-222 wa$ cunsol i.{liite.J i rrt.o

ca:;r 04-888, and f-he newLy-consolidated case was tran$fcr:r:t(l L o

the United Statcs Dir11i61 CouI. l. fer the Western District o f

ArkdrrsaEr, where il- was assigned case number 05-6061. ("CaEe 05-

6061") . In his Order drrecri g cortErol. i(laL. 1.on and t-ransfer, Senior

Judge Jilrncs O. El I i:-ron $Ldr:ed sLrccinctf y :

A.l l. O l t-his lil-igation involves thc sdrne j.sSue,

j.e, r)wner.ship of the s.fme F.ltcnt.$. T i:. is clear that i f

EFTI (the Farent of Pri rrr+rr+rgy) , 

is claiming arl

ownership intrrcst i rr I.h+ patents/ they are a n

indispensabLc Fa r try ancl should have been madc a par't-y t-o

-h- ;. rhi - -at: rrr rr*nr'F,-di ^rq T'Lo a.rrrr.r .i .d$ t_hat aS a

mattcr of judicial economy, rllc tlvo Qklanoma cases

stroulcl tle r::onso.Iidated into t.h+ I ow-or numbered c.1ric,

cijs+ Nn. 04-cv-888.

The cc-rllrt is awdrt o I f-he "f irst to f i]t" f,ule

discussrd i rr F.tF rrld. rnc. v. Sutter, 1?9 F.3d 861 (IOtlr

C j r:. 19.(J9) . However, j n Iighi: of the fcact tlla[ i:he

aqreemEnrs wcIC enL:el.ed inro by PFM aI.r.J Frimenergy an.l

not EF'tI, the "tirst to file" r:r.rle as aFplied to ttrirl

ccrsc sllou I (1 point roward t.l)c I irst- lawsuit f ilett hy r-he

c r)lrauting Fartiosr wiric:h would Lrc the Arkansas

I i l-.igat-ion. '-t'trc Cou r [. tinds that the proper venue to

t.e.iofve the irjEr.reir hetween the$L: parit.ies is the t{d$ttrn

District of Ar kanBas and this ca5e. dtt-er consoLiddti.()r't,

should b.i Ll.ansferred to the Un.ited Statcs Lli$trict

Cour t. for the i^lestcrrr Disl-r.ict of Arkdrl$as.

Or'r october 7 , 2005, Case 05-606:l was consolidatrld i nt.o

case 04-61.5 i ,

a- rl-Fl r'l1.r1'Fq- -r f \,= r'r.,,r' l Fa Frrt i Fc .1xCh f Urnished

-BCase 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 8 of 23 PageID #: <pageID>
;n r- ;.-.-r'l \/l.i .i -.- : ccrr6c r-Fr qo,l 'r r-.:-1.1i rtrr nO[ions in thE var i.Out

(::it...j + F now consolidated irrt.o CaEje 04-6'I57 that rcnrai.n pending and

=1-- rr,1'r rjrrrr t-.1- .r..- iiiorL. The Court f incls LheSe issues enbrdcL:d

in rhc rnr:li.JnB Iisred ar the bcgi rrning of rhis Ordtr. arrd in ir-s

t,rr ianc l-h6F6^h ;nFF .-..-.----, ',, _. il .

4, In 1ts Motion TO Di.tmiss Flrst Arncrrde.J ComFlaint/

.:ahrt--1l- F .iFF.lhrlrrlI Frirncnrrnrr rh:l EFM'e -liime aarinc:r i r

shouLd l:re di.tmissed becausr: they are claims thiit rru..-rt. he submitted

t.o a rhitration . Primcrre rgy a.Lso c,f,ntend.s tha t. the First Amcrrclecl

a'.,rF':1 irll- irn.1 -l-ha-'12 irr-a.rrrl- .r f rr .-r\/Frrt -.,ntr11Ct ClaimS into tort

-l-.:*.-.. r-r'l- {-- i1'r:rrrr {:'.r,rd I'i th r-l1E rrr'r,,iaira brrl-irrrl=ritrr. crf !u.tl. -r.E !L.-tu I n.!L.r; lJd!LrLuLorrL.Y,

End fai-ls to rarrrc EPTf . a necESScir:y p;rty,/ as a ilcfendant.

5. Tlre business reIaL.i .rnship betweLlrr PRM dnd Frimentrgy i s

,-.r-1rf.r...rr.l tr1/ F qFri F.: r.c .-,ar-ri-r-E 'i..t,'^r.if ied aS ttlC General YvvL'!r|\J!r

t.rraAnarlr l-h- ,t..,r.r.it,1l.i.i1 T.iror.:r: I.rrFAmFnr -r-.. . ^ n r: i rl - i - i a l i r .

- - .. .- --..---- L r Lne LOIl.(rellL-Lc{-LrLlr

A/-rr6-.nFnl- - 

-l.A /-^*Ertl.. r,.r Af r-F Fr*Fnf . in,l f l.f' r-]'rt i /_r * T. '..}ff),,*11

Territ.ry (sornel:imes referrrlcl t-o in toto as "tho ']999

Atlreernents") .

Th+ Gener.ll AcjrL++rnent. )ry i.r-:; t-erms, is to Lre construtd

.r..i--rrlin.r tlr ArkFnq,rs Iaw. Tl.- cont.ains aar Arbitratiott CIause

Frovi cl i.rrg thar " Ia 1 J.1 cl.ispureE un(l-Ar this CcI]erdI AgreemenL thatl

(,-annot l:rr: r:esolved Lry the Fart. j eFi shall tr+ decided by

arbirrat.i ()n. " ThE 'llc l-rri r-oriaL Li cens-. AgreencIl t, confident.i alil-y

AqI.-4ement/ LlonFrulting Aqre+rtleltt/ and Qpt-ion Eactl contains a

-9-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 9 of 23 PageID #: <pageID>
Frovi-cion wh.ich nakr:s i.u a parr of tll,:-r Gtneral Agreemtnt, These

crrhri.Ji ,.rr'\/ Aarr.rFmFnrq --- -- -- ...11rr"ra,4 hr/ f ha r;rF-rrl

Agreemenrr s ArbitraT:.i orr CLause.

Arkirnt;as Iaw strongly fdvors arbitr.fri.Jtl, n-Ir-hough it inrpos;t:

cerL.ain restrictidrts l,.irat- f ederal Law doe$ not. Iror cxafitpf -o. itspecificcrlly cxempts "tort rnattcrrl// from arbitral- j,on. .4,.C.A. S16-

108-201; LetunEn Properti€E. Ltd. PartECEBhip v. BB&B Ce4gEluction

cdmpany, Inc,, 81 Ark. App. 104, 98 s.w.3d 470 (2003). However,

wher-r r-re un.lcr I yinE dispure invO.-Lves inrerstaL+ cDftmerce,

Arkansas Law rrcrlgnizes that lrhe Federal Arbil-r:ation Act ("FAA").

rat-h+r than t.he Arkansas Uni.f orm Arbitr'dl-.ion Act, L:dnLro.ls.

Lehfian, id.; WaLtqLv. Lewi8, 33? Ark. 45, 987 S.w.2d 262 (19991 .

The lr'AA applies ro "d Lront-ract eviLlencing a tr,tr)$action invol virrg

corrurer.-'L1r' 9 U.S.C. $2, and def irr.Jg '\connerce" as "commerce afilt)nq

the sev€rdI Sf.ates or wi.th foreicllt rrat-ions. " I U.S.C. 51 .

Given tht rrfitu.re of the busin€s,s r l.al.ionshitrr t)el:ween PFM and

-.) y jr_F_F.!,. r- _,_j nr.....ari h,/ {_LF "-_,.:r,'ti nne. tltere is no Llout)L i n l ' 'rrr L

the Cor.rrr-'s mirlil Lhar rhE underlying di.spLltes of 1-he parEies

involvE i arler5t.1rc {::ommerce/ }]or;.h as t}taL term ii c(]mmon]y

underltoocl ancl as itt is dEfinect in the FAA. The Counf. thereforr

{:uncLudes t.h.al- the artL i.f.ration iSsues in thi Er .ase arc: (:ontrolf e d

by thc FAA.

The lr'AI .loes not +Hempt tor [: claims f rom artji t. rat-ionr but

inst,:-ra.l sweE]:)ij t..Jrt c.IilirrrS into tht amhlt of n rhitr tiorr claus€s

-10-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 10 of 23 PageID #: <pageID>
unless thrir w(lrdir'rg is suLrll L.hat- it can be Ereen that tltc pdrlies

.lid not contrdC:i: t o arJritrdLe such cId-irn$,

Partners ,.LLC v. Grizzlg, 424 F.3d 795 (Bth Cir

See, c.9,r

2005);

The arlritrai-ion cLausc$ i n t-he f ranr:lr;i se agreements are

wordcd hroadly to .j+ver ".eny claim, controver$y o r

ati riptrt--- arisi g orrl- of or relat-ing to Franchisee's

operation {)l Lhe ll rar)chised busi rrtss under l-he

agreem€r'rt. " There is ir 51.1669 national pc-rlicy iI] favor

of arlr j lrat-ion. As a (ronsequencc/ (lolrbts .alf,out wh-other

.an d rllit-r'ation cl ause shouLd l:re constrr.led to cover a

pd rt.-iaular di spul:e are gencli aI.Iy resolvtcl in f avor o f

arllitratiott. Broadly word(td arbitr.ation r:Lauses suth a s

t-he ones at i5suF here are generally con$trued to cover

torr suit.s arising fron l.:h-o same slrt of opEriltive facts

covcr +(J hy r corrt.ract betwccn f-he parti es to thr

dg r*aemEnt .

424 F.3d at 800 (intcrnal citatiorr$ omittEd) .

While the a rbit-ratio c I ause at i$slr-o here is not- as brod{J L v

t() Iimit (Jr' I.estrict l.:he c.lteqories of r'li Eputes cov+red. I t

vr'orded as l-hclF-o in CD PartnetF-, it iertai ly is nDt cralted so a s

:nnlioe f n

rji.rrrn(]t- he

"lalll disFuLee under l-his Gencr'al AgrecftenL that

tir.:r. l rre.l h\' *htr n. -. i +s . 

"

ll: 'l i cblr--,- l,+ e+i n 11r,:r:aFrF,-l .ts cf ra I that n()ne of thtm - -

wheth[rr ijo]rnding ir'r contra.-:L or in tof t -- woul.cl exist but for thc

Crneral Aqretment atr(l its q,r11(, i,.i i -a r1r r.rTAAnFhi 4 Th€ Ceurt

lherefore concLrrdes that bot-h thr: t-ort dnd contrdcI claim$

:.:.: r: r.l. +d hrr PRM acI,J i n.c t

Frihan.Fdlr rtF rl.ti Ehlr+ ac rrnnnr,. l. h a

CFrF-,r'1 lorFFr]Frl ,tl.d. tr''F-f rn .r'h't-.rrir;r1 

,

r]Fi,nAhErdl' : 1 ,1- -,1Fr.'.,.1r rhnl- fllrihtiff'c rl-r-^ ! !!.,'!.r-E_91 + Lrru! u-+!rrL egef rr-L

if r r.A h,arrr.r{ rrrr nri 11_ i}_r'lF,: .1f /-dq ;r1tl;tare. Ft.r,r j l. ,.r f_rrr, 1.hF l._r{- .\1 rr.Y IJ!lj'L.lIJ

-11-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 11 of 23 PageID #: <pageID>
asserts are diffcrcnt f ror t.tlc conlrr.acL c-taimF s\rbmitted to the

irrl).iLral.orf heing hased on maffeasance rather thar] orlftldsdnce,

The Ar kans.ls ijuF)remE Court ha$ hcld I.ttd L "except in L-ertain

Linrjt.r:ct E:i Itl.'al.i6nc, a va]id and f in.1l award by arhitrdtjofi hir$ t-hr

sitrnc Lrf f ecL und+r Lhe rtrles of -res jLlcl-1c.f td, subject to Lhe sarre

(jxccIJtiO;rEt An(J qllalif i.at-ions, cls .a judgment Of a C()Uf t-..'/

Riverdale Development Cq-!!ll V-..Bqf f in Building Systemg, Inc-,-,

356 Afk. 90, 146 S.w,3d 852 (2004). Federal l.1w i:i tlre $afte, V4t -

U constEuction Co. of South DahqELv. Rosebud Sioux Eribe, 146

F.3d s73 (8th cir. 1998).

treq il],Ji -irr .]rr{ar'Ftoc ci,r"i-Fr-1r,ir. h/lrtr rhC AT:kaniaS and the

f eder.rl schemr of L.h Lrlgi. under Arkansas Law, '\ re-i judicata bars

nor only rllc r,:-r-.1 it.igar:ion of cf aims lvhiclr weL'e .t-LuaIly litigated

ilr th(r f irrsl suit. but also thoFje which colrld havc b{r{trr l.-itigat-ed.

!,trhe r'e a case is bascd o|L l:fr-o same eventE ir$ t-.he sub j ect matter of

r r'r+rri r'rre l:werri - a\/Fn i f tho errlrelrrrrr:nt

o lJLL-r'_LL.q t.\:,j ltJQledLd 4f !! Erl,rP I y !-!\-rr -! LrrL q u ! e L. -r r .-. , - L .

f aw:;uit faiEes new Lec{iiI issu-.9 and seeks addi.l,ional rEmedies. "

BarcJ.ay tt- wateEs. 357 Ark. 386, --- s.w.3d - (2004).

U nclc r: lletteral Iaw'

Ir'llrr. -.-.-'.- l,1ei -h 11rin-i11lr. rrf' ree irr,4i --rl- i rlfei)Fnre r\rhF

tLJllLtrr.LlJ!t,ll.\,.'

rclitigat-ion of a cl.airn on grounds thdL ,/uere raised o r

r-:r-ruf d ]rave been r:a i $e.-l 1n the pritrr suit-. " We undtrLaRe

d Ljrr-ae part inqJ.i ry t-o determinr: whet-her res judi r:aca

applies addr(.j5i-ling th€se is:ju+5; (1) wherher Lhe prior

judqnrcrrt- !\,as rendcrcd by a court. {)f comFetent

jur r ..-: cli c: t- i o n ; (ZJ wh-or-her rhe Irr i ot. jL.tdllment wiiS a

(l Lrrnp -L e i-.e(J a rhitrat-iOn PRM counters that th€ tort clainrs i t

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 12 of 23 PageID #: <pageID>
h- -- -F- mnri r-.:. j,r1.l / 

-l\ 

r,harhs- -ta- --y5 ! r d! I uu9ruErr L

citllt,:t of {tCt i Orr itr'rd l..tr+ Earrle partres or rhe.ir privics

wer'{+ i rrvof v-od irr hoth flases.

With reg.rrd to th€ third rrqu:i rement of res

-rr.ri ----. wE s;r,rrrnl- F'-l f hF rrfi.i. f i rlrr .r, i hF R-EstatEment

($ccond) of ,:Iu(lgrnerrlj.s in de1--ermining whether tvno causes

Of acIion are the same for res j udicdl-d pu fF.)Se5 , 

/ '

SeL-tion 24 of rhe R€Jt,:f tcmcrrir (5eL-rn.J) of Judgmentg

provides rhcat l"lhlhcn a val. id and tinal judgment

rcndc:rcc-l j rr itfr a{,-L:.L.Jn extingtrishes the plaintif f 's clairtr

plr rsuar:l-. [o t-he ruLes of merger or b.rr l/ ] . . . l-he cl a i.fil

eHLinguished includes all riqhts oJ: t.h-o plaint-ilf t o

remedies .against tll dtf.jfrdirn[. wit:h respect to aIL o r

any prLrt of thLr LrdrrFacLion. r.rr .series of corrnECted

traflsacti.orltr, r.r r.r l- of which the action arosc. WtlaL

f ;cr-ua] grouping constirutes a 'rransdctiorr,' and what

grouplngs constitutLr d '$er'ie.5r' are to be determined

:.ahFrr L19r'r4 L rLt:rrr y, q r v.r. 9

r^ c../-h ,--nci derat.ions a 5

whEthcr th(-r f acl-:fr are related in tim€, space. o::iqJi , o r

r ti.val.ion, whether they form a convrnj+nL L-riaf unit,

arr.J whet-her their treatmEnt its a ull i t: (jonf orms to the

parrrest expecrarion: or lrtrsin-oss unclerstandiI]Ll o r

Lls.lgc. ["]

Thus, \\a rlalm is barrrcj Lly res judicata if i t

arises out of the samc rr.rc:l +u.5 .)f operative facts iis the

pIior cl.rim.

" lRl Clj drrce, . . on different sub$tdnt.:ive Iaw and

ncw :l tq,:i I Lheories does nor prccl.ude l.-he operarion o f

r-a$ jr.tdir:.rta....lf,ilherc a p.l.ainIif f fashions a n t],',r

l-heory of rELrovLrr.y Lr rl cit:es a new body of l.a\d t-hat- was

arguably vio-.arecl hy a defend.rntf s conduct., res judicata

will still frar the second claim if i,L is based on thc

$arrle nuclelrs of operativr fact.$ ds t-he prior cldift" I n

effect, "res judicata ba rr$ refitigation not only o f

t-hose matters ttrdt were a(rt-uaIly f itigiltcicl, btrf- also

f-hose wh.ich L:aul.Ll have been Litigo.tcd i fr t-.he earlier

F ro cL: fj il i rlg , 

"

BankE v . _International Union ElegEEqELq, Electrical-lEqhElcal ,

SaLaried and Machirre Workers. 390 F.3d 1049 (8th Cir.

2004) (inrernal r-: j 1:':t.-ott:-: omittEd)

WhiIe thc ArIl.i.Lr'ation Award is nol. yet- final. bcttr ParLies

-13-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 13 of 23 PageID #: <pageID>
have moved the Court to f i rral.i,r-a it, either by conf i.rimaLion,

vacation/ r Udi f.i cation, or some combirration ol these actions.

l'trr.rc. tlr+ Cou-rl .oncllldes that thc nwar(J w-ill be, at some Foint. i r l

this li.trrgal..ion, "a vaLid rrnd f irla l dwar.J by arbitration. "

For aIl the f orcqrli rrg reasor'rs / rhe Court f j n{l$ thar- PRl4' s

l-'l;rimq rari rrr:r F.im+ncrrrrr -rhh-t l-F I i1-i rlArF.l hrrl- hrrEr inEl--nn

bc $uLrft j l:Le.J In arbitr.rt-ion. f o Lh+ exl-Ent that lsEr.rLr:j rd j sed irl

-l-rs r-tre, n.: hF+w-rrr E,e\4:.,.1 F . I rr F n F, r ,-r , r . wCIL: Otl C.:OUId haVe beeL

resolved in the now-coJnplet-ed arbirration, rL:,+ ludir:at-r wilf bar

t.h{i.i. r' -reLltigarion hrrrc. Tu Lhe elttenr rhat rttc-1y c:otrId nor have

been resolved in t.he arbit-ration that ltiirj now lleen completcd

-i-l-.Frr. tr-+rr ,.li rr *n- \,.\f ,=nis- nr w6rF -hF.r , . k,tAr.rr -- th+rr

rntrst be sLlbrnitt{iLl l-.J arhitration before this Court cdrr dcl- orl

r-hem. AII cla irni herween FRM arrd Primenergy urtder l-he ceneral

a,arFFdlr'r' mtlal ha r=.:-1\,i.1 h\t :rlai -r.r-iil* a-n -Li i .

n9-Lt--.,:rrrrlr.l,rel+il f F-n tnl.i n.r .A,rl1i r:nro af -'t'. ,-l:ime r-ri eird :e hctr^r,.er *./ -/,_ _,, _ -.1

F'RM and Primenc|qy, exceFt ro rht: -Axt-ent th.lt ir hal b-oen, or wil]

b+, asked to conf j rr , vacate, or :n(ldiIy an Arbitr dl--ion Award.

1 . Llccausie rhe C.Jur t' :; dispositicrr .Jf the {arbitrdLiarissncr-i r'+moves alI o F FRMt s clainr:t dqainst Primcnt r:gy f rom rhis

c,,it frr* thaeo F.1 lrri,r., l.a rr.rr.rri-rr rn.di f r -.rl- i .'\ri ^ 1 =ALEI" L r. !r '

c:onf irmat j orr of the Arb j- L r'at.:ion Award, l-he CoLrrt nttd not, and

w i L1 nor, aclclrcr ri s PrimEnergy'i ot:her ar.Jurrrenl:.i for disrrri 55af of

the I irtj L. ninend€d Co;flFIif int .

-L4-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 14 of 23 PageID #: <pageID>
B. Individuaf defen,lants MeIIott dnLl Scot-t also move for

illsmi.ssa] of the First Anlcndcd CofirFla ini-. making the followi g

arqufirc ti;;

(.r) th.1t Courtt.$ IT, III, and VI fail to state d cl.a j m

drJiti fr$1. l.hem rlFolr which relief ca l-rc qrdrrLed. in that these are

in reality Jrreach of ontrd(:l- claims against Frincrrcrgy,.

(b) ttrat Counl- II faiLs to FIEad f rdu(J wil-h sufficient

Ha! LfLua4! ! Ly r

(c) Lha L. Count- III fails becausrr a corporate

,-rrrr=ni ve urrrh irc -,rr1 .1Ff i /.f.'.1 r,1.1 omnl nrror '- '- -.-..F--r-:s;

(d) that Colrrrt. IV fails to rjt.at.e a

-r: c,rifrf rrrn-i lI i rrrr n! - r ade ser::rets i

(+) that Collnt V fail$ to state

c{lmpet-i t ion;

Fnl- i l-r/ -ihh-t

claim for

cl a ir'n f or unfa.ir

(f) that. Count VI fails 1-o st-at-e claift tor tortious

intErf c f .jTr(ie with bu:iir)csE eHpectancy; Lrtrd

/fr\ thrl- hl ri nti FF l-r i I oil rr ini rr .+ na-aqcrrrr b.n11-\r \l/

9. The contentio thal: Collnts II, IlI, atrd VI f.ril to rtll.al-e

f .r.t -.- Ii*r nrrH; r.i l. q-.af - nFn M+t l--- in tttdt l-hese are i n

|arl i 1-\' l1r'r.:. h af rnntr-:rr-r /- :i"nc .rdnirr<l !L*_f _), rlfr"ErrElrjyr 'lfy ! E

reatliJ.y .li.iFosed of . Tr- is true, at Lhe.ce def enditrrLS argue/ that

r11 .:.-i^n lrnq-'r ''-111 : h'-r;rr.h 'rt r].-lnr cE j.: 

Cl:JlttraCtUal in ndtUrer

.1nd orr(:r based upon bredc:lt of a non-c-ror'lLractua] dury is tortious irl

n.rtlrrc. curry v. Thorqsberry, 81 Ark. App. 112, 98 S.w.3d 477

-15-

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 15 of 23 PageID #: <pageID>
(2003). It is also true/ as defendants; corrtcrrd. L.traL p-Lainr-itf

doEs nor aIIeqe rhar Mcf l.Jtt art ScoL.I are parries to any

a.Jreement wirh plcrinrif f . 

'f husf i.r fo.r:t i or'j, dny claim against

t-hem does not souncl in contract,

Ir is a f ar cry f rLrm Lha li c:onclusion, howeverr to the one

.rrgerl hy Mellorr and Storr, i. e. , 

that tllrre {:arr be no c:f aim o t

F--,--r ^* LirL.i|]rrs inr-erference iEE-rrFr u!urIr'r a.rriaa- L rFa,n LrrL'rL.

T.a r'l lanrri^hr f,E -- €F-,r,_i /l'rrrr+ TT\ r-aa+.rlr:rrr /-^,1h+ TTT\ \L!urrL rr./ r Lrr.rrr+P!rnL-y \L!urrL rrr/,

.rnd tortiuu$ i.tltt-ir.f er+nr,j-- r,Jith business eHFECtancy (Corrrrt: VI)

sratc faiL.s tdhi(lh, if proven up, woulcl suFporr- a finding rhal

MeL.lorr and ljcotr cDmffii.Lt.e.l [heiie rEspecrive tort$, dlheiL in Lhe

conreHt of rhLri r efirt]loyment by one who vrdS i.rr a contracrual

rElatiorr$h ip \',rilh the Flaintl f f . This asserted motion f o r

dr emi ce-rl wi I I l- hi5r'af ^FA ho .l+nia.l

I0. The (lontention of M{tr.Llitl arr.l Scott that t}rr: Fi r::;l

Afnend-od lomFlaint fai.l si t:o plead a claim of f raud, as against

r-hem, with suf f i r: ierrt: parricularity a.l.ijo meril-s lrtrf E anirl-ysi -5,

Flaintif f (l()es not rEIy on rn(: r-a conclusory itll egalions, but

cleL:ails a serie$ of act,s hy these dcfefldanf-s which' if Prov-At] ltp,

rr,rrr'ln crr-".'.- r f irrdinn nf frrrrrl 'rhFr- .lFt- ii 1a ,1rF ,-lF:1r'11'

rruf f icient rLr plrL. Mellott and Sr:oLL. rrn notice of what it is rhey

r.r,a.r r. hrrre dnnc th.1L. was f raudulcrrt.. This is .rll thaL i S

Iequired by F.R.C.P. 9{b):

!.ie mr.lst inl,er.prel: the rr:quirements of Rul,e g (b) i n

harmorry wif.h the FrinciFles of noticr Plta.ling.... The

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 16 of 23 PageID #: <pageID>
special narurc Jf frdud doesj n(]r- n-ocessitare anythinq

Dthcr thdrl nol..:i.ce ol the claim; it simply rlccc$siLa[.ts

a higher degree of notice.... Thu$, d pl.aintif f must

spe-if ically allege ttrc c j. rc:umrj Lances constitllt j-n!t

fraud, incluclincl slrL:fr rnaL.Leri as r-he time, placr alrrl

contcI]ts Of f dlie lepr-o-centationsf crs wcL.l. aB Lh+

i rlerrr-i f w rr,- , r.F lfFyEon r:ki -,-r f r.rc -1i=r-r:rr-r:q.1r)titLiOnS and

what wa:j obt-ai rrtr:l or qiven up therebv.

A.bels v. FafltleEg lqoffiflodi tiea Co.rp., ?s9 F.3d 910 (8rh cir

2001) (inl..ernal r:itations and quotation norks {)ft-Ltte.l) . The motion

to disnri$s Coufrt. fT wiIl, t-herefore/ be denrcci.

:1..l The argument that Count III rrhould he dismlssed as t o

MeIIa)|:r- and Scorr bec.ruse a c rlroraLio]r aannot conspirc rni.rlr its

uw f f-i(leci and agEnrs is well r'f kcrl, i.rrsa)tar as a consFrr,:tcy i :

aIlerled only lf,etwcrln Pr i rrlenef gy and MelLott, Scott, an.J McQuigg.

Hordever, thc Fi riiI Am-anded Comp]air]t d 1 $() dI-Leges a conspiracl'

i rrrrnl rri rlir ilr.ariF defr:nd:nr,: nrrd A ,J;rrFnFqp /-flmr:r'r1r. I{art\r1 ct-Fal

Ltr1. ("Hoire'/). as to which th(l cont-ention for clisnri s$a] of Mellott

and Scort is .irrc levarrr-. Insof ar iis tht First- Amended Conlpld j.rrL

al f ,:-rclcrj a rt(.)nsFiracy rnvoLvinq Kobe, the Court f irrrlrl L]taL a cfaim

is .if-ated. Th€ rflLrti tn t.o dismiss as to (idurrl: III wiLL, thrrrf or+,

L.r t ctenied, but ttrc feach of thcrt cdurtL. wiI.I be limited l-o

s l l Fflnf i.)rr:i t.hai: ref ate t.J ilcfcir'tClanl-sf interacti ()rr firith Kobe.

12. MelIotr. ,-ir)d !j.;or-r- neHt ,:f rcJuc lrnar- they carlltoL be held

rirhra 1:-F hi e-rhrr.1r,r -j.AIiOn of tradr $e.jret-s (Count IV) L]eCaUSe

+11-,, -ri-r r\i.r' rho$Lr LfAde Secrets by "improper mca S. r '

This i.$ nol-, hcrwever. a ne(]essary cLcrnent- of tht torl-. A s

prtaintiff po:int:s ollt/ undLrr: A.rkansas Iaw "nri.'japproFriation" irLs.)

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 17 of 23 PageID #: <pageID>
occur-s Llfron \\ [,:l] i.$Lrl(:rt;Lrr+ (tr use of a trad{r secret_ of another

wi t.trLrLrtj e j'.press or implied con:jenl.: by a person who . , . at t-he

I.im-. of disclosurc or Lriilrr knew or had roasc)tr 1,o know that his

knowl edge of the t rildc rJ+c rre L- was lalcqL:rired under

r-i r.-rrme1-nn..r..r irirr'n.-r Fi-5 -- - n.-+-, ..,. -lihtrih i J ,J. "-_.-lJ 4 uL'LY rlr irLLr-Lv.y v _

l imif- its use . . . 

" A.c.A. S4-75-601. PIaint-if f 's Eleaclinrr

d I Leges facts whir:h. ii. pl.oven, wou]d ijupF,ort a f inding thdt

MeIIort and i;cor-t rrisappropriatFd tr:itde sec:rErs undcr t.he$ri

nrr.rri.,:{r.. .-,f -laF, .:l-n-,--.. r-rt iLa r-r- j-r-t 

to diSmiSS Count I V

rn'i -].1, thereforE/ br-r rJ+nie.l.

l ? T^li+ lr F'fdrr.l ra rlrr. rl l+^rl- i-hE -+ f laa- -F-!

---- JI LU,.l,L v, t-lIdL -flelt

viuLared the Lanh.ifit ncL, MeIIott alrd Scol,r conrend rhar ptainriff

lras faifed to statc ir c]aim uFon which relief can brt granr-ed. I L

is setrled ldw t-hat .r conrpla i nt should not he dismissed f-o r

failurc ro st.ar-e a clairrL urrless, viewing Lhe aflegatiorli ol rhe

(ronlFI;.inr in rhc Iighr mosr fdvOr;bIe to F.ldirrLif f , 

ir .r.ppc,:ars

beyoncl {lLruhr: rhat Fla.int-.iff .ou-lC frLr t. prcve uF r: ier of facr:.

'!''hi(-:h w,ruId entiLle it ro rLllief . Thar i5 Lo say' rhcrc rnust- b e

i;r)me "insuPc-rahl.+ ]lar to relr-.f " on the face of tht comFlainr.

KferyEE !t Robertgon Fire Pr ction pistriqiEr 228 F.3d g9? (8th

cir. 2000).

FIIM / s Lanhan n(:I claim i$ $aid to iirisie und€r 15 U,$.c.

F,rovi. e5/ in rcftvanl- partf thaI

on or i rr rlonr"r€cti.Jn wif.h any goodEr or

S1125. Th.r t 5e(,t-ion

I a I ny Llersotr whfl,

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 18 of 23 PageID #: <pageID>
sier.VrfieS uses rn corllrllc r:re Any word/ term, narnc /

symbo]/ or devicll, or any comhination thereof. 6r itny

false designatiorr ot oI.igin, false or mi.sl.+itding

descrj.Ilti.on of fact, or faLsrr of misleading

rLll)rc$trrl.dL.i.otr of fact, which (A) is; ).ikely to cause

trttrf uFi+rt, or to c.1use niEtakc, o[' l.:o d-oceive as to thrl

irf f il i.rt-ion, conrr+r:: l:irn, o-r a5soci.rt ion of r-iuEj]:r pej:'.Bon

Lri il, rr,/rt-har rl-r' .r'i,a i ^

.jFonsorshlP/

- nF L j r _r L,=F ,rfrrrr.jq cFrrri,__c nr commerr:ial.

a(::l.ivilies by anothcr pcl::ron , , , shall be lial:rlc i n a

rllvil action J:ry arry perEJon who befieves thdt he or slte

is or is likcly t-. o be damaged by such ac:t.

The Clolrrt has revicwtcl i:he fact-ual alleqatidrrs of the First

lrnFn.lr:,-l a'-mhl.- i lr ar1.l auah ranei.lori h.r l-hE,l1 i ,r rho I i rLt m-.:rf:rvoraL.'l.e t-. n FEM. finrls that tIl+y do r]ol allege facLs which would,

if trfoved, !,rould entitLr: PI{M [o a verdict on it$ Lar]ham Act cfaim.

r}1a d--1,ar-- r.s -r.,a r"eoe-rors iji f h,! t- Meffott .lnd sr:otL w+re

,r i \ri r,-r r.j E lFn,ri rlr'. i^+-.rh:+i-F -r DrlM .^f I_O Other5 AbOLrf-. FRM.

FRM go+...r .co far ar t.o aIIe,Je that K.rlre $l-ee.I (the r:u$tonler

ir.rr'lrron ih rl,r. !l lorr+r! ,4arorri.1r',.r1 LhaL' ih-ar f l,,r c:':rFmahte FFiFrr

made ro it !ry Mellort and 5(t()1-r- abour Frj.rrr+rlergy' s righr Lc) Lhe

'i.,rrr i r- rrrro:r-. r,rL w-ore f alse .

WhiLe PRM ar.L:empts to sllort up its Flcdc-l.ings by af lccldl,ions

irr its bri cf arrd attachrnerri.F thereto, Ihis is not

Tl){l st-atemEnt iI: a cl.aim $howing entl.tleftent t o

rc-liLrl- i.i to be fila.Je in a p]daaJiJtgf. F.R.C.P. 8,. and a nrol-i.in, o r

r!AsIronse thLrrei-.(]r is rlot d pI-.ading, F.R.C.P

B+causE tllcre are n.J d I Legations 1I1

[rre paramcl.t L.5

motiorr of MeIIotf, and Scatt tc)

containcd

su f. I'i.tlient

7 .

t-he I ir$t Am-onded

of r l,anharr Act ' LUrrtlriEl IalI withirr

r-:laitn, thc Llouf i: finds thirt. t-he

Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 19 of 23 PageID #: <pageID>
ni --i -. rL\ - ^l-r* (l_..jr -155 Lrrrs cId_tTl, crJ LO Lnem. 5l.uJ_tl irc gIdn1.1efl.

I4. linalLy, M,:jllOIt. arld Scott- argl]e that the First Amtndcd

Compl-a-irrt rttu$t- I)+ dismre ted as t-o then because plaint.if f fai 1ed l:o

add a necessary ;rarry, EPTL The CoJrt; f :Lnds t-his argumenr moot/

rnasr uLrir t$ FPTT fjecarne a p;rt-y to this suit by mcans of its

r:-rrsolidation with the Okf .thoma ca$c$.

15. The Court tllrns now to Defendant8' Motion To Stav

conaideration Of PLaintiff's First RevisEd Motion A,nd Application

For FertiaJ. Confirmation And Partial VadEtion Afid Partial

Modification Qf Arbitration Awatd Or In Th€ Alternative Tcl

TranEfer $uch Motion To The Northern Distriet Of Ok]ahoma.

This mc,rion rcqu{jil,s t.hat- I-he 'Jourt defcr. ru-ing on FRM'S

l i.r'$t. Revi.'-:e.l Motion And AnDf i-cdti,orr For Farti.ll Conf ir:nrHti on Anct

Partial vac.rtior Anrl Mrrdification Of Arbitr'aLion Award Llntil i t

ru]c5 orr defendants' moti.Jns to cli$iniss. The Court aqrieeB t-hat

ttrii 5L.agi.ng of rh,- ctrsc is appropriare, arlcl tlre motion will,

thcrcfore. r)-o granted. LlLlfcrrdanL$ are, howevcr, c-lire.jt-ed to file

rruch opposlt j. rr Lo P]aintif f ' s Firsl- Revised Mot inn And

AI)pl i{--at-ifln For Pilrtidl Cor:firmation Ard PaI.t-ia-l Vacation And

Fartial Mocl . i.icarion Of Arbi.Lration Aw.ard ds t.hey desire rhis

Court- t-o consider/ ort or hefore Novcmber 22, 2005. Upon the

j.iling of such response lsl , arrd arry timely resjponse to PRM's

Motiurl Ft]r. Preliminary Irrjunction Arcl Part-iaI Sumlnarjy iludgmenf-/

1-.he Court !vill- l.:ake uF afL i$Fjues relativ|J t.o l-he vacatloII,

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rtodi Ii.ca[1rrr], and,/or confirm.ltio .JJ: [h+ Arbitration Award.

16. FinaLLy, the C urt wi ,l.I aclclress PRM's rcrclutErL: [.hat- it- ]re

allowed lcav{i l-o tile a countercfairl d!JaLnSt- EFTI and join twcr

ddd it..-Lonaf sLlbsidicrriLls of FPTT/ Heater SpecialistS/ Tnr:, (\'HSI")

and Mohank Ficld Services ("Mohawk"), as dtfendants. EFTI opFO:ics

thjE mof-ion, which was fileLt .i n Case 05-6061, Foint..i.ng out that

when it filed C.rsc ll4.'889, PRM t-ook the Fositio l-l)at thEre was n o

f..rrrl r.r\/,i.qv hetween PRM and EPTI. EFTI contends tlrat FRM

rook l:.fLi:r po:ition solcly d5 a maLt-er of srratcqy, in o-rder t o

i. rri r i l- if r. i f d r.F.1r,-q,.d tr.lnsfEr of Ctdsje 04-BBB to thc trilesttrn

District oil Arkansas. IIETI ar'queF that PRM $hou.1 d be l:ound b y

th.is st rat+q ic decision, drrd denred rhe rj qht to ftake a

r:or.rn1-erclaim .lgainst il,. For its F.1rt, PRM .:ontinues to rnaint,.tin

that at ttrll tir e it tc,ok its Fosi l-inn in Case 04-888, there was o

-n er.r rl r r-.)hf r-\rFrllv I)i:1..,'t-oen it .and llF.'TI, but CIains thn I noW a

cortl,f(lverslr does ex.i Et- Iretween tllerrL.

Without q()ing into thc dtLails ' the Cclurl- will simPly llol-e

rhat rh.jre has lleen d qr+ar- deal of jock+ying for posi t.ion in this

r';65q. which has nol- c(]nrributt]d r:o E prompt tti Spos jtion of Lhe

issues to b+ dec.idEd. Thal, heing saj.dr l.he Court aqreei with the

drldlysis of JudLle ElLison, i . c. . 

t-hat "in I. i.gllt- of th.r f aLlL tilat

the agrcer ent-s wer,:i Lrrt l.-ared into Lry E'RM anal Pr i rrterrergy and Itdt

IFTT/ the 'fir$t to file' r'ule as aFFIied t-o this cdse should

r1-ihr t-rll,rrn rlro Fi r.: _L5 --rrl-yEarillr-:t Dnrtlrri- Fuf --- Ll-r^e-Lr -r-E -r-.rL -L+w5u-LL Ir rE:!r rry

-2rCase 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 21 of 23 PageID #: <pageID>
whi.ch ,,,i0 1d Ie l:he Ar:kaflFarr Iltic{atlon. " The Tenth Circuit casr.,

uFon which .fudge lILIison reLicLl i s i n cr{j(lordarr(]e uirlt Eighth

Circllit l.rw on the subjrct. Scc, e ,q.. U, S-EiEe-I4Eqtance Co, v .

Goodyear Tire e RubbeECo,, 920 F.2d 487 (8th Cir. 1990) ("firstf iled" rulL. not inrcrrdcrJ t.{) Llc-i " r.igid, mechanical/ or inf Iexible, "

l:rur "is ro lrc dFpl i.ed in a mann-Er best serving thc inter{:SL oI:

ju.:ti.e, " and aFplies only "in t.he ahsence of compelfing

r.i tr.rrnrqrrrrr-r:c:"\ ThF --1rr_1- thor+frro inr.1r1r: l-11ar lha ^r.lhar'

forum for rhis lirigar:.ort i ij r:l-.e West-ern District of Arkansa:i,

.. r., fr ! -. r r l . 1 i: r. .rr f f,F niila|rrFr-i n'-r 1-rr wh. l-L i- ;--rivcd tr+r e. The COUrr

a t -_ ri,-n- rF.i_ -ary..i -ac i_r_r_ LrLr\4 r_,r alLo,,red tO a$S_art- ir_F

r.rlrrrrF.rr.- tE i hl :,rli her IrFl f rrrl 1r,rrr+ ' ,1 rnahn ..'r 'l - t-1-^--F--.. 1,..

-._. -.., ..__..._Itt.L w_t_LIr LtteteIUIt_:f LJL'

granrcd I)ur5udr'rL. t.o F.R.C.P. 13(f ). Iiinal l.y. Lhe CourE finds rhal

rhe claims ilgaiI]tjL. HII an.l Mohawk shculd blr aI Iowed pursuant t o

F.R.C.P. 20.

IT IS THEREFORE oRDERED that FrirTrLrncrr{rv'$ Motion to DiBmiEE

First Amended Complaint Of Defendant Primenergy I Ir.L,C. (document

#Zil) i s granted, and the cliiirns aFserted by tsHM acld i.nFil. Primenergl'

j.rr l..ir+ First Amendccl Complaint are hcrctly dismissed. ,I'h 1 S

di:iflliSria l. dfies not, howcvrrr, en.J t-he case as t.o Primenergy' there

r--i Fr t-1..1 ..,.rr i .,i rn r egss5 as to wheT:her rhiS Courr SlrOuf d VaCate,

*,-'ri r-./ ^r ,-,.1rf i -n thr., Ar.b it.r;t-ion Aw.ard.

IT IS FURTHER ORDERED I..hat. the MOtiON T6 DiamiEs FiTEt

AJtlended Complaint Of DefendantB Scott Afid Mellott (document #?9)

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Case 6:04-cv-06157-JLH Document 48 Filed 11/15/05 Page 22 of 23 PageID #: <pageID>
i.s grtanted in part and denied in patt.

ThE rrotior'\ is grE$ted aS to PRM's Lanttam Act. claim aqainst.

Mi:Ilort and Scott, anrl denied iri all other resp*octs,

IT IS FURTIIER ORDERED that Defendants' MoIiofl To Stav

ConEideration Of Plaintiff's First RevisGd Motion And Applicatior.

For Partial eonfirmation And PaEtial Vacation Ard Partial

Modification Of Arbitration A$ard Or In The Alternative Tc,

TranEfer Such Motion llo The Northern District Of Ok1ahoroa

(document #371 is granted. arrrl d+fendani:s are alfowct! LrF [o drld

i cludirig November ?2, 2005, to respond to Plainti ffr s Fir$f

Reviijed Motiorr Arrcl AFlrlicirt-ion For Par Iia] ccrilirmd t-iorl And

F.rr trierf Vaca l-.ion And Farti aI Madif i.caticn Of Arl:r;i.t-rat ion Award,

IT IS FURTHER ORDERED that pFM F,nerc;y Sy5tefl$/ Motion For

L6ave fo EiLe Counterclaim And ,.Toin Affiliated Corporationg

(docurnent #? j.n ca..re nurrber 05-006f) is granted.

IT IS SO ORDERED.

,/ s./ ,JiflEn Lrrrl HeryLEen

JIMM LARRY HENDREN

UNITED STATES DISTRTCT ,JUDGE

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