Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00420/USCOURTS-azd-2_12-cv-00420-0/pdf.json

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

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Cold Stone Creamery, Inc., an Arizona 

Corporation, 

Plaintiff, 

v. 

Nutty Buddies, Inc., a Florida Corporation, 

Defendant.

No. CV12-0420-PHX DGC

ORDER 

 Defendant Nutty Buddies, Inc. is both a Cold Stone franchisee and a member of 

the National Independent Association of Cold Stone Creamery Franchisees, Inc. 

(“NIACCF”), an association comprised of over one hundred Cold Stone Creamery 

franchisees. Doc. 21 at 3. The NIACCF filed a Complaint for Declaratory Relief against 

Plaintiff Cold Stone Creamery, Inc. in the Circuit Court of the Eleventh Judicial Circuit, 

Miami-Dade County, Florida (“the NIACCF lawsuit”). Doc. 21-1. The NIACCF lawsuit 

alleges that Plaintiff has failed to provide information pertaining to, and failed to properly 

account for, certain monies Plaintiff received from third parties designated for the benefit 

of franchisees. Doc. 21-1 ¶ 1. 

After initiation of the NIACCF lawsuit, Plaintiff filed a petition to compel 

arbitration in this Court. Doc. 1. Plaintiff also moved the United States District Court for 

the Southern District of Florida to stay the NIACCF lawsuit on the ground that the 

individual franchisees named in the NIACCF lawsuit, and other franchisees, have 

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agreements with Plaintiff requiring arbitration in Arizona. Doc. 17-1 at 17. The Florida 

District Court granted Plaintiff’s motion to stay pending a determination by this Court of 

whether the individual franchisees must submit to arbitration. Doc. 17-1 at 20. 

Defendant then moved this Court to dismiss Plaintiff’s petition to compel 

arbitration. Doc. 21. Plaintiff responded with an opposition to the motion to dismiss, and 

Defendant failed to reply. Doc. 30. The Court will deny the motion to dismiss. 

I. Legal Standard. 

 Defendant does not identify the rule of civil procedure under which it brings the 

motion to dismiss. Doc. 21. Plaintiff assumes the motion is brought under Rule 12(b)(6), 

and the Court will as well. When analyzing a complaint for failure to state a claim under 

Rule 12(b)(6), the well-pled factual allegations are taken as true and construed in the light 

most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th 

Cir. 2009). To avoid dismissal, the complaint must plead enough facts to state a claim to 

relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 

II. Analysis. 

 The issue before the Court is whether to dismiss Plaintiff’s petition to compel 

arbitration, not whether to compel the parties to arbitrate. Defendant’s arguments that 

NIACCF has associational standing to assert the claims of its members in the NIACCF 

lawsuit, and that the Court should allow consolidated arbitration in the event that 

Defendant’s motion to dismiss is denied, are irrelevant to the issue before the Court. 

Similarly, Defendant’s argument that NIACCF is not required to arbitrate its disputes 

with Plaintiff is not applicable because this action seeks to compel Defendant, not the 

NIACCF, to arbitrate. Finally, Defendant’s argument that Plaintiff’s petition should be 

dismissed in favor of the first-filed NIACCF lawsuit misapplies the “first-to-file rule,” 

which requires the same dispute between the same parties. Pacesetter Sys., Inc. v. 

Medtronic, Inc., 678 F.2d 93, 94–95 (9th Cir.1982). The NIACCF lawsuit does not 

involve the same parties as this case. 

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 Plaintiff alleges that Defendant entered into one or more franchise agreements 

with Plaintiff and that the operative agreement, dated June 28, 2004 (“the Franchise 

Agreement”), contains a broad arbitration clause. Doc. 1 ¶ 3, 4. The arbitration clause 

requires all controversies or disputes arising between the parties “related in any way to 

this Agreement or the relationship between the parties” to be arbitrated in Phoenix, 

Arizona. Doc. 1 ¶ 4. According to Plaintiff, the NIACCF lawsuit asserts claims on 

behalf of Defendant that arise out of the Franchise Agreement and Defendant’s 

relationship with Plaintiff, and such claims are subject to arbitration. Doc. 1 ¶ 12. Taken 

as true, these allegations state a claim to compel arbitration.1

 

 IT IS ORDERED that Defendant’s motion to dismiss (Doc. 21) is denied. 

 Dated this 3rd day of October, 2012. 

 

1

 As to Defendant’s argument that Plaintiff’s petition is not ripe because it was filed before Defendant has filed an action against it, Plaintiff alleges it has been sued by the NIACCF for claims on behalf of Defendant and others, and that Defendant is 

attempting to circumvent its obligation to arbitrate, which the Court takes as true. 

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