Court Opinion

ID: 4032609
Source: CourtListenerOpinion
Date Created: 2016-09-09 21:00:41.970783+00
Date Added: 2024-06-11T13:16:01.933858
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 15-1786

                    LUIS ADRIÁN CORTÉS-RAMOS,

                      Plaintiff, Appellant,

                                  v.

              SONY CORPORATION OF AMERICA, et al.,

                     Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

        [Hon. Gustavo A. Gelpí, Jr., U.S. District Judge]

                                Before

                 Torruella, Kayatta, and Barron,
                         Circuit Judges.

     Juan R. Rodríguez,     with whom Rodríguez Lopez Law Offices,
P.S.C. was on brief, for   appellant.
     David C. Rose, with   whom Pryor Cashman LLP, Jorge I. Peirats,
and Pietrantoni Méndez &   Alvarez LLC were on brief, for appellees.

                           September 9, 2016
             BARRON,     Circuit     Judge.       Luis     Adrián      Cortés     Ramos

("Cortés")     appeals      from   the     dismissal       of    his   contract       and

intellectual      property    claims       against     a   variety     of    companies

affiliated with Sony Music Entertainment ("Sony").                        The dispute

concerns an original song and music video that Cortés submitted to

Sony as part of a songwriting contest sponsored by Sony.                              The

District Court dismissed all of Cortés's claims.                   It did so on two

grounds: that the claims were subject to mandatory arbitration

under the Federal Arbitration Act, and that Cortés failed to allege

facts sufficient to support his claims under Fed. R. Civ. P.

12(b)(6).     Because Cortés has not appealed the ruling that his

claims    must    be   arbitrated,       we     affirm     the    order     compelling

arbitration.

                                           I.

             Cortés makes the following allegations in his complaint.

             In 2013, Sony collaborated with Enrique Martín Morales,

also known as "Ricky Martin," to create a music contest in Puerto

Rico.    Contestants were to submit an original song, along with an

accompanying music video.          Martin would perform the winner's song

at the 2014 Fédération Internationale de Football Association

("FIFA") World Cup.

             On   January    2,    2014,      Cortés   entered      the     contest    by

submitting a music video with his original song to Sony via Sony's

website.     A few weeks later, Cortés signed two contest documents

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-- a release and an affidavit –- and sent them to Sony.        Cortés

did not win the contest. Nonetheless, on or around April 22, 2014,

Martin released a song and music video -- "Vida" –- that, according

to Cortés, closely resembled his own contest submission.

          On July 28, 2014, Cortés filed suit in the District Court

of the District of Puerto Rico.   Cortés alleged that his agreement

with Sony was unenforceable under Puerto Rico contract law because

it was fraudulently induced by Sony.        He also alleged that the

agreement violated Puerto Rico trademark law and United States

trademark and copyright law.1

          On February 12, 2015, Sony filed a motion seeking, among

other things, dismissal under Fed. R. Civ. P. 12(b)(6) and, in the

alternative, a stay pending arbitration under 9 U.S.C. § 3.      Sony

appended the "Contest Official Rules" to its motion to dismiss.

Those rules contained a mandatory arbitration clause, requiring

that disputes "arising under, in connection with, touching upon or

relating to" the rules be submitted to an arbitrator.

          On June 10, 2015, the District Court ordered Cortés's

case dismissed "with prejudice," J. at 1, June 10, 2015 (ECF No.

41), "pursuant to Fed. R. Civ. P. 12(b)(6)," and "direct[ed] the

parties to proceed to arbitrate,"       Cortés-Ramos v. Sony Corp. of

     1Ricky Martin was originally a defendant in the suit. Martin
was voluntarily dismissed from the suit, however, on March 27,
2015.

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Am., 108 F. Supp. 3d 18, 25, 29 (D.P.R. 2015).              In doing so, the

District Court rejected Cortés's assertion that he was not bound

by the arbitration clause because he had not read or received a

copy of the Contest Rules.       Id. at 24.        The District Court found

that   Cortés    "received,    signed,       notarized,   and    returned"    an

affidavit stating he had complied with the Contest Rules, and noted

that "a valid agreement to arbitrate is presumed even when the

signed document incorporates by reference an arbitration provision

that may be found in another document, irrespective of whether the

party received a copy of the document containing the clause."                Id.

(internal quotation marks, brackets, and citations omitted).                 The

District Court then determined that Cortés's fraudulent inducement

claim came within the "broad language" of the arbitration clause.

Id.

           Notwithstanding       its     rulings     that       the   mandatory

arbitration     clause   was   both    enforceable    and   encompassed      the

fraudulent inducement claims, however, the District Court also

addressed the substance of the claims.           Specifically, it concluded

that Cortés "failed to make a cognizable claim that the Contest

[Official] Rules constitute a voidable contract under Puerto Rico

law because he entered into it as a result of deceit."                Id. at 25.

                                       II.

           On appeal, Cortés argues that the District Court erred

in ruling that he failed to allege facts sufficient to support his

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fraudulent inducement claim.          But Cortés does not appeal the

District Court's separate rulings that the mandatory arbitration

clause    is    enforceable   and   that    this   clause   encompasses    his

fraudulent inducement claim.2         Because those rulings provide an

independent basis for dismissing his claims, we need not address

Cortés's challenge to the District Court's decision to dismiss his

complaint on 12(b)(6) factual sufficiency grounds. We do, however,

wish to repeat our previously articulated caution that "[a] court

compelling arbitration should decide only such issues as are

essential to defining the nature of the forum in which a dispute

will be decided."       Thompson v. Irwin Home Equity Corp., 300 F.3d

88, 91 (1st Cir. 2002) (quoting Larry's United Super, Inc. v.

Werries, 253 F.3d 1083, 1085 (8th Cir. 2001)).

               Cortés's next challenge to the District Court's order of

dismissal is that the District Court erred by ruling on Sony's

motion to dismiss before the court's deadline for permitting Cortés

to file a sur-reply had elapsed.            But Cortés does not posit a

standard of review for assessing whether the District Court erred,

cites no authority to support his contention that the District

Court did err, and makes no argument as to how any error affected

the   District      Court's   decision     to   send   Cortés's   claims    to

      2Cortés contends that the District Court erred by dismissing
his case pursuant to Fed. R. Civ. P. 12(b)(2) and (b)(3). As the
District Court did not dismiss Cortés's complaint on these bases,
this contention is without merit.

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arbitration.   Nor is such an argument regarding possible prejudice

apparent to us.     Consequently, we conclude that this contention is

too undeveloped to warrant further scrutiny.        See United States v.

Zannino, 895 F.2d 1, 17 (1st Cir. 1990).

            Cortés also appears to contend -- though he does not

list this contention in his statement of the issues -- that the

District Court erred by not permitting discovery before dismissing

the case.    But Cortés makes no argument as to how the District

Court's   refusal    to   permit   discovery   undermines   the   District

Court's ruling that his claims must be dismissed because they must

be arbitrated, a ruling that Cortés has not appealed. Accordingly,

we need not address this aspect of Cortés's challenge either.

            Finally, Cortés contends that the District Court erred

in dismissing his case with prejudice.          Given that the District

Court, in dismissing the case, ruled that the claims were subject

to mandatory arbitration, we agree that "[t]his is a peculiar use

of the phrase 'with prejudice.'"       Next Step Med. Co. v. Johnson &

Johnson Int'l, 619 F.3d 67, 71 (1st Cir. 2010) (citing Alford v.

Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992));

see also Cont'l Cas. Co. v. Am. Nat'l Ins. Co., 417 F.3d 727, 732

(7th Cir. 2005) (noting that there is a split in authority as to

how courts characterize dismissal on arbitrability grounds, with

some courts treating the dismissal as jurisdictional and thus

pursuant to Rule 12(b)(1); other courts treating the dismissal as

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"failure to state a claim cognizable in federal court" and thus

pursuant to Rule 12(b)(6); and still others treating the dismissal

as "entirely separate from the Rule 12(b) rubric").   But, even if

peculiar, the District Court's use of "with prejudice" is "not

without precedent."   Next Step, 619 F.3d at 71.   We thus affirm

the order of dismissal.   See    id. at 71-72 (affirming dismissal

with prejudice of claim deemed subject to arbitration).    We note,

however, that, in light of the District Court's order compelling

arbitration, Cortés's claims "ha[ve] not been extinguished but

[have been] merely left to the arbitrator."   Id. at 71.

                                III.

          For the reasons given, we affirm the District Court's

order compelling arbitration.

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