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Appeals Court: Courts Decide Enforceability of Franchise Arbitration Provision
The enforceability of franchise arbitration agreements took center stage in the Ninth Circuit Court of Appeals en banc decision in Nagrampa v. Mailcoups, Inc., American Arbitration Ass'n. (2006) __ F.3d __, 2006 WL 3478345 ('Nagrampa II'.) In a 7-4 ruling reversing the decision of the three-judge panel upholding arbitration ('Nagrampa I,' 401 F.3d 1024), the Nagrampa II court struck down the arbitration clause under California principles of unconscionability. Along the way, the court made significant holdings and observations that should garner the attention of franchise practitioners on both sides of the aisle.
The facts and procedure of the case are common in franchise circles. Mailcoups sued its franchisee Connie Nagrampa in arbitration for breach of contract after she failed and terminated the agreement. Although initially filed in Los Angeles, the American Arbitration Association transferred venue to Boston in accordance with the forum selection clause in the agreement. Nagrampa objected to arbitration and brought an action against Mailcoups in California state court alleging fraud and statutory violations as well as attacking the arbitration provisions. Mailcoups removed the case to federal court and moved to compel arbitration and to stay or dismiss the case. Nagrampa opposed the motion to compel on state law grounds of unconscionability. The district court found that the arbitration agreement was valid and granted Mailcoups' motion to dismiss. Nagrampa appealed, and the three-judge panel of the court of appeals (Nagrampa I), 401 F.3d 1024, affirmed, holding that the unconscionability of an arbitration provision contained in the franchise agreement is a question for the arbitrator to decide. The underpinning of that conclusion was that where an adhesion contract contains an arbitration clause, the arbitrator must decide unconscionability because the issue of adhesion (and thus the procedural prong of unconscionability) pertains to the making of the agreement as a whole and not to the arbitration clause specifically.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Transfer Tax Implications on Real Property Leases
The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.