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Best In Class Suppliers, LLC v. Incipio, LLC

United States District Court, W.D. Arkansas, Fayetteville Division

September 6, 2019

BEST IN CLASS SUPPLIERS, LLC PLAINTIFF
v.
INCIPIO, LLC DEFENDANT

          MEMORANDUM OPINION AND ORDER

          TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE.

         Now pending befre the Court are Defendant lncipio, LLC's Second Motion to Compel Arbitration (Doc. 22) and Brief in Support (Doc. 23), Plaintif Best in Class Suppliers, LLC's Response in Opposition (Doc. 25), and lncipio, LLC's Reply (Doc. 28). On August 20, 2019, the Court held a hearing on the Motion, and the paries were aforded an opportunity to present oral argument. At the close of the hearing, the Court took the Motion under advisement. Now, having reviewed the parties' briefing and considered their arguments made during the hearing, the Motion (Doc. 22) is GRANTED fr the reasons set forth below.

         I. BACKGROUND

         The parties to this lawsuit are Defendant lncipio, LLC, a California company that manufactures and sells cell phone accessories, and Plaintif Best in Class Suppliers, LLC ("BICS"), an Arkansas company that brokers sales between manufacturers and distributors of products and Walmart, Inc., Sam's Club, Walmart.com, and Samsclub.com. The facts relevant to the parties' dispute began on June 16, 2015, when BICS entered into a Non-Exclusive Sales Representative Agreement (Doc. 21-1, "Agreement") with lncipio Technologies, lnc.-a company the Defendant describes as its predecessor in interest. The Agreement identifies Incipio Technologies, Inc. as "Client" and BICS as "Representative." Id. at 1.

         A brief overview of some of the more important provisions of the Agreement is necessary in order to understand the parties' current dispute about arbitration. Section 1.1 of the Agreement generally describes the parties' business relationship, including the services that BICS agreed to provide; BICS's obligation to "effectively and diligently market and promote the sale of the Products"; and BICS's promise to front all costs associated with marketing Incipio's products to Walmart in exchange for Incipio's agreement to pay BICS certain commissions on sales. Id. Section 1.1 further specifies that BICS "will not represent any other manufacturer during the term of this Agreement" in such a way that would constitute "direct competition with the services to be performed by Representative for Client during the term of this Agreement." Id. at 2.

         Sections 2.1 and 2.2 explain the method for calculating commissions, including the calculation of "Net Sales" and the deadline by which commissions should be paid. Id. at 3.

         Section 3.1 contemplates the termination of the parties' business relationship as follows:

Termination With Notice. This Agreement shall terminate immediately upon receipt of written notice if: (i) upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of either party's debts, (ii) upon either party making an assignment for the benefit of creditors, or (iii) upon either party's dissolution or ceasing to do business.

Id.

         Section 7.6 deals with the assignment or transfer of the parties' rights under the Agreement as follows:

Assignment. The Agreement is not assignable or transferable by Client. This Agreement is not assignable or transferable by the Representative without the written consent of Client, which consent shall not be unreasonably withheld or delayed.

Id. at 7.

         And finally, the arbitration clause appears at Section 7.14 as follows:

Arbitration. Any controversy, dispute, or claim arising out of or related to this Agreement or breach of this Agreement shall be settled solely by confidential binding arbitration by a single arbitrator in accordance with the commercial arbitration rules of JAMS in effect at the time the arbitration commences. The award of the arbitrator shall be final and binding. No. party shall be entitled to, and the arbitrator is not authorized to, award legal fees, expert witness fees, or related costs of a party, The arbitration shall ...

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