United States District Court, D. Connecticut
RULING RE: PLAINTIFF'S PETITION TO COMPEL
ARBITRATION (DOC. NO. 1)
C. Hall United States District Judge
Doctor's Associates, Inc. (“DAI” or
“Subway”), the franchiser of Subway sandwich
shops in the United States, filed a Petition to Compel
Arbitration (Doc. No. 1) against defendants Brian Burr and
Bryn Burr (also known as Brynn Burr) (collectively,
“the Burrs”). The Burrs entered an arbitration
agreement with DAI, as part of two Subway Applications for
Additional Information that the Burrs completed. See
Subway Applications for Additional Information (Doc. No. 2-8)
at 3, 5. DAI now seeks to compel arbitration in connection
with a lawsuit that the Burrs are pursuing in California
state court (“the California Lawsuit”).
See Pet. ¶ 16; see also California
Compl. (Doc. No. 2-2). In the California Lawsuit, the Burrs are
suing DAI's development agents, Raghu Marwaha and Rohit
Marwaha (collectively, “the Marwahas”).
See Pet. ¶ 16; California Compl. DAI seeks an
order “directing the Burrs to arbitrate with DAI their
claims against DAI's agents that they asserted or could
have asserted in the California State Court Lawsuit.”
See Pet. ¶ 35.
Burrs argue that the Petition should be denied for the
following reasons: First, the Burrs argue that the California
Lawsuit falls outside the scope of the arbitration agreement
between the Burrs and DAI. See Response (Doc. No.
13) at 2. Second, the Burrs argue that the Marwahas are
required parties whose joinder would destroy diversity
jurisdiction. See id. at 2-3. Third, the Burrs argue
that the principle of comity dictates that the California
court should decide arbitrability. See id. at 2.
reasons stated below, DAI's Petition to Compel
Arbitration is granted.
fall or winter of 2013, the Morongo Tribal Council approved
the Burrs to open and run a new Subway franchise location
inside the Morongo Casino Resort & Spa. See
California Compl. ¶ 11; Brian Burr Declaration (Doc. No.
13-3) ¶ 3. In December 2013, the Burrs then contacted a
Subway regional headquarters regarding the possibility of
opening a Subway franchise in the casino. See
California Compl. ¶ 12; Brian Burr Decl. ¶ 4.
December 13, 2013 and January 5, 2014, the Burrs completed
and executed Subway Applications for Additional Information.
See Pet. ¶ 6; Ralph Piselli Declaration (Doc.
No. 2-7) ¶ 7; Subway Applications for Additional
Information. In exchange for the Burrs filling out the
Applications, DAI agreed to provide the Burrs with
information concerning a Subway franchise and to consider the
Burrs as potential Subway franchisees. See Pet.
¶ 6; Piselli Decl. ¶ 7. The Applications both
contain the following arbitration clause:
I agree that I will settle any and all previously unasserted
claims, disputes or controversies arising out of or relating
to my application or candidacy for the grant of a SUBWAY®
franchise from Franchisor, pursuant to the laws of
Connecticut, USA and by binding arbitration only. The
arbitration shall be administered by the American Arbitration
Association (“AAA”) . . . in accordance with its
administrative rules including, as applicable, the Commercial
Rules of the AAA and under the Expedited Procedures of such
rules or under the Optional Rules for Emergency Measures of
Protection of the AAA. . . . I agree that the arbitration
will be held in Bridgeport, Connecticut, USA, conducted in
English and decided by a single arbitrator.
Applications for Additional Information at 3, 5.
initially poised to approve the Burrs as franchisers of a new
Subway location in the casino. See California Compl.
¶¶ 14-16, 23-26; see also Pet. ¶ 26.
In August 2014, the Burrs learned that the Marwahas had
become DAI's new development agents for the area.
See California Compl. ¶ 19; see also
Pet. ¶ 24. As development agents, the Marwahas use an
operating company, the Marwaha Group, to operate their
development agent business. See Pet. ¶ 26 n.5;
David A. Cousins Second Declaration (Doc. No. 15-1) ¶ 6.
The Marwahas operate the Marwaha Group with one other
individual, Ravi Marwaha. See Response at 4 n.1. DAI
ultimately did not approve the Burrs to run the location.
See California Compl. ¶ 29-30; Pet. ¶ 27.
California Lawsuit alleges that the reason DAI ultimately did
not approve the Burrs was because the Marwahas “caused
the Marwaha Group to take steps as the Development Agent to
cause Subway to withdraw its acceptance so that [the
Marwahas] could steal the franchise for themselves.”
See California Compl. ¶ 32; Brian Burr Decl.
¶ 26. The California Lawsuit alleges that the Marwahas
told the casino's CEO “that they would own the
franchise or there would be no franchise.” California
Compl. ¶ 34; see also Brian Burr Decl. ¶
28. The Marwahas currently operate the Subway franchise in
the casino. See California Compl. ¶ 34; Brian
Burr Decl. ¶ 29.
22, 2016, the Burrs filed the California Lawsuit against the
Marwahas and several Doe defendants. See California
Compl. The California Lawsuit alleges intentional
misrepresentation, interference with contractual relations
and prospective economic relations, and unfair business
practices. See California Compl. Counts 1-5. On
August 4, 2016, DAI filed an arbitration against the Burrs
for declaratory relief relating to the facts underlying the
California Lawsuit. See Arbitration Statement of
Claims (Doc. No. 2-6).