-JMA Profitstreams, LLC v. Ameranth, Inc, No. 3:2011cv00766 - Document 23 (S.D. Cal. 2011)
Court Description: ORDER denying 6 Motion for More Definite Statement, or in the Alternative, to Dismiss for failure to state a claim. It is further ordered that Ameranth shall file their Response in Opposition to the Petition by 9/6/2011, Replies shall be filed by 9/19/2011. The Hearing on the Petition to Compel Arbitration is set for 9/26/2011 at 2:30 PM in Courtroom 05. Signed by Judge Michael M. Anello on 8/17/2011. (All non-registered users served via U.S. Mail Service)(leh)
Download PDF
<![CDATA[
-JMA Profitstreams, LLC v. Ameranth, Inc Doc. 23 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 PROFITSTREAMS, LLC, CASE NO. 11 CV 0766 MMA (JMA) Petitioner, 12 ORDER DENYING RESPONDENT AMERANTH INC.’S MOTION UNDER FEDERAL RULE OF CIVIL PROCEDURE 12 vs. 13 14 AMERANTH, INC., [Doc. No. 6] Respondent. 15 On April 13, 2011, Profitstreams, LLC filed a petition to compel arbitration against 16 17 Ameranth, Inc. [Doc. No. 1.] On April 25, 2011, Ameranth filed the pending motion for a more 18 definite statement under Federal Rule of Civil Procedure 12(e), or, in the alternative, to dismiss the 19 petition for failure to state a claim upon which relief can be granted under Rule 12(b)(6). [Doc. 20 No. 6.] For the reasons stated herein, the Court DENIES Ameranth’s Rule 12 motion, and 21 ORDERS Ameranth to respond to the petition. BACKGROUND 22 On August 27, 2008, Profitstreams and Ameranth entered a Second Amended and Restated 23 24 License Agreement (“Agreement”), under which Profitstreams obtained a license for certain 25 technology owned by Ameranth. [Doc. No. 1, Exh. A.] A dispute has arisen between the parties 26 regarding the scope of the Agreement. [Doc. No. 1, p.3.]1 It appears the parties attempted to 27 28 1 Profitstreams invokes this Court’s diversity jurisdiction under 28 U.S.C. § 1332. [Doc. No. 1, p.4.] -1- 11cv766 Dockets.Justia.com 1 resolve the dispute informally, and when those efforts failed, Profitstreams sought to initiate 2 arbitration proceedings as required by the Agreement. [See Doc. No. 16, Exhs. A-I.]2 The 3 Agreement contains the following dispute resolution provisions: 4 14.2 Governing Law and Dispute Resolution: 5 14.2.1 . . . 6 14.2.2 Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall first be referred to each Party’s appointed management, and the Parties shall use reasonable efforts to resolve such dispute. 7 8 9 14.2.3 Any dispute that is not resolved as provided in the preceding Section 14.2.2, whether before or after termination of this Agreement, will be referred to binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association in the city and state where the defendant party has its headquarters. Except with respect to a breach of Section 2.5 or any other unauthorized transfer of Ameranth’s intellectual property or proprietary rights, the arbitrator shall not be authorized to award, and no party shall be obligated to pay to the other Party hereunder, punitive, exemplary, consequential, indirect, special or incidental damages or lost profits (collectively “Special Damages”) with respect to any such claim or controversy, nor shall any party seek Special Damages relating to any matter under, arising out of or relating to this Agreement in any other forum. Judgment upon the award of the arbitrators may be entered in any court having jurisdiction thereof or such court may be asked to judicially confirm the award and order its enforcement, as the case may be. 10 11 12 13 14 15 16 17 18 14.2.4 . . . 19 14.2.5 Notwithstanding anything to the contrary in this Section 14, either Party shall be entitled to seek injunctive relief in any court of competent jurisdiction for a breach or threatened breach of Section 13 or any infringement of such Party’s intellectual property or proprietary rights. 20 21 22 23 [Doc. No. 1, Exh. A, p.16 (bold and italics in original) (underline added).] 24 Ultimately, the parties reached an impasse regarding which claims could be sent to 25 arbitration, and Profitstreams filed its petition to compel Ameranth to participate in arbitration to 26 2 27 28 Ameranth objects to email correspondence submitted by Profitstreams on the grounds that Profitstreams did not properly authenticate the correspondence, it lacks foundation, it is irrelevant, and it is largely hearsay. [Doc. No. 18-1.] Because the Court does not rely on the correspondence to reach its decision on Ameranth’s pending motion, the Court OVERRULES Ameranth’s objections without prejudice, for purposes of the current motion only. -2- 11cv766 1 resolve their dispute regarding the scope of the license. [Doc. No. 1.] The petition is drafted as a 2 motion, not as a civil complaint. Accordingly, Ameranth asserts Profitstreams’s case initiating 3 document is improper, and so vague that it cannot form a meaningful response. [Doc. No. 6.] 4 LEGAL STANDARDS 5 Federal Rule of Civil Procedure 81(a)(6) provides that, to the extent applicable, the Federal 6 Rules of Civil Procedure govern arbitration proceedings under 9 U.S.C. §§ 1 et seq., unless the 7 arbitration laws provide otherwise. Fed. R. Civ. Proc. 81(a)(6)(B). 8 I. 9 FED. R. CIV. PROC. 12(e) “A party may move for a more definite statement of a pleading to which a responsive 10 pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a 11 response.” Fed. R. Civ. P. 12(e); see Coleman v. Sterling, 2011 U.S. Dist. LEXIS 47377 * 11 12 (S.D. Cal. May 3, 2011) (citing Bureerong v. Uvawas, 922 F. Supp. 1450, 1461 (C.D. Cal. 1996)). 13 “[A] motion for a more definite statement should not be granted unless the defendant literally 14 cannot frame a responsive pleading.” Bureerong, 922 F. Supp at 1461 (citation omitted). A 15 motion under Rule 12(e) “is used to provide a remedy for an unintelligible pleading rather than a 16 correction for lack of detail.” Coleman, 2011 U.S. Dist. LEXIS at *11-12 (citing North County 17 Communs Corp. v. Sprint Communs Co., L.P., 2010 U.S. Dist. LEXIS 35825, at *1 (S.D. Cal. Apr. 18 12, 2010)). “Motions for a more definite statement are generally viewed with disfavor and are 19 rarely granted.” Id. (citing Cellars v. Pac. Coast Packaging, Inc., 189 F.R.D. 575, 578 (N.D. Cal. 20 1999)). 21 II. 22 FED. R. CIV. PROC. 12(b)(6) When a party challenges a petition to compel arbitration by filing a motion to dismiss 23 under Rule 12(b)(6), the petition survives a motion to dismiss if it contains “enough facts to state a 24 claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); 25 Fund Raising v. Alaskans for Clean Water, 2009 U.S. Dist. LEXIS 106549 *3-5 (C.D. Cal. Oct. 26 29, 2009). The court reviews the contents of the petition, accepting all factual allegations as true, 27 and drawing all reasonable inferences in favor of the nonmoving party. Knievel v. ESPN, 393 F.3d 28 1068, 1072 (9th Cir. 2005). -3- 11cv766 1 “When there are well-pleaded factual allegations, a court should assume their veracity and 2 then determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, -- 3 U.S. -- , 129 S. Ct. 1937, 1950 (2009). A claim has “facial plausibility when the plaintiff pleads 4 factual content that allows the court to draw the reasonable inference that the defendant is liable 5 for the misconduct alleged.” Id. at 1949. “The plausibility standard is not akin to a ‘probability 6 requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” 7 Id. “Where a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it 8 ‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id. (citing 9 Twombly, 550 U.S. at 557). 10 11 12 DISCUSSION I. FORMAT OF PETITION “A party to a valid arbitration agreement may petition any United States district court for 13 an order directing that such arbitration proceed in the manner provided for in such agreement.” 14 Lansmont Corp. v. SPX Corp., 2011 U.S. Dist. LEXIS 65611 *16 (N.D. Cal. Jun. 20, 2011) 15 (internal marks omitted) (citing Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 16 1012 (9th Cir. 2004) (quoting 9 U.S.C. § 4)). Ameranth asserts Profitstreams’s petition is 17 improperly formatted as a motion, and fails to comply with the pleading requirements of Federal 18 Rules of Civil Procedure 8 and 10. [Doc. No. 6, p.5.] Ameranth argues the deficient pleading 19 makes it impossible for Ameranth to formulate a meaningful response to the petition, in part, 20 because it lacks numbered paragraphs and fails to identify specific causes of action and the 21 corresponding relief sought. The Court disagrees. 22 Section 6 of the Federal Arbitration Act (“FAA”) provides that, “[a]ny application to the 23 court [under the FAA] shall be made and heard in the manner provided by law for the making and 24 hearing of motions, except as otherwise expressly provided herein.” 9 U.S.C. § 6 (emphasis 25 added). In addition, Federal Rule of Civil Procedure 7(b)(1) requires a request for a court order to 26 be made by motion. Because Profitstreams initiated this action to request the Court to order the 27 parties to arbitration, the petition reasonably may proceed as a motion, and is subject to the 28 -4- 11cv766 1 Federal Rules governing motion practice, not pleadings. See, e.g., Patriot Mfg., Inc. v. Dixon, 399 2 F. Supp. 2d 1298, 1299 n.1 (S.D. Ala. 2005). 3 II. 4 ALLEGATIONS IN PETITION Ameranth further contends Profitstreams’s allegations are insufficient because 5 Profitstreams does not assert it complied with the conditions precedent to invoking the arbitration 6 provisions, nor does Profitstreams specify the exact claims it desires to arbitrate and specify why 7 those claims are arbitrable. Again, the Court disagrees. 8 9 Profitstreams’s petition states with particularity the relief sought and identifies grounds for that relief. Specifically, Profitstreams asserts the parties entered an Agreement on August 27, 10 2008, and that a dispute has arisen regarding the scope of the license in that Agreement. [Doc. No. 11 1, p.1.] Profitstreams alleges, it “believes that the license in the Agreement covers all of the 12 claims” of the patents at issue, whereas Ameranth “contends that the license granted in the 13 Agreement is limited to the subset of claims practiced by the Software.” [Id.] Profitstreams seeks 14 “a declaratory judgment regarding the scope of the license granted under the Agreement.” [Id. at 15 p.3.] Or in the alternative, to rescind the Agreement for a lack of meeting of the minds. [Id.] 16 Profitstreams asserts the Agreement requires that the parties resolve this dispute through 17 arbitration, but Ameranth refuses to agree on an arbitration service, thereby preventing 18 Profitstreams from initiating arbitration proceedings. [Id.] 19 While the Court does not now decide whether Profitstreams’s claims are subject to 20 arbitration,3 the Court concludes the petition is sufficient to survive Ameranth’s motion for a more 21 definite statement and motion to dismiss. The petition contains plausible allegations, sufficient for 22 Ameranth to compose a meaningful response to Profitstreams’s request that the Court order the 23 parties to arbitration. 24 25 /// 26 27 28 3 For this reason, the Court DENIES without prejudice Ameranth’s request for the Court to take judicial notice of an action pending in Colorado. [Doc. No. 20.] -5- 11cv766 1 2 CONCLUSION For the reasons set forth above, the Court DENIES Ameranth’s motion for a more definite 3 statement, or, in the alternative, to dismiss the petition for failure to state a claim upon which relief 4 can be granted. IT IS FURTHER ORDERED that Ameranth shall file its opposition to the 5 petition on or before September 6, 2011 and Profitstreams shall file its reply, if any, on or before 6 September 19, 2011. The hearing on Profitstreams’s petition to compel arbitration is hereby set 7 for September 26, 2011 at 2:30 p.m. in Courtroom 5. 8 9 10 11 IT IS SO ORDERED. DATED: August 17, 2011 Hon. Michael M. Anello United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- 11cv766
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
