Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Glazer v. Alliance Beverage Distributing Co. LLC

Court of Chancery of Delaware

March 2, 2017

Bennett J. Glazer, et al.
v.
Alliance Beverage Distributing Co., LLC,

          Patricia L. Enerio, Esquire Aaron M. Nelson, Esquire Proctor Heyman Enerio LLP

          Arthur L. Dent, Esquire Jaclyn C. Levy, Esquire Potter Anderson & Corroon LLP

         Dear Counsel:

         This letter opinion addresses Defendant's motion to dismiss or to stay this case in favor of arbitration. I have reviewed the parties' submissions and the applicable law and do not require oral argument on this motion. For the reasons stated herein, Defendant's motion to stay is granted.

         I. BACKGROUND

         Plaintiffs' complaint seeks advancement of legal fees and expenses from Alliance Beverage Distributing Co., LLC, a Delaware limited liability company, ("Alliance") pursuant to Section 18-108 of the Delaware Limited Liability Company Act (the "LLC Act")[1] and Section 5.5 of the Limited Liability Company Agreement of Alliance (the "Alliance LLC Agreement"). Arizona Beverage Distributing Co., LLC, a subsidiary of Breakthru Beverage Group ("Breakthru"), and Cactus Beverage Distributing Company ("Cactus"), a subsidiary of Glazer's, Inc. ("Glazer's"), are the two members of Alliance. Glazer's allegedly entered a nationwide distribution agreement with Bacardi, Inc. ("Bacardi"), which deprived Alliance of the ability to distribute Bacardi brands. Glazer's actions form the basis of an ongoing dispute between Breakthru and Glazer's. In this case, Plaintiffs, certain Alliance managers and Cactus, seek advancement of their legal fees and expenses incurred in connection with that dispute.

         The Alliance LLC Agreement contains a dispute resolution provision, which requires that:

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in the State of Arizona administered by the American Arbitration Association under its Commercial Arbitration Rules and the Supplemental Procedures for Large, Complex Disputes, and judgments on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.[2]

         In light of the parties' agreement to submit disputes to arbitration, Defendant moves to dismiss this case under Court of Chancery Rule 12(b)(1) for lack of subject matter jurisdiction or alternatively to stay this case pending resolution of the dispute through arbitration.

         II. ANALYSIS

         "Delaware courts lack subject matter jurisdiction to resolve disputes that litigants have contractually agreed to arbitrate."[3] Delaware public policy favors arbitration, and "in recognition that 'contractual arbitration clauses are generally interpreted broadly in furtherance of that policy[, ]' a Rule 12(b)(1) motion will be granted if the parties contracted to arbitrate the claims asserted . . . ."[4] "This Court also possesses the inherent power to manage its own docket and may, on the basis of comity, efficiency, or common sense, issue a stay pending the resolution of an arbitration . . . ."[5]

         As a threshold matter, I must determine whether this Court has jurisdiction to decide the question of substantive arbitrability-that is, who may decide whether the present dispute is subject to arbitration. The Delaware Supreme Court held in James & Jackson, LLC v. Willie Gary, LLC that the general rule in Delaware is that "courts should decide questions of substantive arbitrability."[6] That rule may be altered by contract when there is "'clear and unmistakable' evidence that the parties agreed to arbitrate."[7] Willie Gary holds that such clear evidence of the parties' intent to arbitrate exists when the contract contains "(1) an arbitration clause that generally provides for arbitration of all disputes; and (2) a reference to a set of arbitration rules that empower arbitrators to decide arbitrability . . . ."[8] This Court subsequently held in McLaughlin v. McCann that to realize the efficiency goals of the Willie Gary rule, "absent a clear showing that the party desiring arbitration has essentially no non-frivolous argument about substantive arbitrability to make before the arbitrator, the court should require the signatory to address its arguments against arbitrability to the arbitrator."[9]

         Under the Willie Gary test, the Alliance LLC Agreement presents "clear and unmistakable" evidence that the parties intended to arbitrate the question of substantive arbitrability in this case. The Alliance LLC Agreement provides that "[a]ny controversy or claim arising out of or relating to this Agreement, or the breach thereof" shall be submitted to arbitration.[10] The parties point to no exceptions in the Alliance LLC Agreement to that arbitration clause. Such a broad agreement to arbitrate satisfies the first prong of the Willie Gary test.

         The arbitration clause also satisfies the second Willie Gary prong. It requires that arbitration proceedings arising under or related to the Alliance LLC Agreement be "administered by the American Arbitration Association under its Commercial Arbitration Rules and the Supplemental Procedures for Large, Complex Disputes."[11]AAA Commercial Arbitration Rule 7 provides that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction."[12] Thus, the Alliance LLC Agreement ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.