Fantastic Sams Franchise Corp. v. FSRO Ass'n, Ltd., No. 11-2300 (1st Cir. 2012)Annotate this Case
In 2011, FSRO filed a Demand for Arbitration against Fantastic Sam's Franchise Corporation, on behalf of its members, who are franchisees, holding individual license agreements with Fantastic Sams. FSRO alleged that the Corporation had breached those license agreements. The Corporation filed a petition pursuant to the Federal Arbitration Act, 9 U.S.C. 4, to stay FSRO's arbitration and to compel FSRO members to arbitrate their claims individually. The district court allowed the petition as to license agreements that specifically prohibit class-arbitration. The decision in favor of the Corporation was not appealed. The court denied relief as to other agreements, which state: “Any controversy or claim arising out of or relating in any way to this Agreement or with regard to its formation, interpretation or breach shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association." The First Circuit affirmed. Whether the language permits group arbitration, as requested by FSRO, is a question for the arbitrators.