EFT Holdings, Inc. v. CTX Virtual Technologies, Inc., 2:15-cv-01597

Plaintiff EFT Holdings (formerly EFT Biotech) sued BBR and Peter Lau; BBR moved to compel arbitration and stay litigation.
Defendant relies on an arbitration clause in Plaintiff’s RBC CM clearing-broker Customer Agreement; RBC CM is not a party here and the Agreement names “ME, MY INTRODUCING BROKER, AND RBC CM.”
The Agreement’s arbitration clause provides disputes “between me, my introducing broker, and RBC CM” and separately covers disputes “between me and RBC CM.”
The Court asked the parties to address the significance of the word “AND” under Minnesota law (the contract’s governing law); both parties briefed the issue under Minnesota law.
Plaintiff argued the clause is unambiguous and does not cover disputes solely between Plaintiff and BBR; Defendants urged the court to read “and” as if it meant “or” to reach BBR.
The Court concluded the plain conjunctive meaning of “and” controls and denied the motion to compel arbitration as to disputes solely between EFT and BBR.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether an arbitration agreement covers disputes solely between EFT and BBR	The clause is unambiguous and requires BBR and RBC CM both be parties for arbitration; no agreement exists between EFT and BBR alone	The clause should be read to reach EFT–BBR disputes (treating “and” as if it meant “or” or otherwise construing to include BBR)	Denied — no arbitration agreement applies to disputes solely between EFT and BBR
Proper interpretation of the conjunctive “and” in the arbitration clause under Minnesota law	“And” has its plain conjunctive meaning; courts must avoid readings that render other provisions superfluous	“And” may be read as “or” to effectuate parties’ intent and allow RBC’s drafter to cover introducing-broker disputes	Court adopts plain-meaning rule: cannot substitute “or” for “and” absent clear intent; interpret clause to preserve meaning of the separate “between me and RBC CM” provision

Ashbey v. Archstone Prop. Mgmt., 785 F.3d 1320 (9th Cir. 2015) (court first determines whether an agreement to arbitrate exists)
Lowden v. T-Mobile USA, Inc., 512 F.3d 1213 (9th Cir. 2008) (state-law contract-formation principles govern arbitrability)
Carlson v. Allstate Ins. Co., 749 N.W.2d 41 (Minn. 2008) (clear contract language is interpreted according to plain, ordinary meaning)
Indep. Sch. Dist. No. 877 v. Loberg Plumbing & Heating Co., 123 N.W.2d 793 (Minn. 1963) (cardinal rule: avoid interpretations that render provisions meaningless)
Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539 (Minn. 1995) (contracts should be interpreted to give effect to all provisions)
Mutual Serv. Cas. Ins. Co. v. Wilson Twp., 603 N.W.2d 151 (Minn. Ct. App. 1999) (words construed in plain and fair sense rather than technical sense)
First & Am. Nat’l Bank of Duluth v. Higgins, 293 N.W. 585 (Minn. 1940) (the word “and” may be read as “or” only where clear expression of intent exists)