Gold Mine Jewelry Shoppes, Inc. v. Lise Aagaard Copenhagen, A/S
240 F. Supp. 3d 391
E.D.N.C.2017Background
- Gold Mine Jewelry Shoppes, Inc. (Goldmine), a North Carolina retail jeweler, entered a February 21, 2011 Retailer Agreement with Trollbeads United States, Inc. (TBUS) to sell Trollbeads products; the Agreement contains a New Jersey choice-of-law clause and an arbitration clause requiring AAA arbitration in Princeton, NJ.
- Goldmine alleges the relationship functioned as a franchise/distributorship and brought federal antitrust and state-law claims after TBUS informed Goldmine of termination in August 2014; suit was filed March 29, 2016.
- Defendants moved to dismiss and compel arbitration under FAA §4 and Fed. R. Civ. P. 12(b)(3); they also sought costs related to the motion.
- Goldmine argued the arbitration clause is unenforceable under New Jersey law (Atalese) because it lacks explicit waiver-of-jury/court-language and also contended the Agreement is an adhesive, non‑negotiated contract rendering the clause unconscionable.
- Defendants argued Atalese is limited to consumer/employment contexts, that this is a commercial arm’s‑length transaction between sophisticated parties, and that the claims fall squarely within the arbitration provision’s scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause is invalid under New Jersey’s Atalese (waiver disclosure) requirement | Atalese requires explicit waiver language for arbitration clauses; clause here lacks such language so it’s void | Atalese applies to consumer/employment contracts; this is a commercial, negotiated dealer/distributor agreement between sophisticated parties, so Atalese does not apply | Court: Atalese’s strict consumer standard does not apply; this is not a consumer transaction and the clause is enforceable |
| Whether the Agreement is an unenforceable adhesion contract / unconscionable | Agreement was standardized, drafted by defendant, not negotiated, and thus adhesive and unenforceable under NJ law (Kubis/Martindale concerns) | FAA preempts state rules that would categorically invalidate arbitration clauses; general contract defenses apply but Goldmine has not shown public‑interest or other factors justify nonenforcement | Court: Even assuming adhesion, under NJ factors (subject matter, bargaining positions, economic compulsion, public interest) the clause is not unconscionable and is enforceable |
| Whether Goldmine’s claims fall within the arbitration clause’s scope | The business‑relationship claims are franchise/distribution claims but (implicitly) some claims may be non‑contractual or statutory and thus outside arbitration | Clause covers “any dispute arising out of, or in connection with, the Agreement,” so all claims tied to the Retailer Agreement must be arbitrated | Court: Goldmine’s claims arise out of the Retailer Agreement and fall within the broad arbitration provision; case must be submitted to arbitration |
| Whether defendants are entitled to costs for moving to compel arbitration | Goldmine’s opposition was colorable and not frivolous; costs request unnecessary | Defendants sought costs and disbursements for resisting arbitration | Court: Denied costs; Goldmine’s opposition was not unjustified or frivolous |
Key Cases Cited
- Aggarao v. MOL Ship Mgmt. Co., Ltd., 675 F.3d 355 (4th Cir.) (arbitration clause treated as forum‑selection clause; venue challenge under Rule 12(b)(3))
- Scherk v. Alberto‑Culver Co., 417 U.S. 506 (U.S. 1974) (arbitration clause as specialized forum‑selection clause)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S. 2009) (FAA enforces arbitration agreements unless revocable by general contract defenses)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (federal policy favoring arbitration)
- Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir.) (district court must compel arbitration when valid agreement and dispute covered)
- United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (U.S. 1960) (arbitration is contractual; parties cannot be compelled to arbitrate disputes they did not agree to submit)
- Atalese v. United States Legal Servs. Group, L.P., 99 A.3d 306 (N.J. 2014) (consumer arbitration clauses require clear waiver‑of‑rights language to satisfy mutual assent in consumer context)
- Kubis & Perszyk Assocs., Inc. v. Sun Microsystems, Inc., 680 A.2d 618 (N.J. 1996) (forum‑selection clauses in franchise settings examined for potential invalidation under disparity of bargaining power)
- Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681 (U.S. 1996) (generally applicable contract defenses like fraud, duress, unconscionability may invalidate arbitration clauses but state rules cannot single them out for disfavored treatment)
- J.J. Ryan & Sons v. Rhone Poulenc Textile, S.A., 863 F.2d 315 (4th Cir.) (non‑signatory parent may compel arbitration when claims against parent/subsidiary are inseparable)