Isagenix International LLC v. Hodgin
2:25-cv-01587
| D. Ariz. | Jul 14, 2025Background
- Isagenix, a network marketing company, entered into agreements with associates that included an arbitration clause.
- Noah Hodgin, a California-based associate, sued Isagenix in California, claiming he and others were misclassified as independent contractors and were entitled to employee wages and related relief.
- Isagenix removed the case to federal court in California, then filed a separate action in Arizona seeking to compel arbitration pursuant to the agreement's clause requiring arbitration in Arizona.
- Hodgin moved to stay the Arizona action, arguing all arbitration issues should be handled in the California action, which is now stayed pending a ruling from the Arizona court.
- The Arizona District Court addressed whether it should stay its proceeding under the federal first-to-file rule and who should resolve the scope and venue of arbitration.
Issues
| Issue | Hodgin's Argument | Isagenix's Argument | Held |
|---|---|---|---|
| Should the Arizona proceedings be stayed under the first-to-file rule? | Stay required since the California case was first filed and involves the same issues/parties. | First-to-file rule is discretionary; Arizona is proper for arbitration-related issues. | Denied; proceeding in Arizona serves sound judicial administration. |
| Which law governs arbitration procedures? | Arbitration clause selects Arizona law; AZ statutes require filing in CA court. | Arbitration agreement doesn't select AZ law for arbitration procedures, only for non-arbitrable disputes. | Arizona law doesn't govern arbitration procedures; FAA applies. |
| Who decides arbitrability and where is arbitration to occur? | The California court should decide whether arbitration must occur and where. | Agreement delegates "gateway issues" (arbitrability and venue) to an arbitrator per AAA rules in Arizona. | Court finds the agreement delegates arbitrability to the arbitrator and that Arizona is the presumptive venue. |
| Can a court outside Arizona compel arbitration to occur in Arizona? | Not directly addressed. | Only the Arizona federal court can compel arbitration in Arizona. | Only this court can order Arizona arbitration; supports not staying the case. |
Key Cases Cited
- Pacesetter Sys., Inc. v. Medtronic, Inc., 678 F.2d 93 (9th Cir. 1982) (established the discretionary nature of the first-to-file rule)
- Alltrade, Inc. v. Uniweld Prods., Inc., 946 F.2d 622 (9th Cir. 1991) (emphasized the flexibility of the first-to-file doctrine)
- Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) (reaffirmed the FAA mandate favoring arbitration)
- Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468 (1989) (congressionally mandated enforcement of arbitration agreements per their terms)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (FAA's primary purpose is to enforce private arbitration agreements)
- Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir. 2015) (adoption of the AAA rules is clear evidence of intent to delegate arbitrability to the arbitrator)
- Textile Unlimited, Inc. v. A..BMH & Co., 240 F.3d 781 (9th Cir. 2001) (district courts can only compel arbitration within their jurisdiction)