Jane Roes v. Sfbsc Management, LLC
656 F. App'x 828
| 9th Cir. | 2016Background
- Plaintiffs sued several nightclubs; SFBSC Management, LLC (BSC) moved to compel arbitration as a non‑signatory under arbitration clauses in performer contracts.
- BSC denied the complaint’s allegations that it acted as agent or alter ego of the nightclubs and submitted declarations (including from former BSC president Gary Marlin) describing an arm’s‑length consulting/administrative relationship.
- Plaintiffs relied on complaint allegations that BSC managed or controlled nightclub operations and could enforce the clubs’ arbitration agreements.
- The district court denied BSC’s motion to compel arbitration; BSC appealed the denial.
- The Ninth Circuit considered whether BSC, as a non‑signatory, had standing to enforce the arbitration clauses via agency or alter‑ego doctrines in light of the conflicting record evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BSC has standing as a non‑signatory to compel arbitration | Complaint alleges BSC acted as agent/manager of nightclubs and can enforce arbitration clauses | BSC denies those allegations and says it provided only consulting/administrative services; thus it can compel arbitration | BSC failed to show standing; denial of motion to compel affirmed |
| Whether allegations in the complaint are judicial admissions binding BSC | Plaintiffs treat complaint allegations as conclusive proof of agency/alter ego | BSC contends its denials and contradictory declarations prevent treating complaint as judicial admission | Court: conflicting evidence prevents treating complaint allegations as binding judicial admissions |
| Whether an agency relationship existed between BSC and nightclubs | Agency alleged in complaint (enabling enforcement of arbitration clauses) | BSC produced declarations showing independent ownership and arm’s‑length services; no produced written agreements showing control | Court: record lacks evidence of principal’s control over BSC; agency not established |
| Whether BSC is alter ego/owner of nightclubs permitting arbitration enforcement | Plaintiffs argue alter ego or ownership gives standing | BSC expressly denied ownership and presented evidence of separate business structures | Court: ownership is a prerequisite for alter ego; BSC’s evidence negates ownership; alter ego not shown |
Key Cases Cited
- Britton v. Co-op Banking Grp., 916 F.2d 1405 (9th Cir.) (standing is threshold issue for motions to compel arbitration)
- Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320 (9th Cir.) (FAA burden: valid written arbitration agreement and scope)
- Murphy v. DirecTV, Inc., 724 F.3d 1218 (9th Cir.) (non‑signatory cannot compel arbitration absent evidence the signatory controlled behavior relevant to dispute)
- Batzel v. Smith, 333 F.3d 1018 (9th Cir.) (control is essential to agency finding)
- S.E.C. v. Hickey, 322 F.3d 1123 (9th Cir.) (ownership is prerequisite for alter ego liability)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S. Sup. Ct.) (non‑signatory standing draws on state contract principles; FAA governs arbitration procedure)
- Fid. Fed. Bank, FSB v. Durga Ma Corp., 386 F.3d 1306 (9th Cir.) (federal procedural law governs effect of judicial admissions in FAA cases)
- Swift v. Zynga Game Network, Inc., 805 F. Supp. 2d 904 (N.D. Cal.) (declining to treat agency allegations as binding where defendants deny and evidence indicates independent contractors)