Katsoris v. WME IMG, LLC, 237 F. Supp. 3d 92

Background

Nick Katsoris authored children’s "Loukoumi" books and founded the Loukoumi Make a Difference Foundation to market a TV project teaching kids to pursue dreams; IMG Productions produced a 2014 TV Special under a work‑for‑hire agreement with the Foundation.
The work‑for‑hire agreement (May 28, 2014) assigned ownership to the Foundation and included an arbitration clause incorporating the AAA Commercial Arbitration Rules with a mediation prerequisite.
Plaintiffs allege Viacom/Nickelodeon later developed and aired a similar series (All In with Cam Newton) and asserted copyright and related claims against IMG, WME IMG, IMG Productions, LLC, and Viacom.
Plaintiffs sought arbitration under the work‑for‑hire agreement against IMG; IMG resisted and moved to dismiss. Plaintiffs also filed suit and repeatedly sought mediation/arbitration with AAA.
The district court held (1) Plaintiffs did not waive the right to arbitrate, (2) arbitrability of claims as to IMG/WME IMG is for the arbitrator (due to AAA rules incorporation and sufficient relationship), (3) Viacom cannot be compelled to arbitrate under the IMG/Foundation agreement, and (4) the entire action was stayed pending arbitration because of substantial factual overlap.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiffs waived right to arbitrate	Plaintiffs promptly sought mediation/arbitration and asked for stay; asserted arbitration in complaints and letters	Defendants argued Plaintiffs litigated and delayed, incurring costs and revealing positions	No waiver: timing, minimal litigation/discovery, mediation attempts, and limited prejudice favor arbitration
Who decides arbitrability for claims involving IMG/WME IMG	Plaintiffs: incorporate AAA rules delegates arbitrability to arbitrator; non‑signatories linked to signatory	IMG: WME IMG not a party; Katsoris not a signatory so arbitrability should be judicial	Arbitrability delegated to arbitrator for IMG/WME IMG—incorporation of AAA rules is clear and sufficient relationship exists to delegate
Whether Viacom can be compelled to arbitrate under the work‑for‑hire agreement	Plaintiffs: Viacom benefited from the TV Special and should be estopped from avoiding arbitration	Viacom: not a signatory, no role in formation/performance, benefits are indirect	Viacom cannot be compelled: no direct benefit from that agreement and ordinary estoppel/agency theories fail
Whether to stay litigation pending arbitration	Plaintiffs: stay is required or appropriate because many issues overlap	Defendants: oppose stay for non‑arbitrable claims	Court stayed entire action pending arbitration because of significant factual overlap and potential preclusive effect of arbitration outcomes

Key Cases Cited

Bird v. Shearson Lehman/Am. Express, Inc., 926 F.2d 116 (2d Cir. 1991) (discusses federal policy favoring arbitration)
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Supreme Court) (arbitration agreements are valid and enforceable under FAA)
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (Supreme Court) (procedural questions of arbitrability are for arbitrators unless parties clearly and unmistakably provide otherwise)
Contec Corp. v. Remote Sol. Co., 398 F.3d 205 (2d Cir. 2005) (incorporation of AAA rules delegates arbitrability to arbitrator; successor/non‑signatory issues)
Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016) (standard for motions to compel arbitration akin to summary judgment)
Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 20 (2d Cir. 1995) (waiver of arbitration not lightly inferred)
PPG Indus., Inc. v. Webster Auto Parts, Inc., 128 F.3d 103 (2d Cir. 1997) (factors for waiver analysis; extensive pretrial litigation can show waiver)
Louisiana Stadium & Exposition Dist. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 626 F.3d 156 (2d Cir. 2010) (waiver found after protracted delay and motion practice)
Thomson‑CSF, S.A. v. Am. Arbitration Ass’n, 64 F.3d 773 (2d Cir. 1995) (limits on estoppel for non‑signatories; direct vs indirect benefit)
Deloitte Noraudit A/S v. Deloitte Haskins & Sells, U.S., 9 F.3d 1060 (2d Cir. 1993) (non‑signatory estopped where it knowingly accepted direct benefits tied to agreement)
Katz v. Cellco P’ship, 794 F.3d 341 (2d Cir. 2015) (stay of proceedings when all claims referred to arbitration and stay requested)