Kroma Makeup EU, LLC v. Boldface Licensing + Branding, Inc.
845 F.3d 1351
| 11th Cir. | 2017Background
- Lee Tillett, Inc. developed and registered the Kroma trademark and contracted to grant exclusive distribution/use rights in the UK/EU to Jay Willey Ltd., then to Kroma Makeup, EU (Kroma EU).
- The Kroma EU–Tillett agreement contained an arbitration clause limiting arbitration to “disputes arising between them” concerning validity, interpretation, termination, or performance of the contract.
- The Kardashians licensed a “Khroma” line through Boldface; Tillett sued Boldface and added the Kardashians as counterclaim defendants; that suit was settled and Tillett withheld settlement proceeds from Kroma EU.
- Kroma EU sued Boldface, the Kardashians (vicarious infringement), and Tillett; both Tillett and the Kardashians moved to compel arbitration.
- The district court compelled arbitration as to Tillett but denied the Kardashians’ motion; the Kardashians appealed the denial under the FAA.
- The central legal question: can non‑signatory Kardashians invoke Florida’s equitable‑estoppel doctrine to compel arbitration when the arbitration clause is expressly limited to disputes “between the parties” (i.e., Kroma EU and Tillett)?
Issues
| Issue | Plaintiff's Argument (Kroma EU) | Defendant's Argument (Kardashians) | Held |
|---|---|---|---|
| Whether a non‑signatory may compel arbitration under Florida equitable estoppel when the arbitration clause is limited to disputes “between the parties” | Kroma EU: clause covers only signatories; non‑signatories cannot expand clause or force arbitration of disputes not covered | Kardashians: equitable estoppel’s fairness principle allows a non‑signatory to enforce arbitration even if clause’s literal scope would not include them | Held: Florida equitable estoppel permits non‑signatory use of arbitration only when the claims fall within the clause’s scope; clause limited to “between the parties” does not cover Kardashian claims; motion denied and affirmed. |
| Whether federal precedent (World Rentals; MS Dealer) controls the equitable‑estoppel analysis | Kroma EU: state law controls; federal cases misapplied prior to Arthur Andersen | Kardashians: rely on federal equitable‑estoppel decisions to support broader access | Held: State (Florida) law governs whether a non‑signatory may invoke equitable estoppel; federal cases are not controlling on this point. |
Key Cases Cited
- Lawson v. Life of the S. Ins. Co., 648 F.3d 1166 (11th Cir.) (applies federal arbitrability standards while recognizing state law governs non‑signatory arbitration questions)
- Klay v. All Defendants, 389 F.3d 1191 (11th Cir.) (arbitration is matter of contract; parties can be compelled only where they agreed)
- Allscripts Healthcare Sols., Inc. v. Pain Clinic of Nw. Fla., 158 So. 3d 644 (Fla. 3d DCA) (describing Florida equitable‑estoppel test requiring reliance on the agreement)
- Koechli v. BIP Int’l, Inc., 870 So. 2d 940 (Fla. 1st DCA) (two‑step analysis: plaintiff’s reliance on contract and whether clause scope covers the dispute)
- Ocwen Fin. Corp. v. Holman, 769 So. 2d 481 (Fla. 4th DCA) (non‑signatories who are officers/agents and received contract rights/obligations can be treated as parties for clause coverage)
- Turner Constr. Co. v. Advanced Roofing, Inc., 904 So. 2d 466 (Fla. 3d DCA) (noting agent/officer status is critical to treating non‑signatory as a party under the clause)
- Giller v. Cafeteria of S. Beach Ltd., LLP, 967 So. 2d 240 (Fla. 3d DCA) (equitable estoppel prevents a party from taking advantage of contract provisions while avoiding others)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S.) (state law, not federal, controls the substantive question of whether arbitration applies to non‑signatories)