Mylocker.com, LLC v. S&S Activewear, LLC
2:25-cv-10160
E.D. Mich.Aug 12, 2025Background
- MyLocker.com, LLC filed a breach of contract lawsuit against Broder Bros. Co. (d/b/a alphabroder) and S&S Activewear, LLC, following a Term Sheet containing an arbitration clause.
- Alphabroder and MyLocker are already involved in ongoing arbitration regarding the dispute covered by the Term Sheet.
- MyLocker agrees that arbitration is appropriate and requested the litigation be stayed; alphabroder also sought to compel arbitration and stay litigation.
- S&S Activewear was not a signatory to the Term Sheet; it acquired alphabroder through a merger and is now the sole member and manager of Broder Bros., LLC.
- MyLocker argues S&S is a successor by merger and bound to arbitrate, while S&S claims it cannot be compelled to arbitrate as a non-signatory.
- The court addressed the motions to compel arbitration, stay litigation, and dismiss, ordering limited discovery on successor liability and arbitrability as to S&S.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Compel arbitration between MyLocker and alphabroder | Arbitration provision applies, both parties agree | Agrees arbitration provision applies | Granted; litigation stayed as to alphabroder and MyLocker must arbitrate |
| Compel arbitration against S&S (a non-signatory) | S&S is a successor by merger, thus bound to arbitrate | S&S did not sign/become party to the Term Sheet, not bound | Denied without prejudice pending discovery on successor status |
| Dismiss claims against S&S | Seeks stay and order for all parties to arbitrate | Move to dismiss as S&S is not bound by arbitration clause | Denied without prejudice (as arbitration and successor status needs factual development) |
| Applicability of successor liability exceptions | S&S is liable due to de facto merger/mere continuation | No continuity qualifying as de facto merger, entities remain separate | Limited discovery ordered on whether S&S is a de facto successor under relevant state law |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility pleading standard for Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Rule 12(b)(6) requires more than conclusory allegations)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (arbitrability under state contract law)
- Howard Johnson Co. v. Detroit Loc. Joint Exec. Bd., Hotel & Rest. Emp. & Bartenders Int'l Union, AFL-CIO, 417 U.S. 249 (non-signatory may be bound to arbitration in some cases)
- Javitch v. First Union Sec., Inc., 315 F.3d 619 (nonsignatory bound to arbitration under certain legal principles)