FLOYD, Circuit Judge.
This appeal arises from a franchise dispute. Dickey's, a national franchisor of quick-service barbeque restaurants, claims several of its franchisees in Maryland breached their franchise agreements by running their restaurants poorly. The franchisees in turn claim that Dickey's misrepresented start-up and other costs in violation of Maryland franchise law, thus never giving them a chance to succeed. At this stage in the proceeding, however, we must decide only whether the parties' claims should be arbitrated, as Dickey's argues, or heard in federal court in Maryland, as the franchisees contend.
This issue is governed by the parties' franchise agreements. On one hand, the agreements require arbitration of all claims "arising out of or relating to" the agreements. J.A. 553. On the other hand, the agreements state that the agreements "shall not require" the franchisees to waive their "right to file a lawsuit alleging a cause of action arising under Maryland Franchise Law in any court of competent
The district court held that these provisions create an ambiguity that only a jury can resolve. In doing so, the district court appeared to conclude that the agreements set up an "either/or" scenario: either all the parties' claims must go forward in arbitration, or they must all proceed in federal court. For the reasons set forth below, we will reverse. As a matter of law, the clear and unambiguous language of these provisions requires that the common law claims asserted by Dickey's must proceed in arbitration, while the franchisees' Maryland Franchise Law claims must proceed in the Maryland district court.
We recognize that requiring the parties to litigate in two different forums may be inefficient, and could lead to conflicting results. But this outcome is mandated by the Federal Arbitration Act, which requires piecemeal litigation where, as here, the agreements call for arbitration of some claims, but not others. Accordingly, we reverse with instructions to compel arbitration of the common law claims only. We leave it to the district court's discretion whether to stay the franchisees' Maryland Franchise Law claims pending conclusion of the arbitration.
Dickey's Barbeque Restaurants, Inc. (Dickey's), is a Texas-based franchisor of quick-service restaurants specializing in barbequed meats, with franchises operating throughout the United States.
The Franchisees' respective relationships with Dickey's soured shortly after they opened their restaurants.
According to Dickey's, the Chorleys violated their franchise agreement by, among other things, failing to pass certain food safety inspections and receiving numerous customer complaints.
Despite initially exploring whether the dispute could be mediated, Dickey's ultimately brought arbitration proceedings against the Chorleys in Texas on May 1, 2014. In the arbitration demand, Dickey's asserted three common law claims. Count I sought a declaratory order finding that the Chorleys breached their franchise
The Chorleys then brought suit in federal court in Maryland, seeking to enjoin the arbitration and asking the court to declare the arbitration provisions unenforceable. The Chorleys also brought affirmative claims for relief under the Maryland Franchise Law against Dickey's, its owner, and its director of business development (collectively "Dickey's" or the "Franchisor"). Dickey's in turn opposed the motion for injunctive relief, and also filed a cross-motion to compel arbitration of all the Chorleys' claims. In the alternative, Dickey's sought to stay those claims pending arbitration.
Trouard and Chelton had a similar history with Dickey's. Dickey's contends that Trouard and Chelton mismanaged their restaurant, while Trouard and Chelton assert that Dickey's violated the Maryland Franchise Law by misrepresenting startup costs and estimated potential sales and profits. The parties initially discussed mediating their dispute, but Dickey's ultimately filed arbitration in Texas, alleging breach-of-contract and fraud claims.
The district court consolidated the Franchisees' lawsuits for purposes of deciding these preliminary motions. The arbitrations are currently being held in abeyance pending a final decision on the motions for preliminary injunctions and the cross-motions to compel arbitration.
Both below and here on appeal, the parties' arguments hinge on the interplay between two provisions in the Franchisees' virtually identical franchise agreements: (i) the dispute resolution provisions in Article 27 and (ii) the Maryland-specific provisions in Article 29.
Article 27, which contains the "Arbitration Clause," requires the parties to first mediate their claims before proceeding to arbitration. If mediation fails to resolve the disputes within 90 days after the mediator has been appointed, either party is entitled to seek arbitration at the office of the American Arbitration Association located nearest to the Franchisor's corporate headquarters in Plano, Texas. In the Arbitration Clause, the parties also agreed to arbitrate "all disputes, controversies, claims, causes of action and/or alleged breaches or failures to perform arising out of or relating to this Agreement (and attachments) or the relationship created by this Agreement." J.A. 553.
Notwithstanding this Arbitration Clause, the agreements also provide that the "STATE SPECIFIC PROVISIONS" in Article 29 "CONTROL." J.A. 555. And Article 29.1, the "Inconsistent Provisions Clause," provides that Maryland law "shall govern and control any contrary or inconsistent provisions" of the agreement, and that any such inconsistent provisions are "modified and amended" so that they comply
The Maryland Clause is similar (but not identical) to Section 02.02.08.16(L)(3) of the Code of Maryland Regulations (the "Regulation"). Under the Regulation, a franchisor violates the Maryland Franchise Law if it requires a franchisee to "[w]aive the franchisee's right to file a lawsuit alleging a cause of action arising under the Maryland Franchise Law in any court of competent jurisdiction in this State." Md. Code Regs. 02.02.08.16(L)(3) (2015).
During the district court proceedings, the parties presented opposing interpretations of these clauses. The Franchisees claimed that the Maryland Clause fundamentally conflicts with the Arbitration Clause, thus rendering the Arbitration Clause void such that all of the parties' claims must proceed in the district court. Dickey's took a different view, arguing that the Maryland Clause is consistent with the Arbitration Clause because the Maryland Clause merely preserves the Franchisees' right to bring a claim under the Maryland Franchise Law in either arbitration or in court. Alternatively, assuming the Franchisees' interpretation was correct, Dickey's argued that the Federal Arbitration Act, (FAA), 9 U.S.C. § 1 et seq., would preempt the Maryland Clause as an invalid prohibition on arbitration.
The district court concluded that both parties' readings of the Arbitration and Maryland Clauses were plausible, thus rendering the agreements ambiguous. The district court noted that under the Franchisor's interpretation, the "Arbitration Clause could function in harmony with the Maryland Clause." J.A. 32. The court also recognized that under the Franchisees' "view, the Maryland Clause . . . control[s], and [its] language refers to litigation only, not arbitration." Id. Faced with these conflicting interpretations, the court reasoned that a jury must determine exactly which claims, if any, the parties agreed to arbitrate.
Dickey's then timely appealed the denial of its motions to compel, and the Franchisees cross-appealed from the denial of
Before we can address the merits, we must determine whether we have jurisdiction over these appeals. We ordinarily review only final decisions from the district courts. Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690, 696 (4th Cir.2012). And there is no dispute that the order at issue is not final. Thus, we typically would not have jurisdiction over the parties' interlocutory appeals, absent an exception to the final order doctrine.
Section 16 of the FAA provides just such an exception. 9 U.S.C. § 16.
The Court-appointed amicus disagrees, arguing that this matter is not as straightforward as it seems. The amicus reasons that Section 16(a)(1) applies only when a district court makes a final decision as to whether any or all of the claims between the parties must proceed to arbitration. Because the district court reserved a final ruling on the motions until after a jury trial, the amicus contends the order is not immediately appealable. In essence, the amicus believes an interlocutory appeal under Section 16 is always premature if a district court orders a jury trial under Section 4 before deciding a motion to compel.
Although we appreciate the amicus's views, this interpretation is contrary to the FAA's plain language. Section 16(a)(1)(b) provides for interlocutory appeals of orders denying arbitration without stating whether those orders must be final. A separate subsection, Section 16(a)(3), provides for interlocutory review of any "final decision with respect to an arbitration." 9 U.S.C. § 16(a)(3). If Section 16(a)(1)(b) applies only to final orders, as the amicus contends, Congress would have said as much, as it did in Section 16(a)(3). See Sandvik AB v. Advent Int'l Corp., 220 F.3d 99, 102-03 (3d Cir.2000) (finding it significant "that Congress decided to use the word `final' in one part of the statute, but declined to do so in the section that declares that orders denying motions to compel arbitration are indeed appealable"). Congress did not do so, of course, because grafting a finality requirement onto Section 16(a)(1)(b) would read that section out of the statute by making it redundant with Section 16(a)(3). See id.
The amicus's interpretation would also frustrate the very purpose of Section 16. As we have previously recognized, Congress created appellate jurisdiction over non-final orders denying motions to compel arbitration "to effectuate a strong policy favoring arbitration." Rota-McLarty, 700 F.3d at 696 (quotation omitted). Refusing to hear an appeal until after a jury trial would not further this policy. That is
In short, the district court expressly "denied" the motions to compel arbitration "without prejudice." J.A. 35. As we have previously held, and we reiterate again today, that is "all that is necessary to grant us appellate jurisdiction in this case." Snowden v. CheckPoint Check Cashing, 290 F.3d 631, 636 (4th Cir.2002); see also Quilloin v. Tenet HealthSystem Phila., Inc., 673 F.3d 221, 228 (3d Cir. 2012) ("[T]here can be no doubt that we have the authority to review an appeal from the District Court's order denying a motion to compel arbitration, irrespective of the fact that the order was denied without prejudice.").
The Franchisees also contend we have jurisdiction to hear their cross-appeal under 28 U.S.C. § 1292(a)(1), which authorizes interlocutory appeals of orders "refusing . . . injunctions." We are not so sure. The Franchisees fail to address Section 16(b)(4) of the FAA, which expressly prohibits immediate review of interlocutory orders refusing to enjoin arbitration. 9 U.S.C. § 16(b)(4). Several of our sister circuits have concluded that Section 16(b)(4) trumps 28 U.S.C. § 1292(a)(1), thus precluding immediate review of such orders. See Accenture LLP v. Spreng, 647 F.3d 72, 74-75 (2d Cir.2011) (collecting cases). Section 16(b)(4) may also preclude us from exercising pendant appellate jurisdiction over the Franchisees' cross-appeal under Swint v. Chambers County Commission, 514 U.S. 35, 50-51, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995) (suggesting that appellate courts may exercise jurisdiction over non-appealable issues that are "inextricably intertwined" with a question that is the proper subject of an immediate appeal).
We decline to decide these issues, however, because resolution of the Franchisor's appeal will necessarily decide the issue presented by the Franchisees' cross-appeal: whether arbitration may proceed in Texas. Indeed, the appeal and cross-appeal present two sides of the same coin: the Franchisor's appeal asserts that all the parties' claims should be arbitrated in Texas; the Franchisees' cross-appeal seeks to enjoin the arbitrations in Texas. We need not step out on a jurisdictional limb as to the Franchisees' cross-appeal when deciding the Franchisor's appeal—which we clearly have jurisdiction over—will resolve all the issues raised by the parties. Accordingly, we dismiss the cross-appeal as moot.
Having concluded that we have jurisdiction over the Franchisor's appeal, we turn to the merits of the parties' contentions.
As background, Section 2 of the FAA, its "primary substantive provision," Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), makes agreements to arbitrate "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Sections 3 and 4 in turn "provide[] two parallel devices for enforcing an arbitration agreement: a stay of litigation in any case raising a dispute referable to arbitration, 9 U.S.C. § 3, and an affirmative order to engage in arbitration, § 4." Moses H. Cone, 460 U.S. at 22, 103 S.Ct. 927.
We will compel arbitration under Section 4 if: (i) the parties have entered into a valid agreement to arbitrate, and (ii) the dispute in question falls within the scope of the arbitration agreement. Muriithi, 712 F.3d at 179 (citation omitted). "The issue whether a dispute is arbitrable presents primarily a question of contract interpretation, requiring that we give effect to the parties' intentions as expressed in their agreement." Id. If we conclude that the parties intended to arbitrate a dispute, we must enforce that agreement according to its terms. CompuCredit Corp. v. Greenwood, ___ U.S. ___, 132 S.Ct. 665, 669, 181 L.Ed.2d 586 (2012). At the same time, it is well-settled that a "party cannot be required to submit to arbitration any dispute which he has not agreed to so submit." Levin v. Alms & Assocs., Inc., 634 F.3d 260, 266 (4th Cir. 2011) (quotation omitted).
In determining the parties' intent, we apply ordinary state law principles governing the formation of contracts. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). And under applicable Maryland Law,
The district court concluded that Section 4 of the FAA requires a jury trial
Not just any factual dispute will do. Rather, the party requesting a jury trial under Section 4 must provide sufficient evidence in support of its claims such that a reasonable jury could return a favorable verdict under applicable law. This standard is akin to the burden on summary judgment. See Oppenheimer, 56 F.3d at 358 (comparing Fed.R.Civ.P. 56(c), (e) to the level of sufficient evidentiary facts needed for jury trial under 9 U.S.C. § 4). In other words, to obtain a jury trial, the parties must show genuine issues of material fact regarding the existence of an agreement to arbitrate.
Here, the Franchisees requested a jury trial, but did not dispute any material facts. Accordingly, the Franchisees are not entitled to a jury trial under Section 4 of the FAA. Rather, we will decide whether the parties intended to arbitrate their disputes as a matter of law based on the plain language of the agreements.
We first consider whether the parties intended to arbitrate the Franchisor's common law claims. This question is governed by the Arbitration Clause, Ford v. Antwerpen Motorcars, 443 Md. 470, 117 A.3d 21, 25-26, No. 68, 2015 WL 3937607, at *3 (Md. July 29, 2015), which indicates that the Franchisees agreed to arbitrate "all disputes, controversies, claims, causes of action and/or alleged breaches or failures to perform arising out of or relating to this Agreement (and attachments) or the relationship created by this Agreement." J.A. 553.
The Franchisor's breach of contract claims clearly "arise out of or relate to" the Franchise Agreements, and thus fall squarely within the Arbitration Clause. See Am. Recovery Corp. v. Computerized Thermal Imaging, 96 F.3d 88, 93 (4th Cir.1996); see also Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) (labeling as "broad" a clause that required arbitration of "any controversy or claim arising out of or relating to this Agreement"). Similarly, the Franchisor's claim that Trouard and Chelton fraudulently falsified sales reports falls within the scope of the Arbitration Clause because that claim arises directly from the franchise relationship created by the agreement. See Long v. Silver, 248 F.3d 309, 318 (4th Cir.2001) (holding that fraud claims must be arbitrated when a "significant relationship"
The Franchisees make several unavailing arguments to avoid this result. First, the Franchisees contend that Dickey's cannot arbitrate its dispute because it failed to first seek mediation as required by Article 27 of the franchise agreements. According to the Franchisees, mediation is a condition precedent to invoking the arbitration provision, and so the motions to compel should be denied for this reason alone.
As the Supreme Court has recently re-affirmed, however, arbitrators—not courts—must decide whether a condition precedent to arbitrability has been fulfilled. BG Group PLC v. Republic of Arg., ___ U.S. ___, 134 S.Ct. 1198, 1207-08, 188 L.Ed.2d 220 (2014); see also Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85-6, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002).
The Franchisees next argue that Article 29 "trumps" or "voids" the Arbitration Clause in its entirety. In support, they point to language in the agreements stating that the Maryland Clause applies "notwithstanding anything in th[e] Agreement in the contrary." J.A. 555. We disagree. At least as to the common law claims, the Arbitration Clause is not contrary to the Maryland Clause. Indeed, the common law claims do not implicate the Maryland Clause in the first instance, because that Clause only applies to claims "aris[ing] under Maryland Franchise law," and the Franchisor's claims clearly do not arise under that Law. J.A. 555. Read together then, the Arbitration and Maryland Clauses demonstrate that the parties agreed to arbitrate all disputes except for the narrow carve-out for Maryland Franchise Law claims as set forth in the Maryland Clause.
We reject this reasoning. As an initial matter, the Maryland Clause only states that the Franchisees have a right to "file a lawsuit" bringing Maryland Franchise Law claims in Maryland court; it does not say the Franchisees also have a right to bring all "affirmative defenses" based on the Maryland Franchise Law in court. By its plain language then, the Maryland Clause does not apply to the Franchisees' affirmative defenses. And as set forth above, where the Maryland Clause is not implicated, the Arbitration Clause controls.
Moreover, the FAA requires the exact piecemeal litigation the Franchisees seek to avoid here, notwithstanding the potential for conflicting results. KPMG LLP v. Cocchi, ___ U.S. ___, 132 S.Ct. 23, 26, 181 L.Ed.2d 323 (2011) (per curiam) ("[W]hen a complaint contains both arbitrable and nonarbitrable claims, the Act requires courts to compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums."); see also In re Cotton Yarn Antitrust Litig., 505 F.3d 274, 285 (4th Cir.2007) ("[F]ederal law requires piecemeal resolution when necessary to give effect to an arbitration agreement."). Accordingly, we will not determine the preclusive effect of a hypothetical award at this stage.
We note that if the parties had wanted to avoid potentially conflicting results—and thorny questions regarding the preclusive effect of a potential award
Whether the parties also agreed to arbitrate the Franchisees' Maryland Franchise Law claims is another matter.
Unlike the Franchisor's common law claims, the Franchisees' claims directly
Dickey's disagrees, asserting that the Maryland Clause does not mean what it says. In its view, the Maryland Clause merely preserves the Franchisees' right to pursue a claim—in court or in an arbitration—under the Maryland Franchise Law. In support, Dickey's cites three cases purportedly holding that "words such as `lawsuit,' `sue' and `court' do not negate [an] arbitration provision, but merely preserve[] the right of a franchisee to pursue a claim—in court or in arbitration—under Maryland Franchise Law." App. Br. at 32 (citing Holmes v. Coverall N. Am., 336 Md. 534, 649 A.2d 365 (1994); Zaks v. TES Franchising, No. 3:01CV2266JBA, 2004 WL 1553611 (D.Conn. July 9, 2004); and CompuCredit, 132 S.Ct. at 669). Its reliance on these cases is misplaced. As set forth below, none of these cases addresses language even remotely similar to the Maryland Clause.
First, Holmes is readily distinguishable because it held only that the Maryland Franchise Law neither prohibits arbitration nor requires Franchise Law claims to be brought in Maryland. 649 A.2d at 368.
In short, Holmes establishes that the Maryland Franchise Law grants franchisees a right to sue for violations of that Law, but does not say where that suit must take place; whereas the Maryland Clause goes one step further and expressly grants franchisees a right to file that suit
Dickey's next cites Zaks for the proposition that the Maryland Franchise Law does not prohibit arbitration. In doing so, Dickey's again conflates the Maryland Franchise Law with the Maryland Clause. Zaks is also inapposite because, unlike here, the parties there executed an addendum to their agreement expressly stating that the arbitration provision overrode any provision permitting suit in Maryland. Zaks, 2004 WL 1553611, at *2 ("Notwithstanding anything to the contrary in the Franchise Agreement to which this Addendum is attached, the following terms and conditions shall control: . . . The Franchise Agreement requires binding arbitration."). The opposite is true here: to the extent they conflict, the Maryland Clause controls "notwithstanding" the Arbitration Clause. J.A. 555.
Dickey's also contends that CompuCredit, 132 S.Ct. at 669 construed language similar to that in the Maryland Clause. According to Dickey's, the Supreme Court held that statutory language purportedly prohibiting "the waiver" of "the right to sue" in "court actions" only established a private right of action that could be brought in either arbitration or court. App. Br. at 36. Dickey's overstates CompuCredit's holding.
In CompuCredit, the Supreme Court considered whether a federal statute—the Credit Repair Organizations Act (CROA), 15 U.S.C. § 1679 et seq.—precludes arbitration of claims alleging violations of that statute. The plaintiffs contended that "the right to sue" language in the CROA's disclosure provision, 15 U.S.C. § 1679c(a), created a right to sue in court, not arbitration. The Supreme Court disagreed, but not because, as Dickey's contends, that language could be read to permit arbitration. Instead, the Court held that the disclosure provision was entirely irrelevant because it does not "provide[] consumers with a right to bring an action in a court of law," but rather provides only "the right to receive the [disclosure] statement, which is meant to describe the consumer protections that the law elsewhere provides." 132 S.Ct. at 669-70. In contrast, the Maryland Clause does not merely provide notice of rights that are provided elsewhere; rather, as a contractual commitment, it expressly creates the right itself.
If anything, CompuCredit supports the Franchisees' position that the parties were free to select a Maryland court forum, notwithstanding the default position that Maryland Franchise Law claims can be brought in arbitration:
132 S.Ct. at 671 (emphasis in original). In the same way, here, Dickey's and the Franchisees were free under the Maryland Franchise Law to arbitrate or litigate claims arising under the Law. But, by agreeing to the Maryland Clause, the parties expressly chose to litigate those claims in Maryland (while arbitrating all other claims in Texas). This choice is wholly consistent with CompuCredit, which expressly notes that parties remain free to agree to forum-selection clauses, notwithstanding civil liability provisions using words such as "court" and "action."
Finally, Dickey's argues that the Regulation does not prohibit arbitration, and therefore the Maryland Clause must not either. Again, we disagree. Although some of the language in the Clause tracks the Regulation, they are not identical. Both the Regulation and the Clause consist of a single sentence, but they differ in one fundamental respect: they contain different subjects. In the Regulation, the subject is the franchisor: it is the franchisor who may not require the franchisee to waive their litigation rights. But in the Clause, the subject is the agreement itself: the "provisions of the agreement" cannot be read to require that franchisees waive their litigation rights.
This distinction matters. As the district court held, when the subject is the "franchisor" as in the Regulation, the Franchisees remain free to agree to arbitrate Maryland Franchise Law claims— the Regulation only prohibits forced or involuntary waivers.
Put differently, under the district court's interpretation of the Regulation, the Franchisees were free to waive their right to file suit in Maryland, as long as that waiver were voluntary. But the Maryland Clause demonstrates that the Franchisees did not agree to waive that right in the first instance, at least as to their Franchise Law claims. Rather, both parties agreed to litigate those claims in Maryland. Accordingly, we will not compel arbitration of the Franchisees' Maryland Franchise Law claims.
Alternatively, Dickey's contends that if the Maryland Clause does prohibit arbitration of the Franchisees' claims, then the Clause is preempted by the FAA. The district court did not reach this issue because it referred the threshold arbitrability question to a jury. Because we have decided this question in the Franchisees'
It is well established that the FAA "pre-empts application of state laws which render arbitration agreements unenforceable." Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 472, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). Thus, where "state law prohibits outright the arbitration of a . . . claim . . . [t]he conflicting rule is displaced by the FAA." Marmet Health Care Ctr., Inc. v. Brown, ___ U.S. ___, 132 S.Ct. 1201, 1203-1204, 182 L.Ed.2d 42 (2012) (citing AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740, 1747, 179 L.Ed.2d 742 (2011)); Saturn Distr. Corp. v. Williams, 905 F.2d 719, 722 (4th Cir.1990).
Our decision in Saturn is particularly instructive. There, Saturn—an automobile distributor—brought an action for declaratory and injunctive relief, claiming that the FAA preempted a Virginia statute prohibiting arbitration of claims arising out of auto dealership agreements. 905 F.2d at 721. Saturn submitted its dealer agreement to the Virginia Commissioner of the Department of Motor Vehicles, but the Commissioner refused to approve it in light of its arbitration clause. We concluded that the Virginia statute plainly conflicted with the FAA and was thus preempted. Id. at 722.
Unlike in Saturn, however, the Maryland Clause is not a state law prohibiting arbitration. Rather, it is a contractual provision prohibiting arbitration. And it is generally well-settled that when a "party to a contract voluntarily assumes an obligation to proceed under certain state laws, traditional preemption doctrine does not apply to shield a party from liability for breach of that agreement." Epps v. JP Morgan Chase Bank, N.A., 675 F.3d 315, 326 (4th Cir.2012) (citing Am. Airlines v. Wolens, 513 U.S. 219, 228, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995)); see also Coll. Loan Corp. v. SLM Corp., 396 F.3d 588, 598 (4th Cir.2005) (where parties to an agreement voluntarily assume federal standards in their bargained-for private contract, a party's argument that enforcement of the agreement is preempted by that federal law "boils down to a contention that it was free to enter into a contract that invoked a federal standard as the indicator of compliance, then to proceed to breach its duties thereunder and to shield its breach by pleading preemption. . . . [F]ederal supremacy does not mandate such a result.").
Although none of these cases address FAA preemption, their reasoning applies equally here. FAA preemption prevents states from carving out wholesale
Dickey's argues this law does not apply because it did not voluntarily include the Maryland Clause in the agreements. Rather, Dickey's asserts that both Maryland law and the Maryland Commissioner of Securities forced it to include the Clause in the agreements as a condition precedent to doing business in Maryland.
Dickey's did neither, however. Instead, it chose to add the Maryland Clauses to its agreements so that it could reap the benefits of conducting its franchise business in Maryland. It then waited nearly two years after including the Maryland Clause in its franchise agreements before challenging the state's purported required inclusion of them. Simply put, Dickey's had multiple options other than agreeing to the Maryland Clause. In this scenario, we are comfortable holding Dickey's to the terms of the agreements.
Finally, Dickey's requests that we stay the Franchisees' Maryland Franchise Law claims in the district court pending conclusion of the arbitration on its common law claims. The district court did not decide this issue because it did not decide whether arbitration should proceed at all. Whether to grant such a stay is a matter within the district court's discretion, Am. Recovery Corp., 96 F.3d at 97, so we leave it to the district court to decide this matter in the first instance on remand.
For the foregoing reasons, we vacate the district court's order and remand for further proceedings.
VACATED AND REMANDED
J.A. 597.