MIAMI — The Florida Third District Court of Appeals has ruled it has no legal authority to determine if an arbitration clause in a contract between four companies that are sparring over trademark use and non-performance is valid, affirming an earlier trial court’s decision.
According to the appellate court’s July 5 decision, JARM LLC and Dude IP LLC entered into a contract with two other firms, South Beach Delivery Dudes and DDRA LLC. A dispute later arose over the use of trademarks under the licensing agreement.
Their contract contained a forced arbitration provision, which mandated that arbitration would be used to resolve any legal disputes related to the agreement. JARM and Dude argued that the trial court was not authorized to determine the validity or the applicability of the arbitration provisions to the claims.
DDRA, however, petitioned the court to rule that the arbitration provision was invalid and could not apply to this type of case. The trial court disagreed with the DDRA’s assessment, ruling that it had no authority to make any decision on the applicability of the mandatory arbitration clause. DDRA then appealed the trial court’s decision.
In the appellate court opinion, Judge Leslie Rothenberg pointed to the language in the licensing and operating agreement, which explicitly stated that any dispute required the arbitrator, not a court, to determine the validity of the arbitration provision and the applicability of the arbitration provision to a claim.
Rothenberg agreed with the trial court's determination that courts lack the legal authority to rule on the applicability of arbitration under the terms of the contract in question..