Cortes-Ramos v. Sony Corporation of America

United States Court of Appeals
For the First Circuit
No. 15-1786
LUIS ADRIÁN CORTÉS-RAMOS,
Plaintiff, Appellant,
v.
SONY CORPORATION OF AMERICA, et al.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, Jr., U.S. District Judge]
Before
Torruella, Kayatta, and Barron,
Circuit Judges.
Juan R. Rodríguez, with whom Rodríguez Lopez Law Offices,
P.S.C. was on brief, for appellant.
David C. Rose, with whom Pryor Cashman LLP, Jorge I. Peirats,
and Pietrantoni Méndez & Alvarez LLC were on brief, for appellees.
September 9, 2016
BARRON, Circuit Judge. Luis Adrián Cortés Ramos
("Cortés") appeals from the dismissal of his contract and
intellectual property claims against a variety of companies
affiliated with Sony Music Entertainment ("Sony"). The dispute
concerns an original song and music video that Cortés submitted to
Sony as part of a songwriting contest sponsored by Sony. The
District Court dismissed all of Cortés's claims. It did so on two
grounds: that the claims were subject to mandatory arbitration
under the Federal Arbitration Act, and that Cortés failed to allege
facts sufficient to support his claims under Fed. R. Civ. P.
12(b)(6). Because Cortés has not appealed the ruling that his
claims must be arbitrated, we affirm the order compelling
arbitration.
I.
Cortés makes the following allegations in his complaint.
In 2013, Sony collaborated with Enrique Martín Morales,
also known as "Ricky Martin," to create a music contest in Puerto
Rico. Contestants were to submit an original song, along with an
accompanying music video. Martin would perform the winner's song
at the 2014 Fédération Internationale de Football Association
("FIFA") World Cup.
On January 2, 2014, Cortés entered the contest by
submitting a music video with his original song to Sony via Sony's
website. A few weeks later, Cortés signed two contest documents
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-- a release and an affidavit –- and sent them to Sony. Cortés
did not win the contest. Nonetheless, on or around April 22, 2014,
Martin released a song and music video -- "Vida" –- that, according
to Cortés, closely resembled his own contest submission.
On July 28, 2014, Cortés filed suit in the District Court
of the District of Puerto Rico. Cortés alleged that his agreement
with Sony was unenforceable under Puerto Rico contract law because
it was fraudulently induced by Sony. He also alleged that the
agreement violated Puerto Rico trademark law and United States
trademark and copyright law.1
On February 12, 2015, Sony filed a motion seeking, among
other things, dismissal under Fed. R. Civ. P. 12(b)(6) and, in the
alternative, a stay pending arbitration under 9 U.S.C. § 3. Sony
appended the "Contest Official Rules" to its motion to dismiss.
Those rules contained a mandatory arbitration clause, requiring
that disputes "arising under, in connection with, touching upon or
relating to" the rules be submitted to an arbitrator.
On June 10, 2015, the District Court ordered Cortés's
case dismissed "with prejudice," J. at 1, June 10, 2015 (ECF No.
41), "pursuant to Fed. R. Civ. P. 12(b)(6)," and "direct[ed] the
parties to proceed to arbitrate," Cortés-Ramos v. Sony Corp. of
1Ricky Martin was originally a defendant in the suit. Martin
was voluntarily dismissed from the suit, however, on March 27,
2015.
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Am., 108 F. Supp. 3d 18, 25, 29 (D.P.R. 2015). In doing so, the
District Court rejected Cortés's assertion that he was not bound
by the arbitration clause because he had not read or received a
copy of the Contest Rules. Id. at 24. The District Court found
that Cortés "received, signed, notarized, and returned" an
affidavit stating he had complied with the Contest Rules, and noted
that "a valid agreement to arbitrate is presumed even when the
signed document incorporates by reference an arbitration provision
that may be found in another document, irrespective of whether the
party received a copy of the document containing the clause." Id.(internal quotation marks, brackets, and citations omitted). The
District Court then determined that Cortés's fraudulent inducement
claim came within the "broad language" of the arbitration clause.
Id.Notwithstanding its rulings that the mandatory
arbitration clause was both enforceable and encompassed the
fraudulent inducement claims, however, the District Court also
addressed the substance of the claims. Specifically, it concluded
that Cortés "failed to make a cognizable claim that the Contest
[Official] Rules constitute a voidable contract under Puerto Rico
law because he entered into it as a result of deceit." Id. at 25.
II.
On appeal, Cortés argues that the District Court erred
in ruling that he failed to allege facts sufficient to support his
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fraudulent inducement claim. But Cortés does not appeal the
District Court's separate rulings that the mandatory arbitration
clause is enforceable and that this clause encompasses his
fraudulent inducement claim.2 Because those rulings provide an
independent basis for dismissing his claims, we need not address
Cortés's challenge to the District Court's decision to dismiss his
complaint on 12(b)(6) factual sufficiency grounds. We do, however,
wish to repeat our previously articulated caution that "[a] court
compelling arbitration should decide only such issues as are
essential to defining the nature of the forum in which a dispute
will be decided." Thompson v. Irwin Home Equity Corp., 300 F.3d
88, 91 (1st Cir. 2002) (quoting Larry's United Super, Inc. v.
Werries, 253 F.3d 1083, 1085 (8th Cir. 2001)).
Cortés's next challenge to the District Court's order of
dismissal is that the District Court erred by ruling on Sony's
motion to dismiss before the court's deadline for permitting Cortés
to file a sur-reply had elapsed. But Cortés does not posit a
standard of review for assessing whether the District Court erred,
cites no authority to support his contention that the District
Court did err, and makes no argument as to how any error affected
the District Court's decision to send Cortés's claims to
2Cortés contends that the District Court erred by dismissing
his case pursuant to Fed. R. Civ. P. 12(b)(2) and (b)(3). As the
District Court did not dismiss Cortés's complaint on these bases,
this contention is without merit.
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arbitration. Nor is such an argument regarding possible prejudice
apparent to us. Consequently, we conclude that this contention is
too undeveloped to warrant further scrutiny. See United States v.
Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
Cortés also appears to contend -- though he does not
list this contention in his statement of the issues -- that the
District Court erred by not permitting discovery before dismissing
the case. But Cortés makes no argument as to how the District
Court's refusal to permit discovery undermines the District
Court's ruling that his claims must be dismissed because they must
be arbitrated, a ruling that Cortés has not appealed. Accordingly,
we need not address this aspect of Cortés's challenge either.
Finally, Cortés contends that the District Court erred
in dismissing his case with prejudice. Given that the District
Court, in dismissing the case, ruled that the claims were subject
to mandatory arbitration, we agree that "[t]his is a peculiar use
of the phrase 'with prejudice.'" Next Step Med. Co. v. Johnson &
Johnson Int'l, 619 F.3d 67, 71 (1st Cir. 2010) (citing Alford v.
Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992));
see also Cont'l Cas. Co. v. Am. Nat'l Ins. Co., 417 F.3d 727, 732
(7th Cir. 2005) (noting that there is a split in authority as to
how courts characterize dismissal on arbitrability grounds, with
some courts treating the dismissal as jurisdictional and thus
pursuant to Rule 12(b)(1); other courts treating the dismissal as
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"failure to state a claim cognizable in federal court" and thus
pursuant to Rule 12(b)(6); and still others treating the dismissal
as "entirely separate from the Rule 12(b) rubric"). But, even if
peculiar, the District Court's use of "with prejudice" is "not
without precedent." Next Step, 619 F.3d at 71. We thus affirm
the order of dismissal. See id. at 71-72 (affirming dismissal
with prejudice of claim deemed subject to arbitration). We note,
however, that, in light of the District Court's order compelling
arbitration, Cortés's claims "ha[ve] not been extinguished but
[have been] merely left to the arbitrator." Id. at 71.
III.
For the reasons given, we affirm the District Court's
order compelling arbitration.
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