MYSTIC RETREAT MED SPA & WEIGHT LOSS CENTER v. ZELTIQ AESTHETICS LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

MYSTIC RETREAT MED SPA & )

WEIGHT LOSS CENTER, and MISTY )

SINCLAIR, M.D., )

)

Plaintiffs, )

)

v. ) 1:21-cv-00515

)

ASCENTIUM CAPITAL LLC, ZELTIQ )

AESTHETICS LLC, and ALLERGAN )

USA, INC., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.

This is an action involving a contract for weight loss

equipment. Defendants Zeltiq Aesthetics, Inc. (“Zeltiq”) and

Allergan USA, Inc. (“Allergan”) (collectively the “Allergan

Defendants”) move for leave to file an amended answer (Doc. 28)

and to stay proceedings and compel arbitration (Doc. 29).

Defendant Ascentium Capital, LLC (“Ascentium”) consents to the

Allergan Defendants’ motion for leave to file an amended answer.

(Doc. 28-3.) Plaintiffs Mystic Retreat Med Spa & Weight Loss

Center, PLLC, (“Mystic”) and Misty Sinclair, M.D., oppose both

motions.1 (Docs. 34, 35.) The Allergan Defendants filed a reply.

1 Ascentium also filed a response, clarifying that it did not agree to

arbitration with Plaintiffs. (Doc. 36.) Ascentium requests, should the

court grant the Allergan Defendants’ motion to stay proceedings and

compel arbitration, that the “Ascentium/Plaintiffs Claims should not be

stayed, should be severed from the claims between Plaintiffs and the

(Doc. 37.) For the reasons set forth below, the Allergan

Defendants’ motion to stay proceedings and compel arbitration

(Doc. 29) will be denied without prejudice, and the motion for

leave to file an amended answer (Doc. 28) will be granted.

I. BACKGROUND

The basic facts, as relevant to the motions before the court,

are as follows:

Zeltiq and Ascentium worked together to sell and finance the

purchase of medical devices designed to assist with weight loss.

(Doc. 7 ¶ 8.) On June 22, 2016, Sinclair and her business partner,

Marcia Ballard, met with Wes Lev, Zeltiq’s sales manager, to

execute a Master Sales Agreement (“MSA”) with Zeltiq2 for Mystic’s

purchase of CoolSculpting System equipment and services. (Doc.

29-3.) Lev presented Sinclair and Ballard with a single-page MSA

Sales Order. (Doc. 34-1 ¶ 13, Doc. 34-2 ¶ 12.) The bottom of the

Sales Order states:

The agreement between Customer and ZELTIQ Aesthetics

regarding the products described above (the ‘Master

Sales Agreement’) includes this Sales Order and the

attachments (A-C) hereto which are incorporated herein

in their entirety by this reference.

(Doc. 29-3.) However, Lev did not present Sinclair and Ballard

with any of these MSA attachments on June 22. (See Doc. 34-1

Allergan Defendants, and should be allowed to proceed forward in this

Court without delay.” (Id. at 5.)

2 Allergan USA, Inc. acquired Zeltiq in 2017. (Doc. 16 ¶ 5.)

¶¶ 13-16; Doc. 34-2 ¶¶ 12-13.) At the in-person meeting,

Plaintiffs made two handwritten changes to the Sales Order; first

to change the address to the new Mystic facility in Carthage, North

Carolina; and the second to note $1,000 in marketing development

funds that Zeltiq was providing. (Doc. 34-1 ¶ 14, Doc. 29-3.)

Lev and Sinclair both initialed and dated the two changes, and

Sinclair signed the MSA Sales Order on behalf of Mystic. (Doc.

29-3.) The next day, on June 23, Lev sent Sinclair an email with

a copy of the executed single-page MSA Sales Order attached. (Doc.

34-1 ¶ 18; Doc. 34-2 ¶ 16.)

In support of their motion to compel arbitration, the Allergan

Defendants have filed a copy of an email they contend Lev sent to

Sinclair and Ballard at 8:14 p.m. on June 19, 2016, three days

before their in-person meeting, which attached a blank copy of the

MSA Sales Order with Attachments A through C. (Doc. 29-2.)

However, these Defendants have not filed an affidavit to

authenticate this email. Plaintiffs also claim they did not see

Lev’s June 23, 2016 email attaching the signed MSA Sales Order

until the pendency of this litigation. (Doc. 34-1 ¶ 18; Doc. 34-

2 ¶ 16.) Plaintiffs state under oath that the first time they saw

the MSA attachments was during the pendency of this litigation.

(See Doc. 34-1 ¶ 16; Doc. 34-2 ¶¶ 14-15.)

Attachment A purports to contain, among other terms, the

following:

APPLICABLE LAW; DISPUTE RESOLUTION. The laws of the

State of California govern this agreement without regard

to conflict of laws principles or any other principles

that would result in the application of a different body

of law. . . . Any controversy or claim arising out of

or relating to this Agreement, or its breach, shall be

subject to non-binding mediation prior to binding

arbitration in Alameda County, California under the

then-current Commercial Arbitration Rules of the

American Arbitration Association by one arbitrator

appointed in accordance with such Rules. . . .

(Doc. 29-1 at 5.)

As demand for the CoolSculpting System declined, Plaintiffs

refused to make additional payments to Defendants and sought to

return the device and terminate the business relationship.

(Doc. 7 ¶¶ 25-26.) Plaintiffs allege Ascentium took possession of

the device but wrongfully demanded the balance due under the

equipment financing agreements. (Id. ¶¶ 27, 31.)

On May 10, 2021, Plaintiffs filed their complaint against

Defendants in The General Court of Justice, Superior Court

Division, in Moore County, North Carolina. (Doc. 7.) Ascentium’s

counsel accepted service of the complaint on June 7, 2021 (Doc. 1-

1 at 15), and on June 23 the Allergan Defendants, with Ascentium’s

consent, timely filed a notice of removal in this court. (Doc. 1

¶ 8.) On January 3, 2022, the Allergan Defendants moved for leave

to file an amended answer to add an arbitration defense and to

change the name of “Zeltiq Aesthetics, LLC” to “Zeltiq Aesthetics,

Inc.” (Doc. 28), and they moved to stay proceedings and to compel

arbitration (Doc. 29).

II. ANALYSIS

A. Legal Standard

When presented with a question as to whether parties are

required to arbitrate a dispute, the trial court is limited to

resolving the “gateway dispute” of whether the claims are

“arbitrable.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79,

84 (2002); Peabody Holding Co., LLC v. United Mine Workers of

America, International Union, 665 F.3d 96, 104 (4th Cir. 2012).

Here, the parties do not dispute that the court is the proper forum

to determine whether the dispute is arbitrable, nor do the relevant

agreements contain “clear and unmistakable” language requiring

that an arbiter make this determination. Peabody, 665 F.3d at

102-03. Thus, the court must determine whether the dispute is

arbitrable.

The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1–16,

establishes “a liberal federal policy favoring arbitration”

agreements. Moses H. Cone Memorial Hospital v. Mercury

Construction Corp., 460 U.S. 1, 24 (1983).3 “When parties have

entered into a valid and enforceable agreement to arbitrate their

disputes and the dispute at issue falls within the scope of that

agreement, the FAA requires federal courts to stay judicial

3 Though Attachment A provides that disputes under the MSA are governed

by the laws of California (Doc. 29-1 at 5), the FAA preempts conflicting

state law. See Volt Info. Scis., Inc. v. Bd. of Tr. of Leland Stanford

Jr. Univ., 489 U.S. 468, 477 (1989).

proceedings, and compel arbitration . . . .” Murray v. United

Food & Commercial Workers International Union, 289 F.3d 297, 301

(4th Cir. 2002) (citations omitted); 9 U.S.C. §§ 3-4. However, “a

party cannot be required to submit to arbitration any dispute which

he has not agreed so to submit.” American Bankers Insurance Group

v. Long, 453 F.3d 623, 626–27 (4th Cir. 2006) (citation omitted).

As such, the court must determine whether parties have a valid and

enforceable agreement to arbitrate. Berkeley County School

District v. Hub International Limited, 944 F.3d 225, 234 (4th Cir.

2019).

The party seeking to compel arbitration must establish an

agreement to arbitrate. See In re Mercury Construction Corp.,

656 F.2d 933, 939 (4th Cir. 1981), aff’d sub nom. Moses, 460 U.S.

1; see Adkins v. Labor Ready, Inc., 303 F.3d 496, 500–01 (4th Cir.

2002) (requiring litigant seeking to compel arbitration to

demonstrate “a written agreement that includes an arbitration

provision which purports to cover the dispute”). A court may order

arbitration of a dispute only where it is satisfied that the

parties entered into an agreement to arbitrate it. Granite Rock

Co. v. International Brotherhood of Teamsters, 130 S. Ct. 2847,

2855-56 (2010) (citing First Options of Chicago, Inc. v. Kaplan,

514 U.S. 938, 943 (1995)). The party seeking to compel arbitration

must demonstrate: “(1) the existence of a dispute between the

parties, (2) a written agreement that includes an arbitration

provision which purports to cover the dispute, (3) the relationship

of the transaction, which is evidenced by the agreement, to

interstate or foreign commerce, and (4) the failure, neglect or

refusal of the defendant to arbitrate the dispute.” American

General Life & Accident Insurance Co. v. Wood, 429 F.3d 83, 87

(4th Cir. 2005) (quoting Adkins, 303 F.3d at 500-01). In this

case, Plaintiffs challenge only the presence of the second element,

arguing that the parties never entered into a written agreement to

arbitrate any dispute over the MSA. (Doc. 34.)

“Arbitration is ‘a matter of consent, not coercion,’ and

federal arbitration policy does not alter that maxim.” Raymond

James Financial Services, Inc. v. Cary, 709 F.3d 382, 385 (4th

Cir. 2013) (quoting Volt Information Sciences, Inc. v. Board of

Trustees of Leland Stanford Junior University, 489 U.S. 468, 479

(1989)). The Fourth Circuit has recognized that “the ‘touchstones

of arbitrability analysis’ are the ‘twin pillars’ of the parties’

‘consent and intent’ to arbitrate.” Id. at 385-86 (quoting

Peabody, 665 F.3d at 103). While the court must resolve any

ambiguity regarding the scope of the arbitral issues in favor of

arbitration, Moses, 460 U.S. at 24-25; Wachovia Bank National Ass’n

v. Schmidt, 445 F.3d 762, 767 (4th Cir. 2006), the question of the

parties’ intent does not enjoy any presumption favoring

arbitration, First Options of Chicago, Inc. v. Kaplan, 514 U.S 938,

944 (1995).

To determine whether the parties agreed to arbitrate a

particular dispute, the court must consider relevant state law

principles governing contract formation. Hill v. Peoplesoft USA,

Inc., 412 F.3d 540, 543 (4th Cir. 2005); see Perry v. Thomas,

482 U.S. 483, 492 n.9 (1987). This inquiry is not confined to

defects in contract formation, but also includes “such grounds as

exist at law or in equity for the revocation of any contract.”

Hooters of America, Inc. v. Phillips, 173 F.3d 933, 938 (4th Cir.

1999) (citation omitted). In a case premised upon diversity

jurisdiction, a federal court applies the law of the forum state.

Arthur Anderson LLP v. Carlisle, 556 U.S. 624, 630–31 (2009); see

also Cara’s Notions v. Hallmark Cards, Inc., 140 F.3d 566, 569

(4th Cir. 1998). Here, the parties agree that North Carolina law

applies to the question of contract formation. (See Doc. 30 at 5;

Doc. 34 at 6.)

In determining if an agreement to arbitrate exists, North

Carolina law instructs “the court to examine the language of the

contract itself for indications of the parties’ intent . . . .”

State v. Philip Morris, USA, Inc., 618 S.E.2d 219, 225 (N.C. 2005).

The parties’ intent is determined in light of the “contract as a

whole.” Id. “Whenever a court is called upon to interpret a

contract its primary purpose is to ascertain the intention of the

parties at the moment of its execution.” Lane v. Scarborough,

200 S.E.2d 622, 624 (N.C. 1973). When construing contractual

terms, a contract’s plain language controls. See DeLoach v.

Lorillard Tobacco Co., 391 F.3d 551, 558 (4th Cir. 2004) (noting

that “as under general principles of contract law, our task is to

‘give ordinary words their ordinary meanings.’” (quoting Internet

East, Inc. v. Duro Communications, Inc., 553 S.E.2d 84, 87 (N.C.

Ct. App. 2001)); Walton v. City of Raleigh, 467 S.E.2d 410, 411

(N.C. 1996) (“If the plain language of a contract is clear, the

intention of the parties is inferred from the words of the

contract.”).

The standard for deciding a motion to compel arbitration is

similar to that applied to a motion for summary judgment.

Berkeley, 944 F.3d at 234; Adams v. Citicorp Credit Services, Inc.,

93 F. Supp. 3d 441, 445 (M.D.N.C. 2015). A party seeking to compel

arbitration bears the initial burden of demonstrating the absence

of any genuine dispute of material fact as to the parties’

agreement to arbitrate. See Celotex Corp. v. Catrett, 477 U.S.

317, 323 (1986); see also Dillon v. BMO Harris Bank, N.A., 787

F.3d 707, 713 (4th Cir. 2015). Once the moving party has met its

burden, the nonmoving party must affirmatively demonstrate with

specific evidence that there is a genuine dispute of material fact

requiring trial. Matsushita Electric Industry Co. v. Zenith Radio

Corp., 475 U.S. 574, 585–87 (1986); see Drews Distributing, Inc.

v. Silicon Gaming, Inc., 245 F.3d 347, 352 n.3 (4th Cir. 2001).

In determining whether arbitration should be compelled, the court

is entitled to consider materials beyond the complaint and its

supporting documents. Berkeley, 944 F.3d at 234. If there are

unresolved questions of material fact that prevent the court from

deciding the arbitrability issue, the court shall hold “an

expeditious and summary hearing.” Moses H. Cone, 460 U.S. at 22;

9 U.S.C. § 4.

B. Motion to Compel Arbitration

The Allergan Defendants argue that Plaintiffs’ dispute

arising under the MSA must be arbitrated and that the court should

therefore stay this lawsuit pursuant to the FAA, pending the

resolution of arbitration. (Doc. 30.) In response, Plaintiffs

contend the Allergan Defendants “have failed to submit competent,

admissible evidence in support of the agreement to arbitrate”

(Doc. 34 at 5) and that, as an electronic document, the attachments

to the MSA do not satisfy North Carolina’s statute of frauds (id.

at 5-11 (citing the North Carolina Uniform Electronic Transactions

Act, N.C. Gen. Stat. Article § 66-311 et. seq.)). Plaintiffs

further contend that their claims against the Allergan Defendants

must proceed because the arbitration clause is not incorporated

into the signed MSA Sales Order, as there is a lack of mutual

assent. (Id. at 11-14.) The question, therefore, is whether there

is an absence of any genuine dispute that the parties agreed to

the arbitration clause contained in the MSA attachments.

In support of its position that there is a written arbitration

agreement, the Allergan Defendants proffer three pieces of

evidence: an unsigned copy of the MSA with attachments (Doc. 29-

1); the June 19, 2016 email from Lev to Sinclair and Ballard, with

the MSA attachments that include the arbitration provision (Doc.

29-2); and the June 22, 2016 signed single-page MSA Sales Order,

which includes the statement that “the attachments (A-C) hereto

which are incorporated herein in their entirety by this reference”

(Doc. 29-3).

In response, Plaintiffs argue that they did not enter into

the terms and conditions contained in the MSA attachments, and

thus the arbitration provision, because “Lev never presented

Plaintiffs with a paper copy of [the MSA attachments] in the

document he presented for signature, nor did he ever mention it.”

(Doc. 34 at 12–13 (referring to the full MSA contained in the June

19, 2016 email as “the MSA.pdf file”).) Plaintiffs also contend

that the record “is bereft of evidence that Plaintiffs knew about

and intended to agree to the terms in the [MSA attachments]” as

the Allergan Defendants have failed to lay a foundation for their

proffered evidence. (Id.) Consequently, Plaintiffs argue, the

Allergan Defendants have failed to present evidence that the

parties entered into the MSA beyond the single-page MSA Sales

Order, and thus did not enter into the agreement to arbitrate

contained within Attachment A of the MSA attachments. (Id. at 13-

14.)

Additionally, Plaintiffs maintain that, particularly in light

of the declarations of Sinclair and Ballard, the Allergan

Defendants have failed to meet their burden to demonstrate

Plaintiffs’ consent to the arbitration clause. (See Docs. 34-1,

34-2.) In her declaration, Sinclair states that Lev only presented

her with the single-page MSA Sales Order at the in-person meeting

on June 22, 2016. (Doc. 34-1 ¶¶ 12-15.) She states that she did

not see the MSA attachments until the pendency of this litigation

and that she did not intend to agree to them. (Id. ¶¶ 16-17.)

Further, in Ballard’s declaration, she also states that Lev only

presented her with the single-page MSA Sales Order at the in-

person meeting on June 22, 2016. (Doc. 34-2 ¶¶ 11-13.) She states

that she was unaware of, and thus did not intend to agree to, the

terms of the MSA attachments, and that she has “never seen” them.

(Id. ¶¶ 14-15.)

In reply, the Allergan Defendants argue that because their

emails and attachments are “relevant, credible, and highly

probative, they are admissible for purposes of deciding this

motion.” (Doc. 37 at 3-5 (citing Fed. R. Evid. 402).) They

contend that the terms of the MSA attachments, including the

arbitration clause, “were explicitly incorporated by reference

into the MSA Sales Order.” (Id. at 8.) They further argue that

Plaintiffs’ “failure to read the full terms of the MSA before

signing does not negate Plaintiffs’ assent to the arbitration

provision.” (Id. at 9-10; see also id. at 10 n.5 (arguing that

Plaintiffs’ declarations “do not establish lack of mutual assent

simply because Plaintiffs failed to read their emails”)).

On the present record, Plaintiffs are correct that the

Allergan Defendants have failed to produce admissible evidence

that there was an arbitration agreement. “The initial burden on

a proponent of an arbitration agreement is not high. But [Federal]

Rule [of Evidence] 901 does require that the proponent submit ‘a

satisfactory foundation’ from which a jury could ‘reasonably find

that the evidence is authentic.’” Dillon v. BMO Harris Bank, N.A.,

173 F. Supp. 3d 258, 269 (M.D.N.C. 2016) (quoting United States v.

Hassan, 742 F.3d 104, 133 (4th Cir. 2014)). Defendants have not

submitted a declaration, or other proper basis, to authenticate

their proffered documents. See Fed. R. Evid. 901 (“To satisfy the

requirement of authenticating or identifying an item of evidence,

the proponent must produce evidence sufficient to support a finding

that the item is what the proponent claims it is.”). Rather, they

simply rely on their statements in their briefing. Accordingly,

the court cannot determine whether the items on which the Allergan

Defendants rely are “what the proponent claims [they] [are].” Id.

Thus, the Allergan Defendants have not met their burden to proffer

credible, admissible evidence of an arbitration agreement.

Even were the court to consider the Allergan Defendants’

evidence, Plaintiffs have “unequivocally den[ied] that there was

an arbitration agreement and produce[d] evidence to substantiate

the denial.” Dillon, 173 F. Supp. 3d at 269 (citing Drews

Distributing, 245 F.3d at 352 n.3). Indeed, Sinclair and Ballard

both state under oath that Lev presented them with only the single-

page MSA Sales Order at their in-person meeting on June 22, 2016,

and that they were unaware of, and thus did not intend to agree

to, the terms of the MSA attachments. (Doc. 34-1 ¶¶ 12-17; Doc.

34-2 ¶¶ 11-15.) While the Allergan Defendants present a copy of

Lev’s June 19, 2016 email (with the MSA attachments) to Sinclair

and Ballard (Doc. 29-2), there is no evidence that Sinclair or

Ballard received, read, or were even aware of this email or its

contents. Under North Carolina law, the MSA Sales Order’s

incorporation by reference of the MSA attachments is insufficient

to establish that Plaintiffs agreed to arbitrate — especially where

there is doubt that the Plaintiffs ever saw or were aware of the

MSA attachments. See Sciolino v. TD Waterhouse Investor Services,

Inc., 562 S.E.2d 64, 65-67 (N.C. Ct. App. 2002) (finding no

evidence of mutual assent to arbitrate where plaintiffs signed an

application in which they indicated that they “read, understand,

and agree to be bound by the terms of the attached Customer

Agreement” enclosed, but there was no customer agreement attached

to the application, plaintiffs denied a customer agreement was

provided, and the customer agreements presented by defendants at

trial did not bear any indication that plaintiffs had ever seen

the document); Evangelistic Outreach Center v. General Steel

Corp., 640 S.E.2d 840, 843-45 (N.C. Ct. App. 2007) (affirming

trial court’s denial of a motion to compel arbitration and finding

that defendant had not carried its burden of showing that an

agreement’s second page, which contained an arbitration provision,

had been faxed to or received by the plaintiff, who claimed he

received and signed only the first page, despite the inclusion of

a notation on the first page that the agreement was subject to

“terms and conditions on the face and reverse hereof”); Kennedy v.

Branch Banking & Trust Co., 600 S.E.2d 520 (N.C. Ct. App. 2004)

(same, where plaintiff executed a “signature card” incorporating

by reference an agreement to arbitrate but denied receiving a copy

of the agreement to arbitrate until after the commencement of his

lawsuit); see also Dillon, 173 F. Supp. 3d at 266-67, 267 n.6

(collecting cases).

For these reasons, the Allergan Defendants have failed to

establish the absence of a genuine dispute that Sinclair and Mystic

agreed to be bound by the arbitration provision. Their motion to

stay proceedings and compel arbitration will accordingly be denied

without prejudice.

C. Motion to Amend Answer

The Allergan Defendants also move for leave to file an amended

answer. (Doc. 28.) The amendment merely seeks to correct the

corporate status of Defendant Zeltiq from an LLC to a corporation

and to amend the third affirmative defense to clarify that reliance

on the terms of the MSA “includ[es] the arbitration provision.”

(Doc. 28-1 at 8.)

Federal Rule of Civil Procedure 15(a)(2) provides that “a

party may amend its pleading only with the opposing party’s written

consent or the court’s leave. The court should freely give leave

when justice so requires.” While district courts have discretion

to grant or deny a motion to amend, the Fourth Circuit has

“interpreted Rule 15(a) to provide that leave to amend a pleading

should be denied only when the amendment would be prejudicial to

the opposing party, there has been bad faith on the part of the

moving party, or the amendment would have been futile.” Laber v.

Harvey, 438 F.3d 404, 426 (4th Cir. 2006); see also Foman v. Davis,

371 U.S. 178, 182 (1962) (holding leave should be “freely given”

absent “any apparent or declared reason – such as undue delay, bad

faith or dilatory motive on the part of the movant, repeated

failure to cure deficiencies by amendments previously allowed,

undue prejudice to the opposing party by virtue of allowance of

the amendment, futility of amendment, etc.”).

The Allergan Defendants filed their motion for leave to file

an amended answer on January 3, 2022. (Doc. 28.) Plaintiffs do

not claim, nor is there evidence in the record, that the Allergan

Defendants seek leave to amend their answer in bad faith.

Therefore, the motion should be granted unless it presents unfair

prejudice to Plaintiffs or if amendment would be futile. “Whether

an amendment is prejudicial will often be determined by the nature

of the amendment and its timing.” Laber, 438 F.3d at 427. An

amendment is not prejudicial if “it merely adds an additional

theory of recovery to the facts already pled.” Id.; see

also Hatteras/Cabo Yachts, LLC v. M/Y EPIC, 2020 WL 1668045, at *3

(E.D.N.C. 2020) (holding that undue prejudice justifies denying a

motion to amend “if the amendment would require the non-moving

party to expend significant additional resources to conduct

discovery and prepare for trial, or would significantly delay the

resolution of the dispute” (citation omitted)). “It is settled

that ‘if the proposed change . . . advances a claim or defense

that is legally insufficient on its face, the court may deny leave

to amend.’” Williams v. Little Rock Municipal Water Works,

21 F.3d 218, 225 (8th Cir. 1994) (citing Charles A. Wright & Arthur

Miller, Federal Practice & Procedure: Civil, § 1487, at 637

(1991)); see Joyner v. Abbott Labs, 674 F. Supp. 185, 190 (E.D.N.C.

1987) (“When a proposed amendment is frivolous or advances a claim

or defense that is legally insufficient on its face, the motion to

amend should be denied.”).

Neither party claims any additional discovery is needed to

address the Allergan Defendants’ proposed amended answer including

an arbitration defense. Cf. Laber 438 F.3d at 427. In short,

there is no indication that granting the Allergan Defendants’

motion for leave to file an amended answer would cause delay, and,

even if it would, “[d]elay alone, however, is an insufficient

reason to deny . . . a motion to amend.” Id. Additionally, even

though the court has found that the Allergan Defendants have failed

to establish that Plaintiffs agreed to arbitration when they signed

the single-page MSA Sales Order, their amendment pleading an

arbitration defense would not be futile as Defendants may “cure

the evidentiary deficiencies” presently before the court and move

to compel arbitration again after having done so unsuccessfully.

See BMO Harris Bank, 787 F.3d at 715-16 (explaining that “no

authority — not the FAA, the Federal Rules of Civil Procedure, or

any other source of law of which we are aware — limits a party to

only one motion under §§ 3 or 4 of the FAA”); see also Johnson v.

Oroweat Foods Co., 785 F.2d 503, 510 (4th Cir. 1986) (holding that

“[l]eave to amend, however, should only be denied on the ground of

futility when the proposed amendment is clearly insufficient or

frivolous on its face”). Thus, the Allergan Defendants’ motion to

file an amended answer will be granted.

III. CONCLUSION

For the reasons stated,

IT IS THEREFORE ORDERED that the Allergan Defendants’ motion

stay proceedings and compel arbitration (Doc. 29) is DENIED without

prejudice.

IT IS FURTHER ORDERED that the Allergan Defendants’ motion

for leave to file an amended answer (Doc. 28) is GRANTED, and

Defendants are DIRECTED to file their amended answer forthwith.

/s/ Thomas D. Schroeder

United States District Judge

August 3, 2022