# Brandt v. CNS Corporation

> District Court, E.D. Louisiana · October 15, 2024

URL: https://www.frixlaw.com/law-library/cases/10648605

## Case

- **Court:** District Court, E.D. Louisiana
- **Decided:** October 15, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10648605

## How later opinions describe it (automated extraction)

- noting that “[n]owhere in the document do the defendants reserve to themselves the right to litigate any issue arising from the contract
- noting that nine-point font was “not unreasonably small”
- holding that “[t]he ruling denying arbitration appears to be, by definition, an interlocutory ruling—one that does not determine the merits, but only preliminary matters in the course of the action”
- stating that the plaintiff had “the option of not signing the agreement and finding work at another automotive repair shop if he did not wish to be bound to arbitration”

## Opinion text

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

BRIAN BRANDT CIVIL ACTION

VERSUS NO: 24-574

CNS CORPORATION ET AL. SECTION: “H”

ORDER AND REASONS
Before the Court are Defendant N.I.S. Financial Services, Inc.’s Motion
to Compel Arbitration and Stay (Doc. 11), and Plaintiff’s Motion to Take
Judicial Notice of Documents from Dickerson Case Pursuant to Federal Rule
of Evidence 201 (Doc. 19). For the following reasons, Defendant’s Motion to
Compel Arbitration and Stay Litigation is GRANTED, and Plaintiff’s Motion
to Take Judicial Notice is GRANTED.

BACKGROUND
This dispute arises out of Plaintiff Brian Brandt’s employment with
Defendant CNS Corporation of Missouri (“CNS”). Plaintiff began working for
CNS in 1986 and was still employed there as of the date he filed his state court
petition.1 Plaintiff is “in the business of soliciting and selling insurance
policies, capital shares of investment companies, and mutual funds.”2
Prior to his employment, Plaintiff signed various Agent’s and Sales
Representative’s Contracts (“the Contracts”) with Defendants CNS, N.I.S.
Financial Services, Inc. (“NIS”), and Ozark National Life Insurance Company
(“Ozark”) that contained non-competition and non-solicitation provisions
prohibiting Plaintiff from (1) “the business of soliciting” for 12 months from the
date of termination within the county where Plaintiff solicited insurance and
sold mutual funds for Defendants in the 12 months prior to termination; (2)
engaging in or becoming “interested in, affiliated, or concerned with any
activity of business that competes” with Defendants’ business; and (3)
contacting, soliciting, or selling to any person who is or was a customer of
Defendants within 12 months before termination or three years after
termination.3 The contracts include a Missouri choice-of-law clause.
In his state court petition, Plaintiff requests a declaratory judgment that
(1) Louisiana law applies, (2) the non-competition and non-solicitation
provisions in the Contracts are invalid and unenforceable, and (3) upon
voluntary termination or termination without cause, Plaintiff is entitled to
receive commissions from Defendant Ozark.4 On or about March 7, 2024,
Defendants removed to this Court on the basis of diversity jurisdiction.
Now before the Court is Defendant’s Motion to Compel Arbitration and
Stay pursuant to the NIS Sales Representative’s Contracts (“NIS Contract”)

1 Doc. 2-1 at 2. The petition was filed in the 21st Judicial District Court for the Parish of
Tangipahoa on January 31, 2024. Id. at 1.
2 Id. at 2.
3 Id. Plaintiff alleges that “Defendants are affiliated and/or related companies and have
common direct or indirect ownership.” Id. at 1.
4 Id. at 4–6.
executed between Plaintiff and Defendant NIS.5 Plaintiff opposes.6 In
response, Plaintiff filed a Motion to Take Judicial Notice of Documents from
“the Dickerson Case”—a case in state court between Defendant NIS and
another of its independent contractors wherein the 15th Judicial District Court
for the Parish of Lafayette purportedly held that claims related to
enforceability of identical non-competition and non-solicitation provisions are
not subject to mandatory arbitration. Defendant failed to file an opposition to
Plaintiff’s Motion to Take Judicial Notice.7

LEGAL STANDARD
1. Motion for Judicial Notice
Federal Rule of Evidence 201 permits a court to take judicial notice of
“an adjudicative fact” upon a party’s request where the fact is “not subject to
reasonable dispute because it: (1) is generally known within the trial court’s
territorial jurisdiction; or (2) can be accurately and readily determined from
sources whose accuracy cannot reasonably be questioned.”8
2. Motion to Compel Arbitration

5 There are several contracts between NIS and Plaintiff spanning 2011 and 2021. Doc. 11-1 at
4-5. Plaintiff signed the 2011 NIS Sales Representative Contract but did not sign the 2021
NIS Sales Representative Contract that was signed by NIS and mailed to Plaintiff in 2020.
Doc. 11-1 at 5. Plaintiff did not provide any written objection to the 2021 contract. Id. In its
Memorandum supporting the instant motion, NIS refers to these documents collectively as
the “NIS Contract” because the relevant provisions at issue are the same. Id. The Court
adopts this term for clarity and does not delineate between the signed 2011 and unsigned
2021 contracts. See Bankston v. Imagine Pools Mfg. N.Am. Inc., No. CV 22-01289, 2022 WL
17814244, at *2 (E.D. La. Dec. 6, 2022) (providing that “[a]cceptance of an arbitration
agreement need not include a signature, and conduct alone may show the effect or validity of
the agreement.”) (internal quotation marks omitted).
6 Doc. 18.
7 Defendant did, however, raise arguments regarding the alleged preclusive effect of the
documents subject to judicial notice, which this Court considers in this ruling. See Doc. 22.
8 FED. R. EVID. 201(a)–(c).
The question of arbitrability is governed by the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 1 et seq., which broadly applies to any written provision in
“a contract evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract or
transaction.”9 A two-step analysis governs whether parties should be
compelled to arbitrate a dispute.10 The Court must first determine whether
the parties agreed to arbitrate the dispute.11 This determination involves two
separate inquiries: (1) whether there is a valid agreement to arbitrate between
the parties, and, if so, (2) whether the dispute in question falls within the scope
of that agreement.12 Both inquiries are generally guided by ordinary principles
of state contract law.13 The strong federal policy favoring arbitration applies
“when addressing ambiguities regarding whether a question falls within an
arbitration agreement’s scope,” but it does not apply “when determining
whether a valid agreement exists.”14 If the Court finds the parties agreed to
arbitrate, it must then proceed to the second step of the analysis and consider
whether any federal statute or policy renders the claims non-arbitrable.15

LAW AND ANALYSIS
1. Motion for Judicial Notice
In opposition to Defendant’s Motion to Compel Arbitration, Plaintiff filed
a motion for judicial notice, requesting that this Court take judicial notice of
various documents filed and writ denials in Victoria Dickerson v. N.I.S.

9 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).
10 JP Morgan Chase & Co. v. Conegie ex rel. Lee, 492 F.3d 596, 598 (5th Cir. 2007).
11 Banc One Acceptance Corp. v. Hill, 367 F.3d 426, 429 (5th Cir. 2004).
12 Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381 (5th Cir. 2008).
13 See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995).
14 Sherer, 548 F.3d at 381.
15 Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002).
Financial Services, Inc. et al., a 2017 case filed in the 15th Judicial District
Court for the Parish of Lafayette.16 Defendant did not file an opposition to the
Motion for Judicial Notice.
Each of the eleven documents that Plaintiff seeks judicial notice of were
obtained from the public records of the 15th Judicial District Court for the
Parish of Lafayette, the Louisiana Third Circuit Court of Appeal, and the
Louisiana Supreme Court.17 Courts may generally take judicial notice of public
records in prior state court proceedings.18 “Although we cannot take judicial
notice of findings of fact of other courts, the fact that a judicial action was taken
is indisputable and is therefore amenable to judicial notice.”19 Accordingly,
Plaintiff’s Motion for Judicial Notice is GRANTED as to the eleven public
records referenced in his Motion for Judicial Notice and attached to his
Opposition of Defendant’s Motion to Compel Arbitration.20
2. Motion to Compel Arbitration and Stay
Defendant NIS moves this Court to order arbitration of Plaintiff’s claims
against it because the claims fall within the scope of a valid arbitration
agreement and, alternatively, Financial Industry Regulatory Authority
(“FINRA”) Rules require arbitration of the dispute. Defendant NIS also
requests a stay of proceedings as to all Defendants—including CNS and Ozark,
which do not have an arbitration agreement with Plaintiff—on the basis that

16 See Doc. 19.
17 See Doc. 19-1.
18 Kahn v. Ripley, 772 F. App’x 141, 142 (5th Cir. 2019) (citing Taylor v. Charter Med. Corp.,
162 F.3d 827, 829 (5th Cir. 1998); Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir. 1994)).
19 Gray ex rel. Beverly Enters.–Miss., Inc., 390 F.3d 400, 407 n.7 (5th Cir. 2004) (citing Taylor,
162 F.3d at 831).
20 Docs. 18-3, 18-4, 18-5, 18-6, 18-7, 18-8, 18-9, 18-10, 18-11 & 18-12.
Plaintiff’s claims against them are “based upon the same operative facts” and
“inherently inseparable from [Plaintiff’s] claims against” Defendant NIS.21
Plaintiff responds that issue preclusion bars Defendant NIS from
arguing that Plaintiff’s claims are subject to mandatory arbitration. And even
if issue preclusion does not apply in this case, Plaintiff avers that the
arbitration agreement is unenforceable as adhesionary, and his claims against
NIS are outside the scope of the arbitration agreement. Further, Plaintiff
contests whether Form U-4 and FINRA Rules mandate arbitration in this case.
And even if this Court orders arbitration, Plaintiff maintains that a stay
against Defendants CNS and Ozark would be inappropriate in this case. The
Court considers each argument in turn.
A. Issue Preclusion
Plaintiff argues that issues regarding “the enforceability of the non-
competition and non-solicitation provisions in the NIS Sales Representative’s
Contract and whether such claims are subject to mandatory arbitration” are
precluded by the 15th Judicial District Court’s January 24, 2020 Judgment in
Dickerson v. N.I.S. Financial Services, Inc. et al.22 Defendant argues, however,
that all elements for application of issue preclusion are not met.
“[C]ollateral estoppel or ‘issue preclusion,’ recognizes that suits
addressed to particular claims may present issues relevant to suits on other
claims.”23 When a federal court is asked to give res judicata effect to a state
court judgment, it must give the same preclusive effect to the state court
judgment as would be given by the courts of that state.24 Under Louisiana

21 Doc. 11-1 at 16 (quoting Hill v. GE Power Sys., Inc., 282 F.3d 343, 347 (5th Cir. 2002))
(internal quotations omitted).
22 Doc. 18 at 10.
23 United Disaster Response, L.L.C. v. Omni Pinnacle, L.L.C., 569 F. Supp. 2d 658, 663 (E.D.
La. 2008) (citing Harris v. Washington, 404 U.S. 55 (1971)).
24 Zatarain v. WDSU–Television, Inc., 79 F.3d 1143 (5th Cir. 1996); see 28 U.S.C. § 1738.
Revised Statutes § 13:4231(3), “a valid and final judgment is conclusive
between the same parties . . . in any subsequent action between them, with
respect to any issue actually litigated and determined if its determination was
essential to that judgment.” Thus, the following elements must be present for
issue preclusion to apply: (1) a valid and final judgment; (2) the parties must
be identical; (3) the issue to be precluded must be identical to that involved in
the prior action; and (4) the issue must have been actually litigated and its
determination was essential to the prior judgment.25 Each and every element
must be “established beyond all question.”26
In Dickerson, the plaintiff—an independent contractor for Defendant
NIS—filed a petition for declaratory judgment, seeking
a judgment declaring the noncompetition and/or nonsolicitation
provisions contained in the [Sales Representative’s Contract and
Agent’s Contract]: (a) are governed by Louisiana law; (b) do not
comply with the provisions of Louisiana Revised Statute 23:921;
and (c) are therefore null and void, invalid and unenforceable as a
matter of law.27
Plaintiff avers that the relevant provisions in the Sales Representative’s
Contract and Agent’s Contract at issue in Dickerson were identical to those in
the Contracts at issue here.
The defendants in Dickerson—NIS and Ozark—filed a motion to compel
arbitration, wherein they argued that Dickerson was required to arbitrate her
claim against NIS according to “Louisiana law, FINRA rules, and the terms of

25 See Jones v. Daimler Trucks of N. Am., Inc., 336 So. 3d 622, 627 (La. App. 4 Cir. 2022); In re
Keaty, 397 F.3d 264, 270–71 (5th Cir. 2005) (citing Charpentier v. BG Wire Rope & Slings,
Inc., 174 B.R. 438, 441 n.1 (E.D. La. 1994); Matter of Whittaker, 225 B.R. 131 (Bankr. E.D.
La. 1998)).
26 Kelty v. Brumfield, 633 So. 2d 1210, 1215 (La. 1994) (internal citations omitted).
27 Doc. 18-4 at 4.
Plaintiff’s agreement.”28 The motion to compel arbitration was denied by the
15th J.D.C. on October 5, 2017.29
Considering the issues raised in Dickerson and the issues presently
raised in this case, the Court considers whether each element for application
of issue preclusion is present and has been established beyond all question.
i. Valid and Final Judgment
The parties dispute whether the court’s ruling in Dickerson that the
plaintiff’s claims were not subject to mandatory arbitration was indeed final
for purposes of issue preclusion.
As to the first requirement of issue preclusion, for purposes of res
judicata, a valid judgment is one rendered by a court with
jurisdiction over both the subject matter and the parties after
proper notice was given, and a final judgment is one that disposes
of the merits in whole or in part.30
Louisiana courts have generally held that orders on motions to compel
arbitration are interlocutory and not final judgments because they do not
dispose of the merits of a case in whole or in part.31
Plaintiff nevertheless contends that the state court’s order denying the
motion to compel arbitration became a final judgment “after the matter

28 Doc. 18-6 at 1.
29 See Doc. 18-5 (motion to compel arbitration); Doc. 18-6 (memorandum in support of motion
to compel arbitration), Doc. 18-7 (order denying the motion to compel arbitration).
30 Global Mktg. Solutions, LLC v. Chevron USA Inc., 286 So. 3d 1054, 1062 (La. App. 1 Cir.
2019) (citing Oliver v. Orleans Par. Sch. Bd., 156 So. 3d 596, 612 (La. 2014)). See also LA. CIV.
CODE art. 1841 (“A judgment that does not determine the merits but only preliminary
matters in the course of the action is an interlocutory judgment. A judgment that determines
the merits in whole or in part is a final judgment.”).
31 See, e.g., Arkel Constructors, Inc. v. Duplantier & Meric, Architects, L.L.C., 965 So. 2d 455,
158 (La. App. 1 Cir. 2007) (holding that “[t]he ruling denying arbitration appears to be, by
definition, an interlocutory ruling—one that does not determine the merits, but only
preliminary matters in the course of the action”); Collins v. Prudential Ins. Co. of Am., 752
So. 2d 825, 829 (La. 2000) (holding that “the district judge’s order compelling arbitration in
this case was clearly not a final judgment” because “it did not dispose of the merits of the
case in whole or in part”).
proceeded to a hearing on the merits of NIS’s exceptions held on July 8, 2019,
when the Court entered a final Judgment dated January 24, 2020.”32 There,
the state court granted the exceptions of lack of subject matter jurisdiction,
mootness, and lack of right or interest filed by CNS and NIS.33 The Court
stated that these motions were granted, and the plaintiff’s petition was
dismissed with prejudice, “[b]ecause of the Stipulation” between NIS, CNS,
and Plaintiff that NIS and CNS would not “take any further action against
Plaintiff Victoria Dickerson to enforce or seek damages for breach of the non-
solicit and non-competition restrictive covenants that are the subject of
Plaintiff’s declaratory judgment claims.”34
The phrasing of the judgment dismissing the case in Dickerson suggests
to this Court that it was based solely on the stipulated agreement between the
plaintiff and Defendants NIS and CNS. In other words, the judgment on the
exceptions spung exclusively from the consent of the parties. Therefore, while
it was not labeled as such, the Court finds that the judgment of dismissal in
Dickerson can only be characterized as a consent judgment.35 Consent
judgments are final judgments between the parties.36 “A consent judgment or a
stipulated judgment is a bilateral contract by which the parties adjust their
differences by mutual consent, with each party balancing his hope of gain
against his fear of loss.”37 “A stipulation entered into by and between parties
to a lawsuit and later incorporated into a consent judgment in the lawsuit is a

32 Doc. 25 at 1.
33 Doc. 18-12 at 1.
34 Id.
35 See Garland v. Cargill, 602 U.S. 406, 430 (2024) (Sotomayor, J., dissenting) (“When I see a
bird that walks like a duck, swims like a duck, and quacks like a duck, I call that bird a
duck”).
36 Hardy v. Hardy, 273 So. 3d 448, 453 (La. App. 1 Cir. 2019) (citing Mill Creek Homeowners
Ass’n, Inc., 916 So. 2d 268, 269 (La. App. 1 Cir. 2005)) (emphasis added).
37 Id.
transaction or compromise between the parties for the purpose of preventing
or putting an end to the lawsuit in the manner in which they agree.”38 A
consent judgment ordinarily does not give rise to issue preclusion because the
issues underlying the judgment are neither actually litigated nor necessary
and essential to the judgment. However, consent judgments will be given
preclusive effect if the parties manifest such an intention.39 Critically, in
Dickerson, the original parties to the consent judgment did not manifest an
intention to be bound by the arbitrability finding in the case with a new
plaintiff or against a new defendant, nor did the judgment explicitly mention
binding third parties.40 Thus, the consent judgment in Dickerson lacks
preclusive effect here. Accordingly, the Court is not satisfied beyond all
question that the August 2020 state court judgment is a valid and final
judgment for purposes of applying issue preclusion.
ii. Issue Actually Litigated and Determination Was Essential to
Prior Judgment
Issue preclusion also requires that “the issue must be one that has been
actually litigated and determined in the prior action, and its determination
must have been essential to the prior judgment.”41 In other words, “[i]ssue
preclusion requires the issue to be precluded to have been a dispositive issue
which the prior court must have considered in a contest between the same

38 Aufrichtig v. Aufrichtig, 34,909—CA (La. App. 2 Cir. 8/22/01); 796 So. 2d 57, 63 (citing LA.
CIV. CODE art. 3071). In Dickerson, Defendants CNS and NIS’s stipulation was incorporated
into the consent judgment.
39 Hughes v. Santa Fe Intern. Corp., 847 F.2d 239, 241 (5th Cir. 1988).
40 Dowd v. Helena Emergency Physicians, 2023-527 (La. App. 3 Cir. 3/27/24); 387 So. 3d 31, 36,
writ denied sub nom. Dowd v. Helena Emergency Physicians, 2024-00536 (La. 9/17/24)
(“Ordinarily, contracts are only binding between the parties to the contract”). While the
Court, and the parties, concede that the parties in the instant case qualify as “identical
parties” for the purposes of res judicata, it cannot be said that they are the original parties
bound by the Dickerson consent judgment.
41 Jones, Inc., 336 So. 3d at 628 (quoting Global Mktg. Solutions, 286 So. 3d at 1063)).
parties.”42 Louisiana courts have noted, however, that “[t]here is nothing in the
case law defining the term ‘actually litigated’ to require a trial or evidentiary
hearing. . . . Louisiana law does not mandate that an issue must be decided
after a trial or evidentiary hearing to be considered ‘actually litigated.’”43
As to whether the issue was essential to the prior judgment, the Court
notes that the parties do not contest whether this element is met. The Court
must nevertheless find that Plaintiff has proven this element “beyond all
question.”44 Here, even if the Court had found arguendo that the judgment was
a final judgment for the purpose of applying issue preclusion, the Court would
not be able to find that the denial of arbitration was essential to that final
judgment. A complete review of the Dickerson record does not reveal why
Defendants ultimately entered into the stipulation that formed the basis of the
consent agreement. The Court would, therefore, be required to speculate about
what prompted Defendants NIS and CNS to stipulate to the terms agreed to
in the Dickerson judgment.45
As such, because this Court cannot ascertain whether the denial of
arbitration was essential to the state court’s judgment in Dickerson, the
enforceability of the non-competition and non-solicitation provisions in the NIS
Contract and whether such claims are subject to mandatory arbitration, is not

42 Id. (quoting Goodman v. Spillers, 686 So. 2d 160, 167 (La. App. 2 Cir. 1996)) (emphasis in
original).
43 Id. (quoting In re Keaty, 397 F.3d 264, 271 (5th Cir. 2005)).
44 Kelty, 633 So. 2d at 1215 (internal citations omitted).
45 There is a myriad of reasons why Defendants NIS and CNS might have decided to stipulate
and not pursue the contract’s non-competition and non-solicitation provision against the
plaintiff in Dickerson. Litigants, especially businesses, regularly partake in cost-benefit
analyses regarding what claims to pursue and when to settle. These determinations, often
made in private, are not clear from the Dickerson record. As such, the Court would be making
a guess that cannot meet the “beyond all question” standard required by issue preclusion.
barred by issue preclusion.46Accordingly, the Court declines to apply issue
preclusion in this case.
B. Agreement to Arbitrate
Because the Court has declined to apply issue preclusion, it must
determine whether the parties should be compelled to arbitrate.
The arbitration provision in Paragraph 18(c) of the NIS Contract at issue
reads:
Remedy: Sales Representative agrees that all
controversies that may arise between Sales
Representative and Company concerning any order
or transaction, or the continuation, performance or
breach of this or any other agreement between us,
shall be determined by arbitration before a panel of
arbitrators selected by the Financial Industry
Regulatory Authority or the New York Stock
Exchange, Inc., as Sales Representative and
Company may designate, pursuant to the rules of
the organization in existence at the time of the
submission to arbitration.47 (“Arbitration
Provision”)

i. Validity of Arbitration Agreement
First, the Court must determine whether there was a valid agreement
to arbitrate between the parties. Plaintiff argues that the Arbitration
Provision is invalid as adhesionary.48 Plaintiff contends that because the
contract was drafted without any negotiation with or input from him, it is a
standard form contract and raises the inquiry as to whether he truly
consented to the arbitration provision.49 Additionally, Plaintiff claims in a

46 See Midwest Mech. Contractors, Inc. v. Commonwealth Constr. Co., 801 F.2d 748, 751–52
(5th Cir. 1986).
47 Doc. 11-2 at 10, ¶18(c).
48 Doc. 18 at 13.
49 Id. at 14-15.
declaration not to have understood the terms of Paragraph 18(c) to mean
that the validity and scope of the non-competition and non-solicitation
provision would be determined by arbitrators. The Court considers these
arguments in turn.
Ordinary principles of state contract law apply to the determination of
whether parties formed a valid arbitration agreement.50 The NIS Contract
containing the Arbitration Provision contains a Missouri choice of law
provision that Plaintiff himself acknowledges.51 However, regardless of what
state contract law governs, the outcome of the foregoing analysis remains the
same.52
Under Louisiana law, a contract is formed by consent of all parties.53
“Broadly defined, a contract of adhesion is a standard contract, usually in
printed form, prepared by a party of superior bargaining power for adherence
or rejection of the weaker party.”54 Plaintiff argues that the agreement is
adhesionary because NIS drafted the NIS Contract without negotiating with
Plaintiff regarding its terms.55 However, “not every contract in standard form
may be regarded as a contract of adhesion.”56 In Duhon v. Activelaf, LLC, and
Aguillard v. Auction Management Corp., the Louisiana Supreme Court set
forth factors to consider to determine the enforceability of the arbitration
clause in a standard form contract: “(1) the physical characteristics of the

50 Am. Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 537–38 (5th Cir. 2003).
51 See Doc. 2-1 (Petition for Declaratory J.), at ¶20 (“It is undisputed that the Contracts
purportedly contain a Missouri choice-of-law provision.”)
52 See Edwards v. Doordash, Inc., 888 F.3d 738, 744 (5th Cir. 2018) (citing Rent-A-Center, W.,
Inc. v. Jackson, 561 U.S. 63, 70 (2010)) (“An arbitration agreement is severable from the
underlying contract under Section Two of the Federal Arbitration Act.”).
53 Chase Bank USA, N.A. v. Leggio, 999 So. 2d 155, 159 (La. App. 2d Cir. 2008) (citing LA. CIV.
CODE art. 1927).
54 Aguillard v. Auction Mgmt. Corp., 908 So. 2d 1, 8–9 (La. 2005) (internal quotation omitted).
55 Doc. 18 at 14-15.
56 Duhon v. Activelaf, LLC, No. Civ.A. 02-2231, 2016 WL 6123820, at *4 (La. 10/19/16).
arbitration clause, (2) the distinguishing features of the arbitration clause, (3)
the mutuality of the arbitration clause, and (4) the relative bargaining strength
of the parties.”57 The court “effectively established a framework for examining
the validity of an arbitration clause within a standard form contract by
generally describing the characteristics of an unenforceable adhesionary
agreement.”58 It further noted that the “real issue in a contract of adhesion
analysis is not the standard form of the contract, but rather whether a party
truly consented to all the printed terms. Thus, the issue is one of consent.”59
“The party seeking to invalidate the contract as adhesionary bears the burden
of demonstrating that the non-drafting party did not consent to the terms or
his consent was vitiated by error.”60 Further, under a contract of adhesion
analysis, “a presumption of arbitrability does exist” regarding the provision’s
enforceability.61
In Duhon, the Louisiana Supreme Court considered an arbitration
clause in an agreement that patrons to Sky Zone, an indoor trampoline park,
were required to sign prior to entering the facility.62 The court concluded that
the agreement was adhesionary and unenforceable because (1) the arbitration
provision was “not relegated to a separate paragraph or set apart in some
explicit way” but was instead “camouflaged” within a larger paragraph
unrelated to arbitration, and (2) the agreement lacked mutuality and did not
bind Sky Zone to arbitration.63

57 Id.
58 Id.
59 Aguillard, 908 So. 2d at 9.
60 Herring v. Patterson Structural Moving & Shoring, LLC, No. CV 17-8677, 2017 WL 6540614,
at *2 (E.D. La. Dec. 21, 2017).
61 Aguillard, 908 So. 2d at 18.
62 Duhon, 2016 WL 6123820, at *1.
63 Id. at *4.
In Aguillard, the Louisiana Supreme Court considered an arbitration
provision in an auction sales agreement and ultimately held that the
agreement was not adhesionary because (1) the agreement was in a single
sentence paragraph set apart from each other paragraph, in a short, two-page
document; (2) the provision was not concealed; (3) the agreement did not lack
mutuality because the defendants did not reserve the right to litigate; and (4)
the underlying transaction was not such a necessary transaction as to compel
the plaintiff to enter it.64
Here, while the entirety of the contract between Defendant NIS and
Plaintiff is significantly more substantial than the two-page document
considered in Aguillard, the arbitration provision was relegated to its own
paragraph that begins with the underlined term “Remedies,” clearly
demarcating it from surrounding provisions that had were of the same size and
font.65 Additionally, the contract neither expressly reserves NIS’s right to
litigate nor prohibits Plaintiff from requesting arbitration.66 Therefore, the
contract does not want for mutuality.
Plaintiff suggests that the Arbitration Provision was drafted as the
result of unequal bargaining power between himself and NIS. Louisiana
appellate courts have, however, rejected this argument in the employer-
employee setting. In Stadtlander v. Ryan’s Family Steakhouses, Inc., the
Louisiana Second Circuit Court of Appeal held that it was “reluctant to find
the requisite difference in bargaining positions between [an employee and
employer] to justify labeling the present agreement a contract of adhesion”
where the employee “could have found a similar position elsewhere [and] could

64 Aguillard, 908 So. 2d at 5 and 17.
65 See id. at 16 (noting that nine-point font was “not unreasonably small”).
66 Id. (noting that “[n]owhere in the document do the defendants reserve to themselves the right
to litigate any issue arising from the contract).
have avoided the arbitration agreement had she objected to it by simply
choosing to work elsewhere.”67 Further, there is no evidence that Plaintiff was
compelled to enter into the agreement with NIS.68
Plaintiff contends that in addition to his lack of participation in the
contract drafting process, he did not understand Paragraph 18(c) to require
arbitration of the non-competition and non-solicitation provisions, and,
therefore, did not consent to its terms.69 This, too, fails to make the Arbitration
Provision adhesionary since “[i]t well settled that a party who signs a written
instrument is presumed to know its contents and cannot avoid its obligations
by contending that he did not read it, that he did not understand it, or that the
other party failed to explain it to him.”70 As such, Plaintiff cannot avoid
arbitrating his claims on the grounds that he did not understand the terms of
the Arbitration Provision when he signed the NIS Contract.
Accordingly, having considered the factors espoused in Duhon and
Aguillard, this Court finds that the Arbitration Provision does not have the
“characteristics of an unenforceable adhesionary agreement.”71 The
Arbitration Provision is clearly labeled, not concealed in any way, and the
Plaintiff was free to object to the NIS Contract by not signing it or choosing
different employment. It cannot be said that Plaintiff did not consent to the
NIS Contract or provisions therein. Having found that neither the NIS

67 794 So. 2d 881, 890 (La. App. 2 Cir. 2001); see also Simpson v. Pep Boys-Manny Moe & Jack,
Inc., 847 So. 2d 617, 622 (La. App. 4 Cir. 2003) (stating that the plaintiff had “the option of
not signing the agreement and finding work at another automotive repair shop if he did not
wish to be bound to arbitration”); Rogers v. Brown, 986 F. Supp. 354, 359 (M.D. La. 1997)
(“Plaintiff has failed to submit any evidence that other similar jobs were not available and
thus, she was required to take the KFC job even though she did not approve of the arbitration
provision.”).
68 See Doc. 22 at 2-3.
69 Doc. 18 at 14-15.
70 Aguillard, 908 So. 2d at 17.
71 See Duhon, 2016 WL 6123820, at *4.
Contract nor the Arbitration Provision are adhesionary, this Court finds that
Plaintiff and Defendant NIS have entered into a valid agreement to arbitrate.

ii. Scope of Arbitration Agreement
Having found that there is a valid arbitration agreement, the Court next
considers whether Plaintiff’s claims fall within the scope of such agreement.
Defendant NIS avers that both federal and state policy suggest that doubts
about the scope of arbitration should be resolved in favor of arbitration.72
Plaintiff argues that his Request for Declaratory Relief is outside the scope of
the Arbitration Provision because (1) he did not breach the non-competition
and non-solicitation provisions, making the paragraph including the
Arbitration Provision inapplicable; (2) there was no controversy when he filed
the suit, and (3) the provision is too narrowly constructed, limiting itself to
controversies arising after and in the event of the breach of the Covenant Not
to Compete and not to issues of validity or enforceability the Plaintiff raises in
his request for relief.73 Beyond these arguments, Plaintiff calls on Paragraph
18(d) of the NIS-Brandt Contract to act as a savings clause.74 The Court dispels
with Plaintiff’s strained arguments in one stroke.
“Even when the scope of an arbitration clause is fairly debatable or
reasonably in doubt, a court should decide the question of construction in favor
of arbitration.”75 “As a consequence, a valid agreement to arbitrate applies

72 See Doc. 11-1 at 12 (quoting Safer v. Nelson Fin. Group Inc., 422 F.3d 289, 294 (5th Cir.
2005)).
73 Doc. 18 at 15-16 (internal quotation marks omitted).
74 See Doc. 18 at 16-17.
75 Aguillard at 18.
‘unless it can be said with positive assurance that [the] arbitration clause is
not susceptible of an interpretation which would cover the dispute at issue.’”76
In his complaint, Plaintiff seeks a declaratory judgment that the non-
competition and non-solicitation provisions in the Contracts are invalid and
unenforceable as a matter of law.77 The Court finds that the Arbitration
Provision’s construction is broad enough to cover these issues. The filing of the
suit created a controversy under the terms of the Provision regardless of
whether Plaintiff breached the agreement prior or after.78 Such a controversy
must be arbitrated.
“Where… an arbitration provision purports to cover all disputes ‘related
to’ or ‘connected with’ the agreement, [the Fifth Circuit has] held that the
provision is not limited to claims that literally ‘arise under the contract,’ but
rather embraces all disputes between the parties having a significant
relationship to the contract regardless of the label attached to the dispute.”79
Whether or not the provisions cited in Plaintiff’s complaint are enforceable
concerns the “continuation, performance or breach” of the NIS Contract; it is
therefore covered by the language of the Arbitration Provision.80 The NIS
Contract’s non-competition and non-solicitation provisions are disputes

76 Pers. Sec. & Safety Sys. Inc. v. Motorola Inc., 297 F.3d 388, 392 (5th Cir. 2002) (quoting Neal
v. Hardee’s Food Systems, Inc., 918 F.2d 34, 37 (5th Cir. 1990).
77 Doc. 2-1 at 4.
78 Doc. 11-1 at 13.
If this Court were to rule in Mr. Brandt’s favor on his declaratory judgment claim
against NIS, that ruling would constitute a finding that non-compliance with the non-
competition and non-solicitation provisions in the NIS Agreement does not constitute a
breach of the NIS Agreement and/or performance under the NIS Agreement. Therefore, his
claim against NIS concerns the ‘continuation, performance or breach” of the Contract and is
arbitrable. Id.
79 Pers. Sec. & Safety Sys. Inc., 297 F.3d at 393 (citing Pennzoil Expl. and Prod.n Co. v. Ramco
Energy Ltd., 139 F.3d 1061, 1067 (5th Cir. 1998). The Court finds “concerning” in Paragraph
18(c) analogous to “related to” and “connected with” in this standard.
80 Doc. 11-2 at 10, ¶18(c).
between NIS and Plaintiff that have a significant relationship to the contract
because it involves Plaintiff engaging in work that would directly impact the
business of his employer, NIS.
Plaintiff argues that this Court—“not a panel of FINRA or NYSE
arbitrators”—should decide whether the terms of the non-competition and non-
solicitation provisions are reasonable or not. In so arguing, he relies on
Paragraph 18(d) which provides that:
Limitation of Covenant: If a court of competent
jurisdiction enters a final non-appealable judgment or order
that the time or the area or any other provision of this
Paragraph constitutes an unreasonable restriction on the
Sales Representative, the provisions of this Paragraph shall
not be rendered void but shall apply as to such time or to
such other said court may judicially determine or indicate or,
if such court does not so determine or indicate, to the extent
that any pertinent statute or judicial decision in the
jurisdiction of any such court may indicate constitutes a
reasonable restriction under the circumstances.81

Plaintiff argues that Louisiana Civil Code Article 2050 and its call that
“[p]rovisions of a contract must be interpreted in pari materia and consistent
with the meaning as a whole” supports his argument.82 Indeed, Paragraph
18(d) must be read as a whole, and it must be read considering its location just
below the Arbitration Provision in Paragraph 18(c). This suggests that the
determination of the issues therein are ones that shall be arbitrated.
This Court finds that Paragraph 18(d) does not explicitly or otherwise
exclude from arbitration an action to declare the non-competition provision
unenforceable; it simply states that a court of competent jurisdiction might

81 Id., ¶18(d) (emphasis added).
82 See Doc. 18 at 16-17.
render a decision about the restrictions in the Arbitration Provision.83 The
language of Paragraph 18(d) does not trump Plaintiff’s agreement to arbitrate.
Thus, having found that the determination of whether the non-competition and
non-solicitation provisions violates Louisiana law is a controversy relating to
the “continuation, performance or breach” of Plaintiff’s agreements with NIS,
this Court finds the issues must be sent to arbitration. And, while NIS and
Plaintiff argue in their respective filings about whether FINRA and the U-4
Form Plaintiff signed compel arbitration—this Court, having already found
that the NIS Contract compels arbitration of the issues in this matter—will
not address these arguments. 84

iii. Federal Statute or Policy Prohibiting Arbitrability of Claims
Plaintiff does not raise any federal policy or statutes that would render
the claims non-arbitrable. Accordingly, Plaintiff shall arbitrate the claims
brought herein.85

C. Stay Pending Arbitration

83 See Pro. Ass'n of Ct. Sec. Officers - S. Dist. of Texas v. Centerra Grp., LLC, No. 4:23-CV-
01813, 2023 WL 7285540, at *4 (S.D. Tex. Nov. 3, 2023) (finding that “[i]n the Fifth Circuit,
the presumption of arbitrability is rebutted only if the party resisting arbitration shows
either (1) the existence of an express provision excluding the grievance from arbitration or
(2) the ‘most forceful evidence’ of a purpose to exclude the claim from arbitration.”) and
Weiner v. Tootsie Roll Indus., Inc., 412 F. App’x 224, 228 (11th Cir. 2011) (finding that
“[b]ecause the Arbitration Act creates a presumption in favor of arbitrability, the parties
must clearly express their intent to exclude categories of claims from their arbitration
agreement. The provision of the covenant not to compete cited…does not exclude from
arbitration an action to declare the covenant wholly unenforceable.”) (internal citations and
quotation marks omitted).
84 See Doc. 11-1 at 14-15, Doc. 18 at 17-21, and Doc. 22 at 8-10.
85 Priebe v. Advanced Structural Techs., Inc., No. CV 21-1274-WBV-DMD, 2021 WL 4893614,
at *4 (E.D. La. Oct. 20, 2021) (finding that when a plaintiff relied exclusively on Louisiana
law to find an arbitration provision invalid, this prong was not satisfied).
Defendant NIS asks the Court to stay litigation not only for the claims
Plaintiff brings against it, but also those claims that Plaintiff is pursuing
against Ozark and CNS Corporation citing the two entities’ interrelatedness
and the identical nature of the issues and claims that will be adjudicated in
arbitration if it is compelled.86 Plaintiff argues that this is not appropriate
because none of Plaintiff’s contracts with Ozark or CNS contain an arbitration
provision and neither CNS nor Ozark is a FINRA member and therefore not
subject to FINRA’s arbitration rules.87 Plaintiff goes further to say that staying
proceedings against CNS and Ozark would “forc[e] him to continue with
uncertainty of whether he is bound to comply with the non-competition and
non-solicitations provisions”—an outcome he states would go against
Louisiana public policy.88
i. Claims against NIS
Defendant has asked the Court to stay this matter pending arbitration.
Pursuant to 9 U.S.C. § 3, the Court “shall on application of one of the parties
stay the trial of the action until such arbitration has been had in accordance
with the terms of the agreement.” Having found that Plaintiff’s claims against
NIS are properly referable to arbitration, the Court finds that the matter
should be stayed and administratively closed pending arbitration.
ii. Claims against CNS and Ozark
“Courts may stay proceedings as to multiple defendants pending the
outcome of arbitration, even if some of those defendants are non-signatories to

86 See Doc. 11-1 at 16.
87 Doc. 18 at 21.
88 Id.
the arbitration agreement.”89 The Court’s discretion to stay litigation in such
cases is dependent not on the identity of the parties, but rather on whether the
“charges against the two non-signatory defendants were based on the same
operative facts.”90
Here, the claims brought by Plaintiff relating to the relevant non-
competition and non-solicitation provisions in his contracts with NIS are
identical in nature to and are, therefore, “inherently inseparable” from, its
claims against the identical provisions in his respective contracts with CNS
and Ozark regardless of their status as FINRA members.91
Further, Defendant NIS avers that the claims against Ozark and CNS
must be stayed to give full effect to the arbitration provision in the NIS
Agreement, and this Court agrees. “If the [non-signatory] was forced to try the
case, the arbitration proceedings would be rendered meaningless and the
federal policy in favor of arbitration effectively thwarted.”92 Further, the
strength of the state and federal policies in favor of staying litigation until the
conclusion of arbitration overcomes Louisiana’s policy disfavoring covenants
not to compete and any potential prejudice Plaintiff might experience while he
waits for the matter to be arbitrated thoroughly.93 As such, Plaintiff’s claims
against be stayed regarding Defendants CNS, Ozark and NIS must be stayed
pending resolution of the arbitration proceedings between Plaintiff and NIS.

89 Francisco v. Stolt-Nielsen, S.A., No. Civ.A. 02-2231, 2002 WL 31697700, at *6 (E.D. La. Dec.
3, 2002) (citing Grigson v. Creative Artists Agency L.L.C., 210 F.3d 524, 528 (5th Cir. 2000)).
90 Id. (quoting Sam Reisfeld & Son Imp. Co. v. S. A. Eteco, 530 F.2d 679, 680 (5th Cir. 1976)).
91 See Doc. 18-2 at 14, ¶21 and Doc. 18-3 at 14, ¶21; see Sam Reisfeld & Son Imp. Co. at 681.
92 Sam Reisfeld & Son Imp. Co., 530 F.2d at 681.
93 See 9 U.S.C. § 3 (stating “Upon being satisfied that the issue involved in [a] suit or proceeding
is referable to arbitration under such an agreement, [the Court] shall on application of one of
the parties stay the trial of the action until such arbitration has been had in accordance with
the terms of the agreement….”).
CONCLUSION
For the foregoing reasons, Plaintiff's Motion to Take Judicial Notice of
Documents from Dickerson Case Pursuant to Federal rule of Evidence 201
(Doc. 19) is GRANTED. Defendant’s Motion to Compel Arbitration and Stay
Litigation (Doc. 11) is GRANTED. Plaintiff and NIS are compelled to arbitrate
this dispute with the terms of the Contracts. This matter is STAYED and
ADMINISTRATIVELY CLOSED pending arbitration.

New Orleans, Louisiana this 15th day of October, 2024.

gy TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10648605. Public record. Not legal advice.