Mark and Tammy Smith granted Neora arbitration injunction
Since the filing of Mark and Tammy Smith’s Californian lawsuit against Neora (then Nerium), the company has moved swiftly to have the matter resolved via arbitration in Texas.
To that end Neora filed an arbitration demand in July 2018.
Describing Neora’s response as “retaliatory and vexatious attempts to litigate against Plaintiffs in Texas”, the Smiths’ sought a restraining order against Texas arbitration.
The Smiths’ initial TRO motion was denied, on the grounds the California court anticipated Neora filing ‘motions challenging jurisdiction and seeking to transfer the case‘ to Texas.
Before those motion were filed however, Neora filed a motion to compel arbitration.
In November 2018, a Texas court granted the motion – compelling the Smiths’ to participate in Texas arbitration.
This presented the bizarre situation wherein arbitration was ordered to determine the legitimacy of the arbitration clause in the Smiths’ Neora contract (referred to as “the Contract Issue”).
Meanwhile the issue of whether the Smith’s are bound to participate in arbitration remains pending before the Californian court.
This prompted the Smiths’ to file a renewed TRO motion, which was scheduled to be heard on June 3rd.
On May 15th at a preliminary hearing for the Texas arbitration, the selected arbitrator ‘stated that she is the authority who is to conclusively to
determine the Contract Issue.‘
To that end the arbitrator set a briefing schedule, which is intended to resolve the Contract Issue before the June 3rd TRO motion hearing.
This prompted the Smiths’ to file an ex parte application for immediate consideration of their TRO motion.
The Smith’s argue that allowing the Texas arbitration to proceed
is clearly usurpation of (the Californian) Court’s authority to determine the Contract Issue and a usurpation of Plaintiffs’ right to a jury trial on the issue.
In the alternative if the court wasn’t willing to immediately make a decision on the TRO motion, the Smiths’ requested a stay on the Texas arbitration proceedings.
Neora filed an opposition to the Smiths’ May 20th ex parte application on May 21st.
On May 2nd the Californian court issued a ruling on the matter, granting a stay on the Texas arbitration proceedings.
The TRO hearing remains scheduled for June 3rd.
On June 3rd it will be decided whether or not the Smiths’ have to participate in the Texas arbitration proceedings.
Simplifying the legal ramifications of the June 3rd hearing; arbitration in Texas favors Neora, whereas continuing the case in California favors the Smiths.
Stay tuned for an update pending the outcome of the June 3rd TRO hearing.
Footnote: When I originally covered the Smiths’ Neora lawsuit I noted it wasn’t available to track on Pacer.
Seems the case is now up on Pacer so I’ve added it to our list of tracked cases for updates.
Update June 4th 2019 – The June 3rd hearing went ahead as scheduled.
The matter had been taken under submission, meaning a ruling will be issued at a later date.
Pending said ruling, the TRO in place blocking Neora’s arbitration efforts in Texas remains in place.
Update June 28th 2019 – Mark and Tammy Smith have been denied an arbitration preliminary injunction.