Electronically FILED by Superior Court of California, County of Los Angeles on 03/17/2020 03:11 PM Sherri R.

Carter, Executive Officer/Clerk of Court, by M. Soto,Deputy Clerk

BOIES SCHILLER FLEXNER LLP

MARTIN ELLISON, State Bar No. 292060
2 mellison@bsjllp.com
MICOL SMALL, State Bar No. 229287
3 msmall@bsjllp.com
401 Wilshire Boulevard, Suite 850
4 Santa Monica, California 90401
Telephone: (31 0) 752-2400
5 Facsimile: (31 0) 752-2490

6 BOIES SCHILLER FLEXNER LLP

MATTHEW L. SCHWARTZ (pro hac vice pending)
7 mlschwartz@bsjllp.com
55 Hudson Yards
8 New York, New York 10001
Telephone: (212) 446-2300
9 Facsimile: (212) 446-2350

I 0 Attorneys for RED GRANITE PICTURES, INC.,

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X SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF LOS ANGELES, CENTRAL DISTRICT
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JORDAN BELFORT, an individual, Case No. 20STCV02883
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Plaintiff,
(/) 16 MEMORANDUM OF POINTS AND
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v. AUTHORITIES IN SUPPORT OF
w 17 MOTION TO COMPEL ARBITRATION
RED GRANITE PICTURES, INC., formerly AND TO DISMISS OR,
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18 RED GRANITE PRODUCTIONS, INC., a ALTERNATIVELY, TO STAY
California corporation· RIZA SHAHRIZ BIN
19 ABDUL AZTZ, aka RIZA AZIZ, an {Filed concurrently with Notice of Motion;
individual, Declaration of Martin Ellison; and
20 [Proposed] Order]
Defendants.
21 Date: April 17, 2020
Time: 8:30a.m.
22 Dept.: 15

23 Assigned for All Purposes to:

Hon. Richard L. Fruin, Dept. 15
24
Action Filed: January 23, 2020
25 Trial Date: Not Set

26 RESERVATION ID: 777754769916

27

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF

MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 TABLE OF CONTENTS

3 I. INTRODUCTION .................................................... ..............................................................5

4 II. RELEVANT FACTS .................................................. ........................................................... 6

5 A. Plaintiffs Complaint .................................................................................................. 6

6 B. What Really Happened ............................... ...... ................. ......................................... ?

7 C. The Arbitration Agreement .............................. ........... ...............................................8

8 III. THE COURT SHOULD COMPEL ARBITRATION .................... ........ .. .................... ... ...... 9
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9 A. Under Both Federal and California Law, This Dispute Must Be Arbitrated .... .........9
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10 B. The Parties' Agreement Contains a Broad Arbitration Clause ................................ 10
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z II C. The Arbitration Clause Encompasses Belfort's Claims in This Action ................... ll
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w 12 D. The Arbitrator Must Decide Any Questions Regarding Arbitrability ...................... 13
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13 E. Belfort's Allegations of Fraud Provide No Basis to Deny Arbitration .................... 14

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14 IV. THE COURT SHOULD DISMISS OR, AT A MINIMUM, STAY THE ENTIRE
--' ACTION PENDING ARBITRATION ............................ ................. .......... .... ..................... 15
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v.
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u CONCLUSION ....... ..... ........................ ..................... .............................. .. .. .. .. ........ ........... .. 17

If) 16
If)

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 TABLE OF AUTHORITIES

3
Brinkley v. Monterey Fin. Servs., Inc.,
4 242 Cal. App. 4th 314 (2015) ......................... .................. ............ .......................................... 12, 13

5 Brown v. Wells Fargo Bank, NA.,

168 Cal. App. 4th 938 (2008) ..... ..................................................................... ......................... 9, 12
6

7 Buckeye Check Cashing, Inc. v. Cardegna,

546 u.s. 440 (2006) ·············································································································· ······· 12
8
Charles J. Rounds Co. v. Joint Council of Teamsters No. 42,
Q_
9 484 P.2d 1397 (Cal. 1971) ..... .... .................................................................................................. 16
10
"' Dean Witter Reynolds, Inc. v. Byrd,
470 u.s. 213 (1985) ...................................................... .. ............................................................. 10
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12 Dittenhafer v. Citigroup,
L1. No. C 10-1779 PJH, 2010 WL 3063127 (N.D. Cal. Aug. 2, 2010) ....... ................ .. ............... ...... 10
13
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14 Engalla v. Permanente Med. Grp., Inc.,
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938 P.2d 903 (Cal. 1997) .................... ......................... .... ........... .................... ...... .. ............ 9, 10, I5
I
15
(.) Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak St.,
Cl) 16 673 P.2d 251 (Cal. 1983) ............................................. .......................... ......... ...... .................... 9, I5
Cl)

17
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Gravillis v. Coldwell Banker Residential Brokerage Co.,
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18 I43 Cal. App. 4th 761 (2006) ......................... ....... ..... .. .. .. .................................................. .... 10, 12
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19 Greenspan v. LADT, LLC,

I85 Cal. App. 4th I413 (20I0) ....... ............... ...... ........................................ ........................... 13, 14
20
Gutierrez v. Jolt Delivery, LLC,
21
Case No LACV 17-8380-VAP (SSx), 20I8 WL 6II8581 (C.D. Cal. Aug. 7, 20I8) .................. 16
22
Hayes Children Leasing Co. v. NCR Corp.,
23 37 Cal. App. 4th 775 (1995) ... ............ ......... ........... .. .............................................................. I 0, I5

24 Heritage Provider Network, Inc. v. Superior Court,

I5 8 Cal. App. 4th II46 (2008) .............................. ................................ .... ................................... I6
25

26 Johnson v. Siegel,
84 Cal. App. 4th 1087 (2000) ................... ... .......... ............................................................. .......... II
27
Merrick v. Writers Guild ofAm., W., Inc.,
28 130 Cal. App. 3d 212 (1982) .............. .. ... .... .. ............ ................................ ................................... 13
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 MKJA, Inc. v. 123 Fit Franchising, LLC,
191 Cal. App. 4th 643 (2011) ............................... ................................ .. ...................................... 16
2
Molecular Analytical Sys. v. Ciphergen Biosystems, Inc.,
3
186 Cal. App. 4th 696 (20 10) ........................... ............... ... .................. ... ............................... 10, 12
4
Moses H Cone Mem 'I Hosp. v. Mercury Constr. Corp.,
5 460 u.s. 1 (1983) ··········································· ·· ·· ·· ·· ·· ·································· ······· ··························· 10
6 Prima Paint Corp. v. Flood & Conklin,
388U.S.395(1967) .................................................................................... ..... ............................ l5
7
8 Rent-A-Ctr., W., Inc. v. Jackson,
561 U.S. 63 (2010) ...................................................................................... .... ............................. 12
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Rosenthal v. Great W. Fin Sec. Corp.,
10 926P.2d 1061 (Cal.I996) .......................................................... ................... .... .. ............ ... 9, 14,15
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Rowe v. Exline,
w 12 153 Cal. App. 4th 1276 (2007) ..................................................................................................... 14

13 St. Agnes Med. Ctr. v. PacifiCare ofCal.,

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w 82 P.3d 727 (Cal. 2003) ................................... ................................................................... 9, 10, 15

14
Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc.,
15
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(.)
368 F.3d 1053 (9th Cir. 2004) ....................................... ............................................................... 16
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Statutes
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9 U.S.C. § 1 .................... ....... ...... ...................................................................................................... 9
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19 9 U.S.C. § 2 ........ ............... ................. ........................ ............... .......................... ......... .... ........... 9, 14

20 9 u.s.c. § 3 ..................... ... ............. ............................................ ... .. ............... ............... ................. 16

21 Code Civ. Proc. § 338(d) ..................................................................................................... .............. 8

22 Code Civ. Proc. § 1281 ............................................................................................................... 9, 14

23
Code Civ. Proc. § 1281.4 ................................................................................................................ 16
24
Code Civ. Proc. § 1281.2(a-c) .......................................... .............. ................................................. 14
25
Code Civ. Proc. § 1281.7 ............................................................................................... ................... 5
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 I. INTRODUCTION

2 Jordan Belfort, a man famous equally (and only) for deceit and inebriation, alleges that he

3 was tricked into signing away the rights to his life story and is suffering because those rights are

4 laying fallow. Belfort claims that if he had only known that Defendant Red Granite Pictures, Inc.

5 ("Red Granite") would come under scrutiny, he never would have agreed to do business with it.

6 Forget that Red Granite produced the motion picture "The WolfofWall Street" based on

7 Belfort's life, which earned more than $392 million in worldwide box-office receipts plus a Best

8 Picture Oscar nomination, making Belfort famous. Forget that Red Granite paid Belfort more than
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9 $1 million upfront for the rights to make that film, making him wealthy. Forget that even though
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I 0 Red Granite made Bel fort rich and famous through legitimate means for the first time in his life, it
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w 12 otherwise exploit Belfort's story. And forget that Belfort himself has claimed- when it suited

13 him, and directly contrary to his claims now- that "it was so obvious" since at least 2011 that Red
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14 Granite would come under scrutiny for the funding for its movies, rendering his claims both false
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15 and untimely.
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Ul 16 Forget all ofthose things, which demonstrate why Belfort's claims are as morally bankrupt
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w 17 as he is. Those issues are for another day, and another forum, because Belfort forgot that he
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18 agreed to arbitrate any disputes with Red Granite, not take them to court. (A cynic might think

19 that Belfort publicly filed his lawsuit in this Court and then disseminated it widely to the press

20 because he was trying to extend his 15 minutes of fame, or perhaps was under the mistaken

21 impression that Red Granite would bow to the public scrutiny of a court case. We prefer to

22 believe that he forgot.)

23 Pursuant to California's Code ofCivil Procedure§ 1281.7, Red Granite respectfully moves

24 to compel arbitration ofBelfort's claims in lieu of filing an answer to Belfort's complaint, and

25 further moves to dismiss this action or, alternatively, to stay this action in its entirety pending

26 arbitration. Bel fort has improperly sued Red Granite in this Court, in violation of a broad and

27 binding arbitration clause that requires all disputes to be decided in arbitration through JAMS.

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, AL TERNA TIVEL Y, TO STAY
 The Court should therefore issue an order compelling arbitration and dismissing Be1fort's claims

2 or, at a minimum, staying this case pending such arbitration.

3 II. RELEVANT FACTS

4 A. Plaintiff's Complaint

5 Belfort's claims arise from an agreement with Red Granite entered into on March 29, 2011.

6 Declaration of Martin Ellison ("Ellison Decl."), Ex. A at I (the "Agreement"). Under this

7 Agreement, which is attached to and incorporated into Belfort's complaint ("Compl."), Red Granite

8 acquired from Bel fort the rights, including future film and television production rights, in two books
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9 depicting Belfort's life and crimes: "The Wolf of Wall Street" and "Catching the Wolf of Wall

10 Street." Red Granite acquired these rights "exclusively, in perpetuity and throughout the universe,"
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z 11 subject only to certain "Reserved Rights" not relevant here. Ellison Dec!., Ex. A, ,-r 4. As part of
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12 the Agreement, Bel fort made a series of representations and warranties; Red Granite made none.
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13 Ellison Dec!., Ex. A, ,-r 5. Further, the Agreement specifically provides that "[n]othing contained in
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14 this Agreement shall be construed as requiring [Red Granite] to exercise or exploit, or continue to

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15 exercise or exploit, any of the rights herein granted." Ellison Dec!., Ex. A, ,-r 4(h).
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18 Red Granite has "refused to further exploit this goldmine of an asset ... despite its contractual

19 obligations." Compl. at 2. Bel fort alleges that the reason Red Granite has refused to further exploit

20 his story is because it is "facing heavy scrutiny" as a result of allegations that it received tainted

21 funding. Compl. at 3. According to Belfort, he was "blindsided" by these ailegations, and would

22 not have entered into the Agreement had he had reason to suspect that Red Granite's funding would

23 come under such scrutiny. Compl. at 2-3. Based on these allegations, Belfort asserts causes of

24 action for fraud, negligent misrepresentation, violation of the Racketeer Influenced and Corrupt

25 Organizations Act, breach of contract, breach of the covenant of good faith and fair dealing, and

26 declaratory relief.

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, AL TERNA TJVEL Y, TO STAY
 B. What Really Happened

2 Belfort's complaint is based on an alternate version of reality.

3 First, his claim that Red Granite breached the Agreement by failing to exploit his story is at

4 odds with the express language of the Agreement, which specifically provides that Red Granite had

5 no such obligation. Ellison Decl., Ex. A, 4(h) ("Nothing contained in this Agreement shall be

6 construed as requiring [Red Granite] to exercise or exploit, or continue to exercise or exploit, any

7 ofthe rights herein granted.").

8 Second, it is also not true that Red Granite has refused to exploit its existing intellectual
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9 property, or that its ability to do so is somehow impaired by the government's allegations. Compl.

IO 66. In March 20I8, Red Granite entered into a civil settlement with the United States government
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I2 its claims to Red Granite's film assets, among other things. See United States v. "The Wolf of Wall
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I4 Third, Belfort's self-serving allegation that he "was completely blindsided to learn, after the

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I5 fact, of the source of funding for Red Granite," Com pl. at I-2, is contradicted by his own public
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I8 See Katharina Bart, Jordan Be/fort: I Knew JMDB Was a Scam, Finews.com (Jan. 26, 2017),

I9 https://www.finews.com/news/english-news/25957-jordan-belfort-wolf-of-wall-street-switzerland-

20 speeches-donald-trump-greg-coleman-3 ("But I met these guys, and said to Anne, these guys are

21 fucking criminals"; "I knew it, it was so obvious."). 1

22 Fourth, those same admissions demonstrate that Belfort's claims are time-barred. For

23 example, according to The Hollywood Reporter:

24 Belfort also discussed the now-notorious Cannes party in 20I1 where Red Granite
announced The Wolf of Wall Street. "They flew me to Cannes four or five months
25

26 1 Of course, Red Granite denies any allegation that it knowingly received "stolen money" or
otherwise tainted funding. Red Granite has never been accused of knowingly receiving tainted
27 funds, and its settlement with the U.S. government expressly includes no finding of fault or liability.

28 The point for present purposes is simply that Belfort has previously and publicly made admissions
that are flatly at odds with the allegations in his complaint.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 after they bought the movie, and they wanted to announce it in Cannes," he said. "It
hadn't even gone into production yet, and they threw a launch party. They must have
2 spent $3 million on a launch party. They flew in Kanye West, and I said to Anne,
this is a fucking scam, anybody who does this has stolen money. You wouldn't spend
3
money you worked for like that."
4
Alex Ritman, Jordan Be/fort Says He Knew 'Wolf of Wall Street' Producers Were "F-ing
5
Criminals," The Hollywood Reporter (Jan. 30, 2017),
6
https://www.hollywoodreporter.com/news/jordan-belfort-says-he-knew-wolf-wall-street-
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producers-were-f-ing-criminals-970069. Thus, far from being "blindsided," Belfort by his own
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admission had suspicions dating back to 2011 - almost nine years before he filed this lawsuit. If
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Belfort actually had such suspicions, he certainly did not ask to be released from the Agreement at
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that time or otherwise let his suspicions get in the way of the production of "The Wolf of Wall
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X Street." Instead, he enjoyed the fruits of Red Granite's success, and waited nearly nine years to sue.
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But California's statute of limitations requires that a cause of action sounding in fraud or mistake
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be filed within three years from the date on which the aggrieved party learned of the facts
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constituting the fraud or mistake, Code Civ. Proc. § 338(d), rendering Belfort's claims time-barred
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by his own admission.
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In short, Belfort's lawsuit is factually untrue, legally meritless, and untimely.
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C. The Arbitration Agreement
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Although Belfort's lawsuit is therefore doomed to fail and in fact not brought in good faith,
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it suffers from a threshold defect, as well: the Parties agreed to arbitrate any disputes. The
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Agreement contains a broad and binding arbitration clause ("Arbitration Clause"). Ellison Decl.,
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Ex. A, 10( c). The Arbitration Clause states in relevant part that:
22
Any and all controversies, claims or disputes arising out of or related to this
23 Agreement or the interpretation, performance or breach thereof, including, but not
limited to, alleged violations of state or federal statutory or common law rights or
24 duties, and the determination of the scope or applicability of this agreement to
25 arbitrate ("Dispute"), except as set forth below, shall be resolved according to the
following procedures which shall constitute the sole dispute resolution mechanism
26 hereunder.

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 Ellison Dec!., Ex. A, , I 0(c). The Arbitration Clause incorporates the JAMS Rules and

2 provides that arbitration shall be conducted in Los Angeles County before a single neutral

3 arbitrator.

4 The arbitration shall be initiated and conducted according to either the JAMS
Streamlined (for claims under $250,000) or the JAMS Comprehensive (for claims
5 over $250,000) Arbitration Rules and Procedures, except as modified herein,
including the Optional Appeal Procedure, at the Los Angeles office of JAMS, or its
6
successor ("JAMS") in effect at the time the request for arbitration is made (the
7 "Arbitration Rules").

8 Ellison Decl., Ex. A, , I 0(c). Under the Arbitration Clause, the Parties also waived the right

a. 9 to seek punitive damages with respect to any claim or dispute arising out of or related to the
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10 Agreement. Id.
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11 III. THE COURT SHOULD COMPEL ARBITRATION
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12 A. Under Both Federal and California Law, This Dispute Must Be Arbitrated

13 This Court should compel arbitration pursuant to both federal and California law. The
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14 Federal Arbitration Act ("FAA"), codified at 9 U.S.C. § 1 et seq., and its state-law analogue, the
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15 California Arbitration Act ("CAA''), codified in Code Civ. Pro c. § 1281 et seq., both dictate that a
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16 written agreement to arbitrate a dispute is valid, enforceable, and irrevocable. See 9 U.S.C. § 2;
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17 Code Civ. Proc. § 1281; see also Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100

0 18 Oak St., 673 P.2d 251, 256 (Cal. 1983) (en bane) (calling any difference between the federal and
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19 California provisions "inconsequential"). 2

20 Under both federal and California law, "[t]he purpose of arbitration is to have a simple, quick

21 and efficient method to resolve controversies." Molecular Analytical Sys. v. Ciphergen Biosystems,

22

23 2
"In most important respects, the California statutory scheme on enforcement of private
arbitration agreements is similar to the [FAA]." Rosenthal v. Great W. Fin Sec. Corp., 926 P.2d
24
1061, 1067 (Cal. 1996); accord Brown v. Wells Fargo Bank, N.A., 168 Cal. App. 4th 938, 954 (2008)
25 ("In most respects, the CAA is similar to the FAA."). Although there is no conflict between federal
and California law on the issues raised in this motion to compel arbitration and for dismissal or,
26 alternatively, a stay pending arbitration, Red Granite submits that the FAA applies here. See 9
U.S.C. § 2 (stating that the FAA applies to any "written provision in any ... contract evidencing a
27 transaction involving commerce"). That said, California contract-Jaw principles apply to the extent

28 not preempted by the FAA. See St. Agnes Med Ctr. v. PacifiCare ofCal., 82 P.3d 727, 731 (Cal.
2003); Engalla v. Permanente Med Grp., Inc., 938 P.2d 903, 915 (Cal. 1997).
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 Inc., I86 Cal. App. 4th 696, 704 (20 10) (citation and internal quotation marks omitted); accord

2 Moses H. Cone Mem '1 Hosp. v. Mercury Constr. Corp., 460 U.S. I, 22 (1983) (stating that the FAA

3 is designed "to move the parties to an arbitrable dispute out of court and into arbitration as quickly

4 and easily as possible"). "Typically, those who enter into arbitration agreements expect that their

5 dispute will be resolved without necessity for any contact with the courts." Engalla v. Permanente

6 Med. Grp., Inc., 938 P.2d 903, 920 (Cal. I997) (citation and internal quotation marks omitted).

7 In both systems, any doubt or ambiguity regarding the enforceability of an arbitration

8 agreement- including as to its validity or scope- must be resolved in favor of arbitration. See, e.g.,
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9 Gravillis v. Coldwell Banker Residential Brokerage Co., 143 Cal. App. 4th 761, 771 (2006) (under
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10 California law, arbitration agreements "should be liberally interpreted, and arbitration should be
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w 12 marks omitted)); Hayes Children Leasing Co. v. NCR Corp., 37 Cal. App. 4th 775, 782, 788 (1995)
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13 (under federal law, "any doubts concerning the scope of arbitrable issues should be resolved in favor
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I4 of arbitration," id. at 782 (quoting Moses H. Cone, 460 U.S. at 24-25)).

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I5 For these reasons, courts in this state have long recognized that both the FAA and the CAA
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Ul 16 embody "a strong public policy favoring contractual arbitration." Molecular Analytical Sys., I86
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w I7 Cal. App. 4th at 704; accord id. at 7I4; St. Agnes Med. Ctr. v. PacificCare of Cal., 82 P.3d 727, 732
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I8 (Cal. 2003). In keeping with such a policy, both the FAA and CAA require that a court compel

19 arbitration of claims covered by an arbitration agreement, without room for judicial discretion. See

20 Dittenhafer v. Citigroup, No. C 10-1779 PJH, 20IO WL 3063I27, at *2 (N.D. Cal. Aug. 2, 2010)

21 (citing Dean Witter Reynolds, Inc. v. Byrd, 470 U.-S. 213, 218 (1985)); Molecular Analytical Sys.,

22 I86 Cal. App. 4th at 704.

23 B. The Parties' Agreement Contains a Broad Arbitration Clause

24 Belfort concedes that the Parties entered into the Agreement on March 29, 201I. See Compl.

25 52 ("Bel fort and Red Granite entered into the Agreement."). This Agreement contains a broad

26 and binding Arbitration Clause, which plainly states that arbitration "shall constitute the sole dispute

27 resolution mechanism hereunder." Ellison Decl., Ex. I O(c).

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 C. The Arbitration Clause Encompasses Belfort's Claims in This Action

2 There is also no dispute that Belfort's claims against Red Granite are within the scope of the

3 Arbitration Clause. The Arbitration Clause applies to:

4 [a]ny and all controversies, claims or disputes arising out of or related to this
Agreement or the interpretation, performance or breach thereof, including, but not
5 limited to, alleged violations of state or federal statutory or common law rights or
duties, and the determination of the scope or applicability of this agreement to
6
arbitrate.
7
Ellison Decl., Ex. lO(c).
8
Here, Belfort alleges that Red Granite (a) fraudulently induced him to enter into the
9
Agreement by misrepresenting its source of funding, Compl. 22, 26; (b) breached the Agreement
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"'UJ by failing to exploit the book and story rights it purchased from Belfort to the fullest extent possible,
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X Compl. 53-54; and (c) violated certain statutory and common law duties relating to the
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Agreement, Compl. 49-50, 59-60. Belfort also seeks an order from this Court declaring the
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Agreement void. Compl. 70.
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All of Belfort' s claims "aris[e] out of or relat[ e] to" the Agreement and are therefore within
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the scope of the Arbitration Clause. First, his claims relating to breach of the Agreement, as well
{f) 16
as "alleged violations of state or federal statutory or common law rights or duties," are explicitly
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covered by the language of the Arbitration Clause. Ellison Decl., Ex. I O(c). Second, Bel fort's
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fraud claims relate to the formation of the Agreement generally, and as discussed below, fraud in
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the inducement of the underlying contract is not sufficient to defeat an arbitration clause. See, e.g.,
20
Johnson v. Siegel, 84 Cal. App. 4th 1087, I 094-95 (2000) ("[W]here there is an arbitration clause,
21
courts may not consider claims of fraud in the inducement of the contract generally." (citation and
22
internal quotation marks omitted)). And, third, Belfort's request that this Court declare the entire
23
Agreement void is squarely within the scope of the Arbitration Clause, which applies to "[a]ny and
24
all controversies, claims or disputes arising out of or related to this Agreement." Ellison Decl., Ex.
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10(c). 3
26

27 3
Although the Arbitration Clause includes a carve-out for "injunctive relief (unless otherwise
28 precluded by any other provision of this Agreement)," Ellison Dec I., Ex. A, I 0(c), this clause must

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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 As the U.S. Supreme Court has routinely held, "regardless of whether the challenge is

2 brought in federal or state court, a challenge to the validity of the contract as a whole, and not

3 specifically to the arbitration clause, must go to the arbitrator." Buckeye Check Cashing, Inc. v.

4 Cardegna, 546 U.S. 440, 449 (2006); Rent-A-Ctr., W., Inc. v. Jackson, 56I U.S. 63 (20IO). Thus,

5 all ofBelfort's claims are subject to arbitration.

6 Finally, it bears repeating that, under both federal and California law, any doubt or ambiguity

7 regarding the scope of an arbitration agreement must be resolved in favor of arbitration, in keeping

8 with the pro-arbitration policies ofthe federal and state governments. See, e.g., Gravillis, I43 Cal.
a.
9 App. 4th at 77I (under California law, an order compelling arbitration should be granted "unless it

IO may be said with positive assurance" that the arbitration clause "is not susceptible of an
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lL

13 indulge every intendment to give effect to" arbitration proceedings (internal quotation marks
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I4 omitted)); Brinkley v. Monterey Fin. Servs., Inc., 242 Cal. App. 4th 3I4, 331-32 (2015) (under

I
15 federal law, "all doubts are to be resolved in favor of arbitrability," such that when a broad
0

"' 16 arbitration clause - providing for arbitration of all disputes "arising out of or relating to" the
"'w 17 agreement- is at issue, "a party's factual allegations need only 'touch matters' covered by the
0
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18 contract containing the arbitration clause" to compel arbitration (alteration and citation omitted)).

19

20

21

22
be interpreted narrowly and does not cover Belfort's claim for declaratory relief. See Gravillis, 143
23 Cal. App. 4th at 771 ("To the extent possible, an exclusionary clause in an arbitration provision
should be narrowly construed."); Molecular Analytical Sys., 186 Cal. App. 4th at 705 ("[D]oubts as
24 to the scope of an agreement to arbitrate are to be resolved in favor of arbitration." (citation and
internal quotation marks omitted)).
25
Moreover, the Agreement also provides that injunctive relief is not available to Belfort at
26 all. Thus, to the extent that Belfort's declaratory judgment claim could be considered injunctive in
nature, it is barred by the Agreement. Ellison Dec I., Ex. 8 ("No breach by [Red Granite] of this
27 Agreement shall entitle [Belfort] to equitable relief, whether injunctive or otherwise ... it being

28 acknowledged and agreed that [Belfort]'s remedy of money damages in accordance with the dispute
resolution provisions set forth below is adequate.").
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 D. The Arbitrator Must Decide Any Questions Regarding Arbitrability
2 Both federal and California Jaw are clear that where, as here, contracting parties have agreed

3 to arbitrate questions of arbitrability - including the validity and scope of an arbitration clause -

4 such questions must be determined by an arbitrator in the first instance, not the Court. See, e.g.,

5 Merrick v. Writers Guild ofAm., W, Inc., 130 Cal. App. 3d 212, 218 (1982) (discussing both federal

6 and California Jaw). So long as the parties' contract supplies "clear and unmistakable" evidence of

7 their agreement "to have the arbitrator, rather than the court, decided which grievances are

8 arbitrable," questions regarding the enforceability of an arbitration clause are firmly committed to
Q_

-'
9 arbitration. Greenspan v. LADT, LLC, 185 Cal. App. 4th 1413, 1441 (20 10).
-'
10 Courts in this state, applying both federal and California Jaw, have repeatedly held that when
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13 to an arbitrator." Id. at 1442 (citations omitted); see also id. at 1441-42 (collecting cases); cf
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14 Brinkley, 242 Cal. App. 4th at 354 (holding that "(t]he parties' agreement to arbitrate their disputes

I
15 under a specifically designated set of rules, which in tum provide that the arbitrator shall decide
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18 Here, the Arbitration Clause expressly covers "[a]ny and all controversies, claims or disputes

19 arising out of or related to this Agreement or the interpretation, performance or breach thereof,

20 including, but not limited to, ... the determination of the scope or applicability of this agreement to

21 arbitrate." Ellison Dec I., Ex. A, 10(c). Moreover, the Arbitration Clause incorporates the JAMS

22 Rules, which in tum provide that the arbitrator will decide all questions of arbitrability. Specifically,

23 JAMS Rule 11(b) provides: "Jurisdictional and arbitrability disputes, including disputes over the

24 formation, existence, validity, interpretation or scope of the agreement under which Arbitration is

25 sought, ... shall be submitted to and ruled on by the Arbitrator." Ellison Decl., Ex. Bat 15.4 Thus,

26

27 4
In the version of the JAMS Comprehensive Arbitration Rules & Procedures in effect when
28 the Agreement was executed, the above-quoted language appeared as Rule 11 (c). Ellison Dec I.,
Ex. Cat 14.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 any disputes regarding arbitrability- including questions ofthe validity and scope ofthe Arbitration

2 Clause - must be resolved by an arbitrator. See Greenspan, 185 Cal. App. 4th at 1442-43 (citing

3 JAMS Rule II in holding that an arbitration clause that incorporated the JAMS Rules committed all

4 questions of arbitrability to arbitral, not judicial, determination).

5 E. Belfort's Allegations of Fraud Provide No Basis to Deny Arbitration

6 Belfort alleges that he relied on Red Granite's purported misrepresentation that it was "a

7 properly funded film production company," which "caused him to enter into the Agreement" when

8 he otherwise would not have done so. Campi. 16. Aside from the fact that these allegations are

9 entirely lacking in merit, they provide no basis for avoiding arbitration under either federal or

10 California law.
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L1.

13 contract." 9 U.S.C. § 2; accord Code. Civ. Proc. § 1281; see also id. § 1281.2(b) (stating that, if a
""
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14 court finds that an arbitration agreement exists, it must compel arbitration unless it determines that

I
15 "[g]rounds exist for rescission of the agreement"). 5 As this state's highest court has noted, the U.S.
u
Cll 16 Supreme Court has held that, under the FAA, '"claims of fraud in the inducement of the contract
Cll

w 17 generally,' that is, fraud claims not going 'to the "making" of the agreement to arbitrate,' are to be
0
18 decided by the arbitrator rather than the court." Rosenthal v. Great W Fin. Sec. Corp., 926 P .2d

19

20
5
California's Code of Civil Procedure§ 1281.2 outlines three other exceptions, none ofwhich
21 apply here. Two of these exceptions are facially irrelevant, since they concern waiver, id.
22 § 1281.2(a), and state or federally chartered depository institutions, id. § 1281.2(d).
The third exception, which contemplates a situation where "[a] party to the arbitration
23 agreement is also a party to a pending court action or special proceeding with a third party, arising
out of the same transaction or series of related transactions and there is a possibility of conflicting
24
rulings on a common issue of law or fact," is likewise inapplicable. !d. § 1281.2(c). Aside from
25 this suit, there is no pending action or special proceeding arising out of this transaction, and thus no
risk of inconsistent rulings. Furthennore, defendant Riza Aziz also would be entitled to compel
26 arbitration of Bel fort's claims under the theory of estoppel or, as Belfort himself alleges, Com pl.
6, as the alter ego of Red Granite. See, e.g., Rowe v. Exline, 153 Cal. App. 4th 1276 (2007)
27 (applying both theories to hold that non-parties could compel arbitration and thus were not "third

28 part[ies]" under section 1281.2(c), which therefore did not apply, id. at 1290). Thus, even assuming
the CAA governs this agreement, none of its exceptions to arbitration applies.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 1061, 1073 (Cal. 1996) (quoting Prima Paint Corp. v. Flood & Conklin, 388 U.S. 395,404 (1967)).

2 The California Supreme Court "ha[ s] interpreted section 1281.2 to embody the same standard of

3 enforceability." Id.; see also Ericksen, 673 P.2d at 256 (calling any difference between the federal

4 and California statutes "inconsequential" and thus "not requir[ing] or point[ing] to a different rule"

5 on this issue).

6 In his complaint, Belfort does not allege any fraud specific to the making of the Agreement's

7 Arbitration Clause, as would be necessary to potentially avoid arbitration of his claims under federal

8 or state law. See, e.g., Rosenthal, 926 P.2d at 1074-76; Engalla, 938 P.2d at 916-17; St. Agnes, 82
(l_

...J
9 P.3d at 735 (applying the FAA); Hayes, 37 Cal. App. 4th at 785 (applying the FAA). By entering

10 into an agreement containing an arbitration clause that provided for arbitral resolution of"[a]ny and
«
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-'
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13 agreement to arbitrate," Ellison Decl., Ex. A, 10(c), "the parties established their intent that
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14 disputes coming within the agreement's scope be determined by an arbitrator rather than a court;
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15 this contractual intent must be respected even with regard to claims of fraud in the inducement of
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18 presumptively equal bargaining power have entered into an agreement containing a commitment to

19 arbitrate by a procedure of unchallenged fairness" - in keeping with the strong federal and state

20 policies favoring arbitration. Ericksen, 673 P.2d at 257. Therefore, Belfort's claims of fraud in the

21 inducement of the Agreement generally- which Red Granite denies completely and will contest in

22 full at the proper time and place - do not provide any grounds for denying this motion to compel

23 arbitration.

24 IV. THE COURT SHOULD DISMISS OR, AT A MINIMUM, STAY THE ENTIRE

25 ACTION PENDING ARBITRATION

26 If Red Granite's motion to compel arbitration is granted, then all of the claims against it

27 should be dismissed, under both federal and California law, because arbitration is the exclusive

28 forum for the resolution ofBelfort's claims. See Thinket Ink Info. Res., Inc. v. Sun Microsystems,
-15-
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 Inc., 368 F.3d I 053, I 060 (9th Cir. 2004) (holding that a district court did not err "in dismissing the

2 plaintiffs' claims that were subject to arbitration" under the FAA); Gutierrez v. Jolt Delivery, LLC,

3 Case No LACY I7-8380-VAP (SSx), 20I8 WL 6II8581, at *5 (C.D. Cal. Aug. 7, 20I8)(dismissing

4 arbitrable claims and staying non-arbitrable claim under federal law); accord Charles J Rounds Co.

5 v. Joint Council ofTeamsters No. 42, 484 P.2d I397, I40I-04 (Cal. I97I) (en bane) (trial court has

6 discretion to dismiss, rather than merely stay, arbitrable claims under California law). 6

7 At a minimum, the Court should stay this action in its entirety pending arbitration, pursuant

8 to both federal and state law. See 9 U.S.C. § 3; Code Civ. Proc. § I28I.4.

9 When the Court has ordered arbitration of a dispute that is also an issue in a pending action,

I 0 a stay of judicial proceedings is necessary "to protect the jurisdiction of the arbitrator by preserving
w
z II the status quo until the arbitration is resolved." MKJA, Inc. v. 123 Fit Franchising, LLC, 19I Cal.
X
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u.
I3 court disrupts the arbitration proceedings and can render them ineffective." Heritage Provider
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I4 Network, Inc. v. Superior Court, 15 8 Cal. App. 4th Il46, II 52 (2008). Indeed, "a single overlapping

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15 issue is sufficient to require imposition of a stay." Id. at II 53; accord 9 U.S.C. § 3 (stating that if
0
CfJ 16 "any issue" is referred to arbitration, the court "shall" issue a stay pending arbitration upon request
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18 Once this Court determines that all of the claims against Red Granite are subject to
"'
19 arbitration- as, we respectfully submit, it should- there is nothing left for this Court to decide with

20 respect to those claims, and thus they should be dismissed under both federal and California law.

21 Alternatively, because there is much more than "a single overlapping issue" between the arbitration

22 and this action, the Court is required to stay these proceedings in their entirety pending arbitration,

23 pursuant to both federal and state law.

24

25

26 6 The Court would be well within its discretion to dismiss not only the claims against Red
Granite, but Belfort's entire lawsuit. As explained in the preceding footnote, Belfort's claims
27 against co-defendant Riza Aziz are also arbitrable, meaning that all ofBelfort's claims against all

28 of the defendants are subject to mandatory arbitration, and there is therefore nothing left for this
Court to adjudicate.
-16-
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 V. CONCLUSION
2 Red Granite respectfully requests that the Court grant its motion to compel arbitration of

3 Belfort's claims and dismiss or, in the alternative, stay this action in its entirety pending arbitration.

4
DATED: March I7, 2020 Respectfully submitted,
5
BOIES SCHILLER FLEXNER LLP
6

8
By:
Q.
9 MARTIN ELLISON, State Bar No. 292060
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mellison@bsjllp. com
10 MICOL SMALL, State Bar No. 229287
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z II 40 I Wilshire Boulevard, Suite 850
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Santa Monica, California 90401
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12 Telephone: (31 0) 752-2400
... Facsimile: (3I 0) 752-2490
I3
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w MATTHEW L. SCHWARTZ (pro hac vice

I4 pending)
mlschwartz@bsfllp. com
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15 55 Hudson Yards
(.)
New York, NewYork IOOOI
Cll I6 Telephone: (212) 446-2300
Cll Facsimile: (212) 446-2350
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0 Attorneys for RED GRANITE PICTURES, INC .
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18

I9

20

21

22

23

24

25

26

27

28
-17-
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY
 PROOF OF SERVICE

2 Be/fort v. Red Granite Pictures, Inc., and Riza Shahriz Bin Abdul Aziz
20STCV02883
3
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
4
At the time of service, I was over 18 years of age and not a party to this action. I am
5 employed in the County of Los Angeles, State of California. My business address is 725 South
Figueroa St., 31st Floor, Los Angeles, CA 900 17.
6
On March 17, 2020, I served true copies ofthe following document(s) described as
7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO
COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY on the
8 interested parties in this action as follows:
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9 Attorneys for Plaintiff
..J

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10 Bryan J. Freedman
w David Marmorstein
z 11
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FREEDMAN+ TAITELMAN, LLP
w 12 1901 Avenue ofthe Stars, Suite 500
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Los Angeles, CA 90067
13 Telephone: (31 0) 201-0005
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Facsimile: (31 0) 201-0045
14 Email: BFreedman@ftllp.com
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DMarmorstein@ftllp.com
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15
(.)
BY FEDEX: I enclosed said document(s) in an envelope or package provided by FedEx
Ul 16 and addressed to the persons at the addresses listed in the Service List. I placed the envelope or
Ul package for collection and overnight delivery at an office or a regularly utilized drop box ofFedEx
w 17 or delivered such document(s) to a courier or driver authorized by FedEx to receive documents.
0
18 BY E-MAIL OR ELECTRONIC TRANSMISSION: I caused a copy ofthe
document(s) to be sent from e-mail address jwerther@bsfllp.com to the persons at the e-mail
19 addresses listed in the Service List. I did not receive, within a reasonable time after the
transmission, any electronic message or other indication that the transmission was unsuccessful.
20
I declare under penalty of perjury under the laws of the State of California that the
21 foregoing is true and correct.

22 Executed on March 17, 2020, at Los Angeles, California.

23

24

25

26

27

28

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF

MOTION TO COMPEL ARBITRATION AND TO DISMISS OR, ALTERNATIVELY, TO STAY