James & Jackson, LLC. v. Willie Gary, LLC.

906 A.2d 76 · Supreme Court of Delaware · 2006

Facts

Willie Gary LLC (80% owner) and James & Jackson LLC (J&J) own MBC Gospel Network. Willie Gary sought to dilute ownership for a capital infusion, which J&J refused. Willie Gary sued for injunctive relief, specific performance, and dissolution, while J&J sought to compel arbitration. The trial court denied J&J's motion, holding the claims were not arbitrable.

Issue

Should a court or an arbitrator decide substantive arbitrability when an arbitration clause incorporates AAA rules but also expressly authorizes judicial relief for certain claims? Did the specific LLC agreement require arbitration of Willie Gary's claims for injunction, specific performance, or dissolution?

Holding

The court affirmed that courts should decide arbitrability in this case, despite the incorporation of AAA rules, because the arbitration clause also explicitly allowed judicial remedies. It further affirmed that Willie Gary's claims for injunctive relief, specific performance, and dissolution were not subject to arbitration under the LLC Agreement.

Rule

Courts generally decide substantive arbitrability unless there is "clear and unmistakable evidence" of intent to delegate to an arbitrator. While incorporating AAA rules can be such evidence, it is not sufficient if the arbitration clause also contains specific provisions authorizing judicial remedies for certain disputes, thereby indicating not all disputes are referred to arbitration.

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Case brief last reviewed 2026-04-28. Prepared by CaseReader from the published opinion.