JOHN H. SCHNATTER v. 247 GROUP, LLC, dba Laundry Service - Articles

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Posted by: Azya Thornton on Sep 10, 2025

Court: 6th Circuit Court (Published Opinions)

Attorneys 1: ARGUED: Michael P. Abate, KAPLAN, JOHNSON, ABATE & BIRD, LLP, Louisville, Kentucky, for Appellant.

Attorneys 2: ARGUED: Michael P. Abate, KAPLAN, JOHNSON, ABATE & BIRD, LLP, Louisville, Kentucky, for Appellant.

Attorneys 3: ON BRIEF: Michael P. Abate, Burt A. (Chuck) Stinson, KAPLAN, JOHNSON, ABATE & BIRD, LLP, Louisville, Kentucky, Bert H. Deixler, Patrick J. Somers, David Freenock, KENDALL BRILL & KELLY LLP, Los Angeles, California, for Appellant.

Attorneys 4: ON BRIEF: Dennis D. Murrell, Elisabeth S. Gray, Augustus S. Herbert, M. Katherine Ison, Jason H. Raff, GRAY ICE HIGDON, PLLC, Louisville, Kentucky, for Appellee.

Judge(s): CLAY, GILMAN, and BLOOMEKATZ, Circuit Judges

Court Appealed: United States District Court for the Western District of Kentucky at Louisville

BLOOMEKATZ, Circuit Judge. John Schnatter is the founder and former CEO of Papa John’s, a pizza company. He accused his company’s former public-relations firm, Laundry Service, of leaking damaging information about him to the press, and brought this lawsuit, claiming that the alleged leak violated the parties’ nondisclosure agreement. Laundry Service denied the allegation, and the parties spent the next four years litigating the dispute in federal court. Finally, after Laundry Service failed to win on the merits, it moved to compel arbitration under the Federal Arbitration Act (FAA), 9 U.S.C. § 4. The district court denied the motion. It concluded, after a bench trial, that Schnatter and Laundry Service had entered an enforceable nondisclosure agreement containing an arbitration provision that bound both parties. Despite this contract, however, the district court held that Laundry Service had lost its right to arbitrate by litigating extensively in federal court before moving to compel. In this interlocutory appeal, Laundry Service challenges the district court’s rulings on alternative grounds. First, Laundry Service argues that it did not enter a binding nondisclosure agreement with Schnatter. Second, even assuming that it is bound by the nondisclosure agreement, Laundry Service argues that it did not forgo its right to arbitrate under that contract, and that the FAA requires the district court to send the dispute to arbitration. Given the limited scope of our interlocutory review, we lack jurisdiction to review Laundry Service’s first argument that it did not enter a binding contract. We do, however, have jurisdiction to review the district court’s determination that Laundry Service defaulted on its arbitration rights. On that issue, we agree with the district court. Thus, we dismiss Laundry Service’s appeal in part and otherwise affirm the district court’s judgment. Schnatter urges us to go one step further by sanctioning Laundry Service for filing a frivolous appeal. We decline to do so.

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