Tuesday, March 26, 2013

Textile Unlimited, Inc. v. ATTBMH and Company, Inc. case brief

Textile Unlimited, Inc. v. ATTBMH and Company, Inc. case brief summary
240 F.3d 781

Defendant initiated arbitration proceedings due to plaintiff's refusal to pay for goods. Plaintiff filed an action in the United States District Court for the Central District of California to enjoin the arbitration. The district court preliminarily enjoined both the pending arbitration and defendant from any further action regarding arbitration of the dispute in question. Defendant appealed the district court's order.

-The Plaintiff and Defendant dealt with one another for ten months and conducting approximately 38 transactions with one another.
-Plaintiff received some yarn from Defendant that it contended was defective.
-Defendant, in accordance with the contract terms of its invoices submitted the matter to arbitration in Atlanta, Georgia.
-Plaintiff filed suit to enjoin the arbitration, claiming it did not agree to arbitration in their original contractual arrangement and that arbitration was prejudicial to the Plaintiff.
-The Defendant argued that the Plaintiff accepted its agreement because their contract provided that Plaintiff “accepted these terms in full.”

HOLDING: The instant court found that the district court correctly concluded that venue was proper in the district court under 28 U.S.C.S. § 1391.

-Contrary to defendant's arguments, nothing in the Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., required that plaintiff's action to enjoin arbitration be brought in the district where the contract designated the arbitration to occur.
-The district court did not abuse its discretion in granting the preliminary injunction.
-The district court found that plaintiff would have suffered irreparable harm if the arbitration were not stayed, that the balance of hardships tipped in plaintiff's favor and that it was in the public interest to stay arbitration.
-Serious questions were raised and plaintiff had shown a probability of success on the merits.
-The supplemental terms to the contract proposed by defendant, including the arbitration clause, did not become part of the contract.
-Finally, plaintiff did not waive its objection to arbitration by failing to object within the time period specified in the arbitration rules.

OUTCOME: The order was affirmed; the action was properly venued in the district court, it was not an abuse of discretion to grant the preliminary injunction, and plaintiff never entered into an arbitration agreement.

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