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Yil Ki Moon; Woongjin Coway Hawaii, Inc v. Woongjin Coway Usa

April 2, 2012

YIL KI MOON; WOONGJIN COWAY HAWAII, INC., PLAINTIFFS,
v.
WOONGJIN COWAY USA, INC.;
JOHN DOES 1-10, JANE DOES 1-10;
DOE CORPORATIONS 1-10;
DOE FOR PARTNERSHIPS 1-10;
DOE FOR GOVERNMENTAL AGENCIES 1- 10, DEFENDANTS.



The opinion of the court was delivered by: J. Michael Seabright United States District Judge

ORDER (1) GRANTING DEFENDANT'S MOTION TO COMPEL FINAL AND BINDING ARBITRATION AND FOR STAY OF ACTION, AND (2) DENYING AS MOOT DEFENDANT'S MOTION TO DISMISS FOR IMPROPER FORUM, OR IN THE ALTERNATIVE, CHANGE OF VENUE

I. INTRODUCTION

Two Motions are before the court. First, Defendant Woongjin Coway USA, Inc. ("Defendant" or "Woongjin USA") moves to compel arbitration of all claims made in this action by Plaintiffs Yil Ki Moon and Woongjin Coway Hawaii, Inc. ("Woongjin Hawaii") (collectively "Plaintiffs"), and to stay the action pending the arbitration ("Motion to Compel"). Doc. No. 7. Second, if the court does not compel arbitration, Defendant moves to dismiss without prejudice based on an improper forum or, in the alternative, for a change of venue to the United States District Court for the Central District of California ("Motion to Dismiss"). Doc. No. 6. Based on the following, the Motion to Compel is GRANTED, and the Motion to Dismiss is DENIED as MOOT.

II. BACKGROUND

Plaintiffs filed this action on September 29, 2011 in the Circuit Court of the First Circuit, State of Hawaii, and Defendant removed it to this court based upon diversity of citizenship on January 24, 2012. Doc. No. 1. The Complaint asserts statutory claims under Hawaii Revised Statutes ("HRS") §§ 480-2 & -13, and common law claims for breach of contract and fraud. The present dispute arises out of a distributorship agreement between Woongjin USA and Woongjin Hawaii. See Doc. No. 7-3, Yoon Decl. Ex. 1. The merits of the dispute are not at issue in the present Motions.

The distributorship agreement contains a broad arbitration clause:

15.10 Arbitration. Any dispute or controversy between the Parties in any way arising out of, related to, or connected with this Agreement or the scope of this Agreement shall be resolved through final and binding arbitration. The arbitrator shall hold the arbitration hearing in Los Angeles, California, and shall enforce this Agreement consistent with its terms. . . .

Id. at 14-15. Based upon this arbitration clause, Defendant's Motion to Compel seeks an order compelling arbitration in Los Angeles, California of all issues in the Complaint. Alternatively (also based upon the arbitration clause), Defendant's Motion to Dismiss contends that the suit belongs in the United States District Court for the Central District of California.

Defendant filed its Motions on January 31, 2012. See Doc. Nos. 6, 7. On March 22, 2012, Plaintiffs filed a Response to the Motion to Compel, Doc. No. 11, and Opposition to the Motion to Dismiss, Doc. No. 12. Plaintiffs filed a consolidated Reply on March 29, 2012. Doc. No. 14. The matters are suitable for decision without a hearing under Local Rule 7.2(d).

III. DISCUSSION

The Federal Arbitration Act ("FAA") provides that any arbitration agreement within its scope "shall be valid, irrevocable, and enforceable," 9 U.S.C. § 2, and permits a party "aggrieved by the alleged refusal of another to arbitrate" to petition a district court for an order compelling arbitration in the manner provided for in the agreement. 9 U.S.C. § 4. The FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Kilgore v. KeyBank, Nat'l Ass'n, --- F.3d ----, 2012 WL 718344, at *5 (9th Cir. Mar. 7, 2012) (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985)).

The court's role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. If the response is affirmative on both counts, then the [FAA] requires the court to enforce the arbitration agreement in accordance with its terms.

Id. (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)).

Defendant thus seeks an Order compelling arbitration in Los Angeles, California, as well as a stay of the action pending such arbitration. In response to Defendant's Motion to Compel, Plaintiffs agree that paragraph 15.10 of the distributorship agreement contains a mandatory arbitration clause. Doc. No. 11, Response at 2. And, as the Motion seeks to arbitrate all of the issues raised in Plaintiffs' Complaint, Plaintiffs also agree to engage in final and binding arbitration as set forth in paragraph 15.10. Id. Thus, the court GRANTS the Motion to Compel -- the ...


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