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Blash v. Charter Finance, Inc.

United States District Court, D. South Carolina, Greenville Division

October 3, 2014

Joseph A. Blash; Chantal M. Blash; Pig Iron Leasing, Inc.; and North American Amusements, Inc., Plaintiffs,
v.
Charter Finance, Inc.; Dustan Barber; Tommy Coffing; and Jason Seeley, Defendants.

OPINION & ORDER

TIMOTHY M. CAIN, District Judge.

This matter is before the court on Defendants' Motion to Compel Arbitration and Dismiss or, alternatively, to Stay. (ECF No. 12). Plaintiffs filed a Notice of Non-Opposition to Defendants' Motion to Compel Arbitration and Dismiss or Stay (ECF No. 15). Within its response, however, Plaintiffs request that the court order that the arbitration take place in California. Defendants filed a reply opposing arbitration in California and seeking an order requiring it to take place in South Carolina. (ECF No. 17).

This action was originally filed in the Central District of California. Subsequently, without opposition, it was transferred to this district. When it was transferred, the instant motion was pending. The parties agree that the claims raised in this action are subject to arbitration. They do not, however, agree on where the arbitration should take place. Defendants contend that, based upon the forum selection clause within the contract, arbitration should take place in South Carolina while Plaintiffs argue arbitration should take place in California.

The arbitration agreement selects South Carolina as the arbitration forum. Under the FAA, "[w]hen a valid agreement to arbitrate exists between the parties and covers the matter in dispute, the FAA commands the federal courts to stay any ongoing judicial proceedings, 9 U.S.C. § 3, and to compel arbitration." Hooters of America, Inc. v. Phillips, 173 F.3d 933, 937 (4th Cir.1999). However, section 4 of the FAA states that "[t]he hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed." 9 U.S.C. § 4. This has been interpreted to mean that a federal district court may not compel arbitration outside its own district. See M.C. Const., Corp. v. Gray Co., 17 F.Supp.2d 541, 548 (W.D.Va.1998).[1] And when Plaintiffs filed their opposition in the Central District of California seeking to have arbitration ordered to take place in California, their argument hinged on this very view of § 4. (ECF No. 15 at 2). However, now that this action has been transferred to South Carolina, the argument is moot, as this court can order arbitration to take place in South Carolina. Reviewing the record in ths case, the court finds that the claims are subject to arbitration, and the parties selected South Carolina as the forum for such arbitration.

Therefore, Defendant's Motion to Compel Arbitration and to Dismiss (ECF No. 12) is GRANTED, and this action is dismissed without prejudice.

IT IS SO ORDERED.


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