Kane International Corporation v. US Polymers-Accurez LLC

Filing 32

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiffs Motion to Compel Arbitration or, in the Alternative, to Retain Jurisdiction over All Claims and Reconsider Motion for Temporary Restraining Order (ECF No. 20 ) is GRANTED in part, and the Court compels the parties to participate in arbitration per their agreement. See ECF No. 29-1. The Court will not reconsider the Motion for Temporary Restraining Order. The Court hereby designates the American Arbitration Association as the arbitration forum for the parties' dispute. Signed by District Judge Ronnie L. White on 06/21/2017. (KCB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

KANE INTERNATIONAL CORPORATION, )
)

Plaintiff,

)
)

vs.

)

Case No. 4:17CV1625RLW

)

US POL YMERS-ACCUREZ LLC,

)
)

Defendant.

)
MEMORANDUM AND ORDER

This matter is before the Court on Plaintiffs Motion to Compel Arbitration or, in the
Alternative, to Retain Jurisdiction over All Claims and Reconsider Motion for Temporary
Restraining Order ("Motion to Compel"; ECF No. 20).
On June 7, 2017, this Court held a hearing on Plaintiff Kane International Corporation' s
("Kane") Motion for Temporary Restraining Order (ECF No. 5). Defendant US Polymers-Accurez
LLC' s ("USP A") opposed the Motion for Temporary Restraining Order and indicated to the Court
that it would participate swiftly and fully in an arbitration. Thereafter, the Court denied the
Motion for Temporary Restraining Order, holding that it lacked jurisdiction over Kane's request
for injunctive relief because its claims were subject to arbitration. (ECF No. 16).
In the Motion to Compel, Kane notes that, contrary to USPA's position at the hearing on
the Temporary Restraining Order, USP A is now taking the position with the American Arbitration
Association ("AAA") that USP A does not consent to arbitrate before the AAA. USP A claims
that the AAA lacks jurisdiction over the USPA and the parties' dispute. Kane asks for the Court
(1) to issue an order compelling USP A to submit to the jurisdiction of the AAA for arbitration of
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the parties' disputes, or (2) to find that the USPA has waived its right to arbitration and retain
jurisdiction over the entire dispute between the parties in this Court and grant Kane's Motion for
Temporary Restraining Order. (ECF No. 20 at 4-5).
USPA filed a Response to Plaintiffs Motion to Compel Arbitration. (ECF No. 27).
USP A argues that the Motion to Compel should be denied because ( 1) the Complaint does not state
a cause of action, preventing the Court from determining whether any dispute exists and whether
such dispute falls within the scope of the arbitration provision; (2) if the Court is able to determine
what Kane alleges USP A did wrong, the conduct is not prohibited by the Supply Agreement, such
that no dispute exists to arbitrate; and (3) if the Court believes a dispute exists, the arbitration
provision is unenforceable because (a) the arbitration provision did not survive the Supply
Agreement and (b) the arbitration provision is vague and ambiguous.
The Court grants the Motion to Compel Arbitration. The Supply Agreement (ECF No.
29-1) provides, "Kane and USP A agree ... not to compete with each other for a period of three (3)
years after the termination of this agreement as agreed to in the current mutual NDA dated
November 19, 1997." The Supply Agreement further states, "If Kane and USPA should have a
major disagreement that we can not [sic] work out among ourselves, we both agree to settle said
disagreement in Arbitration, according to the laws of the State of New York." (ECF No. 29-1). The
Court holds that the dispute regarding the noncompetition agreement constitutes a "major
disagreement" between the parties that invokes the arbitration provision. (ECF No. 29-1). "A
dispute must be submitted to arbitration if there is a valid agreement to arbitrate and the dispute
falls within the scope of that agreement." Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d
943, 945 (8th Cir. 2001) (quoting Telectronics Pacing Systems, Inc. v. Guidant Corp., 143 F.3d
428, 433 (8th Cir. 1998)). USPA previously submitted to the Court that Kane's Temporary
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Restraining Order was not subject to review because the parties' agreement contains a valid
arbitration provision. USPA cannot now argue that it is not subject to the arbitration provision
and that Kane has no remedy. The Court further holds that the pleading deficiencies in the
original Complaint have been corrected by the First Amended Complaint.
Although the parties disagree regarding the scope of the arbitration provision and their
dispute, that disagreement is for the arbitrator to resolve. "The FAA establishes that 'as a matter
of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of
arbitration, whether the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability. "' Lyster, 239 F.3d at 945 (quoting

Moses H Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S . 1, 24, 103 S. Ct. 927, 941 , 74 L.
Ed. 2d 765 (1983).
Finally, any ambiguity regarding the appropriate forum for the arbitration can be resolved
by the Court. 9 U.S.C. §5 provides that ifthe agreement does not designate method of naming or
appointing the arbitrator, "then upon application of either party to the controversy the court shall
designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act
under the said agreement with the same force and effect as if he or they had been specifically
named there; and unless otherwise provided in the agreement the arbitration shall be by a single
arbitrator." Therefore, the Court designates AAA as the appropriate body for the arbitration
between the parties.
Accordingly,

IT IS HEREBY ORDERED that Plaintiffs Motion to Compel Arbitration or, in the
Alternative, to Retain Jurisdiction over All Claims and Reconsider Motion for Temporary
Restraining Order (ECF No. 20) is GRANTED in part, and the Court compels the parties to
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participate in arbitration per their agreement. See ECF No. 29-1. The Court will not reconsider
the Motion for Temporary Restraining Order.

The Court hereby designates the American

Arbitration Association as the arbitration forum for the parties' dispute.

Dated this 21st day of June, 2017.

58~
RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE

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