Bigge Crane and Rigging Co. v. Agility Project Logistics, Inc

Background

Bigge Crane and Rigging Co. sued Agility Project Logistics, Inc., BP Products North America, Inc., and Jacobs Engineering Group, Inc. The lawsuit arose from the BP Cherry Point Coker Heater Project, a construction project at an oil refinery in Washington. Bigge alleged that Agility failed to pay $722,311 for barge and heavy-haul support services provided under a Transportation Service Agreement.

Bigge asserted breach-of-contract, breach-of-the-duty-of-good-faith-and-fair-dealing, monies-due, and account-stated claims against Agility. It also asserted a quantum-meruit claim against Agility, BP, and Jacobs.

The agreement required disputes between Bigge and Agility to go first to mediation. If mediation did not resolve the dispute, the agreement required arbitration administered by the American Arbitration Association. It stated that arbitration would take place in Houston, Texas, unless the parties agreed otherwise, and that Texas law governed the agreement.

The Parties’ Positions

Agility moved to compel arbitration and stay the lawsuit while arbitration took place. BP and Jacobs did not oppose the motion. Bigge did not dispute that a valid arbitration agreement existed or that the agreement covered its claims against Agility. Instead, Bigge argued that the court could not order arbitration in Houston because the lawsuit and the motion to compel were filed in the Northern District of California.

Agility argued in its reply that it was seeking only a stay and an order requiring Bigge to follow the agreement, not an order compelling arbitration in California. The court rejected that characterization because Agility’s opening motion had primarily argued that the arbitration agreement was valid, covered the dispute, and required the court to compel arbitration.

Court’s Analysis

The court applied Section 4 of the Federal Arbitration Act. That provision allows a party to ask a federal district court to direct arbitration and states that the arbitration hearing and proceedings must occur within the district where the petition to compel arbitration was filed. The court explained that Ninth Circuit authority limits a court to ordering arbitration within that district, even when the parties’ agreement specifies a different location.

Because Agility’s petition was filed in the Northern District of California, the court concluded that it could not compel arbitration in Houston, Texas. It therefore granted the motion to compel arbitration but directed that any arbitration under the agreement occur within the Northern District of California.

The court also considered Agility’s request to stay the entire lawsuit. The court stated that a lawsuit involving a dispute subject to a written arbitration agreement must be stayed until arbitration occurs, and noted that no party objected to staying the case. It stayed the action pending the outcome of arbitration between Bigge and Agility, including the claims involving BP and Jacobs.

Disposition

The court granted Agility’s motion to compel arbitration and stay the action pending arbitration. Any arbitration under the agreement was ordered to take place within the Northern District of California. The clerk was directed to administratively close the case, and Bigge and Agility were ordered to file a joint status report within two weeks after any arbitration was completed.