Mobile Real Estate, LLC v. NewPoint Media Group, LLC
- Kenneth Karas
- 7:19-cv-11475
- U.S. District Court · Southern District of New York
- 3
In Mobile Real Estate v. NewPoint Media, Judge Karas temporarily stayed arbitration while deciding whether the dispute belonged in arbitration.
Mobile Real Estate, LLC and John Lim, the plaintiffs, obtained a temporary halt to the arbitration involving the defendants. The defendants and the American Arbitration Association were affected because the arbitration was stayed while the court considered the arbitration-related motions.
What happened
Mobile Real Estate, LLC and John Lim sued NewPoint Media Group, LLC and other defendants, alleging state-law violations and violations of the federal Defend Trade Secrets Act. The parties disputed whether their claims had to be arbitrated.
The plaintiffs asked the court to temporarily stop the arbitration while it considered their request to cancel or stay arbitration and the defendants’ request to compel arbitration. The arbitration administrator had said it would continue unless the court ordered a stay.
The court granted the plaintiffs’ request for a temporary stay until it decided those motions or issued another order. Judge Kenneth M. Karas also directed the Clerk of Court to terminate the pending letter motions; he did not decide whether the dispute ultimately had to be arbitrated.
The detailed version
- Mobile Real Estate, LLC v. NewPoint Media Group, LLC · No. 7:19-cv-11475
- Kenneth Karas
- Feb. 21, 2020
Background
Mobile Real Estate, LLC and John Lim sued NewPoint Media Group, LLC; NewPoint Media Group Holdings, LLC; The Real Estate Book doing business as TREBMobile Agent; Lion Equity Partners, LLC; and Pez Gallo Holdings, LLC. The complaint asserted state-law claims and a claim under 18 U.S.C. § 1836, the Defend Trade Secrets Act.
At a February 6, 2020 pre-motion conference, the court allowed the plaintiffs to file a motion to vacate or stay arbitration and allowed the defendants to file a motion to compel arbitration. The plaintiffs then asked the court to temporarily stay the arbitration until it ruled on those motions. They said the defendants had insisted that the arbitration proceed and that the American Arbitration Association would continue administering the matter without a court order. The defendants objected to the temporary stay and filed their motion to compel arbitration.
Court’s Analysis
The court stated that courts in the district had routinely issued temporary orders staying arbitration when the question of whether a dispute was subject to arbitration was pending. Here, the pending motions concerned only whether the parties’ dispute was subject to arbitration, and the briefing was scheduled to be completed by March 5, 2020.
The court reasoned that allowing arbitration to proceed before deciding those motions could harm the plaintiffs’ potential right to litigate in court if the court later determined that their claims belonged there. It also concluded that a temporary stay limited to the period needed to decide the motions would not prejudice the defendants.
Disposition
The court granted the plaintiffs’ request for a temporary stay of arbitration, pending the court’s resolution of the motions or further order. It directed the Clerk of Court to terminate the pending letter motions, docket numbers 17 and 25. The order did not decide the plaintiffs’ motion to vacate or stay arbitration or the defendants’ motion to compel arbitration.
Judge Kenneth M. Karas issued the order.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.