Clear Finance Technology Corporation v. I&L Distributing Inc.

Background

Clear Finance Technology Corporation brought this action seeking confirmation of an arbitration award issued against I&L Distributing Inc. Clear Finance moved for default judgment. The court held a hearing on that motion on January 9, 2023.

Default-judgment motion

The court denied Clear Finance’s motion for default judgment without prejudice to renewal as a motion for summary judgment. The opinion cites Second Circuit authority stating that a petition to confirm an arbitration award should be handled through summary judgment rather than default judgment. The order therefore did not grant judgment confirming the arbitration award.

Venue and possible transfer

The court ordered Clear Finance to file a letter by January 13, 2023, at 12:00 p.m., showing why venue was proper in the Southern District of New York and why the case should not be transferred to the Eastern District of New York. The court explained that the Federal Arbitration Act permits a petition to confirm an arbitration award where the award was made or where venue is proper under the general venue statute.

The court stated that the award appeared to have been made in Washington, D.C. It also stated that, according to Clear Finance, I&L Distributing resides in Kings County, New York, and that Clear Finance’s counsel said at the hearing that the events underlying the claims did not occur in the Southern District. The court further stated that the venue provision Clear Finance cited, 29 U.S.C. § 1451(d), applies to employee-benefit cases and did not apply here.

Disposition

The court denied the default-judgment motion without prejudice to renewal as a summary-judgment motion and issued an order requiring Clear Finance to show cause concerning venue and possible transfer. The Clerk of Court was directed to terminate the motion at docket entry 12. The opinion does not state that the case was transferred.