Sharif v. Wellness International Network

What is the standard for dismissing a motion to compel arbitration?

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The Circuit Court held that when a motion to compel arbitration is made, the Court is required to rule on it first, before proceeding to rule on any other aspect of the case. Sharif, a WIN distributor sued WIN, claiming that it was an illegal pyramid scheme. WIN moved to transfer the proceeding for lack of venue, and later moved to compel arbitration under the arbitration clause contained within Sharif's distributor agreement with the company. The District Court ruled the arbitration motion was superfluous because the motion to transfer venue was already before the court. On appeal, the Seventh Circuit ruled that the district court erred in not ruling on the motion to compel arbitration. The Federal Arbitration Act requires a judge to first consider any motion to compel arbitration before ruling on any other dispositive motions. Further, despite the district judges ruling, the claims of the multiple parties could not be aggregated to defeat the contractually imposed limit of $100,000 for claims subject to arbitration. Such limits only apply to the dollar values of individual claims.

Full case and case summary also available online at: http://www.mlmlegal.com/legal-cases/Sharif_v_WellnessInternationalNetwork.php

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Published In: Civil Procedure Updates, MLM / Direct Sales Updates, MLM Consulting / Network Marketing Updates

Reference Info:Federal, 7th Circuit, Illinois | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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