The plaintiff was a maker of karaoke systems, which it sold to Costco on a consignment basis. The parties had a contract which required that any dispute between them be arbitrated. As is often the case, the plaintiff filed a lawsuit and attempted to avoid arbitration. The district judge entered an order compelling arbitration and Costco moved for sanctions. The Second Circuit affirmed the order to arbitrate the dispute but declined to award sanctions.
The Second Circuit concluded that the arguments were “weak” but not weak enough to be sanctionable.
Edward X. Clinton, Jr.