BLIMPIE INTERNATIONAL INC v. Robert Sandow, et al., Defendants-Appellants. (2000)

Order, Supreme Court, New York County (Beatrice Shainswit, J.), entered July 6, 1999, which granted respondent's motion for a stay of the main action pending arbitration of appellants' counterclaims, unanimously affirmed, without costs.

 The court properly applied Federal law in determining whether respondent had waived its right to arbitrate under an agreement governed by the Federal Arbitration Act (FAA)(9 USC § 1, et seq.).   When an agreement to arbitrate falls within the scope of the FAA, “[f]ederal law in the terms of the Arbitration Act governs [the] issue [of arbitrability] in either state or federal court” (Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765, emphasis added;  see also, Southland Corp. v. Keating 465 U.S. 1, 10-16, 104 S.Ct. 852, 79 L.Ed.2d 1;  Bridas Sociedad Anonima Petrolera Indus. y Comercial v. Intl. Std. Elec. Corp., 128 Misc.2d 669, 673, 490 N.Y.S.2d 711, affd. 117 A.D.2d 1027, 499 N.Y.S.2d 566.

 We agree with the motion court's finding that appellants failed to show any prejudice resulting from respondent's delay in seeking to enforce its right to arbitrate appellants' counterclaims (see, Leadertex, Inc. v. Morganton Dyeing & Finishing Corp., 2d Cir., 67 F.3d 20, 25-26;  Matter of Advest, Inc. v. Wachtel, 253 A.D.2d 659, 660, 677 N.Y.S.2d 549).   Pretrial expense and delay, without more, does not constitute prejudice sufficient to support appellant's claim (Leadertex, Inc., supra, at 26).   Respondent had engaged in minimal discovery and had not engaged in motion practice prior to seeking arbitration.   All discovery was produced by respondent and no depositions had been taken.   Since appellants benefitted from the limited discovery undertaken, they cannot claim prejudice (see, Sweater Bee by Banff, Ltd. v. Manhattan Indus., Inc., 2d Cir., 754 F.2d 457, 464, cert. denied 474 U.S. 819, 106 S.Ct. 68, 88 L.Ed.2d 55).

MEMORANDUM DECISION.