UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PATRICE CHASE; RONALD G. CHASE,

Plaintiffs-Appellees,

v.

SIDNEY FRANK IMPORTING COMPANY,

No. 97-1407

INCORPORATED; ALL-STATE

PROMOTIONS, INCORPORATED; SIDNEY

E. FRANK,

Defendants-Appellants.

Appeal from the United States District Court

for the District of South Carolina, at Charleston.

David C. Norton, District Judge.

(CA-96-1756-2-18)

Argued: October 1, 1997

Decided: January 8, 1998

Before HAMILTON and WILLIAMS, Circuit Judges, and

BUTZNER, Senior Circuit Judge.

_________________________________________________________________

Dismissed by unpublished per curiam opinion. Judge Hamilton wrote

a concurring opinion.

_________________________________________________________________

COUNSEL

ARGUED: Henrietta Urbani Golding, BELLAMY, RUTENBERG,

COPELAND, EPPS, GRAVELY & BOWERS, P.A., Myrtle Beach,

South Carolina, for Appellants. Jay T. Gouldon, STONEY & GOUL-
DON, Charleston, South Carolina, for Appellees. ON BRIEF: Richard S.W. Stoney, STONEY & GOULDON, Charleston, South

Carolina, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Sidney Frank Importing Company, Incorporated (Sidney Frank)

appeals the district court's decision to deny its motion to compel arbitration. We find that Sidney Frank's appeal is premature and remand

the case to the district court to determine the enforceability of the

arbitration agreement.

I

Patrice Chase brought suit against Sidney Frank for assault and battery, for violation of South Carolina statutory law, for civil conspiracy, including conspiracy for wrongful termination and for various

other claims. Sidney Frank made a motion to compel arbitration of

Chase's claims in the United States District Court for the District of

South Carolina. Chase opposed the motion claiming that she was

fraudulently induced into signing the arbitration clause. She claims

that Beth Brillos, her immediate supervisor, advised her that the arbitration clause only protected the company from suits brought by

employees who alleged that they were sexually harassed by customers

at company promotions. Brillos did not tell Chase that the clause covered all claims an employee might have against the company.

Further, Chase alleges that Brillos fraudulently induced her into

back-dating the arbitration clause to July 5, 1995. Chase contends she

agreed to the arbitration clause on July 14, 1995, the day she was

fired. Chase believes Brillos requested the back dating so that the

 2
clause would appear to have been agreed to before the company

decided to terminate her employment.

The district court denied the motion stating:

There is not sufficient evidence before this court to determine whether Defendants fraudulently induced Patrice to

agree to the arbitration clause. Accordingly, this court will

not presently compel arbitration of Patrice's wrongful termination claim but rather will withhold making a final determination pending further factual findings.

Sidney Frank appealed the district court's determination to this court.

Chase counters that this appeal is premature since the district court

has not made a determination on the validity of the arbitration clause.

II

Before a motion to compel arbitration can be granted, the district

court must first determine whether a valid arbitration clause exists.

When a party asserts fraud in the inducement of the arbitration clause

itself, the court must determine whether or not the clause is valid and

enforceable. Moseley v. Electronic & Missile Facilities, Inc., 374 U.S.

167 (1963); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388

U.S. 395 (1967). If the clause is not enforceable there is no right to

arbitration.

Once the district court makes this determination this court can hear

an appeal of that decision in certain circumstances. Section 16 of the

Federal Arbitration Act governs the appealability of arbitration

orders. It authorizes an immediate appeal from an order refusing a

stay of litigation pending arbitration or an order denying a motion to

compel arbitration. 9 U.S.C.A. § 16(a)(1)(A), (B), (C) (West Supp.

1997); see American Cas. Co. of Reading, Pennsylvania v. L-J, Inc.,

35 F.3d 133, 135 (4th Cir. 1994).

III

This case, however, is not yet ripe for an appeal under section 16.

For the case to be appealable under section 16, the district court must

 3
first decide whether the arbitration clause is enforceable. Once the

district court reaches a decision, that decision can be appealed. The

district court has not determined the enforceability of the arbitration

clause. The court explicitly stated that it needed more information

before reaching its decision. It has not precluded this case from ultimately reaching arbitration, it has only delayed it until it can make a

determination on the validity of the arbitration agreement. Until the

district court makes this determination, we hold that this appeal is premature.

IV

The case must be remanded to the district court for determination

of the validity of the arbitration agreement. Having held this appeal

to be premature, we do not reach any of the other issues in the case.

DISMISSED

HAMILTON, Circuit Judge, concurring specially:

I concur in the court's opinion. I write separately only to note that

should the district court determine that Sidney Frank did not fraudulently induce Chase into agreeing to the arbitration clause itself,

Chase's claim that Sidney Frank fraudulently induced her into entering into the employment agreement as a whole, a claim not specifically discussed by the district court, would be subject to arbitration

if the district court determined that it fell within the scope of the arbitration clause. See Prima Paint Corp. v. Flood & Conklin Mfg. Co.,

388 U.S. 395, 403-04 (1967); Peoples Sec. Life Ins. Co. v. Monumental Life Ins. Co., 867 F.2d 809, 813-14 (4th Cir. 1989).

 4