Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

In connection with an attempted purchase of a California residence, Kum Tat filed a motion to compel arbitration of a claim against Linden Ox. The district court denied the motion and Kum Tat filed this interlocutory appeal. The court held that the order denying the motion to compel arbitration was not an order from which section 16(a)(1) of the Federal Arbitration Act (FAA), 9 U.S.C. 16(a)(1), permits an interlocutory appeal. In this case, Kum Tat's motion was neither under section 3 nor 4 of the FAA, and the motion expressly urged application only of California arbitration law and contained no citation to the FAA. Significantly, Kum Tat later emphasized that the motion was not made under the FAA. In the alternative, the court concluded that the district court's order was not clearly erroneous and did not warrant mandamus relief. Here, the district court did not clearly err in reserving for itself the question whether the parties agreed to arbitrate, nor did the district court clearly err in concluding the parties did not form a contract. Accordingly, the court dismissed the appeal for lack of jurisdiction. View "Kum Tat Limited v. Linden Ox Pasture, LLC" on Justia Law

Move commenced arbitration proceedings alleging that Citigroup mismanaged $131 million of Move’s funds by investing in speculative auction rate securities. FINRA provided the parties with a list of thirty proposed arbitrators and their employment histories, including ten proposed arbitrators from FINRA’s chairperson roster. Move ranked “James H. Frank” first who, according to the FINRA Arbitrator Disclosure Report (ADR), received a law degree from Southwestern University in 1975 and was licensed to practice law in California, New York, and Florida. Mr. Frank subsequently served as the chairperson of the panel along with Arthur T. Berggren, a licensed attorney, and Daniel R. Brush, a Certified Public Accountant and Certified Financial Planner. After Move subsequently discovered that Mr. Frank lied about his qualifications, Move filed a complaint arguing that vacatur was warranted because of Mr. Frank's misrepresentations. On appeal, Move challenges the district court's dismissal of its action and denial of its motion to vacate the arbitration award under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The court held that Move’s motion was not untimely because the FAA is subject to equitable tolling. The court also held that Move’s right to a fundamentally fair hearing was prejudiced by the fraudulent misrepresentations of the arbitration panel’s chairperson, resulting in proceedings led by an arbitrator who should have been disqualified from the dispute under the rules and regulations of FINRA. Accordingly, the court reversed and remanded. View "Move, Inc. v. Citigroup Global Markets, Inc." on Justia Law

Plaintiff filed suit against his employer, alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301-4334. Plaintiff claimed that he was fired from his job after providing notice of his deployment to Afghanistan in the United States Navy Reserve. The court joined its sister circuits and held that the plain text of USERRA does not preclude the compelled arbitration of disputes arising under its provisions. Furthermore, plaintiff has failed to establish that the legislative history evinces Congress’s intent to prevent the enforcement of the arbitration agreement he signed. Accordingly, the court affirmed the district court's order compelling arbitration and dismissing the complaint. View "Ziober v. BLB Resources" on Justia Law

Plaintiffs Mohamed and Gillette, former Uber drivers, filed suit alleging on behalf of themselves and a proposed class of other drivers that Uber violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq., and various state statutes. Gillette has also brought a representative claim against Uber under California’s Private Attorneys General Act of 2004 (PAGA) alleging that he was misclassified as an independent contractor rather than an employee. The district court denied Uber’s motion to compel arbitration of the claims. The court concluded that the district court improperly assumed the authority to decide whether the arbitration agreements were enforceable. The question of arbitrability as to all but Gillette’s PAGA claims was delegated to the arbitrator. Under the terms of the agreement Gillette signed, the PAGA waiver should be severed from the arbitration agreement and Gillette’s PAGA claims may proceed in court on a representative basis. All of plaintiffs’ remaining arguments, including both Mohamed’s challenge to the PAGA waiver in the agreement he signed and the challenge by both plaintiffs to the validity of the arbitration agreement itself, are subject to resolution via arbitration. Finally, the court affirmed the district court’s order denying Hirease’s joinder in the motion to compel. View "Mohamed v. Uber Technologies" on Justia Law

Multiple plaintiffs filed different class actions against 23andMe relating to the company’s health claims. 23andMe, a direct-to-consumer provider of genetic testing service, claimed that its service could be used to help customers manage health risks, as well as prevent or mitigate diseases such as diabetes, heart disease, and breast cancer. The district court granted 23andMe's motion to compel all plaintiffs to arbitrate their claims. After reviewing the mandatory arbitration provision in the Terms of Service, the district court concluded that the arbitration provision at issue was enforceable. The court concluded that under principles established by recent California Supreme Court decisions, California’s common law rule of unconscionability does not provide a basis to revoke the arbitration agreement in the Terms of Service. In this case, the court concluded that plaintiffs failed to carry their burden of demonstrating the substantive unconscionability of the bilateral prevailing party clause; that the forum selection clause is unconscionable; that the intellectual property exemption is unconscionable under current California law; and that the unilateral modification provision renders the arbitration clause, set forth in a separate provision, unconscionable. Therefore, the arbitration agreement is valid, irrevocable, and enforceable. The court affirmed the judgment. View "Tompkins v. 23andMe, Inc." on Justia Law

In this companion case to Van Dusen v. Swift, No. 15-15257 (“Van Dusen III”), Swift seeks a writ of mandamus ordering the district court to vacate its case management order and decide the petition to compel arbitration without discovery or trial. The court concluded that the Bauman factors weigh against the grant of mandamus relief; Swift has a remedy in urging its position before the district court in dispositive motions and, if the district court is adverse to Swift, in the form of direct appeal following the issuance of a final order; normal litigation expense does not constitute sufficient prejudice to warrant relief, and the discovery cost has already been incurred; and most crucially, in the absence of controlling precedent, the district court order was not clearly erroneous. Accordingly, the court concluded that Swift is not entitled to the extraordinary relief of the issuance of a writ of mandamus. View "In re Swift Transportation" on Justia Law

Plaintiff filed suit alleging that Swift misclassified her and others as independent contractors, as well as alleging violations of federal and state labor laws. On appeal, plaintiff objected that section 1 of the Federal Arbitration Act (FAA), 9 U.S.C. 1, prevented the district court from compelling arbitration. The district court granted Swift's motion to compel arbitration. The court clarified that the district court - not the arbitrator - must decide the section 1 issue. The district court then set out to determine the section 1 exemption issue. Swift moved for an order to stay proceedings, including discovery, and for an order setting a briefing schedule to determine the section 1 issue without resort to discovery and trial. The district court denied Swift’s motion. It also concluded that the order was not immediately appealable. The court concluded that that, absent statutory authorization, district court certification, or application of the collateral doctrine, the court lacked appellate jurisdiction over the appeal and dismissed. In this case, this is not an appeal from a motion explicitly brought under the FAA or unmistakably invoking its remedies. Because the district court did not deny a petition to order arbitration to proceed, there is no jurisdiction under section 16(a)(1)(B). View "Van Dusen v. Swift Transportation" on Justia Law

Plaintiffs, individuals who enrolled in a cosmetology program at Milan Institute, filed a class action against the college and its President, alleging that defendants violated state labor laws and the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. On appeal, defendants challenged the district court's denial of their motion to compel arbitration. The court concluded that the district court did not err in deciding the litigation conduct waiver issue itself. If the parties intend that an arbitrator decide that issue under a particular contract, they must place clear and unmistakable language to that effect in the agreement. Defendants failed to do so in this case and thus the district court did not err by deciding the conduct waiver issue. The court also concluded that defendants waived their right to arbitration because they engaged in acts inconsistent with their right to arbitration, and plaintiffs were prejudiced. Accordingly, the court affirmed the judgment. View "Martin v. Yasuda" on Justia Law

After Renee Tillman filed suit against her law firm, arbitration proceeded for a time until Tillman ran out of funds. The arbitration was then terminated and now the parties disagree about what should now happen to Tillman’s federal court case against the firm. The court concluded that Tillman's case “has been had in accordance with the terms of the agreement,” so it is no longer appropriate to stay the proceedings below; the district court appropriately excused Tillman’s failure to pay for arbitration on the grounds of financial incapacity; and, under these circumstances, the court held that the FAA does not require dismissal of Tillman’s case. Rather, Tillman's case should go forward in federal court and thus the court remanded with instructions on how to proceed. View "Tillman v. Rheingold firm" on Justia Law

Pow! Mobile (the Company), not a party here, is a mobile content provider that marketed a “reverse auction” game called “Bid and Win.” Both Mobile Messenger and m-Qube (defendants) are “billing aggregators” who serve as financial intermediaries between customers and content providers. Plaintiff filed a class action alleging that defendants have engaged in a scheme “that causes Washington consumers to become unknowingly and unwittingly subscribed to premium text message services.” The district court held that defendants are not intended third-party beneficiaries entitled to enforce the arbitration clause at issue and denied defendants' motion to compel arbitration. The court concluded that the Terms and Conditions in this case create a direct obligation from the subscriber to the Company’s suppliers. The signatory to the Terms and Conditions agrees to waive all claims against the Company’s suppliers. Therefore, the Company’s suppliers are intended third-party beneficiaries of the Terms and Conditions. Thus, if defendants are suppliers of the Company, they may enforce the arbitration clause. The court remanded for the district court to make determinations in the first instance regarding assent to the Terms and Conditions, and whether defendants are Pow! Mobile’s suppliers. View "Geier v. m-Qube Inc." on Justia Law