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

Years after Starline and TMZ launched a joint venture to operate a celebrity bus tour together, TMZ terminated their agreement. TMZ and Starline brought their claims (and counterclaims) to arbitration, and the arbitrator ultimately issued the final award in favor of TMZ. After the Appeal Panel affirmed the majority of the arbitrator's award, Starline moved to vacate the award in district court, and TMZ petitioned to confirm the award. The district court denied Starline's motion and granted TMZ's petition. The Ninth Circuit subsequently issued Monster Energy Co. v. City Beverages, LLC, 940 F.3d 1130 (9th Cir. 2019), interpreting the standard for "evident partiality" to warrant vacatur of an arbitration award under the Federal Arbitration Act (FAA).The Ninth Circuit concluded that the district court did not abuse its discretion in denying Starline's Federal Rule of Civil Procedure 59(e) motion on the grounds that the arbitrators did not exhibit evident partiality by failing to disclose JAMS's prior business dealings with TMZ or its counsel. The panel also concluded that the district court likewise did not err when it declined to vacate the arbitration award on the grounds that (1) the arbitrator did not produce a form indicating she had no conflicts with the Boies Schiller law firm, (2) the arbitrator improperly granted an anti-SLAPP motion, or (3) based on her interpretation of California partnership law.However, the panel concluded that the district court clearly erred in concluding that JAMS provided a disclosure in accordance with Monster Energy, where JAMS declined to make such disclosure and instead asserted that the arbitrators no longer had jurisdiction over the arbitration. Accordingly, the panel remanded this issue to the district court to consider in the first instance how the parties can obtain from JAMS the information required by Monster Energy. The panel affirmed in part, reversed in part, and remanded in part. View "EHM Productions, Inc. v. Starline Tours of Hollywood, Inc." on Justia Law

The Ninth Circuit vacated the district court's order denying LMB's motion to compel arbitration under the Federal Arbitration Act (FAA) in an action brought by plaintiff under the Telephone Consumer Protection Act (TCPA). The panel concluded that, because the district court mistakenly issued a nonfinal order denying LMB’s motion to compel arbitration, while stating its intent to schedule a trial to resolve the factual issues, the panel has jurisdiction to consider this appeal under 9 U.S.C. 16.However, the panel held that, under 9 U.S.C. 4, once a district court concludes that there are genuine disputes of material fact as to whether the parties formed an arbitration agreement, the district court must proceed without delay to a trial on arbitrability and hold any motion to compel arbitration in abeyance until the factual issues have been resolved. In this case, LMB challenges the district court's determination that there are genuine disputes of material fact on arbitrability. Therefore, in order to further Congress's clear intent in the FAA to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible, the panel vacated the district court's erroneous denial of the motion to compel and remanded for the district court to proceed summarily to the trial on the question whether plaintiff is bound by the arbitration agreement. View "Hansen v. LMB Mortgage Services, Inc." on Justia Law

Franklin, a nurse, was employed by a staffing agency, USSI, and had signed an Arbitration Agreement. USSI assigned Franklin to work at the Hospital. Franklin signed a Travel Nurse Assignment Contract that also includes an arbitration provision. The Hospital is not a signatory to either the Arbitration Agreement or the Assignment Contract. There is no contract between Franklin and the Hospital nor between the Hospital and USSI. The Hospital contracts with RightSourcing, which contracts with USSI to provide the contingent nursing staff. The Hospital retains supervision over the provision of clinical services. RightSourcing bills the Hospital and remits payment to USSI.Franklin brought a class and collective action against the Hospital, alleging violations of the Fair Labor Standards Act, the California Labor Code, and the California Business and Professions Code, alleging that the Hospital required Franklin to work during meal breaks and off the clock but failed to pay her for that work and failed to provide accurate itemized wage statements or reimburse travel expenses.The district court granted the Hospital’s motion to compel arbitration. The Ninth Circuit affirmed. The Hospital, a nonsignatory, could compel arbitration because Franklin’s claims were intimately founded in and intertwined with her contracts with USSI; under California law, she was equitably estopped from avoiding the arbitration provisions. View "Franklin v. Community Regional Medical Center, FKA" on Justia Law

Stafford used his third-party insurance coverage to purchase prescription drugs from Rite Aid’s pharmacies. Rite Aid submits a claim for a prescription drug to an insurance company through a “pharmacy benefits manager” (PBM). The claim form that Rite Aid submits includes the “usual and customary” price of the relevant prescription drug.Stafford brought a class action, alleging that Rite Aid fraudulently inflated the reported prices of prescription drugs, which resulted in class members paying Rite Aid a higher co-payment for the drugs than they would have paid if Rite Aid had reported the correct price. After litigating several motions to dismiss, Rite Aid moved to compel arbitration. Although Rite Aid and Stafford had no contract between them containing an arbitration clause, Rite Aid did have such contracts with the PBMs who coordinated insurance reimbursements and co-payment calculations.The Ninth Circuit affirmed the denial of the motion to compel arbitration. Under California law, Stafford’s claims did not depend on Rite Aid’s contractual obligations to the PBMs. Consequently, equitable estoppel did not apply to bind Stafford to the arbitration agreements in those contracts. View "Stafford v. Rite Aid Corp." on Justia Law

The Department of Labor brought an enforcement action against Larry Browne and his companies, alleging that Browne and his entities violated the Fair Labor Standards Act's (FLSA) minimum wage, overtime, record-keeping, and antiretaliation requirements by misclassifying delivery drivers as independent contractors rather than employees. The district court denied Browne's motion to compel arbitration pursuant to EEOC v. Waffle House, Inc., 534 U.S. 279 (2002).The Ninth Circuit concluded, in light of Waffle House, that a private arbitration agreement does not bind the Secretary of Labor when bringing a FLSA enforcement action that seeks relief on behalf of one party to the arbitration agreement against the other party to that agreement. In Waffle House, the Supreme Court ruled that the EEOC was not party to Waffle House's arbitration agreement, and it was not bound by the agreement because the FAA "does not require parties to arbitrate when they have not agreed to do so." The panel explained that this same reasoning dictates that the Secretary cannot be compelled to arbitrate this case. Here, as in Waffle House, the remedial statute at issue unambiguously authorizes the Secretary to obtain monetary relief on behalf of specific aggrieved employees. The panel explained that, like the EEOC in Waffle House, the Secretary is not party to the arbitration agreement between Browne and his entities and the delivery drivers. Therefore, the panel affirmed the district court's denial of the motion to compel arbitration. View "Walsh v. Arizona Logistics, Inc." on Justia Law

The Ninth Circuit dismissed based on lack of appellate jurisdiction plaintiffs' appeal from the district court's order compelling arbitration of a putative class action alleging that LuLaRoe operated an illegal endless-chain pyramid scheme in violation of California and federal law.The panel held that Langere v. Verizon Wireless Services, LLC, 983 F.3d 1115 (9th Cir. 2020), was controlling under these circumstances. In this case, plaintiffs voluntarily dismissed their action with prejudice in an attempt to obtain an appealable final judgment following an order compelling arbitration. Furthermore, as in Langere, this tactic no longer creates appellate jurisdiction. The panel explained that, contrary to plaintiffs' contention, it is of no consequence that plaintiffs moved for a court order dismissing their action under Federal Rule of Civil Procedure 41(a)(2), while Langere unilaterally dismissed his action under Rule 41(a)(1). Finally, plaintiffs' contention that Langere is inapplicable because the panel has jurisdiction under 9 U.S.C. 16(a)(3) is without merit. View "Sperring v. LLR, Inc." on Justia Law

The Ninth Circuit reversed the district court's denial of defendants' motion to compel arbitration of plaintiff's statutory employment discrimination and civil rights claims. Plaintiff, a former corporate attorney who became an investment banker with defendants, entered into an agreement that set her compensation and benefits, as well as provided that all disputes arising from her employment would be resolved through binding arbitration. Plaintiff also signed a second document that specified the arbitration procedures.The panel concluded that employment disputes are encompassed by the arbitration provisions, and plaintiff knowingly waived her right to a judicial forum. The panel applied Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), where the Supreme Court has held that, while not all statutory claims may be appropriate for arbitration, if a party agreed to arbitration, the party will be held to that agreement unless the party could prove a congressional intent to preclude a waiver of judicial remedies for the statutory rights at issue. In this case, plaintiff carries the burden to show such an intention. The panel extended Gilmer to Title VII claims and held that there must be at least a knowing agreement to arbitrate employment disputes before an employee may be deemed to have waived judicial remedies.The panel assumed, without deciding, that the knowing waiver requirement remains good law and is applicable to these statutes despite the district court's failure to utilize the proper analysis to establish that the standard applies to these statutory claims. Instead, the panel held that this appeal is resolved on the arbitration agreement's clear language encompassing employment disputes and evidence that plaintiff knowingly waived her right to a judicial forum to resolve her statutory claims. The panel remanded to the district court with the direction that all claims be sent to arbitration and the case be dismissed without prejudice. View "Zoller v. GCA Advisors, LLC" on Justia Law

The Ninth Circuit agreed with the Second Circuit that the amount in controversy in a Section 7 of the Federal Arbitration Act enforcement action can be measured by either the benefit to the plaintiff or the detriment to the defendant that would result from enforcement of the subpoena. In this case, because there is a good faith allegation that the benefit to plaintiff of obtaining the subpoenaed information in this controversy exceeds $75,000, the panel reversed the district court's order dismissing for want of subject matter jurisdiction and remanded for further proceedings regarding enforcement of the subpoena. View "Maine Community Health Options v. Albertsons Companies, Inc." on Justia Law

The Ninth Circuit affirmed the district court's order compelling arbitration pursuant to the Federal Arbitration Act and dismissing a putative class action brought by plaintiff against MoneyLion, operator of a smartphone app offering financial services to its customers. Plaintiff alleged that MoneyLion violated California's Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act when it refused to allow her to cancel her membership after she fell behind on her fees, deposits, and loan payments.The panel concluded that the district court correctly determined that the arbitration provision at issue was valid and enforceable because it allowed public injunctive relief and did not violate the McGill rule under California law. The panel explained that in California, litigants proceeding in individual lawsuits may request public injunctive relief without becoming private attorneys general. In this case, the arbitration agreement authorized the arbitrator to award all injunctive remedies available in an individual lawsuit under California law. View "DiCarlo v. MoneyLion, Inc." on Justia Law

On remand from the Supreme Court in light of GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020), the Ninth Circuit affirmed the district court's order denying defendant's motions to compel arbitration and to grant a stay pending arbitration.Rather than apply the law of India, the panel applied federal common law to the issue of whether defendant, a non-signatory to the partnership deed containing an arbitration provision, could compel plaintiffs to arbitrate. The panel applied Letizia v. Prudential Bache Securities, Inc., 802 F.2d 1185 (9th Cir. 1986), which remains good law, and concluded that federal law applied because the case involved federal claims and turned on the court's federal question jurisdiction. The panel held that equitable estoppel precludes a party from claiming the benefits of a contract while simultaneously attempting to avoid the burdens that contract imposes. In this case, the district court did not abuse its discretion in rejecting SS Mumbai's argument that SS Bangalore should be equitably estopped from avoiding arbitration. View "Setty v. Shrinivas Sugandhalaya LLP" on Justia Law