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

This appeal involved Continental's pursuit of a breach of contract claim against Thorpe in Thorpe's Chapter 11 bankruptcy proceeding. The district court affirmed the bankruptcy court's order denying Continental's motion to compel arbitration and disallowing its claim. The court held that the bankruptcy court had discretion not to enforce the arbitration clause at issue and that the bankruptcy court did not abuse its discretion in denying Continental's motion to compel arbitration. The court also held that the bankruptcy court did not abuse its discretion in declining to give Continental further opportunity for discovery and Thorpe could not contract away its right to avail itself of the protections of 524(g) of the Bankruptcy Code. Accordingly, the lower courts correctly disallowed Continental's claim.

The district court affirmed a bankruptcy court's confirmation of a Chapter 11 plan of reorganization under 11 U.S.C. 524(g), a special provision for the reorganization of companies facing substantial asbestos-related liability. Appellants were several insurance companies that did not reach settlements with Thorpe and Pacific, together with Debtors in bankruptcy court, and who were denied standing to challenge the reorganization plan. The court affirmed the district court's conclusion that the plan preempted appellants' state law contract rights; disagreed with the position of Debtors that the appeal was equitably moot; and in reaching the merits, reversed the district court's conclusion that appellants lacked standing. The court remanded to the district court with instructions that it return the case to the bankruptcy court to give appellants the opportunity to present their proof and argument.

This appeal concerned the maintenance of a suit for rescission under section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. 78a et seq., by plaintiffs Kenneth Weiss and his wholly-owned corporation. The district court granted summary judgment to defendants on all claims and awarded defendants attorneys' fees. The court held that a plaintiff suing under section 10(b) seeking rescission must demonstrate economic loss and that the misrepresentation or fraud conduct caused the loss. The court found that the record revealed that rescission was not feasible in the instant case. Yet employing a rescissionary measure of damages, Weiss would be able to convince the finder of fact that he was entitled to relief. On that basis, the court reversed the district court's grant of summary judgment of Weiss's federal and state securities claims and remanded for consideration under a rescissionary measure of damages. With respect to the statue of limitations issue, the court remanded for consideration in light of Merck & Co., Inc. v. Reynolds. The court affirmed the district court's judgment on Weiss's state law claims of common law fraud, negligent misrepresentation, mutual mistake, and unjust enrichment. The court vacated the district court's attorneys' fee award and dismissed the appeal of this award as moot.

This case concerned a Railcar Contract with TriMet that required Colorado Railcar to secure a $3 million standby letter of credit, which Colorado Railcar arranged through Collateral II, a bankruptcy remote entity. TrimMet certified Collateral II's default and drew on the Letter of Credit when Colorado Railcar defaulted. At issue was whether Collateral II was a surety to Colorado Railcar, entitled to the defense of discharge. The court held that it was not. Because the standby letter of credit issued by KeyBank required TriMet to certify Collateral II's default, TriMet sought clarification that should Colorado Railcar default, TriMet's authority to certify Collateral II's default would be triggered. In response to TriMet's concern, Collateral II agreed to become a part of the Railcar Contract via Modification No. 1, but it undertook no new obligation nor did it subject itself to any additional liability beyond what it previously undertook by securing the Letter of Credit at Colorado Railcar's direction. Thus, no suretyship was created. Because Collateral II was not entitled to the protections of a surety, it was error for the district court to grant summary judgment in its favor.

Defendant appealed the sentence imposed after he pled guilty to being a deported alien found in the United States. Defendant contended that the government breached the plea agreement, notwithstanding the government's later admission that it made a mistake in its initial sentencing recommendation and its substitution of the recommendation to which defendant and the government had agreed in the plea agreement. The court vacated and remanded for resentencing, holding that the government breached the plea agreement and the sentence must be vacated to give defendant the benefit of his bargain, specific performance on the plea agreement.

Brian Fitzgerald appealed for a second time the district court's award to him of $33,333 in quantum meruit - for his services in a medical malpractice case appellee had settled on behalf of Wende Nostro, a client Fitzgerald had referred to appellee - based on the unjust enrichment he conferred on appellee. The court held that the initial measure of Fitzgerald's quantum meruit award was one-third of appellee's $500,000 recovery from the Nostro settlement, or $166,666. The court further held that the $166,666 amount should be reduced to the extent Fitzgerald decreased the overall value to appellee of the Nostro case. Accordingly, the court vacated the district court's order and remanded with instructions that the district court enter a final quantum meruit award of $100,000 for Fitzgerald.

This case involved a breach of contract claim for the sale and service of an air combat maneuvering range for use by Iran's military. At issue was whether confirmation of an arbitration award in favor of the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran was "contrary to the public policy" of the United States under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the "New York Convention," 9 U.S.C. 201-208. The court held that confirmation of the award did not violate any public policy. The court also held that the district court's judgment was a "money judgment" subject to postjudgment interest, and that a district court had discretion to award prejudgment interest and attorney's fees in an action to confirm an arbitration award under the Convention. Accordingly, the court affirmed the judgment in part, vacated it in part, and remanded to the district court for reconsideration of the Ministry's motions for prejudgment interest and attorney's fees.

This litigation arose out of a franchise agreement between West Coast Hotels and Mahmoud Karimi. The successor in interest to West Coast Hotels was Red Lion, both were incorporated in Washington state. Karimi and his hotel management company (collectively, Karimi) operated a Red Lion franchise in Modesto, California. Red Lion subsequently terminated the franchise and sued Karimi for breach of contract and Karimi counterclaimed, asserting state-law claims, including a claim based on the "franchise bill of rights" of the Washington Franchise Investment Protection Act (FIPA), Wash. Rev. Code 19.100.180, 19.86.020. At issue on appeal was whether a non-Washington franchisee could assert a claim against a Washington franchisor under FIPA's bill of rights. The court concluded that an out-of-state franchisee could assert such a claim. Because FIPA's bill of rights applied to the franchise agreement at issue, the court remanded to the district court for further proceedings. The court agreed with the district court's conclusion that Red Lion was not equitably estopped from terminating the franchise agreement. The court remanded for consideration by the district court of the entry of judgment against Karimi's wife.

This appeal concerned the maintenance of a suit for rescission under section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. 78a et seq., by plaintiffs. The district court granted summary judgments to defendants on all claims and awarded defendants attorneys' fees. The court held that a plaintiff suing under section 10(b) seeking rescission must demonstrate economic loss and that the misrepresentation of fraudulent conduct caused the loss. In this case, the court found that the record revealed the rescission was not feasible. Yet employing a rescissionary measure of damages, plaintiffs could be able to convince the finder of fact that plaintiffs were entitled to relief. On that basis, the court reversed the district court's grant of summary judgment on plaintiffs' federal and state securities claims and remanded for consideration under rescissionary measure of damages. With respect to the statute of limitations issue, the court remanded for consideration in light of Merck & Co. The court affirmed the district court's judgment on plaintiffs' state law claims of common law fraud, negligent misrepresentation, mutual mistake, failure of a condition precedent, and unjust enrichment. The court vacated the district court's attorneys' fee award and dismissed the appeal of the award as moot.

The NLRB petitioned for enforcement of its order finding that Legacy Health violated sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. 158(a)(1) and (3) by not allowing its employees to simultaneously hold bargaining unit positions and non-bargaining unit positions. The court held that, under section 10(e) of the Act, the court did not have jurisdiction to hear Legacy Health's exceptions to the NLRB's remedial order. Accordingly, the court granted summary enforcement of the NLRB's order.