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

Plaintiff brought suit against an airline alleging a common law breach of contract under the implied covenant of good faith and fair dealing. At issue was whether plaintiff's claim was preempted by the Airline Deregulation Act (ADA), 49 U.S.C. 41713(b)(1). The court reversed and held that the purpose, history, and language of the ADA, along with Supreme Court and Ninth Circuit precedent, lead the court to conclude that the ADA did not preempt a contract claim based on the doctrine of good faith and fair dealing.

Plaintiff filed a complaint against defendant, seeking indemnity and/or contribution based on the damage defendant allegedly caused through gross negligence in removing plaintiff's vessel from a coral reef. At issue was whether the district court properly denied defendant's motion to compel arbitration of the dispute under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., where defendant alleged that the district court erred in refusing to apply English arbitrability law. The court held that based on the Supreme Court's reasoning in First Options of Chicago, Inc. v. Kaplan, courts should apply non-federal arbitrability law only if there was clear and unmistakable evidence that the parties intended to apply such non-federal law. Because there was no clear and unmistakable evidence in this case, federal arbitrability law applied. Under federal arbitrability law, the court's decisions in Mediterranean Enterprises, Inc. v. Ssangyong Construction Co. and Tracer Research Corp. v. National Environmental Services, Co., mandated a narrow interpretation of a clause providing for arbitration of all disputes "arising under" an agreement. Under this narrow interpretation, the present dispute was not arbitrable. Therefore, the court affirmed the district court's judgment.

Defendants engaged in discovery misconduct that was sufficiently egregious to cause the district court to enter an order of default against them. Although defendants subsequently challenged the default order as erroneous, defendants did not challenge the order of default by way of a Federal Rule of Civil Procedure 55(c) or 60(b). At issue was whether Judge Real, a district court judge, had the power to impose default as a sanction for discovery misconduct and assuming such power, whether Judge Real abused his discretion by imposing default rather than lesser sanctions. The court held that defendants' failures to comply with orders of the court provided Judge Real with the power under Rule 37(b) to impose sanctions sua sponte, up to and including default and that Judge Wilson appropriately revisited previous orders of the court when he replaced Judge Real after Judge Real recused himself. The court also held that the district court possessed the power to impose the sanction of default and that the district court did not abuse its discretion by doing so. Accordingly, the judgment was affirmed.

This case stemmed from the collective bargaining activities of the International Longshore and Warehouse Union, Local 142 (Union) and the Pacific Beach Hotel (Hotel) where the Union filed numerous unfair labor practice charges with the Regional Director of Region 20 of the Board (Director). At issue was an injunction issued pursuant to section 10(j), 29 U.S.C. 160(j), of the National Labor Relations Act (Act), 29 U.S.C. 151 et seq. The court must determine whether the injunction should be affirmed on its merits and whether the district court had the power to issue the injunction in the first place. As a preliminary matter, the court held that the appeal was not moot because its resolution was crucial to a pending claim for retrospective monetary relief sought by the National Labor Relations Board (Board) against the Hotel in a civil contempt proceeding. The court held that the text of the Act, reinforced by the Board's longstanding practice under section 10(e), allowed the Board to assign the General Counsel final authority in deciding when to petition for injunctive relief under section 10(j) in particular unfair labor practice cases pending before the Board. The three other circuits that have addressed this question agreed that the district court could entertain section 10(j) petitions approved by the General Counsel pursuant to the authority granted him by the Board in December 2007. Although the court's reasoning differed somewhat from that in those cases, the court's conclusion with regard to the validity of the Board's 2007 delegation of litigation authority under section 10(j) was identical. With respect to the Board's power to file petitions under section 10(j), it was sufficient that a quorum of the Board in 2007 decided to assign decisions as to individual petitions to the General Counsel. Under the distinction explained in New Process Steel, L.P. v. NLRB, nothing in the Board's quorum requirement would cause the General Counsel's ability to file section 10(j) petitions to lapse after the Board's membership fell below a quorum. As for the merits of the injunction, the court concurred with the district court's assessment that the Board was likely to determine, and be affirmed by the court in so determining, that the Hotel engaged in violations of section 8(a)(1), (3), and (5) of the Act by refusing to bargain in good faith and excluding five union activists from the workforce. The district court likewise did not abuse its discretion in concluding that the other requisites for section 10(j) relief were met. Accordingly, the court affirmed the injunction.

This case stemmed from a Mutual Strike Assistance Agreement (MSAA) that was entered into by defendants (grocers) where the MSAA included a revenue-sharing provision (RSP), providing that in the event of a strike/lockout, any grocer that earned revenues above its historical share relative to the other chains during the strike period would pay 15% of those excess revenues as reimbursement to the other grocers to restore their pre-strike shares. At issue was whether the MSAA was exempt from the antitrust laws under the non-statutory labor exemption, and if not, whether the MSAA should be condemned as a per se violation of the antitrust laws or on a truncated "quick look," or whether more detailed scrutiny was required. The court held that the MSAA between the grocers to share revenues for the duration of the strike period was not exempt from scrutiny under antitrust laws and that more than a "quick look" was required to ascertain its impact on competition in the Southern California grocery market. Given the limited judicial experience with revenue sharing for several months pending a labor dispute, the court could not say that the restraint's anti-competitive effects were "obvious" under a per se or "quick look" approach. Although the court concluded that summary condemnation was improper, the court expressed no opinion on the legality of the arrangement under the rule of reason. Accordingly, the judgment was affirmed.

This case stemmed from an asset purchase transaction where defendants and plaintiff entered into an allocation agreement that included an arbitration clause. Defendants appealed from the district court's order enjoining arbitration and denying their motion to stay judicial proceedings under section 3 of the Federal Arbitration Act ("FAA"), 9 U.S.C. 3. Defendants contended that the arbitration clause reserved the question of arbitrability for the arbitrators, and that the district court erred in determining that the dispute was not subject to arbitration. The court held that the arbitration clause in the agreement clearly and unmistakably expressed the parties' intent that the arbitrators determine questions of arbitrability, and that the district court therefore erred in permanently enjoining the arbitration and failing to stay judicial proceedings under section 3 of the FAA. Accordingly, the court reversed and remanded with instructions to grant the motion to stay proceedings under section 3 and dissolve the permanent injunction.

Plaintiffs sued defendants alleging copyright infringement, breach of implied contract, breach of confidence, and several other causes of actions where defendants produced a television series on the Sci-Fi Channel based on plaintiffs' materials. At issue was whether the district court properly dismissed plaintiff's contractual claims on the basis that the claims were preempted by copyright law. The court reversed and held that copyright law did not preempt a breach of implied contract claim where plaintiffs alleged a bilateral expectation that they would be compensated for use of the idea, the essential element of a Desny v. Wilder claim that separated it from preempted claims for the use of copyrighted material. The court also held that the breach of confidence claim was not preempted by copyright law where the claim protected the duty of trust or confidential relationship between the parties, an extra element that made it qualitatively different from a copyright claim. The court also held that the complaint sufficiently alleged facts to make out a claim for breach of implied contract and breach of confidence.

Plaintiffs sued Atlas Van Lines, Inc. ("Atlas") and Pickens Kane Moving & Storage Co. ("Pickens") for carrier liability under the Carmack Amendment to recover damages plaintiff paid to its insureds after the insureds' shipment of household goods were destroyed by a fire while in transit. Pickens was the receiving carrier and the goods were destroyed in the custody of Atlas. At issue was whether the district court properly interpreted sections 14706(f) and 14706(b) of the Carmack Amendment when apportioning the replacement value of household goods and apportioning costs. The court held that the district court properly apportioned the damages as it did under section 14706(f)(2), (3) to limit Atlas' liability to the tariff amount of $5.00 per pound in the absence of a declared value. The court also held that the district court did not abuse its discretion in apportioning costs where Atlas had custody of the shipment when it was destroyed and was liable to Pickens.