Infuturia Global Ltd. v. Sequus Pharmaceuticals, Inc.
2011 U.S. App. LEXIS 2337
| 9th Cir. | 2011Background
- Infuturia (British Virgin Islands) sues Sequus (California) and others over Liposome technology licenses.
- Yissum (Israel) and Barenholz developed relevant IP; Infuturia licensed from Yissum in 1990 with arbitration clause.
- Sequus licensed liposome tech from Yissum in 1995; Barenholz/Yissum involved in arbitration background.
- Infuturia sued in California state court for tortious interference; Yissum petitioned for stay pending arbitration; stay granted in 1999.
- Israeli arbitration ultimately determined Infuturia’s license valid, Yissum did not breach, and Infuturia had no rights to certain patents/products under Sequus License.
- Infuturia amended complaint to omit products/arising disputes; Defendants removed under 9 U.S.C. § 205; district court denied remand and later dismissed certain claims; Infuturia appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 205 removal jurisdiction exists when a defendant uses an affirmative defense tied to an arbitration award. | Infuturia argues no § 205 removal because no party to arbitration; non-applicability of privity. | Sequus argues § 205 governs any case where an arbitration relates to the action; broader removal. | Removal jurisdiction exists under § 205. |
| Whether the arbitration relates to the action under § 205. | Argue narrow relation to arbitration not implicated. | Arbitration relates to the action since it could affect outcome via collateral estoppel. | Yes, the arbitration relates to the action; § 205 removal proper. |
| Whether the district court had diversity jurisdiction after dismissal of foreign defendants. | Diversity existed only at removal; dismissed defendants cured lack of diversity. | Dismissal of foreign defendants cured diversity defect under Grupo Dataflux. | Diversity jurisdiction existed; appropriate basis for removal. |
| Whether removal was timely under § 205. | Removal occurred after state-court adjudication began; not timely. | Removal before adjudication of claims; arbitration not a final adjudication of the claims. | Removal timely under § 205. |
Key Cases Cited
- Beiser v. Weyler, 284 F.3d 665 (5th Cir. 2002) (relates to broad removal when arbitration could affect outcome)
- Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (Supreme Court, 1983) (plan-related removal analogy for broad reach of 'relates to')
- McGuire v. United States, 550 F.3d 903 (9th Cir. 2008) (related-to concept in bankruptcy jurisdiction analogies)
- Nike, Inc. v. Comercial Iberica de Exclusivas Deportivas, 20 F.3d 987 (9th Cir. 1994) (diversity at removal time discussion; forum-defendant considerations)
- Grupo Dataflex v. Atlas Global Group, L.P., 541 U.S. 567 (U.S. 2004) (diversity at time of removal; statutory, non-jurisdictional)