Jeff Boardman v. Pacific Seafood Group
822 F.3d 1011
9th Cir.2016Background
- 2010 Whaley class action by West Coast fishermen against Pacific Seafood, Ocean Gold, and Dulcich alleged antitrust conspiracies; parties settled by a Resolution Agreement in 2012. The agreement (Paragraph 3(a)) required 60 days’ notice and submission to Judge Hogan (or successor) for objections to any new agreement that requires Pacific Seafood to act as Ocean Gold’s exclusive marketer.
- In Dec. 2014 Pacific Seafood announced plans to acquire Ocean Gold; a new group of fishermen (Boardman plaintiffs) sued in Jan. 2015 alleging monopolization/attempted monopolization and sought to enjoin the acquisition.
- The district court granted a preliminary injunction halting further acts to acquire or control Ocean Gold pending litigation.
- Defendants moved to compel arbitration under Paragraph 3(a) of the Resolution Agreement; the district court denied the motion, finding plaintiffs’ claims fell outside Paragraph 3(a).
- Ninth Circuit consolidated appeals and affirmed both the denial to compel arbitration and the grant of the preliminary injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Paragraph 3(a) of the Resolution Agreement covers the present dispute and requires arbitration | Paragraph 3(a) applies only to new agreements that explicitly require Pacific Seafood to act as Ocean Gold’s exclusive marketer; the stock purchase does not do so | The stock acquisition functionally permits or results in Pacific Seafood being Ocean Gold’s exclusive marketer, so objections must be submitted under Paragraph 3(a) | Paragraph 3(a) unambiguously covers only new agreements that require Pacific Seafood to act as exclusive marketer; stock acquisition does not fall within that scope, so no arbitration compelled |
| Whether Paragraph 3(a) is a valid arbitration agreement (threshold FAA inquiry) | Plaintiffs questioned validity and whether a federal judge/magistrate can be named arbitrator; also argued clause was ancillary, not arbitration | Defendants argued Paragraph 3(a) designates a third‑party decisionmaker and is enforceable under the FAA and local ADR authority | Majority did not decide validity because clause’s plain scope excludes the dispute; concurrence would treat Paragraph 3(a) as a valid arbitration clause and that magistrate/judge could serve as neutral under statutes and district local rules |
| Whether plaintiffs released their post‑2011 claims in the 2012 Resolution Agreement | Plaintiffs: release was temporally limited to claims arising June 21, 2006–Dec. 31, 2011 and thus did not bar new claims | Defendants: reading of release would encompass related claims for injunctive/damages without temporal limit | Court construed release textually and held it was temporally limited; plaintiffs did not release claims arising after 2011 |
| Whether preliminary injunction was properly granted (Winter factors: likelihood of success, irreparable harm, equities, public interest, scope) | Plaintiffs: acquisition would create monopsony/high concentration in input markets, causing irreparable competitive harm; status quo must be preserved | Defendants: business cooperation already existed; stipulation with Oregon AG and ability to terminate within 60 days undermines urgency; injunction overbroad because it bars preparatory conduct | Court: did not abuse discretion—plaintiffs showed likelihood of success on §7/monopsony theory, irreparable harm, favorable equities and public interest; injunction appropriately preserved status quo and was not overbroad |
Key Cases Cited
- Chiron Corp. v. Ortho Diagnostic Sys., 207 F.3d 1126 (9th Cir. 2000) (two-step FAA inquiry: existence of agreement and scope of arbitrable dispute)
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (standard for issuing preliminary injunctions)
- Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775 (9th Cir. 2015) (merger analysis and burden-shifting framework under §7)
- Wolsey Ltd. v. Foodmaker, Inc., 144 F.3d 1205 (9th Cir. 1998) (presumption in favor of arbitrability; arbitration need not use the word "arbitrate")