Medivas, LLC v. Marubeni Corporation
2014 U.S. App. LEXIS 1646
9th Cir.2014Background
- MediVas (San Diego) and Marubeni (Japanese corp.) contracted in connection with a $5M loan; some contracts called for arbitration in Tokyo while another contained a San Diego forum-selection clause.
- After MediVas defaulted, Marubeni initiated foreclosure and invoked an arbitration clause; MediVas and individuals sued in state court and Marubeni removed under the New York Convention and moved to compel arbitration.
- In Aug. 2011 the district court ordered many claims compelled to arbitration and remanded several nonarbitrable claims to state court; it neither expressly dismissed nor expressly stayed the arbitrable claims.
- Arbitration proceeded; the panel awarded for Marubeni on nearly all claims but left one claim outside its jurisdiction. Marubeni later filed to confirm the award in district court.
- MediVas filed a notice of appeal from the Aug. 2011 order only after the arbitration concluded; the Ninth Circuit considered whether the order compelling arbitration was an appealable “final decision with respect to an arbitration” under 9 U.S.C. § 16(a)(3).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an order compelling arbitration that neither dismisses nor expressly stays the action is immediately appealable under 9 U.S.C. § 16(a)(3) | MediVas argued the Aug. 2011 order was final and appealable (it sought immediate review) | Marubeni argued the order was not final and the appeal was premature (alternative: time to appeal expired) | The court held the order implicitly stayed the arbitrable claims, so it was not a final, appealable decision under § 16(a)(3). |
| Whether an arbitral award rendered the district court order "final" post hoc | MediVas contended the award made the district-court order final and thus appealable/timely | Marubeni argued the order was never final and could not be rendered final by external arbitration events | The court rejected that the award could retroactively make the district-court order final; finality must come from the court’s order. |
| Whether courts should require a clarifying district-court order before appellate review | MediVas asked the Ninth Circuit to hold the appeal pending a clarifying district-court ruling | Marubeni opposed delaying appellate resolution; later argued untimeliness | The Ninth Circuit declined to follow the Second Circuit’s stay-for-clarification practice but urged district courts to be clear; it adopted a rebuttable presumption favoring an implicit stay. |
Key Cases Cited
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (U.S. 2000) (orders that end litigation and leave nothing for court are final and appealable)
- Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863 (U.S. 1994) (final judgment rule principles)
- Coopers & Lybrand v. Livesay, 437 U.S. 463 (U.S. 1978) (scope of final judgment rule)
- Interactive Flight Techs., Inc. v. Swissair Swiss Air Transp. Co., 249 F.3d 1177 (9th Cir. 2001) (order compelling arbitration with dismissal is appealable)
- Bushley v. Credit Suisse First Bos., 360 F.3d 1149 (9th Cir. 2004) (order compelling arbitration without dismissal is not final; deemed implicitly stayed)
- Dees v. Billy, 394 F.3d 1290 (9th Cir. 2005) (order compelling arbitration and administratively closing case was not final)
- Sanford v. Memberworks, Inc., 483 F.3d 956 (9th Cir. 2007) (order directing arbitration but leaving claims before the court is interlocutory)
- Cap Gemini Ernst & Young, U.S., L.L.C. v. Nackel, 346 F.3d 360 (2d Cir. 2003) (procedure placing appeal on hold for district-court clarification; not to be routinely followed)