Momot v. Mastro
2011 U.S. App. LEXIS 12602
| 9th Cir. | 2011Background
- Mastros and Momot entered the Allocation Agreement containing an arbitration clause governing disputes arising from the Agreement.
- The asset sale closed on May 15, 2007, after which Momot complained about the allocation of purchase-price proceeds among entities in which he invested.
- Momot sued the Mastros in Nevada state court on April 16, 2009 asserting fiduciary and related claims.
- The Mastros started AAA arbitration on May 19, 2009 and moved in federal court to compel arbitration and stay the Nevada action under the FAA.
- Arizona district court denied initial relief, citing forum-shopping concerns and lack of irreparable harm, and held arbitration not clearly enforceable at that stage.
- Nevada district court later stayed the Arizona arbitration and held Momot’s claims were not within the Allocation Agreement, allowing the Nevada action to proceed in court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause delegates arbitrability to arbitrators | Momot argues no delegation to arbitrators exists. | Mastros contend the clause reserves arbitrability to arbitrators. | Agreement clearly and unmistakably delegates arbitrability to arbitrators. |
| Whether the district court should have stayed the litigation under FAA §3 | Momot argues that the dispute is subject to arbitration and should be stayed. | Mastros contend no stay is required because arbitration is not properly invoked. | District court erred; stay granted and arbitration ordered. |
Key Cases Cited
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (U.S. 2010) (enforces agreement to arbitrate threshold issues)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (clear and unmistakable evidence for arbitrability questions)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (gateway questions of arbitrability reserved to court)
- Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (U.S. 2003) (plurality on arbitration clause scope)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (FAA Section 2 substantive policy favoring arbitration)
- Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (U.S. 2010) (court must enforce arbitration according to terms; limits on perplexing arbitrability questions)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (contract-based arbitration principles)
- AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643 (U.S. 1986) (arbitration agreement validity and enforceability)