995 F.3d 680
9th Cir.2021Background:
- Plaintiffs (consultants for LuLaRoe) sued, alleging LuLaRoe operated an illegal endless-chain pyramid scheme under California and federal law.
- Defendants moved to compel arbitration under arbitration agreements signed by each consultant; the district court granted the motion and stayed the case pending arbitration.
- Plaintiffs moved under Fed. R. Civ. P. 41(a)(2) to voluntarily dismiss the action with prejudice so they could immediately appeal the order compelling arbitration, arguing arbitration would be futile.
- The district court granted the voluntary dismissal with prejudice; plaintiffs appealed the arbitration order.
- The Ninth Circuit dismissed the appeal for lack of appellate jurisdiction, relying on Langere and the Supreme Court’s decision in Microsoft.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a voluntary dismissal with prejudice after an order compelling arbitration creates an appealable final decision under 28 U.S.C. § 1291 | Voluntary dismissal produces a final judgment permitting immediate appeal of the arbitration order | Such a dismissal does not convert an interlocutory order into an appealable final decision; Microsoft and Langere foreclose jurisdiction | No — following Langere and Microsoft, voluntary dismissal after an arbitration order does not create appellate jurisdiction |
| Whether dismissal under Rule 41(a)(2) (court-ordered) differs from unilateral Rule 41(a)(1) dismissal for purposes of appellate jurisdiction | Rule 41(a)(2) dismissal should allow appeal even if unilateral dismissal would not | The mechanics of dismissal (41(a)(1) vs 41(a)(2)) are irrelevant; Microsoft involved a Rule 41(a)(2) dismissal too | No — the form of dismissal does not change the jurisdictional result |
| Whether 9 U.S.C. § 16(a)(3) provides appellate jurisdiction over the arbitration order after voluntary dismissal | § 16(a)(3) permits appeals from final decisions with respect to arbitration, so it supplies jurisdiction | Langere holds a voluntary dismissal is not an appealable “final decision” under § 16 or § 1291 | No — § 16(a)(3) does not supply jurisdiction where dismissal is not a final decision per Langere |
Key Cases Cited
- Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017) (Supreme Court: voluntary-dismissal tactic does not yield an appealable final judgment)
- Langere v. Verizon Wireless Servs., LLC, 983 F.3d 1115 (9th Cir. 2020) (Ninth Circuit: voluntary dismissal after an order compelling arbitration does not create appellate jurisdiction)
- Omstead v. Dell, Inc., 594 F.3d 1081 (9th Cir. 2010) (earlier Ninth Circuit decision holding voluntary dismissal could create jurisdiction; effectively overruled by Microsoft and Langere)
- Ward v. Apple Inc., 791 F.3d 1041 (9th Cir. 2015) (Ninth Circuit decision recognizing appellate jurisdiction after voluntary dismissal; no longer controlling)