Cox v. Ocean View Hotel Corp.

facilitation crime in violation of telephone CONCLUSION 843(b) within, beyond, this defini- [§ ] above, For the reasons we hold ‘drug trafficking tion of used in offense’ as prior Jimenez’s convictions under 21 Sentencing Chapter Two of Guide- 843(b) § qualify “drug U.S.C. as traffick lines.”). As Orihuela was the first case to 2L1.2(b)(1)(A)(i) § ing offenses” under issue, decide this law there was no case Guidelines, as reasoned United codify regarding this issue 1997. As Orihuela, States v. such, Jimenez cannot demonstrate that the (11th Cir.2003), and affirm therefore clearly Commission intended to not include judgment district court’s as to Jimenez. 843(b) § meaning convictions within the AFFIRMED. “drug trafficking offense” and his statuto- ry argument construction must fail.

C) Jimenez’s Argument “Facili-

tation” Cannot Constitute “Aiding and

Abetting” is Unavailing

Jimenez next argues that the Elev

enth reasoning Circuit’s Orihuela and COX, Plaintiff-Appellee, Thomas R. reasoning this court’s in Vea-Gonzales are they presume flawed as both that the “fa 843(b) § cilitation” element aof offense is OCEAN VIEW HOTEL CORPORA- the equivalent “aiding abetting” TION, doing Radisson; business as which is included within the definitions of 50; John Does 1 TO Jane Does 1 TO “controlled substance offense” and “drug 50; Partnerships 1-50; Doe Doe Cor- trafficking offense.” He cites the Ninth porations 1-50; 1-50, Doe Entities De- Jury Circuit’s Model Criminal Instructions fendants-Appellants. in arguing that the Government faces a higher in proving burden “aiding and abet No. 06-15903. ting” than it does in proving “facilitation” Appeals, United States Court of points of a crime. He out that for aiding Ninth Circuit. abetting, jury the model instructions require the Government to prove that the Argued and Submitted Nov. 2007. knowingly defendant intentionally aid July Filed ed another to commit “each element” of crime, the substantive while it need

show that the defendant knowingly and

intentionally used a facility communication “help bring pur about” the crime for 843(b).

poses of facilitation under Section Jury 5.1,

See Model Crim. Instr. 9th Cir. (2003). may so,

9.25 While this be we have

held that “facilitation” for purposes 843(b)

§ amounts to the thing same as Vea-Gonzales,

“aiding abetting.” 1329-30. As Vea-Gonzales is con

trolling, reject Jimenez’s contentions. Rand, Torkildson, Katz,

Richard M. Fonseca, Hetherington, Moore & Honolu- lu, HI, defendants-appellants. for the Honolulu, Hioki, HI, Stephen T. for the plaintiff-appellee.

Before: F. DIARMUID O’SCANNLAIN, A. WALLACE TASHIMA, SMITH, JR., and MILAN D. Judges. Circuit TASHIMA; Opinion by Judge Partial Partial by Judge Concurrence and Dissent O’SCANNLAIN. Any disputes Employer between

TASHIMA, Judge: Circuit arising out of the Employee employment (“Ocean Corporation Hotel View Ocean be relationship shall settled arbitra- View”) an em- and Thomas Cox executed the then accordance with current containing a manda- ployment Employment Model Arbitration Proce- a dispute clause. When tory arbitration of the American Asso- dures Arbitration employment, during the course arose (AAA)in all jury ciation lieu of trial and request- a letter to Ocean View Cox wrote judicial dispute meth- other resolution arbitration, responded but View ing Ocean Employee fully ods. understands and it did not consider his by telling Cox that Any controversy except accepts this.... Following ter- ripe claim for arbitration. Compensation, involving for Workmen’s filed a employment, of his Cox mination application or of the the construction in of Hawai’i. complaint the Circuit Court terms, provisions, or conditions of this it decided that point, At that Ocean View Agreement arising otherwise out of claim. After to Cox’s wanted arbitrate Agreement or related to this shall like- court, action to federal removing the by be This wise settled arbitration. compel to arbitration. Ocean View moved to arbitrate covers all em- its motion to The district court denied lim- ployment disputes including but not Cox’s mo- granted arbitration and tort, involving wrongful ited to those summary judgment on the partial tion for discharge, and discrimination claims. previously that View ground Ocean paid The cost of the arbitration shall be and waived its its breached The location of the by Company. disputes to arbitrate with Cox. Cox paid by Compa- arbitration shall be F.Supp.2d Corp., Hotel Ocean View ny. The location of the arbitration shall (“Cox I”). (D.Haw.2006) have We County Company in which the be in denial jurisdiction over the district court’s located. This clause cannot be is under 9 of a motion to amended without written consent of 16(a)(1)(B). Ingle § v. Circuit U.S.C. parties. both (9th Cir.2005). City, 408 validi- provided “[t]he The letter also in that the district court erred We hold enforceability, and the ty, interpretation, in fa- summary judgment granting partial Agreement of this shall be performance breaeh-of-agree- vor of Cox based on his in accordance governed by and construed theory, did not ment because Cox of California.” with the law of State of his initiate arbitration under the terms relationship began to employment The also hold employment agreement. We supervi- when Cox’s sour October improperly granted that the district Gary allegations raised that Cox sor Jutz in favor on the summary judgment Cox’s relationship in a with was involved sexual issue of waiver. one of his female subordinates. litiga- the current gave events that rise to

BACKGROUND year, began following on October July Cox Ocean View On 5, 2004, sent a memorandum when Jutz signed Agreement a Letter of Cox’s demanding personal end his Cox Cox Finance for as the Director of Al- employment that subordinate. relationship with Kuhio. Waikiki Prince the rela- though the Radisson Hotel the letter did not describe one, job it setting forth Cox’s de- as a romantic or sexual tionship In addition to alleged perception in- that the compensation, the letter stated scription and relationship disrupting perform- was following arbitration clause: cluded the department. being anee of the Jutz ended the At point, terminated. assum- by warning letter Cox that you “[f]ailure ing wrongful then consider it a ter- change maintain expect- behavior and [his] mination, may be order. responsibilities ed a serious work disci- meantime, if you Gary feel that plinary matter” and that continued “[a] “guilty Jutz is of’ the issues set out failure to organization work within the above, may it be that we should an have “ultimately resolve this situation” could be independent investigation by an outside an deemed act of insubordination and attorney to establish whether or not grounds for immediate termination of em- there is in the Hotel a perception of ployment.” “relationship” existing you between 11, 2004, responded On October in a Cox your ..., thereby jus- direct subordinate Guinn, Clyde letter to supervisor, Jutz’s tifying complaints made Mr. Jutz arguments which he laid out various you on numerous occasions.... At support of claim that his he was a victim of the conclusion of such investigation line, sex discrimination. In the first position I believe the will be much clear- “request called the letter a to enter into er for all and we could then each arbitration.” He also stated asser- decide on what course of action each tions in provisions Jutz’s memo violated in adopt wishes to in the circumstances. handbook, employment by his amounting discrimination, harassment, to “sex intimi- Jutz employment terminated Cox’s on dation, per- interference with others in the 20, 10, February December 2004. On jobs, formance of their threatening, mak- 2005, a Charge Cox filed of Discrimination ing maliciously false defamatory and/or Commission, with the Hawai’i Rights Civil associate, statements concerning an and 26, 2005, September and on the Commis- retaliation....” Cox’s letter by concluded sion granted right him the to sue. Cox requesting that “provide Guinn the date court, then complaint filed a in state which and time of the hearing arbitration and Ocean View removed to federal district any questions” attorney to his at a listed answer, court. In its Ocean View request- address. ed “that the Complaint stayed herein be 27, 2004, responded Guinn on in October and that required Plaintiff be to submit all (“Guinn’s letter”). it, a letter to Cox In of his claims to final and binding arbitra- ” disagreed Guinn with Cox’s characteriza- .... Cox moved for partial summary tion of Jutz’s memo accusing as Cox of judgment denying arbitration on the theo- having a romantic or relationship sexual ry that Ocean View breached its agree- with that subordinate. He disagreed also ment to engage arbitration refusing with Cox’s guilty statements that Jutz was arbitration in Guinn’s letter. of the violations asserted in Cox’s letter. Cox, The district court ruled in portions The essential favor of of Guinn’s letter are granting partial contained his motion for following paragraphs: summary two judgment denying Ocean View’s mo- summary, therefore, I do not consid- I, tion to compel arbitration. Cox er this a Gary ease for arbitration. Jutz F.Supp.2d at 1181. The district court con- your behavior, believes that as a senior cluded that properly Cox team, member of the hotel initiated arbitra- management tion, 1176; id. at is cause for censure. You Ocean accept do not View refused to arbitrate, 1177; Clearly, and, this is the case. if id. at you result, continue as a pursue Gary the activities which Ocean Jutz View both breached agreement its of, has complained you arbitrate, run the risk of id. at and waived its dispute at agreement encompasses Id. to enforce (citation quotation issue.” Id. at 1130 followed. appeal This omitted). challenges

marks the arbi- OF REVIEW STANDARD ground. agreement tration first Therefore, we decide whether Cox’s con- a motion to the denial of We review challenges tract-based to enforcement— Brown v. Dil arbitration de novo. (9th breach of the and waiver—are lard’s, Inc., Cir. 2005). the court. motion to com before denial of a Because the same effect as pel arbitration has 2 of the FAA creates a Section deny summary judgment grant partial policy favoring agreements enforcement of arbitration, partial motion for ing Cox’s 2;§ Buckeye to arbitrate. 9 U.S.C. Check functional summary judgment was the v. Cashing, Cardegna, Inc. U.S. opposition of an to Ocean View’s equivalent 443-44, 126 S.Ct. 163 L.Ed.2d 1038 motion, it will treat as such. Cf. (2006). provision, Under Co., Campbell Soup v. Craft valid, irrevo clauses in contracts “shall be Cir.1999) (treating n. 4 a motion cable, enforceable, upon save such mo summary judgment as de facto grounds equity exist at law or in for the as arbitration), abrogated on tion to § 2. revocation of contract.” 9 U.S.C. Stores, Inc. City Circuit grounds other recently Court has clarified Supreme 1302, 149 Adams, U.S. challenges that contract-based valid (2001).1 L.Ed.2d 234 ity agreements come two types: type challenges specifically “[o]ne ANALYSIS validity to arbitrate I challenges .... other the con [and][t]he whole, ground on a that tract as a either we must decide Preliminarily, ... directly agreement affects the entire enforcing to the challenges whether Cox’s illegality that the of one ground or on the court, for the or for arbitration clause are renders the provisions of the contract’s arbitrator, previ have the to decide. We Buckeye whole contract invalid.” Check that the federal law ously determined 444, Cashing, at 126 S.Ct. 1204 546 U.S. arbitrability under the Federal Arbitration added). Challenges to the con (emphasis (“FAA”) of au governs Act the allocation by the arbi validity tract’s are considered thority between courts and arbitrators. 445-46, at in the first instance. Id. trator Sys., Corp. Diagnostic v. Ortho Chiron Where, however, “the Cir.2000). 126 1204. Inc., 1126, ... complaint crux the is the arbitration that the FAA mandates “district Because itself, courts ... provision then the federal parties proceed to courts shall direct provi the arbitration must decide whether as to which an to arbitration on issues ” sion is invalid and unenforceable.... signed[,]” has been agreement Myers, 485 F.3d O’Melveny v. & Davis FAA limits courts’ involvement to “de (9th Cir.2007) 1066, 1072 (1) (citing Nagrampa agreement a valid termining whether Inc., 1257, and, does, MailCoups, if it whether v. arbitrate exists on remand. deciding "dis- ties are free to contest We without that 1. assume Brown, ("To degree 430 F.3d at 1006 is an arbitrable pute” Cox wanted arbitrated breached its ar- meaning parties’ our conclusion that Dillard's dispute within Also, depends on appeal, with Brown this bitration facts, disputed on remand legal questions presented Dillard’s free resolve facts.”). par- disputes, which the contest those and not factual (en (9th Cir.2006) banc)). sum, Reynolds, In our case and Howsam Dean Witter Inc., properly law makes clear courts exer- 537 U.S. 123 S.Ct. jurisdiction raising (2002), cise over claims de- L.Ed.2d 491 do not discuss whether at existing equity fenses law or for the courts or arbitrators should consider chal- revocation of it- arbitration clause lenges validity agree- of arbitration See, e.g., Nagrampa, self. 469 F.3d at ments, instead, separate but focus on the (holding 1263-64 that courts should ad- inquiry of whether courts or arbitrators procedural unconscionability dress a de- scope should determine the of the arbitra- fense to the enforcement of an arbitration Omar, clause. See at Brown,, provision); 430 F.3d at Howsam, 566; at 537 U.S. 123 S.Ct. (considering plaintiffs breach of contract (addressing question “[t]he and waiver defenses to enforcement of an have particular submitted a agreement).2 otherwise valid arbitration arbitration”).4 dispute to case, In party disputes this neither Howsam, In the Court confronted the validity Agreement. of the Letter of issue whether a court or a National Associ- Instead, challenges enforcement of (“NASD”) ation of Securities Dealers arbi- grounds the arbitration clause on the apply procedural trator should a NASD Ocean View breached the parties. rule to between the Id. dispute right arbitrate and therefore had no at provision 123 S.Ct. 588. The NASD or, enforce the alternatively, clause six-year issue included a limi- statute of Ocean View’s conduct amounted to a waiv tations plaintiff, which the Dean Witter Therefore, er of the to arbitrate. Reynolds, attempted to enforce in under Buckeye Cashing, partic Check against disgruntled client. Id. at ular contractual defenses to enforcement 82, 123 precise question S.Ct. 588. The of the arbitration clause at issue in this presented to the Court was whether the case, waiver, breach and were parties agreed to submit enforcement of heard the district court.3 arbitrator, procedural this rule to an rath- Ocean View contends that the issue of er than the courts. Id. at 123 S.Ct. waiver was for the arbitrator to answering, determine. the Court distin- relies, however, The cases on which it guished gateway between two disputes. Ralphs Grocery Omar v. Company, 118 The first parties was “whether the are 955, Cal.App.4th (2004), Cal.Rptr.3d by clause[,]” 13 562 given bound a arbitration a 2. Other agreement courts have considered parties, waiver as a contractual between the a defense to a motion to arbitration. party compelled "cannot be to arbitrate if an See, Servs., e.g., Khan v. Parsons Global 521 arbitration clause does not bind it at all.” 421, (D.C.Cir.2008); Tyco 424-25 In re Wiley Livingston, John & Sons v. 376 U.S. 41, (1st Litig., Int’l Ltd. Sec. 422 F.3d 44 543, 547, 909, 84 S.Ct. 11 L.Ed.2d 898 Cir.2005); Indus., PPG Inc. v. Webster Auto (1964). binding It is the nature of the arbitra- 103, (2d Cir.1997); Parts 128 F.3d 107 contests, clause Cox and that we Peacock, Mortgage Corp. Great W. v. 110 F.3d must review. 222, (3d Cir.1997). 4.Indeed, Appeal the California Court of not- partial 3. The premise dissent is based the ed that the issue "whether there is an enforce- agreement that the arbitration is valid. Dis- par- able arbitration below, however, between the sent at 1127. As discussed ties” was antecedent to the issue can reach that conclusion after con- matters, sidering, particular procedural rejecting, by such as waiv- the defenses raised er, Omar, Supreme by Cox. The Court has noted that are covered be- duty originates cause the to arbitrate in a at 566. decide, 84, ly presented at decided the issues in this to id. for a court question at in the case. and one not issue “whether an arbi- The second was case. binding con- concededly in a

tration clause II of contro- particular type to a applies tract provides of the FAA Section addressing the second versy....” Id. In arbitration clauses contracts “shall be issue, reasoned gateway Court valid, irrevocable, enforceable, save “ grow out of questions which ‘procedural’ upon grounds such as exist at law or disposition its final dispute and bear on equity any for the revocation of contract.” judge, not for the but presumptively are FAA, § party may 2. a U.S.C. Under arbitrator, decide[,]” because for an validity applicability challenge an likely expect that arbi- “parties would by provision raising the same mat- gateway decide [that] trator would party seeking defenses “available to a (citation quotation marks ter.” Id. avoid enforcement of contract.” omitted). likely parties would Because Brown, at 430 F.3d 1010. These contract- a interpretation of NASD have committed by challenges governed applica based are arbitrator, that particular rule to a NASD Davis, state law. See 485 F.3d at 1072. ble left for the arbitra- procedure issue of was Here, noted, previously have as we Id. at 123 S.Ct. 588. tor to decide. govern parties selected California law to out disputes arising the resolution of in- reasoning simply of Howsam is employment agreement. gate- of the first applicable resolution way whether the are bound issue: A clause.5 As discussed by the arbitration above, repudiation that he Breach or contract does not concede clause; instead, nonperformance by party one excuses bound the arbitration principle the other. “A bedrock of Califor he contends that Ocean View revoked the that he or waiver of nia contract law is who seeks through clause its own breach that he has enforce a contract must show to arbitrate. Cox does arbitrable, agree the conditions and complied is not but with contend waiver part on his to be ments of the contract raises it as a defense to motion to (ci Brown, at 1010 performed.” brought against him federal omitted). quotation marks disputing Far from the arbitrabili- tation court. Corp. claim, also Local I.A.T.S.E. Color ty initially sought he arbitra- his Am., P.2d Therefore, 47 Cal.2d proper- the district court tion. Indeed, strange would create a not even cite Prima see Dissent Howsam does get crack at would first Co., result: the arbitrator Mfg. Corp. v. & Conklin 388 Paint Flood compel to a motion to arbitration defenses 1801, 395, 18 L.Ed.2d 1270 U.S. 87 essence, the waiver or breach. based on (1966), progeny, the allo- or its which discuss with- would have to authority between the court and cation of reviewing parties’ the out the contentions. If challenges validity over of arbitrators of the arbitrator resolves the issue in favor Buckeye Similarly, Check arbitration clauses. however, defense, party asserting the a waiver Cashing and its does not cite to Howsam in likewise have no recourse would predecessors discussing scope of arbitra- the Therefore, Judge the arbitral forum. kept those ble The Court has hitherto issues. suggestion virtually eliminates O’Scannlain's Further, separate. treat inquiries two a motion to waiver as a defense to arbitration, procedural widely recognized by and waiver as issues for breach a defense arbitrator, supra suggests, note partial other courts. the as the dissent 1122

(1956) (In Bank) (“A initiated, repudiation just of con- how arbitration was to be promisor tract accepted the excuses “in place it would take accordance” performance by promisee”)- the Before AAA position with rules. This is untena reaching question the whether Ocean because, above, ble as discussed the repudiation View’s actions constituted a of clearly agreement integrated those rules agreement, Cox must first establish and procedures. challenging Besides that he If properly initiated arbitration. clarity provision, of the Cox does not as so, he failed to do then Ocean could View any sert traditional contract defenses. repudiated agreement, not have re- Recently, the Appeal California Court of of gardless the contents of Guinn’s letter. noted that it was aware of no cases “that stand for proposition the extreme that a 11, argues his October party who fails to read a contract but 2004, a proper letter to Guinn constituted objectively nonetheless manifests his as disagree. demand arbitration. We by signing sent it—absent fraud or knowl employment arbitration clause edge by contracting the other party of the clearly agreement “disputes states that alleged -may ... ... later rescind the shall be settled accordance with mistake-— agreement the then on Employment current Model Arbi the basis that he did not ” tration Procedures of the Our agree [AAA].... to its terms.” Stewart v. Preston court, as well as the Inc., California Court of 1565, Pipeline Cal.App.4th 134 36 Appeal, language has concluded that such (2005) 901, Cal.Rptr.3d (citing 921 Brook incorporates applicable rules of the Am., Cal.App.4th wood Bank of AAA into the terms the contract. See 1667, 515, (1996) (com Cal.Rptr.2d Lifescan, Servs., Inc. v. Diabetic Premier menting “plaintiff was bound Cir.2004); provisions [an] Consultants, O’Hare v. Mun. Res. 107 Cal. regardless of whether she read it or was App.4th aware the arbitration clause when she (2003). Howsam, Accord U.S. document”) (citation signed quota (finding incorporation S.Ct. 588 of a omitted)). tion marks Cox’s contention procedure NASD arbitration in similar cir proposi amounts the same “extreme cumstances). employment The AAA rules tion” noted in Although Stewart. the ar procedures are AAA available bitration clause did not explicitly articu website. See American Arbitration Associ requirement formally late the initiating ation, Rules, Employment Arbitration AAA, arbitration proceedings with the (last http://www.adr.org/sp.asp?id=32904 are satisfied that Cox consented to the 2007). Dec. visited Rule “Initiation of terms of he signed. The Arbitration,” requires initiating fact that Cox was hired for a managerial (hereinaf party: “file a written notice position represented by and was counsel ‘Demand’) ter of its intention to arbitrate” at the time he made his flawed request for duplicate; provide copy arbitration reinforces this view. Demand to the other party; and in Cox, clude the applicable filing fee. who Cox also contends that Ocean represented by counsel, was then does not View’s placed refusal arbitrate him in dispute that comply he failed to with having the situation of to pay filing his own requirements. of these basic fee, AAA require party because rules a to Instead, justifies pay Cox a fee in order to his failure to fol- initiate arbitration. AAA procedures by Therefore, low arguing argues, compliance that the he with employment agreement did not AAA specify procedures would violate the terms Cir.1970) (9th (articulating a agreement because employment the of elements). cost of agreed pay substantially “[t]he to similar list of To Ocean View ” AAA language .element, The of the arbitration.... satisfy the second the district argument. this directly on rules bears that court reasoned “the Defendant’s letter “Filing Fees” is listed The item described from came the Senior Vice President of called general heading a “Costs under and the Plaintiff Operations, certainly is positioning of the items Arbitration.” entitled to the believe Defendant’s state- filing that fees are one of various suggests ment that the Defendant not did consider costs, fees, postpone- including hearing I, this a case for arbitration[.]” Cox fees, fees, rental, abeyance room and ment F.Supp.2d at 1177. There is no indication sup- to lend expenses. Though this seems that the record Ocean View intended contention, each the afore- port to Cox’s rely upon that its Cox letter to his detri- party is specifies mentioned costs which ment. Nor did assert that he Cox believed them, pay to and all save for the expected him rely, Ocean View intended to or did in charged employ- filing fee are to be rely, fact on letter. Guinn’s O’Donnell Cf. Thus, er. the text of the Rule itself avoids v. Vencor ambiguity by identified problem the Cir.2006) (affirming equitable denial of es- Cox.6 toppel grounds no there was The district court also deter purpose part “evidence of on the improper equita defendant”) (citation should be mined that Ocean View quotation of the initi bly estopped denying from that Cox omitted). Therefore, marks the district own refusal ated arbitration because of its erred in concluding Ocean View arbitrate. The facts established estopped denying was from Cox’s initiation view. The pleadings support do not this of arbitration. Because Cox did not abide “provides equitable estoppel doctrine of clause, the terms of may deny existence person that a did not its hold Ocean View breach intentionally if of a state of facts he led agreement to arbitrate. circum particular another to believe a reasons, foregoing For the Cox’s reli- rely upon to be true and to such stance Brown, misplaced. In ance on Brown Aerojet-Gen. belief to his detriment.” Dillard’s, employer, an terminated Brown Co., Corp. v. Commercial Union Ins. allegedly adding for ten minutes her Cal.App.4th Thereafter, timecard. she filed notice of (2007) (citation quotation marks omit AAA re- intent to arbitrate with the as “(1) ted). doctrine, apply order policy. Id. quired by Dillard’s arbitration estopped apprised party to be must be policy, at 1008. Under facts; he must intend his fee was Brown’s share of the arbitration upon, acted or must so act conduct shall be paid Id. She the fee. Id. After $100. party asserting estoppel that the has a Dil- filing, the AAA informed Brown that intended; right to believe it was so responded requests lard’s had not to its party ignorant other must be of the true speak information. Id. Brown was able to facts; rely upon he must state legal department (citation person with a Dillard’s injury.” the conduct to his Id. omitted). notify employer of this delin- once to quotation marks See also Co., quency, response did not receive Georgia-Pac. United States v. but Moreover, presumably part reim- of the arbitration award. could seek any filing bursement of fees he advanced as repudiated agree- Id. Further- the arbitration subsequent communications. View more, AAA simply apply sent two letters Dillard’s not ment. Brown does under already notifying paid it that Brown had the facts of this case. and that Dillard’s portion

her of the fee B remaining filing owed the of the fee. $400 respond Id. After failed to Dillard’s argues the alternative AAA, AAA that Dil- notified Brown letter amounted to a waiver of Guinn’s not of the paid filing lard’s had its share right to Ocean View’s arbitrate Cox’s dis- fee, and returned her notice of arbitration. pute. Recently, Supreme the California attempts Id. at 1009. Brown made to Court set forth the factors to be consid- contact Dillard’s for two months to discuss ered under California law to determine arbitrate, its refusal to succeeded whether arbitration has been waived: once, in making contact at which time the waiver, determining In a can con- legal department told her “her com- (1) party’s are sider whether the actions had no merit and that Dillard’s re- plaint arbitrate; right inconsistent with the fused to arbitrate.” Id. After Brown filed (2) litigation machinery whether the has suit, Dillard’s removed the case to federal substantially par- been invoked and the district court and moved to arbitra- preparation ties were well into of a law- tion. Id. party oppos- suit before the notified the concluded, This court based on facts (3) arbitrate; ing party of an intent to above, summarized that Dillard’s “breach- whether a party requested either arbi- agreement ed its refusing with Brown tration enforcement close to the trial participate proceed- in the arbitration delayed long period date or for a before ings Brown initiated.” Id. at 1010. We seeking stay; a whether defendant rejected the notion that employer seeking arbitration filed counterclaim independent could make an determination asking stay without for a proceed- of the suitability of the employee’s of the claims ings; important intervening arbitration, stating that Dillard’s steps [e.g., taking judicial advantage of “proper course of action was to make discovery in ar- procedures available argument (emphasis in arbitration.” Id. place; had taken bitration] added). Thus, we construed Dillard’s re- affected, misled, delay whether the fusal as a breach which prejudiced the opposing party. having excused Brown from to arbitrate Agnes Cal., St. Med. Ctr. v. pursuing the matter instead of her lawsuit. PacifiCare of 31 Cal.4th 82 P.3d Id. at 1011. (2003) (citations quo- and internal plaintiff Brown made heroic ef- omitted).7 tation marks arbitration, clearly forts to initiate going that, preliminarily We note while Cox’s beyond requirements of the arbitration failure properly to initiate arbitration un- Here, contrast, Cox did not may der the AAA rules make it more comply agreement; with the terms of the waiver, difficult for him to establish it simply he failed does to initiate arbi- assertion, tration. As the in not foreclose his as it does in the non-complying party case, this Cox cannot establish that Ocean breach of context discussed concluding F.Supp.2d that Ocean tracing lineage, View had “waived at 1180. After its however, agree- its to enforce the arbitration we conclude that the Brown three- ment,” test, the district court relied on the three- factor 430 F.3d at is not based on I, factor test articulated in Brown. Cox California law.

1125 Moreover, above, That is equitable Ocean View. waiver is an of waiver of on the actions waiver focuses generally because doctrine. See Wyler Summit To charged be party with waiver. Inc., v. Turner P’ship Sys., Broad. 235 sure, upon the may Cox’s conduct bear (9th 1184, Cir.2000). such, F.3d 1194 As above, a fact finder factors discussed but it to apply injustice courts can redress reasonably that Ocean might determine where requirements situations technical right independently waived its View prevent provid from otherwise for ar- perfected request whether Cox his ing adequate legal remedies. Toscano bitration. Music, 685, 124 21 Cal.App.4th Greene Thus, consid properly the district court 732, Cal.Rptr.3d 738 (noting right Ocean waived its ered whether View object of equity right is to do and “[t]he arbitration, notwithstanding compel justice[,]” and that of a court powers “[t]he AAA, file a failure to claim with Cox’s ... are not equity cribbed or confined private is a matter of because arbitration law”) (citations rigid rules of by the Howsam, law. See 537 U.S. contract omitted). quotation internal And marks Inv., 588; 83, 123 see also Cronus compel “an action to in es arbitration is Servs., 376, Concierge Inc. v. 35 Cal.4th 25 equity specific sence a suit in 540, 217, 107 222 Cal.Rptr.3d P.3d performance agree of [the arbitration (noting provide the FAA does not Wagner Pac. Mech. ment].” Constr. Co. v. for special agreements, status 19, 434, 41 Corp., Cal.4th makes them simply but as enforceable 1029, (2007). Thus, 157 P.3d it is contracts, that the FAA does as other possible that Ocean could have View require any specific procedural set right waived its to arbitrate notwithstand rules) (citations quotation marks omit ing failure to a claim with the Cox’s file ted). contrast, This stands for marked AAA, en district court example, to the Federal Rules of Civil however, note, in that gaged inquiry. We Procedure, govern which manner in “[a]ny examination of whether bring regardless of parties which suits right has been those would have chosen must be light waived conducted above, rules. As particular discussed strong policy favoring federal enforcement may fail to the terms of party comply with agreements.” of arbitration Fisher v. AG. agreement, resulting in a breach 691, Becker Paribas situation, though, In such a contract. Cir.1986) (citing Hosp. v. long recognized has been as a valid Moses H. Cone waiver 24-25, nonperformance by the breach Mercury Corp., defense Constr. 460 U.S. See, ing party. e.g., Holdings, (1983)). 103 S.Ct. 74 L.Ed.2d 765 Westfed States, Inc. v. United district We conclude that (Fed.Cir.2005) (“Implied may waiver be in determining court erred that Ocean by conduct or that mislead inferred actions right waived its to arbitrate its dis View party reasonably believ breaching into Agnes of the St. pute with Cox. None ing rights arising that the to a claim from supports waiver. Even under the factors waived.”); was Extension [sic] the breach factor, understanding given Guinn’s first 52 Cal. Corp., Oil Co. v. Oil Richfield dispute yet ripe that the was not arbi (1942) (dis 125 P.2d App.2d tration, proposi it is at least a debatable accep cussing the established rule in [were] tion “whether actions [Guinn’s] following of the benefit of tance a contract St. with the to arbitrate.” consistent by the other constitutes party breach breach). at 733. Agnes, Cal.Rptr.3d 82 P.3d waiver of (5), O’SCANNLAIN, Second, through Judge, all of factors which Circuit with the invocation of “the in and in concurring part dissenting part: have to do use, litigation machinery” and its militate While I concur in the court’s decision in favor of Ocean View because Ocean compel that the motion to arbitration was litigation itself and View did not resort to court, erroneously denied I district immediately acted to invoke arbitration respectfully disagree with its conclusion learning that had instituted liti- upon Cox that the was for the waiver issue court to gation. Finally, strongly factor favors view, my arbitrability decide. In is a mat- prej- Ocean View. The district court found court; ter for the whether or not “delay alleged by udice in the and costs” in- properly arbitrate was I, F.Supp.2d at 1180. It is Cox. voked, side, time, any either is a self-evident, however, not that those costs matter for the arbitrator to decide. Thus delay should be attributed to Ocean very I would on the reverse narrow than View rather to Cox himself for not ground a motion to must be properly filing his claim with the AAA. In granted because arbitration clause is event, delay approx- was minimal — valid. I would leave all other issues to the days imately filing from Cox’s his law- arbitrator. in suit state court to Ocean motion View’s removal of the upon I costs, action to federal court. As to As the in opinion Nagrampa en banc v. Supreme California Court has noted that Inc., Mailcoups, 469 F.3d 1257 Cir. expenses ... “costs and incurred in re- 2006) (en banc) revealed, has are there sponding [litigation] to such efforts like- juris continued tensions our arbitration support finding wise do not waiver prudence clarify which have failed to this prejudice.” Agnes, Cal.Rptr.3d St. Very recently, area. Supreme Court Thus, 82 P.3d at 739. argument Cox’s has renewed support its commitment to prejudiced by delay he was finds no Associates, arbitration in Hall Street support the record or under California — Mattel, U.S.-, v. L.L.C. 128 S.Ct. law.8 (2008). 1402, 170 L.Ed.2d 254 But Because none of the Agnes St factors Prima Corp. Paint v. Flood & Conklin supports argument given Cox’s waiver Co., 395, 400, Manufacturing 388 U.S. strong policy federal favoring the en- 18 L.Ed.2d 1270 (holding agreements, forcement of arbitration that a federal court must “order arbitra hold that the district court erred in con- tion once it is satisfied that an cluding that Ocean View had waived its for arbitration has been made and has right to enforce the arbitration honored”), been Howsam v. Dean Witter 79, 85, Reynolds, 537 U.S. 123 S.Ct. CONCLUSION (holding 154 L.Ed.2d 491 grant We reverse the district court’s “in the of an agreement absence partial summary Cox, judgment in favor of contrary, issues of substantive arbitrabili and remand for further proceedings con- ty ... are a court to decide and issues for opinion. sistent with this ie., of procedural arbitrability, whether limits, notice, REVERSED and REMANDED. prerequisites such as time prejudiced argument premised 8. Cox also contends that he was on the ultimate outcome arbitration, however, prevailed because he “would have speculative [in arbitra- and, such, tion] [Ocean would not have a support prejudice View] as cannot ar- terminating employment.” basis Any gument. for [his] Here, I relevant distinction be see no prec- laches, and other conditions estoppel, have to avoid the arbitra- obligation attempt to arbitrate Cox’s to an tween edent met, to de- the arbitrators are bility employment dispute been of his based ” Arbi- Revised Uniform (quoting cide or not he followed the 2) (RUAA) 6(c) § cmt. Act of 2000 tration AAA and Dean procedures of the Witter’s original)), in the (emphasis added challenge arbitrability Howsam based Cardegna, Cashing, Inc. Buckeye Check Association of Securities on the National 440, 449, 126 S.Ct. 546 U.S. (NASD) rules. See procedural Dealers (“[A] challenge to the L.Ed.2d 1038 Howsam, 81, 123 In 537 U.S. at S.Ct. 588. whole, and not as a validity of the contract reasoning of case I would follow the this clause, must to the specifically in Howsam that Supreme “[be the Court added)), (emphasis the go to arbitrator.” likely have com parties cause the would (hold- F.3d at 1293-94 469 Nagrampa, of rule to interpretation a[AAA] mitted agreement that was an arbitration ing that arbitrator, particular that issue of a[AAA] unconscionability was not to invalid due to was left for the arbitrator procedure once enforceable), absolutely clear that are (citing 1121 How Opinion at decide.”1 that by the court is made legal the decision 588). sam, 86,123 at 537 U.S. valid, remaining all clause is an arbitration Here, the exis party disputes neither are for the arbitrator. issues validity nor of the arbitration tence could Howsam Supreme Court Therefore, in the I concur is presumption “the not be clearer: to arbitration. majority’s decision allegations] decide arbitrator should the However, all other issues I would remand waiver, a like defense to arbi- delay, or arbitrator, including the issues of at 123 S.Ct. 588 trability.” U.S. 537 provision was the arbitration (internal citation marks and quotation breached, and therefore dissent waived or omitted). Thus, the ma- perplexing I find holds otherwise.2 the extent the court Howsam. to distinguish jority’s attempt party resisting arbitra- prejudice to the notwithstanding when approach correct is 1. Such added)). (emphasis be tion can shown.” majority's to out of circuit cases the citation partic considering based on extensive waiver See, v. Par litigation. e.g., Khan ipation in my ap- majority opinion states that 2. The Servs., 428 521 F.3d sons Global strange result: the arbitra- proach leads to "a (D.C.Cir.2008) (holding that Parsons waived to a get crack at defenses would first tor “filing a motion right compel arbitration waiver based on motion However, out summary judgment based on matters Opinion at 1121 n. 5. or breach.” Tyco Ltd. pleadings”); approach In re Int’l no less majority opinion's side the 41, 43, (1st require answer Litig., strange; a court to Sec. it would Cir.2005 ) deciding wheth- (considering question question of waiver of waiver before after arbi- Tyco question for arbitra waiver is one for the demand "AAAdismissed er consent”); Opinion at 1120 n. PPG decide. See ... for lack of written trator to tion Indus., a waste approach leads to Parts Such an Inc. v. Webster Auto 1120-21. Cir.1997) (2d the court find (holding judicial “a resources should F.3d clause was not breached right when it the arbitration to arbitration party waives its take into account and it does litigation prejudices waived engages protracted added)); favoring arbitra- policy enforcement of (emphasis Great FAA's opposing party” directly Peacock, Although agreements. Corp. F.3d Mortgage W. Cashing us that (3d Cir.1997) (“Indeed, point, Buckeye Check instructs party waives “conundrum” must faced such a when compel arbitration "resolve[j separate enforce- it in favor of following when the circumstances: provisions.” 546 U.S. ability litigation, of arbitration lengthy engaged in a course of have 448-49, occurred, 126 S.Ct. 1204. discovery has when extensive Howsam, 537 U.S. at 123 S.Ct. II majority’s

Let me add that I find the Dillard’s, Inc.,

treatment Brown v. (9th Cir.2005), problematic to be I,

and I would not reach it. If rather than arbitrator, were question to reach the

of whether or not arbitration was

invoked, however, reluctantly I would con-

clude that Bromi controls this case. view,

my simply principled there is no holding

difference between the that Ms. properly

Brown invoked arbitration

Brown and the district finding court’s

Mr. Cox invoked arbitration here.

Tatyana PARUSSIMOVA, Michailovna

Petitioner, MUKASEY, Attorney

Michael B.

General, Respondent.

No. 06-75217.

United States of Appeals, Court

Ninth Circuit.

Argued May and Submitted 2008. July

Filed

Case Details

Case Name: Cox v. Ocean View Hotel Corp.

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Jul 23, 2008

Citation: 533 F.3d 1114

Docket Number: 06-15903

Court Abbreviation: 9th Cir.