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MediVas, LLC v. Marubeni Corp.

United States Court of Appeals, Ninth Circuit

January 27, 2014

MEDIVAS, LLC, a California limited liability company, Plaintiff-Appellant,
v.
MARUBENI CORPORATION, a Japanese corporation, Defendant-Appellee. and Kenneth W. Carpenter; Joseph D. Dowling; T. Knox Bell; Dari Darabbeigi; Lindy Hartig; Sachio Okamura; William Summer; Paul Teirstein; William G. Turnell, individuals, Plaintiffs,

Argued and Submitted Nov. 7, 2013.

Page 5

Stephen L. Schreiner (argued), Solomon Ward Seidenwurm & Smith, LLP, San Diego, CA, for Plaintiff-Appellant.

Jeffry A. Davis (argued) and Nathan R. Hamler, Mintz Levin CohnFerris Glovsky and Popeo, San Diego, CA, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of California, Thomas J. Whelan, Senior District Judge, Presiding. D.C. No. 3:10-cv-01001-W-RBB.

Before: ALFRED T. GOODWIN, RAYMOND C. FISHER and RICHARD R. CLIFTON, Circuit Judges.

OPINION

FISHER, Circuit Judge:

We address whether an order compelling arbitration is appealable when the district court neither explicitly dismisses nor explicitly stays the action. We hold that such an order implicitly stays the action and thus is not " a final decision with respect to an arbitration" under the Federal Arbitration Act, 9 U.S.C. § 16(a)(3). We also adopt a rebuttable presumption that an order compelling arbitration but not explicitly dismissing the underlying claims stays the action as to those claims pending the completion of the arbitration. Accordingly, we dismiss this appeal for lack of jurisdiction.

BACKGROUND

MediVas is a small biomedical company based in San Diego, California, that specializes in developing new methods for pharmaceutical drug delivery. Marubeni is a Japanese multinational trading corporation. Between April 2004 and October 2007, Marubeni and MediVas executed various contracts in connection with a $5 million loan from Marubeni to MediVas. One of these contracts required the parties to submit contractual disputes to international

Page 6

arbitration in Tokyo, Japan, whereas another designated the courts of San Diego as the exclusive forum for such disputes. The contracts also granted Marubeni a security interest in all of MediVas' assets.

After MediVas defaulted on the loan, Marubeni foreclosed on promissory notes held by MediVas and threatened to foreclose on additional MediVas assets. In response, MediVas and several individual plaintiffs filed suit against Marubeni in San Diego Superior Court, raising numerous state law claims arising out of this series of transactions. Invoking the contractual arbitration clause, Marubeni removed the action to federal court under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, moved to compel arbitration and initiated arbitration against the plaintiffs. See 9 U.S.C. §§ 205-06. MediVas opposed arbitration, relying on the forum selection clause, and moved to remand the action to state court.

In an August 2011 order, the district court ruled that many of MediVas' claims against Marubeni were subject to the arbitration clause and ordered arbitration of those claims. Because it concluded that federal jurisdiction rested solely on the New York Convention, the court remanded the remaining claims, including all claims brought by the individual plaintiffs, to state court.[1] Neither the August 2011 order nor any ...


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