Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-17472/USCOURTS-ca9-14-17472-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KUM TAT LIMITED,

Plaintiff-Appellant,

v.

LINDEN OX PASTURE, LLC,

Defendant-Appellee.

No. 14-17472

D.C. No.

3:14-cv-02857-WHO

OPINION

Appeal from the United States District Court

for the Northern District of California

William Horsley Orrick, III, District Judge, Presiding

Argued and Submitted December 15, 2016

San Francisco, California

Filed January 13, 2017

Before: Carlos F. Lucero,* Susan P. Graber,

and Andrew D. Hurwitz, Circuit Judges.

Opinion by Judge Hurwitz

 * The Honorable Carlos F. Lucero, Circuit Judge, United States 

Court of Appeals for the Tenth Circuit, sitting by designation.

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2 KUM TAT LTD. V. LINDEN OX PASTURE

SUMMARY**

Jurisdiction / Arbitration

The panel dismissed for lack of jurisdiction an 

interlocutory appeal from the district court’s order denying 

Kum Tat Limited’s motion to compel arbitration of a claim 

against Linden Ox Pasture, LLC, where the arbitration 

motion relied only on state law and was not filed pursuant to 

the Federal Arbitration Act.

The Federal Arbitration Act authorizes interlocutory 

appeals from the orders described in 9 U.S.C. § 16(a)(1). 

The panel held that the district court order denying the 

motion to compel arbitration was not an order from which 

§ 16(a)(1) permitted an interlocutory appeal because the 

arbitration motion urged application only of California 

arbitration law and contained no citation to the Federal 

Arbitration Act.

The panel declined to treat the appeal as a petition for a 

writ of mandamus given that mandamus is warranted only if, 

among other requirements, a district court order was clearly 

erroneous. The panel held that the district court did not 

clearly err in reserving for itself the question of whether the 

parties agreed to arbitrate. The panel also held that the 

district court did not clearly err in concluding that the parties 

did not form a contract.

 ** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

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KUM TAT LTD. V. LINDEN OX PASTURE 3

COUNSEL

Charles Michael Schaible (argued) and Patrick P. Gunn,

Cooley LLP, San Francisco, California, for PlaintiffAppellant.

Jeffrey L. Fillerup (argued), Rincon Law LLP, San 

Francisco, California, for Defendant-Appellee.

OPINION

HURWITZ, Circuit Judge:

Kum Tat Limited (“Kum Tat”) moved to compel 

arbitration of a claim against Linden Ox Pasture, LLC 

(“Linden Ox”), in connection with an attempted purchase of 

a California residence. The arbitration motion relied only on 

state law, and Kum Tat later emphasized that the motion was 

not filed pursuant to the Federal Arbitration Act (“FAA”), 

9 U.S.C. §§ 1–16. The district court denied the motion, and 

Kum Tat filed this interlocutory appeal, invoking appellate 

jurisdiction under the FAA. We dismiss the appeal for lack 

of jurisdiction.

BACKGROUND

A. Contract negotiations

In May 2014, Kum Tat, a Chinese corporation, offered 

to buy a residential property from Linden Ox, a Florida 

limited liability corporation, for $38 million. The offer 

included all “furniture,” “art work,” and “decorative items,” 

and required Linden Ox to submit an “[e]xclusion list of any 

personal items” within five days of acceptance. The offer 

provided that any disputes “arising out of this Contract” 

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4 KUM TAT LTD. V. LINDEN OX PASTURE

would be arbitrated and that the parties “MAY BE 

COMPELLED TO ARBITRATE UNDER THE 

AUTHORITY OF THE CALIFORNIA CODE OF CIVIL 

PROCEDURE.”

Linden Ox initialed the arbitration clause in the offer, but 

counter-offered to sell for $43 million. The counter-offer 

included “furniture” but excluded certain artwork and other 

items, and it provided that Linden Ox would send “a specific 

exclusion list” within seven days of acceptance of the 

counter-offer for Kum Tat to “approve.”

Kum Tat then counter-offered at $41 million; the 

counter-offer included “furniture” and “decorative items” 

but excluded certain artwork. The counter-offer stated that 

Kum Tat had to “review and approve” Linden Ox’s inclusion 

and exclusion lists in order to “Fully Ratify” the contract:

Seller to provide a specific exclusion and 

inclusion lists the same day signing Counter 

Offer No. Two (2) as the Record, and Buyer 

to review and approve in order to Fully Ratify 

this Purchase Contract.

Linden Ox signed this counter-offer in the space marked 

“Acceptance” and sent Kum Tat detailed inclusion and 

exclusion lists.

Several days later, Kum Tat notified Linden Ox that it 

“disapproved the exclusion list” and was “requesting a small 

reduction” in price. That evening, Kum Tat notified Linden 

Ox that it “accepts” the exclusion list and that the contract 

would be “fully ratified” upon Linden Ox’s acceptance of a 

price reduction:

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KUM TAT LTD. V. LINDEN OX PASTURE 5

Buyers accepts seller’s exclusion list

delivered on 5/30/2014, with a purchase price 

reduction of $500,000.00 – total purchase 

price to be $40,500,000.00. Contract to be 

fully ratified by acceptance of this addendum.

Linden Ox did not accept the addendum. Rather, on the next 

day, Linden Ox rejected the price reduction and terminated 

negotiations. It later agreed to sell the property to a third 

party.

B. Litigation

Kum Tat sued Linden Ox in California state court, 

claiming breach of contract and recording a lis pendens on 

the property. Asserting diversity, Linden Ox removed the 

suit to the Northern District of California and moved to 

expunge the lis pendens. The district court granted the 

motion.

Kum Tat then moved “for an order compelling 

arbitration and staying this action” pursuant to California 

“Code of Civil Procedure sections 1281.2 and 1281.4.” Kum 

Tat’s motion did not cite the FAA, instead arguing that 

“California law governs this motion” and that, “under 

California law, this dispute must be arbitrated.” The district 

court denied the motion, finding that the parties had not 

entered a binding agreement to arbitrate.

Kum Tat filed a notice of appeal and sought a stay 

pending appeal. Kum Tat’s stay motion, in attempting to 

distinguish an unfavorable Ninth Circuit case interpreting 

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6 KUM TAT LTD. V. LINDEN OX PASTURE

the FAA, emphasized that Kum Tat’s motion to compel 

arbitration was made under state law only.1

Kum Tat’s opening brief in this court cited 9 U.S.C. 

§ 16(a)(1) as the source of appellate jurisdiction. Although 

Linden Ox’s answering brief did not contest jurisdiction, we 

requested supplemental briefing on the applicability of 

§ 16(a)(1), in view of our independent obligation to ensure 

jurisdiction. See WMX Techs., Inc. v. Miller, 104 F.3d 1133, 

1135 (9th Cir. 1997) (en banc) (holding that we must 

consider our jurisdiction). Kum Tat’s supplemental brief 

maintains that § 16(a)(1) authorizes this interlocutory appeal 

and, alternatively, asks us to construe the appeal as a petition 

for a writ of mandamus.

DISCUSSION

A. 9 U.S.C. § 16(a)(1)

Although our appellate jurisdiction is generally limited 

to “final decisions” of district courts, 28 U.S.C. § 1291, the 

FAA authorizes interlocutory appeals from the orders 

described in 9 U.S.C. § 16(a)(1). See Arthur Andersen LLP 

 1 The case in question was Britton v. Co-op Banking Group, 

916 F.2d 1405 (9th Cir. 1990). Kum Tat stated:

Britton was decided pursuant to §§ 15(a)(1)(A) and 

(B) of the Federal Arbitration Act, and concerned a 

motion to compel arbitration made pursuant to § 4 of 

the Federal Arbitration Act. In contrast, Kum Tat’s 

motion to compel arbitration was made pursuant to 

section 1281.2 of the [California] Code of Civil 

Procedure . . . .

The district court denied a stay pending appeal, but this court granted a 

stay.

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KUM TAT LTD. V. LINDEN OX PASTURE 7

v. Carlisle, 556 U.S. 624, 627–28 (2009). FAA appellate 

jurisdiction extends to orders “refusing a stay of any action 

under section 3 of this title,” § 16(a)(1)(A), and orders 

“denying a petition under section 4 of this title to order 

arbitration to proceed,” § 16(a)(1)(B). We interpret this 

statute “according to its ordinary meaning” and “do not add 

to the jurisdictional provisions set forth by Congress.” Van 

Dusen v. Swift Transp. Co., 830 F.3d 893, 897 (9th Cir. 

2016).

Kum Tat’s motion to compel arbitration and stay 

litigation was neither “under section 3” nor “under section 

4” of the FAA. The motion expressly urged application only 

of California arbitration law and contained no citation to the 

FAA. Significantly, Kum Tat later emphasized that the 

motion was not made under the FAA.2 Thus, we hold that 

the order denying the motion was not an order from which 

§ 16(a)(1) permits an interlocutory appeal.

Our sister circuits have reached similar conclusions. The 

Third Circuit has held that § 16(a) does not permit appellate 

“review of a non-FAA, state-law arbitration claim in an 

otherwise nonappealable interlocutory order.” Palcko v. 

Airborne Express, Inc., 372 F.3d 588, 594 (3d Cir. 2004). 

The Seventh Circuit has held that § 16(a) does not apply “to 

a motion to stay litigation when state rather than federal law 

is the source of the obligation to arbitrate.” Sherwood v. 

Marquette Transp. Co., 587 F.3d 841, 843 (7th Cir. 2009). 

And the Tenth Circuit has held that § 16(a) is not “an avenue 

for interlocutory appeal of a motion to confirm brought 

 2 We therefore need not decide today whether a more ambiguous 

arbitration motion—for example, one that cites neither state nor federal 

arbitration law—is “under” the FAA.

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8 KUM TAT LTD. V. LINDEN OX PASTURE

under one of any fifty state laws.” KCOM, Inc. v. Emp’rs 

Mut. Cas. Co., 829 F.3d 1192, 1197–98 (10th Cir. 2016).

Kum Tat argues that its state-law motion is appealable 

under § 16(a)(1) because the “essence” of the motion was a 

request for arbitration. But the cases cited by Kum Tat are 

inapposite. In Western Security Bank v. Schneider Ltd. 

Partnership, the question was whether a stay motion that did 

“not seek to compel a party to arbitrate” was brought under 

the FAA. 816 F.3d 587, 588–89 (9th Cir. 2016) (order). We 

said no and dismissed for lack of jurisdiction. Id. at 590. 

Similarly, in Conrad v. Phone Directories Co., the question 

was whether a “generic motion to dismiss under Rule 12” 

was brought under the FAA. 585 F.3d 1376, 1379–81 (10th 

Cir. 2009). The Tenth Circuit said no and dismissed for lack 

of jurisdiction. Id. at 1386. In both cases, the movant did 

not seek the remedy provided by the FAA: arbitration. This 

case is different. There is no question that Kum Tat sought 

arbitration, but it did not invoke—and indeed disclaimed—

the FAA as the source of that remedy.

Allowing an appeal from the denial of a state-law 

arbitration motion might well comport with “the FAA’s 

policy favoring arbitration agreements.” Green Tree Fin. 

Corp.–Ala. v. Randolph, 531 U.S. 79, 85–86 (2000). But 

Congress chose to authorize interlocutory review only of 

denials of arbitration motions brought “under” the FAA, and 

we cannot “invoke the policy of the FAA to expand the scope 

of appellate jurisdiction in § 16.” Van Dusen, 830 F.3d at 

898. Of course, as “the master of its motion,” a litigant may 

simply request arbitration under the FAA, rendering 

appellate jurisdiction over an adverse decision “crystal 

clear.” KCOM, 829 F.3d at 1196–97.

Kum Tat also argues that, though it chose to seek 

arbitration under state law, it would have been entitled to 

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KUM TAT LTD. V. LINDEN OX PASTURE 9

arbitration under the FAA had it so claimed. But our 

jurisdiction turns on whether Kum Tat “invoked” the FAA, 

see Arthur Andersen, 556 U.S. at 629, not whether it 

theoretically could have. Kum Tat “cannot now morph a 

motion brought under [state law] into one brought under the 

FAA.” KCOM, 829 F.3d at 1197.3

B. Mandamus

Kum Tat alternatively requests that we construe its 

appeal as a petition for a writ of mandamus. Our 

discretionary decision to do so “depends on whether 

mandamus is itself justified.” Stanley v. Chappell, 764 F.3d 

990, 996 (9th Cir. 2014) (quoting Hernandez v. Tanninen, 

604 F.3d 1095, 1099 (9th Cir. 2010)). And, mandamus is 

warranted only if, among other requirements, a district court 

order is clearly erroneous. Id.

The district court did not clearly err in reserving for itself 

the question whether the parties agreed to arbitrate. 

Although challenges to the validity of a contract with an 

arbitration clause are to be decided by the arbitrator, see

Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 

444–46 & n.1 (2006), challenges to the very existence of the 

contract are, in general, properly directed to the court, see

 3 The parties dispute whether the FAA could govern any motion to 

compel because the arbitration clause at issue cites California law. The 

parties also dispute whether the underlying transaction involves 

interstate commerce for FAA purposes. See Saneii v. Robards, 289 

F. Supp. 2d 855, 860 (W.D. Ky. 2003) (concluding that “a residential 

real estate sales contract does not evidence or involve interstate 

commerce”). Had Kum Tat moved for arbitration under the FAA, the 

district court could have addressed these issues. We decline to adopt a 

rule that would allow a party to avoid a decision on such issues in the 

district court by moving for arbitration solely under state law, yet require 

us to confront them in the first instance on appeal.

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10 KUM TAT LTD. V. LINDEN OX PASTURE

Sanford v. MemberWorks, Inc., 483 F.3d 956, 962 (9th Cir. 

2007); Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 

925 F.2d 1136, 1140–41 (9th Cir. 1991). Linden Ox’s 

argument that there was “no contract” was a challenge to the 

existence of a contract.

Nor did the district court clearly err in concluding the 

parties did not form a contract. “Contract formation requires 

mutual consent, which cannot exist unless the parties ‘agree 

upon the same thing in the same sense.’” Bustamante v. 

Intuit, Inc., 45 Cal. Rptr. 3d 692, 698 (Ct. App. 2006) 

(quoting Cal. Civ. Code § 1580). The district court did not 

clearly err in interpreting Kum Tat’s “review and approve” 

clause in its counter-offer and its subsequent request for a 

$500,000 price reduction as showing an absence of mutual 

consent, rather than as an application of an inspection 

contingency clause in Kum Tat’s initial offer. We therefore 

decline to treat its appeal as a petition for a writ of 

mandamus. Stanley, 764 F.3d at 996.4

APPEAL DISMISSED.

 4 Kum Tat also appealed the district court’s order expunging the lis 

pendens and asks us either to exercise pendent appellate jurisdiction or 

to treat that appeal as a petition for mandamus. We cannot exercise 

pendent jurisdiction in the absence of other appellate jurisdiction, and 

mandamus is not justified for the lis pendens order in the absence of clear 

error in the district court’s finding that no contract was formed.

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