F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

M E D I V A S , L L C, a California limited liability company , Plaintiff-Appellant

,

and

K E N N E T H W

. C A R

P E N T E R ; J O S E P H D

. D O W L I N G ; T. K

N O X B E L L ; D A R

I D A R A B B E I G I ; L I

N D Y H A R

T I G ; S A C H I O O K

A M U R A ; W I L L I A M S U M M E R ; P A

U L T E I R S T E I

N ; W I L L I A M G. T U R N E L L , individuals, Plaintiffs

,

v

.

M A R U B E N I C O R P O R A T I O N , a J apanese corporation,

Defendant-Appellee

. N o. 12-55375

D.C. No. 3:10-cv-01001- W-RB B

OPI NI ON

A ppeal from the United States District Court for the Southern District of California Thomas J . W helan, Senior District J udg e, Presiding

Arg ued and Submitted November 7, 2013—Pasadena, California

F iled J anuary

27, 2014M E D I V A S , L L C V

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B efore: Alfred T. Goodwin, Ray mond C. F isher

a nd Richard R. Clifton, Circuit J udg es.

O pinion by

J udg e F isher

SUMMARY *

Appellate Jurisdiction

The panel dis m i s s e d for lack of jurisdiction an appeal from an order c ompelling arbitration where the district court neither ex plicitly

dismissed nor ex plicitly

stay ed the action.

The p a nel held that such an order implici t l y stay s the acti o n a n d thus is not “a final decision with respect to an arbitration” u nder the F ederal Arbitration Act. The panel also adopted a rebuttable presumption that an order compelling arbitration but not ex plicitly dismissing the underly ing c laims stay s the action as to those claims pending the completion o f the arbitration.

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.M E D I V A S , L L C V

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COUNSEL

Stephen L

. Schreiner (arg ued), Solomon W ard Seidenwurm & Smith, L L P, San Dieg o, California, for Plaintiff-Appellant.

J effry A. D avis (arg

ued) a nd Nathan R. Hamler, Mintz L e vin Cohn F erris Glovsky and Popeo, San Dieg o, California, for Defendant-Appellee.

OP INION

F I SHER, Circuit J udg e :

W e address whether an ord e r compelling arbitration is appealable when the district c ourt neither ex p licitly dismisses

nor e x p l i c i tly stay s the action. W e hold that such an order implicitly stay s the action and thus is not “a final decision with respect to an arbitration” under the F ederal A r bitration Act, 9 U.S.C. § 1 6 ( a ) (3). W e also adopt a rebuttable presumption that an o rder compelling arbitration but n ot

ex p licitly dismissing the underly ing claims stay s the action a s to those claims pending the completion of t h e a r bitration. According ly

, we dismiss this appeal for lack of jurisdiction.

BACK G ROUND

MediVas is a small biomedical c o m p any based in San D i e g o , California, that specializ es in developing ne w m e t h o d s f or pharmaceutical drug delivery

. Marubeni is a J apanes e multinational trading corporation. B etween April 2004 a nd October 2 007, Marubeni and MediVas ex ecuted v a rious
contracts in connection with a $5 million loan from Marubeni
to M e d i V a s

. One of these contracts required the parties toM E D I V A S , L L C V

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submit contractual disputes to intern at ional arbitration in T o k y o, J apan, whereas another d esig nated the courts o f S a n Dieg o as the ex clusive f orum for such dispu tes. The
contracts also g ranted Marubeni a sec u rity interest in all o f MediVas’ assets.

After MediVas def

a u l ted on the loan, Marubeni foreclosed on promissory notes held by MediVas a nd threatened to foreclose on additional MediVas assets. I n response, MediVas and several individual plaintiffs filed suit
ag ainst Marubeni in San Dieg o Super i o r C ourt, r aising

numerou s s tate law c laims arising out of this series o f
t r a nsactions. I nvoking the contractual arbitration clause, Marubeni rem o v e d the action to f ederal court u nder the Convention on the Recog nition and Enforcement of F oreig n Arbitral Awards, also k

nown as the New York Convention, moved to compel arbitration and initiated arbitration ag ainst the plaintiffs. See 9 U.S.C. §§ 2 05–06. MediVas opposed arbitration, relying on the forum selection clause, and moved to remand the action to state court.

I n an Aug ust 2011 o rder, the district court ruled that many of Medi V a s ’ claims ag a inst Marubeni were subject to the arbitration clause and orde r e d arbitration of those claims. B ecause it concluded that federal jurisdiction rested solely on the New York Convention, the court remanded the remaining claims, including all c laims b roug h t by the individual plaintiffs, to state court. 1 Neither the Aug ust 2011 order nor

1 T h e p arties d i d n o t d isp u te th is j u risd ictio n al co n clu sio n an d it is n o t

a t i s s u e in th is ap p eal. W e th eref o re d o n o t d ecid e w

h eth er th e d istrict

co u rt d id h av e su

p p lem en tal j u risd ictio n o v er th ese claim s u n der 2 8 U.S.C. § 1 3 6 7 (a) or w h et h e r th ey w ere p ro p erly rem an ded u n derM E D I V A S , L L C V

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any o ther order ex plicitly stay ed or dismissed the arbitra b le claims, and no judg ment was entered in the action.

The a rbitration panel r uled in favor of Marubeni o n all claims save one, which th e p anel concluded fell outside its jurisdiction. Marubeni then filed a second action in di s t rict
court to confirm the arbitration award, which action was assig n e d to the same district judg e as the orig inal action. I n F ebruary 2012, a few day s after Marubeni filed the final award in the confirmation action, Medi V a s f i led in the orig inal ac t i o n its notice of appeal f rom the district court’s A ug ust 2 0 11 order. Then, also in the orig inal a ctio n , Marubeni moved to r em a n d the unarbitrated claim to state court. The district court s t a y e d p r oceeding s in both actions in lig ht o f MediVas’ pending appeal, which the court believed
may have divested it of jurisdiction to proceed.

D ISCUSSION

A.

The F ederal Arbitration A ct permits immediate appeal o f “a final decision w ith respect t o a n arbitration,” 9 U .S.C. § 16(a)(3), 2 which is a decision that “ends the litig ation on the

§ 13 6 7 (c). S

ee ES AB Grp

., In c. v. Zu rich In s. PLC
, 6 8 5 F.3 d 3 7 6
, 3 9 3

– 9 5 (4 th Cir. 2 01 2 ).

2 T h e f u ll tex t o f th is sectio n

p ro v id es:

(a) A n ap p eal m ay

b e tak en f ro m –
(1 ) an o rd er –M E D I V A S , L L C V

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merits and leaves nothing more for the court to do but ex ecute

(A ) ref u sin g a stay o f an y actio n u n der sectio n 3 o f th is title,

(B ) den y i n g a p etitio n u n d er sectio n 4 o f th is title to o rd er arb itratio n

to p ro ceed

, (C) d en y in g an ap plicatio n u n der sectio n

2 0 6

o f th is title to co m

pel arb itratio n , (D) co n f irm in g or d en y in g co n f

irm atio n o f an

aw ard o r p artial aw ard , o r

(E) m o d if

y in g , co r r e ctin g , or v acatin g an

aw ard ;

(2 ) an in t erlo cu to ry

o rd er g ran tin g , co n t in

u in g , or

m o d if y in g an in j u n ctio n ag ain s t an arb i tratio n th at is su b j ect to th is title; o r

(3 ) a f in al d ecisio n w ith resp ect to an arb itratio n th at is su b j ect to th is title.

(b ) Ex cep t as o th erw i se p ro v id ed i n sectio n 1 2 9 2 (b ) of title 2 8, an ap peal m ay n o t b e tak e n fr o m an in terlo cu to ry

o rd er –

(1 ) g ran tin g a stay of an y actio n u n d er s ectio n 3 of th is title;

(2 ) d irectin g arb i tratio n to p ro ceed u n d er sectio n 4

o f th is title;

(3 ) co m p ellin g arb itratio n u n d er sectio n 2 0 6 o f th is title; o r

(4 ) ref u sin g to en

j o i n an arb itratio n

th at is su b j ect to th is title.

9 U.S.C. § 1 6.M E D I V A S , L L C V

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the jud g m en t.” Green Tree Fin. Corp.-Ala. v. Randolph

, 531 U.S. 7 9, 8 6 ( 2 0 00) (quoting Digital Equip. Corp. v

. Desktop Direct, Inc.
, 5 1 1 U.S. 863, 867 (1994); Coopers & Lybrand v. Livesay
, 43 7 U .S. 463, 467 (1978)) (internal quotation mar k s omitted). Thus, an order compelling arbitration may be a

ppealed if the district court dismisses all the underly

ing clai m s, but may not be appealed if the court stay s the a c t i o n p ending arbitration. See id. at 87 n .2, 89; Bushley v

. Credit Suisse First Bos.
, 3 60 F .3d 1149, 1153 n.1 (9th Cir. 2004).

I n G reen Tree
, the district c ourt had o rdered the parties to arbitrate their dispute and dismissed the underly ing c laims with prejudice. See 531 U.S. at 83, 86. The Supreme Court acknowledg ed that t h e parties could bring a separate proceeding to confirm, vacate or mo d i f y any award made in the arb i t ration, but held that the district court’s order was f i n a l a nd appealable b ecause it disposed of the entire action then pending before the district court. S e e id. at 86–87. Sig nificantly

, the Court noted that an appeal would not have been allowed had the district court stay e d the action instead of dismissing it. See id. at 87 n.2 (citing 9 U.S.C. § 16(b)(1)).

I n Interactive Flight Technologies, Inc. v. Swissair S wiss Air Transport Co.
, 249 F .3d 1177 (9th Cir. 2001), we

ex tended Green Tree to an order compelling arbitration a nd dismiss i n g t h e underly ing claims without prejudice. See id.
at 1 179. B e cause the district c ourt had dismissed t h e action without prejudice solely to allow the parties to “bring [ ] a new action after com p l e ting arbitration,” we held that the distinction was not sufficient “to show that the dismissal was interlocutory

rather than an appealable final decision.” Id.M E D I V A S , L L C V

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Since Interactive F

light

, we have consistently treated orders c o mpelling a

rbitration but not ex plicitly dismissing the underly ing claims as unappealab l e interlocutory o rders. I n Dees v. Billy

, 394 F .3d 1290 (9th Cir. 2005), for ex ample, we held that a district c ourt order compelling arbitration, stay ing the p r o ceeding s and administratively c losing the case was not final because the plaintiff’s c laim f or relief was still pending before the distr i c t court. S ee id. at 1293–94. Similarly

, Sanford v

. Memberworks, Inc.
, 483 F .3d 956 (9th Cir. 2007), held that a

n order directing a

r bitration, deny ing the defendant’s motion to stay and stating that the case would be terminated if arbitration was not completed within a y e ar was not final, ag ain because the plaintiff’s c laims remained before the t r i a l court. See id. at 961–62. Most importantly for this appeal, in Bushley

, when the district court ordered se veral claims to arbitration, dismissed a nonarbi t r able claim for failure to state a claim and did not enter judg ment or rule on the defendant’s motions to stay or d ismiss th e proceeding s,

we concluded that the order compelling a r b itration was not final because the action was effectivel y s t a y ed pending the conclusion of the arbitration. See 360 F .3d at 1151–53.

W e have little trouble concluding that Bushley ex tends to the facts o f this case

. I n b o th cases, the district court f ully disposed o f the nonarbitrable claims but not of the arbitrable claims, whi c h were ordered to a r bitration and neither dismissed n or stay ed. The c laims sent to arbitration therefore remained pending before the d istrict court, albeit subject to an implicit stay pending the outcome of the arbitration. B ecause those c laims were implicitly stay ed rather than dismissed, the Aug ust 2 011 o rder compelling arbitration did not constitute

a “final decision with respect to an arbitration” u n der section 16(a)(3) o f the F ederal Arbitration Act. See Green T r ee , 531 U.S. at 86–87 & n.2; Sanford

, 483 F .3d at 962; Dees
,M E D I V A S , L L C V

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394 F

. 3 d at 1 294; B ushley

, 360 F .3d at 1 1 5 3 ; In teractive Flight

, 249 F .3d at 1179.

Our conclusion that the proceedi n gs were implicitly stay ed pending arbitrati o n is bolstered by the procedural history o f this case. T h e district court’s Aug ust 2011 order ruled on Marubeni’s “motion to compel arbitration a nd stay litig a t i o n,” which ex plicitly requested that the district court st a y t h e proceeding s. B ecause the district court g ranted the motion as to the claims it decid ed w e r e arbitrable, the most reasonable inference is that the court intended to stay , not to dismiss, those claims. See M cC a s ki l l v

. SCI Mgmt. Corp.
, 298 F .3d 677, 679 (7th Cir. 2002) ( holding that the district
court dismissed the action without prejudice b ecause, a mong other facts, “the district court g ranted [ t h e defendant] ’s motion which actually requested the court to c ompel arbitration and dis m i s s t h e case”). I ndeed, in this sense the inference of an implicit stay is strong er h ere than in Bushley

, where the defendant moved to stay proceeding s or to dismiss the action. 3

The parties’ actions also support our con c l u s i on that the Aug ust 2011 order implicitly stay ed the a rbitrated claims. MediVas, which asserts that i t “anx iously awaited the first opportunity to appeal” t h e court’s decision, did not file a notice of appeal until a f

ter the arbitration had finished a nd the award had been fin a liz ed. Moreover, in its application for leave to file a motion f

or reconsideration, MediVas requested

as an alternative an order certify ing a n a ppeal under

3 W e reco g n i ze th at th e A u g u s t 2 0 1 1 o r d e r said th at “ a stay is n o t

w a rran ted ,” bu t th at statem en t ref erred o n ly to th e n o n arb itrab le claim s. T h is statem en t t

h eref o re d id n o t m an if

est an y in ten t n ot to stay p ro ceed in g s o n

th o se claim s it o rd ered to arb i tratio n

.M E D I V A S , L L C V

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28 U.S.C. § 1 292(b), acknowledg ing that the court’s order compelling arbitration was an interlocutory order under 9 U.S.C. § 16(b)(3). B ecause the district cour t a l l o wed MediVas to file a motion f or reconsideration, it d i d not

ex p licitly address this alternative request.

F or its p art, Marubeni ori gi n a l l y arg ued that this appeal

was premature because the d istrict court had not issued a final order in either the orig inal action or in the con f i r m ation

a c t ion. O nly after we ordered supplemental briefing t o address appellate jurisdiction, including “whether the notice of appeal was time l y filed,” did Marubeni arg ue that the Aug ust 2011 order was a final decision for which the time to appeal had ex pired.

F inally , it would be difficult to conclude that the Aug ust 2011 order “end[ ed] the litig ation o n the merits an d l e[ ft] nothing more for the court to do but ex ecute t h e j u d g ment,” Green Tree
, 5 31 U.S. at 86, when even now, after the arbitration has ended, one o f MediVas’ cla i m s f o r relief remains pending b efore the district c our t

. Moreover, the district court will at some poin t have to rule on Marubeni’s pending motion to remand that claim t o s tate court. Under these circum s tances, we cannot c onclude that the Aug ust 2011 order “plainly

disposed of the entire case o n the merits and left no part of it before the court.” I d.

B.

W e decline MediVas’ invitation to follow the a p p ro ach

once taken by the Second Circuit by putting this appeal on hold while the parties r eq uest a clarify ing order from the d i s t r i c t court. See Cap Gemini E rnst & Y oung, U.S., L.L.C.

v. Nackel

, 346 F .3d 360, 363 (2d Cir. 2003) (per curiam).M E D I V A S , L L C V

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The Cap Gemini court itself noted that althoug h the procedure was necessitated by the ambig uity in the record, it

w o uld not ag ain be permitted. See id. B ecause the r ec o r d here is not ambig uous f

o r the reasons ex plained a bove, we conclude that no clarify

ing order is necessary

.

W e fully endorse the Second Circuit ’s statement that “parties and district courts have an o b l i ga tion to ensure that the finality of the district court’s decision is evident from the record, so that no further reconstruction of the district court’s intent need be attempted on appeal.” Id. W e ag ain urg e district courts to be a s clear as possible a b o u t w h ether they intend to dismiss, stay

or “do something else entirely ” when they order a

rbitration. B ushley

, 360 F .3d at 1153 n.1 (quoting Salim Oleochemicals v. M/V Shropshire

, 278 F .3d 90, 93 (2d Cir. 2 002)). Had MediVas requested a clarify ing order from the dis t r i c t court before taking this a ppeal, the substantial time and e ffort ex pended on this procedural issue could have instead been spent a dvancing this litig ati o n toward its ultimate resolution.

Moreover, thoug h we decline to f ollow the Second C ircuit and “re q u i r e an official dismissal of all claims before reviewing a

n order to compel a r

b itration,” Cap Gemini
, 346 F .3d at 3 63, we adopt a rebut t a b l e p resumption that an order compelling arbitration but not ex plicitly dismissing the underly ing claims stay s the action as to those claims pending the completion of the arbitration. This presumption accords with our preference for stay ing an action pending arbitration rather than dismissing it. See Bushley

, 360 F .3d at 1153 n.1. 4

4 W e reco g n i ze th at th e p ro

- arb itratio n p olicies u n d erg ird i n g th is
p ref eren ce are n o t serv ed b y a stay w h en th e p ractical realities of arb itratio n an d l itig atio n su g g est eith er th at n o arb itrat i o n w ill actu allyM E D I V A S , L L C V

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I ndeed, the wisdom o f this preference is underlined h ere, where the arbitration panel left u n d e ci d ed a claim that the district court had o rd e r e d to arbitration. Cf. Coopers & Lybrand

, 437 U.S. at 468 (noting that the purpose of the final j u d gm ent rule “is to combine in one review all stag es of t h e proceeding that effectively may be reviewed and corrected if and w he n final judg ment results” (quoting Cohen v

. Beneficial Indus. Loan Corp

. , 337 U.S. 541, 546 (1949))). According ly

, the finality of an order compelling arbitration is determined by the contex t in w h i c h i t was issued, but our review of that contex t is weig h ted ag ainst finality

.

C.

F inally

, we reject the arg u m e n t t hat the issuance o f the arbitral award somehow “‘finaliz ed’ the district court order,” making this appeal both proper and t i m e l y

. Dannenberg v

. Software Toolworks Inc.
, 16 F .3d 1073, 1075 (9th Cir. 1994). Had the Aug u st 2011 order been final, i t w as “immediately appealable,” D ees , 394 F .3d at 1292, a n d this appeal would
not have b een timely

. See Comedy Club, I n c

. v

. I mprov W

. Assocs.
, 553 F .3d 1277, 1283–84 (9th Cir. 2009). B ecause the order was not final, it did not become final throug h events

ex ternal to the district court proceeding s without any f urther action taken by the court itself. This cour t re v iews the judg ments and orders of the district courts, not the awards o f arbitration panels. See 9 U.S.C. § 16.

tak e p lace o r th at th e arb itratio n w i ll b e s o d i fferen t in ch aracter as to

m ak e stay in g th e o rig i n al actio n u seless. S e e , e .g

. , Am. Exp ress Co

. v. Ita lia n Co l o rs Rest.
, 1 3 3 S. Ct. 2 3 0 4 (2 0 1 3); AT& T Mo b ility LLC v. Co n cep cio n , 1 3 1 S. Ct. 1 7 40 (2 0 1 1 ). Un d er su ch circu m s tan ces, a d ism issal allo w in g im

m ed i ate ap p eal m ig h t b e ap p ro p riate.M E D I V A S , L L C V

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CONCLUSION

The c ircumstances surr o u

n d i n g the district court’s Aug ust 2011 order show that the arbitrated claims were implic i t l y stay ed pending the conclusion of the arbitration. To simplify the analy sis in circums t an c es that are less clear, we a dopt a rebuttable presumpt i on that an order compelling arbitration but n ot e x plicitly dismissing the underly ing c laims stay s the action a s to those claims pending the completio n of the arbitration. B ecause the distri c t c ourt’s Aug ust 2011 order

was not “a final decision w ith respect to an arbitration,” 9 U.S.C. § 16(a)(3), we are without jurisdiction to review it.

DISMISSED.