FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOHN MOMOT, 

Plaintiff-Appellee, No. 10-15276

v. D.C. No.  2:09-cv-00975-RLH DENNIS MASTRO; MICHAEL MASTRO;

JEFF MASTRO, OPINION

Defendants-Appellants. 

Appeal from the United States District Court

for the District of Nevada

Roger L. Hunt, Chief District Judge, Presiding

Argued and Submitted

March 15, 2011—Davis, California

Filed June 22, 2011

Before: William A. Fletcher and Milan D. Smith, Jr.,

Circuit Judges, and George H. Wu, District Judge.*

Opinion by Judge Milan D. Smith, Jr.

*The Honorable George H. Wu, United States District Judge for the

Central District of California, sitting by designation. 

8483
COUNSEL

Jerry C. Bonnett, Bonnett, Fairbourn, Friedman & Balint, PC,

Phoenix, Arizona, for the defendant-appellants.

Marc P. Cook, Bailus Cook & Kelesis, Ltd., Las Vegas,

Nevada, for the plaintiff-appellee.

OPINION

M. SMITH, Circuit Judge:

Defendants-Appellants Dennis, Jeff, and Michael Mastro

(collectively, the Mastros) appeal from the district court’s

order enjoining arbitration and denying their motion to stay

judicial proceedings under section 3 of the Federal Arbitration

Act (FAA), 9 U.S.C. § 3. 

MOMOT v. MASTRO 8485
In connection with an asset purchase transaction, the

Mastros and Plaintiff-Appellee John Momot entered into an

allocation agreement (Allocation Agreement) that included an

arbitration clause. The Mastros contend that the arbitration

clause reserved the question of arbitrability for the arbitrators,

and that the district court therefore erred in determining that

the dispute was not subject to arbitration. We agree, and hold

that the arbitration clause in the Allocation Agreement clearly

and unmistakably expresses the parties’ intent that the arbitrators determine questions of arbitrability, and that the district

court therefore erred in permanently enjoining the arbitration

and failing to stay judicial proceedings under section 3 of the

FAA.1

FACTUAL AND PROCEDURAL BACKGROUND

Momot, a member of the Nevada State Bar since 1974, was

an investor in three Mastros restaurants. In early 2007, the

Mastros agreed to sell several companies, including the restaurants in which Momot had invested. In connection with the

sale, the Mastros, Momot, and other investors entered into the

Allocation Agreement, which, among other things, allocated

the total purchase price among the selling entities, and

included the following arbitration clause:

4. Resolution of Disputes.

(a) Arbitration. If a dispute arises out of or relates

to this Agreement, the relationships that result from

this Agreement, the breach of this Agreement or the

validity or application of any of the provisions of

this Section 4, and, if the dispute cannot be settled

1

In their related appeal, Mastro v. Momot, No. 09-17698, the Mastros

contend that the Arizona district court erred in denying their motion to

compel arbitration under section 4 of the FAA, 9 U.S.C. § 4. We address

that issue in a memorandum disposition filed contemporaneously with this

opinion. 

8486 MOMOT v. MASTRO
through negotiation, the dispute shall be resolved

exclusively by binding arbitration. A Party may submit the dispute to binding arbitration administered

by the American Arbitration Association under the

Commercial Arbitration Rules upon notice to the

other Party subject to the dispute . . . . 

The asset sale closed on May 15, 2007. Several months

later, Momot’s counsel contacted the Mastros to complain

about the portion of the aggregate purchase price realized

from the sale that had been allocated to the three companies

in which Momot had invested. The Mastros’ counsel

responded that under the Allocation Agreement, any such disputes must be arbitrated. Nevertheless, Momot sued the

Mastros in Nevada state court on April 16, 2009, alleging that

they had taken “steps over a number of years designed to

increase their own profits from the restaurant enterprises and

diminish any profits that would be realized by private investors, including Momot.” The complaint alleged breach of

fiduciary duty, accounting, conversion, theft and embezzlement, monies owed, civil conspiracy, civil RICO, failure to

register securities, fraud, and usurped corporate opportunity.

On May 19, 2009, the Mastros initiated arbitration proceedings with the American Arbitration Association. On May 20,

2009, they filed a petition in the United States District Court

for the District of Arizona, seeking an order under section 4

of the FAA compelling Momot to arbitrate his claims and

staying the Nevada suit under section 3 of the FAA. Next, the

Mastros removed Momot’s state-court action to the United

States District Court for the District of Nevada based on

diversity jurisdiction, and filed a motion under section 3 of

the FAA to dismiss or stay the litigation so removed. 

On July 9, 2009, the Arizona district court denied the

Mastros’ motion for a temporary restraining order and preliminary injunction staying the Nevada litigation. In so doing, the

court first noted that “the Nevada action was filed first and

MOMOT v. MASTRO 8487
there is no obvious reason of economy to proceed here in

spite of that action and, for all intents and purposes, to enjoin

that action from proceeding,” especially since the court had

no reason “to assume that the Nevada court is unable to police

its own jurisdiction and stay its proceedings or transfer venue

as necessary.” Second, the court held that the Mastros had not

demonstrated a threat of irreparable harm that would justify

the issuance of a preliminary injunction, because they had

shown no likelihood that the Nevada district court would fail

to require the arbitration to proceed, assuming such a course

of action was legally correct, or that Momot would refuse to

participate in arbitration. Finally, the court concluded that

“granting the requested relief would be an encouragement of

forum shopping.” Because it concluded the Mastros “would

have no entitlement to a Temporary Restraining Order or Preliminary Injunction from this Court under any arbitration

agreement,” it found it “unnecessary to consider the likely

merits of [the Mastros’] Petition to Compel Arbitration at that

stage of the proceedings.” 

Meanwhile, in the Nevada district court, Momot filed an

emergency motion seeking an order denying the Mastros’

motion to dismiss, which the court denied. Instead, on August

14, 2009, the Nevada district court handed down an injunction

temporarily staying the Arizona arbitration so that the court

“may review the parties’ forthcoming simultaneous response

briefs . . . and more fully consider the nature and scope of its

jurisdiction over this case and the nature and scope of any

related arbitration.” The Mastros appealed the Nevada district

court’s temporary injunction to this court. 

On July 21, 2009, the Mastros filed a motion to compel

arbitration in the Arizona district court. On November 24,

2009, the Arizona district court denied the motion, noting that

normally it would “have very little discretion when deciding

petitions to compel arbitration,” but concluding that “given

the procedural morass the parties have created, granting Petitioner’s request to compel arbitration would only further com8488 MOMOT v. MASTRO
plicate matters.” In so concluding, the court cited the Nevada

district court’s August 14, 2009 order staying the arbitration,

and noted, “even if this Court were to grant the petition to

compel arbitration, the arbitration would not continue until

the Nevada Court or the Ninth Circuit takes further action.

There is no need to compel arbitration when another court has

stayed that arbitration.” 

On February 4, 2010, the Nevada district court ordered that

Momot’s claims be adjudicated in court and issued a permanent injunction staying arbitration proceedings in Arizona.

The court first noted, “Because the parties admit the Allocation Agreement contains an arbitration clause, the Court must

simply decide whether Momot’s claims fall within the scope

of the agreement.” It concluded, however:

Despite the general presumption in favor of arbitration, the Court can say with positive assurance that

Momot’s claims are not governed by the Allocation

Agreement. . . . Momot’s claims do not arise out of

or relate to the agreement because they arise out of

the Mastros’ alleged mishandling of his investment

funds prior to the Mastros’ decision to sell their restaurants. . . . Because Momot’s claims do not arise

out of or relate to the Allocation Agreement, he is

not required to submit his claims to arbitration and

this Court has jurisdiction to adjudicate this lawsuit.

Because the court ordered arbitration proceedings in Arizona

terminated, it denied as moot the Mastros’ motion to stay

enforcement of the injunction. 

On April 14, 2010, we dismissed as moot the Mastros’

appeal of the temporary injunction. The Mastros now timely

appeal the district court’s issuance of a permanent injunction

and its failure to stay the suit under section 3 of the FAA. 

MOMOT v. MASTRO 8489
STANDARD OF REVIEW AND JURISDICTION

We review de novo the district court’s decisions about the

arbitrability of claims. Simula, Inc. v. Autoliv, Inc., 175 F.3d

716, 719 (9th Cir. 1999). Because “[a] district court’s decision

to grant a permanent injunction involves factual, legal, and

discretionary components,” we review a decision to grant

such relief under several different standards. Walters v. Reno,

145 F.3d 1032, 1047 (9th Cir. 1998). We review legal conclusions underlying the decision de novo, factual findings for

clear error, and the scope of injunctive relief for an abuse of

discretion. Id. 

We have jurisdiction under 28 U.S.C. § 1292(a)(1) and 9

U.S.C. § 16(a)(1)(A). 

DISCUSSION

The Mastros argue that the Nevada district court erred in

issuing a permanent injunction terminating the pending Arizona arbitration, and in failing to stay the suit pending arbitration under section 3 of the FAA.2

 Because we hold that the

Allocation Agreement clearly and unmistakably indicates the

parties’ intent to arbitrate the question of arbitrability, we

reverse and remand. 

[1] Because arbitration is fundamentally a matter of contract, “the central or ‘primary’ purpose of the FAA is to

ensure that ‘private agreements to arbitrate are enforced

according to their terms.’ ” Stolt-Nielsen S.A. v. AnimalFeeds

2Momot contends that these questions are not properly before us

because we previously found the same issue to be moot. However, the previous appeal was moot because the preliminary injunction that was the

subject of that appeal was no longer in effect. In contrast, the Mastros now

appeal issuance of the permanent injunction, and relief remains available

in that setting because the claim has not “lost its character as a present,

live controversy.” Am. Rivers v. Nat’l Marine Fisheries Serv., 126 F.3d

1118, 1123 (9th Cir. 1997). 

8490 MOMOT v. MASTRO
Int’l Corp., 130 S. Ct. 1758, 1773 (2010) (quoting Volt Info.

Sciences, Inc. v. Bd. of Trs. of Leland Stanford Junior Univ.,

489 U.S. 468, 479 (1989)). Thus, “[w]hether enforcing an

agreement to arbitrate or construing an arbitration clause,

courts and arbitrators must ‘give effect to the contractual

rights and expectations of the parties.’ ” Stolt-Nielsen S.A.,

130 S. Ct at 1773-74 (quoting Volt, 489 U.S. at 479). In conducting that analysis, “as with any other contract, the parties’

intentions control.” Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). 

[2] Section 2 of the FAA, the “primary substantive provision of the Act,” Moses H. Cone Mem’l Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 24 (1983), provides that “[a] written provision in . . . a contract evidencing a transaction

involving commerce to settle by arbitration a controversy

thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at

law or in equity for the revocation of any contract.” 9 U.S.C.

§ 2. The FAA also establishes procedures by which federal

courts implement section 2’s substantive rule. Thus, section 4

of the FAA provides that a court “shall” order arbitration, on

petition of a party, “upon being satisfied that the making of

the agreement for arbitration or the failure to comply therewith is not in issue.” 9 U.S.C. § 4. Section 3 provides that a

court “shall . . . stay the trial of the action,” on petition of a

party, “upon any issue referable to arbitration under an agreement in writing for such arbitration.” 9 U.S.C. § 3. 

Accordingly, whether the Nevada district court should have

stayed judicial proceedings pending arbitration turns on

whether the parties agreed to arbitrate their dispute. Generally, when examining an arbitration contract, “the [FAA]

establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in

favor of arbitration . . . .” Moses H. Cone Mem’l Hosp., 460

U.S. at 24-25. 

MOMOT v. MASTRO 8491
Certain issues, however—the kind that “contracting parties

would likely have expected a court to have decided”—remain

within the province of judicial review. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). Such issues concern gateway questions of arbitrability, such as whether the

parties have a valid arbitration agreement or are bound by a

given arbitration clause, and whether an arbitration clause in

a concededly binding contract applies to a given controversy.

See Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452

(2003) (plurality opinion); Howsam, 537 U.S. at 84. But, 

the law treats silence or ambiguity about the question

“who (primarily) should decide arbitrability” differently from the way it treats silence or ambiguity

about the question “whether a particular meritsrelated dispute is arbitrable because it is within the

scope of a valid arbitration agreement”—for in

respect to this latter question the law reverses the

presumption. 

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,

944-45 (1995). This is so because questions about the scope

of an agreement arise when the parties have entered into an

agreement providing for the arbitration of some issues, and

therefore presumably have contemplated that an arbitrator

will decide at least some disputes. See id. at 945. Given the

general presumption in favor of arbitration, “one can understand why the law would insist upon clarity before concluding

that the parties did not want to arbitrate a related matter.” Id.

In contrast, 

given the principle that a party can be forced to arbitrate only those issues it specifically has agreed to

submit to arbitration, . . . courts might hesitate to

interpret silence or ambiguity on the “who should

decide arbitrability” point as giving the arbitrators

that power, for doing so might too often force

unwilling parties to arbitrate a matter they reason8492 MOMOT v. MASTRO
ably would have thought a judge, not an arbitrator,

would decide.

Id.

[3] Although gateway issues of arbitrability presumptively

are reserved for the court, the parties may agree to delegate

them to the arbitrator. See, e.g., Howsam, 537 U.S. at 83-85;

Green Tree Fin. Corp., 539 U.S. at 452. The Supreme Court

recently reaffirmed this principle in Rent-A-Center, West, Inc.

v. Jackson, holding that courts must enforce the parties’

“agreement to arbitrate threshold issues” regarding the

arbitrability of their dispute, and may do so by staying federal

litigation under section 3 of the FAA or compelling arbitration under section 4. 130 S. Ct. 2772, 2777-78 (2010). 

Because such issues would otherwise fall within the province of judicial review, we apply a more rigorous standard in

determining whether the parties have agreed to arbitrate the

question of arbitrability. Rather than applying “ordinary statelaw principles that govern the formation of contracts” as we

would when determining, for example, the scope of a concededly binding contract, the Supreme Court has cautioned that

“[c]ourts should not assume that the parties agreed to arbitrate

arbitrability unless there is ‘clear and unmistakable’ evidence

that they did so.” First Options of Chicago, Inc., 514 U.S. at

944 (quoting AT&T Techs., Inc. v. Commc’ns Workers, 475

U.S. 643, 649 (1986) (alterations omitted)). 

[4] Accordingly, the question of arbitrability is left to the

court unless the parties clearly and unmistakably provide otherwise. Such “[c]lear and unmistakable ‘evidence’ of agreement to arbitrate arbitrability might include . . . a course of

conduct demonstrating assent . . . or . . . an express agreement

to do so.” Rent-A-Center, 130 S. Ct. at 2783 (Stevens, J., dissenting) (citing First Options of Chicago, Inc., 514 U.S. at

946). Here, there is no evidence that the parties engaged in

conduct demonstrating assent, so we turn to the terms of their

MOMOT v. MASTRO 8493
agreement. As previously noted, the arbitration clause in the

Allocation Agreement provides, in relevant part:

4. Resolution of Disputes.

(a) Arbitration. If a dispute arises out of or

relates to this Agreement, the relationships that result

from this Agreement, the breach of this Agreement

or the validity or application of any of the provisions

of this Section 4, and, if the dispute cannot be settled

through negotiation, the dispute shall be resolved

exclusively by binding arbitration.

(Emphasis added.) We hold that this language, delegating to

the arbitrators the authority to determine “the validity or

application of any of the provisions of” the arbitration clause,

constitutes “an agreement to arbitrate threshold issues concerning the arbitration agreement.” Rent-A-Center, 130 S. Ct.

at 2777. In other words, the parties clearly and unmistakably

agreed to arbitrate the question of arbitrability. 

[5] Because the parties’ agreement clearly and unmistakably indicates their intent for the arbitrators to decide the

threshold question of arbitrability, we hold that the district

court erred in failing to stay the action under section 3 of the

FAA and in enjoining the arbitration. 

REVERSED AND REMANDED with instructions to

grant the motion to stay proceedings under 9 U.S.C. § 3

and dissolve the permanent injunction.

8494 MOMOT v. MASTRO