Court Opinion

ID: 151963
Source: CourtListenerOpinion
Date Created: 2010-07-31 00:01:58+00
Date Added: 2024-06-11T17:24:26.607875
License: Public Domain

FILED
                                  NOT FOR PUBLICATION                        JUL 30 2010

                          UNITED STATES COURT OF APPEALS                 MOLLY C. DWYER, CLERK
                                                                          U .S. C O U R T OF APPE ALS

                                  FOR THE NINTH CIRCUIT

                                                     No. 09-35800
      VALVE CORPORATION,                             D.C. No. CV 09-579-RSL
                           Plaintiff-Appellant,      MEMORANDUM *
               vs.

      ACTIVISION BLIZZARD, INC.,
                         Defendant-Appellee.

                         Appeal from the United States District Court
                            for the Western District of Washington
                        Robert S. Lasnik, Chief District Judge, Presiding

                                    Submitted July 16, 2010 **
                                      Seattle, Washington

     Before: GRABER, PAEZ, Circuit Judges, and BURNS,*** District Judge.

      Valve Corporation appeals the district court’s judgment declining to vacate an

arbitration award, but directing the arbitrator to decide one disputed issue. We review

           *
             This disposition is not appropriate for publication and may not be cited to or by
     the courts of this circuit except as may be provided by Ninth Circuit Rule 36-3.
           **
            The panel unanimously finds this case suitable for decision without oral
     argument. Fed. R. App. P. 34(a)(2).
           ***
              The Honorable Larry Alan Burns, District Judge for the Southern District of
     California, sitting by designation.

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the district court’s decision de novo. United States v. Park Place Assocs., 563 F.3d
907, 918 (9th Cir. 2009). The facts are well known to the parties, so we recite them

only as necessary.

       Under the parties’ contract, any dispute over royalties was to be arbitrated.

Activision disputed almost the entire amount of royalties determined by the KPMG

audit and specifically requested an offset for certain returned merchandise. Under the

arbitration agreement, this is all that Activision was required to do to present the offset

dispute to the arbitrator for resolution.

       The arbitrator, however, made an award without deciding the offset issue.

Although Activision drew her attention to the issue and asked her to reopen the award

to consider it, she declined, concluding that her authority was “limited to the

resolution of Disputes agreed upon by the parties . . . .” The arbitrator wrote, “[s]ince

there is no agreement that this is an actual Dispute, this issue cannot be arbitrated by

me.” This was error. The arbitration agreement does not require the parties to agree

on whether a matter is in dispute; if a properly noticed matter pertains to amounts

owed, it must be arbitrated.

       Whether the parties have submitted a particular dispute for arbitration is an

issue for judicial determination unless the parties have agreed otherwise. Howsam v.

Dean Witter Reynolds, Inc., 537 U.S. 79, 82 (2002). The district court held that the

amount of royalties was arbitrable, and we agree. Arbitrators can exceed their powers

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by failing to arbitrate all matters submitted to them by agreement. W. Employers Ins.

Co. v. Jefferies & Co., Inc., 958 F.2d 258, 262 (9th Cir. 1992). That happened here.

      We reject Valve’s argument that the offset dispute had to be newly audited

before it could be arbitrated. The dispute arose only when Activision received the

audit’s result and saw the auditor’s calculations. The arbitrator did not rely on the

lack of a second audit in deciding not to arbitrate the offset issue, and the arbitration

agreement does not require a second audit before the element of the dispute can be

decided by arbitration.

      AFFIRMED.

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