Court Opinion

ID: 3049734
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:28:22.926597+00
Date Added: 2024-06-11T12:46:39.739549
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

DEPENDABLE HIGHWAY EXPRESS,           
INC.,
               Plaintiff-Appellant,        No. 05-56346
                v.                          D.C. No.
                                          CV-05-01208-NM
NAVIGATORS INS. CO.,
              Defendant-Appellee.
                                      
       Appeal from the United States District Court
           for the Central District of California
        Nora M. Manella, District Judge, Presiding

DEPENDABLE HIGHWAY EXPRESS,           
INC.,
                        Petitioner,
                                           No. 05-75033
                v.
                                             D.C. No.
UNITED STATES DISTRICT
COURT FOR THE CENTRAL
                                          CV-05-01208-
                                            NM(PLAx)
DISTRICT OF CALIFORNIA,
                      Respondent,           OPINION
NAVIGATORS INS. CO.,
            Real Party in Interest.
                                      
              Petition for Writ of Mandamus

                 Argued and Submitted
           March 6, 2007—Pasadena, California

                   Filed August 22, 2007

                           10271
10272 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
    Before: Stephen Reinhardt and Richard C. Tallman,
    Circuit Judges, and Claudia Wilken,* District Judge.

                   Opinion by Judge Tallman

  *The Honorable Claudia Wilken, United States District Judge for the
Northern District of California, sitting by designation.
       DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10275

                        COUNSEL

David E.R. Woolley, Los Angeles, California, for the
plaintiff-appellant.

Arthur A. Leonard, Santa Monica, California, for the
defendant-appellee.

                         OPINION

TALLMAN, Circuit Judge:

  In this diversity action, Dependable Highway Express, Inc.
(“Dependable”) appeals from a district court order staying
Dependable’s domestic contract dispute against Navigators
Insurance Company (“Navigators”) pending resolution of
arbitration proceedings in England. We hold that the district
court abused its discretion, and we remand for further pro-
ceedings.
10276 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
                                    I

   Dependable, a California company, operates a warehouse
in Los Angeles and a fleet of trucks to service warehouse cus-
tomers. Navigators, a New York insurance company, issued
indemnity insurance to Dependable for the period of Novem-
ber 1999 to October 2001. As the result of two cargo thefts
in 1999 and 2001, Dependable incurred expenses totaling
approximately $245,000 (for third-party payments to the
aggrieved customers, as well as claims defense costs), which
it submitted to Navigators for indemnification. When Naviga-
tors refused to reimburse Dependable, Dependable filed a
complaint in California superior court on January 8, 2005,
alleging breach of the insurance contract.

   Shortly thereafter, Navigators commenced proceedings in
the High Court of Justice, Queen’s Bench Division, Commer-
cial Court, in London, England. Navigators sought a restrain-
ing order against Dependable to forbid Dependable from
proceeding with litigation in the United States. Navigators
asserted that Dependable’s insurance policy was subject to the
general terms and standard conditions of its “Columbus
Wording” document, which designated English arbitration as
the means for resolving disputes between the parties.1 After
hearing ex parte testimony from Navigators’ English lawyer
on two occasions, the English court granted an injunction and
assessed court fees of roughly $23,000 against Dependable on
March 11, 2005. Despite Navigators’ attempts to notify
Dependable of the English proceedings, Dependable never
appeared in England.

   Around the same time, Navigators removed the California
state case to federal court and answered Dependable’s com-
plaint. As an affirmative defense, Navigators raised the
  1
   Apparently, Navigators and Dependable never directly negotiated the
terms of insurance coverage. Instead, Navigators asserts that Dependable’s
insurance broker procured coverage on Dependable’s behalf.
         DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10277
English arbitration provision found in its Columbus Wording
document. In response, Dependable filed a motion for sum-
mary judgment, which the district court “vacated,” reasoning
that a motion for summary judgment was improper before dis-
covery.

   On May 20, 2005, Navigators filed a motion to dismiss or
stay the federal action in light of the English proceedings.
Dependable opposed Navigators’ motion, claiming that the
Columbus Wording (and specifically the arbitration provi-
sions) were not part of Dependable’s insurance policy because
the schedules summarizing the policy’s key terms referred
only to “Transport Wording.” Thus, in Dependable’s view,
the difference between the words “Transport” and “Colum-
bus” established that the English arbitration provision was not
part of its insurance policy.2 The district court granted Navi-
gators’ motion for a stay in a brief minute order that acknowl-
edged the English court’s injunction and stayed the federal
proceedings “pending the resolution of the London proceed-
ings, including arbitration.” This timely appeal followed.

                                    II

   Before considering the merits, we must first decide whether
we have jurisdiction under 28 U.S.C. § 1291 to review the
district court’s stay. Generally, interlocutory orders are not
immediately appealable. See 28 U.S.C. § 1291 (restricting
appellate jurisdiction to “final decisions”). However, in cer-
tain cases, an interlocutory order may be deemed “final” for
jurisdictional purposes. See Lockyer v. Mirant Corp., 398
F.3d 1098, 1101-04 (9th Cir. 2005). We hold that we have
  2
    Dependable’s position is somewhat puzzling because it claims never to
have received a copy of the Transport Wording. Thus, Dependable con-
cedes that it entered into a contract, the general terms and conditions of
which it has never actually seen. The parties did not include the original
contract documents in the excerpts of record, making it difficult for us to
evaluate the argument. We leave to the district court on remand the resolu-
tion of that dispute.
10278 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
jurisdiction under § 1291 because the stay order puts Depend-
able “effectively out of court” under Moses H. Cone Memo-
rial Hospital v. Mercury Construction Corp., 460 U.S. 1, 9
(1983), and Idlewild Bon Voyage Liquor Corp. v. Epstein, 370
U.S. 713, 715 n.2 (1962), and because the stay is an appeal-
able collateral order under Cohen v. Beneficial Industrial
Loan Corp., 337 U.S. 541 (1949).3

                                      A

  [1] In Moses H. Cone, a federal district court issued a stay
so that the parties could resolve an arbitrability issue raised in
a concurrent state court action. 460 U.S. at 7. Relying on its
  3
    The parties’ jurisdictional statements miss the mark. Dependable
asserts that the district court’s stay was an example of Colorado River
abstention. See Colo. River Water Conservation Dist. v. United States, 424
U.S. 800, 817 (1976) (holding that in exceptional circumstances a district
court may dismiss a federal action in light of parallel state court proceed-
ings and base its decision purely on “considerations of [w]ise judicial
administration, giving regard to conservation of judicial resources and
comprehensive disposition of litigation” (internal quotation marks omit-
ted) (alteration in original)). However, Dependable points to no case in
which a district court invoked Colorado River where the parallel proceed-
ings were commenced in a foreign tribunal, as opposed to state court. Fur-
thermore, the district court’s minute order in this case does not cite
Colorado River. Presumably, if the district court had wished to invoke this
doctrine—which by its very holding is available only in rare
circumstances—the order would have cited to it. While interlocutory
orders based on Colorado River abstention are appealable, see Holder v.
Holder, 305 F.3d 854, 863 (9th Cir. 2002), there is no basis for concluding
that such a stay was intended in the district court’s decision.
   For its part, Navigators construes the district court’s stay as an appeal-
able exercise of international comity. See JP Morgan Chase Bank v. Altos
Hornos de Mexico, 412 F.3d 418, 422 (2nd Cir. 2005) (“Declining to
decide a question of law on the basis of international comity is a form of
abstention . . . .”). Once again, the order does not address the comity doc-
trine or cite any case invoking it. In the alternative, Navigators argues that,
under the Federal Arbitration Act (“FAA”), stays pending arbitration are
unappealable. 9 U.S.C. §§ 3, 4, 16(b)(1)-(2). There is no indication, how-
ever, that the court entered the stay pursuant to the FAA.
         DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10279
earlier decision in Idlewild, the Supreme Court concluded that
the stay was appealable because there would be “no further
litigation in the federal forum” and the state’s decision would
be res judicata, leaving the defendant “effectively out of
court.” Moses H. Cone, 460 U.S. at 10. In Idlewild, a federal
district court stayed an action seeking to invalidate a New
York law to allow the state court the opportunity to address
the plaintiff’s various claims. 370 U.S. at 714. Notably, the
Court held that the stay was appealable despite the fact that
the state court decision might not moot the federal proceed-
ings. Id. at 714, 715 n.2 (holding that Idlewild was “effec-
tively out of court” where the district court’s stay allowed the
state court to address issues that would not necessarily dis-
pose of the case); see also Lockyer, 398 F.3d at 1102 (“Even
. . . where the case might well come back to federal district
court, Idlewild Liquor was ‘effectively out of court’ for pur-
poses of appealability of the stay order.”).

   [2] The stay in this case presents a strong likelihood that
the English proceedings will leave one of the parties “effec-
tively out of court.” If the English arbitrators decide in Navi-
gators’ favor, Dependable will have little recourse back in the
United States district court. See Ministry of Def. of the Islamic
Republic of Iran v. Gould, Inc., 969 F.2d 764, 770 (9th Cir.
1992) (“The district court’s . . . review of a foreign arbitration
award is quite circumscribed.”); id. (noting that the party
challenging a foreign award bears a substantial burden
because “public policy in favor of international arbitration is
strong” (internal quotation marks omitted)).4 On the other
hand, were Dependable to prevail in England, its domestic
suit would be mooted, “just as Idlewild’s federal constitu-
tional claims in the district court would have been mooted if
  4
   To the extent that the FAA allows a district court to refuse to enforce
a foreign award, thus rendering the foreign decision somewhat less bind-
ing than an analogous state court decision, the Idlewild Court established
that the possibility of further review by the district court is not a bar to
appealability. See 370 U.S. at 714, 715 n.2; Lockyer, 398 F.3d at 1102.
10280 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
the New York state courts had granted relief on state-law
grounds.” Lockyer, 398 F.3d at 1102 (citing Terra Nova Ins.
Co. v. 900 Bar, Inc., 887 F.2d 1213, 1219-21 (3d Cir. 1989)
(concluding that the possibility that a stay would render a
claim moot was equivalent to res judicata for purposes of
applying Moses H. Cone)). Similarly, if the district court were
to enforce the English court’s injunction against Dependable
proceeding domestically, Dependable once again would be
“effectively out of court.”

   [3] Although the mooting of Dependable’s federal suit is
not a foregone conclusion, the stay order provides no indica-
tion that the district court “clearly [anticipated] and intend[ed]
that proceedings [would] resume after the stay has expired.”
Lockyer, 398 F.3d at 1103 (emphasis added); see also Cofab,
Inc. v. Phila. Joint Bd., 141 F.3d 105, 109 (3d Cir. 1998)
(holding that Moses H. Cone does not apply where district
court had no intention to “ ‘deep six’ the suit”). Indeed, the
stay order contains no detail as to what might occur back in
the United States once English arbitration concluded. As a
result, analysis under Moses H. Cone and Idlewild confirms
that the stay in this case puts Dependable “effectively out of
court,” and we have appellate jurisdiction to determine the
propriety of the stay—regardless of whether the foreign pro-
ceedings actually moot the domestic litigation. See Lockyer,
398 F.3d at 1102 (noting that “absolute certainty is not
required in order to put a party ‘effectively out of court’
within the meaning of the Moses H. Cone doctrine”).

                                B

   [4] Even if the stay did not constitute a final order under
Moses H. Cone, appellate jurisdiction is established under
Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541
(1949). In Cohen, the Supreme Court concluded that under
certain conditions a small class of collateral orders of the dis-
trict court is immediately appealable. To fall within Cohen’s
ambit, an order “must [1] conclusively determine the disputed
        DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10281
question, [2] resolve an important issue completely separate
from the merits of the action, and [3] be effectively unreview-
able on appeal from a final judgment.” Coopers & Lybrand
v. Livesay, 437 U.S. 463, 468 (1978) (internal quotation
marks omitted).

   [5] Following the Supreme Court’s lead in Moses H. Cone,
the Lockyer court buttressed its jurisdictional holding with an
alternative analysis under Cohen. 398 F.3d at 1103-04. The
court held that the first Cohen criterion was satisfied “be-
cause, even though the stay order could theoretically be modi-
fied, the district court did not impose a time limit on the stay
or note circumstances that might result in its modification.”
Id. at 1103 (citing Moses H. Cone, 460 U.S. at 13 (“[There is]
no basis to suppose that the District Judge contemplated any
reconsideration of his decision to defer to the parallel [pro-
ceedings].”); Burns v. Walter, 931 F.2d 140, 144 (1st Cir.
1991) (noting that there was “no indication in the record” that
the district court would take further action)). Cohen’s first cri-
terion is met here. As in Lockyer, the district court did not
impose a time limit or indicate that it might consider modify-
ing the order.

   [6] Cohen’s second criterion is also met. In applying
Cohen, the Moses H. Cone Court held that “[a]n order that
amounts to a refusal to adjudicate the merits plainly presents
an important issue separate from the merits.” 460 U.S. at 12.
Similarly, the district court order staying the federal action in
light of the English proceedings was a refusal to address the
merits of Dependable’s breach of contract claims and related
challenges to the arbitration clause found in Navigators’
Columbus Wording.

   [7] Finally, the stay satisfies Cohen’s third criterion
because the “propriety of the stay will be unreviewable on
appeal” regardless of whether the English proceedings moot
the domestic litigation. Lockyer, 398 F.3d at 1104 (noting that
even if the parallel proceedings do not moot the federal claim,
10282 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
“the district court will lift the stay on its own and proceed
with the suit,” rendering review of the stay impossible). As in
Lockyer, if the English proceedings do not put an end to the
U.S. cause of action, the district court will lift the stay and
eliminate its reviewability. We therefore conclude that the
stay is reviewable under Cohen as a collateral order.5

                                  III

   We review a district court’s stay order for abuse of discre-
tion. See Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d
908, 912 (9th Cir. 1993). However, the standard is “somewhat
less deferential” than the abuse of discretion standard used in
other contexts. Yong v. INS, 208 F.3d 1116, 1119 (9th Cir.
2000). A district court abuses its discretion if it “base[s] its
ruling on an erroneous view of the law or on a clearly errone-
ous assessment of the evidence.” Cooter & Gell v. Hartmarx
Corp., 496 U.S. 384, 405 (1990).

   The district court’s stay order is extremely terse. It consists
of four paragraphs and contains citations to only two cases:
Landis v. North American Co., 299 U.S. 248, 254-55 (1936),
and Leyva v. Certified Grocers of California, Ltd., 593 F.2d
857, 863-64 (9th Cir. 1997). The passages from Landis and
Leyva in the stay order establish the general principle that a
district court possesses the inherent power to control its
docket and promote efficient use of judicial resources. See
Landis, 299 U.S. at 254 (“[T]he power to stay proceedings is
incidental to the power inherent in every court to control the
disposition of the causes on its docket with economy of time
and effort for itself, for counsel, and for litigants.”); Leyva,
593 F.2d at 863-64 (“A trial court may, with propriety, find
it is efficient for its own docket and the fairest course for the
parties to enter a stay of an action before it, pending resolu-
  5
   Because jurisdiction is proper under Moses H. Cone or Cohen, if not
both, Dependable’s petition for a writ of mandamus is moot, and we must
dismiss it.
        DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10283
tion of independent proceedings which bear upon the case.
This rule applies whether the separate proceedings are judi-
cial, administrative, or arbitral in character, and does not
require that the issues in such proceedings are necessarily
controlling of the action before the court.”).

   However, while it is the prerogative of the district court to
manage its workload, case management standing alone is not
necessarily a sufficient ground to stay proceedings. See Lock-
yer, 398 F.3d at 1112 (holding that a Landis stay was inappro-
priate where grounds other than judicial economy were
offered and found to lack merit).

   [8] Moreover, the district court overlooked certain restric-
tions on what otherwise might be an unfettered exercise of
discretion. First, Landis cautions that “if there is even a fair
possibility that the stay . . . will work damage to some one
else,” the stay may be inappropriate absent a showing by the
moving party of “hardship or inequity.” 299 U.S. at 255. In
this case, there is more than a “fair possibility” that the stay
will “work damage” to Dependable. Forcing the company to
enter into arbitration in a foreign country when it remains
unclear whether Dependable even agreed to arbitrate and
where a foreign court has already levied legal and equitable
penalties against it qualifies as a “fair possibility” of damage.
Moreover, Navigators has failed to establish a sufficient case
of hardship: as the Lockyer court noted, “being required to
defend a suit [if the stay is vacated], does not constitute a
‘clear case of hardship or inequity’ within the meaning of
Landis.” 398 F.3d at 1112.

   In addition, the Landis Court reversed the lower court deci-
sion primarily because the stay would result in undue delay.
299 U.S. at 256; id. at 259 (remanding to consider whether to
grant a stay of what was likely to be fairly short duration). In
Leyva, the court expanded this reasoning, concluding that “[a]
stay should not be granted unless it appears likely the other
proceedings will be concluded within a reasonable time.” 593
10284 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
F.2d at 864. Generally, stays should not be indefinite in
nature. See Yong, 208 F.3d at 1119 (requiring a strong show-
ing to justify an indefinite stay). The order in this case pro-
vides no specific deadline for when the stay will terminate. In
the nearly two years that have passed since the order issued,
we have received no indication that any arbitration proceed-
ings have commenced in England—let alone concluded.6 Cf.
id. (noting that a stay that terminated upon the resolution of
an appeal could “remain in effect for a lengthy period of time,
perhaps for years” if litigation dragged on). Thus, in light of
the general policy favoring stays of short, or at least reason-
able, duration, the district court erred by issuing a stay with-
out any indication that it would last only for a reasonable
time.

   [9] Because the stay is likely to do damage to Dependable,
and it is unclear when the stay might lift, if at all, the district
court misapplied Landis and Leyva, committing an error of
law which rendered the order an abuse of discretion. See
Lockyer, 398 F.3d at 1112-13 (noting the reluctance with
which the appellate court questions the district court’s man-
agement of its docket but nevertheless concluding that a Lan-
dis stay was improper).

                                  IV

   Having determined that the district court’s stated grounds
for issuing the stay were erroneous, we next consider whether
the stay nevertheless should be upheld under principles of
international comity, as urged by Navigators. See Forest
Guardians v. U.S. Forest Serv., 329 F.3d 1089, 1097 (9th Cir.
2003) (“[W]e are free to affirm the district court on any
ground supported by the record and briefed by the parties, and
we are not limited to reviewing the district court’s stated basis
for its decision.”). We conclude that deferring to the English
  6
   During oral argument, counsel for both parties acknowledged that Lon-
don arbitration had yet to commence.
        DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10285
proceedings as an exercise of comity would be inappropriate
on the inadequate record before us.

   [10] Comity is “the recognition which one nation allows
within its territory to the legislative, executive or judicial acts
of another nation.” Hilton v. Guyot, 159 U.S. 113, 164 (1895).
The term “summarizes in a brief word a complex and elusive
concept—the degree of deference that a domestic forum must
pay to the act of a foreign government not otherwise binding
on the forum.” Laker Airways Ltd. v. Sabena Belgian World
Airlines, 731 F.2d 909, 937 (D.C. Cir. 1984). Comity “is nei-
ther a matter of absolute obligation, on the one hand, nor of
mere courtesy and good will, upon the other.” Hilton, 159
U.S. at 163-64. Indeed,

    there are limitations to the application of comity.
    When the foreign act is inherently inconsistent with
    the policies underlying comity, domestic recognition
    could tend either to legitimize the aberration or to
    encourage retaliation, undercutting the realization of
    the goals served by comity. No nation is under an
    unremitting obligation to enforce foreign interests
    which are fundamentally prejudicial to those of the
    domestic forum.

Laker Airways, 731 F.2d at 937.

   [11] Laker Airways, a seminal case on anti-suit injunctions
and international comity, involved an antitrust action initiated
by Laker against several domestic and international air carri-
ers. Id. at 917. In response to Laker’s U.S. lawsuit, several of
the foreign defendants sought an anti-suit injunction in British
court as a means to bar further domestic action. Id. at 918.
The British court granted the injunction, prompting Laker to
seek its own anti-suit injunction in the United States. Id. The
district court granted Laker’s injunction barring further
British proceedings, id., and on interlocutory appeal the D.C.
Circuit held, in part, that the U.S. court was not bound by
10286 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
principles of international comity, id. at 915-16. The court
noted that, “[w]hen the availability of an action in the domes-
tic courts is necessary to a full and fair adjudication of the
plaintiff’s claims, a court should preserve the forum.” Id. at
929. Moreover, domestic courts should be wary of enforcing
foreign injunctions where the “clear thrust of the requested
relief was the termination of the United States . . . claim.” Id.
at 930. The Laker Airways court further emphasized that
Laker’s suit “was first instituted in the United States,” and
thus the “initial opportunity to exercise comity . . . was put to
the United Kingdom courts.” Id. at 939. Because the defen-
dants’ “claims of comity now asserted in United States courts
come burdened with the failure of the British to recognize
comity,” the district court did not err by refusing to extend
comity to the later-filed British action. Id.

   More recently, we addressed the comity doctrine in E. & J.
Gallo Winery v. Andina Licores S.A., 446 F.3d 984 (9th Cir.
2006), which involved a contract dispute between a California
winery and its Ecuadorian distributor. Id. at 987. Following a
series of disagreements concerning the parties’ contract,
Andina filed suit in Ecuador, alleging the violation of a decree
that was issued by an Ecuadorian military dictatorship in 1976
and later repealed in 1997. Id. In response, Gallo filed suit in
California pursuant to the contract’s forum selection clause,
seeking declaratory and injunctive relief, and damages. Id. at
988. After Andina removed the domestic action to federal
court, the district court denied Gallo’s request for a prelimi-
nary injunction restraining Andina’s action in Ecuador and
relying heavily on considerations of comity. Id.

   On appeal, we held that the district court abused its discre-
tion when it declined to grant a preliminary injunction. High-
lighting the strong domestic policy favoring enforcement of
forum selection clauses, and noting that neither party disputed
the validity of the contract’s clause naming California as the
forum, we concluded that “[a]n anti-suit injunction is the only
way Gallo can effectively enforce the forum selection clause.”
       DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10287
Id. In doing so, we rejected the district court’s application of
the comity doctrine. Although the Ecuadorian action was filed
first, the parties had “previously agreed to litigate their dis-
putes” in California, and thus respecting the Ecuadorian pro-
ceedings would frustrate “United States policy favoring the
enforcement of forum selection clauses.” Id. at 994. We there-
fore declined to extend comity to a foreign action instituted
solely in an effort to “evade the enforcement of an otherwise-
valid forum selection clause.” Id.

   [12] In light of the principles applied in Laker Airways and
E. & J. Gallo, we conclude that invoking the international
comity doctrine would be inappropriate on the inadequate
record before us. Dependable filed suit in a U.S. forum before
Navigators brought its anti-suit injunction action in the
English court. The English court thus had the “initial opportu-
nity to exercise comity,” Laker Airways, 731 F.2d at 939, but
elected not to. Moreover, the clear thrust of Navigators’
English action was to halt Dependable’s domestic
proceedings—a tactic frowned upon in Laker Airways. Cf. id.
at 938 (“[B]y any definition the injunctions of the United
Kingdom courts are not entitled to comity. This is because the
action before the United Kingdom courts is specifically
intended to interfere with and terminate Laker’s United States
antitrust suit . . . . [T]he English injunction seeks only to
quash the practical power of the United States Courts to adju-
dicate claims under United States law . . . .”). Indeed, the
express purpose of an anti-suit injunction, be it offensive or
defensive, is to block litigation in a separate forum. Comity
is not required where the British action was filed after the
U.S. action for the sole purpose of interfering with the U.S.
suit.

   [13] To be sure, Navigators’ actions are far less egregious
than those of the defendants in Laker Airways and E. & J.
Gallo. See Laker Airways, 731 F.2d at 932, 940 (characteriz-
ing defendants’ conduct as “offensive” and the related actions
of the British government as “arrogant”); E. & J. Gallo, 446
10288 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
F.3d at 995 (“Andina has involved Gallo in messy, protracted,
and potentially fraudulent litigation in Ecuador in direct con-
travention of a valid and enforceable forum selection
clause.”); see also id. (delaying issuance of the mandate to
consider whether to impose sanctions pursuant to the court’s
inherent authority). The record now before us contains no evi-
dence that Navigators has acted in bad faith or sought deliber-
ately to circumvent the terms of the agreement with
Dependable (whatever the district court may find them to be
on remand). On the contrary, Navigators claims it has acted
in accordance with the terms of a forum selection clause that
it believed to have been part of the insurance contract. Despite
Navigators’ purportedly good intentions, however, the practi-
cal effect of its action in English court was to interfere with
the domestic forum’s ability to adjudicate the dispute.

   [14] If the record were clear that the parties agreed to for-
eign arbitration, or if the district court made such a determina-
tion, we would have little trouble upholding the stay on
grounds of international comity. See Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 629 (1985)
(concluding that “international comity . . . and sensitivity to
the need of the international commercial system for predict-
ability in the resolution of disputes require [enforcement of a
foreign arbitration clause], even assuming that a contrary
result would be forthcoming in a domestic context”). The
English court would not have been bound by principles of
comity in the first instance, and the district court’s stay would
have simply recognized the validity of the parties’ forum
selection clause. See E. & J. Gallo, 446 F.3d at 994 (“[W]here
private parties have previously agreed to litigate their disputes
in a certain forum, one party’s filing first in a different forum
would not implicate comity at all [in the second forum].”).
Central to the dispute before us, however, is the parties’ dis-
agreement over the very existence of arbitration and forum
selection clauses designating London as the site of the arbitra-
tion and English law as the sole means of settling insurance
coverage disputes. Cf. id. (noting that “the contract clearly
        DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS. 10289
contains a California choice-of-law clause”). Where, as here,
the record does not even contain a copy of the original insur-
ance contract, it would be improper to invoke international
comity based on the mere possibility of upholding a disputed
forum selection or arbitration clause.

   [15] In sum, because the district court never addressed the
parties’ dispute over the substance of the contract—
specifically, the contested arbitration clause—we decline
Navigators’ invitation to defer to the English anti-suit injunc-
tion obtained in Dependable’s absence. See Laker Airways,
731 F.2d at 934 (noting that a forum with jurisdiction over a
particular dispute is not obligated to “stay its own proceedings
in response to an anti-suit injunction”).

                               V

   We hold that the district court’s indefinite Landis stay was
an abuse of discretion. Furthermore, upholding the stay under
the doctrine of international comity would be inappropriate at
this stage based on the limited record before us. We remand
so the district court can develop the record in order to deter-
mine whether Dependable and Navigators agreed to arbitrate
disputes arising from the insurance contract. See Nagrampa v.
MailCoups, Inc., 469 F.3d 1257, 1268 (9th Cir. 2006) (en
banc) (reiterating that a district court is obligated to answer
threshold issues of arbitrability). We leave to the district
court’s determination the scope of any necessary discovery
and whether the arbitrability issue can be resolved on sum-
mary judgment. If there are contested issues of material fact
on that issue, the district court might consider conducting a
bifurcated trial and proceed to the merits only if the fact-
finder determines that there is no arbitration clause in the con-
tract. Conversely, if the evidence shows the existence of the
arbitration clause, the district court is free to issue another
stay as warranted under principles of international comity or
the Federal Arbitration Act, 9 U.S.C. §§ 3-4.
10290 DEPENDABLE HIGHWAY EXPRESS v. NAVIGATORS INS.
   The stay order in No. 05-56346 is REVERSED and the
case is REMANDED for further proceedings consistent with
this opinion. The petition for a writ of mandamus in No. 05-
75033 is DISMISSED as moot. The parties shall bear their
own costs.