Court Opinion

ID: 3163786
Source: CourtListenerOpinion
Date Created: 2015-12-17 21:01:04.858562+00
Date Added: 2024-06-11T12:47:20.466315
License: Public Domain

FILED
                              NOT FOR PUBLICATION                            DEC 17 2015

                                                                         MOLLY C. DWYER, CLERK
                       UNITED STATES COURT OF APPEALS                     U.S. COURT OF APPEALS

                               FOR THE NINTH CIRCUIT

CLEAN TECH PARTNERS, LLC,                         No. 14-15156

             Plaintiff - Appellant,               D.C. No.1:13-cv-01409-AWI

  v.
                                                  MEMORANDUM*
ELECTRONIC RECYCLERS
INTERNATIONAL, INC., et al.,

             Defendants - Appellees.

                     Appeal from the United States District Court
                         for the Eastern District of California
                   Anthony W. Ishii, Senior District Judge, Presiding

                             Submitted December 10, 2015**
                               San Francisco, California

Before: CLIFTON and OWENS, Circuit Judges, and MOSKOWITZ, Chief District
Judge.***

       *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
         The panel unanimously concludes this case is suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
       ***
         The Honorable Barry Ted Moskowitz, Chief Judge, United States District
Court for the Southern District of California, sitting by designation.
      Clean Tech Partners, LLC, (“Clean Tech”), appeals from the district court’s

order denying discovery, compelling arbitration, and dismissing the case. Clean

Tech argues the order should be vacated on the ground that the district court erred

in denying its request for limited discovery relating to the validity of a Stock

Transfer Agreement (“STA”). We review the district court’s decision denying

discovery for an abuse of discretion. Hallett v. Morgan, 296 F.3d 732, 751 (9th

Cir. 2002).

      The dispute in this case arises out of an arbitration provision in the STA,

entered into between Clean Tech and Appellees John and Tammie Shegerian. John

Shegerian is the Chairman and Chief Executive Officer of Appellee Electronic

Recyclers International, Inc. (“ERI”), and Tammie Shegerian is ERI’s Chief

Financial Officer. Pursuant to the STA, the Shegerians agreed to purchase ERI

stock owned by Clean Tech. Although the STA contains an arbitration provision,

Clean Tech filed a complaint in the Eastern District of California alleging, inter

alia, breach of contract, fraud, RICO violations, and securities fraud stemming

from the transaction. The district court denied Clean Tech’s motion for limited

discovery, compelled arbitration, and dismissed the case.

      As an initial matter, Clean Tech’s appeal is not moot even though the parties

arbitrated Clean Tech’s claims following the district court’s decision. An appeal is

moot if no live case or controversy remains at the time of appeal. NASD Dispute

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Resolution, Inc. v. Judicial Council of Cal., 488 F.3d 1065, 1068 (9th Cir. 2007). A

case or controversy exists on appeal so long as a favorable decision on the merits

can give an appellant effective relief. Id. Here, Clean Tech’s appeal is not moot

because a decision vacating the district court order would give Clean Tech an

opportunity to potentially contest the validity of the STA before a district judge

rather than an arbitrator. See Haig Berberian, Inc. v. Cannery Warehousemen, 535

F.2d 496, 498 n.1 (9th Cir. 1976) (holding that an appeal was not moot because the

arbitration award would be unenforceable if the court agreed with the appellant that

the dispute was not arbitrable).

      Reaching the merits, we hold that the district court did not abuse its

discretion when it denied Clean Tech’s request for discovery. Clean Tech failed to

demonstrate how discovery would produce evidence indicative of the STA’s

invalidity both at the proceedings below and in its arguments on appeal. See

Hallett, 296 F.3d at 751 (“[B]road discretion is vested in the trial court to permit or

deny discovery, and its decision to deny discovery will not be disturbed except

upon the clearest showing that denial of discovery results in actual and substantial

prejudice to the complaining litigant.”) (quoting Goehring v. Brophy, 94 F.3d

1294, 1305 (9th Cir. 1996)). The district court properly denied discovery based on

Clean Tech’s bare assertions that the STA was invalid.

      AFFIRMED.

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