Court Opinion

ID: 9481902
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:34:49.238887+00
Date Added: 2024-06-11T17:39:50.488921
License: Public Domain

KOZINSKI, Circuit Judge,
concurring:
Be it through clever pleading or blind luck, Aydin has managed to assert two types of injury in its complaint for declaratory relief. In its opinion, the majority addresses only one of Aydin’s alleged injuries while overlooking the other.
Aydin first claims it will be injured by an adverse award in the Indian arbitration unless the district court declares that an award against Aydin would be unenforceable in the United States. As the majority concludes, any claim arising from this injury does not yet create a case or controversy under Article III. So far we agree.
But Aydin also claims it is injured by being compelled to participate in an arbitration proceeding from which any decision, either favorable or unfavorable to Aydin, will be invalid because the structure and format of the arbitration are fatally flawed.1 It seeks a declaration from the district court that any decision from the arbitrator is unenforceable in the United States so that it can spare itself the expense and uncertainty of participating in an arbitration it claims is a legal nullity.
Admittedly, the expense and uncertainty of participating in an adjudicative proceeding normally are not adequate harms for the purpose of establishing an Article III case or controversy. However, here we have a claim that the result of this adjudicatory proceeding will have no binding effect whatsoever. In such a case, a participant would suffer an Article III injury by being compelled to expend resources without receiving any benefit, not even a final binding resolution of the subject dispute.
Unlike Aydin’s first claimed injury, this second type of injury occurs regardless of the outcome of the arbitration. Thus no “speculative and remote course of events ... stands between Aydin and its contemplated [second] injury.” Ante at 528. In a similar case, Thomas v. Union Carbide Agric. Prods., 473 U.S. 568, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985), the Supreme Court found that “it is sufficient for purposes of a claim ... challenging a tribunal’s jurisdiction that the claimant demonstrate it has been or inevitably will be subjected to an exercise of such ... jurisdiction.” Id. at 580, 105 S.Ct. at 3332. Article III jurisdic*530tion was found to exist in Thomas because the injury did not depend on whether the tribunal issued a favorable or unfavorable award, but on whether the tribunal had authority to adjudicate the controversy in the first place. See id.
Whether Aydin’s second injury creates an Article III case or controversy under the rationale of Thomas turns on whether the alleged flaws in the arbitration operated to preclude enforcement of any decision by the arbitrator. This question cannot be resolved on the record before us because the district court did not address the factual allegations underlying Aydin’s second asserted injury. See Berardinelli v. Castle & Cooke, Inc., 587 F.2d 37, 39 (9th Cir.1978). The court made no attempt to ascertain what support Aydin had for its assertions of structural and methodological flaws (as opposed to its assertions of bias and unequal treatment). Without findings on such jurisdictional facts, we can only speculate as to whether an Article III case or controversy exists here. See Land v. Dollar, 330 U.S. 731, 738-39, 67 S.Ct. 1009, 1012-13, 91 L.Ed. 1209 (1947).
In any event, it is unnecessary to resolve whether Aydin’s second injury is sufficiently concrete to create an Article III case or controversy. Even when there is jurisdiction under Article III, a court may decline to hear a request for declaratory relief because of prudential considerations, such as the relative hardships to the parties, judicial economy and international comity. See Abbott Labs. v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515-16, 18 L.Ed.2d 681 (1967); cf. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 638-40, 105 S.Ct. 3346, 3359-61, 87 L.Ed.2d 444 (1985) (international comity and international commercial arbitration).
These prudential concerns weigh heavily against Aydin. We should be reluctant to pass judgment on another sovereign’s dispute resolution procedures until it becomes absolutely necessary to do so. There is still time for any structural flaws in the arbitration to be cured, and Aydin’s active participation may provide the impetus for such corrective action. Moreover, even if the arbitrator’s decision is unenforceable in the United States, the two parties may resolve their differences before a federal court is ever asked to enforce the arbitrator’s decision. Finally, Aydin’s injury of unnecessarily expending time and resources is not of such severity that foregoing current resolution of its claim will be inequitable; Aydin consented to arbitrate its dispute in India and is therefore poorly positioned to claim that forcing it to arbitrate there is inequitable.
While I reach the same result as my colleagues, I am troubled by the majority's categorical assertion that a litigant in Ay-din’s position cannot allege sufficient injury to cross the Article III case or controversy threshold. I believe the standard is somewhat more lenient than my colleagues admit. Nonetheless, I concur.

. In its complaint, Aydin asked the district court to "find and declare as its judgment that any award made in the above-described arbitration will be unenforceable in the courts of the United States.” ER-19. Before us Aydin asserts that this request for relief encompassed a claim that no decision by the arbitrator could be enforced in the United States, even if the decision was to Aydin’s benefit.
The majority does not address this claim, perhaps because my colleagues do not read the complaint as stating such a claim. While reasonable minds might differ on this point, we are instructed to construe pleadings liberally at this stage in the proceedings. Conley v. Gibson, 355 U.S. 41, 47-48, 78 S.Ct. 99, 102-03, 2 L.Ed.2d 80 (1957).