Court Opinion

ID: 9485862
Source: CourtListenerOpinion
Date Created: 2023-08-05 11:32:17.672929+00
Date Added: 2024-06-11T17:51:24.513358
License: Public Domain

BRUNETTI, Circuit Judge,
dissenting:
The majority holds that the acts Liebling allegedly committed were “unrelated to any provision or interpretation of the contract” between plaintiffs and GDL. As a result, it finds that Liebling lacks standing to invoke the arbitration provision in that contract. The panel’s interpretation ignores contemporary federal principles on the issue of arbi-trability, and its erroneous conclusion proves fatal to an otherwise well-reasoned opinion. Accordingly, I dissent.
The Supreme Court has emphasized repeatedly the strong federal policy in favor of arbitration:
[Wjhere the contract contains an arbitration clause, there is a presumption of arbi-trability in the sense that “[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.”
AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 650, 106 S.Ct. 1415, 1419, 89 L.Ed.2d 648 (1986), quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). The balance of this presumption is the principle that “arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to so submit.” Warrior & Gulf, 363 U.S. at 582, 80 S.Ct. at 1353; Southern California Dist. Council of Laborers v. Berry Constr., 984 F.2d 340, 343 (9th Cir.1993).
We are not free to disregard the presumption in favor of arbitration and weigh the arbitrability of this dispute on an even scale. Because I believe the arbitration clause in this case is unquestionably “susceptible of an interpretation that covers the asserted dispute,” I would follow the Court’s mandate and direct the matter to arbitration.
The majority recognizes that the arbitration clause in this case is a broad one. It errs, however, in ignoring the settled consequence of that breadth. The clause provided as follows:
Any controversy or claim arising out of or relating to this Agreement or the breach thereof, shall be settled by arbitration ... and judgment upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction thereof.
Memorandum Opinion and Order at 3.
The majority concludes that the arbitration clause does not cover the instant dispute because Liebling’s actions, which formed the basis for the complaint, were “subsequent, independent acts of fraud, unrelated to any provision or interpretation of the contract,” and because “[tjhey simply do not impose any contractual liability, vicariously or otherwise, upon Liebling.” The scope of this clause, however, is not restricted to contro*749versies relating to interpretation or performance of the contract itself.
We travelled this ground in Mediterranean Enterprises v. Ssangyong, 708 F.2d 1458 (9th Cir.1983). In that opinion, we explained the “significant” difference between broad arbitration clauses, which direct to arbitration disputes “arising out of or relating to [an] agreement,” and clauses limited to disputes or controversies “under” or “arising out of’ the contract. Id. at 1464. The Ssang-yong court had “no difficulty” finding that the latter type of clause “is intended to cover a much narrower scope of disputes, i.e., only those relating to the interpretation and performance of the contract itself.” Id. The broader clause, like the one we interpret today, is not so limited.
The majority ignores this distinction. It attributes to our broad clause the effect we have expressly described for the “much narrower” clause which omits the “or relating to this agreement” language. See id., quoting Michele Amoruso e Figli v. Fisheries Development Corp., 499 F.Supp. 1074, 1080 (S.D.N.Y.1980). The majority’s construction cannot stand in the shadow of Ssangyong.
I would reverse the district court’s determination that Liebling lacks standing to invoke the arbitration provision in the GDL contract and direct the court to grant Lie-bling’s request for an order to arbitrate pursuant to that agreement. I would also direct the district court to set aside its earlier order of default in accordance with our prior decision in this case. Britton v. Co-Op Banking Group, 916 F.2d 1405, 1414 (9th Cir.1990). I respectfully dissent.