Brennan v. Opus Bank, No. 13-35580 (9th Cir. 2015)
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Plaintiff appealed from the district court’s order dismissing his action in favor of arbitration. Opus Bank cross appealed from the district court’s implicit denial of its motion to seal plaintiff’s complaint, and the district court’s denial of its motion for reconsideration as moot. The court held that federal arbitrability law applies in the present case; that the district court did not err in concluding that these parties’ incorporation of the Rules of the American Arbitration
Association (AAA) constituted “clear and unmistakable” evidence of their intent to submit the arbitrability dispute to arbitration; that Rent-A-Center, West, Inc. v. Jackson controls the present case where there are multiple severable arbitration agreements, only one of which is at issue; and that in this case, plaintiff failed to challenge the specific agreement at issue, as Rent-A-Center requires. The court concluded that the district court erred in denying as moot Opus Bank's motion for reconsideration to seal plaintiff's complaint because final judgment and even the filing of a notice of appeal does not divest a district court of its jurisdiction over matters ancillary to the appeal, such as protective orders. Accordingly, the court affirmed in part, and vacated and remanded in part.
Court Description: Arbitration. The panel affirmed the district court’s dismissal of plaintiff’s diversity action in favor of arbitration; reversed the district court’s denial, as moot, of Opus Bank’s motion for reconsideration of the district court’s implicit denial of its motion to seal plaintiff’s complaint; and remanded for the district court to decide Opus Bank’s motion to seal the complaint in the first instance. The plaintiff was the Executive Vice President of Opus Bank when he signed an Employment Agreement that contained an arbitration clause. Plaintiff alleged that Opus Bank breached the Agreement and wrongfully terminated him, and Opus Bank sought to compel arbitration. BRENNAN V. OPUS BANK 3 The panel held that federal law governed the arbitrability question by default because the Agreement was covered by the Federal Arbitration Act, and the parties did not clearly and unmistakenly designate that nonfederal arbitrability law applied. The panel held that the Agreement’s express incorporation of the Rules of the American Arbitration Association (the Delegation Provision), as part of the arbitration provision, constituted clear and unmistakable evidence that the contracting parties agreed to arbitrate arbitrability. The panel held that Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), applied to this case, and required plaintiff to challenge the specific Delegation Provision inside of the arbitration clause in order for the district court – rather than the arbitrator – to determine the validity of the arbitration clause. The panel concluded that because plaintiff failed to make any arguments specific to the Delegation Provision, and instead argued that the arbitration clause as a whole was unconscionable under state law, the court need not consider that claim because it was for the arbitrator to decide in light of the parties’ delegation of that question. The panel held that the district court’s dismissal of plaintiff’s claims did not moot Opus Bank’s motion to seal the complaint because final judgment and the filing of a notice of appeal did not divest the district court of its jurisdiction over matters ancillary to the appeal, such as protective orders. 4 BRENNAN V. OPUS BANK
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