Unpublished Disposition, 889 F.2d 1094 (9th Cir. 1989)

MEMORANDUM^* 

These appeals stem from a dispute between Employers Insurance of Wausau (Wausau) and National Union Insurance Company of Pittsburg (National Union). The controversy involves two reinsurance certificates that National Union issued to Wausau, reinsuring an officers' and directors' liability and corporate reimbursement policy Wausau previously had issued to BankAmerica Corporation. The district court issued an order modifying a preliminary injunction and compelling arbitration. In addition, the order required the arbitration panel to apply California law.

Wausau appeals from the district court's order modifying the preliminary injunction and compelling arbitration. National Union cross appeals, challenging only that portion of the order requiring the application of California law in the arbitration proceeding. We dismiss because we lack jurisdiction to hear these appeals.

Discussion

On November 19, 1988, a newly added section of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., went into effect. It provides, in relevant part:

Sec. 15 Appeals

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(b) Except as otherwise provided in section 1292(b) of title 28, an appeal may not be taken from an interlocutory order--

(1) granting a stay of an action under section 3 of this title;

(2) directing arbitration to proceed under section 4 of this title;

(3) compelling arbitration under section 206 of this title; or

(4) refusing to enjoin an arbitration that is subject to this title.

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This court has already applied this section of the Arbitration Act retrospectively to pending appeals in two cases. In Nichols v. Stapleton, 877 F.2d 1401 (9th Cir. 1989), we held that the new amendment applied retroactively because it altered remedies and procedures, not substantive legal rights. Id., at 1403. In Delta Computer v. Samsung Semiconductor & Telecomm. Co., 879 F.2d 662 (9th Cir. 1989), we recognized that a case by case exception to the rule that a court is to apply the law in effect at the time of its decision (absent a legislative pronouncement or history to the contrary) can be made to avoid "manifest injustice." Id., at 663, citing Bradley v. School Bd. of City of Richmond, 416 U.S. 696, 716 (1974).

The factors recited in Delta Computer to determine whether retroactive application of the new legislation would result in manifest injustice are also applicable to Wausau's appeal and lead to the same conclusion: no manifest injustice will occur by applying section 15 of the Arbitration Act retroactively. Thus we conclude that we do not have jurisdiction to hear Wausau's appeal of the order compelling arbitration.

The more interesting question is whether National Union should be able to appeal that portion of the district court order requiring the arbitration panel to apply California law. National Union's argument that this portion of the order deviates from the requirement of the Arbitration Act of arbitration according to the terms of the agreement raises serious questions. If meritorious, National Union's objections might affect the validity of any arbitration proceedings entered into under the order. The requirement that California law be applied to the arbitration proceedings is still part of the order compelling arbitration, however, and therefore is not appealable at this time.

If either party is dissatisfied with the arbitration decision, it can return to the district court to challenge the award. Following a final judgment there, a party may seek appellate review of the entire case, including plenary review of the initial order. Abernathy v. Southern California Edison, 88-15105, slip op. 10681, 10690 (September 5, 1989).

These appeals are DISMISSED for lack of jurisdiction.¹