VOLTAGE PICTURES, LLC V. GUSSI, S.A. DE C.V., No. 23-55123 (9th Cir. 2024)Annotate this Case
In a dispute between Voltage Pictures, LLC (Voltage) and Gussi S.A. de C.V. (Gussi SA) regarding their Distribution and License Agreement (DLA), the United States Court of Appeals for the Ninth Circuit affirmed the District Court for the Central District of California's decision to confirm an arbitral award in favor of Voltage. The court held that the district court had jurisdiction under Section 203 of Chapter 2 of the Federal Arbitration Act (FAA) and 28 U.S.C. § 1331, despite an incorrect initial assertion of diversity jurisdiction. The court also ruled that Federal procedural law, not California law, governed the service of Voltage's notice of motion to confirm the arbitral award. It held that Voltage had sufficiently served the notice by mailing the motion papers to Gussi SA's counsel. Lastly, the court held that the district court had not erred in refusing to extend comity to an alleged Mexican court order enjoining Voltage from seeking to confirm the award in the United States, as Gussi SA had not certified the genuineness of the purported Mexican court order or its translation.
Court Description: Arbitration / Service. The panel affirmed the district court’s judgment confirming an arbitral award in favor of Voltage Pictures, LLC (Voltage), and against Gussi S.A. de C.V. (Gussi SA), in a case arising from a dispute concerning the parties’ respective rights and obligations under their Distribution and License Agreement (DLA).
The panel held that the district court had jurisdiction to hear the motion to confirm the arbitral award but not for the reasons it articulated. The district court ruled that it had diversity jurisdiction, but the panel was not satisfied that it did where the record below did not indicate the citizenship of Voltage’s members. The panel nevertheless held that Section 203 of Chapter 2 of the Federal Arbitration Act (FAA) and 28 U.S.C. § 1331 gave the district court an independent basis for exercising jurisdiction.
The panel held that the district court erred in ruling that California law governed service of Voltage’s notice of motion to confirm the arbitral award. Federal procedural law generally governs service when a party files an action in federal district court unless the party-to-be-served waives this protection. The panel looked to the DLA, which was governed by California law, and held that the parties agreed to accept service of a confirmation motion pursuant to the law that applied to such motions in the prevailing party’s chosen confirmation forum. Because Voltage filed its confirmation motion in a federal court, the panel analyzed whether service of the motion on Gussi SA complied with federal law.
Applying federal law, the panel held that Voltage sufficiently served notice to confirm the arbitral award by mailing its motion papers to Gussi SA’s counsel. Gussi SA does not reside in the district where the award was made, and Voltage did not serve Gussi SA by a U.S. marshal. Gussi SA contended that service of Voltage’s notice of motion was insufficient pursuant to § 9 of the FAA, which requires service by a U.S. marshal. The panel held that later amendments to the Federal Rules of Civil Procedure did not implicitly repeal § 9’s marshal requirement, and thus it is still valid where it applies. However, § 9’s nonresident service provision does not apply to the service of notice of an application to confirm a foreign arbitral award governed by the New York convention if the adverse party is not available for service in any judicial district of the United States at the time of service. When § 9 does not apply, section 6 of the FAA and Fed. R. Civ. P. 5(b)—the federal procedural law governing how service of a motion is made— fill the gap. Therefore, Voltage properly effected service by mailing its motion papers to Gussi SA’s attorney pursuant to Rule 5(b). Service of notice was sufficient under federal law, and the district court was empowered to enter judgment against Gussi SA in confirming the award.
Finally, the panel held that the district court did not abuse its discretion when it declined to extend comity to a purported Mexican court order enjoining Voltage from seeking to confirm the award in the United States because Gussi SA did not certify the genuineness of the purported Mexican court order or the accompanying translation.