J & J Celcom v. AT & T Wireless Services, Inc.

508 F.3d 1177, 2007 WL 4125301

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 20, 2007
• Docket: 05-35567
• Status: Published

Opinion

TALLMAN, Circuit Judge:

On March 26, 2003, plaintiff J & J Cel-com along with other former owners of minority interests in nine general partnerships involving cellular telephone businesses filed a diversity suit in the United States District Court for the Western District of Washington alleging that the defendants, AT & T Wireless, Inc. (AWS) and nine of its wholly-owned subsidiaries, violated Washington State law when AWS sold its controlling interests in those partnerships to affiliated entities. The plaintiffs asserted claims of breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duties, misrepresentation, tortious interference, and unjust enrichment. The defendants moved for summary judgment, and the plaintiffs cross-moved for partial summary judgment as to liability. The district court granted summary judgment in the defendants’ favor, and denied the plaintiffs’ motion. This appeal followed.

In a December 26, 2006, memorandum disposition, we affirmed the district court’s rulings on all issues save for one. We certified a state law question, framed as follows, to the Washington Supreme Court in a separate order:

Does a controlling partner violate the duty of loyalty to the partnership or to dissenting minority partners where the controlling partner causes the partnership to sell all its assets to an affiliated party at a price determined by a third-party appraisal, when the appraisal and the parties to the transaction are disclosed and the partnership agreement allows for sale of assets upon majority or supermajority vote, but the partnership agreement is silent on the subject of sale to a related party?

J & J Celcom v. AT & T Wireless Services, Inc., 481 F.3d 1138, 1143 (9th Cir.2007).

At the time of the order, “[n]o Washington court ha[d] had occasion to harmonize state case law concerning the fiduciary duty of loyalty with the Revised Uniform Partnership Act.” Id. at 1142 (citing Wash. Rev.Code §§ 25.05.005-.907). We noted that “[wjhether a trial on the minority owners’ fiduciary duty of loyalty claim is necessary depends entirely upon the answer provided by the Supreme Court of Washington to our certified question.” J & J Celcom, 481 F.3d at 1142. On October 25, 2007, the Washington Supreme Court answered the certified question in the negative, finding that a controlling partner does not violate the duty of loyalty where the controlling partner causes the partnership to sell its assets to an affiliated party. J & J Celcom v. AT & T Wireless Servs., Inc. 169 P.3d 823 (2007). The partnership agreements at issue are dependent upon Washington law for the question before us. This answer, therefore, disposes of the last remaining issue between the parties in favor of the defendants.

AFFIRMED.