Sergio Gonzalez v. Coverall North America, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 17, 2024
• Docket: 22-56189
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 17 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

SERGIO GONZALEZ, on behalf of himself No. 22-56189 and all others similarly situated, D.C. No. Plaintiff-Appellant, 5:16-cv-02287-JGB-KK

v. MEMORANDUM* COVERALL NORTH AMERICA, INC.,

Defendant-Appellee.

Appeal from the United States District Court for the Central District of California Jesus G. Bernal, District Judge, Presiding

Argued and Submitted February 22, 2024 San Francisco, California

Before: BYBEE, D.M. FISHER,** and LEE, Circuit Judges.

Sergio Gonzalez entered into a franchise agreement with Coverall North

America, Inc. to operate a cleaning business. He sued Coverall in 2016, claiming

he was misclassified as a contractor when he was in fact an employee. Coverall

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable D. Michael Fisher, United States Circuit Judge for the U.S. Court of Appeals for the Third Circuit, sitting by designation. filed a motion to compel arbitration under the parties’ agreement. The District

Court granted the motion in 2017. Since then, a veritable litigation odyssey has

ensued, and this is the parties’ third appeal to our Court. We assume familiarity

with this labyrinthine record. Gonzalez now argues the District Court abused its

discretion in denying his motion to reopen his lawsuit under Federal Rule of Civil

Procedure 60(b). We dismiss for lack of jurisdiction.

I. Background

In April 2017, the District Court sent the question of arbitrability to the

arbitrator and then granted Gonzalez’s motion to dismiss without prejudice.

Gonzalez appealed. Gonzalez v. Coverall N. Am., Inc., 754 F. App’x 594, 595 (9th

Cir. 2019) (Gonzalez I).

While “it is ‘well established that § 16(b) [of the Federal Arbitration Act

(FAA)] bars appeals of interlocutory orders compelling arbitration and staying

judicial proceedings,’” Langere v. Verizon Wireless Servs., LLC, 983 F.3d 1115,

1118 (9th Cir. 2020) (citation omitted), we have held that plaintiffs could

immediately appeal an order compelling arbitration “if they voluntarily dismissed

their claims with prejudice under Rule 41(a)(2),” id. (citing Omstead v. Dell, Inc.,

594 F.3d 1081, 1085 (9th Cir. 2010)). That did not happen here; Gonzalez’s claims

were dismissed without prejudice. Gonzalez I, 754 F. App’x at 595.

Nor could Gonzalez rely on the other strategy we have endorsed: where the

2 district court orders all of a party’s claims to arbitration and dismisses all of the

claims without prejudice. Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072,

1074 (9th Cir. 2014). That did not happen here, either; the District Court did not

order all of Gonzalez’s claims to arbitration. Rather, it ordered only the question of

arbitrability to arbitration before dismissing the case at Gonzalez’s request.

Gonzalez I, 754 F. App’x at 595. Because neither exception applied, we held the

District Court’s dismissal was not final and dismissed for lack of jurisdiction. Id. at

596.

On remand, Gonzalez filed a motion under Rule 60(b)(6), which provides

for relief “from a final judgment, order, or proceeding” for several specified

reasons or “any other reason that justifies relief.” Fed. R. Civ. P. 60(b). That

motion was denied. The finality of an order denying a Rule 60(b) motion “derives

from the finality of the underlying judgment upon which such relief is sought.” In

re Mason, 709 F.2d 1313, 1315 (9th Cir. 1983). The underlying judgment was the

District Court’s ruling that arbitrability would be decided by the arbitrator—which

is not a final judgment. Therefore, when Gonzalez appealed a second time,

Gonzalez v. Coverall N. Am., Inc., 826 F. App’x 645, 646 (9th Cir. 2020)

(Gonzalez II), he was attempting to obtain review of an interlocutory order.

II. Discussion

That non-final judgment of the District Court is once more before us. Just as

3 before, we lack appellate jurisdiction. This fact is unchanged by two aspects of the

procedural history that, initially, might seem to muddy the waters. First,

Gonzalez’s Rule 60(b)(6) motion seeking to reopen the April 2017 order was

improper. “Rule 60(b) . . . applies only to motions attacking final, appealable

orders . . . .” United States v. Martin, 226 F.3d 1042, 1048 n.8 (9th Cir. 2000). But

in the first appeal—which had concluded just before Gonzalez filed his Rule

60(b)(6) motion—we held the District Court’s April 2017 order was not final and

appealable. The District Court should not have adjudicated the motion, at least not

under Rule 60(b)(6).

Second, appellate jurisdiction is not created by the Gonzalez II majority’s

decision to reach the merits and remand for the District Court to “consider whether

and how the Henson factors might apply to this case.” 826 F. App’x at 646.

Because we now determine that jurisdiction is lacking, dismissal is the only option:

“[t]he limits upon federal jurisdiction . . . must be neither disregarded nor evaded.”

Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374 (1978).1 The case is still

1 The law of the case doctrine does not require us to follow the majority’s sub silentio exercise of jurisdiction in Gonzalez II. That doctrine instructs that “one panel of an appellate court will not as a general rule reconsider questions which another panel has decided on a prior appeal in the same case.” Merritt v. Mackey, 932 F.2d 1317, 1320 (9th Cir. 1991) (citation omitted). However, “[t]he doctrine does not apply to issues not addressed by the appellate court.” U.S. ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1186 (9th Cir. 2001). The Gonzalez II majority opinion did not discuss jurisdiction and therefore does not bind us with respect to jurisdiction.

4 in essentially the same place it was in Gonzalez I and Gonzalez II. There is no

final, appealable order—just another ruling on the same improper Rule 60(b)(6)

motion to reopen a non-final order.

Gonzalez argues the District Court’s April 2017 order was appealable under

the collateral order doctrine. Orders compelling arbitration, however, are

categorically not collateral. Johnson v. Consumerinfo.com, Inc., 745 F.3d 1019,

1023 (9th Cir. 2014). Gonzalez also contends the law changed during the pendency

of his appeal with the issuance of Microsoft Corp. v. Baker, 582 U.S. 23 (2017).

He says we applied Microsoft to retroactively invalidate his formerly-sound course

of action. But even under the former state of the law, the April 2017 order was not

final and appealable. The District Court neither dismissed the claims with

prejudice nor sent all the claims to arbitration. See Johnmohammadi, 755 F.3d at

1074; Omstead, 594 F.3d at 1085. Therefore, any changes wrought by Microsoft

are immaterial here.

“Jurisdiction is power to declare the law, and when it ceases to exist, the

only function remaining to the court is that of announcing the fact and dismissing

the cause.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998) (quoting

Ex parte McCardle, 7 U.S. (7 Wall.) 506, 514 (1868)).

DISMISSED.