Todd Meyer v. Fifth Third Bank

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 20, 2021
• Docket: 19-56506
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 20 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

TODD MEYER, in his capacity as Sellers' No. 19-56506 Agent for former stockholders of Celtic Leasing Corporation, D.C. No. 8:19-cv-01803-DOC-DFM Plaintiff-Appellant,

v. MEMORANDUM*

FIFTH THIRD BANK; DOES, 1 through 50, inclusive,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California David O. Carter, District Judge, Presiding

Submitted January 15, 2021** Pasadena, California

Before: FRIEDLAND and BENNETT, Circuit Judges, and BLOCK,*** District Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). *** The Honorable Frederic Block, United States District Judge for the Eastern District of New York, sitting by designation. Plaintiff Todd Meyer appeals from district court orders (1) denying his

motion to remand this case to state court, and (2) granting Defendant Fifth Third

Bank’s (“Fifth Third”) motion to compel arbitration and to dismiss. Meyer is

acting in his capacity as the representative of former stockholders who sold their

shares in Celtic Leasing Corp. pursuant to a stock purchase agreement (“the

Agreement”). He filed essentially identical complaints in state court and before an

arbitration tribunal alleging a breach of the Agreement by Fifth Third and seeking

an order for specific performance of the contract. Fifth Third removed the case

from state court to the United States District Court for the Central District of

California, Southern Division, invoking the district court’s jurisdiction under 28

U.S.C. §§ 1332, 1441. Meyer then moved to remand because, he argues, the

Agreement’s forum-selection clause grants him an exclusive right to decide the

forum. Fifth Third moved to compel arbitration and to dismiss. The district court

denied Meyer’s motion and granted Fifth Third’s, holding that the Agreement did

allow Meyer to choose a venue in Orange County, but not to prevent removal to

federal court within Orange County, and that Meyer’s claims fall within the

Agreement’s arbitration clause.

We review the district court’s interpretation of the forum-selection clause

de novo. Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009). We also

review the district court’s order compelling arbitration and dismissing the case de

2 novo. Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 429 (9th Cir. 2015).1

1. The district court correctly determined that the Agreement does not

prohibit Fifth Third from removing this case to federal court. The forum-selection

clause requires that litigation by Meyer “shall be brought and determined in

Orange County, California.” “Because the clause uses the preposition ‘in,’ the

contract contemplates federal as well as state courts as proper courts for

adjudication.” Simonoff v. Expedia, Inc., 643 F.3d 1202, 1206 (9th Cir. 2011).

Nothing in the Agreement binds Fifth Third to Meyer’s choice between

federal and state court. The parties agreed to waive objections to personal

jurisdiction and improper venue, but the forum-selection clause does not waive

Fifth Third’s right to remove the case to federal court. Cf. City of Albany v. CH2M

Hill, Inc., 924 F.3d 1306, 1308 (9th Cir. 2019) (holding a forum-selection clause

waives the right to remove “when there is no federal courthouse located in the

designated county”). Although the arbitration agreement references Meyer’s “right

to . . . seek and obtain temporary or preliminary injunctive relief” in court, that

provision does not constrain the forum.

2. The Agreement unmistakably delegates to arbitration all disputes “arising

out of or relating to th[e] Agreement,” except those falling in a carve-out that

1 We have jurisdiction to review a district court’s order granting a motion to compel arbitration and dismissing the case as a final order. Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1414 (2019).

3 preserves Meyer’s ability to “seek and obtain temporary or preliminary injunctive

relief . . . in aid of arbitration” in court. Meyer contends his claims here fall within

the carve-out provision.

The district court correctly concluded that they do not. The Complaint seeks

“specific performance” and an injunction to enforce the Agreement because of

Fifth Third’s alleged breach of contract. Such claims are not “in aid of

arbitration,” as they are not aimed at preserving the status quo until the dispute

may be resolved by an arbitrator. See Toyo Tire Holdings of Ams. Inc. v. Cont’l

Tire N. Am., Inc., 609 F.3d 975, 980 (9th Cir. 2010) (holding that district courts

have the “authority to issue equitable relief in aid of arbitration” by preserving the

status quo). As the district court explained, Meyer’s Complaint does not seek to

preserve the status quo pending arbitration, but rather to remedy Fifth Third’s

alleged breach of contract. Only the arbitrator can grant that relief. The district

court therefore correctly held that it lacked the power to adjudicate Meyer’s claims,

and appropriately exercised its discretion to dismiss the case. Johnmohammadi v.

Bloomingdale’s, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014) (“[A] district court may

either stay the action or dismiss it outright when, as here, the court determines that

all of the claims raised in the action are subject to arbitration.”).

Finally, we note that compelling arbitration may not have been necessary

because Meyer had already initiated arbitration with essentially identical claims

4 when he filed his Complaint in state court, and Fifth Third had not resisted that

arbitration. Because nearly identical claims were already pending in arbitration,

dismissing the Complaint without also granting the motion to compel arbitration

might have afforded Fifth Third complete relief without referring duplicative

claims to the arbitrator. But Meyer has forfeited any argument that the district

court should have dismissed without compelling arbitration, Orr v. Plumb, 884

F.3d 923, 932 (9th Cir. 2018), and, in any event, it is unclear what harm could

come from compelling arbitration of claims that were effectively already

proceeding in arbitration with both parties’ consent. We therefore affirm the

district court’s orders in full.2

AFFIRMED.

2 Fifth Third’s unopposed motion to take judicial notice (Dkt. 24) is granted.