James Johnson v. consumerinfo.com, Inc. ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES JOHNSON, individually and on No. 11-56520
behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellant, 2:11-cv-02753-
JVS-FMO
v.
CONSUMERINFO.COM, INC.,
Defendant-Appellee.
STEVEN GROSZ, individually and on No. 11-57182
behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellant, 8:11-cv-00550-
JVS-FMO
v.
CONSUMERINFO.COM, INC.,
Defendant-Appellee.
DEON BIRD, individually and on No. 11-57183
behalf of all others similarly
situated; BARBARA PRICE, D.C. No.
individually and on behalf of all 8:11-cv-00618-
others similarly situated, JVS-FMO
Plaintiffs-Appellants,
2 JOHNSON V. CONSUMERINFO.COM
v.
CONSUMERINFO.COM, INC.,
Defendant-Appellee.
DAVID WARING, individually and on No. 11-57184
behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellant, 8:11-cv-00639-
JVS-FMO
v.
CONSUMERINFO.COM, INC., OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted
February 3, 2014—Pasadena, California
Filed March 20, 2014
Before: Andrew J. Kleinfeld, Barry G. Silverman,
and Andrew D. Hurwitz, Circuit Judges.
Opinion by Judge Hurwitz
JOHNSON V. CONSUMERINFO.COM 3
SUMMARY*
Arbitration / Appealable Order
The panel dismissed the appeals of putative class action
named plaintiffs, denied their petition for a writ of
mandamus, and held that 9 U.S.C. § 16 barred the appeals
from district court orders staying judicial proceedings and
compelling arbitration of the named plaintiffs’ individual
claims.
The named plaintiffs each filed putative class actions,
alleging that Consumerinfo.com, Inc. had violated various
California consumer protection laws. The district court
stayed the actions, compelled individual arbitration of each
plaintiff’s claims, and denied the motion for 28 U.S.C.
§ 1292(b) certification.
The panel held that § 1292(b) provides the sole route for
immediate appeal of an order staying proceedings and
compelling arbitration. The panel further held that § 16(b)
barred immediate appeal of the district court orders staying
judicial proceedings and compelling arbitration, regardless of
whether the orders could be deemed collateral. The panel
also held that although § 16(b) did not preclude mandamus
relief, the named plaintiffs did not merit the extraordinary
remedy of mandamus.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 JOHNSON V. CONSUMERINFO.COM
COUNSEL
Vincent J. Esades, David Woodward (argued), and Renae D.
Steiner, Heins Mills & Olson, P.L.C., Minneapolis,
Minnesota; Gretchen M. Nelson and Gabriel Barenfeld,
Kreindler & Kreindler, LLP, Los Angeles, California, for
Plaintiffs-Appellants.
Meir Feder (argued), Jones Day, New York, New York;
Richard J. Grabowski, Marc K. Callahan, Kevin H. Logan,
and Cyrus A. Ameri, Jones Day, Irvine, California, for
Defendant-Appellee.
OPINION
HURWITZ, Circuit Judge:
The issue for decision in these four putative class actions
is whether we have jurisdiction to hear appeals from district
court orders staying judicial proceedings and compelling
arbitration of the named plaintiffs’ individual claims. We
hold that 9 U.S.C. § 16 bars such appeals.
I
In Internet transactions, James Johnson, Steven Grosz,
David Waring, Deon Bird, and Barbara Prince (collectively
“plaintiffs”) each purchased a “Triple Advantage” credit
report monitoring program from Consumerinfo.com, Inc.
(“Consumerinfo”). The Terms and Conditions of the
purchases included a clause requiring arbitration of all claims
and disputes.
JOHNSON V. CONSUMERINFO.COM 5
In 2011, plaintiffs each filed a putative class action in the
Central District of California, alleging that Consumerinfo had
violated various California consumer protection laws.
Consumerinfo filed motions to compel arbitration in each
case. The district court concluded that plaintiffs had assented
to the arbitration agreements, that Consumerinfo had not
committed fraud in the execution, that any fraud in the
inducement defense must be resolved by an arbitrator, that
federal law foreclosed an effective vindication of statutory
rights defense, and that the arbitration agreements were not
unconscionable. The district court then stayed the actions,
compelled individual arbitration of each plaintiff’s claims,
and denied Johnson’s motion for 28 U.S.C. § 1292(b)
certification. Each plaintiff timely appealed, and we
consolidated the cases for argument.
II
A
The Judicial Improvements and Access to Justice Act,
Pub. L. 100-702, § 1019, 102 Stat. 4642, 4671 (1988)
(codified at 9 U.S.C. § 16), provides:
(a) An appeal may be taken from—
(1) an order—
(A) refusing a stay of any action under
section 3 of this title,
(B) denying a petition under section 4 of
this title to order arbitration to proceed,
6 JOHNSON V. CONSUMERINFO.COM
(C) denying an application under section
206 of this title to compel arbitration,
(D) confirming or denying confirmation
of an award or partial award, or
(E) modifying, correcting, or vacating an
award;
(2) an interlocutory order granting,
continuing, or modifying an injunction against
an arbitration that is subject to this title; or
(3) a final decision with respect to an
arbitration that is subject to this title.
(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 any 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.
It is well established that § 16(b) bars appeals of
interlocutory orders compelling arbitration and staying
JOHNSON V. CONSUMERINFO.COM 7
judicial proceedings. See, e.g., Green Tree Fin. Corp.-Ala. v.
Randolph, 531 U.S. 79, 86–88 & n.2 (2000) (contrasting a
dismissal with prejudice, appealable under § 16(a)(3), with a
stay, which “would not be appealable”); MediVas, LLC v.
Marubeni Corp., 741 F.3d 4, 7 (9th Cir. 2014) (“Thus, an
order compelling arbitration may be appealed if the district
court dismisses all the underlying claims, but may not be
appealed if the court stays the action pending arbitration.”).
This court has not yet addressed, however, whether an
immediate appeal may be taken from a district court order
staying judicial proceedings and compelling arbitration if that
decision can be deemed “final” under the collateral order
doctrine. The plaintiffs correctly note that § 16(b) only
denies jurisdiction over an appeal of an “interlocutory order,”
and that § 16(a)(3) and 28 U.S.C. § 1291 provide appellate
jurisdiction for “final” decisions. Plaintiffs therefore contend
that if an order compelling arbitration qualifies as a collateral
order, it is final—not interlocutory—and § 16(b) does not bar
immediate appeal. See Digital Equip. Corp. v. Desktop
Direct, Inc., 511 U.S. 863, 867 (1994). (“The collateral order
doctrine is best understood not as an exception to the ‘final
decision’ rule laid down by Congress in § 1291, but as a
‘practical construction’ of it.”) (quoting Cohen v. Beneficial
Indus. Loan Corp., 337 U.S. 541, 546 (1949)).
B
We are not persuaded by plaintiffs’ creative argument. In
interpreting the Judicial Improvements and Access to Justice
Act, as any statute, “we look not only to the particular
statutory language, but to the design of the statute as a whole
and to its object and policy.” Crandon v. United States,
494 U.S. 152, 158 (1990). Subsection 16(a)(1) provides that
8 JOHNSON V. CONSUMERINFO.COM
“[a]n appeal may be taken from an order” limiting arbitration.
Subsection 16(b), in contrast, states that an “an appeal may
not be taken from an interlocutory order” requiring
arbitration. A natural reading of these provisions suggests
that Congress included the word “interlocutory” in § 16(b) to
define the orders requiring arbitration listed in § 16(b)(1)–(4)
as nonappealable. See Dependable Highway Express, Inc. v.
Navigators Ins. Co., 498 F.3d 1059, 1063 (9th Cir. 2007)
(“Generally, interlocutory orders are not immediately
appealable.”). The structure of the statute thus suggests that
Congress intended to remove appellate jurisdiction from all
orders listed in § 16(b)(1)–(4), regardless of whether any such
order could otherwise be deemed collateral.
The history of § 16 also demonstrates that Congress
intended 28 U.S.C. § 1292(b) to provide the sole avenue to
immediate appeal of an order staying judicial proceedings and
compelling arbitration. Before Congress enacted § 16, an
order now described in § 16(b)(1)–(4) was immediately
appealable only if collateral or certified pursuant to
§ 1292(b).1 See Napleton v. Gen. Motors Corp., 138 F.3d
1209, 1217 (7th Cir. 1998) (Wood, J., dissenting), majority
opinion overruled by Green Tree, 531 U.S. at 87–89 & n.3.
Because § 16(b) preserves appellate jurisdiction over orders
certified under § 1292(b), plaintiffs’ argument is that § 16 left
both previous routes to immediate appeal unscathed. This
interpretation, however, would render § 16(b) superfluous.
“When Congress acts to amend a statute, we presume it
intends its amendment to have real and substantial effect.”
Stone v. INS, 514 U.S. 386, 397 (1995).
1
Before the enactment of § 16, an order granting or denying a stay was
not appealable under 28 U.S.C. 1292(a)(1). Gulfstream Aerospace Corp.
v. Mayacamas Corp., 485 U.S. 271, 288 (1988).
JOHNSON V. CONSUMERINFO.COM 9
Because the plain meaning of § 16 is clear, we may look
to legislative history only to determine whether it is clear that
“Congress meant something other than what it said.” Carson
Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 877 (9th
Cir. 2001) (en banc) (quoting Perlman v. Catapult Entm’t,
Inc. (In re Catapult Entm’t, Inc.), 165 F.3d 747, 753 (9th
Cir.1999)) (internal quotation marks omitted). The limited
legislative history confirms that Congress meant what it said
in § 16. The Senate Judiciary Committee, whose section-by-
section analysis was incorporated into the Congressional
Record, explained that an order compelling arbitration would
be appealable only when “there is nothing left to be done in
the district court.” 134 Cong. Rec. S16,309 (daily ed. Oct.
14, 1988); see also id. (“This section permits arbitration to
proceed without appeal if the district court orders that
arbitration precede litigation, and by permitting immediate
appeal if the district court orders that litigation precede
arbitration.”). The House Report also made clear that
Congress intended to prohibit immediate appeals from the
orders listed in § 16(b)(1)–(4). See H.R. Rep. No. 100-889,
at 37 (1988) (“[I]nterlocutory appeals are specifically
prohibited in new section 15 when the trial court finds that
the parties have agreed to arbitrate and that the dispute comes
within the arbitration agreement.”).
Our sister circuits have unanimously concluded that
§ 1292(b) provides the sole route for immediate appeal of an
order staying proceedings and compelling arbitration. Moglia
v. Pac. Emp’rs Ins. Co., 547 F.3d 835, 837 (7th Cir. 2008)
(“Other possible sources of appellate jurisdiction, including
28 U.S.C. § 158(d) (final decisions in bankruptcy), § 1291
(final decisions in civil suits), and § 1292(a) (injunctions), are
superseded for orders to arbitrate.”); ConArt, Inc. v.
Hellmuth, Obata + Kassabaum, Inc., 504 F.3d 1208, 1211
10 JOHNSON V. CONSUMERINFO.COM
(11th Cir. 2007) (“Applying the Cohen collateral order
doctrine to permit an appeal that § 16(b) specifically prohibits
. . . would amount to using a judge-made doctrine to erase an
unequivocal congressional command.”); ATAC Corp. v.
Arthur Treacher’s, Inc., 280 F.3d 1091, 1102 (6th Cir. 2002)
(“Congress legislated with specificity in the arbitration
context, and its statute supersedes the collateral order
doctrine.”); Filanto, S.P.A. v. Chilewich Int’l Corp., 984 F.2d
58, 60 n.2 (2d Cir. 1993) (“In the absence of certification,
however, the barrier to appeal cannot be circumvented by the
collateral order doctrine, whether the order compels
arbitration or refuses to stay an action pending arbitration.”)
(citations omitted). Today we hold the same.
III
In the alternative, plaintiffs seek the extraordinary remedy
of mandamus.2 Although § 16(b) does not preclude
mandamus relief, Douglas v. U.S. Dist. Court, 495 F.3d 1062,
1065–66 (9th Cir. 2007) (per curiam),3 we deny the petition.
“Mandamus is a drastic remedy and is to be used only in
extraordinary circumstances; in large measure the issuance of
the writ is a matter of the court’s discretion.” United States
v. Sherman, 581 F.2d 1358, 1361 (9th Cir. 1978). Although
we consider five factors to determine whether the writ should
2
Although plaintiffs did not file a petition for a writ of mandamus, they
briefed the issue, and “a notice of appeal from an otherwise nonappealable
order can be considered as a mandamus petition . . . .” Cordoza v. Pac.
States Steel Corp., 320 F.3d 989, 998 (9th Cir. 2003).
3
Nor does § 16(b) restrict pendant appellate jurisdiction, Quackenbush
v. Allstate Ins. Co., 121 F.3d 1372, 1379 (9th Cir. 1997), a situation not
presented here.
JOHNSON V. CONSUMERINFO.COM 11
issue, the absence of clear error as a matter of law is
dispositive. Andrich v. U.S. Dist. Court, 668 F.3d 1050, 1051
(9th Cir. 2011) (per curiam). Plaintiffs cannot surmount that
hurdle here, as the district court’s well-reasoned decision was
plainly not a “‘usurpation of judicial power’ or a clear abuse
of discretion.” Schlagenhauf v. Holder, 379 U.S. 104, 110
(1964) (quoting Bankers Life & Cas. Co. v. Holland, 346 U.S.
379, 383 (1953)).
Plaintiffs’ appeal is DISMISSED and their petition for a
writ of mandamus DENIED.