Daisy Alvarez v. Sheraton Operating Corporation ( 2022 )

FILED
NOT FOR PUBLICATION
JAN 6 2022
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAISY ALVAREZ, No. 21-55562
Plaintiff-Appellee, D.C. No. 2:20-cv-03608-TJH-JC
v.
MEMORANDUM*
SHERATON OPERATING
CORPORATION, a Delaware corporation;
MARRIOTT INTERNATIONAL, INC.,
Defendants-Appellants,
Appeal from the United States District Court
for the Central District of California
Terry J. Hatter, Jr., District Judge, Presiding
Argued and Submitted December 8, 2021
Pasadena, California
Before: W. FLETCHER, RAWLINSON, and OWENS, Circuit Judges.
Defendants-appellants Sheraton Operating Corporation and Marriott
International, Inc., appeal from the district court’s order denying their motion to
compel arbitration. The district court applied California law in holding that
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
appellants waived their right to compel arbitration by its active litigation of the
case over thirteen months. On appeal, appellants contend that the district court
should have applied federal rather than California law, and that under federal law
they did not waive their right to compel. We have jurisdiction under 28 U.S.C.
§ 1291.
The district court erred in applying California law. “[W]here the waiver of
the right to compel arbitration implicates questions of arbitrability that ‘affect the
allocation of power’ between a court and arbitrator, we have applied a federal law
standard for determining whether an arbitration agreement has been waived.”
Newirth ex rel. Newirth v. Aegis Senior Cmtys., LLC, 931 F.3d 935, 940 (9th Cir.
2019) (quoting Sovak v. Chugai Pharm. Co., 280 F.3d 1266, 1270 (9th Cir. 2002)).
The district court relied on Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1124
(9th Cir. 2008), but we applied California law in that case because “the parties [in
Cox had] selected California law to govern the resolution of disputes arising out of
the[ir] employment agreement.” Id. at 1121. Here, by contrast, the parties agreed
that their arbitration agreement “shall be governed by the Federal Arbitration Act.”
Because federal law differs from California law and is more demanding of
the party resisting arbitration, compare Newirth, 931 F.3d at 940 (articulating the
federal standard), with Cox, 533 F.3d at 1124 (articulating the California standard),
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we reverse and remand to the district court to allow it to apply federal law. The
panel will retain jurisdiction over any appeal from the decision of the district court.
Appellants filed a motion to strike documents in the supplemental excerpts
of records on the ground that they were not filed with the district court (Dkt. 24).
We GRANT the motion to strike.
REVERSED AND REMANDED.
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