Eric Steinmann v. Zte Corp.

FILED
NOT FOR PUBLICATION
JUN 19 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ERIC STEINMANN, an individual; No. 16-55109
DOLORES FRANCO, an individual,
D.C. No.
Plaintiffs-Appellants, 5:11-cv-01578-BRO-SP
v.
MEMORANDUM*
ZTE CORPORATION, a company
incorporated under the laws of the Peoples
Republic of China; ZTE (USA), INC., a
New Jersey corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Beverly Reid O’Connell, District Judge, Presiding
Submitted June 8, 2017**
Pasadena, California
*
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. Fed. R. App. P. 34(a)(2).
Before: GRABER and MURGUIA, Circuit Judges, and BOLTON,*** District
Judge.
Plaintiffs Eric Steinmann and Dolores Franco had a commercial dispute with
ZTE Corporation and ZTE USA, Inc. (collectively, "ZTE"), and agreed to arbitrate
some of their claims. Those claims included some urged by Plaintiffs in their
individual capacities and some brought by entities that Plaintiff Steinmann
controlled. The arbitrator issued a summary adjudication dismissing the individual
claims. Thereafter, the parties arbitrated the entities’ claims, which were resolved
in ZTE’s favor; that award was confirmed. Later, Plaintiffs moved to reopen their
individual case to vacate the dismissal, and ZTE responded with a motion to
confirm that award. The district court granted ZTE’s motion to confirm the award
dismissing the individual claims, and denied Plaintiffs’ motion to vacate it.
Plaintiffs timely appeal from the resulting final judgment.
When reviewing the confirmation of an arbitration award, we decide
questions of law de novo and accept findings of fact that are not clearly erroneous.
Coutee v. Barington Capital Grp., L.P., 336 F.3d 1128, 1132 (9th Cir. 2003).
Plaintiffs argue that the award dismissing their individual claims is fatally infirm
***
The Honorable Susan R. Bolton, United States District Judge for the
District of Arizona, sitting by designation.
2
under 9 U.S.C. § 10(a)(4) because the decision was inadequately reasoned. We
affirm.
Under the American Arbitration Association’s International Centre for
Dispute Resolution ("ICDR") Arbitration Rules governing the arbitration, Plaintiffs
had an opportunity to ask the tribunal to interpret or correct the award. ICDR art.
30(1) (2009).1 Under then-Article 25 of those rules, if a party knows that the
arbitrator has not complied with any requirement of the rules, but proceeds with the
arbitration without promptly objecting in writing, the party "shall be deemed to
have waived the right to object." ICDR art. 25 (2009); see also ICDR art. 28
(2014). Plaintiffs knew of the alleged defect when the dismissal occurred, and they
knew that they could ask the arbitrator to correct the defect; the entities even
sought and received a correction to their own award at the end of the arbitration.
Plaintiffs nevertheless failed to request a clarification or correction to the award
dismissing their individual claims.
Wholly apart from the specific waiver rule contained in the governing terms
of this arbitration, it is well-settled that a plaintiff waives objections not brought
before the arbitrators contemporaneously. Wellman v. Writers Guild of Am., W.,
1
The ICDR rules have since been amended, but the rule persists. ICDR art.
33(1) (2014).
3
Inc., 146 F.3d 666, 669–70 (9th Cir. 1998); Marino v. Writers Guild of Am., E.,
Inc., 992 F.2d 1480, 1484 (9th Cir. 1993). Because Plaintiffs failed to request a
reasoned decision from the arbitrator, they waived the right to challenge the
decision in federal court.
AFFIRMED.
4