Umg Recording Inc v. American Home Assurance Compan

FILED
NOT FOR PUBLICATION MAY 13 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
UMG RECORDINGS, INC. and No. 08-56905
UNIVERSAL MUSIC GROUP, INC.,
D.C. No. CV-07-03257 GAF
Plaintiffs - Appellees, (AGRx)
v. MEMORANDUM *
AMERICAN HOME ASSURANCE
COMPANY,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Argued and Submitted March 4, 2010
Pasadena, California
Before: KOZINSKI, Chief Judge, W. FLETCHER, Circuit Judge, and
TUNHEIM, ** District Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable John R. Tunheim, United States District Judge for the
District of Minnesota, sitting by designation.
American Home Assurance Company (“American Home”) appeals the
district court’s denial of its motion to stay proceedings pending arbitration. The
district court concluded that the mandatory arbitration provision does not extend to
the claims by UMG Recordings, Inc. and Universal Music Group, Inc.
(collectively, “UMG”) against American Home. We have jurisdiction pursuant to
9 U.S.C. § 16(a)(1)(A), and we affirm.
First, the district court properly reached the issue of arbitrability. The
arbitration provisions in the payment agreements do not contain clear and
unmistakable evidence that the parties agreed to arbitrate arbitrability. See First
Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). For example, they state
that arbitrators have exclusive jurisdiction to resolve questions of arbitrability, but
they also state that actions concerning arbitrability must be brought in New York
courts.
Second, the underlying dispute does not arise out of the payment agreements
and therefore is not subject to the mandatory arbitration provisions. American
Home concedes that the arbitration provisions do not extend to disputes over the
policies, including the claims UMG raises in its complaint. UMG’s contention that
it might not be obligated to perform in full its duties under the policies if American
Home acted in bad faith does not transform those claims into disputes “arising out
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of” the payment agreements. See Mediterranean Enters., Inc. v. Ssangyong Corp.,
708 F.2d 1458, 1464 (9th Cir. 1983); cf. Alticor, Inc. v. Nat’l Union Fire Ins. Co.
of Pittsburgh, Pa., 411 F.3d 669, 670-72 (6th Cir. 2005).
For the foregoing reasons, we AFFIRM the district court’s denial of
American Home’s motion to stay proceedings pending arbitration.
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