FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
INFUTURIA GLOBAL LTD.,
Plaintiff-Appellant,
No. 09-16378
v.
SEQUUS PHARMACEUTICALS, INC.; D.C. No.
4:08-cv-04871-SBA
THE HEBREW UNIVERSITY OF
OPINION
JERUSALEM; YECHEZKEL BARENHOLZ,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Saundra B. Armstrong, District Judge, Presiding
Argued August 31, 2010
Submitted January 31, 2011
Pocatello, Idaho
Filed February 7, 2011
Before: Jay S. Bybee, Timothy M. Tymkovich*, and
N. Randy Smith, Circuit Judges.
Opinion by Judge N.R. Smith
*The Honorable Timothy M. Tymkovich, United States Circuit Judge
for the Tenth Circuit, sitting by designation.
2291
2294 INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS
COUNSEL
Eric D. Pearson, Heygood, Orr & Pearson, Dallas, Texas, for
plaintiff-appellant Infuturia Global, Ltd.
Kathleen M. Sullivan, Quinn Emanuel Urquhart Oliver &
Hedges LLP, New York, New York, for defendant-appellee
Sequus Pharmaceuticals, Inc.
OPINION
N.R. SMITH, Circuit Judge:
In this appeal, we primarily address the novel question
whether, under 9 U.S.C. § 205, a district court has removal juris-
diction1 over a case where the defendant raises an affirmative
defense related to an arbitral award falling under the Conven-
tion on the Recognition and Enforcement of Foreign Arbitral
Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 as
implemented by 9 U.S.C. § 201 et seq. (“Convention”).2
1
By “removal jurisdiction” we refer only to whether the requirements
imposed by the particular removal statute have been fulfilled. As our dis-
cussion in Parts II and III illustrates, a federal court must have both
removal and subject matter jurisdiction to hear a case removed from state
court.
2
The Convention was adopted on June 10, 1958, by a special conference
of the United Nations Economic and Social Council. In 1970, the United
INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS 2295
Because an arbitration agreement or award falling under the
Convention “relates to” the subject matter of an action when-
ever it could conceivably affect the outcome of the plaintiff’s
suit, a district court does have removal jurisdiction over such
a case.
I. Factual and Procedural Background
This case arises from a dispute over medical licensing
rights between Appellant Infuturia Global Ltd. (“Infuturia”),
a citizen of the British Virgin Islands; Yissum Research and
Development Co. (“Yissum”), a citizen of Israel; and Appel-
lee Sequus Pharmaceuticals, Inc. (“Sequus”), a citizen of Cal-
ifornia. In the 1980s, Professor Yechezkel Barenholz
(“Barenholz”) of The Hebrew University of Jerusalem (the
“University”) and Yissum developed technologies in Israel
using liposomes as a vehicle for delivering pharmaceuticals to
the human body. In March of 1990, Infuturia entered into a
license agreement (“Infuturia License”) with Yissum
exchanging royalties for an exclusive worldwide right to
develop, market, and use certain Yissum patents. The agree-
ment included an arbitration provision requiring arbitration of
any dispute “connected in any way to the implementation of
[the] Agreement.” In January of 1995, Sequus entered into a
licensing agreement (“Sequus License”) with Yissum for
rights to certain liposome technology owned by Yissum.
Barenholz and Yissum had previously worked with Sequus on
liposome research.
States acceded to the treaty, 21 U.S.T. 2517, T.I.A.S. No. 6997, and Con-
gress implemented the Convention by passing Chapter 2 of the United
States Arbitration Act, 9 U.S.C. § 201 et seq. “The goal of the Convention,
and the principal purpose underlying American adoption and implementa-
tion of it, was to encourage the recognition and enforcement of commer-
cial arbitration agreements in international contracts and to unify the
standards by which agreements to arbitrate are observed and arbitral
awards are enforced in the signatory countries.” Scherk v. Alberto-Culver
Co., 417 U.S. 506, 520 n.15 (1974).
2296 INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS
On October 26, 1998, Infuturia sued Sequus, the Univer-
sity, and Barenholz in California state court alleging tortious
interference with the Infuturia License. Yissum was not
named as a defendant. Infuturia alleged that the defendants
had interfered with the Infuturia License by encouraging Yis-
sum to divulge and license technology that was already
licensed to Infuturia. Though not a party to the California pro-
ceedings, Yissum petitioned for a stay pending arbitration
pursuant to the arbitration provision in the Infuturia License.
The California state court granted the stay on July 15, 1999.
In an Israeli arbitration, Infuturia alleged claims similar to
those asserted in the California state court proceedings,
namely that Yissum breached the Infuturia License by devel-
oping, patenting, and selling technology related to or based on
technology already licensed to Infuturia.3 After completing
the arbitration, the arbitrator determined, among other things,
that (1) Infuturia’s license was valid, (2) Yissum had not
breached the Infuturia License, and (3) Infuturia did not have
rights to any patents and products relating to the Sequus
License.
Given the arbitration decision, the state court lifted the stay
in the California case. Infuturia then filed a First Amended
Complaint in state court which was similar to the original
state court complaint, but did not reference certain Sequus
products the arbitrator determined were not related to the
Infuturia License. The University and Barenholz subsequently
filed a Notice of Removal (in which Sequus joined), pursuant
to 9 U.S.C. § 205. Infuturia filed a motion to remand, arguing
only that removal was improper under 9 U.S.C. § 205,
because the defendants were not parties to the foreign arbitra-
tion agreement between Infuturia and Yissum. In February
2009, the court denied the motion to remand. The district
3
A California state court ordered arbitration of Infuturia’s claims against
Yissum on July 15, 1999. The dispute was submitted to arbitration in
Israel, and, following discovery and testimony, the Israeli arbitrator ren-
dered his opinion on May 21, 2006.
INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS 2297
court found that removal was proper because the litigation
“relates to” the arbitration provision and the arbitration provi-
sion falls under the Convention. The court also found that
Infuturia’s pleadings were vague and ordered Infuturia to file
a second amended complaint identifying the particular Sequus
products, compounds, or inventions that allegedly infringe
upon Infuturia’s license with Yissum.
Infuturia filed its Second Amended Complaint on March
16, 2009. It asserted tortious interference and conversion
claims and only named Sequus as a defendant. In its Answer
to the Second Amended Complaint, Sequus raised the affir-
mative defense of collateral estoppel, arguing that these issues
had already been resolved against Infuturia in the Israeli arbi-
tration. When it filed its Answer, Sequus also moved to dis-
miss under Rule 12(b)(6) for failure to state a claim and Rule
12(b)(7) for failure to join a necessary party. The district court
granted both motions on June 1, 2009. Infuturia appeals the
district court’s grant of both motions, asserts that removal was
improper under 9 U.S.C. § 205, and argues that the district
court lacked federal subject-matter jurisdiction.4
II. Subject Matter Jurisdiction
Infuturia first contends the district court lacked subject mat-
ter jurisdiction over this case. The district court identified 9
U.S.C. § 203 as the basis for jurisdiction in its order granting
Sequus’s motions to dismiss. Sequus agrees with the district
court, but argues for jurisdiction under both §§ 203 and 205,
as well as diversity jurisdiction under 28 U.S.C. § 1332(a)(2).
Because we conclude the district court had diversity jurisdic-
tion, we do not reach the other contended bases for subject
matter jurisdiction under §§ 203 and 205.
4
We address the district court’s dismissal order under Rules 12(b)(6)
and 12(b)(7) separately in an unpublished Memorandum Disposition pur-
suant to Ninth Circuit Rule 36-2.
2298 INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS
[1] Infuturia argues that diversity jurisdiction does not lie
under 28 U.S.C. § 1332(a)(2) because (1) jurisdiction is deter-
mined at the time of removal, and the parties were not diverse
when this case was removed to federal court; and (2) Sequus,
as a forum defendant, could not have originally removed the
case to federal court even if it had been the only defendant
sued. We disagree with Infuturia’s arguments, because they
raise statutory rather than jurisdictional objections. Both the
forum defendant rule and the requirement for diversity at the
time of removal are statutory requirements imposed by the
general removal statute, 28 U.S.C. § 1441, not jurisdictional
requirements. See Grupo Dataflux v. Atlas Global Group,
L.P., 541 U.S. 567, 574 (2004) (holding the requirement that
there be diversity at the time of removal is a statutory, non-
jurisdictional requirement imposed by 28 U.S.C. § 1441(a));
Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 939 (9th Cir.
2006) (holding that the forum defendant rule is a statutory,
non-jurisdictional requirement imposed by 28 U.S.C.
§ 1441(b)). Because removal in this case was effectuated
under 9 U.S.C. § 205, the traditional diversity removal provi-
sions of 28 U.S.C. § 1441 do not apply.
[2] Although the court lacked diversity jurisdiction at the
time of removal because there were foreign citizens on both
sides of the case, see Nike, Inc. v. Comercial Iberica de
Exclusivas Deportivas, 20 F.3d 987, 990 (9th Cir. 1994), this
jurisdictional defect was cured by Infuturia’s dismissal in its
Second Amended Complaint of the foreign defendants that
originally destroyed diversity, see Grupo Dataflux, 541 U.S.
at 572 (stating that a jurisdictional defect can be cured by the
dismissal of the party that had destroyed diversity). Only two
parties remained under the Second Amended Complaint: Infu-
turia (a citizen of the British Virgin Islands) and Sequus (a
citizen of California). Thus, the district court had diversity
jurisdiction under 28 U.S.C. § 1332(a)(2) (which states that
“district courts shall have original jurisdiction of all civil
actions . . . between citizens of a State and citizens or subjects
of a foreign state”).
INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS 2299
III. Removal Jurisdiction
We review de novo a district court’s denial of a motion to
remand for lack of removal jurisdiction. Hamilton Materials,
Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir.
2007). We also review de novo questions of statutory interpre-
tation. Beeman v. TDI Managed Care Servs., Inc., 449 F.3d
1035, 1038 (9th Cir. 2006).
[3] Title 9 U.S.C. § 205 provides that federal courts have
removal jurisdiction
[w]here the subject matter of an action or proceeding
pending in a State court relates to an arbitration
agreement or award falling under the Convention
. . . . The procedure for removal of causes otherwise
provided by law shall apply, except that the ground
for removal provided in this section need not appear
on the face of the complaint but may be shown in the
petition for removal.
(emphasis added). When interpreting the meaning of this stat-
ute, we “look first to its plain language.” United States v.
Juvenile Male, 595 F.3d 885, 898 (9th Cir. 2010) (citation and
alteration omitted). The critical language here is the phrase
“relates to.” The Fifth Circuit, which is the first and only cir-
cuit court to address the meaning of “relates to” in § 205, con-
strued this language to mean that “whenever an arbitration
agreement falling under the Convention could conceivably
affect the outcome of the plaintiff’s case, the agreement
‘relates to’ the plaintiff’s suit.” Beiser v. Weyler, 284 F.3d
665, 669 (5th Cir. 2002). We agree with this interpretation.
The phrase “relates to” is plainly broad, and has been inter-
preted to convey sweeping removal jurisdiction in analogous
statutes. See Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 96-97
(1983) (holding that under § 514(a) of the Employee Retire-
ment Income Security Act, “[a] law ‘relates to’ an employee
benefit plan, in the normal sense of the phrase, if it has a con-
2300 INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS
nection with or reference to such a plan”); McGuire v. United
States, 550 F.3d 903, 911-12 (9th Cir. 2008) (holding that
under the bankruptcy jurisdiction statute, 28 U.S.C.
§ 1334(b), “[a] civil proceeding is ‘related to’ a [bankruptcy]
case if the outcome of the proceeding could conceivably have
any effect on the estate being administered in bankruptcy”
(emphasis added) (citation and internal quotation marks omit-
ted)).
[4] Nothing in § 205 urges a narrower construction.5
Indeed, the statute invites removal of cases whose relation to
an agreement or award under the Convention is based on an
affirmative defense by expressly abrogating the “well-pleaded
complaint” rule. See 9 U.S.C. § 205 (“[T]he ground for
removal provided in this section need not appear on the face
of the complaint but may be shown in the petition for remov-
al.”); Beiser, 284 F.3d at 669 (“[Federal courts] will have
jurisdiction under § 205 over just about any suit in which a
defendant contends that an arbitration clause falling under the
Convention provides a defense. As long as the defendant’s
assertion is not completely absurd or impossible, it is at least
conceivable that the arbitration clause will impact the disposi-
tion of the case. That is all that is required to meet the low bar
of ‘relates to’.”).
[5] Infuturia argues for a narrower interpretation of the
statute by citing AtGames Holdings Ltd. v. Radica Games,
Ltd., 394 F. Supp. 2d 1252 (C.D. Cal. 2005). In AtGames, the
district court held that “a state court action is [only] remov-
able if (1) the parties to the action have entered into an arbi-
tration agreement, and (2) the action relates to that
agreement.” Id. at 1255. AtGames narrows the class of actions
5
Although we generally construe removal statutes strictly, see Boggs v.
Lewis, 863 F.2d 662, 663 (9th Cir. 1988), the plain language of § 205 pro-
vides federal courts with remarkably broad removal authority, see Beiser,
284 F.3d at 674 (“[E]asy removal is exactly what Congress intended in
§ 205.”).
INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS 2301
removable under § 205 by adding privity of contract to the
prerequisites for removal jurisdiction. This holding finds no
support in the language of the statute. While AtGames would
hinge jurisdiction on the relatedness of the parties, § 205
focuses only on the relatedness of the “subject matter of [the]
action . . . to an arbitration agreement.” Further, although
AtGames claims to be consistent with Beiser, nothing in
Beiser suggests that only parties privy to an arbitration agree-
ment or award falling under the Convention may seek
removal under § 205. Rather, Beiser confers removal jurisdic-
tion “whenever an arbitration agreement . . . could conceiv-
ably affect the outcome of the plaintiff’s case . . . .” 284 F.3d
at 669. In a case such as this, where the defendant relies on
the affirmative defense of collateral estoppel regarding issues
already resolved against the plaintiff in arbitration, the arbitral
award “could conceivably affect the outcome” of the case. Id.
[6] We find AtGames unpersuasive and decline to add any
prerequisites to removal jurisdiction not expressed in the lan-
guage of the statute. Because Sequus raised an affirmative
defense “relat[ing] to” the Infuturia-Yissum arbitral award
(which neither party disputes “falls under” the Convention),
the district court had removal jurisdiction under 9 U.S.C.
§ 205.
IV. Timeliness of Removal
[7] Infuturia lastly contends that removal was untimely.
Title 9 U.S.C. § 205 provides that “defendants may, at any
time before the trial thereof remove [an action falling under
the Convention] to [federal] district court.” Infuturia argues
that “trial” should be construed to mean “any adjudication on
the merits” and that the Infuturia-Yissum arbitration consti-
tuted such an adjudication. We disagree.
[8] The language of § 205 refers to the action being
removed and “the trial thereof.” The meaning of this section
is clear: a defendant may remove a qualifying state court
2302 INFUTURIA GLOBAL v. SEQUUS PHARMACEUTICALS
action to federal court at any time before the claims raised in
the state court action have been adjudicated. See LaFarge
Coppee v. Venezolana De Cementos, S.A.C.A., C.A., 31 F.3d
70, 72 (2d Cir. 1994) (holding that removal was not accom-
plished “before the trial” because the state court had already
adjudicated “the entirety of the claim that the plaintiffs ten-
dered for decision”); Pan Atl. Grp., Inc. v. Republic Ins. Co.,
878 F. Supp. 630, 638-39 (S.D.N.Y. 1995). Here, the “action
removed” was Infuturia’s amended complaint in California
state court asserting state law claims against Sequus for tor-
tious interference and conversion. Even if the term “trial” is
broad enough to include arbitration, the “trial thereof” can
only refer to an adjudication of the claims asserted against
Sequus in California state court. Since Infuturia’s claims
against Sequus had not yet been adjudicated by the California
state court, the action was timely removed under § 205.
AFFIRMED.