FILED
NOT FOR PUBLICATION NOV 13 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
WYNN RESORTS, LIMITED, a Nevada No. 11-15841
corporation,
D.C. No. 2:10-cv-00722-KJD-LRL
Plaintiff - Appellee,
v. MEMORANDUM*
ATLANTIC-PACIFIC CAPITAL, INC., a
Connecticut corporation,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Nevada
Kent J. Dawson, District Judge, Presiding
Argued and Submitted October 15, 2012
San Francisco, California
Before: B. FLETCHER,** HAWKINS, and MURGUIA, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Betty Binns Fletcher, Senior Circuit Judge for the Ninth
Circuit Court of Appeals, fully participated in the case and concurred in the
judgment prior to her death.
At issue in this appeal is whether the district court correctly assumed for
itself the task of deciding the issue of arbitrability and, if so, whether it properly
concluded that the dispute is arbitrable.
In 2009, Atlantic-Pacific Capital, Inc. (“APC”) and Wynn Resorts, Limited
(“Wynn”) entered into a written agreement in which Wynn engaged APC as its
exclusive global placement agent to raise $1.5 billion in equity capital for gaming
and hospitality assets or related securities. The parties agreed that “any dispute,
controversy or claim arising from or relating to th[e] Agreement shall be submitted
to and determined by binding arbitration in Las Vegas, Nevada, conducted by”
JAMS. The agreement further provided that it “shall be governed by and construed
in accordance with the laws of the State of New York.”
In 2010, APC filed a demand for arbitration, alleging four causes of action
arising out of the agreement. Wynn responded by filing a complaint in state court
and requesting a stay of the arbitration proceedings. APC removed Wynn’s action
to federal court, after which the district court stayed the arbitration proceedings and
denied APC’s motion to compel.
1. Responsibility for Deciding the Arbitrability Issue
“The question whether the parties have submitted a particular dispute to
arbitration, i.e., the ‘question of arbitrability,’ is ‘an issue for judicial
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determination [u]nless the parties clearly and unmistakably provide otherwise.’”
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (quoting AT & T
Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649 (1986)). In
evaluating whether the parties so intended to provide, courts apply ordinary
state-law contract principles. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938,
944 (1995).
Under New York law, an agreement’s incorporation of arbitral rules that
expressly confer upon arbitrators the power to decide the issue of arbitrability
demonstrates a clear and unmistakable intent by the parties to proceed accordingly.
See, e.g., Shaw Grp. Inc. v. Triplefine Int’l Corp., 322 F.3d 115, 122 (2d Cir. 2003)
(“parties’ intent to arbitrate arbitrability [wa]s further evidenced [under New York
law] by their agreement to refer all disputes to the ‘International Chamber of
Commerce . . . in accordance with the rules and procedures of International
Arbitration,’” which required that the arbitral body address questions of
arbitrability); PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1202 (2d Cir. 1996) (same
as to National Association of Securities Dealers’ rules).
The agreement here incorporated the JAMS arbitration rules, stating,
“[e]xcept as otherwise provided herein, arbitration shall be conducted pursuant to
and in accordance with J.A.M.S.’ [sic] Streamlined Arbitration Rules and
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Procedures in effect at the time of the filing of the demand for arbitration.”1 JAMS
Rule 8(c) provides that an arbitrator shall decide the issue of arbitrability:
Jurisdictional and arbitrability disputes, including disputes over
the formation, existence, validity, interpretation or scope of the
agreement under which Arbitration is sought, and who are
proper Parties to the Arbitration, shall be submitted to and ruled
on by the Arbitrator. The Arbitrator has the authority to
determine jurisdiction and arbitrability issues as a preliminary
matter.
(emphasis added). By incorporating the JAMS rules, the parties demonstrated their
clear and unmistakable intent to have an arbitrator resolve the issue of arbitrability.
Gibson v. Seabury Transp. Advisor LLC, 936 N.Y.S.2d 539, 539 (App. Div. 2012)
(intent to allow arbitrator to decide issue of arbitrability demonstrated by parties’
incorporation of JAMS/Endispute’s commercial rules).
The inclusion of a broad arbitration provision also evinces the parties’ intent to
have an arbitrator decide the question of arbitrability under New York law. See, e.g.,
Shaw Grp. Inc., 322 F.3d at 121 (“a ‘broad grant of power to the arbitrators’ . . .
evidence[s] the parties’ clear ‘inten[t] to arbitrate issues of arbitrability’” (quoting
PaineWebber, 81 F.3d at 1199-1200)). The arbitration provision here is worded
broadly, providing that “[a]ny dispute, controversy or claim arising from or relating
1
Notwithstanding the “except as otherwise provided therein” language, the
agreement evidences no intent by the parties to supersede the JAMS rules or render
them inapplicable.
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to this Agreement shall be submitted to and determined by binding arbitration . . . .”
This language is similar to language found to demonstrate an intent to arbitrate
arbitrability. See, e.g., id. (provision that stated “[a]ll disputes . . . concerning or
arising out of” contract shall be subject to arbitration demonstrated parties “clearly
and unmistakably” agreed to have arbitrator decide arbitrability); Smith Barney
Shearson Inc. v. Sacharow, 689 N.E.2d 884, 885, 887-88 (N.Y. 1997) (agreement
stating that “any controversy” between the parties would be “settled by arbitration”
was sufficiently “plain and sweeping” to indicate an intent to have arbitrator resolve
issue of arbitrability).
Thus, the parties’ incorporation of the JAMS rules and their employment of a
broad arbitration provision establish their clear and unmistakable intent to submit the
issue of arbitrability to arbitration.
2. Arbitrability of the Dispute
Alternatively, even if the district court properly assumed for itself the task of
deciding the issue of arbitrability, it was error to find the dispute fell outside the scope
of the arbitration provision. Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1267 (9th
Cir. 2006) (en banc) (“The validity and scope of an arbitration clause are reviewed de
novo.”)
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Where a contract contains an arbitration clause, courts apply a presumption in
favor of arbitrability as to particular grievances, and the party resisting arbitration
bears the burden of establishing that the arbitration agreement is inapplicable. AT &
T Techs., Inc., 475 U.S. at 650; Westinghouse Hanford Co. v. Hanford Atomic Metal
Trades Council, 940 F.2d 513, 517–18 (9th Cir. 1991).
That presumption applies with particular force where, as here, the arbitration
clause is phrased in broad and general terms. Westinghouse Hanford Co., 940 F.2d
at 517. In such circumstances, “[a]n order to arbitrate the particular grievance should
not be denied unless it may be said with positive assurance that the arbitration clause
is not susceptible of an interpretation that covers the asserted dispute. Doubts should
be resolved in favor of coverage.” United Steelworkers of Am. v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582–83 (1960) (emphasis added). Stated differently,
“[t]o require arbitration, [an aggrieved party’s] factual allegations need only ‘touch
matters’ covered by the contract containing the arbitration clause . . . .” Simula, Inc.
v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999). Accordingly, we must compare
APC’s allegations with the terms of the agreement’s arbitration provision.
The parties’ agreement provides that “any dispute, controversy or claim arising
from or relating to th[e] Agreement” shall be subject to arbitration. In its arbitration
demand, APC alleged that Wynn breached the agreement by (1) failing to compensate
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APC for the $1.5 billion in investments that APC obtained but that Wynn rejected; (2)
failing to compensate APC for the use and deployment of equity capital represented
by the investments in an initial public offering (“IPO”) initiated by Wynn’s
subsidiary, Wynn Macau, SA (“Wynn Macau”); (3) using sales agents other than APC
(i.e., the underwriters of the IPO) to effectuate investments in the investment vehicle;
(4) using Wynn’s subsidiary (Wynn Macau) to circumvent or adversely impact the
exclusivity and rights granted to APC under the agreement; and (5) improperly
terminating the agreement.
APC’s claims not only relate to and touch matters covered by the agreement,
they directly arise out of it. Indeed, whether APC is entitled to fees hinges upon
whether, under the agreement: Wynn was obligated to accept the alleged $1.5 billion
in equity capital raised by APC; proceeds from the Wynn Macau IPO constituted
“equity capital” raised by APC; the underwriters for the Wynn Macau IPO qualified
as “sales agents with respect to the soliciting of investors for the purposes of
effectuating an Investment”; the sale of shares through Wynn Macau qualified as
“conduct or services [by a Wynn affiliate] which circumvent[ed] or adversely
impact[ed] the exclusivity and rights . . . granted to APC”; and APC’s cessation of
marketing constituted “cause” for Wynn’s termination.
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Without resolving the merits of APC’s allegations, AT & T Techs., Inc., 475
U.S. at 649 (“in deciding whether the parties have agreed to submit a particular
grievance to arbitration, a court is not to rule on the potential merits of the underlying
claim”), it is clear this dispute falls within the terms of the arbitration provision.
Simula, Inc., 175 F.3d at 722 (finding that arbitration clause covered claims that
would require “closely examin[ing] [the parties’ agreements] in order to determine
whether [one] performed its contractual obligations in a manner consistent with” the
agreement’s terms).
We therefore vacate the district court’s order and remand with instructions for
the district court to (1) grant APC’s motions to (a) dissolve the interim stay of
arbitration proceedings, (b) vacate the ex parte injunction, and (c) compel arbitration,
and (2) stay proceedings in accordance with 9 U.S.C. § 3.
Costs on appeal to APC.
VACATED AND REMANDED.
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