MediVas, LLC v. Marubeni Corp.

There is a rebuttable presumption that an order compelling arbitration but that does not explicitly dismiss the underlying claims stays the action as to those claims pending the completion of the arbitration and is an unappealable interlocutory order.

MedivVas and Marubeni executed contracts that were linked to a five million dollar loan that MediVas received from Marubeni. This loan was defaulted on by MediVas and foreclosure was carried out on MediVas’s promissory notes. A suit was filed by MediVas in San Diego Superior Court after threats of foreclosure against more of MediVas assets were initiated by Marubeni. However, Marubeni initiated a removal action to federal court after invoking a contractual arbitration clause. MediVas opposed this arbitration and sought to remand the case back to state court. The district court in August 2011 ordered arbitration on MediVas’ claims. This August 2011 order did not dismiss the claims or explicitly stay them and no judgment was recorded. Marubeni received all claims in arbitration except one and filed an action to confirm the award. However, MediVas filed an appeal on the original action and the district court stayed both proceedings. The issue on appeal is whether when a district court does not explicitly stay on an order compelling arbitration or dismiss it, is the order appealable. The Ninth Circuit has considered compelling arbitration orders that do not explicitly dismiss underlying claims to be unappealable interlocutory orders. The panel adopted a “rebuttal presumption that an order compelling arbitration but not explicitly dismissing the underlying claims stays the action as to those claims pending the completion of the arbitration.” In addition, the panel determined that they did not have jurisdiction to review the August 2011 order from the district court, under the Federal Arbitration Act because it was not “a final decision with respect to an arbitration.” DISMISSED.