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Peregrine Falcon LLC v. Piaggioa America, Inc.

United States District Court, D. Idaho

July 21, 2017

PEREGRINE FALCON LLC, Trustee of the Peregrine Falcon Leasing Trust, and FAST ENTERPRISES, LLC, a New York limited liability company, Plaintiffs,
v.
PIAGGIOA AMERICA, INC, a Delaware corporation, and CHARLIE BRAVO AVIATION, LLC, a Texas limited liability company, Defendant.

          MEMORANDUM DECISION AND ORDER

          B. Lynn Winmill Chief Judge United States District Court

         INTRODUCTION

         The Court has before it a Motion to Stay (Dkt. 40-1) from defendant Piaggo America, Inc. The motion is fully briefed and at issue. For the reasons explained below, I will grant Piaggio's motion to stay, allowing the Ninth Circuit to review this Court's ruling on personal jurisdiction and the motion to compel arbitration. If the Ninth Circuit dismisses the jurisdiction appeal, however, the action will not be further stayed to await the outcome of the arbitration appeal.

         BACKGROUND

         On December 21, 2012, Charlie Bravo Aviation, LLC (“CBA”) entered into a sales agreement (Agreement No. 1) to purchase a custom-built P. 180 Avanti II aircraft manufactured by Piaggio America, Inc. See Piaggio/CBA Agreement, Dkt. 7-1. Section 7, paragraph D of the agreement stated that “any controversy or claim between the parties arising out of or relating to this Agreement, or the breach thereof, shall be governed by Florida law and settled by arbitration in Miami, FL. . . .” Id. CBA and Piaggio - the principal parties in the agreement - both signed Agreement No. 1. Fast Enterprises and Peregrine Falcon - the third parties in the agreement - did not sign Agreement No.1.

         Also on December 21, 2012, CBA immediately contracted to sell the Plane to Fast (Agreement No. 2). See generally Decl. James Harrison, Exhibit 1-CBA/Fast Agreement, Dkt. 32-1. Like Agreement No. 1, Agreement No. 2 included an identical choice of law and arbitration clause that required the application of Florida law and mandated arbitration in Miami, Florida. Id. Fast and CBA were the principal parties of Agreement No. 2.

         Following a dispute over the performance of the Plane's landing gear, Fast and Peregrine sued CBA and Piaggio for damages resulting from the plane crash. On August 24, 2016, I denied CBA and Piaggio's motion to dismiss for lack of personal jurisdiction (Dkt. 36). I also determined that the arbitration clause in Agreement No. 2 (CBA/Fast Agreement) is enforceable against Plaintiffs, requiring arbitration in Miami, Florida, applying Florida law. Id. Thus, Plaintiffs' claims against CBA were dismissed to permit arbitration in Florida. For Plaintiffs' claims against Piaggio, however, I denied Piaggio's motion to compel arbitration (Dkt. 7), determining that the arbitration clause in Agreement No. 1 is not enforceable against the Plaintiffs.

         LEGAL STANDARD

         The Federal Arbitration Act (“FAA”) provides for immediate appellate review of an order denying a motion to compel arbitration and refusing to stay judicial proceedings pending arbitration. 9 U.S.C. § 16(a)(1)(A)-(B). Moreover, as part of such an interlocutory appeal, the court of appeals may exercise pendent jurisdiction over any “otherwise non-appealable ruling [that] is ‘inextricably intertwined' with or ‘necessary to ensure meaningful review of' the order properly before [the court of appeals] on interlocutory appeal.” Hendricks v. Bank of Am., N.A., 408 F.3d 1127, 1134 (9th Cir. 2005). Thus, it is clear that the Ninth Circuit has jurisdiction to immediately consider my decision denying the motion to compel arbitration; but, it is less clear the Circuit will exercise pendent jurisdiction to hear the appeal of my decision denying the motion to dismiss for lack of personal jurisdiction.

         When a party files a notice of interlocutory appeal, “jurisdiction over the matters being appealed normally transfers from the district court to the appeals court.” Mayweathers v. Newland, 258 F.3d 930, 935 (9th Cir. 2001). However, this is true only of the issues actually appealed. “Absent a stay, … an appeal of an interlocutory order does not ordinarily deprive the district court of jurisdiction except with regard to the matters that are the subject of the appeal.” Britton v. Co-op Banking Grp., 916 F.2d 1405, 1412 (9th Cir. 1990). For example, the filing of an interlocutory appeal of a district court's decision to deny a motion to compel arbitration does not strip the district court of jurisdiction to proceed with the case on the merits. Britton v. Co-op Banking Grp., 916 F.2d 1405, 1412 (9th Cir. 1990).

         On the other hand, the appeal of a decision denying a motion to dismiss for lack of jurisdiction does preclude the district court from proceedings with a resolution of the case on the merits. Thus, much turns upon whether the Ninth Circuit will exercise pendent jurisdiction to hear the appeal of my decision denying the motion to dismiss for lack of personal jurisdiction. If the Ninth Circuit does hear the appeal of that issue, I am deprived of jurisdiction to proceed during the pendency of the appeal. On other hand, if the Circuit declines to exercise pendent jurisdiction over that issue, I may proceed to consider the merits of the case unless I'm persuaded that I should exercise my discretion to stay the proceedings during the pendency of the arbitration appeal.

         ANALYSIS

         1. Pendent Jurisdiction

         Under 9 U.S.C. § 16, Piaggio has the right to pursue an interlocutory appeal of the district court's denial of the motion to compel arbitration. Furthermore, the court of appeals may exercise pendent jurisdiction over any “otherwise non-appealable ruling [that] is ‘inextricably intertwined' with or ‘necessary to ensure meaningful review of' the order properly before [the court of appeals] on interlocutory appeal.” Hendricks v. Bank of Am., N.A., 408 F.3d 1127, 1134 (9th Cir. 2005).

         A. Inextricably Intertwined

         It is unnecessary to determine whether Piaggio's challenges to arbitration and jurisdiction are “inextricably intertwined, ” because I am persuaded, based upon its prior decisions, that the Ninth Circuit will conclude that reviewing personal jurisdiction is ...


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