Clean Tech Partners v. Electronic Recyclers Int'l , 627 F. App'x 621 ( 2015 )

FILED
NOT FOR PUBLICATION DEC 17 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CLEAN TECH PARTNERS, LLC, No. 14-15156
Plaintiff - Appellant, D.C. No.1:13-cv-01409-AWI
v.
MEMORANDUM*
ELECTRONIC RECYCLERS
INTERNATIONAL, INC., et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Eastern District of California
Anthony W. Ishii, Senior District Judge, Presiding
Submitted December 10, 2015**
San Francisco, California
Before: CLIFTON and OWENS, Circuit Judges, and MOSKOWITZ, Chief District
Judge.***
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Barry Ted Moskowitz, Chief Judge, United States District
Court for the Southern District of California, sitting by designation.
Clean Tech Partners, LLC, (“Clean Tech”), appeals from the district court’s
order denying discovery, compelling arbitration, and dismissing the case. Clean
Tech argues the order should be vacated on the ground that the district court erred
in denying its request for limited discovery relating to the validity of a Stock
Transfer Agreement (“STA”). We review the district court’s decision denying
discovery for an abuse of discretion. Hallett v. Morgan, 296 F.3d 732, 751 (9th
Cir. 2002).
The dispute in this case arises out of an arbitration provision in the STA,
entered into between Clean Tech and Appellees John and Tammie Shegerian. John
Shegerian is the Chairman and Chief Executive Officer of Appellee Electronic
Recyclers International, Inc. (“ERI”), and Tammie Shegerian is ERI’s Chief
Financial Officer. Pursuant to the STA, the Shegerians agreed to purchase ERI
stock owned by Clean Tech. Although the STA contains an arbitration provision,
Clean Tech filed a complaint in the Eastern District of California alleging, inter
alia, breach of contract, fraud, RICO violations, and securities fraud stemming
from the transaction. The district court denied Clean Tech’s motion for limited
discovery, compelled arbitration, and dismissed the case.
As an initial matter, Clean Tech’s appeal is not moot even though the parties
arbitrated Clean Tech’s claims following the district court’s decision. An appeal is
moot if no live case or controversy remains at the time of appeal. NASD Dispute
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Resolution, Inc. v. Judicial Council of Cal., 488 F.3d 1065, 1068 (9th Cir. 2007). A
case or controversy exists on appeal so long as a favorable decision on the merits
can give an appellant effective relief. Id. Here, Clean Tech’s appeal is not moot
because a decision vacating the district court order would give Clean Tech an
opportunity to potentially contest the validity of the STA before a district judge
rather than an arbitrator. See Haig Berberian, Inc. v. Cannery Warehousemen, 535
F.2d 496, 498 n.1 (9th Cir. 1976) (holding that an appeal was not moot because the
arbitration award would be unenforceable if the court agreed with the appellant that
the dispute was not arbitrable).
Reaching the merits, we hold that the district court did not abuse its
discretion when it denied Clean Tech’s request for discovery. Clean Tech failed to
demonstrate how discovery would produce evidence indicative of the STA’s
invalidity both at the proceedings below and in its arguments on appeal. See
Hallett, 296 F.3d at 751 (“[B]road discretion is vested in the trial court to permit or
deny discovery, and its decision to deny discovery will not be disturbed except
upon the clearest showing that denial of discovery results in actual and substantial
prejudice to the complaining litigant.”) (quoting Goehring v. Brophy, 94 F.3d
1294, 1305 (9th Cir. 1996)). The district court properly denied discovery based on
Clean Tech’s bare assertions that the STA was invalid.
AFFIRMED.
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