Esther Yang v. Dongwon Industries Co. , 876 F.3d 996 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ESTHER MARGARITA LIMA SUAREZ No. 15-16881
VIUDA DE YANG, Individually and as
Personal Representative of the Estate D.C. No.
of Chang Cheol Yang, Deceased; 1:13-cv-00015
BRANDON CHEOL YANG LIMA,
Minor; JI HEA YANG LIMA, Minor;
CAMILA ROMINA YANG LIMA, OPINION
Minor,
Plaintiffs-Appellees,
v.
MAJESTIC BLUE FISHERIES, LLC, a
Delaware limited liability company,
Defendant,
and
DONGWON INDUSTRIES CO., LTD., a
corporation incorporated under the
laws of Korea,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Guam
Frances Tydingco-Gatewood, Chief District Judge,
Presiding
2 YANG V. DONGWON INDUSTRIES
Argued and Submitted June 13, 2017
Honolulu, Hawaii
Filed November 30, 2017
Before: Raymond C. Fisher, Richard A. Paez,
and Jacqueline H. Nguyen, Circuit Judges.
Opinion by Judge Nguyen
SUMMARY *
Arbitration
The panel affirmed the district court’s order denying a
motion to compel arbitration in a maritime action arising
from the death of a seaman in the sinking of a fishing vessel.
A defendant sought arbitration based on an employment
agreement between the seaman and the vessel’s owner.
Pursuant to a contract with the owner, the defendant supplied
the vessel’s crew and supervised its repairs and maintenance.
The panel held that the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, an act
implementing a treaty of the same name, does not allow non-
signatories or non-parties to compel arbitration. Agreeing
with other circuits, the panel held that, like an arbitration
agreement, an arbitral clause in a contract must be “signed
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
YANG V. DONGWON INDUSTRIES 3
by the parties” in order to be enforceable under Article II(2)
of the Convention Treaty.
The panel further held that the defendant could not
compel arbitration under the Federal Arbitration Act, which
expressly exempts from its scope any “contracts of
employment of seamen.” The panel declined to import into
the court’s Convention Act analysis precedent permitting a
litigant who is not a party to an arbitration agreement to
invoke arbitration under the FAA if the relevant state
contract law allows the litigant to enforce the agreement.
COUNSEL
Jerry D. Hamilton (argued) and Michael J. Dono, Hamilton
Miller & Birthisel LLP, Miami, Florida, for Defendant-
Appellant.
Scott A. Wagner (argued), Michael T. Moore, and Clay M.
Naughton, Moore & Company P.A., Coral Gables, Florida,
for Plaintiffs-Appellees.
OPINION
NGUYEN, Circuit Judge:
Chang Cheol Yang was a seaman who died when the
fishing vessel he worked on sank because of inadequate
repairs and an incompetent crew provided by Dongwon
Industries Co. Ltd (“Dongwon”). His widow commenced a
wrongful death action against Dongwon on behalf of his
three minor children, herself, and his estate. Dongwon
moved to compel arbitration based on an employment
4 YANG V. DONGWON INDUSTRIES
agreement between Mr. Yang and the vessel’s owner,
Majestic Blue Fisheries, LLC (“Majestic”). Because
Dongwon is neither a signatory nor a party to the
employment agreement, the district court denied Dongwon’s
motion. We affirm.
I.
In 2008, Dongwon sold the vessel, the F/V Majestic
Blue, for $10 to Majestic, which is owned by the same
family that owns Dongwon. In re Majestic Blue Fisheries,
LLC, No. CV 11-00032, 2014 WL 3728556, at *10–11 (D.
Guam July 25, 2014). Around that time, Majestic and
Dongwon entered into contracts that required Dongwon both
to supply the vessel’s crew and to supervise its repairs and
maintenance. Id. at *11. By then, the vessel was the oldest
in Dongwon’s fleet. Id.
On May 21, 2010, after undergoing repairs and despite a
known rudder leak, the vessel set sail from Guam with Mr.
Yang on board. Id. at *22, 32. Three weeks later, on
June 14, 2010, the vessel sank in fair weather after being
flooded with water. Id. at *29, *42. The crew failed to
properly respond to the flooding, leaving Captain David Hill
to execute critical abandon ship procedures on his own. Id.
at *30, *48. Shortly after Mr. Yang re-boarded to look for
Captain Hill, the vessel sank and both men died. Id. at *26.
Following this tragedy, the widows of Mr. Yang and
Captain Hill filed separate wrongful death actions with
overlapping claims and legal theories. Both widows contend
that the vessel’s inadequate repairs and incompetent crew
rendered it unseaworthy and caused it to sink. The
complaints in both actions assert the same four claims
against Dongwon and Majestic: (1) a survival action based
on negligence for pre-death pain and suffering under the
YANG V. DONGWON INDUSTRIES 5
Jones Act, 46 U.S.C. § 30304; (2) a wrongful death action
under general maritime law; (3) a wrongful death action
under the Death on the High Seas Act, 46 U.S.C. § 30301 et
seq.; (“DOHSA”); and (4) a wrongful death action under the
Jones Act.
Unencumbered by an arbitration clause, Captain Hill’s
widow successfully litigated her claims, obtaining a $3.2
million judgment that we affirmed on appeal. Hill v.
Majestic Blue Fisheries, LLC, 692 F. App’x 871 (9th Cir.
2017). In that case, the district court found that the vessel
sank because it was unseaworthy due to shoddy repairs
(which resulted in the rudder leak) and an incompetent and
untrained crew (who failed to close watertight doors or
properly abandon ship). Majestic Blue, 2014 WL 3728556
at *30–31, *37, *49. But while Captain Hill’s widow
accessed a judicial forum for her claims against Majestic and
Dongwon without litigating the arbitration issue, Yang’s
litigation has been stalled by a motion to compel arbitration
filed by Dongwon (and joined by Majestic). Dongwon’s
motion relies on a March 23, 2010 employment agreement
in which Majestic agreed to hire Mr. Yang as a Chief
Engineer aboard the vessel. The agreement, which contains
an arbitration clause, is signed by Mr. Yang and by
Dongwon “on behalf of MAJESTIC BLUE FISHERIES,
LLC.”
The district court compelled arbitration of the claims
against Majestic, but denied the motion as to Dongwon.
Dongwon now appeals.
6 YANG V. DONGWON INDUSTRIES
II.
A. The Convention Act Does Not Allow Non-
Signatories or Non-Parties to Compel Arbitration
Dongwon seeks to compel arbitration under the
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, 9 U.S.C. § 201 et seq. (“Convention Act”),
which implements a treaty of the same name 1 (“Convention
Treaty”) regarding arbitration agreements entered into by
foreign entities or individuals. See Rogers v. Royal
Caribbean Cruise Line, 547 F.3d 1148, 1152–53 (9th Cir.
2008). A party seeking to compel arbitration under the
Convention Act must prove the existence and validity of “an
agreement in writing within the meaning of the Convention”
Treaty. Balen v. Holland Am. Line Inc., 583 F.3d 647, 654–
55 (9th Cir. 2009) (citation omitted). The Convention Treaty
in turn defines an “agreement in writing” to “include an
arbitral clause in a contract or an arbitration agreement,
signed by the parties or contained in an exchange of letters
or telegrams.” Convention Treaty, art. II(2) (emphasis
added). Recognizing that it is neither a signatory nor a party
to Mr. Yang’s employment agreement, Dongwon seeks to
compel arbitration under the theory that the “signed by the
parties” requirement in Article II(2) applies only to “an
1
United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330
U.N.T.S. 3 available at http://www.uncitral.org/pdf/english/texts/arbitr
ation/NY-conv/New-York-Convention-E.pdf. While the Convention
Treaty was executed in 1958, id., the Convention Act was not enacted
until 1970. Rogers, 547 F.3d at 1152.
YANG V. DONGWON INDUSTRIES 7
arbitration agreement” and not “an arbitral clause in a
contract.” We disagree.
We do not write on a blank slate. In Kahn Lucas
Lancaster, Inc. v. Lark International Ltd., the Second Circuit
conducted the first reasoned analysis of Article II(2)’s text
and legislative history to reverse an order compelling
arbitration because, as here, the arbitration clause in the
contract was not signed by one of the litigants. 186 F.3d 210,
215–18 (2d Cir. 1999) abrogation on other grounds
recognized by Sarhank Grp. v. Oracle Corp., 404 F.3d 657,
660 n.2 (2d Cir. 2005). Turning first to the text, the court
concluded that the comma before the phrase “signed by the
parties” signaled that it modified both “an arbitral clause in
a contract” and “an arbitration agreement.” Id. at 217. The
court relied on two common canons of construction. First, it
explained that, under the rule of punctuation, a modifying
phrase that is set off from a series of antecedents by a comma
applies to each of those antecedents. Id. at 216–17. 2 The
court reasoned that interpreting the phrase “signed by the
parties” to modify only an “arbitration agreement” rendered
the comma superfluous, thereby violating the rule against
surplusage. Id. at 217. Next, the court considered not only
the final English text of the Convention Treaty but also the
official French and Spanish texts, each of which used a
plural form of the word “signed,” consistent with the
conclusion that the signature requirement applies not only to
an “arbitration agreement” but also to an “arbitral clause in
2
Under the last-antecedent rule, “the series ‘A or B with respect to
C’ contains two items: (1) ‘A’ and (2) ‘B with respect to C.’ On the other
hand, under the [punctuation canon] the series ‘A or B, with respect to
C’ contains these two items: (1) ‘A with respect to C’ and (2) ‘B with
respect to C.’” Stepnowski v. C.I.R., 456 F.3d 320, 324 n.7 (3d Cir. 2006)
(citing Kahn Lucas, 186 F.3d at 216 n.1).
8 YANG V. DONGWON INDUSTRIES
a contract.” Id. at 216, 217. Finally, cognizant of the
Supreme Court’s instruction that an “analysis based only on
punctuation is necessarily incomplete,” the court analyzed
Article II(2)’s legislative history, which confirmed the
drafters’ intent to apply the signing requirement to both
phrases. Id. at 216, 218 (quoting U.S. Nat’l Bank of Or. v.
Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 454 (1993)).
Consistent with Kahn Lucas, both we and our sister
circuits have recognized the punctuation canon, under which
“a qualifying phrase is supposed to apply to all antecedents
instead of only to the immediately preceding one [where the
phrase] is separated from the antecedents by a comma.”
Davis v. Devanlay Retail Grp., Inc., 785 F.3d 359, 364 n.2
(9th Cir. 2015) (applying California law) (citation omitted).
In Davis, for example, we applied this rule when reasoning
that the phrase “[r]equest, or require as a condition to
accepting the credit card as payment” indicates that the
payment clause would modify only “require,” not
“request.’” Id. at 364–65; see also Am. Int’l Grp., Inc. v.
Bank of Am. Corp., 712 F.3d 775, 781–82 (2d Cir. 2013)
(“When there is no comma, . . . the subsequent modifier is
ordinarily understood to apply only to its last antecedent.
When a comma is included, . . . the modifier is generally
understood to apply to the entire series.”); Finisar Corp. v.
DirecTV Grp., Inc., 523 F.3d 1323, 1336 (Fed. Cir. 2008)
(“[W]hen a modifier is set off from a series of antecedents
by a comma, the modifier should be read to apply to each of
those antecedents.”) (internal quotation marks omitted)
(quoting Kahn Lucas, 186 F.3d at 215); Stepnowski v.
Comm’r, 456 F.3d 320, 324 (3d Cir. 2006) (“[W]here there
is a comma before a modifying phrase, that phrase modifies
all of the items in a series and not just the immediately
preceding item.”); Bingham, Ltd. v. United States, 724 F.2d
921, 925–26 & n.3 (11th Cir. 1984) (“Where the modifier is
YANG V. DONGWON INDUSTRIES 9
set off from two or more antecedents by a comma, . . . the
comma indicates the drafter’s intent that the modifier relate
to more than the last antecedent.”). 3
The case relied upon by Dongwon—Azure v. Morton,
514 F.2d 897 (9th Cir. 1975)—is not to the contrary. There,
we applied the last antecedent rule, not the punctuation rule.
See id. at 900. Properly applying the punctuation rule here,
the signature requirement applies not only to “an arbitration
agreement” but also to “an arbitral clause in a contract.”
We are persuaded by Kahn Lucas’s faithful adherence to
the principles of treaty interpretation, which involve
examining “the text of the treaty and the context in which the
written words are used,” as well as “the history of the treaty,
the negotiations, and the practical construction adopted by
the parties.” E. Airlines, Inc. v. Floyd, 499 U.S. 530, 534–
35 (1991) (internal quotation marks and citations omitted).
Dongwon does not challenge Kahn Lucas’s detailed analysis
of Article II(2)’s legislative history and negotiations.
Instead, Dongwon urges us to consider a 2006
recommendation by a United Nations commission that only
vaguely addresses Article II(2)’s application and dates more
than three decades after the Convention Treaty’s 1970
implementation. 4 While Dongwon argues that the
3
As with the last antecedent rule, the punctuation canon is not
absolute. See U.S. Nat’l Bank of Or. v. Indep. Ins. Agents of Am., Inc.,
508 U.S. 439, 454-55 (1993).
4
See United Nations Commission on International Trade Law,
Recommendation Regarding the Interpretation of Article II, Paragraph
2, and Article VII, Paragraph 1, of the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, U.N. Doc. A/61/17 (July
7, 2006) (recommending that Article II(2) be “applied recognizing that
the circumstances described therein are not exhaustive”), available at
10 YANG V. DONGWON INDUSTRIES
recommendation’s musings are “persuasive,” it then relies
on a case that does not support that proposition. In In re
Condor Insurance Ltd., the court examined a model law
drafted by a United Nations commission that was later
implemented almost verbatim via a federal statute expressly
instructing courts to “consider its international origin” when
interpreting it. 601 F.3d 319, 321–22 (5th Cir. 2010)
(quoting 11 U.S.C. § 1508). Here, in contrast, the
Convention Treaty was not drafted by the United Nations
commission that issued the 2006 recommendation, and its
recommendation has never been implemented by Congress.
See Kahn Lucas, 547 F.3d at 216 (noting that the United
Nations Conference on International Commercial
Arbitration drafted the Convention Treaty). While we have
occasionally interpreted an ambiguous treaty term in light of
the signatory nations’ post-ratification understanding, the
2006 recommendation is nothing like the kind of evidence
we have found persuasive. See, e.g., In re 840 140th Ave.
NE, Bellevue, Wash., 634 F.3d 557, 568 (9th Cir. 2011)
(examining decisions by signatory nations’ courts).
Moreover, every circuit to consider Kahn Lucas’s cogent
analysis has adhered to it. See Standard Bent Glass Corp. v.
Glassrobots Oy, 333 F.3d 440, 449 (3d Cir. 2003) (following
Kahn Lucas to hold that the Convention Treaty’s “signed by
the parties” requirement applied to “an arbitral clause within
a contract or a separate arbitration agreement”); Czarina,
LLC v. W.F. Poe Syndicate, 358 F.3d 1286, 1290–91 (11th
http://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/A2E.pdf.
Dongwon argues that this 2006 recommendation and Article II(2)’s use
of the word “include” show that an agreement in writing “can be formed
in multiple ways.” But even if that were so, it does not negate the
requirement that the agreement—regardless of how it was formed—be
“signed by the parties.” Convention Treaty, art. II(2).
YANG V. DONGWON INDUSTRIES 11
Cir. 2004) (following Kahn Lucas to affirm the district
court’s refusal to enforce an arbitration award based on an
unsigned arbitration clause). Dongwon nonetheless urges us
to follow an outlier decision from the Fifth Circuit, issued
before Kahn Lucas, which deemed the “signed by the
parties” requirement to be inapplicable to an arbitration
clause agreed to by the parties. Sphere Drake Ins. PLC v.
Marine Towing, Inc., 16 F.3d 666, 669–70 (5th Cir. 1994).
That decision cited no authority and provided no analysis,
id., and has therefore been rejected by our sister circuits. See
Kahn Lucas, 186 F.3d at 214, 218; Standard Bent, 333 F.3d
at 449–50. Moreover, the Fifth Circuit has since expressly
adopted the punctuation canon that Sphere Drake omitted
and Kahn Lucas applied. See Sobranes Recovery Pool I,
LLC v. Todd & Hughes Const. Corp., 509 F.3d 216, 223 (5th
Cir. 2007) (“[W]hen there is a serial list followed by
modifying language that is set off from the last item in the
list by a comma, this suggests that the modification applies
to the whole list and not only the last item.”).
Regardless, we need not rely solely on Kahn Lucas or its
progeny to hold that Dongwon cannot compel arbitration.
The Convention Treaty contemplates that only a “party” or
“parties to the agreement referred to in article II” may litigate
its enforcement. Convention Treaty, art. IV(1), V(1)(a), VI.
Indeed, Article II makes clear that arbitration is permissible
only where there is “an agreement in writing under which
the parties undertake to submit to arbitration all or any
differences which have arisen or which may arise between
them”—not disputes between a party and a non-party. Id. at
art. II(1) (emphasis added). Dongwon has therefore failed to
satisfy not only the “signed by the parties” requirement
discussed in Kahn Lucas but also the more basic requirement
that a litigant be a “party” to the agreement under which it
moves to compel. Because the Convention Treaty does not
12 YANG V. DONGWON INDUSTRIES
allow non-signatories or non-parties to compel arbitration,
Dongwon cannot do so here.
B. Dongwon Cannot Compel
Arbitration on Other Grounds
Nor can Dongwon compel arbitration on grounds other
than the Convention Treaty. Federal arbitration law is
codified in different chapters of Title 9 of the United States
Code, and each chapter imposes unique requirements on a
party seeking to compel arbitration. See Rogers, 547 F.3d at
1152–53. Dongwon moved to compel arbitration only under
the second chapter—the Convention Act—but failed to
satisfy its requirements. Dongwon did not and cannot seek
to compel arbitration under the first chapter—the Federal
Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.—because the
FAA expressly exempts from its scope any “contracts of
employment of seamen.” 9 U.S.C. § 1; Rogers, 547 F.3d at
1152–53.
The failure to satisfy either the requirements of the
Convention Act or the FAA should end the inquiry. But
Dongwon urges us to circumvent the Convention Act’s
requirements by importing into our Convention Act analysis
precedent permitting a “litigant who is not a party to an
arbitration agreement to invoke arbitration under the FAA if
the relevant state contract law allows the litigant to enforce
the agreement.” Kramer v. Toyota Motor Corp., 705 F.3d
1122, 1128 (9th Cir. 2013) (emphasis added).
We reject this doctrinal sleight of hand because the
Convention Act and the FAA impose conflicting
requirements on a litigant seeking to compel arbitration.
While the FAA permits arbitration where an arbitration
agreement is enforceable under state law, id., the Convention
Act requires a litigant to satisfy additional prerequisites
YANG V. DONGWON INDUSTRIES 13
established by the Convention Treaty. See Balen, 583 F.3d
at 654–55. One such prerequisite is that the litigant prove
the agreement is in writing and “signed by the parties.”
Convention Treaty, art. II(2). Another is that the dispute at
issue be one between the “parties.” Convention Treaty, art.
II(1). To the extent the FAA provides for arbitration of
disputes with non-signatories or non-parties, it conflicts with
the Convention Treaty and therefore does not apply.
9 U.S.C. § 208. Accordingly, cases interpreting the FAA as
allowing a non-signatory or non-party to compel arbitration
where an arbitration agreement is enforceable under state
law offer no guidance in interpreting the Convention Act’s
requirement that an agreement in writing be signed by the
parties.
Even if we ignore the Convention Act’s requirements
and instead look to our precedent interpreting the FAA,
Dongwon would still not be entitled to relief. Under that
precedent, we first determine, as a threshold matter, which
state’s contract law governs the agreement at issue. See
Kramer, 705 F.3d at 1128. Under the relevant California
law, none of Dongwon’s three theories—equitable estoppel,
agency, and alter ego—provide a basis to compel
arbitration. 5
“Equitable estoppel ‘precludes a party from claiming the
benefits of a contract while simultaneously attempting to
avoid the burdens that contract imposes.’” Comer v. Micor,
Inc., 436 F.3d 1098, 1101 (9th Cir. 2006) (quoting Wash.
5
Given the absence of Guam cases on point, we follow the Guam
Supreme Court’s instruction to look to California law as persuasive
authority regarding equitable estoppel. Mobil Oil Guam, Inc. v. Young
Ha Lee, 2004 Guam 9, ¶ 24 n.2 (Guam 2004); Limtiaco v. Guam Fire
Dep’t, 2007 Guam 10, ¶ 58 (Guam 2007).
14 YANG V. DONGWON INDUSTRIES
Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 267 (5th Cir.
2004)). The doctrine does not apply where, as here, a
plaintiff “would have a claim independent of the existence
of the” agreement containing the arbitration provision.
Kramer, 705 F.3d at 1131 (affirming denial of non-
signatory’s motion to compel arbitration). Dongwon’s
contrary argument “erroneously equates” the Complaint’s
allegation of an employment relationship between Mr. Yang
and Dongwon with reliance upon the employment
agreement between Mr. Yang and Majestic. 6 Id. at 1132.
But Yang’s DOHSA and general maritime law claims do not
require proof of an employer agreement. 7 And, while the
Jones Act claims require a finding that Dongwon was an
employer, that finding does not require proof of a written
employment agreement. 8 Because Yang’s claims against
Dongwon rely on its acts and omissions—furnishing an
unseaworthy vessel and crew—and not on any obligations
created by the employment agreement, Dongwon cannot
compel arbitration under an equitable estoppel theory. See
Goldman v. KPMG LLP, 92 Cal. Rptr. 3d 534, 550, 555 (Ct.
6
The Complaint describes an “agent and alter ego” relationship
between Dongwon and Majestic and alleges that both were employers
for purposes of the Jones Act.
7
See Norfolk Shipbuilding & Drydock Corp. v. Garris, 532 U.S.
811, 819–20 (2001) (recognizing a general “maritime cause of action”
for wrongful death against an entity that had never “employed”
decedent); Davis v. Bender Shipbuilding & Repair Co., 27 F.3d 426, 428
(9th Cir. 1994) (“DOHSA claims may be pursued against defendants
other than employers.”).
8
See Glynn v. Roy Al Boat Mgmt. Corp., 57 F.3d 1495, 1498–99
(9th Cir. 1995) (explaining that employer status under the Jones Act
claims may be established based on several factors, including whether
the alleged employer hired and controlled the crew), abrogated on other
grounds by Atl. Sounding Co., Inc. v. Townsend, 557 U.S. 404 (2009).
YANG V. DONGWON INDUSTRIES 15
Ohio App. 2009) (affirming denial of non-signatory’s motion to
compel arbitration).
The authorities invoked by Dongwon do not suggest a
different result. In Metalcad, the non-signatory defendant
was able to compel arbitration under an equitable estoppel
theory because the plaintiff’s breach of contract and fraud
claims alleged that defendant “caused” the signatory-
defendant “to breach the underlying contract” with the
plaintiff that contained the arbitration clause. Metalclad
Corp. v. Ventana Envtl. Organizational P’ship, 1 Cal. Rptr.
3d 328, 337 (Ct. App. 2003). That is the quintessential
example of a plaintiff “claiming the benefits of a contract
while simultaneously attempting to avoid the burdens that
contract imposes.” Kramer, 705 F.3d at 1128. The other
cases relied upon by Dongwon are also inapposite because
they do not apply California law 9 and have been overruled
or abrogated due to their failure to specify the applicable
state law. 10
Nor can Dongwon compel arbitration based on the
Complaint’s allegations of an agency or alter ego
relationship between Dongwon and Majestic. Not only did
9
See, e.g., Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115,
122, 128 (2d Cir. 2010) (citing New York and federal law); Brown v.
Pac. Life Ins., 462 F.3d 384, 389 (5th Cir. 2006) (citing Louisiana and
federal law).
10
See, e.g., MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942, 948
(11th Cir. 1999) (failing to specify which law applied), abrogated by
Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) as recognized in
Lawson v. Life of the S. Ins. Co., 648 F.3d 1166, 1170–71 (11th Cir.
2011) (rejecting non-signatory’s equitable estoppel argument as a basis
to compel arbitration because MS Dealer’s failure to make “clear that the
applicable state law provides the rule of decision” meant that MS Dealer
was either overruled or abrogated).
16 YANG V. DONGWON INDUSTRIES
Dongwon waive arguments under these theories by failing
to timely raise them in the district court, see Hendricks &
Lewis PLLC v. Clinton, 766 F.3d 991, 998 (9th Cir. 2014), it
affirmatively represented to the district court in related
litigation that Dongwon and Majestic were “separate and
distinct companies.” Where, as here, an alter ego or agency
relationship “was expressly disavowed,” the non-signatory
cannot compel arbitration under that theory. Murphy v.
DirecTV, Inc., 724 F.3d 1218, 1233 (9th Cir. 2013)
(reversing order compelling arbitration). Moreover,
Dongwon cannot invoke an alter ego theory to compel
arbitration of the statutory claims at issue here because the
alter ego rationale “applies only to” breach of contract
claims. Rowe v. Exline, 63 Cal. Rptr. 3d 787, 794 (Ct. App.
2007) (rejecting non-signatory’s argument to compel
arbitration of statutory claims under alter ego theory).
Finally, we see no reason to depart from the general rule
that the contractual right to compel arbitration “may not be
invoked by one who is not a party to the agreement and does
not otherwise possess the right to compel arbitration.”
Britton v. Co-op Banking Grp., 4 F.3d 742, 744 (9th Cir.
1993). Dongwon argues that the state law exceptions to this
general rule—equitable estoppel, agency, and alter ego—
must be construed in Dongwon’s favor given the federal
policy in favor of arbitration. But the “public policy in favor
of arbitration does not extend to those who are not parties to
an arbitration agreement.” Comedy Club, Inc. v. Improv W.
Assocs., 553 F.3d 1277, 1287 (9th Cir. 2009) (quoting
Buckner v. Tamarin, 119 Cal. Rptr. 2d. 489, 490 (Ct. App.
2001). That is because the federal policy applies to “the
scope of arbitrable issues” and “is inapposite when the
question is whether a particular party is bound by the
arbitration agreement.” Norcia v. Samsung Telecomm. Am.,
LLC, 845 F.3d 1279, 1291 (9th Cir. 2017) (internal quotation
YANG V. DONGWON INDUSTRIES 17
marks and citation omitted) (affirming denial of non-
signatory’s motion to compel arbitration); accord
Rajagopalan v. NoteWorld, LLC, 718 F.3d 844, 847 (9th Cir.
2013) (same).
Accordingly, we affirm the district court’s denial of
Dongwon’s motion to compel arbitration.
Costs shall be taxed against Dongwon.
AFFIRMED.