Voltage Pictures, LLC v. Gussi, S.A. de C.V.

92 F.4th 815

VOLTAGE PICTURES, LLC, Petitioner-Appellee, v. GUSSI, S.A. DE C.V., Respondent-Appellant.

No. 23-55123

United States Court of Appeals, Ninth Circuit

Argued and Submitted December 6, 2023 Pasadena, California

Filed February 5, 2024

Appeal from the United States District Court for the Central District of California Fernando L. Aenlle-Rocha, District Judge, Presiding, D.C. No. 2:21-cv-04751-FLA-RAO

Charles M. Coate (argued), Hamrick & Evans LLP, Burbank, California, for Respondent-Appellant.

Elaine Li (argued) and Jeremiah Reynolds, Eisner LLP, Beverly Hills, California, for Petitioner-Appellee.

Before: MILAN D. SMITH, JR., KENNETH K. LEE, and LAWRENCE VANDYKE, Circuit Judges.

OPINION

M. SMITH, Circuit Judge:

On June 10, 2021, Voltage Pictures, LLC (Voltage) filed a motion in the United States District Court for the Central District of California to confirm an arbitral award that was issued against Gussi S.A. de C.V. (Gussi SA) earlier that year. After hearing from both parties, the district court confirmed the award and entered judgment in favor of Voltage. On appeal, Gussi SA maintains that service of the motion to confirm the award was insufficient under federal law and that parallel proceedings in Mexico required the district court to abstain from confirming the arbitral award. We have jurisdiction pursuant to 28 U.S.C. § 1291 and 9 U.S.C. § 16(a), and we affirm.

FACTUAL BACKGROUND

Voltage is a film production and distribution limited liability company based in Los Angeles.¹ Gussi SA is a Mexican corporation with its principal place of business in Mexico City. On November 7, 2018, Voltage, on behalf of non-party EVE Nevada, LLC, entered into a Distribution and License Agreement (the DLA) with Gussi SA to license the distribution rights of the film Ava in Latin America on an exclusive basis, and for pan-regional television services in Spanish in additional foreign countries on a non-exclusive basis.

Exhibit A to the DLA contains an arbitration provision, which states that "[a]ny dispute arising out of or relating to this Agreement will be resolved by final binding arbitration under the [Independent Film & Television Alliance (IFTA)] Rules [for International Arbitration] . . . in effect at the time of the notice of arbitration is filed . . . ." It further states that Gussi SA "consents and submits to the jurisdiction of the state and federal courts located in Los Angeles County, California with respect to any action arising out of or relating to this Agreement or the Picture," and that the DLA "shall be covered by and interpreted in accordance with the laws of the State of California (without regard to the conflict of laws provisions thereof)." It also provides that "[t]he Parties hereby submit to the jurisdiction of the courts in [Los Angeles County, California] to compel arbitration or to confirm an arbitration award." Most significantly to this appeal, the arbitration provision declares that "[t]he Parties agree to accept service of process in accordance with the IFTA Rules."

IFTA Rule 12 is titled "The Award." IFTA Rule 12.5 provides, in part, that:

Service of any petition, summons or other process necessary to obtain confirmation of the Arbitrator's award may be accomplished by any procedure authorized by applicable law, Treaty or Convention, except that the parties waive application of the Hague Convention for Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters with respect to service of process.

Immediately below IFTA Rule 12.5 is IFTA Rule 13, titled "Applicable Law." IFTA Rule 13.1 provides, in full, that:

The Arbitrator shall apply the laws of the State of California to all arbitrations conducted under these Rules unless the parties by mutual agreement or by the contract to be enforced provide that the Arbitrator shall apply the law of one other jurisdiction, or the Arbitrator for good cause designates another location to be the situs of the arbitration in which case the Arbitrator shall have the discretion to apply for good cause the law of the situs of the arbitration.

PROCEDURAL HISTORY

On July 22, 2020, Voltage filed and served its demand for arbitration against Gussi SA after a dispute arose between Voltage and Gussi SA regarding their respective rights and obligations under the DLA. Eventually, both parties participated in an arbitration over Zoom on December 3 and 4, 2020, with the proceedings based in Los Angeles. On June 7, 2021, the Arbitrator issued a final arbitral award in Voltage's favor. Shortly thereafter, Voltage mailed a notice of motion to confirm the arbitral award and the accompanying motion papers to the attorneys who had represented Gussi SA in the underlying arbitration. On June 10, 2021, Voltage filed its motion to confirm the award in the United States District Court for the Central District of California. In the motion, Voltage alleged that the district court had diversity jurisdiction over the matter pursuant to 28 U.S.C. § 1332(a)(2).

On June 21, 2021, Gussi SA filed its first motion to quash service of and to dismiss Voltage's motion to confirm the arbitral award. On March 28, 2022, after the district court held that it had diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(2) to adjudicate the motion, the district court ruled that "the parties agreed to service as allowed under California law" by incorporating IFTA Rule 12.5 into the DLA. However, the court also held that Voltage "fail[ed] to demonstrate it completed service of process on" Gussi SA in accordance with California law. Accordingly, the court granted in part the motion to quash service and ordered Voltage to complete service of the motion to confirm the arbitral award "within 60 days of th[e] order."

The next day, Voltage mailed its notice of motion and accompanying motion papers to Gussi SA's address in Mexico via Federal Express and requested the return of a signed receipt upon delivery. A few days later, Voltage received a return receipt, signed by Silvia Torres, who had been designated by Gussi SA as its representative for service of process during the underlying arbitration proceedings. Then, on May 3, 2022, Voltage delivered the same papers through personal service on the registered service agent for Gussi, Inc., a Delaware corporation registered to do business in California and with its executive offices located in Los Angeles, California. Gussi SA and Gussi, Inc. are owned by the same Mexican holding company. Gussi, Inc. has only three employees, two of whom negotiated the DLA on behalf of Gussi SA.

On June 3, 2022, Gussi SA filed a further motion to quash service of process. Despite the district court already having ruled that California law governed service of process, Gussi SA reargued that federal procedural law—specifically, Federal Rules of Civil Procedure 4(h)(2) & 4(f)—and not California law, applied to service of process. Gussi SA also contended that, even if California law applied, Voltage's service was invalid. On December 6, 2022, the court reaffirmed its holding that California law governed service of the motion and also ruled that Voltage sufficiently served Gussi SA on May 3, 2022, through personal service on the registered service agent for Gussi, Inc., which the district court deemed to be Gussi SA's "general manager" pursuant to § 416.10(d) of the California Code of Civil Procedure and § 2110 of the California Corporations Code.

Within two days of the district court's order denying Gussi SA's further motion to quash service, Gussi SA notified Voltage of an action that Gussi SA supposedly brought against Voltage in Mexico earlier that year. According to Gussi SA, a Mexican court issued an order enjoining Voltage from enforcing the arbitral award on February 2, 2022. Therefore, Gussi SA requested that the district court dismiss or stay Voltage's motion to confirm the arbitral award based on the Mexican court order. The district court ultimately denied this motion, finding that Gussi SA failed to certify the genuineness of the document purporting to be a Mexican court order and the accompanying translation. Accordingly, the district court found that there was no judicially noticeable court order to which the district court could extend comity. On January 23, 2023, the district court entered judgment confirming the arbitral award in all respects. Gussi SA timely appealed.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction pursuant to 28 U.S.C. § 1291 and 9 U.S.C. § 16(a). Johnson v. Wells Fargo Home Mortg., Inc., 635 F.3d 401, 409 (9th Cir. 2011). We review de novo a district court's determination that it had subject matter jurisdiction over an action and its determination that service of process was sufficient. United States v. Peninsula Commc'ns, Inc., 287 F.3d 832, 836 (9th Cir. 2002) (subject matter jurisdiction); In re Focus Media Inc., 387 F.3d 1077, 1081 (9th Cir. 2004) (sufficiency of service). We review for abuse of discretion a district court's evidentiary rulings and its decisions regarding international comity. Wagner v. Cnty. of Maricopa, 747 F.3d 1048, 1052 (9th Cir. 2013) (evidentiary rulings); Mujica v. AirScan Inc., 771 F.3d 580, 589 (9th Cir. 2014) (international comity). We may affirm a district court's decision "on any ground supported by the record even if not explicitly relied upon by the district court." Johnson v. Barr, 79 F.4th 996, 1003 (9th Cir. 2023).

ANALYSIS

I. The District Court Had Jurisdiction to Hear the Motion to Confirm the Arbitral Award but Not for the Reasons It Articulated.

The district court correctly recognized that "[t]he provisions of 9 U.S.C. § 9," which govern motions to confirm an arbitral award, "do not in themselves confer subject matter jurisdiction on a federal district court." See Gen. Atomic Co. v. United Nuclear Corp., 655 F.2d 968, 969 (9th Cir. 1981); see also United States v. Park Place Assocs., Ltd., 563 F.3d 907, 918-19 (9th Cir. 2009). Therefore, the district court had to identify...