Boardman v. Pac. Seafood Grp.
| Decision Date | 03 May 2016 |
| Docket Number | Nos. 15–35257,15–35504.,s. 15–35257 |
| Citation | 822 F.3d 1011 |
| Parties | Jeff BOARDMAN; Dennis Rankin ; Robert Seitz; Todd L. Whaley; South Bay Wild, Inc.; Lloyd D. Whaley; Miss Sarah, LLC; My Fisheries, Inc., Plaintiffs–Appellees, v. PACIFIC SEAFOOD GROUP ; Ocean Gold Holding Co., Inc.; Dulcich Inc.; Frank Dulcich; Pacific Seafood Group Acquisition Company, Inc.; Pacific Seafood Washington Acquisition Co., Inc.; Bandon Pacific, Inc.; Bio–Oregon Protein, Inc.; Pacific Choice Seafood Company; Pacific Coast Seafoods Company; Pacific Garibaldi, Inc.; Pacific Gold Seafood Company ; Pacific Pride Sea Food Company ; Pacific Sea Food Co. ; Pacific Surimi Co., Inc. ; Pacific Tuna Company, LLC; Washington Crab Producers, Inc. ; Pacific Alaska Shellfish, Inc. ; Sea Level Seafoods, LLC ; Island Fish Co., LLC; Pacific Resurrection Bay ; Pacific Conquest, Inc.; Calamari, LLC; Jo Marie LLC; Leslie Lee, LLC; Miss Pacific, LLC; Pacific Future, LLC ; Pacific Grumpy J, LLC; Pacific Hooker, LLC; Pacific Horizon, LLC; Pacific Knight, LLC; Privateer LLC ; Sea Princess, LLC ; Triple Star, LLC ; Pacific Fishing, LLC ; Pacific Sea Food of Arizona, Inc.; Starfish Investments, Inc. ; Dulcich Surimi, LLC; Bio–Oregon Properties, LLC; Pacific Group Transport, Co. ; Pacific Marketing Group, Inc.; Pacific Russia, Inc. ; Pacific Russia Ventures, LLC; Pacific Tuna Holding Company, Inc.; Powell Street Market, LLC; Pacific Fresh Sea Food Company; Seacliff Seafoods, Inc.; Copper River Resource Holding Co., Inc.; Pacific Copper River Acquisition Co., Inc.; Sea Level Seafoods Acquisition, Inc.; Island Coho, LLC; S & S Seafood Co., Inc.; Pacific Seafood Disc., Inc.; Dulcich Realty, LLC; Dulcich Realty Acquisition, LLC; Dulcich Jet, LLC; Ocean Companies Holding Co., LLC, Defendants–Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Timothy W. Snider (argued), Rachel C. Lee, and Randolph C. Foster, Stoel Rives LLP, Portland, OR; Michael J. Esler, John W. Stephens, and Kim T. Buckley, Esler, Stephens, & Buckley, Portland, OR, for Defendants–Appellants.
Michael E. Haglund (argued), Michael K. Kelley, Shay S. Scott, and Sara Ghafouri, Haglund Kelley LLP, Portland, OR, for Plaintiffs–Appellees.
Appeals from the United States District Court for the District of Oregon, Owen M. Panner and Michael J. McShane, District Judges, Presiding. D.C. No. CV 15–0108 MC.
Before: A. WALLACE TASHIMA, RONALD LEE GILMAN,* and CARLOS T. BEA, Circuit Judges.
Opinion by Judge TASHIMA
OPINION
These consolidated appeals arise out of an antitrust action brought by a group of West Coast fishermen against Frank Dulcich, the West Coast seafood processor entities owned by Dulcich (collectively, “Pacific Seafood”), and Ocean Gold Seafoods, Inc. (“Ocean Gold”), another West Coast seafood processor, which was commenced in 2010 and settled in 2012. Their settlement is documented in a Resolution Agreement.
In December 2014, Pacific Seafood informed the other parties to the Resolution Agreement, including several who are now plaintiffs in the instant action, that Pacific Seafood was planning to acquire Ocean Gold. Plaintiffs, a second group of West Coast fishermen,1 then filed the present action against Dulcich, Pacific Seafood, and an Ocean Gold entity (collectively, “Defendants”), alleging antitrust claims under the Sherman Act and the Clayton Act.
Plaintiffs moved for a preliminary injunction to enjoin the acquisition pendente lite, which the district court granted. Defendants then filed a motion to compel arbitration, arguing that the dispute should be arbitrated pursuant to a provision in the Resolution Agreement. The district court denied this motion.
Defendants now appeal the district court's decisions granting the preliminary injunction and denying the motion to compel arbitration. We have jurisdiction over the appeal from the order granting the preliminary injunction under 28 U.S.C. § 1292(a)(1). We have jurisdiction over the appeal from the order denying Defendants' motion to compel arbitration under 9 U.S.C. § 16(a)(1)(C). We affirm both decisions.
In 2010, a group of West Coast fishermen (the “Whaley plaintiffs”) sued Frank Dulcich, Pacific Seafood, and Ocean Gold in the District of Oregon. The Whaley plaintiffs—and Plaintiffs here—sell their catch to processors such as Pacific Seafood and Ocean Gold, and seek to insure competition between the buyers of their fish. The Whaley plaintiffs alleged that the defendants had engaged in a conspiracy to restrain trade in, as well as monopolization and attempted monopolization of, multiple West Coast seafood markets.
Within a few months of filing suit, the Whaley plaintiffs learned that Pacific Seafood was planning to acquire Ocean Gold and its affiliated companies. They filed for a temporary restraining order to halt the proposed transaction. Defendants then represented to the district court and the Whaley plaintiffs that they had terminated the transaction, and that they would not pursue it again without prior notice to the plaintiffs and the Oregon Attorney General.
Throughout the course of the Whaley litigation, Pacific Seafood and Ocean Gold were parties to an exclusive marketing contract, under which Pacific Seafood acted as the exclusive marketer and distributor of Ocean Gold's products. This agreement was set to expire in 2016.
The Whaley litigation continued for twenty months. From February to March 2012, the parties engaged in settlement negotiations, mediated by then-Senior District Judge Michael Hogan. The parties filed a Stipulation and Resolution Agreement of Class Action Claims (the “Resolution Agreement”) in April 2012. The district court entered a Judgment and Order of Dismissal on May 21, 2012.
In the Resolution Agreement, the Whaley defendants agreed not to renew Pacific Seafood and Ocean Gold's exclusive marketing contract when it expired in 2016. Additionally, in Paragraph 3(a) of the Resolution Agreement, defendants agreed that, if Pacific Seafood and Ocean Gold were to “enter into any new agreement that require[d] Pacific Seafood Group to act as the exclusive marketer of any seafood product produced by Ocean Gold Seafoods,” Pacific Seafood and Ocean Gold would give 60–days' notice to plaintiffs' counsel and the Oregon Department of Justice. Objections to the new contractual arrangement were to be submitted to Judge Hogan, or, if he were unavailable, Magistrate Judge John Jelderks, for resolution. If Judge Hogan, or his successor, were to determine that the new agreement were “pro-competitive ... it may be approved.”
In December 2014, counsel for Frank Dulcich and Pacific Seafood informed lead plaintiffs' counsel in the Whaley litigation that Pacific Seafood again intended to acquire Ocean Gold's stock. Plaintiffs' counsel then conducted an investigation into this proposed acquisition, and learned that Pacific Seafood and Ocean Gold had been negotiating the proposed transaction for 15 months. On January 21, 2015, plaintiffs' counsel asked defendants' counsel whether the transaction was scheduled to close in the near future, and defendants' counsel replied that he did not know.
Plaintiffs, a second group of West Coast fishermen,2 then filed this action against Pacific Seafood, an Ocean Gold entity (Ocean Gold Holding Co., Inc.), and Dulcich (collectively, “Defendants”) on January 22, 2015, alleging monopolization and attempted monopolization under § 2 of the Sherman Act, and requesting a declaratory judgment that Pacific Seafood's proposed acquisition of Ocean Gold violated the Whaley Resolution Agreement.3 Plaintiffs also applied for a temporary restraining order to halt Pacific Seafood's proposed acquisition of Ocean Gold, which the district court granted.
Plaintiffs then moved for a preliminary injunction, after which Defendants filed a stipulation stating that the Oregon Attorney General had begun an investigation into Pacific Seafood's proposed acquisition of Ocean Gold, and that Defendants agreed that they would not “enter into any purchase transaction” with respect to Ocean Gold while the investigation was pending. Further, that Defendants could terminate the stipulation “upon 60–days' prior notice to the Oregon Attorney General and the Court.”
The district court (Judge McShane) granted Plaintiffs' preliminary injunction motion. The preliminary injunction prohibited defendants “from undertaking any further act to acquire or control any interest in” Ocean Gold's stock or assets. Defendants timely appeal from the decision granting the preliminary injunction.
About a month after the preliminary injunction was granted, Defendants filed a motion to compel arbitration, arguing that Plaintiffs were obligated to submit their objection to Pacific Seafood's proposed acquisition of Ocean Gold to Magistrate Judge Jelderks, the replacement for now-retired Judge Hogan, for arbitration under Paragraph 3(a) of the Whaley Resolution Agreement. The district court (Judge Panner) denied Defendants' motion, holding that Plaintiffs' claims did not fall within the scope of Paragraph 3(a). Defendants timely appeal the denial of their motion to compel arbitration.
These consolidated appeals are now before this Court.
We review a district court's denial of a motion to compel arbitration de novo. See Brown v. Dillard's, Inc., 430 F.3d 1004, 1009 (9th Cir.2005).
We review a district court's grant of a preliminary injunction for an abuse of discretion. Stormans, Inc. v. Selecky, 586 F.3d 1109, 1119 (9th Cir.2009). A district court abuses its discretion if it “base[s] its decision on an erroneous legal standard or on clearly erroneous findings of fact.” Id. (quoting FTC v. Enforma Nat. Prods., Inc., 362 F.3d 1204, 1211–12 (9th Cir.2004) ).
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