Day v. Orrick, Herrington & Sutcliffe, LLP

• Decision Date: 01 August 2022
• Docket Number: 21-16642
• Citation: 42 F.4th 1131
• Parties: Jones DAY, Petitioner-Appellant, v. ORRICK, HERRINGTON & SUTCLIFFE, LLP; Michael D. Torpey ; Mitchell Zuklie, Respondents-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

42 F.4th 1131

Jones DAY, Petitioner-Appellant,

v.ORRICK, HERRINGTON & SUTCLIFFE, LLP; Michael D. Torpey ; Mitchell Zuklie, Respondents-Appellees.

No. 21-16642

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 10, 2022 San Francisco, California

Filed August 1, 2022

Craig E. Stewart (argued), David C. Kiernan, and Paul C. Hines, Jones Day, San Francisco, California, for Petitioner-Appellant.

Sarah M. Harris (argued), Michael J. Mestitz, Benjamin W. Graham, and Aaron Z. Roper, Williams & Connolly LLP, Washington, D.C.; L. Christopher Vejnoska, Orrick Herrington & Sutcliffe LLP, San Francisco, California; for Respondents-Appellees.

Before: Kim McLane Wardlaw, Sandra S. Ikuta, and Bridget S. Bade, Circuit Judges.

WARDLAW, Circuit Judge:

Congress enacted Chapter Two of the Federal Arbitration Act ("FAA"), see 9 U.S.C. §§ 201 – 208, to provide for the effective and efficient resolution of international arbitral disputes after the United States entered into the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, June 1958) ("the New York Convention" or "Convention"). This appeal arises from the denial of a petition to enforce a summons issued by an arbitrator conducting an international arbitration pursuant to Chapter Two of the FAA.

We first address subject matter jurisdiction. Unlike Chapter One of the FAA, which governs domestic arbitral disputes and does not include a jurisdictional provision, Chapter Two of the FAA includes a jurisdictional provision, 9 U.S.C. § 203, which provides federal district courts with original jurisdiction over "action[s] or proceeding[s] falling under the Convention." It is clear that the enforcement of an agreement to arbitrate or an arbitral award "fall[s] under the Convention," but we must decide whether an action to enforce an arbitral summons issued by the arbitrator in an ongoing international arbitration under the Convention also "falls under the Convention." We join our sister circuits in holding that (1) if the underlying arbitration agreement or award falls under the Convention, and (2) the action or proceeding relates to that agreement or award, then the federal district court has jurisdiction over the action or proceeding.

This conclusion raises the question of in which district court should the enforcement action be brought? Section 204 of the FAA provides that where the arbitration agreement designates a "place of arbitration" in the United States, an action or proceeding may be brought in the district embracing the place of arbitration. However, where, as here, that federal district court lacks personal jurisdiction over the party against whom enforcement is sought, we hold that the action may be brought in any district court deemed appropriate under the general venue statute, 28 U.S.C. § 1391, because § 204 supplements, rather than supplants, other venue rules.

I.

At the root of the ongoing international arbitration is a dispute between Jones Day and one of its former partners, a German national who was based in its Paris office, until he left to join Orrick, Herrington & Sutcliffe.¹ Jones Day's partnership agreement provides for mandatory arbitration of all disputes among partners, and that all such arbitration proceedings are governed by the FAA. The partnership dispute proceeded to arbitration in Washington D.C., the location designated in the arbitration agreement.

Jones Day requested that the arbitrator issue a subpoena to Orrick for documents it deemed material to its claims against its former partner. The arbitrator issued a subpoena and summoned Orrick to appear before him to produce the specified documents. When Orrick failed to comply with the subpoena, Jones Day sought to enforce it in the Superior Court of the District of Columbia. That court dismissed Jones Day's petition, concluding that it lacked personal jurisdiction over Orrick, whose principal place of business is San Francisco, and that section 7 of the FAA "requires Jones Day to file its action to enforce an arbitral subpoena in a United States district court."

Jones Day then requested that the arbitrator sit for a hearing in the Northern District of California and issue a revised subpoena requiring two Orrick partners residing in the Northern District to appear at a hearing in San Jose, California. The arbitrator granted Jones Day's request and issued the arbitral summonses. Orrick refused to comply with those summonses, so Jones Day filed this action to enforce them in the District Court for the Northern District of California.

The district court denied Jones Day's petition, concluding that it lacked authority to compel compliance with the summonses under FAA § 7, which it construed as providing that the district where the arbitrator sits is the only district in which a district court may compel attendance. See 9 U.S.C. § 7. Reasoning that "it is undisputed that Washington D.C. is the seat of the underlying arbitration," the district court concluded it could not compel attendance at a hearing in San Jose, California. The district court rejected Jones Day's argument that an arbitrator can "sit" in more than one location, and that for purposes of the hearing in San Jose, the arbitrator would be sitting in the Northern District. Because it dismissed Jones Day's petition on venue grounds, the district court declined to decide whether Chapter Two of the FAA conferred subject matter jurisdiction over actions to enforce an arbitral summons to a third party.

II.

We have jurisdiction under 28 U.S.C. § 1291. "We review questions of statutory construction and subject-matter jurisdiction de novo." Lake v. Ohana Mil. Cmtys., LLC , 14 F.4th 993, 1000 (9th Cir. 2021) (quoting City of Oakland v. BP PLC , 969 F.3d 895, 903 (9th Cir. 2020) ). We also review the district court's denial for improper venue de novo. California v. Azar , 911 F.3d 558, 568 (9th Cir. 2018).

III.

A.

Although the district court declined to decide the issue, we first conclude that the district court had subject matter jurisdiction to enforce the arbitral summonses. Section 203 of the FAA provides federal district courts with original jurisdiction, without regard to the amount in controversy, over "[a]n action or proceeding falling under the Convention." 9 U.S.C. § 203. The parties do not dispute, and we hold, that the petitions to compel enforcement of arbitral summonses constitute "actions or proceedings" under the statute. Rather, they differ only as to whether such enforcement actions "fall under the Convention."

We begin with the text of the statute, here Chapter Two of the FAA, which governs arbitrations under the Convention. Section 203 provides that "[a]n action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States." 9 U.S.C. § 203. It further provides that the federal district courts "shall have original jurisdiction over such an action or proceeding ..." Id. There is no question that the arbitration agreement itself falls under the Convention. 9 U.S.C. § 202. Agreed, says Orrick, but neither the Convention nor Chapter Two of the FAA expressly provides any tool to enforce arbitral summonses. Orrick contends that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards is narrowly limited to just that—the recognition and enforcement of completed arbitral awards. Moreover, it argues, actions or proceedings that "fall under" the Convention are limited to those set forth in Chapter Two of the FAA. That would confine § 203 jurisdiction to just three types of actions or proceedings: orders to compel arbitration, 9 U.S.C. § 206 ; appointments of arbitrators in accordance with an arbitration agreement, id. ; or orders confirming an arbitral award, 9 U.S.C. § 207. Orrick reasons that because Congress "conspicuously" did not include a provision regarding petitions to enforce arbitral summonses, such a petition is not an action or a proceeding encompassed under § 203.

Orrick argues that to "fall under" means to be "listed or classified as" or "included in," citing Webster's New World Dictionary and the MacMillan Contemporary Dictionary. However, dictionaries from around 1970 (the year Congress enacted § 203, see Pub. L. 91-368 (July 31, 1970), 84 Stat. 692) embrace a broader definition of "fall under" than what Orrick asserts here. See The Compact Edition of the Oxford English Dictionary Vol. I 955 (1971) ("To be brought under the operation or scope of, be subjected to"); Oxford Dictionary of Current Idiomatic English Vol. I 102 (1975) ("be classified as, be placed within a certain category"). As these dictionaries demonstrate, the ordinary meaning of "fall under" does not support Orrick's contention that courts have jurisdiction under § 203 only if the action or proceeding is expressly listed or identified in the Convention.

In addition to the ordinary meaning of § 203's text, the structure of the Convention and Chapter Two of the FAA supports the conclusion that actions or proceedings need not be explicitly listed in the Convention to "fall under" the Convention. The Supreme Court has rejected the notion that the New York Convention must list every "judicial tool" for it to "fall under the Convention." In GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC , ––– U.S. ––––, 140 S. Ct. 1637, 207 L.Ed.2d 1 (2020), the Court determined that the domestic doctrine of equitable estoppel, which permits the enforcement of arbitration agreements against nonsignatories, does not conflict with the Convention, and so is applicable in international arbitrations. Id. at 1645 (citing 9 U.S.C. § 208, which provides that Chapter One applies to actions and proceedings brought under Chapter Two to the extent they do not conflict with Chapter Two or the Convention).

The Court began by examining the text of the New York Convention. Arbitration agreements are discussed only in Article II of the...