United Computer Systems, Inc. v. At & T Corp.

• Decision Date: 31 May 2002
• Docket Number: No. 00-55768.,00-55768.
• Citation: 298 F.3d 756
• Parties: UNITED COMPUTER SYSTEMS, INC., a California corporation, Plaintiff-Appellant, v. AT & T CORPORATION, a New York corporation; AT & T Information Systems Inc.; AT & T Technologies, Inc.; Lucent Technologies Inc., a Delaware corporartion; The National Cash Register Company, a Maryland corporation; Jan Stredicke, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 756

298 F.3d 756

UNITED COMPUTER SYSTEMS, INC., a California corporation, Plaintiff-Appellant, v. AT & T CORPORATION, a New York corporation; AT & T Information Systems Inc.; AT & T Technologies, Inc.; Lucent Technologies Inc., a Delaware corporartion; The National Cash Register Company, a Maryland corporation; Jan Stredicke, Defendants-Appellees.

No. 00-55768.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 14, 2002.

Filed May 31, 2002.

As Amended on Denial of Rehearing July 22, 2002.

COPYRIGHT MATERIAL OMITTED

Steven J. Stanwyck, The Stanwyck Firm, APC, Los Angeles, CA, for the plaintiffs-appellants.

William J. Kramer, Orrick, Herrington & Sutcliffe LLP, for defendants-appellees AT & T Corp., Lucent Technologies, Inc. and NCR Corp.; Richard W. Page, The Page Firm, APC, San Diego, CA, for defendant-appellee Jan Stredicke.

Appeal from the United States District Court for the Central District of California Ronald S.W. Lew, District Judge, Presiding. D.C. No. CV-00-01640-RSWL.

Before SCHROEDER, Chief Judge, CUDAHY,^* and McKEOWN, Circuit Judges.

CUDAHY, Circuit Judge:

In 1986, United Computer Systems (UCS) signed a software licensing and development agreement with a company that later merged with its corporate parent, AT & T. This agreement contained a clause that purportedly made arbitration the exclusive means for resolving any claims or controversies between the parties arising under the agreement. The present case involves an action for arbitration by UCS against AT & T that has yet to be adjudicated by an arbitration panel because counsel for UCS,¹ with a singular obstinacy demonstrated throughout this litigation, filed suit in a California state court rather than pay the filing fee demanded by the American Arbitration Association (AAA). In an effort to destroy diversity jurisdiction under 28 U.S.C. § 1332, UCS also named Jan Stredicke, an AAA administrator, as a defendant. Nevertheless, on a theory of fraudulent joinder, AT & T successfully removed this case to federal court pursuant to 28 U.S.C. § 1441. The district court then dismissed all claims against Stredicke and three corporate defendants, AT & T, Lucent and NCR.² The district court also granted the corporate defendants' motion for sanctions against UCS. The district court entered a total of five judgments against UCS, which are now before this court on appeal. For the following reasons, we AFFIRM in part, REVERSE in part, VACATE in part and REMAND to the district court for further proceedings consistent with this opinion.

I.

In 1986, AT & T Information Systems, Inc. (AT & T-IS), then a subsidiary of AT & T, entered into a Software Licensing and Development Agreement (the Agreement) with UCS. According to the Agreement, "Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration in the state of California in accordance with the rules of the American Arbitration Association then in effect." Prior to this case, UCS initiated three prior arbitrations arising from disputes arising under the Agreement. Arbitrations II and III had been consolidated by the AAA, and on June 11, 1999, an arbitration panel rendered a decision for AT & T and Lucent (NCR being no longer a party to the dispute), denying all of UCS's claims. The panel determined that "[1] the License Agreement was terminated no later than January 15, 1993, and [2] all claims arising out of or relating to the License Agreement either have been or could have been litigated in this arbitration." On September 20, 1999, the Arbitration II/III ruling was confirmed by a federal district court. UCS then appealed to this court, proffering thirteen separate grounds for vacatur, which we summarily rejected in an unpublished memorandum decision. See American Tel. & Tel. Co. v. United Computer Systems, Inc., 7 Fed.Appx. 784 (9th Cir. 2001).

On October 29, 1999 — after the district court confirmed the award in Arbitration II/III but before we upheld its judgment on appeal — UCS photocopied its complaint from Arbitration III and served it again as a statement of claims seeking yet another arbitral award (Arbitration IV). This latest effort now gives rise to the controversy currently before this court. On November 11, 1999, Jan Stredicke, an employee of the AAA in its Los Angeles office, sent UCS a letter advising the company that a $2,000 filing fee was required before the AAA could administratively consider Arbitration IV. Stredicke's letter also advised UCS that the corporate defendants objected to Arbitration IV as being duplicative of the claims previously resolved in Arbitration II/III.

As indicated, Arbitration IV has never taken place because UCS has not come up with the $2,000 filing fee but has instead commenced a lawsuit in Los Angeles Superior Court. Under various legal theories arguably premised on the Agreement, UCS named Stredicke and the various AT & T corporate entities as defendants, demanded a jury trial and sought damages and a declaratory judgment compelling arbitration. On a theory of fraudulent joinder, the corporate defendants successfully removed the case to federal court. On April 3, 2000, the district court dismissed, under Fed.R.Civ.P. 12(b)(6), all claims against Stredicke. Because the district court had recently confirmed an earlier arbitration award based on the same set of operative facts as those underlying the current dispute, the district court ruled on April 4, 2000 that the doctrine of res judicata barred UCS's claims against AT & T, Lucent and NCR. An order denying UCS's motion to remand to state court was entered on April 14, 2000. And on the same day, UCS filed a Rule 60(b) motion for relief from judgment in light of this court's decision in Chiron Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126 (9th Cir.2000). This motion was denied on May 25, 2000. AT & T then filed a motion for sanctions against UCS and its counsel, Steven Stanwyck, which was granted on June 28, 2000.

On May 1, 2000, before the district court had ruled on the motion for reconsideration or the motion for sanctions, UCS filed its original notice of appeal, which referenced only the orders entered on April 3 and 14 (and omitted the Stredicke dismissal, which was entered on April 4). On July 14, 2000, UCS filed an amended notice of appeal, now referencing the April 4 order (Stredicke's dismissal), the May 25 order (denial of the Rule 60(b) motion) and the June 28 order (sanctions).

II.

Denial of a motion to remand a case to state court for lack of removal jurisdiction is reviewed by this Court de novo. See Ramirez v. Fox Television Station, Inc., 998 F.2d 743, 747 (9th Cir.1993) (citing Chmiel v. Beverly Wilshire Hotel Co., 873 F.2d 1283, 1285 (9th Cir.1989)). A decision concerning the arbitrability of a dispute is a question of law reviewed de novo. See Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 474 (9th Cir.1991). "[A] district court's imposition of sanctions pursuant to its inherent power is reviewed for an abuse of discretion." F.J. Hanshaw Enterprises, Inc. v. Emerald River Development, Inc., 244 F.3d 1128, 1135 (9th Cir.2001) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 55, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991)). Findings of fact that underlie a district court's legal conclusions are reviewed for clear error.³ See Alyeska Pipeline Service Company v. Kluti Kaah Native Village of Copper Center, 101 F.3d 610, 612 (9th Cir.1996) (citing Fed.R.Civ.P. 52(a)). "An appellate court must accept the lower court's findings of fact unless the appellate court is left with the definite and firm conviction that a mistake has been committed." Gonzalez-Caballero v. Mena, 251 F.3d 789, 792 (9th Cir.2001).

UCS appeals the following judgments: (1) the dismissal against Stredicke; (2) the denial of its motion to remand to state court; (3) the dismissal against the corporate defendants based on res judicata; (4) the denial of its Rule 60(b) motion for reconsideration; and (5) the sanctions award against UCS and Stanwyck in the amount of $8,000.

A.

As a threshold matter, both UCS's appeal of the Stredicke dismissal and the denial of the Rule 60(b) motion are untimely. The judgment against Stredicke was entered by the district court on April 4, 2000. Under Fed.R.App. P. 4(a)(1)(A), UCS had thirty days, until May 4, 2000, to file its notice of appeal. The Federal Rules of Appellate Procedure state that a "notice of appeal must ... (B) designate the judgment, order, or part thereof being appealed." Fed.R.App. P. 3(c)(1). In this case, the original notice of appeal (specifying only the April 3 and April 14 judgments) was filed before the district court made its ruling on the Rule 60(b) motion. Since that ruling was entered on May 25, 2000, the appeal of the April 3 and the April 14 judgments became effective on that date. See Fed. R.App. P. 4(a)(4)(B)(i) ("If a party files a notice of appeal after the court announces or enters a judgment—but before it disposes of any motion listed in Rule 4(a)(4)(A)—the notice becomes effective to appeal a judgment or order, in whole or in part, when the order disposing of the last such remaining motion is entered."). Even if we assume that the filing deadline for the Stredicke dismissal was thirty days after the court entered the denial of the Rule 60(b) motion (entered on May 25, 2000), which is a plausible but not necessarily correct reading of Fed. R.App. P. 4(a)(4)(A), the latest possible date for filing a timely appeal would have been June 25, 2000. In this case, however, UCS did not file its amended notice of appeal until July 14, 2000.

In summary, this court has jurisdiction only over the April 3rd judgment dismissing the corporate defendants, the April 14th judgment denying the motion to remand to state court and the June 27th judgment imposing sanctions on UCS. Although we agree with the corporate defendants that the appeal of the Rule 60(b) r...