In an opinion that is the first of its kind in the California appellate courts, the Second District Court of Appeal, Division 7, has ruled that certain COVID-19-related business losses may be covered by business-interruption insurance (BII) policy provisions.  Marina Pacific Hotels & Suites, LLC v. Fireman’s Fund Ins., No. B316501, 2022 WL 2711886 (Cal. Ct. App. July 13, 2022) (slip op.), available at https://www.courts.ca.gov/opinions/documents/B316501.PDF.

The groundbreaking opinion gives a leg up to policyholders struggling with pandemic-era debt and business losses.  The decision may also inspire the California Supreme Court, other California Courts of Appeal, and the U.S. Court of Appeals for the Ninth Circuit (among other reviewing courts nationwide) to give policyholders the opportunity to prove BII coverage in the context of the pandemic.

When the 9th Circuit issued Monster Energy Company v. City Beverages, LLC, 940 F.3d 1130 (9th Cir. 2019), there was immediate concern over how far the decision would extend and how many cases it would spawn. The decision vacated an arbitral award in favor of Monster Energy. The court found there was evident partiality “given the Arbitrator’s failure to disclose his ownership interest in JAMS, coupled with the fact that JAMS has administered 97 arbitrations for Monster over the past five years.” Id. at 1132.

As the dissent pointed out, the decision left open a number of troubling questions. For example, “how many prior arbitrations must a corporation have engaged in with an arbitration firm for there to be nontrivial business dealings…that require disclosure?” Id. at 1141. Or “must prior arbitrations with the lawyers or law firms representing the parties also be disclosed?” Id. The dissent predicted there would be endless litigations to resolve the questions. Id.  

Can an order ruling on a motion or petition to compel arbitration in federal court be appealed? While federal appellate jurisdiction is generally limited to “final decisions” of the district courts (28 U.S.C. § 1291), the Federal Arbitration Act (“FAA”) authorizes interlocutory appeals from orders denying arbitration. But the ability to appeal an order that compels arbitration depends on whether the district court dismisses the civil action. Before appealing an order on a motion or petition to compel arbitration, consider the following principles and pitfalls:

FAA appellate jurisdiction extends to orders “refusing a stay of any action under section 3” and orders “denying a petition under section 4 … to order arbitration to proceed.” 9 U.S.C. § 16(a)(1)(A)-(B). Section 16 promotes appeals from orders denying arbitration and limits appeals directing arbitration, consistent with Congress’s intent to have arbitrable disputes proceed quickly to arbitration. Bushley v. Credit Suisse First Bos., 360 F.3d 1149, 1153 (9th Cir. 2004). Thus, a district court’s denial of a motion or petition to compel arbitration will generally give a party the right to appeal.

Amici curiae often walk a tightrope between offering argument that is supplemental, but also sufficiently within the issues framed by the parties. That tightrope may be even narrower after the Supreme Court issued its decision in United States v. Sineneng-Smith, 140 S.Ct. 1575 (2020), which vacated an order by the Ninth Circuit for violating the party presentation rule.

Under the “party presentation rule,” federal courts are discouraged from considering legal arguments and issues not raised by the parties. Federal courts “rely on the parties to frame the issues for decision and assign to courts the role of neutral arbiter of matters the parties present.”  Greenlaw v. United States, 554 U.S. 237, 243 (2008).

By Josephine Petrick & Breana Burgos

2019 was another active year for federal appellate anti-SLAPP opinions. Most notably, the circuit split deepened over whether state anti-SLAPP laws even apply in federal court.

Despite an earlier trend of federal courts applying state anti-SLAPP laws under Erie, recent decisions may reflect a new trend toward limiting or even eradicating the application of state anti-SLAPP laws in federal court—even in the Ninth Circuit.  Given the current robust circuit split and many intracircuit tensions discussed below, this is an issue that the U.S. Supreme Court or en banc circuit courts may be called on to resolve in the months and years to come.  These developments are a further testament as to why Congress should consider enacting a federal anti-SLAPP law.  Here’s an overview of the current circuit split and recent developments in 2019.

Losing a federal appeal raises various options, some more appealing than others. These include filing a petition for panel rehearing, a petition for rehearing en banc, or a petition for writ of certiorari. Before deciding which petition makes sense, consider the following:

According to the Federal Rules of Appellate Procedure (FRAP), a petition for panel rehearing is used to call to the court’s attention any material errors of law or fact resulting in a denial of justice. FRAP 40(a)(2). These include: irregularities in the trial; serious evidentiary flaws; the discovery of important new evidence which was previously unavailable; accident; unpredictable surprise; or unavoidable mistake. But, mere technical errors are not proper grounds for a panel rehearing.