DotC United, Inc. v. Google Asia Pacific Pte. Ltd.

Background

DotC United, Inc. and Avazu Inc. petitioned under the Federal Arbitration Act to vacate an international arbitration panel’s order finding that it had jurisdiction over them. The companies were non-signatories to the underlying arbitration agreement. Google Asia Pacific Pte. Ltd. cross-moved to confirm the panel’s order.

The court had previously requested supplemental briefing about the scope of its review because the arbitration agreement did not contain a delegation clause. The court focused on the Supreme Court’s direction in First Options of Chicago, Inc. v. Kaplan that courts independently decide whether the parties agreed to arbitrate.

Rulings on the governing standards

The court held that independent review means deciding the arbitrability question without deference to the arbitrators’ findings. It rejected review under the clearly erroneous standard, which gives substantial respect to the prior factfinder’s decision.

The court also held that federal substantive law governs whether the petitioners are bound by the arbitration agreement. Applying Ninth Circuit precedent concerning the New York Convention, the court reasoned that federal law is necessary to promote uniform enforcement of international arbitration agreements. The court rejected the petitioners’ arguments for applying state choice-of-law rules and concluded that the authorities they cited did not control in a New York Convention case.

Questions the court will decide

The court identified two questions: (1) whether Jupiter agreed to arbitrate disputes with Google Asia, and (2) if so, whether DotC United and Avazu are bound by the agreement under federal common-law principles such as alter ego, equitable estoppel, or agency. Because the petitioners did not request a jury, the court stated that it would decide both questions in the first instance. The Federal Rules of Evidence will govern the court’s determination of arbitrability, meaning whether the dispute is subject to arbitration.

Next steps and disposition

Neither party claimed entitlement to summary judgment. The court therefore stated that it would make findings of fact and legal conclusions under Federal Rule of Civil Procedure 52 to resolve the arbitrability question. It directed the parties to meet and confer about stipulated facts, any necessary discovery, pre-hearing submissions, and the timing and form of a Rule 52 hearing. The court set a status conference for May 9, 2023, and required a joint update by May 5, 2023.

This order established the governing law, standard of review, evidence rules, and procedure for resolving the cross-petitions. The opinion does not state a final ruling granting or denying either the petition to vacate or the motion to confirm.