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United States Court of Appeals for the Ninth Circuit
July 12, 2019, Argued and Submitted, Pasadena, California; October 22, 2019, Filed
Nos. 17-55813, 17-56082
[*1132] M. SMITH, Circuit Judge:
City Beverages, LLC, doing business as Olympic Eagle Distributing [**2] (Olympic Eagle), and Monster Energy Co. (Monster) signed an agreement providing exclusive distribution rights for Monster's products to Olympic Eagle for a fixed term in a specified territory. After Monster exercised its contractual right to terminate the agreement, the parties proceeded to arbitration to determine whether Olympic Eagle was entitled to protection under Washington law, and thus whether Monster had improperly terminated the agreement without good cause. From a list of several neutrals provided by JAMS, the arbitration organization specified in the agreement, the parties chose the Honorable John W. Kennedy, Jr. (Ret.) (the Arbitrator). At the outset of arbitration, the Arbitrator provided a series of disclosure statements. In the final arbitration award (the Award), the Arbitrator determined that Olympic Eagle did not qualify for protection under Washington law.
The parties filed cross-petitions in the district court, with Monster seeking to confirm the Award and Olympic Eagle moving to vacate it. The district court ultimately confirmed the Award.
We conclude, given the Arbitrator's failure to disclose his ownership interest in JAMS, coupled with the fact that JAMS has [**3] administered 97 arbitrations for Monster over the past five years, that vacatur of the Award is necessary on the ground of evident partiality. We therefore reverse the district court and vacate the Award. We also vacate the district court's award of post-arbitration fees to Monster for its petition to confirm the Award.
FACTUAL AND PROCEDURAL BACKGROUND
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
940 F.3d 1130 *; 2019 U.S. App. LEXIS 31388 **; 2019 WL 5382062
MONSTER ENERGY COMPANY, FKA Hansen Beverage Company, Petitioner-Appellee, v. CITY BEVERAGES, LLC, DBA Olympic Eagle Distributing, Respondent-Appellant.
Subsequent History: Rehearing denied by, Rehearing denied by, En banc Monster Energy Co. v. City Bevs., LLC, 2019 U.S. App. LEXIS 38684 (9th Cir. Cal., Dec. 30, 2019)
Stay granted by Monster Energy Co. v. City Bevs., LLC, 2020 U.S. App. LEXIS 230 (9th Cir. Cal., Jan. 6, 2020)
US Supreme Court certiorari denied by Monster Energy Co. v. City Bevs. LLC, 207 L. Ed. 2d 1100, 2020 U.S. LEXIS 3430, 2020 WL 3492685 (U.S., June 29, 2020)
Motion denied by Monster Energy Co. v. City Bevs., LLC, 2020 U.S. App. LEXIS 21194 (9th Cir. Cal., July 8, 2020)
Prior History: [**1] Appeal from the United States District Court for the Central District of California. D.C. No. 5:17-cv-00295-RGK-KK. R. Gary Klausner, District Judge, Presiding.
Monster Energy Co. v. City Bevs., 2017 U.S. Dist. LEXIS 228681 (C.D. Cal., June 28, 2017)
Disposition: REVERSED and VACATED.
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