United States v. Park Place Assocs.

563 F.3d 907 (9th Cir. 2009)

 

RULE:

The mere existence of a forum does not waive sovereign immunity. A statute may create subject matter jurisdiction yet not waive sovereign immunity. 28 U.S.C.S. § 1340 creates subject matter jurisdiction, but does not constitute a waiver of sovereign immunity. For example, 28 U.S.C.S. § 1331 grants district courts original jurisdiction over all civil actions arising under the Constitution, laws or treaties of the United States, but it does not waive sovereign immunity. Section 1331 cannot be construed as authorizing suits against the United States, else the exemption of sovereign immunity would become meaningless.

FACTS:

The partnership entered into a Joint Venture Agreement with another partnership to develop, own, and operate a legal card-playing club. That second partnership had financed more than 12 million dollars of the initial investment using the proceeds of a drug trafficking ring. The U.S., through a forfeiture proceeding, acquired the second partnership's 65 percent ownership of the club. The first partnership won the arbitration award on the basis that the U.S. mismanaged the club during the eight years of its control. An arbitration panel awarded the partnership $ 93,612,892 against the United States (U.S.), after a proceeding in which the U.S. declined to participate. The U.S. sought to vacate the award, but the United States District Court for the Central District of California denied the U.S.'s 9 U.S.C.S. § 10 motion to vacate the award and granted the partnership's 9 U.S.C.S. § 9 motion to confirm the award. The U.S. appealed.

ISSUE:

Did the United States District Court for the Central District of California err in denying the motion to to vacate the award?

ANSWER:

No.

CONCLUSION:

The denial of the motion to vacate the arbitration award was affirmed. Because the district court lacked authority to confirm the arbitration award, the grant of the motion to confirm the award was vacated. Also vacated was the district court's denial of the partnership's motion for prejudgment and postjudgment interest. The case was remanded with instructions to dismiss the confirmation action as barred by sovereign immunity.

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