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Orrick Must Comply With Arbital Summonses Served by Jones Day, Ninth Circuit Declares
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals held yesterday that a judge of the District Court for the Northern District of California erred in ruling that he could not enforce arbital summonses served on the law firm of Orrick, Herrington & Sutcliffe, which is headquartered in San Francisco, and two of its partners, because the underlying arbitration is taking place in the District of Columbia.
That proceeding relates to a dispute between Jones Day and a former partner, Michael Bühler, a German national who had been stationed in the firm’s Paris office. Quitting the firm, he defected to Orrick.
Jones Day wants Orrick chairman Mitch Zuklie and its former managing partner, Michael Torpey, to appear before the arbitrator in San Jose. They have refused.
District Court’s View
District Court Judge Jon S. Tigar ruled that jurisdiction lies exclusively in the District of Columbia, where arbitration is taking place before JAMS under rules of the Federal Arbitration Act, in accordance with the employment agreement between the parties. The arbitration is being conducted pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
In an opinion directing that the District Court enforce the subpoenas, Circuit Judge Kim Wardlaw said:
“[W]e hold that a federal court has original jurisdiction over an action or proceeding if two requirements are met: (1) there is an underlying arbitration agreement or award that falls under the Convention, and (2) the action or proceeding relates to that arbitration agreement or award.”
The international arbitration comes under the convention, she wrote, and “[t]he petition to compel Orrick’s compliance with the arbitral the arbitral summonses relates to the underlying arbitration agreement, as the arbitrator determined that evidence adduced from the participation may be material to resolving the dispute.”
General Venue Statute
The circuit judge declared:
“Section 204 of the FAA provides that where the arbitration agreement designates a ‘place of arbitration’ in the United States, an action or proceeding may be brought in the district embracing the place of arbitration. However, where, as here, that federal district court lacks personal jurisdiction over the party against whom enforcement is sought, we hold that the action may be brought in any district court deemed appropriate under the general venue statute, 28 U.S.C. § 1391, because § 204 supplements, rather than supplants, other venue rules.”
She pointed out:
“Neither party argues that the Northern District of California is an improper venue under § 1391. Under § 1391. the Northern District of California is a proper venue because it is Orrick’s principal place of business. Therefore, it was error to dismiss the petitions on venue grounds. Because the district court had subject matter jurisdiction and no other challenges were raised to the petitions, the district court should have granted Jones Day’s petitions to enforce the summonses.”
The case is Jones Day v. Orrick, Herrington & Sutcliffe LLP, 21-16642.
Jones Day, accordimg to a survey last year, had the 13th largest gross of any law firm in the world and Orrick came in 43rd.
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