Order Compelling A Reference And Staying Proceedings Does Not Put Plaintiffs "Out Of Court", And Therefore Is Not Final And Appealable
The Ninth Circuit tells us the issue considered in this case is one "of first impression." That issue is "whether an order compelling enforcement of a contractual agreement to submit a dispute to a referee, and staying proceedings in the interim, is immediately appealable." Bagdasarian Productions, LLC v. Twentieth Century Fox Film Corporation, No. 10-56430 (9th Cir. March 26, 2012) (for publication) (Hawkins, Senior Circuit Judge).
The underlying dispute involved plaintiffs, who created or controlled properties connected with Alvin and the Chipmunks, and defendant Fox, owner of rights in the properties entitling it to develop, produce, distribute, exhibit, exploit, advertise, promote and publicize "throughout the universe." The agreement between the parties provided that "any dispute arising out of the Agreement would be submitted to a general non-jury reference pursuant to California Code of Civil Procedure section 638."
Plaintiffs sued Fox. Fox moved to refer the disputes to a referee, and to stay the action. The trial court granted Fox's motion. Was the order granting the reference a final and appealable order?
It helps to know two things: first, that an order granting a motion to compel arbitration is not appealable; second, that both arbitration and a reference are a form of ADR – and therefore, the court is likely to view them similarly:
“Although there are some differences between arbitration and Section 638 reference, both are forms of alternative dispute resolution designed to move disputes out of court and lower the cost of trial proceedings. Plaintiffs offer no convincing reason why stays pending Section 638 reference proceedings should be treated differently from stays pending arbitration, since errors with either may be corrected later on appeal.”
In other words,
“the district court’s order is not final, the Plaintiffs have not been put ‘out of court’ by the order . . . the decision to refer can be reviewed and, if incorrect, later remedied by this court. As such, the appeal is premature and we lack jurisdiction over it under Section 1291.”
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