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937 F2d 613 Metropolitan Digital Inc v. M/a-Com Inc Mac Metropolitan Digital Inc B E

937 F.2d 613

Unpublished Disposition

NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.

METROPOLITAN DIGITAL, INC., Plaintiff-Appellee,
v.
M/A-COM, INC., a Massachusetts corporation, Local Digital
Distribution Company, a corporate subsidiary,
M/A-Com Mac, Inc., a corporate
subsidiary, Defendants-Appellants.
METROPOLITAN DIGITAL, INC., Carl B. Hilliard, Sharon E.
Hilliard, Via/Net Companies, American Digital
Corporation, a Delaware corporation,
Plaintiffs-Appellees,
v.
DINAHO INC., a Delaware corporation, et al., Defendants,
and
M/A-Com, Inc., a Massachusetts corporation, Local Digital
Distribution Company, M/A-Com Mac, Inc., a
corporate subsidiary, Defendants-Appellants.

Nos. 90-55495, 90-55513.

United States Court of Appeals, Ninth Circuit.

Submitted July 9, 1991.*
Decided July 17, 1991.

Before POOLE, KOZINSKI and LEAVY, Circuit Judges.

1

ORDER AND MEMORANDUM**

2

Pursuant to Fed.R.App.P. 3(b), it is ordered that these appeals be, and they are hereby, consolidated.

3

M/A-Com, Inc. ("M/A-Com") appeals from the district court's order denying its motions to compel arbitration and to stay proceedings in two actions brought against it by Metropolitan Digital, Inc. ("MDI"). M/A-Com argues that the district court erred by (1) concluding that M/A-Com was not entitled to enforce the arbitration clause of a contract between MDI and Local Digital Distribution ("LDD"); (2) concluding that M/A-Com had waived its right to arbitration in any event; and (3) refusing to stay the proceedings pending arbitration. We affirm.

4

In Metropolitan Digital Inc. v. M/A-Com, Inc., No. 88-0060-K(M) (No. 90-55495 on appeal), the district court ruled in the alternative1 that M/A-Com had waived any right it might otherwise have had to compel arbitration. Although the question is admittedly a close one, the district court's findings on this point are not clearly erroneous. See Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 759 (9th Cir.1989) (as amended) (party's active two-year litigation of claims before seeking arbitration constituted waiver of arbitration right); Christensen v. Dewor Devs., 33 Cal.3d 778, 782, 661 P.2d 1088, 1091, 191 Cal.Rptr. 8, 10 (Cal.1983) (even when party seeking to invoke arbitration right did not initiate litigation, waiver of said right will be found when defendant took steps inconsistent with desire to arbitrate, defendant engaged in unreasonable delay in seeking arbitration, or prejudice resulted to party opposing arbitration).

5

In Metropolitan Digital, Inc. v. Dinaho, Inc., No. 89-1503-K(M) (No. 90-55513 on appeal), the district court held in the alternative2 that it would not stay the proceedings and compel MDI to arbitrate its dispute with M/A-Com because there were other parties to that action who would not be bound by the outcome of any arbitration between MDI and M/A-Com. The arbitration agreement involved here provides that it is governed by the law of California, which includes the California rules of arbitration. See Volt Information Sciences, Inc. v. Board of Trustees, 489 U.S. 468, 474-75 (1989). Thus, because California Civil Procedure Code Sec. 1281.2(c) (West 1982) allows a court to stay arbitration or refuse to compel arbitration until related litigation between a party to the agreement and third parties is resolved, the district court had the discretion in this case to refuse to compel arbitration. See Volt Information Sciences, Inc., 489 U.S. at 479. Under the circumstances, we hold that the district court did not abuse its discretion in ruling as it did. See Lorber Indus. of Cal. v. Los Angeles Printworks Corp., 803 F.2d 523, 524-25 (9th Cir.1986) (citing Alascom, Inc. v. ITT N. Elec. Co., 727 F.2d 1419, 1422 (9th Cir.1984)); Pioneer Take Out Corp. v. Bhavsar, 209 Cal.App.3d 1353, 1357, 257 Cal.Rptr. 749, 752 (Cal.App.1989).

6

AFFIRMED.

*

The panel unanimously finds this case suitable for submission on the record and briefs and without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4

**

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3

1

The district court first ruled that M/A-Com was not entitled to seek arbitration under the provisions of the contract between MDI and LDD because it had not been a party thereto. Because we affirm on a different basis finding support in the record, we need not and do not reach the merits of M/A-Com's argument on this point See Rivera v. United States, 924 F.2d 948, 952 (9th Cir.1991)

2

The district court also held that M/A-Com had waived any right it might have had to seek arbitration in this action as well as in the companion case. Because we affirm on a different basis finding support in the record, we need not and do not reach the merits of M/A-Com's argument on this point, either. See Rivera, 924 F.2d at 952