GIB, LLC, a California limited liability company v. SALON WARE, INC., a foreign corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GIB, LLC, a California limited liability
company,
Plaintiff-counter-defendant -
Appellant,
v.
SALON WARE, INC., a foreign
corporation,
Defendant-counter-claimant -
Appellee.
No. 14-55399
D.C. No. 2:13-cv-07191-R-MRW
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Submitted February 2, 2016**
Pasadena, California
FILED
FEB 05 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

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Before: WARDLAW and HURWITZ, Circuit Judges and RICE,*** Chief District
Judge.
GIB, LLC appeals the district court’s grant of Salon Ware, Inc.’s motion to
compel arbitration. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we
reverse and remand for further proceedings.
1. The district court erred in holding that GIB waived its right to a trial to
determine the enforceability of the written arbitration agreement. GIB challenged
the validity of the written agreement in several separate submissions to the district
court, starting with its complaint. The district court was required to resolve that
challenge pursuant to the procedures established by Section 4 of the Federal
Arbitration Act. See 9 U.S.C. § 4 (“If the making of the arbitration agreement . . .
be in issue, the court shall proceed summarily to the trial thereof. If no jury trial be
demanded . . . , the court shall hear and determine such issue.”).
2. The district court also erred in holding that GIB was estopped from
challenging the enforceability of the written arbitration agreement. In some
circumstances, “a nonsignatory may be held to an arbitration clause.” Mundi v.
Union Sec. Life Ins. Co., 555 F.3d 1042, 1046 (9th Cir. 2009). Here, however, the
record does not demonstrate that GIB “knowingly exploit[ed]” or “claim[ed] the
*** The Honorable Thomas O. Rice, Chief United States District Judge
for the Eastern District of Washington, sitting by designation.
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benefits of” the distributorship agreement. Id. at 1045–46 (quoting Comer v.
Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 2006)).
3. Finally, the district court erred in compelling arbitration. A court may
“decide as a matter of law that the parties did or did not enter into” an arbitration
agreement “[o]nly when there is no genuine issue of fact concerning the formation
of the agreement.” Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., Inc., 925
F.2d 1136, 1141 (9th Cir. 1991) (citation omitted). Here, GIB raised a genuine
issue of material fact by submitting a sworn declaration denying that the parties
had entered into a written agreement, and email correspondence between the
parties suggesting that they had a different, more informal, arrangement,. It was
also undisputed that GIB never signed the written agreement.
REVERSED AND REMANDED.
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