Craig Arnold; v. Irongate Services, LLC

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CRAIG ARNOLD; et al.,
Plaintiffs-Appellees,
v.
IRONGATE SERVICES, LLC,
Defendant-Appellant,
and
PHILIP MORRIS USA, INC.; et al.,
Defendants.
No. 18-35222
D.C. No. 1:17-cv-00032-TJC
MEMORANDUM*
Appeal from the United States District Court
for the District of Montana
Timothy J. Cavan, Magistrate Judge, Presiding
Argued and Submitted February 6, 2019
Seattle, Washington
Before: IKUTA and CHRISTEN, Circuit Judges, and CHOE-GROVES,** Judge.
FILED
FEB 19 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Jennifer Choe-Groves, Judge for the United States
Court of International Trade, sitting by designation.

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Irongate Services, LLC (“Irongate”) appeals the denial of its motion to
compel Craig Arnold and other nonsignatories to the Master Services Agreement
(collectively referred to herein as “Individual Plaintiffs”) to arbitrate their claims
against Irongate. We have jurisdiction under 9 U.S.C. § 16 and review “the district
court’s decision to deny the motion to compel arbitration de novo.” Davis v.
Nordstrom, Inc., 755 F.3d 1089, 1091 (9th Cir. 2014).
The question whether the Individual Plaintiffs are bound to arbitrate their
claims against Irongate under principles of equitable estoppel is governed by
Montana law. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631–32 (2009).
Our cases applying a federal test to this issue have been superseded by Arthur
Andersen, and are no longer applicable. See id.; Kramer v. Toyota Motor Corp.,
705 F.3d 1122, 1130 n.5 (9th Cir. 2013).
Irongate has not established that the Individual Plaintiffs are bound to
arbitrate their claims against Irongate as a matter of Montana law.1 Irongate failed
to allege that any of the six elements of Montana’s equitable estoppel test are met.
See Turner v. Wells Fargo Bank, N.A., 291 P.3d 1082, 1089–90 (Mont. 2012).
While the Montana Supreme Court has applied California law to hold that
1 Because we decide on this basis, we do not reach the question whether the
arbitration agreement covers the dispute at issue. See Kilgore v. KeyBank, Nat’l
Ass’n, 718 F.3d 1052, 1058 (9th Cir. 2013) (en banc).
2

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nonsignatories can compel signatories to arbitrate under certain circumstances, see
Peeler v. Rocky Mountain Log Homes Canada, Inc., 431 P.3d 911, 926–28 (Mont.
2018), no Montana case has held that signatories can compel nonsignatories to
arbitrate. Irongate argues that California appellate courts have held that signatories
to an arbitration agreement can compel nonsignatories to arbitrate when there are
certain types of preexisting relationships between the parties, see Cty. of Contra
Costa v. Kaiser Found. Health Plan, Inc., 47 Cal. App. 4th 237, 242–43 (1996).
But even if the Montana Supreme Court adopted this test, Irongate has not
demonstrated that there is a preexisting relationship between the Individual
Plaintiffs and Irongate that would meet California’s requirements.
Contrary to Irongate’s argument, neither the Montana Supreme Court’s
unpublished opinion in Stewart v. Hauptman, 169 P.3d 405 (Mont. 2007), nor
section 28-2-503(2) of the Montana Code addresses whether a party who has not
entered into a contract to arbitrate can be bound by its terms. Because Hauptman
is unpublished, under Montana rules it may not be cited as precedent. 169 P.3d at
¶ 1. In any event, Hauptman held that when the parties to a contract agree to share
in the costs and benefits of subsequently acquired leases, a party that accepts the
benefits of such subsequently acquired assignments of leases is deemed to be
bound by such assignments. Id. at ¶ 27. Irongate does not argue that the
3

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Individual Plaintiffs have entered into any analogous arrangement. Nor does
section 28-2-503(2) help Irongate, as that section addresses contract formation, and
provides that a party that voluntarily accepts the benefit of a transaction may be
deemed to have consented to the contract and be bound by its terms. Irongate has
not shown that the Individual Plaintiffs have entered into the MSA either expressly
or by implication.
AFFIRMED.
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