Appeal from the United States District Court for the Southern District of California Barry T. Moskowitz, District Judge, Presiding D.C. No. and 3:08-cv-02196-UAE
The opinion of the court was delivered by: Fisher, Circuit Judge:
Argued and Submitted February 9, 2011-Pasadena, California
Before: Alex Kozinski, Chief Judge, Michael Daly Hawkins and Raymond C. Fisher, Circuit Judges.
Gary Smallwood contracted with Allied Van Lines, Inc. and SIRVA, Inc. (collectively, AVL) to move some of his household goods from southern California to the United Arab Emirates (UAE) and to move the remainder of the goods - including a box full of firearms and ammunition - to storage. Instead, AVL shipped his weapons to the UAE. When UAE officials discovered Smallwood's weapons, they arrested him, imprisoned him for 11 days and tricked him into pleading guilty to smuggling firearms. Smallwood alleges that he is facing deportation from the UAE and sues AVL based on various tort and contract theories. We must decide whether AVL may compel Smallwood to arbitrate pursuant to a foreign arbitration clause in their shipment contract. We hold that the contract's foreign arbitration clause is unenforceable.
The district court denied AVL's motion to compel arbitration, concluding that the shipment was governed by the Carmack Amendment, 49 U.S.C. § 14706, and that the statute precludes enforcement of foreign arbitration clauses.*fn1 AVL argues that the district court misinterpreted Carmack and created an unnecessary conflict with federal arbitration law, which, according to AVL, requires enforcement of the arbitration clause regardless of the Carmack Amendment. We affirm because the district court correctly interpreted Carmack to preclude foreign arbitration clauses; and Carmack, having been enacted subsequent to the federal arbitration statutes, controls this case.
Because this case is still at the pleading stage, we assume the facts alleged in the complaint to be true. Smallwood is a U.S. citizen who resided in San Diego, California until September 2007, when he accepted a job in Abu Dhabi, UAE. Smallwood contracted with a UAE company, Allied Pickfords, to ship some of his belongings to the UAE and to store the remainder in California. Allied Pickfords engaged three affiliates incorporated in the United States - Atlas Transfer & Storage Co. (Atlas), Allied Van Lines and SIRVA - col- lectively referred to in the complaint as "Allied International" - to assist with the move and storage. In September 2007, an Allied International representative met Smallwood at his home in San Diego, took note of which goods were destined for shipment to the UAE and which for storage in California and then packed up Smallwood's belongings. The goods were boxed separately but loaded onto one truck. Shortly thereafter, Smallwood moved to the UAE.
Smallwood did not receive a bill of lading when Allied International received his goods in September 2007. Instead, he received two forms - one entitled "Local Household Goods Descriptive Inventory" that listed the goods destined for storage and one entitled "Descriptive Inventory" that listed the goods destined for the UAE. After Smallwood moved to the UAE, he received a document on Allied Pickfords' letterhead entitled "Acceptance of Quotation." The document is a contract, but does not style itself as a through bill of lading. Importantly, the Acceptance of Quotation includes an arbitration clause:
Any disputes in relation to the conclusion, implementation, interpretation, cancellation, dissolution or invalidity of the contract or stemming therefrom or connected thereto in any form shall be referred to arbitration in accordance with the Dubai Chamber of Commerce and Industry Commercial Conciliation and Arbitration Regulation.
The Acceptance of Quotation was the last written agreement between the parties before Allied International allegedly shipped some of the storage goods, including the box of firearms, to the UAE. When UAE officials discovered Small-wood's firearms, an Allied International employee asked Smallwood to come to the port in Abu Dhabi to "straighten things out." UAE police arrested Smallwood when he arrived at the port. He was later ...