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Mirza v. Cachet Hotel Group Limited Cayman L.P.

United States District Court, C.D. California

November 17, 2017

Alexander Mirza
Cachet Hotel Group Limited Cayman L.P. et at.



         Proceedings:(IN CHAMBERS) Order Re: Plaintiffs Motion to Remand Case (DE 8) and Defendant Cachet Hotel Group Limited HK's Motion to Compel Arbitration (DE9)


         On September 20, 2017, Plaintiff Alexander Mirza ("Mirza") filed a complaint ("Complaint") in Los Angeles County Superior Court against Defendants Cachet Hotel Group Limited Cayman LP. ("Cachet Cayman"), Cachet Hotel Group Limited (HK) ("Cachet"), and ten unnamed Doe Defendants (collectively, "Defendants") (ECF No. 1-2). In the Complaint, Mirza asserted six state law claims against Defendants arising out of Cachet's termination of Mirza's employment in August 2017. On September 27, 2017, Cachet removed the case to this Court, asserting that the Court has diversity jurisdiction under 28 U.S.C. § 1332(a). Subsequently, on October 2, 2017, Mirza filed an amended complaint in this Court (the "FAC").

         Presently before the Court are two motions: Mirza's Motion to Remand the case for lack of subject matter jurisdiction (DE 8) and Cachet's Motion to Compel Arbitration (DE 9). hi the alternative, Cachet also moves to dismiss the case under Federal Rule of Civil Procedure ("Rule") 12(b)(3) for improper venue. For the reasons below, the Court DENIES Mirza's Motion to Remand and DENIES Cachet's Motion to Compel Arbitration.


         Mirza is a citizen of California[1] with extensive management experience in the hotel industry. Cachet is a Hong Kong limited liability partnership that owns and operates hotels, restaurants and other real estate projects in Asia and the Americas, hi April 2013, Mirza and Cachet entered into a written employment contract appointing Mirza as Cachet's President and Chief Executive Officer (the "2013 Agreement"). The 2013 Agreement sets forth the terms and conditions of Mirza's employment with Cachet. Specifically, it establishes that Mirza's office and principal place of business will be in Hong Kong, Shanghai, and "such other non United States locations as approved by the Chairman." (FAC Ex. 1 at 17, ECF No. 7). Additionally, with respect to dispute resolution, the 2013 Agreement provides that "[a]ny dispute, controversy, claims, or differences of any kind whatsoever arising out of or in connection with this Agreement shall be resolved exclusively through arbitration administered by the Hong Kong International Arbitration Centre in Hong Kong which shall be conducted in accordance with the then effective ICC Rules." (Id. at 23) (the "Arbitration Clause"). The same provision designates Illinois law as the choice of law for any dispute that may arise between the parties. Although Mirza and Cachet revised the employment contract several times, notably to add Cachet Cayman as a party in 2014, the parties never revised the Arbitration Clause.

         In August 2017, Defendants fired Mirza, citing alleged mismanagement and breaches of fiduciary duties. On September 5, 2017, Cachet filed claims against Mirza consistent with these allegations in the Hong Kong International Arbitration Centre ("HKIAC") pursuant to the Arbitration Clause. HKIAC then informed Cachet that it was "not in a position to administer the arbitration under the ICC Rules." (Defs.' Mot. Ex. C, ECF No. 9-7). Instead, HKIAC offered to administer the arbitration under HKIAC rules or another set of rules pursuant to stipulation of the parties. Mirza refused this offer. Cachet then re filed its claims on September 25, 2017 with the International Chamber of Commerce ("ICC") in Hong Kong seeking adjudication of the dispute conducted pursuant to ICC rules. (Ex. D, ECF No. 9-8; Ex. E, ECF No. 9-9).

         In the meantime, on September 20, 2017, Mirza filed the Complaint in Los Angeles County Superior Court alleging six claims against Defendants. Specifically, Mirza alleged that Defendants discriminated against him for his religious affiliation and filed him in retaliation for his investigation into complaints of sexual harassment allegedly committed by a business partner. After Defendants removed the case, Mirza filed the FAC in this Court. In the FAC, Mirza makes similar claims against Defendants.

         Mirza now moves for the Court to remand this case back to the state court for lack of subject matter jurisdiction. Cachet opposes Mirza's motion, arguing that the Court properly has both diversity and federal question jurisdiction to hear this matter. Cachet also moves for the Court to compel arbitration pursuant to the 2013 Agreement between the parties, or, in the alternative, for the Court to dismiss this case for improper venue.


         A. Morion to Remand

         A defendant may remove a case from state to federal court when the action could have initially been filed in federal court on the basis of original jurisdiction. 28 U.S.C § 1441(a). Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Original jurisdiction exists when a case either presents a federal question or is between citizens of different states and involves an amount in controversy that exceeds $75, 000. 28 U.S.C. § 1331; 1332(a). A case presents a federal question if a claim "aris[es] under the Constitution, laws, or treaties of the United States." Sullivan v. First Affiliated Sec, Inc., 813 F.2d 1368, 1371 (9th Cir. 1987) (quoting 28 U.S.C. § 1331). Once a federal court has a basis for original jurisdiction, it can exercise supplemental jurisdiction over state law claims that derive from the same common nucleus of operative facts as the federal law claims. See City of Chicago v. int'l Coll. of Surgeons, 522 U.S. 156, 164-65 (1997); 28 U.S.C. § 1367.

         Under 28 U.S.C. § 1447(c), "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." "[R]emoval statutes should be construed narrowly in favor of remand to protect the jurisdiction of state court." Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 698 (9th Cir. 2005).

         B. Motion to ...

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