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The Boeing Company v. Kb Yuzhnoye, 18-55283 (2019)

Court: Court of Appeals for the Ninth Circuit Number: 18-55283 Visitors: 9
Filed: Nov. 12, 2019
Latest Update: Mar. 03, 2020
Summary: NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 12 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT THE BOEING COMPANY; BOEING No. 18-55283 COMMERCIAL SPACE COMPANY, D.C. No. Plaintiffs-Appellees, 2:13-cv-00730-AB-AJW v. MEMORANDUM* KB YUZHNOYE; PO YUZHNOYE MASHINOSTROITELNY ZAVOD, Defendants-Appellants. Appeal from the United States District Court for the Central District of California Andre Birotte, Jr., District Judge, Presiding Submitted October 22, 2019**
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                           NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       NOV 12 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

THE BOEING COMPANY; BOEING                      No.    18-55283
COMMERCIAL SPACE COMPANY,
                                                D.C. No.
                Plaintiffs-Appellees,           2:13-cv-00730-AB-AJW

 v.
                                                MEMORANDUM*
KB YUZHNOYE; PO YUZHNOYE
MASHINOSTROITELNY ZAVOD,

                Defendants-Appellants.

                   Appeal from the United States District Court
                      for the Central District of California
                   Andre Birotte, Jr., District Judge, Presiding

                           Submitted October 22, 2019**
                              Pasadena, California

Before: CALLAHAN and OWENS, Circuit Judges, and RESTANI,*** Judge.

      Defendants-appellees, KB Yuzhnoye and PO Yuzhnoye Mashinostroitelny



      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
             The Honorable Jane A. Restani, Judge for the United States Court of
International Trade, sitting by designation.
Zavod (collectively “Yuzhnoye”), appeal the district court’s grant of summary

judgment in a breach of contract action brought under the Foreign Sovereign

Immunities Act (FSIA), 28 U.S.C. §§ 1602 et seq., by The Boeing Company and

its wholly-owned subsidiary Boeing Commercial Space Company (BCSC)

(collectively “Boeing”). Yuzhnoye also appeals the district court’s order denying

its motion to alter or amend the judgment under Federal Rule of Civil Procedure

59(e) as well as the court’s order denying its motion for a stay in favor of Swedish

arbitration.

      In 1996, Boeing, Yuzhnoye, and two other entities, Kvaerner and Energia,

formed a joint venture, known as Sea Launch, to launch commercial satellites into

space from an ocean platform. In 2009, the joint venture failed, and Sea Launch

filed for bankruptcy, defaulting on loans made to the venture and triggering

Boeing’s guarantees of Sea Launch’s third-party loans, which Boeing paid $449

million to cover. Boeing alleged that Yuzhnoye refused to reimburse its share of

the losses as Yuzhnoye was obligated to do under the joint venture and loan

guarantee provisions in two contracts, referred to herein as the Sea Launch

Creation Agreement and the BCSC Loan Guarantee agreement. The district court

granted summary judgment for Boeing and entered judgment against Yuzhnoye.




                                          2
We have jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm.1

      1. “[S]ummary judgment is appropriate when ‘there is no genuine dispute as

to any material fact and the movant is entitled to judgment as a matter of law.’”

Albino v. Baca, 
747 F.3d 1162
, 1168 (9th Cir. 2014) (en banc) (quoting Fed. R.

Civ. P. 56(a)). Based on our own de novo review of the record in the light most

favorable to Yuzhnoye, we conclude that the district court did not err in granting

summary judgment for Boeing. Specifically, we agree with the district court’s

conclusions that: (1) under Swedish law, the alleged oral representations by

Boeing’s representatives did not modify Yuzhnoye’s obligations under the

Creation Agreement because there was no evidence that Boeing acted consistent

with the alleged representations; (2) Yuzhnoye’s defenses to the alleged breach of

the BCSC Loan Guarantee agreement failed as a matter of UK law; and (3)

Yuzhnoye’s defenses to the alleged breach of the Creation Agreement failed as a

matter of Swedish law.

      On appeal, Yuzhnoye does not present any arguments as to whether or how

the district court erred in its assessment or application of Swedish or UK law. Nor

does Yuzhnoye explain how its alleged disputes of fact are material to any of its

affirmative defenses. Because Yuzhnoye fails to present a genuine issue of



      1
        Because the parties are familiar with the facts and issues in this appeal, we
do not recite them in detail.

                                          3
material fact as to Boeing’s breach of contract claims or Yuzhnoye’s many

defenses, we affirm the district court’s grant of summary judgment.

      2. A district court may grant a Rule 59(e) motion if it “is presented with

newly discovered evidence, committed clear error, or if there is an intervening

change in the controlling law.” McDowell v. Calderon, 
197 F.3d 1253
, 1255 (9th

Cir. 1999) (en banc) (per curiam) (emphasis in original). Here, Energia filed a

Rule 59(e) motion to reduce the judgment against Energia by the amount that

Kvaerner had paid Boeing on Energia’s behalf. Yuzhnoye filed a joinder to

Energia’s motion that “incorporated by reference” the arguments it previously

raised in its Opposition Memorandum to the proposed judgment, but did not file its

own Rule 59(e) motion. After Energia settled, thereby leaving Yuzhnoye the

remaining defendant, the district court denied the motion to alter judgment because

“Yuzhnoye has not provided any argument for how it could benefit from”

Energia’s motion.

      The district court did not abuse its discretion in denying Yuzhnoye’s motion

to alter or amend the judgment given Yuzhnoye’s failure to file its own Rule 59(e)

motion or to raise substantive arguments in its joinder. However, assuming that

the district court should have considered the claims raised earlier in Yuzhnoye’s

Opposition Memorandum, the district court did not abuse its discretion in declining

to amend the judgment against Yuzhnoye. At summary judgment, the district


                                         4
court considered and rejected Yuzhnoye’s unjust enrichment defense, which

essentially presented the same arguments and facts that Yuzhnoye later raised for

amending the judgment. Yuzhnoye did not present any “newly discovered

evidence” or “an intervening change in the controlling law” that would warrant

Rule 59(e) relief, or otherwise show clear error in the final judgment.

Accordingly, we affirm the district court’s denial of Yuzhnoye’s Rule 59(e)

motion.

      3. The district court also did not abuse its discretion in denying Yuzhnoye’s

motion for a stay in favor of Swedish arbitration. On appeal, Yuzhnoye argues that

the district court should have granted its motion based on section 3 of the Federal

Arbitration Act (FAA), 9 U.S.C. § 3. However, Yuzhnoye failed to raise this

argument below, thereby waiving it. Even if the argument were not waived, we

would reject it on the merits. As the district court found, only the Creation

Agreement claims were referable to the Swedish arbitration, whereas the BCSC

Loan Guaranty claims were not. Furthermore, Yuzhnoye’s previous position that

the Swedish arbitrator lacked jurisdiction over Boeing’s claims was clearly

inconsistent with its right to arbitration and constituted a waiver of that right. See

Martin v. Yasuda, 
829 F.3d 1118
, 1124 (9th Cir. 2016) (“The right to arbitration,

like other contractual rights, can be waived.”); Fisher v. A.G. Becker Paribas Inc.,

791 F.2d 691
, 694 (9th Cir. 1986) (“A party seeking to prove waiver of a right to


                                           5
arbitration must demonstrate: (1) knowledge of an existing right to compel

arbitration; (2) acts inconsistent with that existing right; and (3) prejudice to the

party opposing arbitration resulting from such inconsistent acts.”).

      AFFIRMED.




                                           6

Source:  CourtListener

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