August 12, 2020 Practice Points

District Court Distinguishes the Monster Decision

The court decision in Levi Strauss v. Aqua offers insight into the meaning of the “repeat player” aspect of the Ninth Circuit Court of Appeals decision in Monster Energy.

By Mark Kantor

Last month, the U.S. District Court for the Northern District of California distinguished the Monster Energy Co. v. City Beverages, LLC, case and declined to vacate, instead confirming an award issued by JAMS arbitrators. Levi Strauss & Co. v. Aqua Dynamics Systems, Inc., (No. 15-cv-04718-WHO, July 20, 2020). 

The disappointed party (Aqua) sought vacatur on “evident partiality" grounds “because two of the JAMS arbitrators were undisclosed shareholders in JAMS and because JAMS engaged in undisclosed non-trivial business dealings” with the successful party in the arbitration, Levi Strauss & Co. 

The District Court decision in Levi Strauss v. Aqua offers insight into the meaning of the “repeat player” aspect of the Ninth Circuit Court of Appeals decision in Monster Energy. Three distinctions played a role in the willingness of Judge William Orrick to deny vacatur of the JAMS award: (1) the fact that Aqua pressed for arbitration and before JAMS, not Levi Strauss; (2) the difference between 97 arbitrations over five years in Monster Energy compared with one closed court reference and six mediations in almost 10 years in Levi Strauss v. Aqua; and (3) the materially different concerns in mediation contrasted with arbitration.

Mark Kantor is a member of the College of Commercial Arbitrators in Washington, D.C.


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