Allianz Global Risk U.S. Insurance v. General Electric Co.

MEMORANDUM

General Electric Co. (“GE”) appeals the district court’s order granting the motion of Allianz Global Risk U.S. Insurance Co. (“Allianz”) to compel arbitration of Allianz’s claim to recover the amount it paid for repairs of an allegedly defective power .generation turbine sold by GE to the Los Angeles Department of Water and Power (“LADWP”), Allianz’s insured. The contract between GE and LADWP contained an arbitration clause that GE contends Allianz, as a non-signatory to the contract, cannot enforce.

The district court held that GE was equitably estopped from refusing to arbitrate under its own contractual arbitration clause, where the issues in Allianz’s claim are intertwined with issues arising out of the manner in which GE performed its obligations under the GE-LADWP sales contract. The district court applied our court’s decision in Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042, 1045-47 (9th Cir.2009), while under the Supreme Court’s decision in Arthur Andersen v. Carlisle, 556 U.S. 624 , 129 S.Ct. 1896, 1902 , 173 L.Ed.2d 832 (2009), the district court should have applied state law, not federal common law. The district court’s misstatement of the applicable law…