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An appellate court in California held that there is no right to appeal from an order denying a motion to compel arbitration of a dispute over arbitrability because such a ruling lacks finality.
In Vivid Video, Inc. v. Playboy Entertainment Group, Inc., No. B192186, 2007 WL 274366 (Cal. Ct. App.2d Feb. 01, 2007), Vivid Video and Playboy entered into two contracts, one of which contained an arbitration agreement. Vivid Video brought suit and Playboy moved to compel arbitration. However, Playboy limited its motion to the question of whether it was for the arbitrator or the court to decide if the arbitrators had jurisdiction to decide if the claims were arbitrable.
The district court held that Vivid Video did not "sufficiently establish" a valid arbitration agreement and denied the motion to compel arbitration for the arbitrators to decide arbitrability. Notably, the district court did not decide that the claims were not arbitrable, only that the court should decide whether the additional claims should go to arbitration. Vivid Video appealed.
This Court held that the district court's decision that the arbitrators did not have jurisdiction to decide their own jurisdiction was not a final determination, for which appeal is available. The district court did not decide on all issues of the case when it denied Vivid Video's motion. Further, the Court relied on policy considerations, including avoidance of piecemeal litigation, to avoid hearing an appeal of an order lacking finality. Finally, Vivid Video had the option of filing a mandate petition to have the district court's ruling reconsidered, but did not take advantage of that procedural option.
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