                                                                           FILED
                              NOT FOR PUBLICATION                           MAY 13 2010

                                                                        MOLLY C. DWYER, CLERK
                       UNITED STATES COURT OF APPEALS                    U .S. C O U R T OF APPE ALS




                              FOR THE NINTH CIRCUIT



UMG RECORDINGS, INC. and                          No. 08-56905
UNIVERSAL MUSIC GROUP, INC.,
                                                  D.C. No. CV-07-03257 GAF
                Plaintiffs - Appellees,           (AGRx)


  v.                                              MEMORANDUM *

AMERICAN HOME ASSURANCE
COMPANY,

                Defendant - Appellant.



                      Appeal from the United States District Court
                         for the Central District of California
                       Gary A. Feess, District Judge, Presiding

                          Argued and Submitted March 4, 2010
                                 Pasadena, California

Before:         KOZINSKI, Chief Judge, W. FLETCHER, Circuit Judge, and
                TUNHEIM, ** District Judge.



            *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
             The Honorable John R. Tunheim, United States District Judge for the
District of Minnesota, sitting by designation.
      American Home Assurance Company (“American Home”) appeals the

district court’s denial of its motion to stay proceedings pending arbitration.     The

district court concluded that the mandatory arbitration provision does not extend to

the claims by UMG Recordings, Inc. and Universal Music Group, Inc.

(collectively, “UMG”) against American Home. We have jurisdiction pursuant to

9 U.S.C. § 16(a)(1)(A), and we affirm.

      First, the district court properly reached the issue of arbitrability. The

arbitration provisions in the payment agreements do not contain clear and

unmistakable evidence that the parties agreed to arbitrate arbitrability. See First

Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). For example, they state

that arbitrators have exclusive jurisdiction to resolve questions of arbitrability, but

they also state that actions concerning arbitrability must be brought in New York

courts.

      Second, the underlying dispute does not arise out of the payment agreements

and therefore is not subject to the mandatory arbitration provisions. American

Home concedes that the arbitration provisions do not extend to disputes over the

policies, including the claims UMG raises in its complaint. UMG’s contention that

it might not be obligated to perform in full its duties under the policies if American

Home acted in bad faith does not transform those claims into disputes “arising out


                                            2
of” the payment agreements. See Mediterranean Enters., Inc. v. Ssangyong Corp.,

708 F.2d 1458, 1464 (9th Cir. 1983); cf. Alticor, Inc. v. Nat’l Union Fire Ins. Co.

of Pittsburgh, Pa., 411 F.3d 669, 670-72 (6th Cir. 2005).

      For the foregoing reasons, we AFFIRM the district court’s denial of

American Home’s motion to stay proceedings pending arbitration.




                                          3
