page reason the warrant issued almost three years ago under the supreme court's decision in oxford help bro like northern must live with and comply with the results of that arbitration the governor's conclusions the burlington northern breach the contract tried to terminated in bad faith had no bad faith germination power and in bad  tried to avoid its duty to meet and negotiate a reasonable economic adjustment in effort to capture all sims investment and or its fleet without paying for it for all issues for the arbitrators to decide they determine its meaning and they applied the meaning to the facts as they found them that is exactly what they were empowered to do by the parties sections fifteen point parents will construe the agreement in a court records with illinois law that is exactly what they did under oxford help that should have been the end of the matter and it should have led to confirmation of the arbitration award and i'm here is the appellant because the district court did not follow oxford health which did not mention did not apply the standard or confin without cause or means in a time for any reason but that battle that interpretive battle with the arbitrator's was not for the district court to conduct its sole question was whether the so proper question was whether the the arbitrators even arguably interpreted the contract which they plainly did here if the arbitrators even are you will interpret a contract for a court must confirm the award i want to make a point about the actual standard it if it was they were it must be confirmed research or what your best evidence that they did the best evidence is one hundred fourteen page work they engage with the text on page twenty nine they say they have endeavored to apply the terms and conditions of the contract if they in their if they found they could not determine the dispute from the terms then they look to other sources such as illinois law we have extensive discussion in the award itself showing the  gauge with the tax interpreted at the very beginning of our recent hearing the chairman mr hinchey said we are not a court of equity we are here apply the contract and that's just what they did throughout the arbitration proceeding and in the award i think that's clear from the arbitration board itself they did not in the course of interpret in the contract they did not ignore the tax simply failed to mention they didn't read the wrong agreement which actually has happened in some cases they did not act contrary to a stipulated interpretation between the parties which was the case in stone nielsen nor did they act contrary to their own interpretation of the agreement saying agreement means this but we're going to do something else this is interpretation through and through as a stream court said an oxford health now that the district court faulted the arbitrator's thanks for using an illinois principle of contract interpretation to assist them in their task but that is expressly allowed by the contract eighteen point one directs the arbitrator's to use illinois law to construe the contract they did not read the agreement is preventing them from using interpretive principles nor i submit would it make sense told an arbitrator cannot use interpretive principles now the district court i think also objected to the fact that the covenant is referred to as an implied term under illinois law my understanding is not i'm not sure but my standing is texas law does not recognize the implied covenant which may have created some of the confusion in district court but even if one considers the covenant to be an implied term of the agreement  interpretation principle the only supreme court's been clear on that the seventh circuit apply only laws been clear on that in fact you can't even bring a person can even bring a separate freestanding claim for breach of the implied cabin in the illinois law its sole purpose is forbids arbitrator's from using state law principles of contracts interpretation if those principles are founded on the state's notions of public policy there is no case holding that ginsburg which was a case about airline deregulation doesn't hold that still nielsen doesn't forbid arbitrators from using state contract law interpretation principles and it would be awkward to say the federal arbitration act actually forbids arbitrators from applying ordinary principles of contract interpretation in this case illinois to a contract which expressly calls for itself to be construed in courts of the law on the way it would have the odd result that an arbitrator would exceed his or her powers unless he or she reached a different result from what a known court would because no more court would be free to apply the covenant of burlington northern claims an arbitrator is not it's a bizarre result there is no authority for it and there is no authorized to or award such damages by section eleven point nine of the contract the arbitrators calculate of those damages awarded them expressly excluded things that the arbitrators determined constitute lost profits and awarded allston damages based upon its out of pocket expenditures so there is no loss profit and damage or one not at all oh no we asked for it and didn't get it based on the author's reading of eleven point nine  does not apply it was not selected by the parties and without being so if it was not selected in the federal arbitration act applies to this contract which is obviously a transaction interstate co the traders that have to bargain for expanded edition review there is no such bargain here for expanded judicial review finally i have to say i am surprised that a railroad which operates in every state west in texas and have diversity jurisdiction they may be in montana state court and in montana retracement and so i think the argument that the arbitrator the texas arbitration act the way the arbiters interpretive power  misplaced finally there's an argument that the district court should not have compelled arbitration in the first place we submit that arbiter that issue is waived by burlington northern ferried across appeal the order compelling arbitration which was subsumed in the final judgment we also think the challenge to the organ failing arbitration has no merit for the reasons that we explained in our reply brief for these reasons the arbitration award should be confirmed will please the court one hundred and fifty eight that is how many times alston uses the words interpret and construe in their briefs before this court and you heard those words even more just now but the arbitrators here did not just interpret or construe the maintenance agreement that quite literally judged it and they judged its terms unexceptable even though it was negotiated between two sophisticated corporate giants six months ago the us supreme court in northwest versus looked at this implied covenant of good faith and fair dealing and found it to be a state imposed matter of public policy not a matter of consent between the parties not a matter of contract interpretation indeed also asked for recovery under good faith and fair dealing as a matter of public policy the arbitrator's exceeded their power by imposing their view of the policy of good faith and fair dealing and issuing fifty five million dollars in industrial justice against b s f be clear that when the arbitrators interpreted this agreement the n s f one there is a critical ruling at record page eight fifty at that page arbitrators say that there was no breach of the terminations provision of the contract but then they go beyond the contract they apply state imposed public policy and they overrode the agreed upon terminations provision they also exceeded specifically limited powers in the agreement as judge means wrote looking outside the unambiguous terminations provision to illinois law exceeded their powers of interpretation and he was right you can affirm judge means judgement based on two recent united states supreme court cases nielsen and ginsburg stolpe nielsen says it's a matter of federal law for you to look at to know vo whether arbitrators are interpret ng or dispensing their own brand of industrial justice it says the f a a imposes basic rules fundamental rules of importance that arbitration is a matter of consent not coercion and the arbitrators install nielson proceeded as if they had the authority of common law courts to decide the best rule well that's exactly what the arbitrator's did here this was not contract interpretation ginsburg addresses that same question it looked at this animal of the doctrine of good faith and fair dealing and said what is this in that case the petitioner argued that where northwest airlines had a unilateral terminations clause that the doctrine of good faith and fair dealing could be and should be applied to override that terminations provision and the united states supreme court said no it said this doctrine of good faith and fair dealing has no general meaning that it is a state imposed matter of public policy and as a host of arbitration cases hauled arbitrators don't have the power to impose public policy let me turn again to record page eight fifty that is a critical ruling that was where the actual contract interpretation by the arbitrator's ended said is they realize they said they know they can add to or modified the contract and they say absent application of the doctrine of good faith and fair dealing if we are to construe the strict claimed damages for breach of the terminations provision the fact that all stems a breach of contract claim failed on the merits highlights the fact that they added something else to the agreement via good faith and fair dealing which ginsburg instructs is a matter of public policy they reached outside the contract  imposed this doctrine in violation of the law that arbitrators don't decide public policy in violation of the limit on their authority that they couldn't add to or change or modify the agreement and could only go to illinois law if the answer to the dispute wasn't within the agreement and it was and it was in violation of the terminations provision which said notwithstanding anything to the contrary here in b m s that have a thirty day without cause right to terminate so if somehow the doctrine of good faith and fair dealing w implied if it was here in it could not be considered because it was contrary to the party's agreement that the n s f had it without cost germination right could the sophisticated parties alston's an even bigger corporate giant then be n s f at these sophisticated corporate parties have made it any more clear not withstanding anything to the contrary unfettered thirty day without cause terminations right don't go to illinois law you can't change the words of your of this document and that's but that's exactly what the arbitrators did most importantly the arbitrators violated the fundamental precept of arbitration that it's based on consent not coercion they impose their view of public policy and they impose their view of what they thought was right an arbitrator's just can't do that this amorphous doctrine of good thank them fair dealing is just a power given to common law judges in the illinois to look at an agreement and say there's an equal bargaining power here we just don't think this is right but there is not happened here the n s a one there is no breach of contract after that by imposing public policy they found liability arbitrators just can't do that judges and courts can impose public policy arbitrators cannot and it's really that simple at this point in the arbitrator's award what the contract said didn't matter and this becomes very evident when you look at their ruling on damages first they read the contract as written and if there's a court will look at record page eight ninety two and eight ninety three and they say under section eleven point nine there is a mutual obligation that shields both parties for claims for consequential an incidental damages including loss of profit or revenue and allows only ordinary and direct damages accordingly we deny all stems claim for fifty one million dollars for loss of profits and revenue but on the next page record page eight ninety four they then award fifty five million dollars for incidental and consequential damages that are prohibited under the contract the arbitrator say at that page eight ninety four as a result of b n s f early terminations allston was denied the opportunity to earn additional revenues through the remainder of the contract period denied the opportunity to earn additional revenues denied the opportunity to recoup its direct costs and other investments in the fleet those are incidental and consequential damages that the arbitrator's had no power to give this court's decisions in beard and delta queen specifically say that parties can limit the type of damages that arbitrators can award an arbitrator's can't manufacture remedies they manufactured that remedy here the beard case had the same nobody fit cation clause that the parties incorporated into their agreement here you can add to subtract modify and this  delta queen likewise this court's decision in delta queen and united states versus delic refining where judge clement you noted the delta queen line of authority progress looking forward well they did say they were fashioning reasonable economic adjustment but reasonable economic adjustment was not a contract remedy it was an obligation for the parties to meet and can far the contract remedies were ordinary and direct damages and they were not incidental in consequential damages so a reasonable economic justin is not a contract remedy provided in the contract for break it's not even a cognizable breach of contract remedy it was a mutual obligation to meet and confer at the n s f stored more than ten percent breach of a early terminations of the agreement which is actually what happened here that the contract was terminated by b n s f with or without cause right now it was terminated but instead they terminated so you still have the missing quantifiable amount of which i think is what they were trying to get now your honor i disagree what the n s a have had it without cause terminations right so whether it was bad faith or good faith or no faith that didn't matter that's fine th terminated before they made an adjustment to the change and storage they were in the process of conferring about an adjustment right but that is not a contract remedy provided in this contract for early terminations and the arbitrators by somehow looking at the meeting confer obligation about storing locomotives was manufacturing a remedy that wasn't provided for in the contract being as that had paid full price for all the stored locomotives there wasn't alston wasn't out anything on the stored locomotive numbers they were being paid full price as if those locomotives were operating and that's undisputed the arbitrator's by using that as a measure of damages exceeded their power of interpretation exceeded their their remedial power granted by this contract they could only award ordinary and direct damages they could not award incidental consequential damages and truthfully the remedy for early termination was repurchase of alston's inventory and that's exactly what b n s f did so oxford health is not the a revolution all stem claims that an oxford health says that or an arbitrator's power comes from the agreement and the arbitrator is to interpret and construe the agreement it use some strong rhetoric good bad or ugly but the law is basically the same it's always been that arbitrator's power comes from the contract he has to interpret and that  actually construing or interpret in the contract the structure of the arbitrator's decision here shows that they interpreted it and construed and found no breach of contract and it's only when they went beyond that and imposed a public policy obligation that they possibly found that they could possibly have found a violation and they had no power to do that that's a question that this court looks at de novo whether illinois calls it a matter of contract interpretation there was nothing to interpret notwithstanding anything to the contrary  if i could point the court to one more united states supreme court case which we cited in our brief with those which is relevant to the court's analysis here and that's the master bono case the u s supreme court in that case says federal law controls whether choosing a choice of law provision illinois law here federal law controls whether that is part of the agreement good faith and fair dealing is a power granted to judges as i've said repeatedly a power granted to judges to reform contracts when there's unequal bargaining power arbitrators have no such power master bono says that type of power is not a law that is imported into a contract by a choice of law provision choosing illinois general law doesn't incorporate all aspects of that law illinois allows judges to impose sanctions allows judges to issue contempt allows judges to perform marriages but that doesn't mean arbitrators can do that arbitrator's cannot decide policy their application of the amorphis doctrine of good faith and fair dealing under ginsburg under start nielsen and under master bono exceeded their powers in closing the fundamental policy of the f a a is that arbitration is a matter of consent not coercion and you decide that d without deference to these arbitrators whether in reliance on ginsburg that says the doctrine of good faith and fair dealing is a matter of public policy or independently you look at what these arbitrators did it is pure fiction to characterize it as a matter of consent the n s f did not agree that the arbitrator's could just do what they thought was they exceeded their power when the arbitrators imposed the doctrine of good faith and fair dealing which is a public policy matter and they overrode the terms of the party's voluntary recoup its investment would be lost so what's reasonable when austin is invested almost sixty million dollars in the fleet well it's reasonable your peers determine for northern to be ordered to return that value which they benefited from for the past ten years which they benefited from during arbitration which they benefited from during the two years as cases in the district court which they benefit from today a reason working on that adjustment would be ordering reliance recovered investment in the fleet that's correct the the monthly locomotive charge was paid when the local was restored because burlington northern was only excuse matt if it complied with the section four point six which it did not so was required to but that was not for nation for convenience provision what they said was if they say proper terminations without cost or for the convenience of burlington northern if exercised consistently with other terms and conditions of the agreement and is in good faith would only obligate be n s f acting under section eighteen point four to repurchase all sums in the tour that's what they hell they didn't say there's no possible way the burlington northern could reach the term nation provision nor did they find their religion or they did not breach the term nation provision they found it was within their power to find the broad northern did breach determination of provision in the deal last night northwest of charter northwest airlines and this public policy point two things i think are being confused here beverly to north arbitrators can't make up their own public policy when agrees with that but that's not what happened in this case in this case you have a contract which called upon the arbiter is to apply only  illinois has certain contract interpretation principles are part of it's law the arbitrator's applied those contract interpretation principles to this agreement this is not a case like northwest which involved minnesota's covenant which  like illinois is not a contract interpolation principle unlike illinois is not waiver and unlike illinois actually can support a separate separate cause of action this is purely a contract interpretation principle really northern is essen inviting the courts to get in the business of deciding is this state's contract interpretation principle based on the state's view of public policy good public policy or not and if it is based upon good public policy than our peers can use it that doesn't make any sense this agreement called upon the arbitrator's to use the illinois law to interpret and construe the contract without any limitations that's what they did under oxford he