# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _

No. 1 5- 17 86

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In re: W ho le sa le Groc ery Pro du ct s An ti tru st Lit ig at io n

----- ----- ----- ----- ----- -----

Mi ll en ni um

Oper at io ns , Inc .; J FM M ark et , Inc .; MJ F Mar ke t, In c.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll ees

v.

Su pe rVal u, In c.; C &S Who le sa le Groc ers , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el la nt

s

__ __ __ __ __ __
App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

__ __ __ __ __ __

Su bm it te d: May 17, 2 01 6
Fil ed : M arch 1, 2 01 7

__ __ __ __ __ __

Befo re RI LEY, Chi ef J ud ge , COLLOTO N and KELLY , Cir cu it Ju dg es

.

__ __ __ __ __ __
RILEY, Chi ef J ud ge

.

A nu m be r of ret ai l gr oc ers su ed two la rg e fu ll -li ne who le sa le gr oc ers , al le gi ng

th e who le sa le rs ’ co nt ract to ex ch an ge ret ai le r su pp ly ag reem en ts co ns ti tu te d m ark et

al lo cat io n in vi ol at io n o f th e Sh erm an Act, s ee 1 5 U.S.C. § 1. The ret ai le rs fo rm edtwo pu ta ti ve cl as se s, th e Mi dwe st Cl as s an d th e New Eng la nd Cl as s. Each cl as s ha d

an Arb it rat io n Su bc la ss of ret ai le rs who ha d arb it rat io n ag reem en ts wit h th ei r cu rren t (p os t-s wap ) who le sa le r. Each Arb it rat ion Su bc la ss su ed on ly it s pr ev io us who le sa le r,
wit h whi ch it no lo ng er ha d a cu rren t arb i t r a t i o n a gr eem en t. The di st ric t co ur t 1

di sm is se d th e Arb it rat io n S u b cl as se s fro m th e cas e on th e th eo ry th at th e pr ev io us
who le sa le rs , as “ no ns ig na to ry ” de f e n d a n t s, co ul d co m

pe l th e ret ai le rs to arb it rat e
ba se d on eq ui ta bl e es to pp el

. See In re W ho le sa le Gro cery Pro ds

. Ant it ru st Lit ig

., No.

09 -MD-2 09 0, 2 01 1 WL 95 58 05 4, at *3 -4 (D. Min n. J ul y 5, 2 01 1)

.

W e rev ers ed an d th en rem an de d fo r th e di st ric t co ur t to co ns i d e r t he

who le sa le rs ’ al te rn at e th eo ry th at th e no ns ig na to ry de fen da nt s co ul d co m pe l

arb it rat io n be cau se th ey were su cces so rs -in -in te res t to th e si gn at or y de fen da nt s. See

In re W ho le sa le Gro cery Pro ds

. Ant it ru st Lit ig

., 70 7 F.3 d 91 7, 91 9- 20

, 92 5 (8 th Ci r.

20 13 ) ( W ho le sa le Pro ds

. I). The di st ric t co ur t reject ed th e su cces so rs -in -in te res t

th eo ry , as well as th e who le sa le rs ’ th ird al te rn at e t h e o r y th at th ey co ul d di rect ly

en fo rce th ei r pr ev io u s a r b i tra ti on ag reem en ts be cau se so m e of th e co nd uc t at is su e

oc cu rred whe n th e pr ev io us ag reem en ts were st il l in effe ct

. The who le sa le rs ap pe al

.

I. BACKGRO UND

In 20 03

, who le sa le gr oc e r y su pp li ers Su pe rVal u, In c. (Su pe rVal u) an d C&S

W ho le sa le Gro cers , In c. (C& S) (co ll ect iv el y , who le sa le rs or de fen da nt s) en te red in to

an Ass et Exc ha ng e Agr eem en t (AEA). C&S ha d rece nt ly pu rch as ed Fl em in g

Co m pa ni es , In c.’s (Fl em in g) Mi dwe st who le sa le gr oc ery bu s in es s as se ts ou t of

ba nk ru pt cy

. In th e AEA, C&S so ld Fl em in g to Su pe rVal u an d C & S p u r c h as ed

Su pe rVal u’s N ew Eng la nd bu si ne ss

. Am on g th e as se ts ex ch an ge d were su pp ly

ag reem en ts an d arb it rat io n ag reem en ts be twee n ea c h w h o l es al er an d it s nu m ero us

ret ai l cu st om ers (th e swa p)

. Acco rd in g to th e pa rti es , th e AEA co nt ai ne d reci pr oc al

The Hon or ab le Ann D. Mo nt go m ery, Uni te d St at es Dis tri ct Ju dg e fo r th e 1

Dis tri ct of M in ne so ta

.

-2

-no n- co m

pe te pr ov is io ns

. See id

. at 92 0. Sev eral ret ai le rs su ed Su pe rVal u an d C&S

, 2

al le gi ng th e AEA un la wfu ll y al lo cat ed th e New Eng la nd m a r k e t to C&S an d th e

Mi dwe st m ark et to Su pe rVal u, in vi ol at io n of the Sh erm an Act, 1 5 U.S.C. § 1. See

W ho le sa le Pro ds . I, 70 7 F .3d at 9 20

.

The pl ai nti ff re ta ile rs pr opos ed two cl as se s: Mi dwe st Su pe rVal u cu st om ers an d

New Eng la nd C&S cu st om ers

. Each cl as s ha d an A r b i t r a t io n Su bc la ss of ret ai le rs
who ha d arb it rat io n ag reem en ts wit h Su pe rVa l u o r C & S du rin g th e cl as s pe rio d.

Vil la ge Mar ke t (co m

pr is ed of JF M Mar ke t, In c. an d MJ F M ark et

, In c.) was th e

rep res en ta ti ve of th e pu ta ti ve New Eng la n d A r bi tra ti on Su bc la ss an d Mi ll en ni um Ope rat io ns , In c. (Mi ll en ni um ) was th e rep res en ta ti ve of t h e pu ta ti ve Mi dwe st

Arb it rat io n Su bc la ss

. Thi s ap pe al rel at es to th e Arb it rat io n Su bc la ss es (co ll ect iv el y ,
ret ai le rs or p la in ti ffs ).

As th e d i s t r i c t co ur t ex pl ai ne d, th e Arb it rat io n Su bc la ss es “ each as se rte d an

an ti tru st co ns pi racy clai m ag ai ns t th e who le sa le r Defen da nt wit h who m it d[i d] no t [th en ] do bu si ne ss an d d[ id ] no t [th en ] ha ve an ar b i t r a t i o n ag reem en t (th e

‘non si gn at or y Defen da nt ’).

. . . Vil la ge Mar ke t

. . . as se rte d an an ti tru st cl ai m ag ai ns t

Su pe rVal u on ly, an d Mi ll en ni um

. . . as se rte d an an ti tru st co ns pi racy cl ai m ag ai ns t

C & S o n l y.” The who le sa le rs m ov ed to di sm is s or st ay th e cas e, arg ui ng eq ui ta bl e

es to pp el an d su cces so r-i n- in te res t th eo rie s al lo wed th e w h o le sa le rs to en fo rce th e
arb it rat io n agr eem en ts to whi ch th ey were no lo ng er sig na to rie s. See id . at 92 0- 21 ;
Fed eral Arbi tra ti on Act, 9 U.S.C. § 1 et s eq

.

In Ju ly 20 11

, th e di st ric t co ur t gr an te d t h e p a r t i a l m ot io n to di sm is s or st ay ,

co nc lu di ng th e no ns ig na to ry de fen da nt s co ul d co m pe l arb it rat io n th ro ug h eq ui ta bl e

es to pp el

. See In re W ho le sa le Gro cery Pro ds

. Ant it ru st Lit ig

., 20 11 W L 95 58 05 4, at

Th e pa rti es ag ree su ch pr ov is io ns ex is te d, al th ou gh we do no t fin d t h e s e 2

pr ov is io ns in th e AEA.

-3

-*3 -4

. “ A no n- si gn at or y can ‘force a si gn at or y in to arb it rat io n u nd er t he [eq ui ta bl e]

es to pp el th eo ry whe n th e rel at io ns hi p of th e pe rs on s, wro ng s and is su es in vo lv ed is

a cl os e on e.’” W ho le sa le Pro ds . I , 7 0 7 F.3 d at 92 2 (al te rat io n in or ig in al ) (q uo ti ng

CD Part ne rs , LLC v. Griz zl e, 4 2 4 F

. 3 d 79 5, 79 9 (8 th Ci r. 20 05 )). “ [Equ it ab le ]

es to pp el typic al ly rel ie s, at leas t in pa rt, on th e cl ai m s be in g so in te rtwi ne d with th e

ag ree men t c o nt ai ni ng th e arb it rat io n cl au se th at it wou ld be un fai r to al lo w th e
si gn at or y t o r e l y o n th e ag reem en t in fo rm ul at in g it s cl ai m s bu t to di sa vo w

av ai la bi li ty of t h e a r b it rat io n cl au se of th at sa m e ag reem en t.” Id

. (al te rat io n in

or ig in al ) (fo ot no te om it te d) (q uo ti ng PRM Ene rg y Sy s., Inc. v. Prim en erg y , L.L.C.,

59 2 F .3d 83 0, 8 35 (8t h C ir. 2 01 0) ).

In Feb ru ary 20 13

, we rev ers ed th e d i s t r i ct co ur t’s eq ui ta bl e es to pp el ru li ng

. See id

. at 91 9. W e co nc lu de d pl ai nt iff s’ cl ai m s ag ai ns t th e no ns ig na to ry de fen da nt s

were no t “ ‘so in te rtwi ne d wit h th e ag reem en t co nt ai ni ng th e arb it rat io n cl au se th at it

wou ld be un fai r t o a l l o w th e si gn at or y to rel y on th e ag reem en t in fo rm ul at in g it s
cl ai m s bu t to di sa vo w av ai la bi li ty of th e arb it rat io n cl au se of th at sa m e ag reem en t.’”

Id . a t 92 3 (q uo ti ng PRM Ene rg y Sy s., 59 2 F.3 d at 83 5)

. Thi s i s b e c a u se pl ai nt iff s’

an ti tru st cl ai m s aro se ou t of th e Sh erm an Act, no t al le ge d br each es o f th e pa rti es ’

co nt ract s th em se lv es

. See id

. at 92 3- 24

. W e rem an de d th e cas e fo r th e di st ric t co ur t

to co ns id er t he who le sa le rs ’ al te rn at e su cces so r-i n- in te res t t he or y . See i d. at 92 5.

On rem an d, th e who le sa le rs arg ue d th ey co ul d en fo rce each ot he r’s arb it rat io n

ag reem en ts un de r a “ cl os e rel at io ns hi p” ex cep ti on be cau se th ey “ are su cces so rs -in

in te res t, st an d i n g i n each ot he r’s sh oe s wit h res pe ct to th e su pp ly an d arb it rat io n

ag reem en ts th ey ex ch an ge d in th e AEA.” The di st ric t co ur t fir st reject ed th is th eo ry
be cau se Su pe rVal u an d C&S di d no t ha ve th e type of cl os e, ag en cy -li ke rel at io ns hi p

th at wou ld gi ve ris e to an ex c e p t i o n t o th e ge ne ral ru le th at a no ns ig na to ry can no t

en fo rce a n a rb it rat io n a gr eem en t.

-4

-The di st ric t co ur t al so reas on ed th at th e no ns ig na to ry de fen da nt s were

“ pr ed eces so rs -in -in te res t, no t su cces so rs -in -in te res t

, to th e arb it rat io n ag reem en ts

th ey se ek to en fo rce.” Tha t is

, “ Su pe rVal u se ek s to en fo rce th e Vil la ge M ark et

arb it rat io n ag reem en t th at it as si gn ed to C & S un de r th e AEA,” so as th e as si gn or ,

“ Su pe rVal u is th e pr ed eces so r-i n- in te res t.” The s a me i s t r ue of C&S ’s at te m pt to

en fo rce Mi ll en ni um ’s arb it rat io n ag reem en t th at C&S as si gn ed to Su pe rVal u. The

d i st ric t co ur t ob se rv ed th e who le sa le rs ha d ci te d no au th or it y su pp or ti ng “t h e

pr op os it io n th at a pr ed eces so r-i n- in te res t’s as si gn m en t of rig ht s crea te s a ‘clo se
rel at io ns hi p’ wit h it s as si gn ee th at warra n t s a ll owi ng th e pr ed eces so r-i n- in te res t to

as se rt t he rig ht s t ha t i t u nc on di ti on al ly ass ig ne d a nd vo lu nt ari ly reli nq ui sh ed .”

Fi na ll y , th e di st ric t co ur t reject ed th e who le sa le rs ’ ad di ti on al th eo ry th at “ th ey

m ay di rect ly en fo rce th e arb it rat io n ag reem en ts to whi ch th ey are no lo ng er
si gn at or ie s be cau se so m e of th e ev en ts gi vi ng ris e to Mi ll en ni um an d Vil la ge

Mar ke t’s cl ai m s oc cu rred be fo re th e arb it rat io n ag reem en ts were tra ns ferr ed ,” on th e

gr ou nd s th at an “ ‘ass ig no r ret ai ns no in te res t in th e rig h t t r a n s ferr ed .’ ” (Qu ot in g

Mar ti n ex rel

. Hof

f v. Ci ty of Ro ch es te r, 64 2 N.W .2d 1, 13 (Mi nn

. 20 0 2 ) )

. Th e
who le sa le rs ap pe al

. 3

II

. DISCUSS IO N

W e rev ie w de no vo th e di st ric t co ur t’s de ci si on whe th er to co m pe l arb it rat io n.

See Leb an on Ch em

. Co rp

. v. Uni te d Farm ers Pl an t Fo od

, In c., 17 9 F.3 d 10 95

, 10 99
(8 th Ci r. 19 99 ). Th e w ho le sa le rs ad va nc e two le ga l th eo rie s whi ch th ey be li ev e

pe rm it th em to co m

pe l arb it rat io n un de r th e arb it rat io n ag reem en ts th ey as si gn ed to

each ot he r.

In 20 14 , Ne m e c e k M a rk et s, In c. (Nem ecek ), a fo rm er cu st om er of Fl em in g, 3 joi ne d t he li ti ga ti on . Nem ecek ha d a n arb it rat io n ag reem en t wit h Fl em in g, an d h as
ag reed to be bo un d b y

th e arb it rab il it y

de te rm in at io n i n t hi s ca se

.

-5

-A. Clo se Rela tio ns hi p/ Succ es so r-i n-I nter es t

Fi r s t

, th e who le sa le rs arg ue th at ev en if th ey can no t di rect ly en fo rce th e
arb it rat io n ag reem en ts th ey as si gn ed

, th ey can en fo rce th em as no ns ig na to rie s un de r

a “ cl os e rel at io ns hi p” th eo ry

. “ ‘[S] ta te co nt ract la w g o v e r ns th e ab il it y of

no ns ig na to rie s to en fo rce arb it rat io n pr ov is io ns ,’ ” PRM Ene rg y Sy s., 59 2 F.3 d at 83 3
(q uo ti ng D o n a l d s o n Co

. v. Bu rro ug hs Dies el

, In c., 58 1 F.3 d 72 6, 73 2 (8 th Ci r.

20 09 )), an d th e pa rti es ag ree Mi nn es ot a l a w a p pl ie s he re. Und er th at ex cep ti on , a

no ns ig na to ry can co m

pe l arb it rat io n “ whe n ‘the rel at io ns hi p be twee n th e si gn at o r y

an d no ns ig na to ry de fen da nt s is su ffi ci en tl y cl os e th at on ly b y p e r m it ti ng th e

no ns ig na to ry to i n vo ke arb it rat io n m ay ev is cera ti on of th e un de rlyin g arb it rat io n

ag reem en t be twee n si gn at or ie s be av oi de d.’” CD Part ne rs , 42 4 F.3 d at 79 8 (q uo ti ng

MS Deal er Serv

. Co rp

. v. Fran kl in

, 17 7 F.3 d 94 2, 94 7 (1 1t h Ci r. 19 99 ), ab ro ga te d on

ot he r gr ou nd s b y

Arth ur And ers en LLP v. Car li sl e, 55 6 U.S. 6 24 (20 09 )).

The who le sa le r s c i t e CD Part ne rs , in whi ch we co nc lu de d th ree co rp or at e

of fic e rs co ul d co m

pe l arb it rat io n un de r an arb it rat io n ag reem en t to whi ch th ei r

co rp or at io n was a si gn at or y , ev e n t h ou gh th e of fic ers th em se lv es were no t

si gn at or ie s, be cau se th e rel at io ns hi p b et ween th e co rp or at io n an d th e of fic ers was

su ffi ci en tl y cl os e an d be cau se th e un de rlyin g arb it rat io n a g r eem en t wou ld be

ev is cera te d if th e of

fic ers co ul d no t co m

pe l arb it rat io n. Id. at 79 7- 80 0. Acco rd in g

to th e who le sa le rs , “ th e ‘clo se rel at io ns hi p’ do ct rin e is no t l im it ed on ly to ag en ts or

affi li at es of a co rp or at e si gn at or y ,” bu t al so ap pl ie s t o “ ‘thi rd -p art y be ne fic ia rie s o f

a co nt ract

, . . . co rp or at e o f f i c e rs or co rp or at e en ti ti es affi li at ed wit h a si gn at or y ,

or

. . . su cces so rs -in -in te res t of a si gn at or y ,’ ” (q uo ti ng Cen t. Tran sp

. Serv s., In c. v.

Co le , No. 1 3- 12 95 , 20 13 W L 60 08 30 3, at *4 (D. Kan. No v. 1 3, 2 01 3) ).

Bu t he re, as as si gn or s, th e “ no ns ig na to ry ” de fen da nt s are p r e d e ces so rs -in

in te res t to th ei r as si gn ees , n ot su cces so rs -in -in te res t. We are aware of n o au th or it y

su pp or ti ng th e pr op os it io n th at a pr ed eces so r-i n- in t eres t be ars a su ffi ci en tl y cl os e
rel at io ns hi p to a su cce sso r- in- int er es t suc h tha t the pr ed ec es sor- in -in te res t can co m pe l

-6

-arb it rat io n un de r an ag reem en t to whi ch on ly th e su cces so r-i n- in te res t is a si gn at or y

.

Su ch a ru le co ul d crea te un fo res een m is ch ie f an d en co ur ag e co ll us io n. W e co nc lu de

th e d is tri ct co ur t d id no t er r by rejecti ng th is th eo ry

.

B. Dire ct En fo rcement

Seco nd

, th e who le sa le rs as se rt th ey can co m pe l arb it rat io n u n d e r th e

ag reem en ts to whi ch th ey were on ce si gn at or ie s “ be cau se pl ai nt iff s’ cl ai m s are ba se d

on an al le ge d co ns pi racy th at oc cu rred whe n th e or ig in al arb it rat io n ag reem en ts were

in effe ct be twee n th e arb it r a t io n pl ai nt iff s an d th ei r fo rm er su pp li ers .” The

who le sa le rs qu ot e Lit to n Fi na nc ia l Pri nt in g Div is io n v. NLRB, 50 1 U.S. 19 0, 20 5- 06
( 19 91 ), fo r th e pr op os it io n th at “ a pa rty’ s rig ht to co m pe l arb it rat io n su rv iv es t h e

ex pi rat io n of th e ag reem en t if th e di sp ut e ‘inv ol ve s fact s an d oc cu rren ces th at aro se
be fo re ex pi rat io n.’” Bu t he re th e ag reem en ts be twee n th e who le sa le rs an d th e

ret ai le rs di d no t ex pi re or te rm in at e, as in Lit to n. In st ead

, th e who le sa le rs ex pr es sl y

ag reed to “ co nv ey , as si gn , tra ns fer an d de li ve r” to each ot he r “ al l of [th ei r] rig ht

, ti tl e

an d in te res t” in th e un de rlyin g su pp ly an d arb it rat io n ag reem en ts

. See al so Hof f, 64 2

N.W .2d at 13 (“ An as si gn m en t ge ne ral ly op erat es to tra ns fer al l rig ht s po ss es se d by

th e as s i g n o r an d th e as si gn or ret ai ns no in te res t in th e rig ht tra ns ferr ed .”);

Res ta te m en t (Sec on d) of C on tra ct s § 31 7( 1) (“ An as si gn m en t of a rig ht is a

m an ife st at io n of th e as si gn or ’s in te nt io n to tra ns fer it by vi rtu e of whi ch th e

as si gn or ’s rig ht to pe rfo rm an ce by th e ob li go r is ex ti ng ui sh ed in who le or in pa rt an d

th e as si gn ee acq ui res a rig ht to su ch pe rfo rm an ce.”)

. W e se e n o reas on to ex te nd a

pr es um pt io n ab ou t wha t rig ht s an d ob li ga ti on s th e pa rti es to a co nt ract mi g h t h a v e

in te nd ed to ke ep aft er th e co nt ract ex pi red

, se e Lit to n, 50 1 U.S. at 20 4- 06

, to a
si tu at io n whe re a pa rty ha s affi rm at iv el y gi ve n up —i nd eed

, so ld —ev erythi ng it ha d

un de r th e co nt ract

.

The who le sa le rs in si st —an d th e pa rti al di ss en t ta ke s fo r gr an te d, po st at 12

- 13 —t ha t Lit to n’s pr es um p t i o n a b o u t whe n a pa rty ret ai ns th e rig ht to co m pe l

arb it rat io n sh ou ld ap pl y “ reg ard le ss of wha t cau se d th e te rm in at io n of th e en fo rci ng

-7

-pa rty’ s [o th er] co nt ract ua l rig ht s an d ob li ga ti on s,” whe th er ex pi rat io n of th e co nt ract

or de li be rat e rel in qu is hm en t. Bu t Lit to n, fo ll owi ng Nol de Bro s., In c. v. Loc al No.

35 8

, Bak ery & Co nf

ect io na ry W or ke rs Uni on , 43 0 U.S. 24 3, 25 0- 54 (1 97 7)

, was
ab ou t in ferr in g an in te nt to arb it rat e po st -ex pi rat io n di sp ut es ari si ng ou t of a co nt ract

fro m th e pa rti es ’ “ext en si ve ob li ga ti on to arb it rat e un de r th e co nt ract ,” whi ch

su gg es te d th ey di d no t m ean to “ el im in at e al l du ty to arb it r a t e a s o f t he da te of

ex pi rat io n.” Lit to n, 5 01 U.S. at 2 03 -0 4. Whet he r th e p art ie s t o a co nt ract in te nd ed

to be ab le to co m

pe l arb it rat io n ev en aft er as si gn in g away th e rig ht to d o s o , al on g
wit h al l th e i r ot he r rig ht s, is an en ti rel y di ffer en t m at te r, an d, we th in k, m uc h le ss
cl earl y im

pl ie d by a ge ne ral wil li ng ne ss to arb it rat e di sp ut es ari si ng ou t of th e

co nt ract ua l rel at io ns hi p. Fo r on e th in g, al th ou gh pa rti es do no t ne ces sa ril y ha ve th e

fin al sa y ov er whe th er a co nt ract is al lo wed to ex pi re or is te rm in at ed b y t he ir

co un te rp art y , an d pr es um ab ly wou ld no t wan t to su bjec t th e av ai la bi li ty of “ a pi vo ta l

di sp u t e r es ol ut io n pr ov is io n” to su ch fo rtu it ie s, id

. at 20 8, th ey ge ne ral ly do ha ve

co nt ro l o ve r whe th er an d wh en th ey tra ns fer t he ir o wn ri gh ts

.

In im po rta nt res pe ct s, th is cas e pr es en ts th e fli p si de of Koc h v. Co m pu cred it

Co rp ., 54 3 F.3 d 46 0 (8 th Ci r. 20 08 ). The re, on e ba nk ha d a s si gn ed a co nt ract

co nt ai ni ng an arb it rat io n cl au se to an ot he r. See id

. at 46 2- 63

. Afte r ap pl y in g Lit to n

to co nc lu de th e ob li ga ti on to arb it rat e su rv iv ed ev en th ou gh th e co nt ract arg ua bl y ha d

te rm in at ed , we h el d th e as si gn ee b an k c ou ld co m pe l ar bi tra ti on of a di sp ut e ari si ng

ou t of th e co nt ract be cau se “ [t]hr ou gh th e as si gn m en t, [th e as si gn ee] as su m ed al l of
[th e as si gn or ’s] rem ai ni ng rig ht s an d ob li ga ti on s un de r th e co nt ract .” Id

. at 46 5- 67

. Here, it is th e as si gn o r s, no t th ei r as si gn ees , cl ai m in g a rig ht to co m pe l arb it rat io n.
The cl ear co ns eq ue nc e of K o c h ’s l o gi c is th at th e as si gn or s— in th is cas e, th e

no ns ig na to ry

who le sa le rs —s ho ul d h av e n ot hi ng lef t to en fo rce, sin ce “ al l of [t he ir]

rem ai ni ng rig ht s” were “ as su m ed ” b y so m eo ne els e.

It is tru e, as th e pa rti al di ss en t po in ts ou t, “ [t]he Ass et Exc ha ng e Agr eem en t di d

no t tra ns fer pr e-as si gn m en t li ab il it ie s.” Po st at 12

. Kno win g th at

, as th ey m us t ha ve ,

-8

-pe rh ap s th e who le sa le rs sh ou ld ha ve ba rg ai ne d n o t to tra ns fer th e co rres po nd in g

rig ht s to co m

pe l arb it rat io n on di sp ut es reg ard in g th o s e p r e-as si gn m en t li ab il it ie s.

Bu t th ey di d no t, an d no th in g in Lit to n or Koch co nv in ces us to tre at th em li ke th ey
di d. The who le sa le rs m ay no t d ire ct ly enfo rce t he arb it rat io n a gr eem en ts to whi ch 4

th ey are n o l on ge r si gn at or ie s.

II I. CONCLUSI ON

The di st ric t co ur t i s af

fir m ed

.

COLLOTON, Ci rcu it Ju dg e, co nc ur rin g in th e j udgm en t in pa rt an d di ss en ti ng in pa rt.

The pr in ci pa l qu es ti on on th is ap pe al is whe th er th e an ti tru st pl ai nt iff s in th is

cas e are req ui red t o a r b i t rat e th ei r cl ai m s ag ai ns t th e who le sa le gr oc er de fen da nt s,

Su pe rVal u, In c. an d C&S W ho le sa le r Gro cers , In c

. I co nc lu de th at th e cl ai m s
br ou gh t by Vil la ge Mar ke t ag ai ns t Su pe rVal u are su bjec t to arb it rat io n, an d I wou ld

th eref or e rev ers e th e d eci si on of t he di st ric t co ur t i n re le va nt pa rt.

Fr om A pr il 2001 th ro ug h Sep te m

be r 20 03

, Vil la ge Mar ke t an d Su pe rV al u w er e

pa rti es to a su pp ly ag reem en t th at was acco m pa ni ed by an arb it rat io n ag reem en t. The

W e al so fin d qu es ti on ab le th e who le sa le rs ’ po si ti on th at be cau se so m e of th e 4

ch al le ng ed co nd u c t oc cu rred be fo re th e ex ecu ti on of th e AEA, an d so m e of it

oc cu rred aft er, bo th th e as si gn or an d as si gn ee who le sa le r can en fo rce th e arb it rat io n

a g reem en t in th e sa m e di sp ut e. See HT of Hig hl an ds Ran ch

, In c. v. Hol lyw o o d

Tan ni ng Sy s., In c., 59 0 F. Su pp

. 2d 67 7, 68 4 (D

. N

. J

. 2 00 8) (ex pl ai ni ng th at if al l rig ht s an d ob li ga ti on s un de r a co nt ract are tra ns ferr ed

, th e as si gn or ’s rig ht to co m pe l
arb it rat io n is ex ti ng ui sh ed

, whi le le av in g “ un res ol ve d” th e fact ua l m at te r o f wha t rig ht s th e as si gn or act ua ll y tra ns ferr ed ); cf. RRC I Co ns tru ct or s, LLC v. Ch arl ie ’s/Di am on d Rea dy Mi x, In c., No. 20 07 -1 47

, 20 09 W L 79 96 60

, at *5 (D.V.I.

Mar

. 24

, 20 09 ) (rejec ti ng th e th eo ry th at “ bo th th e as si gn o r a n d a s s ig ne e of an
ag reem en t m ay

be co m pe ll ed to arb it rat e a d is pu te th at co m es wit hi n th e sc op e of a

va li d a rb it rat io n a gr eem en t. Su ch a po si ti on is un su pp or te d b y law” ).

-9

-arb it rat io n ag reem en t req ui red arb it rat io n of “ [a]ny co nt ro ve rs y , cl ai m or di sp ut e of

wha te ve r na tu re ari si ng be twee n [Vil la ge Mar ke t] an d SUPERVALU

. . ., in cl ud in g
bu t no t li m it ed to th os e ari si ng ou t of or rel at in g t o a n y a g r e e m en t be twee n th e

pa rti es .” App . 10 6.

In Sep te m be r 20 03

, as pa rt of an as se t ex ch an ge be twee n Su pe rVal u an d C&S

, Su pe rv al u as si gn ed it s ag reem en ts wit h Vil la ge Mar ke t to C&S

. Vil la ge Mar ke t la te r
br ou gh t an an ti tru st cl ai m ag ai ns t Su pe rVal u, al le gi ng th at Su pe rVal u co ns pi red wit h

C&S in vi ol at io n of th e S h e r man A c t. Fo r se ve ral y ears , th e pa rti es ha ve li ti ga te d

whe th er Vil la ge Mar ke t sh ou ld be co m pe ll ed to su b mit it s an ti tru st cl ai m ag ai ns t

Su pe rVal u to arb it rat io n. Se e In re W ho le sa le Gro cer

y Pro ds . An ti tr us t Li ti

ga ti on , 70 7 F .3d 91 7 (8 th Cir . 20 13 ).

In th is ap pe al

, Su pe rVal u co n t en ds th at be cau se Vil la ge Mar ke t al le ge s an

an ti tru st co ns pi racy th at be ga n whi le th e pa rti es we r e s ub ject to an ag reem en t th at

req ui red arb it rat io n of su ch a cl ai m , Vil la ge Mark et sh ou ld be co m pe ll ed to su bm it

th e an ti tru st cl ai m to arb it rat io n. App lying th e pr in ci pl es se t fo rth in Li tt on Fin an ci al

Pri nt in g Divi si on v. NLRB

, 5 0 1 U.S. 19 0 (1 99 1)

, an d Ko ch v. Co mpu cr ed it

Co rp or at io n , 54 3 F.3 d 46 0 (8 th Ci r. 20 08 ), I wou ld di rect th e di st ric t co ur t to co m pe l

arb it rat io n. Tha t Su pe rv al u la te r as si gn ed th e arb it rat io n ag reem en t to C&S do es no t

el im in at e Vil la ge Mar ke t’s o b l i g at io n to arb it rat e a di sp ut e th at in vo lv es fact s an d

oc cu rren ces th at aro se be fo re t he ass ig nm en t.

Li tt on rai se d th e qu es ti on whe th er pa rti es to a co ll ect iv e ba rg ai ni ng ag reem en t

wit h an arb it rat io n cl au se ha d a du ty t o a rb it rat e gr ie va nc es th at were br ou gh t by a

un io n aft er th e ex pi rat io n of th e ag reem e n t

. L i t to n ap pl ie d No ld e Bro th er s, In c. v.
Bak er y W or ker s , 43 0 U.S. 24 3 (1 97 7)

, whi ch fo un d in th e co n t e x t o f a n ex pi red

ag reem en t th at th ere were “ st ro ng reas on s to co nc lu de th at th e pa rti es di d no t in te nd

th ei r arb it rat io n du ti es to te rm in at e au to m at ic al l y w i th th e co nt ract .” Id

. at 25 3.

No ld e Bro th er

s est ab li sh ed “ a p res um

pt io n i n fa vo r of

po st ex pi rat io n arb it rat io n of

-1 0-m at te rs un le ss ‘neg at ed ex pr es sl y or by cl ear im pl ic at io n,’” id

. at 20 4 (q uo ti ng No ld e

Bro th er s , 43 0 U.S. at 25 5)

, as lo ng as th e arb it rat io n was “ of m at te rs a n d d i s p u te s

ari si ng ou t o f th e rel at io n g ov ern ed by con tra ct .” Id

.

Li tt on cl ari fie d th at No ld e Bro th er s ap pl ie s “ on ly whe re a di sp ut e h as it s re al

so ur ce in th e co nt ract .” Id

. at 20 5. I n ot he r wor ds

, “ [t]he No ld e Bro th er s

pr es um pt io n is li m it ed to di sp ut es ari si ng un de r th e co nt ract .” Id

. “ A po st ex pi rat io n

gr ie va nc e,” th e Co ur t ex pl ai ne d, “ can be sa id to ari se un de r th e co nt ract on ly whe re [1 ] it in vo lv es fact s an d oc cu rren ces th at aro se be fo re ex pi rat io n, [2 ] whe re an act io n

ta ke n aft er ex pi rat io n in fri ng es a rig ht th at accr ue d or ve st ed un de r th e ag reem en t, or [3 ] whe re, un de r no rm al pr in ci pl es of co nt ract in te rp ret at io n, th e di sp ut ed co nt ract ua l
rig ht su rv iv es ex pi rat io n of th e rem ai nd er of th e ag reem en t.” Id

. at 20 6. Bec au se th e

em pl oyee la y of

fs at is su e in Li tt on to ok pl ace al m os t on e y ear af te r ex pi rat io n of th e

ag reem en t, an d th e se co nd an d th ird cat eg or ie s wer e n o t im pl ic at ed

, th e gr ie va nc e

was no t ar bi tra bl e. Id . at 2 09 -1 0.

In Ko ch

, th is co ur t ap pl ie d Li tt on ou ts id e th e co nt ex t of co ll ect iv e ba rg ai ni ng

. Ko ch in vo lv ed a cred it ag reem en t wit h an arb it rat io n cl au se

. A cred it card ob li go r

al le ge d vi ol at io ns o f th e Fed eral Deb t Co ll ect io n Prac ti ces Act by t he cred it or , a nd

as si gn ees of th e or ig in al cred it or so ug ht to co m pe l arb it rat io n. W e co nc lu de d th at

ev en th ou gh th e u nd erl y in g c red it ag reem en t ar gu ab ly w as ter m in at ed by an earl ie r

se tt le m en t, th e ob li ga ti on of th e pa rti es to arb it rat e di sp ut es ari si ng un de r th e co nt ract

su rv iv ed an y te rm in at io n. Bec au s e th e di sp ut e at is su e th ere in vo lv ed fact s an d

oc cu rren ces th at aro se be fo re ex pi rat io n of th e cred it ag reem en t, it was a di sp ut e

“ ari s[ in g] un de r th e co nt ract .” 54 3 F.3 d at 46 6 (q uo ti ng Li tt on , 50 1 U.S. at 20 6)

. The

di sp ut e al so fel l wit hi n th e sc op e of th e arb it rat io n cl au se , whi ch co ve red “ an y cl ai m , di sp ut e, or co nt ro ve rs y ari si ng fro m or rel at ed to th e Agr eem en t.” Id . Becau se th e
ob li go r’s cl ai m “ wou ld h a v e b e e n su bjec t to [arb it rat io n] ha d it ari se n du rin g th e

co nt ract ’s te rm ,” i d

. ( q u ot in g No ld e Bro s. , 43 0 U.S. at 25 2)

, an d no th in g in th e
arb it rat io n cl au se ex cl ud ed a di sp ut e th at was ba se d in pa rt on ev en ts oc cu rri ng aft er

-1 1-te rm in at io n of th e ag reem en t, we di rect ed th e di st ric t co ur t to co m pe l arb it rat io n. Id

.
at 46 6- 67

.

A si m il ar an al y si s de m on st rat es th at Vil la ge Ma r k e t sh ou ld be co m pe ll ed to

arb it rat e it s an ti tru st cl ai m ag ai ns t Su pe rVal u. Vil la ge Mar ke t’s an ti tru st cl ai m

in vo lv es fact s and oc cu rren ces th at aro se be fo re Sup erVal u ass ig ne d th e arb it rat io n

ag reem en t in Sep te m

be r 20 0 3 : th e cl ai m is th at Su pe rVal u fo rm ed an an ti tru st

co ns pi racy wh il e ne go ti at in g an as se t ex ch an ge ag reem en t wit h C&S be twee n Ju ly

an d Sep te m

be r 20 03

. Alt ho ug h th e arb it rat io n ag reem en t was as si gn ed in Sep te m be r

20 03

, th e ev id en ce do es no t cl earl y ne ga te a pr es um pt io n th at th e pa rti es in te nd ed to

arb it rat e m at te rs th at aro se un de r th e co nt ract be fo re th e as si gn m en t. If, fo r ex am pl e,
Vil la ge Mar ke t an d Su pe rVal u fo un d t he m se lv es in a m in e-ru n di sp ut e un de r th e

su pp ly a g r e e m en t ba se d on ev en ts in Ju ly 20 03

, th ere is no th in g in th e va rio us

ag reem en ts to su gg es t th at th e pa rti es wan te d th a t d i s p u t e li ti ga te d in fed eral co ur t jus t be cau se Su pe rVal u as si gn ed th e arb it rat io n ag reem en t to C&S in Sep te m be r

20 03

. The Ass et Exc ha ng e Agr eem en t d id no t tra ns fer pr e-as si gn m en t li ab il it ie s.

Alt ho ug h th e in st an t cl ai m as se rts an an ti tru st vi o l a t i on rat he r th an a br each of th e

su pp l y a g r e em en t, th e br oa d arb it rat io n ag reem en t co ve rs it : “ [a]ny co nt ro ve rs y ,

c l ai m or di sp ut e of wha te ve r na tu re ari si ng be twee n [Vil la ge Mar ke t] a n d

SUPERVALU” m

us t b e arb it rat ed

.

In re je c t i ng Su pe rVal u’s po si ti on , th e co ur t de cl in es to ap pl y th e No ld e

Bro th er s p r e su m pt io n of in te nt to arb it rat e whe n a co nt ract is as si gn ed

, ap pa ren tl y
be cau se an as si gn or “ ge ne ral ly ha s co nt ro l ov er whe th er an d whe n th ey tra ns fer th ei r

own rig ht s.” Ant e , at 8. Bu t of co ur se a co nt ract in g pa rty ge ne ral ly ha s co nt ro l ov er

th e ex pi rat io n of a co nt r a c t t oo : th e te rm in at io n da te is a ne go ti at ed te rm of th e

ag reem en t. The po in t of No ld e Bro th er s is th at ev en whe n pa rti es in te nt io na ll y cau se

a co nt ract ua l rel at io ns hi p to en d, th ere a re s tro ng reas on s t o b el ie ve th at th e pa rti es

in te nd to ret ai n arb it rat io n du ti es fo r di sp ut es ari si ng un de r th e co nt ract

. A co nt rary

ru le “ wou ld pr ecl ud e th e en try o f a po st -co nt ract arb it rat io n or de r ev en whe n th e

-1 2-di sp ut e aro se du rin g th e li fe of th e co nt ract bu t arb it rat io n pr oc eed in gs ha d no t be gu n

be fo re te rm in at io n. The sa m e wou ld be tru e if arb it rat io n pr oc es se s be ga n bu t were

no t co m pl et ed

, du rin g th e co nt ract ’s te rm .” 43 0 U.S. at 25 1. The Co ur t th ou gh t “ it

co ul d no t se rio us ly be co nt en de d in ei th er in st an ce th at th e ex pi rat io n of th e co nt ract

wo u ld te rm in at e th e pa rti es ’ co nt ract ua l ob li ga ti on to res ol ve su ch a di sp ut e in an
arb it ral

, rat he r th an a jud ic ia l fo ru m ,” i d

. , ye t th e m ajor it y reac he s pr eci se ly th at

un li ke ly con cl us io n h ere.

In a fo ot no te

, an te

, at 9 n.4

, th e m ajor it y al so qu es ti on s whe th er as si gn m en t of

th e ag reem en t ex ti ng ui sh ed Su pe rVal u’s rig ht to co m pe l arb it r a t i o n

. Bu t th e ci te d

de ci si on of a di st ric t co ur t— acce pt in g a br oa d al le ga ti on as tru e on a m ot io n to

di sm is s— sa id on ly th at th e ex te n t t o whi ch an as si gn m en t tra ns ferr ed th e rig ht to

co m pe l arb it rat io n was “ an un res ol ve d is su e.” HT o f Hig hl an ds Ran ch

, In c. v.
Hol ly wo od Ta n n i n g Sy s., In c. , 5 90 F. Su pp . 2 d 67 7, 68 4 (D.N.J. 20 08 ). Two ot he r
di st ric t cou rts ha ve co nc lu de d th at an ass ig no r se ek in g to arb it rat e a di sp ut e ari si ng
be fo re th e as si gn m en t is st il l a “ pa rty ag gr ie ve d” who m ay co m pe l arb it rat io n un de r

th e Fed eral Arb it rat io n Act. Vai nq ue ur Co rp

. v. La mbo rn & Co

. , 30 5 F. Su pp

. 10 07

, 10 08 (S.D.N.Y. 19 69 ); St at io ns W es t, LLC v. Pin na cl e Ban k of Ore go n , No. CIV 06

- 14 19 -KI, 20 07 W L 12 19 95 2, at *3 (D. Or. Apr

. 23

, 20 07 ). C o n s i s te nt wit h ou r
ci rcu it pr eced en t in Ko ch

, th e be tt er vi ew is th at un le ss th ere is pe rs ua si ve ev id en ce

th at pa rti es in te nd ed to ex ti ng u i s h a du ty t o arb it rat e di sp ut es th at are ba se d in pa rt

on fact s th at aro se be

fo re an as si gn m en t, th e arb it rat io n ag reem en t co nt in ue s in effe ct

as to th os e di sp u t es

. Acco rd in gl y , I wou ld di rect th e di st ric t co ur t to co m pe l

arb it rat io n o f Vil la ge Mark et ’s cla im ag ai ns t Su pe rVal u. 5

The m ajor it y ’s effo rt, an te

, at 8, to gl ean su pp or t fro m th e “ lo gi c” of Ko ch is 5

un pe rs ua si ve

. In Ko ch

, an as si gn or tr an sf er re d pr e-as si gn m en t as se ts an d li ab il it ie s
to an as si gn ee, an d t h e a ss ig ne e was th en en ti tl ed to co m pe l arb it rat io n of a pr eas si gn m en t di sp ut e. Here, th e as si gn or re ta in ed pr e-as si gn m en t li ab il it ie s, an d Ko ch

sa y s not hin g to un de rm in e th e pr es um pt io n th at pr e-as si gn m en t di sp ute s ar isi ng unde r th e co nt ract rem ai n su bjec t to arb it rat io n un de r th e te rm s o f th e o rig in al ag reem en t.

-1 3-As to th e ap pe al by C&S co nc ern in g arb it rat io n of th e an ti tru st cl ai m br ou gh t

by Mi ll en ni um Ope rat io ns , I co nc ur in th e jud gm en t af fir m in g th e di st ric t co ur t. It

is do ub tfu l th at C&S act ua ll y acq ui red Mi ll en ni um ’s su pp ly ag reem en t aft er Fl em in g

Co m pa ni es wen t th ro ug h ba nk ru pt cy

. The Ass et Exc ha ng e Agr eem en t req ui red C&S

to “ us e reas on ab le b e s t effo rts to ca us e Flemi ng to co nv ey ” th e as se ts at is su e

“ di re ct ly t o Su

pe rVa lu .” In an y ev en t, th e sc op e of Mi ll en ni um ’s arb it rat io n

ag reem en t was na rro wer th an Vil la ge Mar k e t ’s

. I t pr ov id ed on ly fo r arb it rat io n of

di sp ut es “ rel at in g to th is Agr eem en t,” an d a ll eg ed un la wfu l res tra in t of tra de is no t

co nd uc t rel at in g to th e ret ai l su pp ly ag reem en t. Se e In re Wh o l e s a l e Gro cer y

Pro du ct s , 7 07 F

. 3 d a t 9 2 3 -2 4. I al so ag ree wit h th e co ur t th at C&S can no t co m pe l

arb it rat io n u nd er a “ cl os e rel at io ns hi p” th eo ry

.

Fo r th es e reas on s, I wou ld affi rm th e de ci si on of th e di st ric t co ur t co nc ern in g

th e cl ai m of Mi ll en ni um Ope rat io ns , bu t rev ers e th e de ci s i o n co nc ern in g Vil la ge

Mar ke t and rem an d wi th di rect io ns to co m pe l ar bi tra ti on of Vil la ge Mar ke t’s clai m

ag ai ns t Su pe rVal u.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-1 4-