United States Court of Appeals

For the First Circuit

No. 07-1766

COMBINED ENERGIES,

Plaintiff, Appellee,

v.

CCI, INC.,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. John A. Woodcock, Jr., U.S. District Judge]

Before

Boudin, Chief Judge,

Selya and Stahl, Senior Circuit Judges.

Ronald W. Schneider, Jr., with whom Bernstein Shur Sawyer &

Nelson were on brief, for appellant.

Thomas G. Rohback, with whom James J. Reardon, LeBoeuf, Lamb,

Greene & MacRae, LLP, John J. Aromando and Pierce Atwood, LLP, were

on brief, for appellee.

February 1, 2008
-2-

STAHL, Senior Circuit Judge. This lawsuit arises from a

business partnership gone sour. Plaintiff-appellee Combined

Energies ("CE") filed suit in Maine federal district court against

Defendant-appellant CCI, Inc. ("CCI"), alleging various contract

and tort claims related to what CE describes as a raid on CE's

workforce subsequent to a failed take-over attempt by its erstwhile

business partner CCI. CCI moved to stay the proceedings and compel

arbitration. The district court denied the motion and, holding

that CE's claims do not fall within the scope of the parties'

arbitration agreement, we affirm.

I. Background

CE is a Maine construction and energy services

subcontractor. CCI is an Alaskan prime contractor. CE and CCI

entered into a business relationship for the purposes of developing

and performing projects for the U.S. Navy. The business

relationship was formalized in three key agreements. The Teaming

Agreement ("TA"), signed in late December 2004, established CCI as

the prime contractor and CE as the subcontractor for a project

proposal to be submitted to the U.S. Navy. The TA also

contemplated other Navy contract opportunities. After the Navy

accepted the proposal and awarded the contract to CCI, CCI and CE

concluded a Strategic Alliance Agreement ("SAA") on August 23,

2005, a short document in which the parties stated their intention

"to strategically align themselves with one another in order to
-3-

promote and utilize their respective expertise for the purpose of

developing and performing projects . . . ." That same day, the

parties also entered into a Purchase Order Agreement ("POA") laying

out the standard terms and conditions applicable to each party's

performance of the Navy contract.

It appears that the parties proceeded to perform as

directed by the above triumvirate of agreements until their

relationship broke down irretrievably in late 2006. CE alleges

that CCI inquired about purchasing its business on October 15,

2006, an offer that CE declined. According to CE, CCI then set out

to "raid what it could not buy," by "preventing CE from performing

its obligations under existing contracts, preventing CE from

obtaining new contracts, damaging CE's good reputation," and

filching CE's entire workforce. CE was subject to a spate of mass

resignations in early January 2007; the majority of the resignation

letters, which are attached to CE's complaint, state that the

sender had accepted or intended to accept a position with CCI.

On February 1, 2007, CE filed suit against CCI in the

United States District Court for the District of Maine, alleging

tortious interference with its business; unjust enrichment; breach

of the TA and SAA; breach of implied covenants including the duty

of good faith and fair dealing; and defamation and slander per se.

Arguing that an arbitration clause in the POA mandated the

submission of CE's claims to arbitration, CCI timely moved to stay
 The FAA provides that: 1

A written provision in . . . a contract

evidencing a transaction involving commerce to

settle by arbitration a controversy thereafter

arising out of such contract or transaction,

or the refusal to perform the whole or any

part thereof, or an agreement in writing to

submit to arbitration an existing controversy

arising out of such a contract, transaction,

or refusal, shall be valid, irrevocable, and

enforceable, save upon such grounds as exist

at law or in equity for the revocation of any

contract.

9 U.S.C. § 2. The POA containing the arbitration clause at issue

here is a contract in interstate commerce because it is an

agreement between Alaskan and Maine corporations to perform work

for the U.S. Navy; thus, this dispute is within the purview of the

FAA.

-4-

the proceedings and compel arbitration; CE opposed the motion. On

March 14, 2007, the district court denied CCI's motion, finding

that it could not conclude that "the arbitration clause in a

construction contract encompasses a law suit alleging multiple

violations of tort and contract law from the unsavory tactics CE

claims CCI used in a bid to take-over its business."

Pursuant to the Federal Arbitration Act ("FAA"), this

court has jurisdiction to review the district court's interlocutory

order denying CCI's request for a stay and motion to compel

arbitration. See 9 U.S.C. §§ 16(a)(1)(A), 16(a)(1)(B); Campbell v.

Gen. Dynamics Gov't Sys. Corp., 407 F.3d 546, 550 (1st Cir. 2005).1

II. Discussion

We are not now tasked with deciding upon the merits vel

non of CE's claims against CCI, but rather upon their
-5-

arbitrability. "[A]rbitrability depends on contract

interpretation, which is a question of law." Keystone Shipping Co.

v. New England Power Co., 109 F.3d 46, 50 (1st Cir.

1997)(alteration in original)(quoting PaineWebber Inc. v. Elahi, 87

F.3d 589, 592 (1st Cir. 1996))(internal quotation marks omitted).

Accordingly, "[w]e evaluate the district court's denial of a motion

to compel arbitration de novo." Kristian v. Comcast Corp., 446

F.3d 25, 31 (1st. Cir. 2006)(citing Campbell, 407 F.3d at 551).

When deciding a motion to compel arbitration, a court

must determine whether "(i) there exists a written agreement to

arbitrate, (ii) the dispute falls within the scope of that

arbitration agreement, and (iii) the party seeking an arbitral

forum has not waived its right to arbitration." Bangor

Hydro-Electric Co. v. New England Tel. & Tel. Co., 62 F. Supp. 2d

152, 155 (D. Me. 1999). Only if all three prongs of the test are

satisfied will a motion to compel arbitration be granted. Here,

prongs (i) and (iii) are not at issue; the outcome of this case,

therefore, turns entirely on whether the dispute is of a kind that

the parties had agreed to submit to arbitration.

Whether a claim falls within the reach of a particular

arbitration clause is a question for the district court to

determine initially as a matter of law. See Acevedo Maldonado v.

PPG Indus., Inc., 514 F.2d 614, 616 (1st Cir. 1975). Federal

policy favors arbitration. See Mitsubishi Motors Corp. v. Soler
-6-

Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985)("The Arbitration

Act establishes that, as a matter of federal law, any doubts

concerning the scope of arbitrable issues should be resolved in

favor of arbitration . . . .")(internal quotations omitted).

However, "arbitration is simply a matter of contract between the

parties; it is a way to resolve disputes–but only those

disputes–that the parties have agreed to submit to arbitration."

First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995).

CCI exhorts us that arbitration clauses must be construed

liberally, while CE cautions that it cannot be compelled to

arbitrate claims that it did not consent to arbitrate. At bottom,

however, federal policy merely "guarantee[s] the enforcement of

private contractual arrangements" by creating "a body of federal

substantive law establishing and regulating the duty to honor an

agreement to arbitrate." Mitsubishi, 473 U.S. at 625 (internal

quotations omitted).

Therefore, "[w]hen deciding whether the parties agreed to

arbitrate a certain matter . . . , courts generally . . . should

apply ordinary state-law principles that govern the formation of

contracts." First Options, 514 U.S. at 944. Under Maine law, a

contract 

is to be construed in accordance with the

intention of the parties, which is to be

ascertained from an examination of the

instrument as a whole. All parts and clauses

must be considered together that it may be

seen if and how far one clause is explained,
 Paragraph 6.2 governs POA-related claims against the Navy. 2

We see no need to recite it verbatim here as it is not particularly

relevant to this case, although we do note that even that section

lays out a dispute resolution procedure only for "dispute[s]

arising under this POA . . . ." (emphasis added).

-7-

modified, limited, or controlled by the

others.

Peerless Ins. Co. v. Brennan, 564 A.2d 383, 385 (Me. 1989). 

In support of its argument that the parties' arbitration

agreement requires arbitration of CE's claims, CCI relies on two

clauses in the POA, which it contends must be read in tandem to

mandate an expansive agreement to arbitrate all disputes between

the parties. Paragraph 6.3 of the POA provides:

All unresolved claims, disputes, and other

matters in question between [CCI] and [CE] not

relating to claims included in Paragraph 6.22

shall be resolved in the manner provided in

Article 14. 

Paragraph 14.1, the relevant provision of Article 14, states:

All claims, disputes and matters in question

arising out of, or relating to, this POA or

the breach thereof . . . shall be decided by

arbitration in accordance with the

Construction Industry Arbitration Rules of the

American Arbitration Association then in

effect unless the parties mutually agree

otherwise.

Precedent may counsel us to construe arbitration clauses

liberally, but it does not permit us to read out of an arbitration

clause an explicit limit upon the scope of that clause that has

been agreed to by both parties. Reading 6.3 and 14.1 together as
-8-

Maine law requires produces not an expansive agreement to arbitrate

but rather an arbitration clause clearly and on its face limited to

"[a]ll claims, disputes and matters in question arising out of, or

relating to, this POA or the breach thereof . . . ." (emphasis

added).

The key question remaining, then, is whether CE's claims

arise out of, or relate to, the POA or breach of the POA. CE's

contract-related claims reference the TA and the SAA, not the POA;

however, it is true that CE cannot avoid arbitration by dint of

artful pleading alone. See, e.g., Acevedo Maldonado, 514 F.2d at

616 (finding that arbitration clause covered "contract-generated or

contract-related disputes between the parties however labeled: it

is immaterial whether claims are in contract or in tort"); Kiefer

Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 910 (7th

Cir. 1999)(noting that arbitrability of particular claim does not

"turn on the label—'tort' or 'contract'—a party chose to affix to

the claim"). Nevertheless, we agree with the district court that

the complaint filed by CE cannot be fairly said to arise out of, or

relate to, the POA in the sense that would be necessary to confer

arbitrability in this case. As the district court observed, "[t]he

Complaint does not claim any disputes between CCI and CE about the

work CE performed under the POA, about payment in accordance with

that work, about change orders, delay, quality of workmanship, or

the myriad of other commonplace controversies between general
 In its reply brief, CCI asserts that CE's response to this 3

argument was cursory and should be deemed waived. See National

Foreign Trade Council v. Natsios, 181 F.3d 38, 61 n.17 (1st Cir.

1999)("[A]rguments raised only in a footnote or in a perfunctory

manner are waived."). Merely because CE may have waived an

argument regarding the incorporation of the SAA into the POA,

however -- a matter on which we take no view -- it does not follow

that CCI's argument automatically prevails. We may affirm the

district court's order "on any independent ground made manifest by

the record." Skirchak v. Dynamics Research Corp., 508 F.3d 49, 57

(1st Cir. 2007).

-9-

contractors and subcontractors." Combined Energies v. CCI, Inc.,

484 F. Supp. 2d 186, 189 (D. Me. 2007). Indeed, as CE points out,

CE existed as a business before entering into any sort of

relationship with CCI and had operations apart from CCI; the

gravamen of CE's allegations--that CCI set upon a course of conduct

that resulted in the destruction of CE's business--reverberate far

beyond the POA and would stand regardless of the parties' rights

and responsibilities as defined by that contract.

CCI next argues that, at the very least, the allegations

in CE's complaint that implicate the SAA must be submitted to

arbitration because the SAA is incorporated into the POA and the

two documents must be considered and construed as one contract.3

See Crowe v. Bolduc, 334 F.3d 124, 137 (1st. Cir. 2003)("Under

Maine law, in the absence of anything to indicate a contrary

intention, instruments executed at the same time, by the same

contracting parties, for the same purposes, and in the course of

the same transaction will be considered and construed together,
-10-

since they are, in the eyes of the law, one contract or

instrument.")(internal quotations omitted). 

CCI thus is making two conceptually distinct, although

related, arguments to advocate applicability of the POA's

arbitration clause to CE's SAA-related claims. See In re Olympic

Mills Corp., 477 F.3d 1, 14 n.11 (1st Cir. 2007)("[The principle

articulated in Crowe] is associated with but distinct from a

court's consideration of a separate writing expressly incorporated

by reference . . . . Compare 11 Williston on Contracts § 30:25

('Writing Expressly Incorporated By Reference'), with id. § 30:26

('Writing Implicitly Incorporated By Reference')."). Both are

unavailing. In Crowe, we looked to two agreements executed on the

same day to resolve a question of contractual ambiguity. Here,

there is no comparable ambiguity. "Where the words of a contract

in writing are clear and unambiguous, its meaning is to be

ascertained in accordance with its plainly expressed intent." 11

Samuel Williston & Richard A. Lord, A Treatise on the Law of

Contracts § 30:6 (4th ed. 1993)(internal citations omitted).

Construing the SAA and POA together does nothing to shed additional

light upon an arbitration clause that is already pellucid.

We then turn to whether the POA can be read explicitly to

incorporate by reference the SAA. CCI rests its assertion that the
 Paragraph 2.2 states, in relevant part: 4

The Contract Documents, detailed in Paragraph 16.3

shall consist of the following, with the order of

supremacy beginning with the first described

document and ending with the last described

document within that paragraph.

 Paragraph 16.3, labeled “Contract Documents,” lists the following:

a) The Strategic Alliance Agreement dated ____________ 

 between CCI and Combined Energies.

b) This POA;

c) These POA Standard Terms and Conditions;

d) Combined Energies’ response to the Navy RFP as 

 referenced on the POA; and

e) Contract N62472-05-R-7510 dated 8/12/05 between the US

 Navy and CCI Inc. 

 

-11-

POA incorporates the SAA on Paragraphs 2.2 and 16.3 of the POA.4

But it is not at all clear that these clauses operate to import the

SAA wholesale into the POA. It appears that the "Contract

Documents" identified in Paragraph 16.3 of the POA are only listed

there in order of supremacy to resolve disputes "in the event of

any inconsistency" as to the work that is to be performed under the

POA. It is true that Paragraph 16.3 of the POA lists the SAA as

one of the "Contract Documents." However, the POA itself is listed

as one of the Contract Documents, separately from the SAA--that

alone belies CCI's contention that the arbitration clause's

specific reference to the POA could be stretched to encompass

claims relating to the SAA as well. Even if one considers the sum

of the "Contract Documents" to equal the whole of the parties'

agreement, the arbitration clause in Paragraph 14.1 of the POA

applies specifically to disputes arising out of only one of those
Since we find that the arbitration clause does not reach 5

claims related to the SAA, we find it unnecessary to consider the

question whether any of CE's claims would be within the scope of a

clause that did extend to SAA-related claims.

-12-

documents: the POA. It does not state that it applies to disputes

arising out of all "Contract Documents." Nowhere is it indicated

that the term "POA," as used in Paragraph 14.1, is shorthand for

"the POA and the SAA" or for all the "Contract Documents" combined.

If the parties had intended the arbitration clause to apply to

their agreement writ large or to each of the "Contract Documents"

individually, it would have been as easy to state that expressly.5

See Fit Tech, Inc. v. Bally Total Fitness, 374 F.3d 1, 9-10 (1st

Cir. 2004)(rejecting argument that arbitration clause in one

agreement applied to dispute arising out of another, related

agreement even though former agreement was referenced in latter).

III. Conclusion

For the foregoing reasons, we affirm the district court's

denial of CCI's motion to stay and compel arbitration.

Affirmed.