Source: https://law.justia.com/cases/federal/appellate-courts/F3/146/573/513898/
Timestamp: 2019-11-18 22:46:37
Document Index: 109517125

Matched Legal Cases: ['§ 10', '§ 12', '§ 12', '§ 4', '§ 4', '§ 9', '§ 9']

Val-u Construction Company of South Dakota, Appellee/cross-appellant, v. Rosebud Sioux Tribe and the United States for the Use Andbenefit of the Rosebud Sioux Tribe,appellants/cross-appellees, 146 F.3d 573 (8th Cir. 1998) :: Justia
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Val-u Construction Company of South Dakota, Appellee/cross-appellant, v. Rosebud Sioux Tribe and the United States for the Use Andbenefit of the Rosebud Sioux Tribe,appellants/cross-appellees, 146 F.3d 573 (8th Cir. 1998)
US Court of Appeals for the Eighth Circuit - 146 F.3d 573 (8th Cir. 1998) Submitted March 11, 1998. Decided June 9, 1998. Rehearing Denied July 9, 1998
October 26, 1990 Val"U filed a demand for arbitration of the contract termination with the American Arbitration Association ("AAA"). December 11, 1990 The Tribe notified the AAA that it would not participate in arbitration based on principles of sovereign immunity. March 5, 1991 The AAA advised the Tribe that a hearing in the matter would begin on May 6, 1997. April 9, 1991 The Tribe filed suit in the United States District Court for the District of South Dakota against Val"U claiming, among other things, breach of contract. May 3, 1991 Val"U filed an answer and pleaded as an affirmative defense the contract's arbitration clause and, later, collateral estoppel based on the subsequent arbitration award in its favor. Val"U also asserted various counterclaims, including breach of contract. (The district court did not compel arbitration of the Tribe's claims against Val"U, or stay the arbitration of Val"U's claims against the Tribe). May 6, 1991 The AAA held an arbitration hearing and Val"U presented its case. The Tribe was not represented at the hearing. May 23, 1991 The Tribe reasserted its position to the AAA that it did not believe it had to participate in arbitration based on principles of sovereign immunity. May 29, 1991 The Tribe acknowledged receipt of the "proposed" arbitration award by the AAA and again stated its position that it was not bound by such an award under principles of sovereign immunity. June 18, 1991 The AAA issued an award in favor of Val"U, finding the Tribe in breach of the contract and awarded Val"U $793,943.58, plus interest, fees, and costs. A copy of the award was forwarded to the Tribe on June 20, 1991. March 30, 1994 The district court, the Honorable John B. Jones, upon the Tribe's motion for a voluntary dismissal, dismissed the Tribe's claims with prejudice, and dismissed Val"U's breach of contract claim on the basis that it was barred by the Tribe's sovereign immunity to the extent it sought recovery beyond recoupment. March 16, 1995 Val"U appealed the dismissal of its counterclaims against the Tribe. On appeal, we held that the arbitration clause waived the Tribe's sovereign immunity as to all claims under the contract. Thus, we remanded to the district court to hear Val"U's counterclaims, and to determine the validity of the arbitration award Val"U obtained against the Tribe. See Rosebud Sioux Tribe v. Val"U Const. Co. of South Dakota, Inc., 50 F.3d 560 (8th Cir. 1995). March 6, 1997 On remand, the district court, the Honorable Charles B. Kornmann, upon consideration of Val"U's motion for summary judgment, held that the doctrine of res judicata barred the Tribe from challenging the arbitration award and ordered the clerk to enter judgment in favor of Val"U in the amount of the arbitration award. May 15, 1997 The district court denied Val"U's motion to amend the judgment to include pre-judgment interest from the date of the arbitration award to the entry of judgment.
The issues presented by the Tribe's appeal were decided by summary judgment. The court reviews a district court's grant of summary judgment de novo, and examines the record in the light most favorable to the nonmoving party. Lang v. Star Herald, 107 F.3d 1308, 1311 (8th Cir.), cert. denied, --- U.S. ----, 118 S. Ct. 114, 139 L. Ed. 2d 66 (1997). See also Fed. R. Civ. P. 56(c).
It is well established that Indian tribes possess the same common-law immunity from suit traditionally enjoyed by sovereign powers. Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S. Ct. 1670, 56 L. Ed. 2d 106 (1978) (citations omitted). The Supreme Court has stated that " [t]his aspect of tribal sovereignty, like all others, is subject to the superior and plenary control of Congress. But without congressional authorization, the Indian Nations are exempt from suit." Id. (internal quotation marks and citation omitted). Furthermore, the Supreme Court has made it clear that "a waiver of sovereign immunity cannot be implied but must be unequivocally expressed." Id.(internal quotation marks and citations omitted).
This court has also recognized a tribe's sovereign immunity and has held that a waiver of immunity cannot be implied but must be unequivocally expressed. See Rosebud, 50 F.3d at 562; Weeks Const. Inc. v. Oglala Sioux Housing Authority, 797 F.2d 668, 670 (8th Cir. 1986). In Rosebud, we addressed the issue of whether an arbitration clause in a contract constituted a waiver of sovereign immunity. The arbitration provision reads: " [a]ll questions of dispute under this agreement shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association." Appellant's Separate Appendix at 92. We found that the language of the arbitration clause was "spare but explicit that disputes under the contract 'shall be decided by arbitration.' " Rosebud, 50 F.3d at 562. Therefore, we concluded that "the parties clearly intended a waiver of sovereign immunity...." Id. We noted that "while the Supreme Court has expressed its protectiveness of tribal sovereign immunity by requiring that any waiver be explicit, it has never required the invocation of 'magic words' stating that the tribe hereby waives its sovereign immunity." Id. at 563.
The Tribe contends that our decision in Rosebud was inconsistent with our previous holding in American Indian Agric. Credit Consortium, Inc. v. Standing Rock Sioux Tribe, 780 F.2d 1374 (8th Cir. 1985). In Standing Rock, we held that an Indian tribe had not waived its sovereign immunity through certain language in a promissory note. Specifically, the promissory note provided for several remedies in the event of a default by the Standing Rock Sioux Tribe, "in addition to such other and further rights and remedies provided by law." Id. at 1376. The note also awarded attorney fees in the event of a collection action and stated that the law of the District of Columbia would apply. In refusing to find an express waiver in the language of the promissory note, we stated that "Standing Rock did not explicitly consent to submit any dispute over repayment on the note to a particular forum, or to be bound by its judgment." Id. at 1380. We noted that the promissory note did not "expressly speak to Standing Rock's consent to suit or to waiver of immunity from suit." Id. at 1376 (footnote omitted). The court stated that to find an express waiver of sovereign immunity in such language "simply asks too much." Id. at 1381.
James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 534, 111 S. Ct. 2439, 115 L. Ed. 2d 481 (1991) (citation omitted).
This court recently held that " [j]udicial review of an arbitration award is extremely limited. Beyond the grounds for vacation provided in the FAA, an award will only be set aside where 'it is completely irrational or evidences a manifest disregard for the law.' " Kiernan v. Piper Jaffray Companies, Inc., 137 F.3d 588, 594 (8th Cir. 1998) (quoting Lee v. Chica, 983 F.2d 883, 885 (8th Cir. 1993) (internal quotation marks and citations omitted)).
Under the FAA, a court may vacate an arbitration award in any of the following cases: (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, or in refusing to hear evidence material to the controversy, or of any other misbehavior; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter was not made. 9 U.S.C.A. § 10(a) (Supp.1997). Under § 12 of the FAA, a party can file a motion to "vacate, modify, or correct an award." 9 U.S.C.A. § 12 (1970). Such a motion, however, "must be served upon the adverse party or his attorney within three months after the award is filed or delivered." Id. Furthermore, we have held that a "failure to file a motion to vacate, modify, or correct within three months of either the initial award or the Clarification of Award waived any defenses to confirmation that might be asserted in a timely motion to vacate." Domino Group, Inc. v. Charlie Parker Memorial Foundation, 985 F.2d 417, 419 (8th Cir. 1993) (citations omitted).
The Tribe relies on the case of Food Handlers Local 425, Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO v. Pluss Poultry, Inc., 260 F.2d 835, 837 (8th Cir. 1958), where the court held that an arbitration clause must contain a provision that permits one party to initiate and prosecute to a conclusion an arbitration proceeding without the other party's participation. Otherwise, the court held, an award obtained under such circumstances is void and unenforceable.
We believe that Food Handlers is easily distinguished. In this case, the parties agreed that " [a]ll questions of dispute under this agreement shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association." Appellant's Separate Appendix at 92. Rule 30 of the Construction Industry Arbitration Rules of the American Arbitration Association states that:
Section 4 of the FAA states that: " [a] party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court ... for an order directing that such arbitration proceed in the manner provided for in such agreement." 9 U.S.C.A. § 4 (1970) (emphasis added). Other circuits have held that the procedural requirements of § 4 are permissive, not mandatory. See Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726, 733 (5th Cir. 1987); Kentucky River Mills v. Jackson, 206 F.2d 111, 120 (6th Cir. 1953).
The Fourth Circuit has held that the language of § 9 is permissive, that the one-year period is not a statute of limitations, and that a party may apply for confirmation of an award beyond the one-year period. Sverdrup Corp. v. WHC Constructors, Inc., 989 F.2d 148 (4th Cir. 1993). The court stated that if it construed § 9 to be a statute of limitations, the court "would merely encourage, at the expense of judicial economy, the use of another analogous method of enforcing awards." Id. at 155. But cf., In re Consolidated Rail Corp., 867 F. Supp. 25 (D.D.C. 1994) (holding that a party may apply for confirmation only within the one year period).
The Tribe asserts that the lower court erred when it determined that the unconfirmed arbitration award was res judicata and entered summary judgment in Val-U's favor. The Tribe cites Gruntal & Co. v. Steinberg, 854 F. Supp. 324 (D.N.J. 1994), where the court held that " [a]bsent judicial confirmation, an arbitration award will not result in a final judgment and cannot, therefore, have preclusive effect on subsequent litigation." Id. at 337 (internal quotation marks, footnote and citation omitted).
The doctrine of res judicata bars a party from asserting a claim if three requirements are met: "(1) the prior judgment was entered by a court of competent jurisdiction; (2) the decision was a final judgment on the merits; and (3) the same cause of action and the same parties or their privies were involved in both cases." United States v. Brekke, 97 F.3d 1043, 1047 (8th Cir. 1996) (citations omitted). The Tribe asserts that in each of the cases where this court determined that an arbitrator's award constituted a final judgment on the merits, both parties had been a part of the arbitration proceedings and had been able to argue their case on the merits. The Tribe contends that it would be unfair in this case to award Val-U judgment against the Tribe when the Tribe has not had the opportunity to present its claims and defenses.
The court, although not addressing "unconfirmed awards," has held that an arbitrator's award constitutes a final judgment for the purposes of collateral estoppel. See American Federation of Television & Radio Artists Health & Retirement Funds v. WCCO Televison, Inc., 934 F.2d 987, 991 (8th Cir. 1991). In holding that the award was a final judgment, the court noted that the parties "had a full and fair opportunity to litigate the issue in that proceeding." Id.
In Wellons, Inc. v. T.E. Ibberson Co., 869 F.2d 1166, 1169 (8th Cir. 1989), however, we stated that for purposes of collateral estoppel " [t]he fact that the award in the present case was not confirmed by a court and was modified by a subsequent settlement agreement does not vitiate the finality of the award." The Second Circuit has expressly held that, under New York law, an unconfirmed arbitrator's award can furnish the basis for res judicata. Jacobson v. Fireman's Fund. Ins. Co., 111 F.3d 261, 267-68 (2nd Cir. 1997).6
We conclude that the Tribe's breach of contract claims are barred by the arbitration award. The Tribe was given a full and fair opportunity to litigate the issues at the arbitration hearing, but chose not to participate in the hearing, knowing full well that an award would be entered against it by the arbitrator. It is clear that had Val-U filed for confirmation of its award prior to filing its motion for summary judgment, the district court would have confirmed the award because under the FAA, confirmation of an arbitration award is mandatory unless the award is vacated, modified or corrected. Indeed, we have stated that " [a]bsent a timely motion to vacate, in most cases the confirmation of an arbitration award is a summary proceeding that makes what is already a final arbitration award a judgment of the court." Domino Group, Inc., 985 F.2d at 420 (internal quotation marks and citation omitted). It appears from the record that the district court simply confirmed the arbitration award at the same time that it granted summary judgment in favor of Val-U. Therefore, we hold that the principles of res judicata and collateral estoppel apply to the arbitration award in this case.
The issue presented on cross-appeal was not decided by the summary judgment motion, but was decided by the court on Val-U's motion to amend the judgment. A decision to deny prejudgment interest is reviewed on appeal under the abuse of discretion standard. Smith v. World Ins. Co., 38 F.3d 1456, 1467 (8th Cir. 1994).
Stroh Container Co. v. Delphi Ind., Inc., 783 F.2d 743, 752 (8th Cir. 1986) (citations omitted). In addition, the court stated that "awarding prejudgment interest is intended to serve at least two purposes: to compensate prevailing parties for the true costs of money damages incurred, and, where liability and the amount of damages are fairly certain, to promote settlement and deter attempts to benefit unfairly from the inherent delays of litigation." Id. The court held that prejudgment interest should be awarded "unless exceptional or unusual circumstances exist making the award of interest inequitable." Id. (citations omitted).
The Tribe asserts that our decision was contrary to Pan American Co. v. Sycuan Band of Mission Indians, 884 F.2d 416, 420 (9th Cir. 1989), where the court held that an arbitration clause in a contract does not effect a waiver of a tribe's sovereign immunity. It goes without saying, however, that the state of the law in the Ninth Circuit at the time the Tribe refused to arbitrate is not controlling precedent in this circuit
We note that the Second Circuit in Jacobson declined to follow its earlier opinion in Leddy v. Standard Drywall, Inc., 875 F.2d 383, 385 (2nd Cir. 1989), where it held that an unconfirmed arbitration award could not be given preclusive effect. Leddy was one of the cases relied upon by the district court in Gruntal, supra