Source: https://law.justia.com/cases/federal/appellate-courts/F2/643/863/454208/
Timestamp: 2020-01-22 01:50:43
Document Index: 673444378

Matched Legal Cases: ['§ 1292', '§ 3', '§ 1292', '§ 2962', '§ 1292', '§ 1292']

Societe Generale De Surveillance, S.a., Plaintiff, Appellee, v. Raytheon European Management and Systems Company, Defendant,appellant, 643 F.2d 863 (1st Cir. 1981) :: Justia
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Societe Generale De Surveillance, S.a., Plaintiff, Appellee, v. Raytheon European Management and Systems Company, Defendant,appellant, 643 F.2d 863 (1st Cir. 1981)
U.S. Court of Appeals for the First Circuit - 643 F.2d 863 (1st Cir. 1981) Argued Jan. 5, 1981. Decided Feb. 25, 1981
This court has jurisdiction under 28 U.S.C. § 1292(a) (1), which provides for appeals of "orders ... granting, continuing, ... or refusing to dissolve or modify injunctions ...."2 We affirm the decision of the district court and remand the case for possible further proceedings consistent with this opinion.
There is a strong judicial policy favoring the submission of contractual disputes to arbitration particularly under the provisions of the Federal Arbitration Act, which embodies the agreements reached in an international convention on arbitration.4 Scherk v. Alberto-Culver Co., 417 U.S. 506, 510-520, 94 S. Ct. 2449, 2452-2457, 41 L. Ed. 2d 270 (1974). Thus, the courts have held that the term "commerce" in this provision of the Act refers to interstate or foreign commerce and is to be broadly construed. See, e. g., Weight Watchers of Quebec Ltd. v. Weight Watchers Int'l Inc., 398 F. Supp. 1057 (E.D.N.Y. 1975); Caribbean Steamship Co., S.A. v. La Societe Navale Caennaise, 140 F. Supp. 16 (E.D.Vir.1956). In this case, both the Basic Contract and Change Order No. 8 "evidenc(e) ... a transaction involving (foreign) commerce." The contract, prepared in New Hampshire, is between an American and a French company, and it concerns the transportation and testing in Europe of missiles made in California and Massachusetts. It clearly covers trade "between citizens of this country and subjects of a foreign country ...." Caribbean Steamship Co., S.A. v. La Societe Navale Caennaise, supra, 140 F. Supp. at 21.
We disagree, however, with REMSCO's claim that the Act removes the district court's power to enjoin the Massachusetts arbitration. The Act supplants only that state law inconsistent with its express provisions. Litton RCS v. Pennsylvania Turnpike Commission, 376 F. Supp. 579 (E.D.Penn.1974), aff'd mem. Litton Business Systems, Inc. v. Pennsylvania Turnpike Com., 511 F.2d 1394 (3d Cir. 1975); see Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967). There is no such inconsistency here. The Act expressly provides federal courts with the power to order parties to a dispute to proceed to arbitration where arbitration is called for by the contract. 9 U.S.C. § 3. To allow a federal court to enjoin an arbitration proceeding which is not called for by the contract interferes with neither the letter nor the spirit of this law. Rather, to enjoin a party from arbitrating where an agreement to arbitrate is absent is the concomitant of the power to compel arbitration where it is present. A.B.C., Inc. v. American Federation of Television & Radio Artists, 412 F. Supp. 1077 (S.D.N.Y. 1976).5 In fact, were the law read to prevent a court from enjoining an arbitration proceeding it might actually interfere with arbitration in the unusual case, arguably present here, where one such arbitration proceeding may interfere with another. Thus, we conclude that the district court had adequate authority under Massachusetts law to stay the Massachusetts arbitration.
Appealability under 28 U.S.C. § 1292(a) (1) depends first on whether the relief granted by the district court was a temporary restraining order (the relief initially requested and the caption of the December 4, 1979 order) or a preliminary injunction. Temporary restraining orders usually do not fall within the interlocutory appeals statute because they are of short duration, often ex parte, and terminate with the ruling on preliminary injunction. 11 Wright & Miller, Federal Practice and Procedure: Civil, § 2962 at 616-622 (1973). Regardless of name, the two orders here, both entered after notice and hearing, have enjoined REMSCO for more than a year from proceeding with arbitration in Boston and have had the effect of a preliminary injunction. SGS has had and continues to have the benefit of all the relief it ultimately sought. Thus, in this instance the temporary restraining order can be considered a preliminary injunction for purposes of appeal. State of Maine v. Fri, 483 F.2d 439 (1st Cir. 1973); 9 Moore's Federal Practice P 110.20(5) at 253-255 (2d ed. 1970)
Second, some courts have questioned whether an appeal lies from an order enjoining a party from proceeding with arbitration, given the fact that an order sending a case to arbitration has been held not to constitute an injunction for purposes of § 1292(a) (1). See, e. g., Lummus Company v. Commonwealth Oil Refining Company, 297 F.2d 80, 86 (2d Cir.), cert. denied sub nom., Dawson v. Lummus Co., 368 U.S. 986, 82 S. Ct. 601, 7 L. Ed. 2d 524 (1962); Greater Continental Corporation v. Schecter, 422 F.2d 1100, 1102 (2d Cir. 1970). In this circuit, however, there is authority allowing an appeal from an order staying a party from proceeding with arbitration, at least where that order does not constitute a preliminary part of a larger case seeking determination by the court of the underlying dispute, but rather where a request for the stay constitutes the entire relief sought. Lummus Co. v. Commonwealth Oil Refining Co., Inc., 280 F.2d 915, 917 (1st Cir.), cert. denied, 364 U.S. 911, 81 S. Ct. 274, 5 L. Ed. 2d 225 (1960). There are strong reasons for holding that an order sending a case to arbitration is not an injunction in light of the policies underlying § 1292(a) (1) and the Federal Arbitration Act. These are set out by Chief Judge Coffin in New England Power Co. v. Asiatic Petroleum Corp., 456 F.2d 183, 186-187 (1st Cir. 1972). Those same policies here underlie a holding of appealability, for the district court's decisions effectively deprived at least one of the parties to the dispute of one of the principal objects for which it allegedly bargained, i. e. a relatively speedy and inexpensive preliminary resolution of any controversy.
See also Shinto Shipping Co. v. Fibrex Shipping Co., 572 F.2d 1328 (9th Cir. 1978); Griffin v. Semperit of America, Inc., 414 F. Supp. 1384 (S.D. Tex. 1976), where federal courts have entertained motions to restrain a party from proceeding to arbitration under the Federal Arbitration Act without rejecting them as illfounded as a matter of law