Source: https://law.justia.com/cases/federal/appellate-courts/F3/61/101/493374/
Timestamp: 2020-02-25 07:39:26
Document Index: 579118402

Matched Legal Cases: ['§ 1291', '§ 16', '§ 13', '§ 16', '§ 13', '§ 201', '§ 206', '§ 207', '§ 9', '§ 4']

Hewlett-packard Company, Inc., Plaintiff, Appellant, v. Helge Berg, Etc., et al., Defendants, Appellees, 61 F.3d 101 (1st Cir. 1995) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › First Circuit › 1995 › Hewlett-packard Company, Inc., Plaintiff, Appellant, v. Helge Berg, Etc., et al., Defendants, Appell...
Hewlett-packard Company, Inc., Plaintiff, Appellant, v. Helge Berg, Etc., et al., Defendants, Appellees, 61 F.3d 101 (1st Cir. 1995)
US Court of Appeals for the First Circuit - 61 F.3d 101 (1st Cir. 1995) Heard April 6, 1993. Decided Aug. 3, 1995
Berg and Skoog filed a request for arbitration with the International Chamber of Commerce Court of Arbitration, claiming millions of dollars of damages arising out of Apollo's unilateral termination of the 1984 agreement. Apollo counterclaimed in the arbitration by asserting that the Swedish company had failed to pay about $10,000 due on the 1984 contract and about $207,000 due under the 1982 contract. After a dispute about Berg and Skoog's right to invoke arbitration, see Apollo Computer, Inc. v. Berg, 886 F.2d 469, 473 (1st Cir. 1989), an arbitration proceeding was begun.
Nothing in the record in this case purports to be a "final judgment," set forth in a separate document as required by Fed. R. Civ. P. 58, disposing of all claims. Thus, in formal terms there is no basis for appeal of a "final decision" under 28 U.S.C. § 1291, even if the court actually resolved all of the claims before it. Indeed, as already noted, the defendants have pending a motion that requests entry of a "final judgment."
Nevertheless, the November 7 order, insofar as it confirms the arbitration award, is appealable now because Congress directed in the statute governing arbitration-related appeals that such an "order" confirming an award should be immediately appealable. 9 U.S.C. § 16(a) (1) (D). The reason is a pro-arbitration policy designed to expedite confirmation of arbitration awards. This is clear from precedent and scholarly commentary. See, e.g., 15B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3914.17, at 9-12, 32-34 (2d ed. 1992).
There is one technical hitch. Seemingly, the order confirming the award is not itself a judgment that can be collected through court processes until it is entered on the docket as a judgment. See 9 U.S.C. § 13. This has nothing to do with the final judgment rule; rather, the statute that governs confirmations provides that after a confirmation is ordered, a separate "entry of judgment" must be made pursuant to that order, and it is only at that stage that "[t]he judgment so entered ... may be enforced as if it had been rendered in an action in the court in which it is entered." Id.
Nevertheless, the Federal Rules of Civil Procedure do not say that appeals can only be taken from judgments; on the contrary, they contemplate that, subject to the complex rules that determine what is immediately appealable, there may be such a thing as an "appealable order" that is not a judgment. Fed. R. Civ. P. 79(b). And, as already noted, Congress has designated as immediately appealable "an order ... confirming ... an [arbitration] award." 9 U.S.C. § 16(a) (1) (D).
Our position is not at odds with Middleby Corp. v. Hussmann Corp., 962 F.2d 614 (7th Cir. 1992). Middleby held that no immediate appeal could be taken where the district court issued an order of confirmation but declined to enter judgment after making a specific determination to delay giving effect to the confirmation order until further proceedings were concluded. Here, by contrast, the district court denied the requested stay, and the confirmation order is immediately effective, requiring only the filing of specified papers with the clerk to permit "the entry of judgment thereon." 9 U.S.C. § 13.
A similar argument might also be made to justify an appeal now based on the district court's refusal to declare Hewlett-Packard's right to the set-off it asserted. The problem is complicated, but we see no need to resolve the complexities. Whether or not the refusal to allow the set-off is an appealable issue, the refusal at this time turns out not to be a legal error, so the jurisdictional issue need not be decided. See Norton v. Mathews, 427 U.S. 524, 530-32, 96 S. Ct. 2771, 2774-76, 49 L. Ed. 2d 672 (1976); In re Pioneer Ford Sales, 729 F.2d 27, 31 (1st Cir. 1984).
It is hard to imagine a step that would be more offensive to the pro-arbitration policies reflected in Congress' endorsement of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, often called the New York Convention. The New York Convention was approved by Congress, and implementing legislation was codified at 9 U.S.C. §§ 201-08. The statute enlists the aid of federal courts to compel arbitration. 9 U.S.C. § 206. By contrast, the judicial set-off requested here would circumvent the 1982 contract to arbitrate and the now-pending arbitration under that contract.
The question here is whether this traditional authority is curtailed by the New York Convention and its implementing legislation. The statute provides that, upon a petition for confirmation, a district court "shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention." 9 U.S.C. § 207 (emphasis added). Article VI of the Convention is the only provision that deals with staying confirmation. Article VI states:
The fact that section 207 uses the word "shall" is not decisive, because a stay is a deferral rather than refusal. But the fact that the statute refers to the Convention and the Convention lists a single ground for a stay could be taken to exclude all other grounds under the principle of expressio unius est exclusio alterius. That was, in substance, the reasoning of the district court. However, expressio unius is an aid to construction and not an inflexible rule. See, e.g., United States v. Massachusetts Bay Transport. Auth., 614 F.2d 27, 28 (1st Cir. 1980). Whatever we might think if the question were entirely open, precedent informs our decision in this case. Domestic arbitrations are governed by the United States Arbitration Act (chapter 1 of Title 9) but not by the Convention (chapter 2 of Title 9). The Act states that, upon application, "the court must grant [a confirmation] order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title." 9 U.S.C. § 9 (emphasis added). But courts routinely grant stays in such cases for prudential reasons not listed in sections 10 and 11. E.g., Middleby, 962 F.2d at 615-16.
Similarly, this court has held that district courts have discretion to stay an action to compel arbitration pending the outcome of related litigation, even though the Act states that on a motion to compel the court "shall hear the parties" and "shall proceed summarily to trial." 9 U.S.C. § 4; see Acton Corp. v. Borden, Inc., 670 F.2d 377, 383 (1st Cir. 1982). In Acton, then-Judge Breyer held that, in drafting the statute, Congress did not "intend[ ] a major departure from the ordinary rule allowing one federal court to stay litigation when another federal court is on the process of deciding the same issue." We take the same view of Congress' intentions in implementing the Convention.
Of course, a stay of confirmation should not be lightly granted. A central purpose of the Convention--an international agreement to which the United States is only one of approximately one hundred signatories--was to expedite the recognition of foreign arbitral awards with a minimum of judicial interference. But the risk that the power to stay could be abused by disgruntled litigants--real though that risk is, see Spier v. Calzaturificio, 663 F. Supp. 871, 875 (S.D.N.Y. 1987)--argues more for a cautious and prudent exercise of the power than for its elimination.