Opinion ID: 180842
Heading Depth: 2
Heading Rank: 2

Heading: The Construction of the Agreement

Text: Absent circumstances not present here, we will not open to review an arbitration award on the merits, including the interpretation of a contract. Sterling Colo. Beef Co. v. United Food & Commercial Local Union No. 7, 767 F.2d 718, 720 (10th Cir.1985). After all, [i]t is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his. United Steelworkers of Am. v. Enter. Wheel and Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960); accord Brown, 220 F.3d at 1183 ([The parties] contracted for the arbitrator's construction of the contract not a judge's construction.). Hence, we will not interfere with an arbitrator's decision unless it can be said with positive assurance that the contract is not susceptible to the arbitrator's interpretation. Sterling, 767 F.2d at 720. The agreement in this case is easily susceptible to the board's interpretation. If anything, it is BNSF's reading that is inconsonant with the plain meaning of the contract. BNSF contends the rate floor provision simply means the adjusted rate can never fall below an independently-determined Base Rate. It also contends the 1994 arbitration award reset the Base Rate amount to $11.77 per ton and fine-tuned the rate adjustment procedures. If all this were true, then BNSF could aver the rate floor provision is entirely separate from the Base Rate and the rate of escalation, and hence is outside the scope of an arbitration. But this argument mischaracterizes both the rate floor provision and the 1994 award. Even when reviewed independently, the rate floor provision does not survive the 1994 award for (at least) two reasons. First, by including the limitation except as provided in Section 11, the rate floor provision is expressly bound by renegotiations of the rate and the adjustment method. Second, the rate floor provision refers not to an adjustable Base Rate but to a specific Base Rate amount$14.00 per ton, the rate in effect when the agreement was filed with the ICC in 1985. So the rate floor provision's plain language prevents the conclusion that it can be retained by inferring a new Base Rate amount. In addition, BNSF misstates what the 1994 arbitration accomplished. The board did not mention a Base Rate in either the findings and conclusions that preceded the award or the award itself. Instead, the board mandated a new, adjustable Agreement rate. In other words, no post-1994 Base Rate exists to serve as a rate floor. Both concepts were replaced entirely by a new calculation scheme. Thus, BNSF cannot aver the rate floor provision is an independent, non-arbitrable issue. In light of the weaknesses of BNSF's proposed reading of the agreement, the district court correctly deferred to the board's construction.