Opinion ID: 4149289
Heading Depth: 2
Heading Rank: 2

Heading: Direct Enforcement

Text: Second, the wholesalers assert they can compel arbitration under the agreements to which they were once signatories “because plaintiffs’ claims are based on an alleged conspiracy that occurred when the original arbitration agreements were in effect between the arbitration plaintiffs and their former suppliers.” The wholesalers quote Litton Financial Printing Division v. NLRB, 501 U.S. 190, 205-06 (1991), for the proposition that “a party’s right to compel arbitration survives the expiration of the agreement if the dispute ‘involves facts and occurrences that arose before expiration.’” But here the agreements between the wholesalers and the retailers did not expire or terminate, as in Litton. Instead, the wholesalers expressly agreed to “convey, assign, transfer and deliver” to each other “all of [their] right, title and interest” in the underlying supply and arbitration agreements. See also Hoff, 642 N.W.2d at 13 (“An assignment generally operates to transfer all rights possessed by the assignor and the assignor retains no interest in the right transferred.”); Restatement (Second) of Contracts § 317(1) (“An assignment of a right is a manifestation of the assignor’s intention to transfer it by virtue of which the assignor’s right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance.”). We see no reason to extend a presumption about what rights and obligations the parties to a contract might have intended to keep after the contract expired, see Litton, 501 U.S. at 204-06, to a situation where a party has affirmatively given up—indeed, sold—everything it had under the contract. The wholesalers insist—and the partial dissent takes for granted, post at 1213—that Litton’s presumption about when a party retains the right to compel arbitration should apply “regardless of what caused the termination of the enforcing -7- party’s [other] contractual rights and obligations,” whether expiration of the contract or deliberate relinquishment. But Litton, following Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionary Workers Union, 430 U.S. 243, 250-54 (1977), was about inferring an intent to arbitrate post-expiration disputes arising out of a contract from the parties’ “extensive obligation to arbitrate under the contract,” which suggested they did not mean to “eliminate all duty to arbitrate as of the date of expiration.” Litton, 501 U.S. at 203-04. Whether the parties to a contract intended to be able to compel arbitration even after assigning away the right to do so, along with all their other rights, is an entirely different matter, and, we think, much less clearly implied by a general willingness to arbitrate disputes arising out of the contractual relationship. For one thing, although parties do not necessarily have the final say over whether a contract is allowed to expire or is terminated by their counterparty, and presumably would not want to subject the availability of “a pivotal dispute resolution provision” to such fortuities, id. at 208, they generally do have control over whether and when they transfer their own rights. In important respects, this case presents the flip side of Koch v. Compucredit Corp., 543 F.3d 460 (8th Cir. 2008). There, one bank had assigned a contract containing an arbitration clause to another. See id. at 462-63. After applying Litton to conclude the obligation to arbitrate survived even though the contract arguably had terminated, we held the assignee bank could compel arbitration of a dispute arising out of the contract because “[t]hrough the assignment, [the assignee] assumed all of [the assignor’s] remaining rights and obligations under the contract.” Id. at 465-67. Here, it is the assignors, not their assignees, claiming a right to compel arbitration. The clear consequence of Koch’s logic is that the assignors—in this case, the nonsignatory wholesalers—should have nothing left to enforce, since “all of [their] remaining rights” were “assumed” by someone else. It is true, as the partial dissent points out, “[t]he Asset Exchange Agreement did not transfer pre-assignment liabilities.” Post at 12. Knowing that, as they must have, -8- perhaps the wholesalers should have bargained not to transfer the corresponding rights to compel arbitration on disputes regarding those pre-assignment liabilities. But they did not, and nothing in Litton or Koch convinces us to treat them like they did.4 The wholesalers may not directly enforce the arbitration agreements to which they are no longer signatories.