Opinion ID: 2364015
Heading Depth: 1
Heading Rank: 1

Heading: The Superior Court and Arbitration

Text: This case raises in sharp relief the question of what limitations exist on the Superior Court's role in supervising, or reviewing the results of, arbitrationan extrajudicial forum for dispute resolution selected by mutual consent of the parties. A generalized review of the applicable law will aid in the proper disposition of this particular appeal. [3] The Uniform Arbitration Act (hereafter Act), 14 M.R.S.A. §§ 5927-49 (Supp.1978-79), defines the part the Superior Court is empowered to play in the arbitration process. [4] See Lewiston Firefighters Ass'n v. City of Lewiston, Me., 354 A.2d 154, 164 (1976). Under the provisions of the Act, the court may be called upon both to determine substantive arbitrability, i. e., whether the parties intended to submit a particular dispute to arbitration, sections 5928, 5938(1)(E), and also to determine whether in deciding the submitted dispute the arbitrator exceeded his powers, section 5938(1)(C). The question of substantive arbitrability may be raised at either of two junctures in the arbitration process. First, prior to the grant of an arbitrator's award, either party may apply to the court for an order to compel arbitration where one party refuses to proceed, section 5928(1), or to stay an arbitration proceeding that has been commenced or threatened, section 5928(2). Second, assuming that the issue has not been adversely determined on a motion pursuant to section 5928 to compel or stay arbitration, a party who did not participate in the arbitration hearing without raising the objection may raise the arbitrability issue on a motion to vacate an award after it has been rendered by the arbitrator, section 5938(1)(E). Whenever raised, the issue presented is the same: Did the parties intend to submit the particular dispute to arbitration? It is well settled that the final decision on the question of substantive arbitrability is the function of the court, not of the arbitrator. Lewiston Firefighters Ass'n v. City of Lewiston, supra at 165. See United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). To hold otherwise would be to give the arbitrator the extraordinary power of determining his own jurisdiction, to the exclusion of the courts or any other authority. [5] In determining the question of substantive arbitrability, the court may divine the intent of the parties from all the traditional sources consulted in contract interpretation. However, the Maine legislature's strong policy favoring arbitration [6] dictates a conclusion that the dispute has been subjected to arbitration if the parties have generally agreed to arbitrate disputes and if the party seeking arbitration is making a claim which, on its face, is governed by the collective bargaining contract. [7] (Emphasis in original) Lewiston Firefighters Ass'n v. City of Lewiston, supra, 354 A.2d at 165. By an alternative formulation it has been held that a court will find a dispute arbitrable unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage. United Steelworkers v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582-83, 80 S.Ct. at 1353. The issue of whether an arbitrator exceeded his powers in making an award poses an entirely different question for this court. This issue, raised by a motion to vacate under section 5938(1)(C), [8] relates not to arbitrability of the dispute, but rather to the way the arbitrator decided the merits of the dispute. Most commonly, as in the case at bar, the arbitrator's decision on the merits involves his construction of the contract under which the dispute arose; and for the court to resolve the question whether the arbitrator's award exceeded his powers, the court necessarily must itself construe that same contract. However, unlike the determination of substantive arbitrability, construction of the contract for the purpose of deciding the merits of a dispute is ordinarily a task for the arbitrator, not the court. Lewiston Firefighters Ass'n v. City of Lewiston, supra, 354 A.2d at 165; School Administrative Dist. No. 75 v. Merrymeeting Educators' Ass'n, Me., 354 A.2d 169, 170 (1976). Even though construction of a contract is a question of law and decision of legal questions is archetypically the work of courts, a number of reasons justify giving judicial deference to the arbitrator's construction of the contract. First, as noted in School Administrative Dist. No. 33 v. Teachers' Ass'n, Me., 395 A.2d 461, 462 (1978), the arbitration process must offer the prospect of finality to retain its vitality as a dispute settlement mechanism in the complex area of labor relations. Second, the interest in achieving a fair resolution of a labor dispute dictates considerable respect for the arbitrator's decision. The arbitrator is usually chosen because of the parties' confidence in his knowledge of the common law of the shop and their trust in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment. . . The ablest judge cannot be expected to bring the same experience and competence to bear upon the determination of a grievance, because he cannot be similarly informed. Lewiston Firefighters Ass'n v. City of Lewiston, supra, 354 A.2d at 165, quoting United Steelworkers v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582, 80 S.Ct. at 1352-53. Finally, the parties choose the arbitrator and should, except under unusual circumstances, be bound by his interpretation of the contract. It 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 v. Enterprise Wheel & Car Co., 363 U.S. 593, 599, 80 S.Ct. 1358, 1362, 4 L.Ed.2d 1424 (1960). See School Administrative Dist. No. 33 v. Teachers' Ass'n, supra, 395 A.2d at 463. We do not mean to say, however, that the parties have no recourse if an arbitrator acts arbitrarily or capriciously in deciding the merits. The four corners of the contract define the limits of the arbitrator's authority, and, in the absence of an express provision to the contrary, it must be assumed that the parties did not intend the arbitrator to go beyond the bounds of the contract. [A]rbitrators may not travel outside the agreement in reaching a conclusion since, if they did so, they would not be interpreting and applying the contract but basing their conclusion on their own individual concept of industrial justice in the particular area involved. [9] School Administrative Dist. No. 75 v. Merrymeeting Educators' Ass'n, supra, 354 A.2d at 170-71. The standard of review to be employed by a court in determining whether an arbitrator has travelled outside the agreement has been variously expressed. The interests in finality and in assuring an informed disposition of the dispute dictate that judicial review be narrow indeed. Accordingly, courts have stated that an award will be vacated only if the arbitrator's award evidences manifest disregard for the terms of the contract, Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128 (3rd Cir. 1969); or the arbitrator's reasoning is so palpably faulty that no judge, or group of judges, could ever conceivably have made such a ruling, Safeway Stores v. American Bakery & Con. W.I.U., Local 111, 390 F.2d 79, 82 (5th Cir. 1968). See also Mistletoe Express Service v. Motor Expressmen's Union, 566 F.2d 692 (10th Cir. 1977) (award will be vacated only if no rational inference from the record supports arbitrator's decision); San Francisco-Oakland Newspaper Guild v. Tribune Pub. Co., 407 F.2d 1327, 1328 (9th Cir. 1969) (award will not be vacated if it is possible for an honest intellect to interpret the words of the contract and reach the result which the arbitrator reached); University of Alaska v. Modern Constr. Inc., Alaska, 522 P.2d 1132, 1137 (1974). See Note, Commercial ArbitrationScope of Judicial Review of Error of Law or Fact, 52 Tulane L.Rev. 862 (1978); Bloch, Labor Arbitration Crossroads Revisited: The Role of the Arbitrator and the Response of the Courts, 47 U. of Cinn.L.Rev. 363 (1978). Contra, Harrison v. Chrysler Corp., 558 F.2d 1273 (7th Cir. 1977); Smitty's Super-Valu, Inc. v. Pasqualetti, 22 Ariz.App. 178, 525 P.2d 309 (1974). While a court will not substitute its judgment for that of an arbitrator, it will conclude that the arbitrator exceeded his powers by travelling outside the agreement, and will therefore refuse to enforce the arbitrator's award, if it finds no rational construction of the contract that can support the award. Stated affirmatively, if all fair and reasonable minds would agree that the construction of the contract made by the arbitrator[s] was not possible under a fair interpretation of the contract, then the court will be bound to vacate or refuse to confirm the award. University of Alaska v. Modern Constr. Co., supra, 522 P.2d at 1137, quoting M. Pirsig, Some Comments on Arbitration Legislation and the Uniform Act, 10 Vand.L.Rev. 685, 706 (1957), see n. 3 above. It now remains for us to apply these general principles to the case at handin regard to both the arbitrability of Dawson's grievance and the merits of the arbitrator's decision in his favor.