Opinion ID: 177174
Heading Depth: 4
Heading Rank: 2

Heading: Correctness of the Ripeness Determination

Text: In challenging the correctness of the district court's ripeness determination, DCS asserts a different form of harm or hardship than the district court considered. The district court held that the potential harm to DCS involved in defending against class arbitration would never occur and that therefore, DCS had failed to demonstrate that withholding judicial review would pose any hardship. On appeal, DCS acknowledges that it won the class determination battle and is no longer threatened, in this case, by the specter of class arbitration expenses and liability. Adopting a new approach, DCS now contends that the hardship posed by denial of immediate confirmation of the class determination award resides in the (a) postponement of judicial confirmation until after the arbitration panel renders its final award(s); and (b) the denial of repose and certainty of preclusive effect that would accompany a confirmed award. DCS did not assert this argument in the district court. The issue is therefore forfeited. See In re Hood, 319 F.3d 755, 760 (6th Cir.2003) (It is well-settled that this court will not consider arguments raised for the first time on appeal unless our failure to consider the issue will result in a plain miscarriage of justice.). A defect in the federal court's original jurisdiction is an issue that cannot be waived and must be raised sua sponte when noticed. See Ku v. State of Tenn., 322 F.3d 431, 433 (6th Cir.2003). Here, however, DCS failed to carry its burden of establishing that the district court had jurisdiction to consider its motion to confirm the interim award and now seeks to rehabilitate its failed effort based on arguments never made to the district court. To address the merits of DCS's new appellate arguments would be to permit an undeserved second bite at the apple under circumstances that do not implicate a miscarriage of justice. Yet, even if we consider the merits of the forfeited arguments, the outcome is unchanged. DCS's new arguments are only weakly supported. First, DCS argues that its opportunity to obtain judicial review and confirmation of the class determination award may be entirely foreclosed if the one-year period of limitation prescribed by 9 U.S.C. § 9 has run before the arbitration panel issues its final award. Yet, no court could legitimately consider the one-year period to have begun running from the date of the interim class determination award after having denied judicial review for lack of ripeness. If the district court's dismissal of the motion for lack of ripeness is affirmed, then DCS's recourse is to seek judicial review after entry of the final award. DCS has neither argued nor cited any authority for the proposition that judicial review of the final award would not afford opportunity for review of earlier issued interim awards integral to the final award. DCS has thus failed to show that withholding of judicial review of the arbitration panel's favorable class determination award at this stage poses any imminent risk of cognizable harm in this case. Absent immediate confirmation of the class determination award, DCS further contends, the award lacks the preclusive effect DCS needs to protect it from other claimants' potential efforts to obtain class arbitration of similar breach of contract claims in other arbitration proceedings. In particular, DCS refers to another pending putative class arbitration proceeding involving similar claims and commenced just four months after the instant arbitration, Fox Valley Ford, et al. v. DCS, in which the claimants are represented by the same counsel as the claimants in this case. DCS contends that counsel for the Fox Valley Ford claimants have made clear their intentions to pursue class arbitration proceedings in that case if the class determination award in this case is not confirmed. In response, Dub Herring Ford contends that Fox Valley Ford involves dissimilar breach of contract claims. Yet, in any event, we remain unpersuaded that such collateral hardship (i.e., potentially incurring expenses in another case) is cognizable in evaluating the ripeness of DCS's motion for confirmation of an interim arbitration award in this case. In evaluating ripeness, the Supreme Court has recognized that the disadvantages of premature review ordinarily outweigh the burden created by the additional costs ofeven repetitivelitigation. See Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 735, 118 S.Ct. 1665, 140 L.Ed.2d 921 (1998). The Ohio Forestry Court thus held that the possibility of potential litigation costs in other cases was not sufficient hardship by itself to justify immediate review of an otherwise unripe matter. Id. at 734-35, 118 S.Ct. 1665. The Court observed that a case-by-case approach, albeit potentially frustrating and inefficient, is the traditional and normal mode of operation of the courts. Id. at 735, 118 S.Ct. 1665. Further, even if such collateral consequences could be considered hardship, DCS's showing of the likelihood of this harm coming to pass is sketchy and hardly compelling. We note that the Fox Valley Ford case does appear to be on a parallel track. When the arbitration panel issued a clause construction award permitting the Fox Valley Ford claimants to pursue class arbitration, DCS's motion to vacate the award was assigned to and denied by the same district judge who denied both DCS's motion to vacate and motion to confirm in this case. See Dealer Computer Services v. Fox Valley Ford, 2008 WL 1837229 (E.D.Mich.2008). DCS's appeal of that ruling was treated in conformity with our ruling in DCS-I. See Dealer Computer Services v. Fox Valley Ford, 310 Fed. Appx. 749 (6th Cir.2009) (vacating the order of the district court and remanding for dismissal for lack of ripeness). Since then, it appears further proceedings in the Fox Valley Ford case have been held in abeyance pending final resolution of the class certification question in this case. Considering this parallel history and the consistency with which the federal courts have treated both cases, DCS's suggestion that it is exposed to imminent hardship is not persuasive. The alleged hardship posed by the possibility of unnecessary, duplicative expenses has not been shown to be substantial in amount or likelihood. Nor has DCS shown that there is any substantial likelihood of an inconsistent class determination award in Fox Valley Ford. In short, the new appellate arguments made by DCS in attempting to carry its burden of showing ripenessif they are considered at allare no better than the old arguments the district court rejected. The district court's order dismissing the motion to confirm for lack of ripeness must therefore be upheld.