Opinion ID: 613100
Heading Depth: 2
Heading Rank: 1

Heading: Challenge to the Grant of Injunctive Relief

Text: In paragraph 7(b) of the Award, the Panel ordered that appellants be permanently restrained and enjoined from ... asserting any ownership interest in ... or using in any way the DIXE Trade Secrets. Appellants claim that the Panel exceeded its authority in doing so and refer us to the express prohibition outlined in the dispute resolution procedures that were to govern the arbitration: Any award in arbitration under this Section shall be limited to monetary damages and shall include no injunction or direction to any party other than the direction to pay a monetary amount. J.A. Ex. 000029 ¶ 9. Appellants contend that the Panel ignored the contract's express prohibition of injunctive relief. The district court concluded that, because appellants had argued that an injunction should be issued against Wells Fargo during the course of the arbitration, they waived the right to challenge the grant of injunctive relief contained in the Award. It relied on the precept that [i]f a party willingly and without reservation allows an issue to be submitted to arbitration, he cannot await the outcome and then later argue that the arbitrator lacked authority to decide the matter. Minneapolis-St. Paul Mailers Union v. Nw. Publ'ns, Inc., 379 F.3d 502, 509 (8th Cir. 2004) (quoting Slaney v. Int'l Amateur Athletic Fed'n, 244 F.3d 580, 591 (7th Cir. 2001)). Appellants deny that their references to injunctive relief constitute a concession that it was an available remedy and contend that even if it they did affirmatively request injunctive relief, the Panel lacked the authority to grant it under the governing Commercial Rules of the American Arbitration Association (AAA Rules). Our review of the record confirms that the appellants were on notice that Wells Fargo was seeking injunctive relief and that they sought it as well. In the pre-hearing brief Wells Fargo submitted in April 2008, it asked the Panel to enjoin the appellants from continuing the alleged misappropriation of DIXE software trade secrets. Appellants did not object or challenge the Panel's authority at this time. This alone may not have been enough to abrogate the prohibition on injunctive relief in the parties' agreement, but appellants affirmatively requested injunctive relief on two separate instances later in the proceedings. First, in a section of their final briefing to the panel entitled Appropriate Remedies, they asked the Panel to [d]eclare that Wells had misappropriated... confidential trade secrets and enjoin Wells from using such confidential information and trade secrets[.] J.A. Ex. 000384. And second, during closing argument, counsel for one of the appellants stated: we think the evidence is clear that we've proven that [Wells Fargo] took this based on the litany that I just gave you, and that would be our preference that you find that they did and you enjoin them from using the software as it's defined in our proposed order. J.A. 000425. Having requested that the Panel enter injunctive relief on their behalf, appellants cannot complain when the Panel decides instead to enter injunctive relief against them. Appellants contend that even if they did affirmatively request injunctive relief, the Panel nonetheless was precluded from granting it under Rule 43(a) of the AAA Rules. Rule 43(a) provides that [t]he arbitrator may grant any remedy or relief that the arbitrator deems just and equitable and within the scope of the agreement of the parties.... Appellants contend that this rule bars the Panel from awarding relief prohibited by the agreement, even if such relief is requested by the parties. But their position ignores the lesson of Minneapolis-St. Paul Mailers Union, 379 F.3d at 509, which teaches that the arbitrator may expand the scope of its review based on the issues the parties submit or the arguments they advance in the proceedings. We find unpersuasive appellants' argument that Minneapolis-St. Paul Mailers Union and like cases are inapposite because they did not involve a form of relief that the parties specifically prohibited in their agreement. We conclude that the appellants have waived their right to enforce the contractual proscription on injunctive relief by failing to challenge Wells Fargo's request for such relief and by requesting it themselves. Accordingly, the district court did not err in determining that appellants had waived their right to challenge the Panel's award of injunctive relief.