Opinion ID: 2977311
Heading Depth: 3
Heading Rank: 2

Heading: District Court Rationale

Text: Nothing in the lower court’s discussion of jurisdiction persuades us to find the Clause Construction Award ripe for review. The court appears to have concluded it enjoyed jurisdiction to hear DCS’s motion to vacate because Rule 3 contemplates judicial review of Clause Construction Awards. Dealer Computer Servs., 489 F. Supp. 2d at 777-78. Similar to the Rule 5(d) stay procedures following Clause Determination Awards, Rule 3 orders an arbitrator to “stay all proceedings following the issuance of the Clause Construction Award for a period of at least 30 days to permit any party to move a court of competent jurisdiction to confirm or to vacate the Clause Construction Award.” Supplementary Rules, Rule 3. The district court concluded this provision “evinces an intent that such matters are properly reviewed by a federal district court even though a final result has not yet been reached [on the merits].” Dealer Computer Servs., 489 F. Supp. 2d at 777. Accordingly, the court determined it had subject matter authority to rule on DCS’s motion to vacate. Id. at 778. The district court’s reliance on the intent of the AAA, a private dispute resolution organization, is misplaced. While the AAA is free to permit parties to seek judicial review for the purposes of its own proceedings, Article III ripeness requirements will not necessarily be satisfied whenever the AAA allows such review. Cf. Marron v. Snap-On Tools, Co., 2006 WL 51193, -3 (D.N.J. Jan. 9, 2006) (disregarding plaintiff’s argument that “Rule 3 of the AAA specifically contemplates judicial review” when declining to review plaintiff’s motion to vacate an AAA Clause Construction Award). The significance of the access to judicial review contemplated by the AAA rules to the issue of ripeness derives from the hardship DCS may suffer if the procedural circumstances compel it to defend against a class arbitration. The AAA, however, does not have the authority to waive away Article III-based ripeness deficiencies. Federal courts should not grant judicial review of arbitration awards simply because the organization conducting arbitration would like them to do so. We also do not believe cases decided in other circuits and referenced by the district court in support of its holding cast doubt on our conclusion regarding jurisdiction. Dealer Computer Servs., 489 F. Supp. 2d at 778; see Sutter v. Oxford Health Plans L.L.C., 227 Fed. App’x 135, 136-37 (3d Cir. 2007); Long John Silver’s Rest., Inc. v. Cole, 409 F. Supp. 2d 682 (D.S.C. 2006); Genus Credit Mgmt. Corp. v. Jones, 2006 WL 905936 (D. Md. Apr. 6, 2006). Sutter and Long John Silver’s are distinguishable from the instant action because both of those matters involved a motion to vacate an arbitration award granting class certification rather than one merely interpreting a clause construction–a key distinction given the above discussion. Unlike Sutter and Long John Silver’s, however, Genus Credit specifically held a court possessed jurisdiction to review an AAA Clause Construction Award, which interpreted the arbitration clause at issue to not preclude class arbitration. See Genus Credit, 2006 WL 905936, . The court found it “prudent to render a decision on the [Clause Construction Award] before [the parties] are forced to adjudicate the entire dispute.” Id., -2. We remain skeptical of the underlying rationale of Genus Credit despite the applicability of its holding. First, Genus Credit relies on the distinguishable precedent of Sutter and Long John Silver’s in reaching its decision. See id. Second, and more importantly, Genus Credit failed to No. 07-1819 Dealer Computer Serv., Inc. v. Dub Herring Ford, et al. Page 6 analyze adequately ripeness when concluding the court possessed jurisdiction to review the arbitration award. Its cursory discussion never acknowledged the possibility that the arbitration panel in its case would decline to certify defendants’ class, thereby obviating the potential harm of defending against a class proceeding. Nor did Genus Credit demonstrate how its plaintiff would suffer if the court withheld judicial review at that stage, given the later opportunity for judicial review through Rule 5(d), in the event the panel did certify the class. These significant omissions from Genus Credit’s jurisdictional analysis prevent the Court from agreeing with its view. At bottom, neither the supporting cases offered by the district court in the instant action nor its references to the judicial review contemplated by Rule 3 persuade this Court that jurisdiction existed to hear DCS’s motion to vacate.