Opinion ID: 177132
Heading Depth: 2
Heading Rank: 3

Heading: The Four Purchase Price Disputes

Text: The full history of the transaction and dispute between the parties is somewhat complex, but all of those details are not necessary to resolve question before us. At issue here are disputes over four price reportsthree lump sum reports dated December 7, 2005, March 16, 2006, and October 16, 2006, and one earnout report dated June 22, 2006that Broadspire provided to Lumbermens under the above-described process and Lumbermens then timely disputed. On each occasion, Lumbermens sent a Disagreement Notice regarding Broadspire's price determination. [2] Each was relatively general. Broadspire disputed the sufficiency of the Disagreement Notices, arguing that they did not meet § 3.3(g)'s requirement that they contain (1) reasonable detail and (2) Lumbermens alternative determination of the payment required. Lumbermens claimed that it could not provide the requisite level of detail called for by § 3.3(g), because Broadspire's price reports were themselves lacking in details that would enable Lumbermens to do so. Lumbermens also claimed in its Disagreement Notices that it had not been given sufficient access to the books and records necessary to properly evaluate Broadspire's determinations. Lumbermens sought arbitration of each of these four disputes under the Purchase Price Dispute procedures set forth in § 3.4 of the Agreement, but Broadspire refused to arbitrate on the basis that Lumbermens had not met the precondition of filing adequate Disagreement Notices. Instead, Broadspire sought to commence panel arbitration of the disputes under the more general § 14.11 procedures. Eventually, on January 19, 2007, Lumbermens filed a Petition in Aid of Arbitration in the United States District Court for the Northern District of Illinois, seeking to compel arbitration under the § 3.4 provision and to compel Broadspire to produce certain documents and information to which it had not given Lumbermens access. The district court ruled in favor of Lumbermens. With regard to which arbitration clause governed the dispute, § 3.4 or the broader § 14.11, the district judge concluded that Lumbermens is clearly right and that the Article III purchase price dispute procedure applied. The court concluded that the question of whether Lumbermens' Disagreement Notices were adequate was certainly within the purview of the arbitrator and that the question was one that was peculiarly within the competence of an accounting/appraisal firm. The district judge ordered the parties to arbitrate the disputes under the § 3.4 procedures, and to each submit within ten days of his ruling the names of two potential accounting or appraisal firms to act as arbitrator to replace Pricewaterhouse-Coopers, which was already acting as an arbitrator in an unrelated Article III price dispute arbitration. [3] The court also ordered Broadspire to produce certain documents. Broadspire appealed.