Court Opinion

ID: 9470824
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:16:52.4634+00
Date Added: 2024-06-11T17:42:07.233525
License: Public Domain

KRUPANSKY, Circuit Judge,
dissenting.
Because I believe this Court lacks jurisdiction to review the lower court’s order, I must, for the reasons set forth below, dissent from the majority’s resolution of the merits of this controversy.
As the majority Opinion acknowledges, ante at 1206, the district court denied the motion, without prejudice, because the record, in the lower court’s perception, was not sufficiently developed to enable the court to decide the propriety of staying the action pending arbitration. The following excerpts from the trial court’s ruling are illustrative:
[Wjithout a more fully developed record, underlying record, I cannot say that arbitration would satisfy what I believe to be the congressional policy explicated or implicated by 10(b), Section 10(b), the fraud operations.
All the arguments Wilko [v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953)] raised against arbitration, arbitrators don’t have a record; arbitrators *1209don’t give their reasons, arbitrators are not required to apply the law. I don’t even know who the arbitrators would be, or how the arbitrators are chosen, or how the submission is made.
******
I am going to allow [First Heritage Corp.] to take discovery and I am not saying though that at a future point, if you can present a proper argument, that I would not consider [a motion to stay] again in the context of this.
' I don’t think I know enough to say that this dispute goes to arbitration and I am relying on Wilko to make that finding.
* * * * * *
On the record now before me I am not satisfied it belongs in arbitration. I may never be satisfied. I am simply not precluding you from, again, asserting it on a more complete record. I can’t tell you what record to put it on, I can’t be that presumptuous.
It is obvious from the foregoing comments by the district court that the lower court did not deny the request for a stay on the merits, but, rather, because the court considered the record incomplete. This is clearly distinguishable from Mansbach v. Prescott, Ball & Turben, 598 F.2d 1017 (6th Cir.1979) in which the lower court reached the merits of the issue and granted a stay.
The instant matter is, however, very similar to New York, New Haven and Hartford R.R. Co. v. Lehigh and New England R.R. Co., 287 F.2d 678 (2d Cir.1961). In that case the plaintiffs moved to stay proceedings on the counterclaims of defendant pending a determination by the Interstate Commerce Commission. The district court denied the stay and plaintiff appealed.
The Second Circuit held that the order was not appealable, stating, in pertinent part:
The denial of the stay is clearly not ap-pealable. The district judge refused to grant the stay not because he decided, as a matter of law, that no stay was appropriate although a similar claim was then pending before the Interstate Commerce Commission, but because he found “simply too many gaps in the proof to reach any definitive conclusion.” The motions were denied without prejudice to renew. The decision now being appealed, therefore, was altogether tentative. It amounted to a postponement of the merits of the motion to stay until the issues became more clearly defined.

Id.

The reasoning of the Second Circuit is directly applicable and should be followed in this case. By accepting jurisdiction of this case pursuant to 28 U.S.C. § 1292(a)(1), the majority unduly broadens the “limited exception to the final judgment rule” that provision was intended to establish and ignores “the general congressional policy against piecemeal review.” Carson v. American Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 996, 67 L.Ed.2d 59 (1981). In sum, the decision of the majority is an exceedingly undesirable legal precedent. Accordingly, I dissent.