Court Opinion

ID: 168546
Source: CourtListenerOpinion
Date Created: 2010-08-14 16:37:58+00
Date Added: 2024-06-11T14:54:43.982375
License: Public Domain

F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit

                                                                   December 28, 2006
                      UNITED STATES CO URT O F APPEALS
                                                                   Elisabeth A. Shumaker
                                   TENTH CIRCUIT                       Clerk of Court

    BANK OF N OVA SCOTIA, and
    CREEKSTONE FARM S PREM IUM S
    BEEF, LLC,

          Plaintiffs-Appellants,                        No. 05-3463
    v.                                           (D.C. No. 05-CV-1083-JTM )
                                                          (D . Kan.)
    SU ITT CON STR UC TIO N
    COM PANY, IN C.,

          Defendant-Appellee.

                             OR DER AND JUDGM ENT *

Before L UC ER O, M cCO NNELL, and HO LM ES, Circuit Judges.

         This Court ordered the parties on November 9, 2006 to be prepared to

address at oral argument why this appeal is not moot. Oral argument was held on

November 13, 2006. At oral argument, the mootness issue was discussed.

However, the parties only reached agreement that this Court lacked appellate

jurisdiction under 28 U.S.C. § 1291. M ore specifically, they agreed that the

challenged O rder - the district court’s November 4, 2005 Order in the parties'

*
 This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. It may be cited, however,
for its persuasive value consistent with Fed. R. App. P. 32.1 (eff. Dec. 1, 2006)
and 10 th Cir. R. 32.1 (eff. Jan. 1, 2007).
second federal action - w as not a “final order” within the meaning § 1291.

      W e are not bound by the parties’ agreement, nor the rationale underlying it.

Exercising our independent obligation to determine the existence of a “case” or

“controversy” within the meaning of Article III of the United States Constitution,

see Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1276 (10 th Cir. 2001), we

hold that the instant appeal has been rendered moot by virtue of the arbitration

panel's O ctober 12, 2006 award.

      The sole relief requested by plaintiffs-appellants Bank of Nova Scotia and

Creekstone Farms Premium Beef, L.L.C. (collectively “plaintiffs”) in the second

federal action was a stay of the arbitration proceeding commenced by defendant-

appellee Suitt Construction Company, Inc. (“Suitt”). Plaintiffs contended that

such relief was appropriate because Suitt’s counterclaim against it was not

arbitrable. The stay question is the only one presented by this appeal.

Specifically, plaintiffs argue that the district court erred in declining to stay the

arbitration of Suitt’s counterclaim.

      The arbitration proceeding on Suitt's counterclaim, however, is now over.

It concluded in September 2006. And, on October 12, 2006, the arbitration panel

issued an Order finding that Suitt was entitled to recover against plaintiffs the

unpaid contract balance in the amount of $2,127,250. 1 The completion of the

1
      Plaintiffs conceded at oral argument that the only relief they sought in the
second federal action was to enjoin the arbitration and that the arbitration of
                                                                       (continued...)

                                          -2-
arbitration of Suitt's counterclaim and the issuance of the October 12, 2006 Order

prevent this Court from granting plaintiffs any effective relief in this appeal. See

Casad v. U.S. Dep't of Health and Human Serv., 301 F.3d 1247, 1254 (10 th Cir.

2002) (“W hen events occur that prevent the appellate court from granting any

effective relief, an issue is moot.”). 2

       W e therefore DISM ISS the instant appeal for lack of subject matter

jurisdiction, VAC ATE the district court's November 4, 2005 Order, 3 and

R EM A N D this mooted action to the district court for dismissal without

1
 (...continued)
Suitt's counterclaim “has taken place.”
2
       Suitt suggested at oral argument that the appeal would not be moot until the
arbitration panel resolved the outstanding issue of calculating Suitt's attorney's
fees and expenses as the prevailing party. W e reject this suggestion. Plaintiffs'
application for a stay sought to enjoin the arbitration of Suitt's counterclaim - an
event that already has taken place. Furthermore, the October 12, 2006 award of
contract damages (and post-award interest) on this counterclaim is currently
subject to confirmation by the district court in the first federal action pursuant to
§ 9 of the FAA. See 9 U.S.C.A. § 9 (party may seek order from district court
confirming “award made pursuant to the arbitration”); cf. Budinich v. Becton
Dickinson & Co., 486 U.S. 196, 202 (1988) (adopting in the § 1291 context a
“uniform rule that an unresolved issue of attorney’s fees for the litigation in
question does not prevent judgment on the merits from being final”).
3
      W e follow the general practice among federal courts and invoke the
equitable remedy of vacatur because the controversy has been mooted through
“happenstance.” United States v. M unsingwear, Inc., 340 U.S. 36, 39-40 (1950);
see U.S. Bancorp M ortgage Co. v. Bonner M all Partnership, 513 U.S. 18, 25
(1994); Wyoming v. U.S. Dep't of Agric., 414 F.3d 1207, 1213 (10 th Cir. 2005).

                                           -3-
prejudice. 4

       This judgment shall not prejudice the parties’ rights to raise the substance

of the arguments presented in this appeal in future proceedings, to the extent the

parties otherwise would be permitted to raise these arguments under applicable

law . In particular, insofar as otherwise legally permissible, the judgment shall

not prejudice the parties’ rights to raise in any further proceedings relating to the

confirmation of the arbitration award arguments regarding the arbitrability of

Suitt’s counterclaim.

                                       ENTERED FOR THE COURT

                                       Jerome A. Holmes
                                       Circuit Judge

4
      Pending before the Court is Suitt’s motion to strike plaintiffs’ supplemental
appellate brief. The stated purpose of plaintiffs’ supplemental appellate brief is
to advise this Court of the outcome of the arbitration betw een plaintiffs and Suitt.
The parties addressed that outcome in oral argument and this Court has
considered the outcome in resolving this appeal. Accordingly, Suitt’s m otion is
denied.

                                         -4-
05-3463 - Bank of Nova Scotia v. Suitt Construction Co.

L UC ER O, J., concurring:

      I join in the result. M y colleagues in the majority have done a thorough

analysis under mootness, and I would join in that analysis, but for my ultimate

conclusion on jurisdiction. From my perspective, we lack subject matter

jurisdiction under either the Federal A rbitration Act (“FAA”) or 28 U.S.C. §

1291. Bank of Nova Scotia (“BNS”) appeals from a district court order that is

styled as a grant of Suitt’s “M otion to Enforce [the First District Court] Order.”

The first district court order, as clarified by the second order, stayed BNS’ claims

and Suitt’s counterclaim pending arbitration. A stay order is not “a final decision

with respect to an arbitration” under the FAA, and we lack jurisdiction to hear

appeals from such orders. 9 U.S.C. § 16(a)(3); see Comanche Indian Tribe of

Oklahoma v. 49, L.L.C., 391 F.3d 1129, 1132-33 (10th Cir. 2004). Only by

treating the second order as strictly independent of the prior action do my

respected colleagues reach the mootness of this appeal. Although the district

court chose not to consolidate the two actions at issue in this dispute, the FAA’s

strong “pro-arbitration tilt” must not be stymied by this technicality. Id. at 1133

n.5. The second order has no legal effect but to enforce the original stay order,

which is explicitly construed to apply to all claims. As such, we must consider

the original order as w ell for purposes of this appeal. This position finds support

in a decision of at least one of our sister circuits. See CitiFinancial Corp. v.
Harrison, 453 F.3d 245, 252 (5th Cir. 2006) (“Since the parties and the judges

treated these two actions as one, we will do the same. W hile the hard edge of

jurisdiction is not softened by expediency and immediacy of need, its principles

must read on the reality of the contest.”). The “reality of the contest” requires

that we treat these two actions as one, and hold the line against end-runs around

the FA A .

                                         -2-