Court Opinion

ID: 9443629
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:26:16.875836+00
Date Added: 2024-06-11T17:29:33.421426
License: Public Domain

FRANK, Circuit Judge
(dissenting).
1. My colleagues say that the district court’s order was one “vacating the prior award and ordering a resubmission to arbitration”. In fact, the -Ordefi, after directing vacation of the award, provided “that the rights of the parties to resubmit their differences to arbitrate before other parties is hereby confirmed.” That seems to me to end the case, leaving it to the parties to arbitrate anew, if they wish. In other words, I think' the' judge did not exercise the discretion, conferred on him by the Act, to direct a- new-arbitration.1
2. But let us assume that the order did so direct. Even so, I think that cases like Schoenamsgruber v. Hamburg American Line, 294 U.S. 454, 55 S.Ct. 475, 79 L.Ed. 989, are not in point. In such a case, suit is begun on a contract, and then one of the parties obtains an order, in that pending suit, that, pursuant to a" clause in the contract, there be an arbitration. In such circumstances, as Judge Learned Hand said in Murray Oil Products Co. v. Mitsui & Co., 2 Cir., 146 F.2d 381, the arbitration is merely a mode of trying the case, like a reference to a master, for the judgment, in the still continuing suit, is based on the arbitrator’s award instead of on a master’s report. Clearly in such a case the order for arbitration is interlocutory.
But I think the situation different when, as here, with no suit on the contract pending, a party begins suit (under the Act) for specific performance of a contract provision agreeing to arbitrate. An order, in such a suit, requiring arbitration seems to me to be final. In re Pahlberg Petition, 2 Cir., 131 F.2d 968, might, on a superficial glance, seem to be contra. But the report, 43 F.Supp. 761, of the district court’s opinion in that case, is preceded by the following statement disclosing, 43 F.Supp. at page 762, what was before this court on appeal: “Libel by the Bulk Carriers Corporation against Kasmu Laeva Omanikud (O. Tiedemann) for failure of owners to deliver chartered vessel to libelant in accordance with charter party, wherein Rud Pahlberg, a member of partnership owning the vessel, petitioned for an order directing libelant to proceed to arbitration of the dispute. Petition to compel charterer to proceed to arbitration granted.” 2 In other words, Pahlberg was, like Schoenamsgruber, an order issued in the course of a still continuing suit.
The non-reviewability of most orders for new trial does not present a helpful analogy. For, as we have just said in Portman v. American Homes Products Corp., 2 Cir., 201 F.2d 847, such an order is generally not reviewable even on appeal from a subsequent final order. But I'gather that my colleagues concede that the order here, if not presently reviewable, will become so after a new arbitration (if any) and judgment thereon.
The cited New York cases are surely not apposite. Aside from the fact that New York appellate procedure is, in many respects, unlike ours, and that . the cited cases do not hold that there is no appeal to the intermediate appellate court,3 the or*529ders in those cases were, I think, markedly different from the order here. In Atlantic Rayon Corp. v. Goldsmith, 302 N.Y. 842, 100 N.E.2d 40, the Appellate Division had postponed its own decision until it heard from an official referee it appointed to consider whether an arbitrator’s award should be vacated or affirmed. In Industrial Union, etc. v. Todd Shipyards Corp., 300 N.Y. 549, 89 N.E.2d 518, the Appellate Division merely sent the matter hack with directions that the same arbitrator hear additional evidence. Moreover, the opinion of the New York Court of Appeals in each of those cases was terse, with no reasoning given and no cases cited.
Nor is the order here like an order for a new trial before a jury or a master or a judge, since involved here is the policy behind the Arbitration Act, i. e., one of encouragement of arbitrations. See Kulukun-dis Shipping Co. v. Amtorg Trading Corp., 2 Cir., 126 F.2d 978, 985; Wilko v. Swan, 2 Cir., 201 F.2d 439.
One basic purpose of seeking an arbitration is to avoid the delay and expense incident to many a law suit. My colleagues’ decision will establish a precedent which will seriously affect that aim; it means that if a judge enters an obviously erroneous order that an arbitration award be set aside, the person who won the arbitration must endure the expense and delay entailed by a new arbitration before he can appeal and obtain a reversal of that order.4
Perhaps in answer to this argument, my colleagues make the puzzling suggestion that, all else aside, a review now of this order is undesirable because, “Even in the normal case” — presumably an appeal from an order as to the finality of which my colleagues have no doubts — the chance of error, as shown by our actions in reversing the lower court, is only about one out of four.” That statement implies that, if it should ever eventuate that, say, 95% of final orders were affirmed, all appeals should he abolished. Actually all that, at most, is shown by statistics such as my colleagues cite, is that, in the view of the upper courts, the trial judges have done their work well in a large proportion of the cases. Surely that fact does not justify eliminating appellate review.
3. My colleagues say that “the new arbitration should now go forward without delay.” However, since they hold the order interlocutory, the plaintiff need not comply with that suggestion. For, since an interlocutory order is necessarily incapable of being asserted as res judicata, the plaintiff is now at liberty to begin a new suit on the old award.5 In such a new suit, another judge may reject the defendant’s contention that that award was defective, and may then enter judgment for plaintiff.
4. Were it not for adverse precedents in this Circuit — precedents with which I disagree but feel bound by 6 — I would suggest that, if this order is interlocutory, we treat the appeal papers as a petition for mandamus. Because of those precedents, the decision here does not preclude plaintiff from now filing such a petition.7
5. Because the majority of the court holds that we cannot review the district court’s order, I shall not discuss the merits. However, nothing I have said above is to be taken as an indication that, were we to consider the merits, I would necessarily vote to reverse.

. See 9 U.S.C.A. § 19(e). It should be noted that the discretion is to “direct a rehearing by the arbitrators.” The New York statute — Civil Practice Act, § 1462 —gives discretion to “direct a. rehearing either before the same arbitrators or before new arbitrators”.

. The caption of the case — see 43 F.Supp. 761, — is “Petition of Pahlberg. Bulk Carriers Corporation v. Kasmu Laeva Omanikud (O. Tiedemann).”

. Lack of “finality” in those cases merely meant that there was no appeal to the highest court from an appellate court *529which had properly heard an appeal from a trial court’s order.

. The frustration of the policy behind the Act will be singularly manifest here, if plaintiff is correct on the merits, for then the statute of limitations barred the vacation of the award.

. See Republic of China v. American Express Co., 2 Cir., 190 E.2d 334, 339, and eases there cited.

. See Zamore v. Goldblatt, 2 Cir., 201 F.2d 738.

. See Ford Motor Co. v. Ryan, 2 Cir., 182 F.2d 329; Foster-Milburn Co. v. Knight, 2 Cir., 181 F.2d 949; Bereslavsky v. Caffey, 2 Cir., 161 F.2d 499; Bereslav-sky v. Kloeb, 6 Cir., 162 F.2d 862; 5 Moore, Federal Practice (2d ed.) 39.13 (pp. 744 note 7, 746-747); Wolfson, Extraordinary Writs in the Supreme Court, 51 Col.L.Rev. (1951) 977, 992.