Court Opinion

ID: 9478066
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:39:11.590677+00
Date Added: 2024-06-11T17:46:13.201512
License: Public Domain

SELYA, Circuit Judge
(dissenting).
I respectfully dissent. Although the question posed in these appeals is not free from doubt, I take a more isthmian view of it than do my colleagues.
The Federal Arbitration Act cuts quite a precise pattern, leaving little room for judicial embroidery. It specifically directs that, if there is “an agreement for arbitration ... made in writing and ... a default in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms [of the agreement]. ” 9 U.S.C. § 4 (emphasis supplied). In crafting this provision, Congress’ “preeminent concern ... was to enforce private agreements into which parties had entered. ...” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221, 105 S.Ct. 1283, 1242, 84 L.Ed.2d 158 (1985). The Supreme Court has repeatedly instructed that if such agreements exist, they must be enforced rigorously. E.g., Perry v. Thomas, — U.S. -, 107 S.Ct. 2520, 2526, 96 L.Ed.2d 426 (1987); Byrd, 470 U.S. at 221, 105 S.Ct. at 1242. Wonted considerations of administrative efficacy and the like do not weigh in this unique balance; the Act “requires piecemeal resolution when necessary to give effect to an arbitration agreement.” Moses H. Cone Memorial Hospital v. Mercury Const. Corp., 460 U.S. 1, 20, 103 S.Ct. 927, 939, 74 L.Ed.2d 765 (1983) (emphasis in original).
Here, there are two separate agreements, involving somewhat different parties. Both agreements contain arbitral • clauses and are, concededly, subject to the Act. Neither agreement provides for consolidation. Absent such a provision, the duty rigorously to enforce the agreements “in accordance with the terms thereof,” 9 U.S.C. § 4, does not allow us to substitute our judgment for that of the parties and order the proceedings consolidated. Accord Del E. Webb Const. v. Richardson Hospital Auth., 823 F.2d 145, 150 (5th Cir.1987); Weyerhaeuser Co. v. Western Seas Shipping Co., 743 F.2d 635, 636-637 (9th Cir.), cert. denied, 469 U.S. 1061, 105 S.Ct. 544, 83 L.Ed.2d 431 (1984); Ore & Chemical Corp. v. Stinnes Interoil, Inc., 606 F.Supp. 1510, 1512-1515 (S.D.N.Y.1985).1 Nor can the happenstance that a state has a law allowing consolidation — or mandating it, for that matter — command a different result.
I need not paint the lily. Consolidation is an action which can have important consequences, especially where — as here — the parties and issues are not identical. It is a course which, in cases falling within the ambit of the Federal Arbitration Act, must be left to the parties’ negotiations. By fashioning an arbitral clause which omits reference to consolidation, the parties have made a choice. By imposing consolidation ab extra, the majority trumps that choice. Rather than order the parties to hold the *10arbitration to which they consented, as the Act suggests, the court disrupts the negotiated risk/benefit allocation and directs them to proceed with a different sort of arbitration. Perhaps the consolidated arbitration will prove to be better conceived, or more efficient — but it is not what the parties agreed to undertake.
There is a second reason why my colleagues’ decision strikes me as wrong. In leaving the dimensions of the changed bargain to the vagaries of state law, the majority demeans the quintessentially federal nature of the rule of decision. See Perry, 107 S.Ct. at 2527 n. 9. In my mind, judicial recourse to a salmagundi of differing state arbitration laws countervails the objectives of the Federal Arbitration Act. Put another way, superimposing Massachusetts' pro-consolidation policy on the expressed wishes of the contracting parties unduly exalts state law and, in the process, subverts the concept of “creatpng] a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.” Moses H. Cone Memorial Hospital, 460 U.S. at 24, 103 S.Ct. at 865. See also Mitsubishi Motors v. Soler Chrysler-Plymouth, 473 U.S. 614, 625, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985) (same). In my estimation, Congress did not intend that the state-law camel could so obtrusively stick its nose into the federal-law tent. See generally Southland Corp. v. Keating, 465 U.S. 1, 13, 104 S.Ct. 852, 859, 79 L.Ed.2d 1 (1984) (Congress “contemplated a broad reach of the Act, unencumbered by state-law constraints”); Kroog v. Mait, 712 F.2d 1148, 1154 n. 5 (7th Cir.1983) (“there is no indication that Congress has chosen to temper the imperatives of the Federal Arbitration Act with respect for state policies regarding informal dispute resolution”) (emphasis in original), cert. denied, 465 U.S. 1007, 104 S.Ct. 1001, 79 L.Ed.2d 233 (1984).
The Federal Arbitration Act necessitates that we enforce the parties’ bargain as they wrote it — nothing more. Neither the language of the statute nor the decisions of the Supreme Court leave the door ajar for reshaping the bargain based on state law. Because I think that the district court correctly gauged the impropriety of ordering consolidation absent a provision to that effect in the agreements, I would affirm the judgments below.2

. In Ore & Chemical Corp., the district court within the Second Circuit expressly declined to follow the decision in Compania Espanola de Petroleos, S.A. v. Nereus Shipping, S.A., 527 F.2d 966 (2d Cir.1975), cert. denied, 426 U.S. 936, 96 S.Ct. 2650, 49 L.Ed.2d 387 (1976)—a decision upon which my brethren rely. Judge Edelstein termed Nereus "no longer good law” and “contrary to recent Supreme Court pronouncements on the scope of the Federal Arbitration Act.” 606 F.Supp. at 1512. I agree.

. Fed.R.Civ.P. 42(a) does not compel a contrary result. That procedural rule provides for consolidation “[w]hen actions ... are pending before the court...." Id. Palpably, the two sets of arbitration proceedings were not triable to, or pending before, the district court on the merits. Accordingly, Rule 42(a) does not empower their consolidation. See Ore & Chemical Corp., 606 F.Supp. at 1514-15 & n. 3.