Federal Arbitration Act Does Not Provide Basis For Jurisdiction To Review Denial Of Stay
SHERWOOD v. MARQUETTE TRANSPORTATION CO. (November 23, 2009)
Bluegrass Marine employs Michael Sherwood as a deckhand on one of its Mississippi River vessels. Sherwood alleged that he was injured during his employment. He brought suit under the Jones Act. Bluegrass sought a stay in favor of arbitration, invoking a clause in Sherwood's employment contract that required all disputes to be arbitrated under the Illinois Uniform Arbitration Act. The court denied the stay, concluding that the Federal Arbitration Act (which does not apply to seamen) preempted the Illinois Act. Bluegrass appealed.
In their opinion, Chief Judge Easterbrook and Judges Evans and Williams dismissed for want of jurisdiction. The Court noted that Bluegrass relied on § 16 of the FAA, which authorizes interlocutory review of a refusal to stay an action under § 3 of the FAA. The Court concluded that § 16 could not provide a basis for jurisdiction since the FAA does not apply to seamen and because Bluegrass never sought or was denied a stay under § 3 of the Act. The Court also rejected Bluegrass' reliance on both the collateral order doctrine and § 1292 (as the denial of an injunction) as bases for an appeal. Although the Court denied the appeal, it did express its doubt regarding the correctness of the district court's preemption conclusion.
In 1996, WellPoint and John Hancock Life Insurance Company (Hancock) entered into a complex business transaction. The transaction was documented with a series of contracts, each of which contained an express arbitration clause. A dispute arose. WellPoint and Hancock both demanded arbitration. Pursuant to the arbitration procedure agreed upon, each appointed its own party arbitrator. When the party arbitrator’s could not agree on a third arbitrator, the AAA made the appointment, again as provided in the agreements. After over two years of extensive discovery and procedural disputes, WellPoint's party arbitrator resigned. Hancock objected but the panel, including Hancock's party arbitrator, approved the resignation. Hancock again objected when WellPoint proposed specific names for the vacancy. Hancock's party arbitrator proposed a compromise that WellPoint accepted -- and Hancock supported. Under the proposal, the panel suggested several candidates from which WellPoint could choose. Again, Hancock objected but also agreed that the replacement arbitrator met the prerequisites for service. The panel awarded WellPoint almost $30 million. WellPoint filed a petition to confirm the award -- Hancock cross-petitioned to vacate the award. The district court confirmed the award. Hancock appeals.
Glenn Williams was a wastewater treatment operator for Illinois-American Water Company ("IAWC"). IAWC discovered that Williams was operating without a required Illinois EPA license. Because it was Williams' second offense, it was punishable by termination. Instead of firing Williams, however, IAWC offered him a Last Chance Agreement ("LCA"). Under the LCA, Williams was suspended without pay for 30 days, he was required to obtain his license within six months, and he was required to repay the extra compensation he received as a result of IAWC's belief that he was licensed properly. The LCA also provided that failure to comply would result in Williams' immediate termination and any disputes regarding the agreement would be resolved through the collective bargaining agreement’s arbitration procedure. The United Food and Commercial Workers Union, which represented Williams, filed a grievance contesting the LCA's validity. When Williams failed to make repayment arrangements, IAWC terminated his employment. The union filed a second grievance. The grievances were consolidated and brought before an arbitrator. The arbitrator ruled against the union on the validity of the LCA but ordered Williams reinstated. He concluded that the termination was improper because of the pending, good faith challenge to the LCA itself. On review, the district court confirmed the arbitration award. The union appeals.