Green v. Ameritech Corp ( 2000 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0006P (6th Cir.)
File Name: 00a0006p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
;

DANIEL V. GREEN, et al.,

Plaintiffs-Appellees,


No. 98-2176
v.

>
AMERITECH CORPORATION 


and AMERITECH SERVICES,
Defendants-Appellants. 
INC.,

1
Appeal from the United States District Court
for the Eastern District of Michigan at Flint.
No. 93-40535—Paul V. Gadola, District Judge.
Argued: October 26, 1999
Decided and Filed: January 6, 2000
Before: JONES, MOORE, and GILMAN, Circuit Judges.
_________________
COUNSEL
ARGUED: Thomas G. Kienbaum, KIENBAUM,
OPPERWALL, HARDY & PELTON, Birmingham,
Michigan, for Appellants. Rudy J. Huizenga, HUIZENGA &
HERGT, Detroit, Michigan, for Appellees. ON BRIEF:
1
2 Green, et al. v. Ameritech Corp., et al. No. 98-2176
Thomas G. Kienbaum, Noel D. Massie, KIENBAUM,
OPPERWALL, HARDY & PELTON, Birmingham,
Michigan, for Appellants. Rudy J. Huizenga, HUIZENGA &
HERGT, Detroit, Michigan, for Appellees.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. In this appeal
defendants-appellants Ameritech Services, Inc. and
Ameritech Corp. (hereinafter referred to collectively as
“Ameritech”) challenge an order of the district court vacating
an arbitral award and remanding the case to a new arbitrator
to be selected by the parties. The underlying arbitration
involved plaintiff-appellee Daniel Green’s state law claims of
age and race discrimination and retaliation. The district court
found that the arbitrator had exceeded his powers by failing
sufficiently to explain his decision with respect to each of the
plaintiff’s theories, as the arbitration agreement required, and
it therefore vacated the award. Finding no ambiguity in the
award, the district court refused to remand the matter to the
original arbitrator for clarification, and instead remanded to
a new arbitrator.
We conclude that although the arbitrator’s opinion was
minimal, it was nevertheless adequate to satisfy the terms of
the agreement. Accordingly, we REVERSE and REMAND
for reinstatement of the arbitral award. Furthermore, we note
that if the arbitrator’s explanation had been inadequate, the
proper remedy would have been a remand to the same
arbitrator for clarification.
I. BACKGROUND
This case originated as a suit brought in state court by
Daniel V. Green, Rhoda A. Giebel, Ruth A. Boyd, and Linda
L. Vincenti against their former employer, Ameritech
Services, Inc., and its parent corporation, Ameritech Corp.,
alleging discrimination under Michigan’s Elliott-Larsen Civil
18 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 3
functus officio doctrine.9 The purpose of this exception is to Rights Act, MICH. COMP. LAWS ANN. § 37.2101 et seq. (West
permit the arbitrator to complete an assigned task, and in this 1985 & Supp. 1999). Ameritech removed the action to the
case the district court adjudged the arbitrator’s task United States District Court for the Eastern District of
incompletely executed. Remanding to Arbitrator Googasian Michigan based on diversity of citizenship.
under these circumstances would not implicate any of the
concerns underlying the functus officio doctrine, as he would Before trial, the parties entered into an arbitration
simply be completing his duties by clarifying his reasoning, agreement. The following provisions of the arbitration
not reopening the merits of the case. Cf. Teamsters Local 312 agreement are particularly relevant to this appeal:
v. Matlack, Inc., 118 F.3d 985, 992 (3d Cir. 1997)
(“[W]hether a case falls within one of these [doctrinal 1. DISMISSAL OF CASE:
exceptions] must be considered in light of the underlying
rationale for the modern application of functus officio.”). A stipulation dismissing Case No. 93-CV-73764-DT
Therefore, if the district court were correct in its conclusion with prejudice shall be filed after (1) this Agreement
that Arbitrator Googasian failed to explain his award, the has been executed and (2) Plaintiffs have filed briefs
proper remedy would have been a remand to the same in opposition to all of Defendants’ motions now
arbitrator for clarification. We emphasize, however, that in pending before the Court.
Part II.B. we have concluded that Arbitrator Googasian
minimally satisfied the explanation requirement stated in the 2. SELECTION OF ARBITRATOR:
arbitration agreement; accordingly, no remand to any The parties agree that George Googasian of
arbitrator is warranted in this case. Bloomfield Hills, Michigan, shall be retained as the
III. CONCLUSION arbitrator.
For the foregoing reasons, we REVERSE the order of the ....
district court and REMAND for reinstatement of the arbitral 10. TIME FOR AWARD: The arbitrator shall issue an
award. award within twenty-one (21) days from the date set
for filing of post arbitration briefs (if such briefs are
filed) or within twenty-one (21) days from the last
date of testimony. The arbitrator’s award shall be
accompanied by an opinion which explains the
arbitrator’s decision with respect to each theory
advanced by each Plaintiff and the arbitrator’s
calculation of the types of damages, if any, awarded
to each Plaintiff.
11. AWARD FINAL AND BINDING: The award of the
arbitrator shall be considered final and binding and
9
Remand on this basis would be authorized only because the parties’ judgment upon the award may be entered in the
agreement imposed a duty of explanation on the arbitrator. We stress that United States District Court for the Eastern District
in the ordinary case remand for the purpose of having the arbitrator clarify of Michigan, Southern Division. Any challenge to
his reasoning would be inappropriate.
4 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 17
the award shall be made only for the reasons submission has been fully executed, an ambiguity arises
enumerated in section 10 of the Federal Arbitration which the arbitrator is entitled to clarify.” La Vale Plaza, 378
Act [(hereinafter “FAA”)], 9 U.S.C. §10, and must F.2d at 573; see also IV MACNEIL, SPEIDEL & STIPANOWICH
be filed within fourteen (14) days of the award. If a § 42.2.4.1, at 42:11 (noting that arbitrators have the authority
party challenges the award and its challenge is “to correct mistakes apparent on the face of the award, decide
rejected by federal courts, that party shall pay costs issues undecided by the award, and clarify ambiguity
and reasonable attorney fees incurred by the respecting the completeness of the award” (footnotes
opposing party in defending the challenge. Nothing omitted)).
in this section implies that the arbitrator’s factual
findings or rulings on admission of evidence shall be In the instant case, the district court concluded, incorrectly
grounds for challenging the award. in our view, that Arbitrator Googasian breached the
arbitration agreement because he failed fully to execute his
.... obligation to explain his award, and it refused to remand.
Courts usually remand to the original arbitrator for
14. APPLICABILITY OF FEDERAL ARBITRATION clarification of an ambiguous award when the award fails to
ACT: This Agreement is made pursuant to and is address a contingency that later arises or when the award is
governed by the Federal Arbitration Act, 9 U.S.C. susceptible to more than one interpretation. See, e.g., Glass,
§1 et seq. Molders, Pottery, Plastics & Allied Workers Int’l Union,
Local 182B v. Excelsior Foundry Co., 56 F.3d 844, 847 (7th
Joint Appendix (hereinafter “J.A.”) at 25-29 (Arbitration Cir. 1995) (holding that uncertainty in an arbitration award
Agreement). On July 25, 1996, in accordance with the about which party would pay for the employee’s rehabilitation
arbitration agreement, the district court dismissed the action justified the arbitrator’s extension of the deadline fixed in the
with prejudice, and the case proceeded to arbitration. When original award, and explaining that this question “can fairly be
the arbitration began, all four plaintiffs were parties to the characterized as ‘interpretive,’ allowing [the plaintiff-
proceeding; within a few days, however, all plaintiffs except appellant] to crawl though the loophole in the doctrine of
Green settled. functus officio for clarification or completion, as distinct from
alteration, of the arbitral award”); Colonial Penn Ins. Co. v.
The parties filed their post-arbitration briefs on May 5, Omaha Indem. Co., 943 F.2d 327, 335 (3d Cir. 1991) (“[T]he
1997. On May 20, 1997, Arbitrator Googasian wrote a letter district court would be authorized to remand so that the
to Green’s counsel stating that he had reviewed the case and arbitrators themselves could clarify their intent as to the
“would request the opportunity to discuss the matter with remedy awarded.”); Courier-Citizen Co. v. Boston
each counsel privately before we move forward.” J.A. at 86 Electrotypers Union No. 11, 702 F.2d 273, 279 (1st Cir.
(Letter from Googasian to Huizenga). In his district court 1983) (holding that an arbitrator did not run afoul of the
action seeking to vacate the arbitrator’s decision, Green functus officio doctrine when he issued a second arbitration
explained that in July of 1997, Arbitrator Googasian award; the first award was incomplete and “the second award
“indicated to the Plaintiff he wanted to settle the case, he had simply fleshed out the remedy announced initially”).
not yet made a decision in the case but was having a hard time
finding discrimination.” J.A. at 58 (Appeal of Arbitrator’s While a failure fully to explain an award does not leave
Ruling). In a letter dated January 14, 1998, Green’s counsel such an interpretive gap, we believe that it would nevertheless
wrote to Arbitrator Googasian, stating that the defendants had authorize a remand based on this third exception to the
indicated that they were not interested in settling and
16 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 5
original arbitrator on the doctrine of functus officio. Black’s inquiring when a decision would issue. J.A. at 94 (Letter
Law Dictionary explains that the term means “[h]aving from Huizenga to Googasian). The arbitrator did not respond
fulfilled the function, discharged the office, or accomplished to this letter, nor did he respond to subsequent letters by both
the purpose, and therefore of no further force or authority.” parties. On May 1, 1998, Green filed a “Motion to Remove
BLACK’S LAW DICTIONARY 673 (6th ed. 1990); see also III Arbitrator and Reinstate Case to Federal Court.” In the
MACNEIL, SPEIDEL & STIPANOWICH § 37.6.1.1, at 37:25 (“In motion, Green alleged that Arbitrator Googasian’s failure to
most cases arbitrators’ appointments continue until they have issue a timely opinion was a breach of the arbitration
heard the case, made a final award, and disclosed it to both agreement, and he requested that the district court remove
parties. At this time their task is performed, their duties under Arbitrator Googasian and appoint a new arbitrator, or in the
the arbitration agreement are discharged, and their arbitral alternative reinstate the case and allow it to proceed to trial.
authority is at an end.”). The Third Circuit has explained:
“The policy which lies behind this [doctrine] is an Before the district court ruled on Green’s motion, Arbitrator
unwillingness to permit one who is not a judicial officer and Googasian rendered his opinion in favor of Ameritech. The
who acts informally and sporadically, to re-examine a final opinion itself is six pages long. It sets forth the plaintiff’s
decision which he has already rendered, because of the claims of age and race discrimination and retaliation, and it
potential evil of outside communication and unilateral focuses primarily on a description of the “Corporate Resizing
influence which might affect a new conclusion.” La Vale Process,” or “CRESP” process, which allegedly operated in
Plaza, Inc. v. R.S. Noonan, Inc., 378 F.2d 569, 572 (3d Cir. a discriminatory manner. The opinion concludes as follows:
1967).
AGE DISCRIMINATION
The doctrine of functus officio contains several exceptions.
This court has noted: “[The] rule [of functus officio] was Considering all the evidence, the Arbitrator finds that
based on the notion that after an arbitrator has rendered an Plaintiff Daniel Green has not met his burden of proof
award, his contractual powers have lapsed and he is ‘functus that the decision to terminate his employment in
officio.’ This rule, however, has its limits. A remand is November of 1992, constituted age discrimination in
proper, both at common law and under the federal law of violation [of the] Elliott-Larsen Civil Rights Act.
labor arbitration contracts, to clarify an ambiguous award or
to require the arbitrator to address an issue submitted to him RACE DISCRIMINATION
but not resolved by the award.” Industrial Mut. Ass’n, Inc. v.
Amalgamated Workers, Local No. 383, 725 F.2d 406, 412 n.3 Considering all the evidence, the Arbitrator finds that
(6th Cir. 1984) (citations omitted). For this proposition, the Plaintiff Daniel Green has not met his burden of proof
Industrial Mutual court cited La Vale Plaza, which contains that the decision to terminate his employment in
a more detailed discussion of the exceptions. The La Vale November of 1992, constituted race discrimination in
Plaza court explained that (1) an “arbitrator can correct a violation [of the] Elliott-Larsen Civil Rights Act.
mistake which is apparent on the face of his award”; (2) RETALIATION
“where the award does not adjudicate an issue which has been
submitted, then as to such issue the arbitrator has not Considering all the evidence, the Arbitrator finds that
exhausted his function and it remains open to him for Plaintiff Daniel Green has not met his burden of proving,
subsequent determination”; and (3) “[w]here the award, in accordance with the standards set under the Elliott-
although seemingly complete, leaves doubt whether the Larsen Civil Rights Act, that retaliation for protected
6 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 15
activity was a factor which made a difference in the Appellee’s Br. at 23-24. However, the arbitrator was not
decision to terminate his employment in November of required by the agreement “fully” to set forth the facts and his
1992. The Arbitrator finds no evidence to support the conclusions; the agreement simply called for an explanation.
Plaintiff’s position that retaliation was, in any way, a Although Arbitrator Googasian’s opinion was brief and
factor in Plaintiff Daniel Green’s termination. conclusory, he did “explain” why Ameritech prevailed on
each theory, namely, that Green had not met his burden of
J.A. at 44-45 (Arbitrator’s Op.). proving that the decision was discriminatory or retaliatory.
On June 9, 1998, Green filed an “Appeal of Arbitrator’s If parties to an arbitration agreement wish a more detailed
Ruling” in the District Court for the Eastern District of arbitral opinion, they should clearly state in the agreement the
Michigan1 under the same case number as the original action. degree of specificity required. In addition, the use of familiar
Green asked the district court to vacate Arbitrator2 legal terms would serve to ensure that reviewing courts have
Googasian’s ruling pursuant to 9 U.S.C. § 10(a)(3) and (4) a standard to guide their analysis. In the instant case,
on the grounds that: (1) Arbitrator Googasian’s decision was Arbitrator Googasian’s opinion was certainly minimal. The
in breach of the agreement because it was not issued within arbitration agreement, however, contained only the inexact
twenty-one days of the filing of post-arbitration briefs; (2) requirement of an explanation as to each theory, and we find
Arbitrator Googasian exceeded his powers by issuing a it significant that the arbitrator’s opinion provided a separate
decision after being notified that he was in breach; and (3) discussion regarding each of the plaintiff’s theories and
explained, albeit briefly, the reasons for denying recovery on
each one.
1
This challenge was timely under the agreement, as Ameritech agreed
to allow the appeal period for the arbitrator’s decision to begin running on C. The Remedy
May 26, 1998, rather than May 7, which was the date of the award.
Ameritech’s final contention is that the district court erred
2
Section 10 provides in relevant part: in declining to remand to Arbitrator Googasian for
supplementation and clarification and in choosing instead to
(a) In any of the following cases the United States court in vacate the award and remand to a new arbitrator to be selected
and for the district wherein the award was made may make an by the parties. Even were we to conclude that the arbitrator’s
order vacating the award upon the application of any party to the
arbitration — opinion did not satisfy the contractual requirement of an
explanation of each of the plaintiff’s theories, we could not
.... affirm the district court’s order to remand to a new arbitrator.
(3) Where the arbitrators were guilty of misconduct in In its analysis, the district court misconstrued the governing
refusing to postpone the hearing, upon sufficient cause
shown, or in refusing to hear evidence pertinent and law. The district court believed that remand to Arbitrator
material to the controversy; or of any other misbehavior by Googasian was not an option; it stated that “[r]emand is
which the rights of any party have been prejudiced. available when an arbitration award is ‘ambiguous.’” J.A. at
130 (Dist. Ct. Op.). Finding that Arbitrator Googasian’s
(4) Where the arbitrators exceeded their powers, or so award was not ambiguous, the district court concluded that it
imperfectly executed them that a mutual, final, and definite could not remand for an explanation. As both parties noted
award upon the subject matter submitted was not made.
in their briefs, the district court must have based its
9 U.S.C. § 10. conclusion that it lacked the authority to remand to the
14 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 7
meanings.” New Elliott Corp. v. MAN Gutehoffnungshütte Arbitrator Googasian breached the agreement by not
AG, 969 F. Supp. 13, 15 (S.D.N.Y. 1997). In addition, the explaining the decision with respect to each theory advanced
arbitration panel in Western Employers actually refused to by the plaintiff.
make the requisite findings and conclusions, instead
questioning whether they were bound by the parties’ On August 6, 1998, the district court issued an opinion
agreement; the panel did not include any findings or vacating Arbitrator Googasian’s award. With regard to
conclusions. Unlike in the present case where the parties Green’s first claim, the district court found that Green had
dispute whether Arbitrator Googasian’s statements waived his right to object to the timeliness of Arbitrator
“explained” his decision, the sufficiency of the panel’s Googasian’s opinion because he went along with Arbitrator
opinion in Western Employers does not seem to have been in Googasian’s settlement plans, and found in the alternative that
doubt. Green was not prejudiced by the delay. As to Green’s claim
that Arbitrator Googasian improperly issued a decision in
Because “explain” is not a standard legal term, we are left favor of Ameritech after Green’s motion for removal, the
with little guidance as to how to determine whether the district court found that the arbitrator was not biased against
arbitrator explained his decision so as to meet the Green. The court went on to state: “In fact, it seems to this
requirements of the agreement.8 To resolve this question, we court that if the arbitrator was biased at all, he was biased in
must examine closely the arbitrator’s opinion. In his opinion, favor of the plaintiff. The arbitrator took the unusual step of
the arbitrator set forth facts pertaining to the dispute and a attempting to obtain a settlement for the plaintiff after the
brief discussion of each of the three claims. With regard to arbitration proceedings.” J.A. at 128 n.2 (Dist. Ct. Op.). The
age and race discrimination, the arbitrator wrote that district court did find merit, however, in Green’s third claim
considering all of the evidence, Green had not met his burden that the arbitrator exceeded his authority by failing to explain
of proof that the decision to terminate his employment his decision.3 The court reasoned: “Here, the arbitrator did
constituted discrimination. The arbitrator wrote slightly more not ‘explain’ his decision with respect to each one of
about the retaliation claim, stating that Green had not met his plaintiff’s theories, as the term ‘explain’ is commonly
burden of proving that retaliation for protected activity was a understood. Rather, the arbitrator merely announced his
factor in the decision to terminate his employment. Green decision with respect to each one of plaintiff’s theories. The
takes issue with the brevity and the conclusory nature of the arbitrator’s opinion is totally conclusory and insufficient
arbitrator’s opinion: according to the terms of the Arbitration Agreement.” J.A. at
129 (Dist. Ct. Op.). The district court therefore vacated the
The arbitrator did not fully set forth the facts of the case arbitration agreement and remanded the matter to a new
presented by the Plaintiff or the Defendants. The arbitrator to be selected by the parties. The court refused
arbitrator did not fully set forth the legal theories of the Ameritech’s suggestion that the award should instead be
Plaintiff and the Defendants. The arbitrator did not remanded to Arbitrator Googasian for clarification, finding
indicate which legal theories he would follow and which that the award was not ambiguous.
he would not follow and why. The arbitrator did not
apply the facts to the law of the case.
8
Ordinarily, of course, “[a]rbitrators have no obligation to the court 3
to give their reasons for an award.” United Steelworkers v. Enterprise Although the district court cited 9 U.S.C. § 10(a)(3), its decision
Wheel & Car Corp., 363 U.S. 593, 598 (1960). appears to have been based in fact on § 10(a)(4).
8 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 13
Ameritech filed a motion for reconsideration in the district id.; Western Employers apparently erroneously believed that
court, claiming that “the Court was wrong in concluding that the inclusion of such findings would entitle it to greater
a more detailed opinion should not be requested from judicial scrutiny in the event that the arbitral award were
Arbitrator Googasian.” J.A. at 143 (Mot. for Recons.). In contested. See id. at 261. In the course of the hearings before
support of its claim that submission of the action to an the three-member panel constituted by NASD, Western
arbitrator other than Googasian impermissibly rewrote the Employers requested findings of fact and conclusions of law
agreement, Ameritech attached the affidavits of two of its several times. In response to one of these requests, Jefferies’s
attorneys, who explained that the selection of Arbitrator counsel informed the panel that Western Employers could use
Googasian was crucial to Ameritech’s decision to submit to such findings for purposes of collateral estoppel in a related
binding arbitration. J.A. at 156-61 (Affs. of Lichtenstein and class action pending against Jefferies. Although Western
Kienbaum). The district court denied this motion, and Employers argued that the panel was required to make such
Ameritech appealed. findings pursuant to the agreement, “[t]he Chairman of the
panel responded that the panel was not bound by an
II. ANALYSIS agreement between Jefferies and Western [Employers].” Id.
at 260. The panel eventually rendered an award in favor of
A. District Court’s Subject Matter Jurisdiction Jefferies on all disputed issues, and it “did not include any
findings of fact and conclusions of law in its award.” Id.
Ameritech first challenges the subject matter jurisdiction of
the district court. This court applies a de novo standard of The Ninth Circuit noted that it had “traditionally vacated
review to questions of subject matter jurisdiction. See arbitration awards under [§ 10(d)7] in cases where the
Friends of the Crystal River v. EPA, 35 F.3d 1073, 1077 (6th arbitrators [have] somehow alter[ed] the parties’ contractual
Cir. 1994). obligations.” Id. at 262. While the provision is most
commonly violated when arbitrators rule on issues not
Ameritech’s jurisdictional argument is that, since the submitted to arbitration, the Ninth Circuit concluded that
district court dismissed the case on July 25, 1996, pursuant to “arbitrators can also ‘exceed their powers’ under 9 U.S.C.
the parties’ agreement to arbitrate, there was “no open § 10(d) when they fail to meet their obligations, as specified
proceeding below” through which Green could challenge the in a given contract, to the parties.” Id. Finding a violation,
arbitrator’s ruling. Appellant’s Br. at 17. Ameritech does not the court vacated the arbitrator’s award.
contend that a proper challenge to Arbitrator Googasian’s
decision could not have been brought. Its contention is that, Western Employers, however, is significantly different from
rather than instituting a new action under § 10 of the FAA in the instant case. First, the standard of explanation called for
order to challenge the arbitral award, Green instead in Western Employers is clear — the arbitration panel was
improperly filed an appeal in a dismissed case. required to make findings of fact and conclusions of law —
whereas the agreement in the present case calls simply for an
Green argues that the fact that a dismissal rather than a stay explanation without specifying what that means. Unlike the
was issued is of no importance, citing the Fifth Circuit’s term “explain,” “‘[f]indings of fact’ and ‘conclusions of law’
decision in Alford v. Dean Witter Reynolds, Inc., 975 F.2d are familiar terms in legal parlance with reasonably plain
1161 (5th Cir. 1992). In Alford, which involved an appeal of
a motion to compel arbitration, the plaintiff-appellant argued
that the district court erred in dismissing her claims with
prejudice rather than staying them pursuant to § 3 of the FAA. 7
Section 10(a)(4) was formerly § 10(d).
12 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 9
arbitration award, we review factual findings for clear error See id. at 1164. The Fifth Circuit rejected the claim,
and questions of law de novo. See Glennon v. Dean Witter explaining:
Reynolds, Inc., 83 F.3d 132, 135 (6th Cir. 1996); see also
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947- The weight of authority clearly supports dismissal of the
48 (1995) (agreeing with the majority of circuits that review case when all of the issues raised in the district court
of a district court decision upholding an arbitration award must be submitted to arbitration. As stated in Sea-Land
“should proceed like review of any other district court [Service, Inc. v. Sea-Land of Puerto Rico, Inc., 636
decision finding an agreement between parties, e.g., accepting F.Supp. 750 (D. P.R. 1986)]:
findings of fact that are not ‘clearly erroneous’ but deciding Although we understand that plaintiff’s motion to
questions of law de novo”). The question whether an compel arbitration must be granted, we do not believe
arbitrator has exceeded his authority is a question of law that the proper course is to stay the action pending
we review de novo. See MidMichigan Reg’l Med. Ctr.-Clare arbitration. Given our ruling that all issues raised in
v. Professional Employees Div. of Local 79, Serv. Employee this action are arbitrable and must be submitted to
Int’l Union, 183 F.3d 497, 501 (6th Cir. 1999). The district arbitration, retaining jurisdiction and staying the action
court’s determination that Arbitrator Googasian did not will serve no purpose. Any post-arbitration remedies
perform in accordance with the arbitration agreement involves sought by the parties will not entail renewed
an interpretation of the meaning of “explain,” and as such is consideration and adjudication of the merits of the
also reviewed de novo. See, e.g., Boyer v. Douglas controversy but would be circumscribed to a judicial
Components Corp., 986 F.2d 999, 1003 (6th Cir. 1993) review of the arbitrator’s award in the limited manner
(“[C]ontract interpretation is generally ‘a question of law not prescribed by law.
subject to the clearly erroneous standard’ . . . .” (quoting
Weimer v. Kurz-Kasch, Inc., 773 F.2d 669, 671 (6th Cir. Alford, 975 F.2d at 1164 (quoting Sea-Land Service, Inc., 636
1985))). F.Supp. at 757) (citations omitted). Although it is certainly
true that dismissal with prejudice of a plaintiff’s
In ruling that Arbitrator Googasian exceeded his authority discrimination claims has no effect upon a subsequent
by failing to explain sufficiently his decision,6 the district challenge to an arbitrator’s ruling, which is an entirely
court relied heavily on the Ninth Circuit’s decision in Western separate action, Green’s argument does not address
Employers Insurance Co. v. Jefferies & Co., 958 F.2d 258 Ameritech’s objection to the procedure used to challenge
(9th Cir. 1992). In that case, the parties executed a Limited Arbitrator Googasian’s ruling.
Trading Authorization that included a standard agreement to
arbitrate any disputes under the rules of the National In order to challenge an arbitrator’s decision under the FAA
Association of Securities Dealers (“NASD”). See id. at 259. when there is no pending proceeding in the district court, the
At the request of Western Employers, “the parties altered the moving party must establish subject matter jurisdiction.
agreement to require arbitrators to accompany any award with Ameritech is correct in asserting that the FAA does not
a statement of their findings of fact and conclusions of law, ” independently confer subject matter jurisdiction on the district
court. See Ford v. Hamilton Invs., Inc., 29 F.3d 255, 257 (6th
Cir. 1994) (“It is well established . . . that § 10 of the
6
For purposes of this opinion, we shall assume without deciding that Arbitration Act does not constitute a grant of subject matter
an arbitrator can exceed his powers in violation of § 10(a)(4) by failing to jurisdiction.”); IV IAN R. MACNEIL, RICHARD E. SPEIDEL &
fulfill his obligations, as opposed to by overstepping the bounds of his THOMAS J. STIPANOWICH, FEDERAL ARBITRATION LAW
authority.
10 Green, et al. v. Ameritech Corp., et al. No. 98-2176 No. 98-2176 Green, et al. v. Ameritech Corp., et al. 11
§ 38.1.4, at 38:7. However, in the case at bar there was a error did not bar the district court’s exercise of subject matter
basis for subject matter jurisdiction in the district court jurisdiction. The district court clearly had diversity
pursuant to 28 U.S.C. § 1332. Additionally, the arbitration jurisdiction over the action. While § 10 limits the scope of a
agreement recognizes the district court’s subject matter district court’s jurisdiction to review arbitral awards to four
jurisdiction with regard to enforcement of and challenges to specified grounds, Green’s challenge fell into one of the
the arbitration award: “The award of the arbitrator shall be categories listed in § 10. The district court’s jurisdiction to
considered final and binding and judgment upon the award review Green’s challenge was therefore not limited by § 10 or
may be entered in the United States District Court for the the parties’ agreement, which contemplated review pursuant
Eastern District of Michigan, Southern Division. Any to § 10. In these circumstances, the district court properly
challenge to the award shall be made only for the reasons exercised subject matter jurisdiction, and we have jurisdiction
enumerated in section 10 of the Federal Arbitration Act . . . .” to review the district court’s decision pursuant to 9 U.S.C.
J.A. at 28 (Arbitration Agreement). § 16(a)(1)(E) and 28 U.S.C. § 1291.
Ameritech essentially argues that the procedure employed B. Whether Arbitrator Googasian Exceeded His Powers
by Green to challenge the arbitrator’s decision deprived the Under 9 U.S.C. § 10(a)(4)
district court of the subject matter jurisdiction it otherwise
would have had. Rather than filing a “new” motion under the The district court found that Arbitrator Googasian exceeded
FAA, Green filed an “appeal” of the arbitrator’s decision his powers because he failed to explain his decision as called
using the case4 number of the dismissed case, and naming the for by the arbitration agreement. The district court concluded
same judge. Ameritech contends that because Green that the arbitrator “merely announced his decision with
proceeded under the old case, he also failed to reestablish respect to each one of plaintiff’s theories,” and that the
diversity jurisdiction. Although the proper procedure for opinion was “insufficient according to the terms of the
initiating a proceeding under § 10 when there is no prior Arbitration Agreement.” J.A. at 129 (Dist. Ct. Op.). When
jurisdictional basis is to file a motion to vacate the award that reviewing a district court’s decision to confirm or vacate an
sets forth the facts establishing jurisdiction,5 Green’s pleading
motion challenges this, in which case the basis of the challenge
4 should be set out;
The “appeal” was eventually renumbered and assigned to a different (4) a statement that the arbitrators made an award in favor
district judge because the original judge recused himself. of petitioner on a given date and setting out the essential terms
5 of the award;
Section 10 of the FAA provides that a party seeking to vacate the (5) a statement of the basis or bases for challenging the
award should make an “application,” and § 6 states that “[a]ny application award, relating each to the section(s) of FAA §10 and/or FAA
to the court hereunder shall be made and heard in the manner provided by §11 upon which the challenge is based; and
law for the making and hearing of motions.” 9 U.S.C. § 6. Therefore, a (6) a request that the court vacate the award pursuant to
party should initiate a proceeding under § 10 by filing a motion to vacate, FAA §10, or where modification is sought, that the court modify
not a complaint. See IV MACNEIL, SPEIDEL & STIPANOWICH § 38.4.3.1, the award in particular respects pursuant to FAA §11, and
at 38:60. A motion to vacate should include the following information, confirm it as so modified. In the latter case the motion should
unless the information is already before the court: request that that [sic] judgment be entered on the award in favor
(1) The name and address of the petitioner and respondent; of petitioner including interest and costs. Where the award is for
(2) facts establishing the jurisdiction of the court; monetary relief, the amount requested should be the amount of
(3) a statement that the parties entered into a contract the award plus interest and costs.
containing an arbitration clause on a given date, unless the Id. § 38.4.3.1, at 38:61 to 38:62 (footnotes omitted).