Meierhenry Sargent LLP v. Bradley Williams ( 2021 )

United States Court of Appeals
For the Eighth Circuit
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No. 19-3323
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Meierhenry Sargent LLP, a South Dakota limited liability partnership
Plaintiff - Appellee
v.
Bradley Williams; Kerry Williams
Defendants - Appellants
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No. 19-3589
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Meierhenry Sargent LLP, a South Dakota limited liability partnership
Plaintiff - Appellee
v.
Bradley Williams; Kerry Williams
Defendants - Appellants
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Appeal from United States District Court
for the District of South Dakota - Sioux Falls
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Submitted: October 22, 2020
Filed: March 24, 2021
[Published]
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Before COLLOTON, GRASZ, and STRAS, Circuit Judges.
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PER CURIAM.
This is the second time that we have been asked to weigh in on this dispute
over attorney fees. This time, the Williamses would like us to overturn several
arbitration-related rulings made by the district court.1 We affirm the one decision
we can review and dismiss the remainder for lack of appellate jurisdiction.
I.
The first time around, we affirmed an interlocutory ruling that several
counterclaims were non-arbitrable. See Meierhenry Sargent LLP v. Williams, 915
F.3d 507, 510–12 (8th Cir. 2019). Interpreting the fee agreement between the
parties, we concluded that “[i]f what [the counterclaims] seek is to reduce or
eliminate the money the Williamses owe to the firm, the claims are arbitrable; if they
seek something else—like money from the firm—they are not.” Id. at 511–12. The
one “exception” was a breach-of-contract claim brought by the Williamses, which
was not before us on appeal. Id. at 511 n.2.
A dispute arose over that claim once the parties resumed arbitration.
Specifically, the firm asked the district court to rule, “consistent with its previous
[o]rder and the Eighth Circuit’s mandate,” that the Williamses could only arbitrate
their breach-of-contract claim to the extent the damages would reduce the fees owed
to the firm. The district court agreed and ruled that “[t]he parties are enjoined from
1
The Honorable Lawrence L. Piersol, United States District Judge for the
District of South Dakota.
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arbitrating counterclaims seeking damages that exceed the attorney[] fees claimed
by [the firm] in this matter.” (Emphasis added).
II.
The primary issue on appeal is whether the district court “improperly re-
wrote” its original order by enjoining the Williamses from seeking damages in
arbitration in excess of fees owed. Under the principles set out in the first appeal in
this case, we can review this decision as “an interlocutory order granting . . . an
injunction against an arbitration” under 9 U.S.C. § 16(a)(2). See Meierhenry Sargent
LLP, 915 F.3d at 509–10.
Though we can review it, we decline to overturn it. All the district court did
was clarify its original order, which it had the authority to do. See Fed. R. Civ. P.
60(a) (explaining that district courts “may correct a clerical mistake or a mistake
arising from oversight or omission whenever one is found in a judgment, order, or
other part of the record” (emphasis added)). The original order stated that the
counterclaims were arbitrable to the extent they reduced the amount the Williamses
owed to the firm, and the court clarified on remand that this restriction applied to the
breach-of-contract claim too. See Hartis v. Chicago Title Ins. Co., 694 F.3d 935,
950 (8th Cir. 2012) (explaining that the district court “has the power under Rule
60(a) to clarify and correct omissions in its judgment to reflect what the court
originally intended” (quotation marks omitted)). It did not abuse its discretion in
doing so. See United States v. Mansion House Ctr. N. Redev. Co., 855 F.2d 524,
527 (8th Cir. 1988) (per curiam) (reviewing a clarification for an abuse of
discretion).
Nor did the clarification “alter or amend anything” that we “expressly or
implicitly ruled on” the first time around. Hartis, 694 F.3d at 950 (quotation marks
omitted). To be sure, we observed that the district court had not limited the scope
of the damages available for the breach-of-contract claim. See Meierhenry Sargent
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LLP, 915 F.3d at 511 n.2. But we did so in the context of explaining why the issue
was not before us, so we could not have tied the court’s hands on remand. See id.
As for the three other issues that the Williamses have raised on appeal, we
lack jurisdiction to consider them. The first is a challenge to a stay that is technically
no longer in effect. With the conditions underlying the stay having now passed,
there is no relief for us to order, making it “the paradigm of a moot” issue. Video
Tutorial Servs., Inc. v. MCI Telecomms. Corp., 79 F.3d 3, 5 (2d Cir. 1996) (per
curiam) (addressing “[a]n interlocutory appeal from a temporary stay no longer in
effect”). There is also no reason to believe that there will be a similar stay imposed
in the future, meaning that it does not satisfy the capable-of-repetition-yet-evading-
review exception to mootness. See Stevenson v. Blytheville Sch. Dist. No. 5, 762
F.3d 765, 769 (8th Cir. 2014); see also Video Tutorial Servs., Inc., 79 F.3d at 6
(explaining that “speculat[ing]” that “lightning may strike” again is not enough).
We also lack jurisdiction over the remaining two issues, but for a different
reason. One is a challenge to the district court’s offhand remark during a hearing
that the arbitrators should be neutral. The other questions the court’s refusal to
acknowledge that the Williamses had properly filed several counterclaims. Neither,
however, is a “final decision[],” 28 U.S.C. § 1291, or one of the interlocutory orders
that we have the authority to immediately review, see, e.g., 9 U.S.C. § 16(a). Both,
in other words, lie beyond our jurisdiction.
III.
We accordingly dismiss the appeal in part, otherwise affirm the judgment of
the district court, and remand for further proceedings consistent with this opinion.
COLLOTON, Circuit Judge, concurring.
In retrospect, there is reason to doubt whether the district court properly
entered an injunction against arbitrating certain claims in response to Meierhenry
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Sargent’s original motion “to declare the scope of the arbitration proceedings.” R.
Doc. 17. As the Eleventh Circuit pointed out in Klay v. United Healthgroup, Inc.,
376 F.3d 1092 (11th Cir. 2004), “wrongful arbitration” is not a cause of action for
which a party may sue. Id. at 1098, 1112. The Federal Arbitration Act, 9 U.S.C.
§ 4, “permits a federal court to compel arbitration based on an arbitration clause in
a written contract, but does not permit a court to enjoin arbitration based on an
issue’s nonarbitrability.” Id. at 1099 n.8. In the first appeal, however, the parties
did not raise this precise issue, and the court did not identify it. The permissibility
of the district court’s original order is now the law of the case. Given that premise,
I concur that the district court on remand did not abuse its discretion in clarifying
the original order. That said, the district court going forward may consider whether
a cause of action adequately supports any further attempt to litigate over these
ongoing arbitration proceedings.
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