A-1 A-lectrician, Inc. v. Commonwealth Reit, 943 F. Supp. 2d 1073

Lessees are 16 small business tenants with 24 long-term leases for lots in an Oahu industrial estate; rents are set by ten-year resets with appraisal panels or arbitrators to determine fair rent.
Lessees seek to consolidate 24 separate appraisals into one proceeding; Lessors want independent appraisals for each lease.
The leases’ rent provisions contemplate appraisers, not arbitrators, and the parties dispute whether these appraisal provisions constitute arbitration agreements.
Historically, a tenants association negotiated rents in the 1980s-1990s, but participation was voluntary and not binding on all lessees; the Damon Estate Trustees could negotiate collectively with the association but could not force consolidation without all parties’ consent.
The Damon Estate sold the properties to Commonwealth REIT (and affiliates) in 2003; since then, Lessors have engaged in several consolidated arbitrations with Upper Mapunapuna tenants but not with Lower Mapunapuna tenants as a group.
The court stayed proceedings to allow limited discovery on whether the original lease parties intended consolidation or later amended agreements to permit consolidation, then later lifted the stay and refused consolidation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does FAA apply to these arbitration-type appraisals?	Lessees rely on FAA applicability due to interstate commerce reach.	Lessors contend FAA may not apply to purely state-law appraisal terms.	FAA applies if appraisal clauses are arbitration under Hawaii law.
Are the appraisal provisions arbitration agreements under Hawaii law?	Appraisal panels with final, binding decisions create arbitration.	Provisions lack explicit arbitration terms; cannot bind all tenants.	Yes, appraisal provisions are arbitration agreements under Hawaii law and FAA.
May the court decide consolidation of arbitrations?	Consolidation should be decided by court based on parties’ intent.	Consolidation is a matter for arbitrators unless parties agreed otherwise.	Court may decide consolidation only if the parties so agreed; here they did not.
Does Hawaii’s consolidation statute apply to pre-2002 agreements?	Statute should govern if applicable.	Statute precludes forced consolidation absent agreement; not applicable here.	Hawaii Consolidation Statute does not force consolidation absent agreement; FAA governs.
Was limited discovery appropriate to determine parties’ intent?	Limited discovery needed on original intent to consolidate.	Discovery should be limited or unnecessary given contract terms.	Limited discovery granted on intent to consolidate; evidence reviewed for intent.

Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (FAA enforcement of arbitration agreements according to terms)
Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (2003) (FAA covers more than interstate transactions; aggregate activity controls)
Wasyl, Inc. v. First Boston Corp., 813 F.2d 1579 (9th Cir. 1987) (Definition of arbitration under FAA controlled by state law when not inconsistent)
Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (Arbitration must be based on the parties’ agreement; no implied class arbitration)
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (Arbitration agreements enforced according to their terms; piecemeal litigation allowed)
AT&T Mobility LLC v. Concepcion, U.S. __, 131 S. Ct. 1740 (2011) (FAA preempts state rules inconsistent with enforcing arbitration agreements)
Portland Gen. Elec. Co. v. U.S. Bank Trust Nat’l Ass’n, 218 F.3d 1085 (9th Cir. 2000) (State-law definition of arbitration applied when not inconsistent with federal law)