Employers Ins. Co. of Wausau v. OneBeacon American Insurance
744 F.3d 25
1st Cir.2014Background
- Between 1966 and 1986 OneBeacon operated an MLEC Program issuing reinsurance contracts with various reinsurers including National Casualty and Wausau as participants.
- Wausau entered into MLEC Agreements with OneBeacon in 1973 and 1974 that mirrored OneBeacon's agreements with Swiss Re from 1975–1980.
- In 2007 OneBeacon sought arbitration against Swiss Re; the panel ruled for Swiss Re and a district court confirmed the award.
- In 2012 OneBeacon demanded arbitration with Wausau and National Casualty under the MLEC Agreements for the same or related claims; a consolidation agreement followed.
- Wausau and National Casualty then petitioned for declaratory relief that the prior Swiss Re arbitration award precluded the pending OneBeacon arbitration.
- The district court denied the petition, and Wausau appealed, challenging who should determine the preclusive effect of the prior arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether preclusive effect of a prior arbitration is arbitrable. | Wausau: federal court must decide preclusion after court-confirmed award. | OneBeacon: issue lies with arbitrator; court lacks exclusive preclusive authority post-confirmation. | Arbitrable; arbitrator may decide preclusion. |
| Whether the waiver doctrine applies to raise new arguments on appeal. | Wausau did not raise the waiver issue below. | OneBeacon: waiver prevents new arguments on appeal. | Waiver applies; argument not preserved. |
| Whether the FAA Section 13 confirms that court judgments and arbitrator determinations are distinct for preclusion purposes. | Preclusion issues are part of merits and should be arbitrated. | Judgment confirms arbitration but does not address merits for preclusion. | Yes, preclusion is generally arbitrable; court order confirms but does not control merits. |
Key Cases Cited
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (arbitration preclusion is arbitrable; merits not reviewed on confirmation)
- U.S. Fire Ins. Co. v. Nat'l Gypsum Co., 101 F.3d 813 (2d Cir. 1996) (preclusive effect of prior arbitration is arbitrable and must be arbitrated)
- Courier-Citizen Co. v. Boston Electrotypers Union No. 11, 702 F.2d 273 (1st Cir. 1983) (preclusive effect of arbitration determined through arbitration)
- Manganella v. Evanston Ins. Co., 700 F.3d 585 (1st Cir. 2012) (collateral estoppel requires examining prior arbitration details)
- Belco Petroleum Corp. v. National Union Fire Ins. Co., 88 F.3d 129 (2d Cir. 1996) (arbitration clause broad enough to cover disputes about prior arbitration)