Marchison Capital Partners, L.P. v. Nuance Communications, Inc.
2014 U.S. App. LEXIS 14237
| 5th Cir. | 2014Background
- Nuance Communications acquired Vocada in 2007 for $24 million upfront and up to $21 million in Earnout Consideration, contingent on Veriphy earnings.
- The Earnout clause was subject to arbitration, culminating in a three-member panel finding fraud by Nuance but no damages to Vocada because the panel attributed Veriphy’s poor post-merger performance to factors other than Nuance’s misrepresentations.
- The arbitration panel issued a 30-page award with written Findings of Fact and Conclusions of Law, concluding Vocada was not entitled to the $21 million Earnout and generally dismissing all claims.
- Vocada shareholders sought to vacate/remand in Texas state court on the ground that the panel failed to address Vocada’s out-of-pocket damages; Nuance removed to federal court under diversity.
- The district court remanded to the arbitration panel for further consideration of Vocada’s out-of-pocket damages, noting the panel exceeded its authority by not addressing that claim.
- Nuance appealed the remand order; the Fifth Circuit recognized a jurisdictional question and ultimately dismissed the appeal for lack of appellate jurisdiction, holding remand for clarification is not a final order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the district court's remand for clarification appealable as a final order? | Appellees contend remand is nonfinal and not appealable. | Nuance argues Forsythe permits appellate review of remands for clarification. | No appellate jurisdiction; remand for clarification is not final. |
| Does Green Tree make the remand order a final decision under § 16(a)? | Green Tree supports finality where a district court ends the case and directs arbitration. | Green Tree not satisfied here because the district court did not dismiss, vacate, or confirm the award. | Green Tree does not render this remand final. |
| Should this Court avoid piecemeal appeals by declining jurisdiction over a nonfinal remand order? | Appeal to review the remand order should not be impeded by procedural piecemeal risks. | Avoid piecemeal appeals by waiting for arbitration clarification and review in a single appeal. | Jurisdiction declined to avoid piecemeal review. |
Key Cases Cited
- Forsythe International S.A. v. Gibbs Oil Co. of Texas, 915 F.2d 1017 (5th Cir.1990) (remands for clarification can be non-final, precluding immediate review)
- Jays Foods, L.L.C. v. Chem. & Allied Prod. Workers Union, Local 20, AFL-CIO, 208 F.3d 610 (7th Cir.2000) (remand to arbitral panel for clarification may be nonfinal to avoid piecemeal appeals)
- Virgin Islands Housing Authority v. Coastal General Construction Services Corp., 27 F.3d 911 (3d Cir.1994) (clarification remand can affect finality depending on whether it reopens arbitration)
- Landy Michaels Realty Corp. v. Local 32B-32J, Service Employees Int'l Union, 954 F.2d 794 (2d Cir.1992) (arbitral remand not immediately appealable when arbitration not fully reopened)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (U.S. 2000) (final decision meaning ends litigation on the merits and leaves nothing else for court)
- Oak Timegate Studios, Inc. v. Southpeak Interactive, L.L.C., 713 F.3d 797 (5th Cir.2013) (deferential review of arbitral awards; remand appropriate when ambiguous)
- Oxford Health Plans v. Sutter, 133 S. Ct. 2064 (U.S. 2013) (final decision interpretation of finality doctrine under FAA)
- Rohm & Haas Co. v. Rohm & Haas, 677 F.2d 492 (5th Cir.1982) (remand is proper when award is ambiguous or not fully resolved)
- Timegate Studios, Inc. v. Southpeak Interactive, L.L.C., 713 F.3d 797 (5th Cir.2013) (arbitration judgments reviewed with extreme deference)