This procedurally complicated lawsuit between two railroads began five years ago when BOCT filed a complaint in federal district court under the Interstate Commerce Act demanding that WCL, to which BOCT had rendered terminal services, pay it switching charges and railroad-car rental fees pursuant to a tariff for such services that BOCT had filed with the Interstate Commerce Commission. In its answer, WCL claimed both that BOCT’s claim was barred by an agreement between the parties covering the services BOCT had rendered (an interchange agreement) and that the rate in the tariff that BOCT was suing on was unreasonable and discriminatory. When shortly afterward the parties appeared before the district judge to report on the status of the. case, they agreed to mediation; it failed, and BOCT, which in response to
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WCL’s answer had denied that there was an enforceable interchange agreement, now moved to amend its complaint to add a claim of breach of contract based on the agreement and for a stay of proceedings pending arbitration of its contractual rights. The Interstate Commerce Act permits railroads to deal with their customers (which can include another railroad) either by tariffs, which are publicly announced take-it-or-leave-it form contracts, or by individually negotiated agreements. 49 U.S.C. §§ 10713,10761 (1994 ed.);
Burlington Northern Ry. v. STB,
The ground on which BOCT asked for a stay pending arbitration of the contract claim was a clause in the interchange agreement requiring the parties to arbitrate any “irreconcilable disputes” arising under it. WCL opposed both the request for the stay, and the motion to amend the complaint, on the ground of undue delay. The judge disagreed with WCL’s position, granted the motion to amend the complaint, but rather than staying the suit pending arbitration dismissed it in its entirety, though without prejudice to either party’s reinstating any nonarbitrable claim or. defense within thirty days after the arbitrators made their award. Yet while dismissing the suit, the judge purported to retain jurisdiction to confirm the award.
The parties proceeded to arbitration, which eventuated in an award to BOCT of some $20 million in damages (including interest) for breach of the interchange agreement. BOCT moved the district court to confirm the award and WCL moved to reinstate its defenses. The judge confirmed the award. He refused to reinstate two of the defenses on the ground that WCL had waived them by failing to present them to the arbitrators. He reinstated others but referred those to the Surface Transportation Board (successor to the Interstate Commerce Commission, which was abolished in 1996) in accordance with the doctrine of primary jurisdiction. The referred defenses are that BOCT’s tariff violates the Interstate Commerce Act because it is unreasonable and discriminatory as applied to the services that BOCT rendered to WCL. The principal defense that the judge refused to reinstate (the other needn’t be discussed) was that BOCT could not recover damages under the interchange agreement because of the filed-tariff doctrine, of which more anon. “Reinstatement” is a misnomer as applied to this defense, for WCL had never pleaded it before. Remember that WCL had originally sought to use the interchange agreement as a shield against BOCT’s tariff claim, and it could hardly do so by arguing that the tariff preempted .the agreement. It was. a new defense, and the judge thought it should have been presented to the arbitrators. “Defense” is a misnomer too, because a claim that a tariff is invalid, when the claim is interposed in a suit by a carrier to collect the tariff charge, is technically a counterclaim.
Reiter v. Cooper,
It may seem odd that the district judge should have referred the challenge to the validity of the tariff to the STB while con-finning the arbitrators’ award. One might think that the award would moot BOCT’s tariff claim by giving BOCT more than it could get under the tariff for the identical services covered by the board. Why, then, having confirmed the award, didn’t the judge dismiss the rest of the suit? Because the arbitrators’ award, and the district judge’s order confirming it, was premised on the yet-to-be-determined validity of the tariff incorporated in the interchange agreement. If *407 the STB determines the tariff to be invalid, WCL will have a claim against BOCT, enforceable in this lawsuit, for the return of part or all of the arbitration award.
The judge certified his order confirming the arbitrators’ award for an immediate appeal to us under Fed.R.Civ.P. 54(b) as a partial final judgment. This was a proper application of the rule, which authorizes the entry of a final, appealable judgment on a separate claim if there is no good reason to delay the appeal until the end of the entire litigation. The part of the case that remains in the district court, though stayed there pending consideration by the Surface Transportation Board, is WCL’s claim that the tariff is invalid. The part of the case that the judge resolved is BOCT’s contract claim. These are, believe it or not, separate claims. WCL’s appeal does not challenge the arbitrators’ interpretation of the agreement, but only the propriety of the judge’s having referred the ease to arbitration in light of BOCT’s failure to request arbitration at the outset, and of his having deemed WCL’s defense, based on the filed-tariff doctrine, to BOCT’s contract claim waived because it could have been presented, to the arbitrators. These entirely procedural issues do not overlap any of the issues in the STB proceedings, and so the resolved and retained claims are rightly regarded as separate claims within the meaning of Rule 54(b). See
Lawyers Title Ins. Corp. v. Dearborn Title Corp.,
It is true that the arbitration award and so the order confirming it may as a practical matter be undone by the STB. But WCL’s “defense” that the BOCT tariff is invalid is a counterclaim, and as such it can be treated as a separate claim for Rule 54(b) purposes,
Reiter v. Cooper,
That is one jurisdictional issue out of the way but there is another: whether the district judge had jurisdiction over the case when it came back to him after the arbitration. There is no doubt that he had jurisdiction over it when it was originally filed and that he was empowered by the Federal Arbitration Act to stay it pending arbitration. 9 U.S.C. § 3. The issuance of a stay, as distinct from an order of dismissal, implies that the proceeding in the court that issued the stay remains on the court’s docket, albeit in a state of suspended animation. As long as the ease remains before the court, the judge has the power to issue any order that is within his power to issue in a case of that sort. And that includes an order confirming an arbitration award when, as in this case, the agreement pursuant to which the parties’ dispute (or some part of it) is being arbitrated is within the compass of the Federal Arbitration Act. See
Marine Transit Corp. v. Dreyfus,
The only thing that obscures this principle in the present case is the judge’s action in dismissing the parties’ claims while retaining jurisdiction to confirm the award. He should not have dismissed BOCT’s claim, since if BOCT failed in the arbitration to obtain all the relief it was seeking it would want to proceed under the Interstate Commerce Act, the original and never-abandoned basis of its original complaint. But remember that the
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judge dismissed BOCT’s claim (and WCL’s defenses) with leave to reinstate; and- if there is a practical difference between such a disposition — especially when coupled with a purported retention of jurisdiction — and a stay, we can’t find it. A dismissal with leave to reinstate is not appealable as a final order, as an ordinary dismissal would be and most stays would not be.
Otis v. City of Chicago,
We now consider whether the judge erred in allowing BOCT to demand arbitration as late as it did. The general rule is that a demand for arbitration, like the invocation of a forum-selection clause or any other claim of improper venue,
Sharpe v. Jefferson Distributing Co.,
We cannot quite say that the judge was unreasonable. BOCT was entitled to elect in filing its original complaint to proceed under the Interstate Commerce Act rather than under the interchange agreement. A plaintiff is not required to invoke every theory of recovery that may be available to him, although he runs the risk of forfeiting an omitted theory by operation of waiver, res judicata, or other defenses. The interchange agreement consisted of an ex-, change of documents with no final, signed contract, and although it was plausible that the exchange was sufficiently final and definite to constitute a legally enforceable contract, this was by no means certain and BOCT could reasonably believe that breach of contract was an infirm basis for seeking millions of dollars in back charges and fees from WCL. Even if it were an otherwise enforceable contract, moreover, it might be preempted by the tariff, as we shall see. And it contained some language that favored WCL by defining the services covered by the agreement so narrowly as possibly to exclude the services that BOCT had rendered and was trying to get paid for. But then WCL— in hindsight mistakenly, indeed disastrously, for in the arbitration BOCT obtained far greater damages than it could have obtained under the tariff with its shorter statute of limitations — injected the contract into the ease. BOCT had now to reconsider its options — and not in the sense, deprecated in
Cabinetree,
in which a party delays invoking arbitration until it senses that the litigation in court is not going well for it. It had to do so promptly, however.
Sharpe v. Jefferson Distributing Co., supra,
When it did this, no discoveiy had yet been taken in the suit, no signals pro or con BOCT’s position had been emitted by the district judge, and WCL had suffered no harm from BOCT’s delay in requesting arbitration. None of these factors is determinative, however, not even absence of harm.
Cabinetree of Wisconsin Inc. v. Kraftmaid Cabinetry, Inc., supra,
One might have supposed that the only policy in play would be that of giving effect to parties’ contractual choices, which sometimes include arbitration. That has indeed been authoritatively described as the princi--pal goal of the Federal Arbitration Act, which repudiated the traditional judicial hostility to enforcing arbitration awards.
Dean Witter Reynolds Inc. v. Byrd,
But here the tactical decision was precipitated by the opponent, which injected the contract with its arbitration clause into the case. It is true that BOOT wasn’t quick off the mark, and didn’t just add a claim but flip-flopped, having previously denied the enforceability of the agreement on which it. based the new claim. Another district judge might reasonably have found that BOOT indeed waited too long. But considering the lack of harm, the lack of activity in the court proceedings, and the absence of any discreditable tactical motive for the belated invocation of arbitration, we cannot say that Judge Hart was unreasonable in allowing BOOT to invoke the arbitration clause.
This bring us to the question whether the judge was right to hold that WCL had waived its filed-tariff defense to the breach of contract claim by failing to present it to the arbitrators. WCL makes three arguments. The first is that a claim under the filed-tariff doctrine is not arbitrable, though it is plainly within the scope of the arbitration clause in the interchange agreement. The clause requires arbitration of
all
irreconcilable disputes arising out of the agreement, and all includes the dispute over whether BOCT’s reliance on the agreement as a basis for seeking the recovery of its switching charges and car-rental fees was blocked by the filed-tariff doctrine. The doctrine (now drastically curtailed in the railroad industry, see 49 U.S.C. § 13702(a)) requires a common carrier or public utility to price in accordance with the terms of the applicable tariff that it has filed with its regulatory commission; it may not vary those terms by agreement with its customer.
American Tel. & Tel. Co. v. Central Office Tel. Inc.,
— U.S. -,- -,
WCL argues that arbitrators cannot be trusted to apply the filed-rate dbctrine because they might make a mistake (they may have made one here, though this is far from clear, as we have just seen), and it is harder to correct an arbitrator’s mistake on judicial review than a district judge’s because the scope of judicial review of arbitral awards is so narrow. But if this argument were accepted, no issue of law, or perhaps no issue, period, could ever be arbitrated (or else the scope of judicial review would have to'be changed, as one court believes, as we’re about to see). It used to be thought that many, perhaps most, statutory claims, which are more likely to present issues of law than contract claims, were nonarbitrable. But the pendulum has swung and now it seems that most, perhaps all, statutory claims are arbi-trable. See
Gilmer v. Interstate/Johnson Lane Corp.,
No provision of the Interstate Commerce Act expressly forbids the arbitration of claims under the Act. But the cases we have cited hold that the statutory prohibition need not be express to be effective; as in other cases of preemption, it is enough if allowing arbitration would disrupt the statutory scheme. And so it-is pertinent to note that the doctrine of primary jurisdiction confides some issues in litigation under the Interstate Commerce Act to the ICC (now the STB) even when the litigation is brought in court rather than in the agency, and the doctrine may therefore be said to evince distrust of judges and conceivably of arbitrators as well.
Barrentine v. Arkansas-Best Freight System, Inc.,
The doctrine of primary jurisdiction is also sometimes invoked with regard to issues of tariff interpretation involving highly technical matters central to the agency’s mission and expertise.
Advance United Expressways, Inc. v. Eastman Kodak Co., supra,
The particular issue in controversy here, however, is neither one of tariff interpretation nor one of the reasonableness of the tariff rate. The issue is the lawfulness of BOCT’s charging WCL under the interchange agreement when the agreement had not been fiied with the STB. This is an issue of law rather than a matter within the special expertise of the STB, and therefore it did not have to be referred to the agency. Courts regularly decide the scope of the filed-tariff doctrine, see, e.g.,
Security Services, Inc. v. K Mart Corp., supra; Marcus v. American Tel. & Tel. Co.,
In any event, the doctrine of primary jurisdiction is not, despite its name, jurisdictional.
Northwest Airlines, Inc. v. County of Kent, supra,
BOCT does not argue that WCL waived the right to challenge before the Surface Transportation Board a tariff covering the same service as the interchange agreement *412 (the agreement containing the arbitration clause), even though the terms of the tariff were incorporated in the agreement. So we need not consider the efficacy of such a waiver.
We can set quickly to one side WCL’s second argument, that whether or not a filed-tariff defense is arbitrable the judge told the parties it was not and this is why WCL didn’t raise the defense in the arbitration. There is a simple answer: he didn’t tell them that. He merely warned them that the arbitration might moot some of WCL’s defenses.
The third argument is that since the filed-tariff doctrine forbids parties to contract around the tariffed rate, the doctrine cannot be waived by not being presented in an arbitration, whatever might be the case with other invocations of the doctrine of primary jurisdiction. But in thus treating the filed-tariff doctrine as one forbidding waivers, WCL confuses a rule limiting freedom of contract with a rule limiting procedural waivers, such as the rule that makes objections to subject-matter jurisdiction nonwaivable. The filed-tariff doctrine limits the power of a seller and a buyer to negotiate a price different from the price in a filed tariff. It is not addressed to the rules of procedure that come into play when, the parties’ contractual relation having broken down, they find themselves in litigation with each other. The logic of WCL’s argument is that, had it failed to file a notice of appeal within the prescribed thirty days, it could still have filed it later; otherwise its filed-tariff claim would have been forfeited and then BOCT, in defiance of the filed-tariff doctrine, might get away with an episode of off-tariff pricing. The argument, rejected in
West Coast Truck Lines, Inc. v. American Industries, Inc.,
AFFIRMED.
