CSX TRANSPORTATION, INC., Plaintiff-Appellant, v. ALABAMA DEPARTMENT OF REVENUE, JULIE P. MAGEE, in her official capacity as Commissioner of the Alabama Department of Revenue, Defendants-Appellees.
No. 12-14676
United States Court of Appeals, Eleventh Circuit.
Aug. 20, 2015.
797 F.3d 1293
Before WILSON and COX, Circuit Judges, and BOWEN,* District Judge.
Margaret Johnson McNeill, Andrew Lynn Brasher, Megan Arys Kirkpatrick, William Keith Maddox, Glenmore Patrick Powers, II, Alabama Department of Revenue, Montgomery, AL, John Cowles Neiman, Jr., Maynard Cooper & Gale, PC, Birmingham, AL, for Defendant-Appellee.
PER CURIAM:
This court previously determined the State of Alabama failed to sufficiently justify its decision to impose certain taxes on rail carriers, including CSX Transportation, Inc., when motor carriers and water carriers (both railroad competitors) are not subject to the same. See CSX Transportation, Inc. v. Alabama Department of Revenue, 720 F.3d 863 (11th Cir.2013). The Supreme Court reversed and remanded, concluding that we should reconsider whether the State has offered sufficient justification—through the imposition of an alternative, comparable tax or otherwise—for exempting railroad competitors from the sales and use taxes the State imposes on railroads when they purchase or consume diesel fuel. See Alabama Department of Revenue v. CSX Transportation, Inc., 575 U.S. ___, 135 S.Ct. 1136, 1143-44, 191 L.Ed.2d 113 (2015) (stating that “an alternative, roughly equivalent tax is one possible justification that renders a tax disparity nondiscriminatory,” and, while the State “cannot offer a similar defense with respect to its exemption for water carriers,” it offers other justifications that should be considered on remand).
In light of the Supreme Court‘s decision and after the benefit of supplemental briefing by the parties, we vacate our prior opinion, reported at 720 F.3d 863 (11th Cir.2013), vacate the judgment of the district court, and remand this case to the district court for further proceedings consistent with the Supreme Court‘s opinion.
VACATED and REMANDED.
Dalton JOHNSON, individually, Alabama Women‘s Center for Reproductive Alternatives LLC, Plaintiffs-Appellees, v. DIRECTORY ASSISTANTS INC., a Connecticut Corporation doing business in Alabama, Defendant-Appellant.
No. 14-15631
United States Court of Appeals, Eleventh Circuit.
Aug. 20, 2015.
797 F.3d 1294
Non-Argument Calendar. Before HULL, ROSENBAUM, and JILL PRYOR, Circuit Judges.
Richard M. Gaal, Edward T. Rowe, McDowell Knight Roedder & Sledge, LLC, Mobile, AL, for Defendant-Appellant.
PER CURIAM:
Directory Assistants, Inc. (“DAI”) appeals the district court‘s decision to vacate an arbitration award against the Alabama Women‘s Center for Reproductive Alternatives (“AWCRA”) and Dalton Johnson (collectively, “plaintiffs”). After careful review, we vacate the district court‘s order and remand for further proceedings.
I.
DAI is an advertising consulting company. In 2009, Dalton Johnson, AWCRA‘s administrator, signed a contract with DAI to have the company take over and manage AWCRA‘s advertising activity. Mr. Johnson wrote on the contract that he was signing on behalf of “Alabama Women‘s Center L.L.C.” The parties agree that no such organization is registered to do business in Alabama. Mr. Johnson asserts that he was actually signing on behalf of AWCRA, but he shortened the organization‘s name because of limited space on the
[W]e both agree to resolve any dispute arising out of or relating to this contract through confidential binding arbitration and agree to try to mutually choose the arbitration service, the location and which state‘s law will govern. If we are unable to come to a mutual agreement, or if one of us refuses to participate in choosing, the party filing the demand will have the right to make the choices unilaterally, as long as the filing party has made a good faith attempt to come to a mutual agreement. The non-filing party expressly consents to and waives any and all objections to the choices made.
Doc. 13-1 at 2.
The plaintiffs assert that DAI‘s services were unsatisfactory. They allege that they communicated their dissatisfaction, but DAI refused to provide a solution. The plaintiffs ceased paying DAI in the second year of the contract. Subsequently, on February 27, 2013, DAI‘s representative David Ford emailed Mr. Johnson in an attempt to agree on a location for arbitration to settle the dispute between the parties. Mr. Ford stated that he wanted to arbitrate in Connecticut under Connecticut law, but he would be willing to arbitrate in an equidistant location, such as Raleigh, North Carolina. Mr. Ford further stated that because Mr. Johnson “ha[d] not been very responsive in our efforts to work this out,” DAI would give him until March 5, 2013 to respond. Doc. 13-4. If he did not do so, then DAI would move forward with unilaterally selecting the arbitration location and governing law, as provided in the contract.
The following day, Mr. Ford discussed the matter with the plaintiffs’ attorney. The parties failed to agree on an arbitration location, and Mr. Ford reiterated his deadline of March 5 in a follow-up email to the attorney. The email also included a detailed case study of another arbitration that DAI had won. On March 11, Mr. Ford emailed the plaintiffs’ attorney, asking if she intended to respond regarding an arbitration location. A few hours later, counsel replied that a response was forthcoming.
By April 1, 2013, the attorney still had not communicated a response from Mr. Johnson. Mr. Ford stated in an email that if he did not hear from Mr. Johnson by April 3, DAI would move forward with filing an arbitration action. The plaintiffs’ counsel responded that “medical emergencies ... ha[d] prevented the gathering of documentation,” but she would communicate a response as soon as she received the remaining documents from Mr. Johnson. Doc. 13-11. On April 17, Mr. Ford again emailed the attorney and stated that if there was no resolution of the arbitration forum by April 25, DAI would choose the forum unilaterally. When the attorney did not respond, on April 22, Mr. Ford told her that DAI would be filing an arbitration demand that week. Again, the attorney did not respond.
On November 1, 2013, DAI filed a demand for arbitration with the Alternative Dispute Resolution Center (“ADRC”). Mark V. Connolly was chosen as the arbitrator, and he disclosed that he had served as an arbitrator in a dispute involving DAI approximately five years earlier. The plaintiffs challenged Mr. Connolly, asking that he be replaced because of his prior experience with DAI. The ADRC denied this request because, after reviewing the record, “[Mr. Connolly] does not believe, nor do we, that his disclosure is of a material nature or would affect his impartiality or judgment ... in the instant case.” Doc. 18-5 at 1. Subsequently, the plaintiffs participated in the arbitration by
In an initial ruling, the arbitrator determined that DAI had attempted to negotiate the terms of arbitration in good faith and that the matter could proceed to a hearing. The hearing was scheduled for March 3 and 4, 2014, but on February 27, the plaintiffs’ attorney requested a continuance. The hearing was moved to April 14 and 15. On April 7, the arbitrator received a letter from the plaintiffs’ attorney stating that “due to extraordinary circumstances and the current state of affairs surrounding [the plaintiffs‘] industry,” the plaintiffs were “not able to continue with the arbitration of this matter.” Doc. 17 at 62. The attorney did not request a continuance. The arbitrator determined that he could continue the arbitration ex parte, pursuant to Rule 18 of the ADRC‘s Commercial Rules. The hearing took place on April 14. DAI appeared by counsel and presented evidence to support its claim of breach of contract.
The arbitrator issued his decision on April 21, 2014, concluding that the plaintiffs breached their contract with DAI. The arbitrator awarded DAI $51,999.36 in liquidated damages, $39,000.00 in late fees, $877.75 in hearing exhibit expenses, and $7,795.30 in arbitration costs and fees. The total award was $99,672.41.
The plaintiffs filed this case against DAI in the Circuit Court of Madison County, Alabama. The complaint included claims of fraud, breach of contract, and misrepresentation, as well as a request to vacate the arbitration award issued by the ADRC. DAI removed the case to federal district court based on the diversity of citizenship of the parties. DAI then filed a motion to compel arbitration of the plaintiffs’ three counterclaims. The district court held a hearing on the motion but deferred ruling until the court could resolve the plaintiffs’ request to vacate the arbitration award. The court requested that the parties brief the issue of whether the award should be vacated.
The plaintiffs filed a brief arguing that the arbitration award should be vacated. The defendants filed their opposition, arguing in part that the plaintiffs’ request to vacate the award was procedurally improper because it was not made in the form of a motion. The district court issued an order construing the plaintiffs’ request to vacate the award, included in their complaint, as a motion to vacate. The district court also decided that the parties needed “one more ‘bite’ at the proverbial apple” and ordered further briefing on the plaintiffs’ motion to vacate. Order, Doc. 14 at 5-6.
After the parties filed additional briefs, the district court released the order that is the subject of this appeal. The court granted DAI‘s motion to compel arbitration of the plaintiffs’ counterclaims. The court further granted the plaintiffs’ motion to vacate the arbitration award based on the court‘s finding that the arbitrator was biased. DAI appealed the district court‘s grant of the motion to vacate.
II.
In considering the district court‘s decision on the motion to vacate the arbitration award, “we accept the district court‘s findings of fact to the extent they are not clearly erroneous and review ques-tions
III.
A.
The Federal Arbitration Act (“FAA”) imposes strict procedural requirements on parties seeking to vacate arbitration awards. DAI argues that the plaintiffs’ request to vacate the award was procedurally barred because the request appeared in the complaint, rather than in a separate motion. DAI is correct that the FAA generally requires parties to make a motion to vacate an award.
B.
Next, DAI challenges the district court‘s decision to vacate the arbitration award. “There is a presumption under the FAA that arbitration awards will be confirmed, and federal courts should defer to an arbitrator‘s decision whenever possible.” Frazier v. CitiFinancial Corp., LLC, 604 F.3d 1313, 1321 (11th Cir.2010) (internal quotation marks omitted). The FAA provides four circumstances where it is appropriate for a court to vacate an arbitration award:
- where the award was procured by corruption, fraud, or undue means;
- where there was evident partiality or corruption in the arbitrators, or either of them;
- where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
- where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.
While several judicially-created bases for vacatur had developed in this circuit over the past few decades, we held in Frazier that such grounds are no longer valid in light of the Supreme Court‘s decision in Hall Street. Frazier, 604 F.3d at 1324.2 Thus, the grounds for vacatur listed in
The district court vacated the arbitration award under
On appeal, the plaintiffs concede that they “have not alleged that there was an actual conflict” on the part of the arbitrator. Appellees’ Br. at 14. Rather, they argue that the arbitration award should be vacated under
The plaintiffs have not pointed to any part of the record showing when or how they requested additional information from ADRC. Our independent examination of the record has not revealed any such evidence. But even if the plaintiffs could show that they asked the ADRC to disclose how many times DAI had used the arbitration service, we are unconvinced that the failure to disclose that information would justify vacatur. The
C.
The plaintiffs next argue that the arbitration award is due to be vacated under
Here, the plaintiffs argue that they could not attend the hearing “due to financial constraints caused [ ] by the services of DAI which caused a decline in Johnson and AWCRA‘[s] business and the current state of Johnson and AWCRA‘[s] industry.” Appellees’ Br. at 17. The plaintiffs presented no evidence to support this claim of financial hardship. Moreover, the plaintiffs did not provide this excuse to the arbitrator; they merely stated that they could not attend “due to extraordinary cir-cumstances and the current state of affairs surrounding [the plaintiffs‘] industry.” Doc. 17 at 62. The plaintiffs never requested that the hearing dates be moved. Their letter simply informed the arbitrator that the plaintiffs would no longer participate in the arbitration. Under these circumstances, where a party participated in an arbitration proceeding only to withdraw a week before the hearing with little explanation and no request for extension, vacatur is inappropriate under
The plaintiffs also argue for vacatur under
D.
Finally, the plaintiffs argue that vacatur is justified under
The arbitrator‘s rulings here do not meet this standard. First, the arbitrator clearly was construing the contract‘s arbitration provision when he found that DAI made good faith attempts to agree to arbitration terms. Notably, the finding is also supported by the record, which shows that DAI attempted to come to an agreement with the plaintiffs several times, despite the plaintiffs’ non-responsiveness. Second, the arbitrator applied the contract when he used its liquidated damages provision to calculate the arbitral award. Because both of these rulings were derived from the contract, the arbitrator‘s actions did not exceed the scope of his power. Although the district court‘s disagreement with the arbitrator‘s decisions is evident in the court‘s ruling that DAI failed to act in good faith and that the liquidated damages clause was a penalty under Alabama law, mere disagreement with an arbitrator‘s legal or factual determinations does not justify vacatur under
IV.
Because the plaintiffs have failed to show that any of the circumstances enumerated in
VACATED AND REMANDED.
Joseph B. MURPHY, an individual, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. DCI BIOLOGICALS ORLANDO, LLC, a Delaware limited liability company, DCI Biologicals, Inc., a Delaware Foreign For Profit Corporation, Medserv Biologicals, LLC, a Delaware Foreign Limited Liability Company, Defendants-Appellees.
No. 14-10414
United States Court of Appeals, Eleventh Circuit.
Aug. 20, 2015.
797 F.3d 1302