This аppeal is from a district court order compelling arbitration, pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-14, of a contract arising from the expansion and renovation of the Richardson Medical Center. The Richardson Hospital Authority, the owner of the medical center, and L.D.W.A./Buford & Work, Inc., the architect on the project, argue that the Federal Arbitration Act is inapplicable because the construction project is not a “transaction involving commerce,” 9 U.S.C. § 2; that the general contractor, Del E. Webb Construction, did not comply with the contractual prerequisites for demanding arbitration; and that Webb waived arbitration by substantially invoking the litigation process. In addition, LDWA arguеs that the district court improperly consolidated LDWA’s claims in the arbitration between the Authority and Webb. We conclude that the Federal Arbitration Act governs this case, that the arbitrator must decide whether Webb satisfied the contractual prerequisites of demand, that the district court erred by ordering consolidated arbitration, and that the district court failed to address LDWA’s waiver contention.
I
In October 1981, the Richardson Hospital Authority contracted with LDWA, an architect, to supervise the expansion and renovation of the Richardson Medical Center. The contract was a standard form agreement between owner and architect prepared by the American Institute of Archi
Later, the Authority signed two contracts with Del E. Webb Construction, the general contractor on the project. Both contracts included American Institute of Architects document A201 entitled, “General Conditions of the Contract for Construction,” which also provided for arbitration of all disputes arising from the contract documents.
The parties had a number of disagreements during construction, including who should bear the costs of construction delays. The parties were unable to resolve their differences, and Webb sued in the United States District Court for the Northern District of Texas, seeking damages or arbitration of its claims. The Authority counterclaimed and joined LDWA and the bonding companies as third-party defendants. LDWA filed a counterclaim against Webb. Webb then filed a motion to compel arbitration, which the district court granted. Meanwhile, Ray Boyd Construction Systems Go., a subcontractor, sued Webb in the same district court, and the court consolidated the two proceedings.
On June 27, 1986, the district court vacated its orders to compel arbitration and to consolidate, ordering the parties to submit evidence regarding Webb’s compliance with the contractual prerequisites for arbitration. After reviewing the evidence, the district court granted Webb’s motion to compel arbitration and ordered “that all third-party claims arising out of the primary suit shall be settled in the same arbitration action.” The Authority and LDWA appeal.
II
The Authority and LDWA argue that the district court erred in holding that the Owner-Contractor contract is governed by the Federal Arbitration Act.
Citizens of different states engaged in performance of contractual operations in one of those states are engaged in a contract involving commerce under the FAA. Such a contract necessitates interstate travel of both personnel and payments. Commerce under the FAA is not limited to interstate shipment of goods ... but includes all contracts “relating to interstate commerce.”
Id. at 243 (quoting Prima Paint v. Flood & Conklin Mfg. Co.,
The district court found the Federal Arbitration Act applicable, noting that
[i]n this case, the contract involved persons from different states; employees of thе plaintiff traveled interstate; the interstate mails were used to facilitate the work of the plaintiff’s subcontractors; and materials used in the construction of the defendant’s facilities were manufactured and moved in interstate commerce.
The Authority and LDWA do not dispute that the construction project involved some interstate commеrce. Rather, they argue that there must be substantial interstate contacts. The Authority and LDWA contend that Webb did not show substantial interstate activity because all construction occurred in Texas, Webb maintained an office in Texas to supervise the construction of several Texas projects, and Webb issued payroll checks in Texas. However, wе are persuaded that in the light of Mesa,
Ill
A
LDWA argues that the district court erred in compelling LDWA to participate in the arbitration between Webb and the Authority. LDWA contends that it was not a party to the arbitration agreement between Webb and the Authority and did not consent to arbitratiоn.
The district court, rejecting LDWA’s argument, noted:
In ¶ 7.9.1, the contract provides that an arbitration action shall include the owner and the contractor, “and any other persons substantially involved in a common question of fact or law, whose presence is required if complete relief is to be accorded in the arbitration.” As long as the proper joinder is made — as it has been hеre — resolution of multi-party claims arising out of a common question of law or fact may be made in a single arbitration action. Thus, the claims of the third-parties shall be resolved in this case in the same arbitration hearing as that settling the dispute between the plaintiff and the defendant.
LDWA contends that because it was not a party to the Owner-Contrаctor contract, the language in II 7.9.1 quoted by the court is irrelevant.
We agree that LDWA could not be compelled to arbitrate under the Owner-Contractor contract. See AT & T Technologies, Inc. v. Communications Workers,
Undoubtedly, the district court was concerned, as are we, about the potential for piecemeal litigation. But as the Supreme Court explаined in Dean Witter Reynolds v. Byrd,
The preeminent concern of Congress in passing the [Federal Arbitration] Act was to enforce private agreements into which parties had entered, and that concern requires that we rigorously enforce agreements to arbitrate, even if the result is “piecemeal” litigation, at least absent a countervailing policy mаnifested in another federal statute.
B
LDWA argues that it should not be compelled to arbitrate at all because it did not consent in writing as required in paragraph 7.9.1 of the Owner-Contractor contract. This provision says in part:
No arbitration arising out of or relating to the Contract Documents shall include, by consolidation, joinder, or in any other mannеr, the Architect, his employees or consultants except by written consent containing a specific reference to the Owner-Contractor Agreement and signed by the Architect, the Owner, the Contractor and any other persons sought to be joined.
But as we have explained, the source of LDWA’s duty to arbitrate is the Owner-Architect contrаct, not the Owner-Contractor contract. The language in paragraph 7.9.1 involves the separate question of whether the district court properly consolidated arbitration of the disputes between the owner and the architect and arbitration of the disputes between the owner and the contractor. We treat this issue in our discussion of whether Webb complied with the prerequisites for arbitration, since both require us to determine which questions the
IV
The district court found that Webb satisfied the contractual prerequisites to arbitration. Under § 4 of the Federal Arbitration Act, however, this question is for the arbitrator. Section 4 of the Fеderal Arbitration Act provides in part:
The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.
In John Wiley & Sons v. Livingston,
Less clear is whether consolidation is a question for the district court or the arbitrator. The district court was persuaded that “[a]s long as the proper joinder is made — as it has been hеre — resolution of multi-party claims arising out of a common question of law or fact may be made in a single arbitration action.” This argument suggests that Rules 42(a) and 81(a)(3) of the Federal Rules of Civil Procedure give the district court power to order a consolidation of arbitrations involving common questions of law and fact, independent of the contract. The two circuits that have decided the question reached different results.
Rule 81(a)(3) provides, “In proceedings under Title 9, U.S.C., relating to arbitration ... these rules apply only to the extent that matters of procedure are not provided for in those statutes.” The Second Circuit concluded that since the Federal Arbitration Act does not еxplicitly discuss consolidations, district courts may consolidate ar-bitrations pursuant to Fed.R.Civ.P. 42(a). See Compania Espanola de Petroleos, S.A. v. Nereus Shipping, S.A.,
But the Ninth Circuit stated in Weyerhaeuser Co. v. Western Seas Shipping Co.,
Arguably the Ninth Circuit’s reasoning in Weyerhaeuser is inconsistent with the Supreme Court’s statement in Livingston that matters of procedure are for the arbitrator, since consolidation is certainly in one sense a “procedural” question. But an examination of the purposes of the Livingston rule supports Weyerhaeuser. The question in Livingston, whether contractual prerequisites to arbitration have been satisfied, is for the arbitrator because invariably that question is intertwined with the underlying facts. The arbitrator, with the full case before it, can better determine whether there has been contractual compliance. Indeed, as Justiсe Harlan explained in Livingston:
Questions concerning the procedural prerequisites to arbitration do not arise in a vacuum; they develop in the context of an actual dispute about the rights of the parties to the contract or those covered by it....
Doubt whether grievance procedures or some part of them apply to a particular dispute, whether such procedures have been followed or excused, or whether the unexcused failure to follow them avoids the duty to arbitrate cannot ordinarily be answered without consideration of the merits of the dispute which is presented for arbitration.
Id.
The district court concluded that consolidation was proper because 7.9.1 “provides that an arbitration action shall include the owner and the contractor, ‘and any other persons substantially involved in a common quеstion of fact or law, whose presence is required if complete relief is to be accorded in the arbitration.’ ” But that conclusion rests on a cropped reading of paragraph 7.9.1. Paragraph 7.9.1 explicitly excludes the architect from consolidated arbitration:
No arbitration arising out of or relating to the Contract Dоcuments shall include, by consolidation, joinder or in any other manner, the Architect, his employees or consultants except by written consent containing a specific reference to the Owner-Contractor Agreement and signed by the Architect, the Owner, the Contractor and any other person sought to be joined. No arbitration shall include, by consolidation, joinder or in any other manner, parties other than the Owner, the Contractor and any other persons substantially involved in a common question of fact or law, whose presence is required if complete relief is to be accorded in the arbitration. No person other than the Owner or Contractor shall be included as an original third party or additional third party to an arbitration whose interest or responsibility is insubstantial. Any consent to arbitration involving an additional person or persons shall not constitute consent to arbitration of any dispute not described therein or with any person not named or described therein.
We are not persuaded by the district court’s reading because it ignores the first sentence, excluding the architect from arbitration absent consent, and treats the second sentence as an affirmative grant of authority, though the sentence is phrased as a limitation on arbitration. To give both sentences meaning, the architect must be excluded from arbitration absent consent. In short, sinсe under the grant of authority in § 4 the district court was limited to enforcing arbitration agreements according to their terms, and since the parties agree that the architect has not consented in writing, the district court should not have ordered consolidation.
V
The Authority and LDWA contend that regardless of whether Webb complied with the contract, Webb wаived arbitration. In Price v. Drexel Burnham Lambert, Inc.,
[A] finding that a party has waived its right to arbitration is a legal conclusion subject to our plenary review, but ... the findings upon which the conclusion is based are predicate questions of fact, which may not be overturned unless clearly erroneous.
The district court, however, did not discuss the issue, though the Authority raised it. The district court only discussed Webb’s сompliance with paragraph 7.9.2, a separate issue from waiver. Accordingly, we
VI
We affirm the district court’s conclusion that the Federal Arbitration Act governs this case; modify the arbitration order to exclude LDWA’s counterclaim against Webb, since the requisite contractual basis for arbitration between LDWA and Webb does not exist; vacatе the district court’s ruling that Webb complied with the contractual prerequisites for demanding arbitration, since that question is for the arbitrator; reverse the district court’s consolidation order, persuaded that the Owner-Contractor contract expressly excluded the architect from consolidation absent written consent; and remand the questiоn of waiver, since the district court did not consider the question separately from the question of compliance with the contractual requirements for demand.
AFFIRMED in part as modified, VACATED in part, and REVERSED in part.
Notes
. By stipulation, the parties agree that Ray Boyd Construction will not be compelled to arbitrate.
. The Authority argues as a threshold matter that the distriсt court made no findings about whether the Owner-Contractor contract is a "transaction involving interstate commerce," thus this court cannot consider the issue. This argument has no merit. The district court in its order of June 5, 1986, found that the contracts evidenced a transaction involving interstate commerce. Although the court vacated this order and made no such finding in its subsequent order, the finding was a prerequisite to its later order.