664 F.2d 936 | 4th Cir. | 1981
Dissenting Opinion
dissenting:
I respectfully dissent to the denial of rehearing in this case.
As I have previously pointed out in dissent, the basic theme of the majority opinion, 4 Cir., 656 F.2d 933, is its lack of confidence in the' North Carolina courts to enforce the Federal Arbitration Act. At the time the case was decided and the majority opinion was filed, I thought that lack of confidence was without foundation, and so expressed myself.
Unknown to us at the time the case was decided, but following argument, the Supreme Court of North Carolina had decided the case of Burke County Public Schools, etc. v. Shaver, etc., 303 N.C. 408, 279 S.E.2d 816 (1981). Burke was a case on facts indistinguishable from those now before us and is one of the very cases
The gist of the majority decision here as shown by the opinion itself is as follows:
“This is a case where it can be fairly said to be doubtful whether the rights of Mercury as fixed by ‘federal substantive law’ will be recognized in the state court.” P. 946.
Contrast that statement of North Carolina law as expressed in the majority opinion with North Carolina law as expressed by the North Carolina Supreme Court in Burke:
“This appeal presents two questions. First, whether the contract between plaintiff and defendant is ‘a contract evidencing a transaction involving commerce’ within the meaning of § 2 of the Federal Arbitration Act. [Footnote omitted] We conclude that it is. Second, whether the Federal Arbitration Act must be applied in state courts. We hold, for reasons given, that it must.” 279 S.E.2d at p. 817.
Not only was the holding of the North Carolina Supreme Court that which I have just quoted, the opinion goes on in detail to provide as follows:
“. . . Parties in a state court to a contract evidencing an interstate transaction should not be permitted to avoid arbitration when, had the action been brought in federal court, they would have been compelled to arbitrate. This much flows from the denomination of compulsory arbitration as a matter of substantive, rather than procedural, law.” 279 S.E.2d at 824-825, note 16.
Additionally, the court in Burke not only held, p. 825, that the contract in question “must be submitted to arbitration pursuant to the federal act,” as one of the reasons therefor it gave that the application of the federal substantive law “discourages ‘forum shopping’ ”. Burke, p. 824.
The upshot of this case is that our court is treating a cause of action concerning the Federal Arbitration Act in many respects as general federal question litigation, which it is not, rather than as diversity litigation, which it is.
. The majority opinion relied on the decision in the North Carolina intermediate court of appeals which was reversed by the decision referred to in this paragraph.
Dissenting Opinion
The dissent to the denial of rehearing of the en banc opinion herein misconceives the real reason on which that opinion rests and, unfortunately, would find the rationale for such opinion to be a “lack of confidence in the North Carolina courts to enforce the Federal Arbitration Act.” The apparent basis for this conclusion is the discussion in the opinion of an issue which, though of importance, was not the decisive point. This issue related to whether the contract in this case was in interstate commerce. At the time the majority opinion was distributed the only decisions from a North Carolina appellate court on this question were the two decisions of the Court of Appeals of North Carolina cited in the majority opinion.
The real issue in this case was: Under what circumstances is it appropriate for a federal court to stay its hand in favor of adjudication by a state court, where the point is the application of federal law. We concluded in the majority opinion “that,” in the words of Will, “a federal court being seized of jurisdiction of a case, [is] not to stay its proceedings in deference to a state court action involving the same issues unless there [are] ‘exceptional circumstances’ justifying such stay . ...”
“Unlike Judge Will in Calvert, the district court [in this case] found ‘no exceptional circumstances’ justifying a departure from the Colorado River [Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483] rule of ‘unflagging obligation’ of the federal court to maintain federal jurisdiction, despite the pendency in state court of a similar action between the parties. Without such finding of ‘exceptional circumstances,’ the district court had no right to stay the federal proceedings in this case.”
. Burke Cty. Pub. Sch. Bd. of Ed. v. Shaver Partner., 46 N.C.App. 573, 265 S.E.2d 481 (1980); Bryant-Durham Elec. v. Durham County Hospital, 256 S.E.2d 529 (42 N.C.App. 351, 1979).
. Burke County Public Schools, etc. v. Shaver, etc., 279 S.E.2d 816 (1981).
. Pp. 943-44.
. Will v. Calvert Fire Ins. Co., 437 U.S. 655, 667-68, 98 S.Ct. 2552, 2559-60, 57 L.Ed.2d 504 (1978).
Lead Opinion
ORDER
Upon consideration of the petition for rehearing, and with the concurrence of the active Circuit Judges, except Judge WIDENER and Judge HALL, who dissent from the denial of the petition,
IT IS ORDERED, That the petition for rehearing be, and it is hereby denied.