529 U.S. 193 (2000), 98-1960, Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co

Docket Nº:Case No. 98-1960
Citation:529 U.S. 193, 120 S.Ct. 1331, 146 L.Ed.2d 171
Party Name:CORTEZ BYRD CHIPS, INC. v. BILL HARBERT CONSTRUCTION CO., A DIVISION OF BILL HARBERT INTERNATIONAL, INC.
Case Date:March 21, 2000
Court:United States Supreme Court
 
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Page 193

529 U.S. 193 (2000)

120 S.Ct. 1331, 146 L.Ed.2d 171

CORTEZ BYRD CHIPS, INC.

v.

BILL HARBERT CONSTRUCTION CO., A DIVISION OF BILL HARBERT INTERNATIONAL, INC.

Case No. 98-1960

United States Supreme Court

March 21, 2000

        Argued January 10, 2000

        CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

        Syllabus

Petitioner Cortez Byrd Chips, Inc., and respondent Bill Harbert Construction Company agreed, inter alia, that any disputes arising from Harbert's construction of a Mississippi mill for Cortez Byrd would be decided by arbitration. When such a dispute arose, arbitration was conducted in Alabama and Harbert received an award. Cortez Byrd sought to vacate or modify the award in the Federal District Court for the Southern District of Mississippi, where the contract was performed; and seven days later Harbert sought to confirm the award in the Northern District of Alabama. The latter court refused to dismiss, transfer, or stay its action, concluding that venue was proper only there, and it entered judgment for Harbert. The Eleventh Circuit held that, under the Federal Arbitration Act (FAA), venue for motions to confirm, vacate, or modify awards was exclusively in the district where the arbitration award was made, and thus venue here was limited to the Alabama court.

         Held:

        The FAA's venue provisions are permissive, allowing a motion to confirm, vacate, or modify to be brought either in the district where the award was made or in any district proper under the general venue statute. Pp. 197-204.

         (a) Cortez Byrd's Mississippi motion was clearly proper as a diversity action under the general venue statute, 28 U.S.C. § 1391(a)(2), because it was filed where the contract was performed. However, the FAA provides that upon motion of an arbitration party, the federal district court where the arbitration award was made "may" vacate, 9 U.S.C. § 10, or "may" modify or correct, § 11, the award. If these provisions are restrictive, supplanting rather than supplementing the general venue statute, there was no Mississippi venue for Cortez Byrd's action. Owing to their contemporaneous enactment and similar language, §§ 10 and 11 are best analyzed together with § 9, which permits parties to select the venue for confirmation of an award and provides that, in the absence of an agreement, venue lies in the federal court for the district where the award was made. Pp. 197-198.

         (b) Parsing the language of §§ 9-11 does not answer the question whether the provisions are restrictive or permissive, for there is language

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supporting both views. However, the history and function of the provisions confirm that they were meant to expand, not limit, venue choice. The FAA was enacted in 1925 against the backdrop of a considerably more restrictive general venue statute than today's. The 1925 general venue statute effectively limited civil suits to the district where the defendant resided, and courts did not favor forum selection clauses. The FAA's venue provisions had an obviously liberalizing effect, undiminished by any suggestion that Congress meant simultaneously to foreclose a suit where the defendant resided. That is normally a defendant's most convenient forum, and it would take a very powerful reason ever to suggest that Congress meant to eliminate such a venue for postarbitration disputes. This view is confirmed by the obviously liberalizing § 9, which permits forum selection agreements. Were §§ 10 and 11 construed restrictively, a proceeding to confirm an award begun in a selected forum would be held in abeyance while an objecting party returned to the district of arbitration to modify or vacate the award. Were that action unsuccessful, the parties would then return to the previously selected forum for the confirming order originally sought. Nothing could be more clearly at odds with the FAA's policy of rapid and unobstructed enforcement of arbitration agreements or with the desired flexibility of parties in choosing an arbitration site. A restrictive interpretation would also place § 3—which permits a court to stay a proceeding referable to arbitration pending such arbitration—and §§ 9-11 in needless tension, for a court with the power to stay an action under § 3 also has the power to confirm any ensuing arbitration award, Marine Transit Corp. v. Dreyfus, 284 U.S. 263, 275-276. Harbert's interpretation would also create anomalous results in the aftermath of arbitrations held abroad. Against this reasoning, specific to the FAA's history and function, Harbert's citations to cases construing other special venue provisions as restrictive, see, e. g., Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 227-228, are beside the point. Their authority is not that special venue statutes are restrictive, but that analysis of special venue provisions must be specific to the statute in question. Pp. 198-204.

169 F.3d 693, reversed and remanded.

         Daniel H. Bromberg argued the cause for petitioner. With him on the briefs were John L. Maxey II and John F. Hawkins.

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         Susan S. Wagner argued the cause for respondent. With her on the brief was Edward P. Meyerson.

        Justice Souter delivered the opinion of the Court.

         This case raises the issue whether the venue provisions of the Federal Arbitration Act (FAA or Act), 9 U.S.C. §§ 9-11, are restrictive, allowing a motion to confirm, vacate, or modify an arbitration award to be brought only in the district in which the award was made, or are permissive, permitting such a motion either where the award was made or in any district proper under the general venue statute. We hold the FAA provisions permissive.

        I

        Petitioner Cortez Byrd Chips, Inc., and respondent Bill Harbert Construction Company agreed that Harbert would build a wood chip mill for Cortez Byrd in Brookhaven, Mississippi. One of the terms was that "[a]ll claims or disputes between the Contractor and the Owner arising out [of] or relating to the Contract, or the breach thereof, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise." App. 52. The agreement went on to provide that "[t]he award rendered by the arbitrator or arbitrators shall be final, and judgement may be entered upon it in accordance with applicable law in any court having jurisdiction thereof," ibid.; that the agreement to arbitrate "shall be specifically enforceable under applicable law in any court having jurisdiction thereof," ibid.; and that the law of the place where the project was located, Mississippi, governed, id., at 60; 169 F.3d 693, 694 (CA11 1999).

        After a dispute arose, Harbert invoked the agreement by a filing with the Atlanta office of the American Arbitration Association, which conducted arbitration in November 1997

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in Birmingham, Alabama. The next month, the arbitration panel issued an award in favor of Harbert. Ibid.

        In January 1998, Cortez Byrd filed a complaint in the United States District Court for the Southern District of Mississippi seeking to vacate or modify the arbitration award, which Harbert then sought to confirm by filing this action seven days later in the Northern District of Alabama. When Cortez Byrd moved to dismiss, transfer, or stay the Alabama action, the Alabama District Court denied the motion, concluding that venue was proper only in the Northern District...

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