Cortez Byrd Chips v. Bill Harbert Constr.
| Decision Date | 21 March 2000 |
| Docket Number | 981960 |
| Citation | 120 S.Ct. 1331,146 L.Ed.2d 171,529 U.S. 193 |
| Parties | CORTEZ BYRD CHIPS, INC., PETITIONER v. BILL HARBERT CONSTRUCTION COMPANY etc.SUPREME COURT OF THE UNITED STATES |
| Court | U.S. Supreme Court |
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. 3-11.
(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. 3-5.
(b) Parsing the language of 9-11 does not answer the question whether the provisions are restrictive or permissive, for there is language 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. 5-11.
169 F.3d 693, reversed and remanded.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
This case raises the issue whether the venue provisions of the Federal Arbitration 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.
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 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 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 of Alabama, and entering judgment for Harbert for $274,256.90 plus interest and costs. Ibid.
The Court of Appeals for the Eleventh Circuit affirmed. It held itself bound by pre-1981 Fifth Circuit precedent, cf. Bonner v. Prichard, 661 F.2d 1206, 1209 (CA11 1981), to the effect that under the Act's venue provisions, 9 U.S.C. 9-11, venue for motions to confirm, vacate, or modify awards was exclusively in the district in which the arbitration award was made. 169 F.3d, at 694; Naples v. Prepakt Concrete Co., 490 F.2d 182, 184 (CA5), cert. denied, 419 U.S. 843 (1974). The arbitration here having been held in Birmingham, the rule as so construed limited venue to the Northern District of Alabama.
We granted certiorari, 527 U.S. 1066 (1999), to resolve a split among the Courts of Appeals over the permissive or mandatory character of the FAA's venue provisions. Compare In re VMS Securities Litigation, 21 F.3d 139, 144-145 (CA7 1994) (9 and 10 permissive); Smiga v. Dean Witter Reynolds, Inc., 766 F.2d 698, 706 (CA2 1985), cert. denied, 475 U.S. 1067 (1986) (9 permissive); Sutter Corp. v. P & P Indus., Inc., 125 F.3d 914, 918-920 (CA5 1997) (9 and 10 permissive); P & P Indus., Inc. v. Sutter Corp., 179 F.3d 861, 869-870 (CA10 1999) (9 and 10 permissive); Apex Plumbing Supply, Inc. v. U.S. Supply Co., 142 F.3d 188, 192 (CA4 1998) (9 permissive); Nordin v. Nutri/System, Inc., 897 F.2d 339, 344 (CA8 1990) (9 permissive), with Central Valley Typographical Union No. 46 v. McClatchy Newspapers, 762 F.2d 741, 744 (CA9 1985) (10 mandatory); Island Creek Coal Sales Co. v. Gainesville, 729 F.2d 1046, 1049-1050 (CA6 1984) (9 mandatory); Sunshine Beauty Supplies, Inc., v. United States District Court, Central Dist. of Cal., 872 F.2d 310, 312 (CA9 1989) (9 and 10 mandatory); United States ex rel. Chicago Bridge & Iron Co. v. Ets-Hokin Corp., 397 F.2d 935, 939 (CA9 1968) (10 mandatory). We reverse.
Section 9 of the FAA governs venue for the confirmation of arbitration awards:
To continue reading
Request your trial
-
Chicken Ranch Rancheria of Me-Wuk Indians v. California
...... actions—ones that satisfy the subsequent specified condition—and no others"); Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co. , 529 U.S. 193, 198, 120 S.Ct. 1331, 146 L.Ed.2d 171 (2000) (explaining that "the mere use of ‘may’ is not necessarily conclusive of congressional intent to ......
-
Badgerow v. Walters
...the Vaden Court to adopt the look-through approach in the first place. Ibid. ; see also Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co. , 529 U.S. 193, 202, 120 S.Ct. 1331, 146 L.Ed.2d 171 (2000) (rejecting interpretation of the FAA that "would create anomalous results"). Most notably, ......
-
Kinney v. HSBC Bank USA, N.A. (In re Kinney)
...materially defaulted. 11 U.S.C. § 1307(c)(6). "May" usually implies some discretion. Cortez Byrd Chips, Inc. v. Bill Harbert Const. Co ., 529 U.S. 193, 198–99, 120 S.Ct. 1331, 146 L.Ed.2d 171 (2000) ; see Part 4, above. But under § 1328(a), a district court "shall" grant discharges to debto......
-
General Elec. Co. v. Anson Stamping Co. Inc.
...based on two primary authorities. The first authority was the Supreme Court decision in Cortez Byrd Chips v. Bill Harbert Const. Co., 529 U.S. 193, 199, 120 S.Ct. 1331, 146 L.Ed.2d 171 (2000). The second authority was an earlier Second Circuit case of Seetransport Wiking Trader Schiffarhtsg......
-
Chapter 10
...Chicago Bridge & Iron Co. v. Ets-Hokin Corp., 397 F.2d 935, 939 (9th Cir. 1968).[280] . Cortez Byrd Chips v. Harbert Construction Co., 529 U.S. 193, 120 S. Ct. 1331, 146 L. Ed. 2d 171 (2000).[281] . Wilko v. Swan, 346 U.S. 427, 436-437, 74 S. Ct. 182, 98 L. Ed. 168 (1953) (emphasis added). ......
-
An Interview with Kent L. Richland
...that resident corporate defendant was not domiciled in district of suit). 3. See Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 204 (2000) (distinguishing 28 U.S.C. § 1400(b) from venue provision in Federal Arbitration Act and citing Fourco for the proposition that “Cong......
-
Prosecution Insights Gleaned from a Review of Recent Patent Examiner Training
...that resident corporate defendant was not domiciled in district of suit). 3. See Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 204 (2000) (distinguishing 28 U.S.C. § 1400(b) from venue provision in Federal Arbitration Act and citing Fourco for the proposition that “Cong......
-
When 30 Years of Practice Goes Against You: Patent Venue Ruling 'Ignores' Supreme Court Precedent
...that resident corporate defendant was not domiciled in district of suit). 3. See Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 204 (2000) (distinguishing 28 U.S.C. § 1400(b) from venue provision in Federal Arbitration Act and citing Fourco for the proposition that “Cong......