National R.R. Passenger Corp. v. Boston and Maine Corp., 87-7190

Citation271 U.S.App.D.C. 63,850 F.2d 756
Decision Date24 June 1988
Docket NumberNo. 87-7190,87-7190
PartiesNATIONAL RAILROAD PASSENGER CORPORATION v. BOSTON AND MAINE CORPORATION, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Charles Lee Eisen, Washington, D.C., with whom Kinga M. LaChapelle and John P. Cronin, North Billerica, Mass., were on the brief, for appellant.

Dennis M. Moore, with whom T. Michael Kerrine, Washington, D.C., was on the brief, for appellee.

Before RUTH BADER GINSBURG, D.H. GINSBURG and SENTELLE, Circuit Judges.

D.H. GINSBURG, Circuit Judge:

In 1977, the two parties to this case entered into an agreement containing a broad arbitration clause. When a dispute between them arose in 1987, one sought arbitration and the other refused, claiming that the agreement, along with the arbitration clause, had expired. The district court, rather than deciding the question itself, held that it was for the arbitrators to determine whether the agreement had expired, and ordered the recalcitrant party to submit to arbitration on that question. We affirm.

I. BACKGROUND

In 1977, the Boston and Maine Corporation ("B & M") entered into a written agreement with the National Railroad Passenger Corporation ("Amtrak"), authorizing Amtrak to operate its "Montrealer" train service over a section of track owned by B & M. Under the agreement, B & M was required to provide various services and facilities to Amtrak, and to maintain its track in such condition as to allow Amtrak's trains to operate over designated segments of it at not less than specified speeds. In return, Amtrak was to make periodic payments to B & M in accordance with a schedule set forth in the agreement.

Our concern in this case is with the relationship between two provisions of the agreement. One is the arbitration clause, which provides that "[a]ny claim or controversy between Amtrak and B & M concerning the interpretation, application or implementation of this Agreement shall be submitted to binding arbitration in accordance with the provisions of the Arbitration Agreement attached hereto...." 1 The other is the expiration clause, which states that "[t]his contract shall remain in full force and effect for two years, through January 31, 1979, unless terminated or modified by mutual consent of both parties, and thereafter until 90 days after written notice of cancellation by either party is received by the other."

In 1987, after several years of feuding with B & M over the condition of the track used for the Montrealer service, Amtrak initiated an arbitration proceeding against B & M, claiming that it had breached the agreement by failing properly to maintain several portions of its track. B & M, however, refused to submit to arbitration, arguing that the agreement had expired in 1981, and that it was therefore under no obligation to arbitrate. Amtrak, on the other hand, maintained that the agreement remained in effect, having been extended by numerous "Amendment Agreements" signed by both parties.

Thus, Amtrak petitioned the district court for an order compelling B & M to arbitrate the contract dispute in the pending arbitration proceeding. In the district court, B & M renewed its contention that the 1977 agreement had expired in 1981; since its expiration, B & M maintained, the parties had simply operated under an "informal arrangement." The parties filed cross-motions for summary judgment, Amtrak seeking a declaration that the arbitration clause continued to bind the parties, and B & M seeking a declaration that it did not. The district court, however, refused to determine the vitality of the arbitration clause after September 30, 1981; instead, it ordered B & M to submit to arbitration the question whether the 1977 agreement had expired. The court reasoned that this question had to be referred to arbitration because the arbitration clause itself "requires that each and every claim or controversy concerning the interpretation, application or implementation of the Agreement, including a dispute over the term of the contract, shall be submitted to arbitration." National R.R. Corp. v. Boston & Maine Corp., No. 87-1507, slip op. at 6 (D.D.C. Aug. 31, 1987) (order granting summary judgment).

B & M moved the district court for a stay pending appeal to this court. In the memorandum accompanying its denial of that motion, the district court noted that B & M's motion had mischaracterized the court's decision as holding that "the question of whether the parties agreed to arbitrate" is for the arbitrator. Its holding, the district court emphasized, was that by entering into "an expansive, nearly all-encompassing arbitration clause," the parties had agreed to arbitrate questions relating to the duration both of the contract itself and of its accompanying arbitration clause. National R.R. Corp. v. Boston & Maine Corp., No. 87-1507, slip op. at 4 (D.D.C. Dec. 21, 1987) (order denying stay pending appeal).

II. ANALYSIS

The principles that underlie our analysis of this case are long-established, and were recently reaffirmed in AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). The "first principle" of arbitrability, the Supreme Court emphasized, is that " 'arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.' " Id. at 648, 106 S.Ct. at 1418 (quoting United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)). This principle recognizes that "arbitrators derive their authority to resolve disputes only because the parties have agreed in advance to submit such grievances to arbitration." Id. It is a necessary corollary of the principle that "arbitration is a matter of contract" that when the parties have provided that a particular type of dispute should be settled in arbitration, rather than in litigation, a court may not override that agreement by itself deciding such a dispute.

The second principle restated in AT & T Technologies is that "the question of arbitrability--whether [an agreement] creates a duty for the parties to arbitrate [a] particular grievance--is undeniably an issue for judicial determination." Id. 475 U.S. at 649, 106 S.Ct. at 1418. In other words, the Court said, "[u]nless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator." Id. (emphasis added).

A.

At the heart of this case is the proper interpretation of this second principle. The parties agree, as they must, that because they have not "clearly and unmistakably" provided otherwise, "the question of whether the parties agreed to arbitrate" must be decided by the court, not by the arbitrators. They disagree, however, about the nature of the "particular grievance" over which the court must find that they agreed to arbitrate. B & M would have us view this case as a dispute over track maintenance. In order to decide whether the parties agreed to arbitrate that dispute, it argues, the court must decide (a) whether the contract, and the arbitration clause it contains, has expired. Amtrak, with the prompting of the district court, takes one step back before beginning its analysis. It notes that there is no real doubt that if the 1977 agreement is still in effect, then the underlying dispute over track maintenance must be submitted to arbitration. Therefore, it argues, the only question for the court is (b) whether B & M agreed to arbitrate disputes over the duration of the contract.

At first blush, either way of stating the issue seems plausible. Under B & M's view of the case, however, we are led to the following dilemma. If, as B & M argues, the question is whether the contract has expired, and if we assume for the moment that the answer is that it has not, then in view of the broad scope of the arbitration clause, this dispute over the proper interpretation of the contract should be decided by the arbitrators and not by the court. Therefore, if we remand the case to the district court, as B & M urges, and that court decides that the contract (with its arbitration clause) is still in effect, then it will have made a decision that the parties have agreed to submit to the arbitrators. Alternatively, if we refer to arbitration the question as B & M puts it, and if the arbitrators decide that the contract (along with its arbitration clause) has expired then they will have made a decision that was outside their contractual jurisdiction, a decision that they have no power to make. Clearly, something is amiss in B & M's approach.

The dilemma disappears, however, when we regress one step (as did the district court) and adopt Amtrak's starting point for the analysis. The relevant inquiry, then, is whether the parties, at the time they entered into the contract, intended that disputes over the duration of the contract would be decided by a court or by the arbitrators--i.e., whether they agreed to arbitrate disputes over contract expiration. B & M's response to this approach to the case is to suggest that the parties intended for such disputes to be resolved in arbitration only as long as the underlying contract was in effect; once the contract has expired, it claims, such disputes must be resolved by the courts. As is readily apparent, however, this argument leads immediately back to the difficulty we described above. That difficulty can be avoided only if the 1977 agreement is interpreted to yield determinate results: regardless of whether the substantive terms of the contract are currently in force, the arbitration clause either requires disputes over expiration of the contract to be submitted to arbitration or it remits such disputes to the courts.

B.

Recalling the Supreme Court's "first principle" of arbitrability, that ...

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