Hardie v. U.S.
| Decision Date | 10 May 2004 |
| Docket Number | No. 04-5026.,No. 04-5035.,04-5026.,04-5035. |
| Citation | 367 F.3d 1288 |
| Parties | George G. HARDIE, Kard King, Inc., and Park Place Associates, Ltd., Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Federal Circuit |
Christopher H. Buckley, Jr., Gibson, Dunn & Crutcher LLP, of Washington, DC, argued for plaintiffs-appellees. With him on the brief were Daniel W. Nelson and Thomas H. Dupree, Jr.
Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant. With him on the brief were Peter D. Keisler, Assistant Attorney General; and David M. Cohen, Director. Of counsel was Lucille C. Roberts, United States Marshals Office, United States Department of Justice, of Washington, DC.
Before MAYER, Chief Judge, LOURIE and LINN, Circuit Judges.
The United States appeals the order of the United States Court of Federal Claims denying its motion to enjoin an arbitration proceeding addressing the contract claims of plaintiffs-appellees George G. Hardie, Kard King, Inc., and Park Place Associates, Ltd. (collectively, "PPA"), the same claims now before the Court of Federal Claims. Hardie v. United States, No. 99-890C (Fed.Cl. Nov. 14, 2003) [Hardie III]. Because we lack jurisdiction to hear this appeal, we dismiss.
This is the second appeal arising from a case still before the Court of Federal Claims, Hardie v. United States, No. 99-890C [Hardie I]. In the first appeal, Hardie v. United States, 19 Fed.Appx. 899 (Fed.Cir.2001) [Hardie II], we provided the circumstances surrounding the contract dispute before the Court of Federal Claims, which we summarize here briefly.
On December 5, 1983, PPA, a California limited partnership, entered into a joint venture agreement with LCP Associates ("LCP") to organize, own, and operate a legal card-playing club. The club generated income by renting its space to card players and by providing expert card dealers. LCP and PPA enjoyed several years of operation and several million dollars in after-tax profits before the government acquired LCP's general partnership interest in the enterprise by virtue of forfeiture proceedings conducted against LCP under the Racketeer Influenced and Corrupt Organizations Act ("RICO"). Because PPA was innocent of any criminal activity that led to the formation of the enterprise, it retained its partnership interest.
The United States kept its share of the enterprise, and in the nine years following the forfeiture, the government received more than $30 million in partnership distributions. The government also selected individuals to manage the club and enter into contracts to keep the club operational. During the government's operational involvement in the club, however, it allegedly failed to meet its obligations to its partner under the terms of the joint venture agreement. This purportedly resulted in damages to PPA in excess of $150 million. PPA ultimately filed a contract claim with the Court of Federal Claims, which dismissed the suit for lack of subject matter jurisdiction.
In vacating the judgment of the Court of Federal Claims, we stated that it had jurisdiction under the Tucker Act to adjudicate PPA's contract claim. Even though the United States was not an original party to the joint venture agreement, it assumed the obligations of the original party, LCP, when it received that party's interest, retained it for the several years following forfeiture, and "conducted its business in a decidedly nonpublic and nongeneral manner." We consequently remanded the case to the Court of Federal Claims for further proceedings.
Events that have transpired since that appeal bring us to the matter now before us. On June 16, 2003, on the eve of the government's expected submission of a motion for summary judgment with respect to all of plaintiffs' claims, PPA filed for arbitration against the United States in Los Angeles, California, pursuant to the arbitration clause contained in the joint venture agreement. Hardie III at 1-2. The United States filed its objection to PPA's arbitration demand with the arbitration panel, stating, "Because the United States is not a party to the Joint Venture Agreement, the United States is not subject to the jurisdiction of [the] arbitrators in this matter." The panel overruled this objection, concluded that the arbitration would proceed absent a stay order, and promulgated a scheduling order on October 1, 2003.
Prior to the panel's decision to move forward with the arbitration proceeding, the United States moved in the Court of Federal Claims to enjoin the arbitration. As of the date of the panel's scheduling order, however, the Court of Federal Claims had yet to rule on the government's motion. On October 2, 2003, the United States "filed an `emergency' motion to expedite the ruling ... because discovery had begun, and depositions were scheduled to commence th[at] month." Id. at 3. Meanwhile, PPA moved for a stay of the judicial proceedings pending the conclusion of the arbitration. The Court of Federal Claims ultimately denied both motions, citing "its lack of subject-matter jurisdiction to compel, arrest, or enforce arbitration." Id. at 12.
On December 4, 2003, the United States filed a motion in this court for an injunction pending its interlocutory appeal of the Court of Federal Claims's decision. PPA responded and then filed a motion to dismiss for lack of jurisdiction. The motions panel of this court denied the government's motion for an injunction pending appeal, and it deferred to us PPA's motion to dismiss because the government's "arguments that it cannot be subject to arbitration are intertwined with the jurisdictional issues raised by [PPA] in its motion...." Hardie v. United States, Nos. 04-5026, -5035 (Fed.Cir. Dec. 12, 2003). Because a "court must satisfy itself that it has jurisdiction to hear and decide a case before proceeding to the merits," we turn first to that issue. PIN/NIP, Inc....
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