Hunt v. Mobil Oil Corp., No. 75 Civ. 1160.

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Citation557 F. Supp. 368
Docket NumberNo. 75 Civ. 1160.
PartiesNelson Bunker HUNT, W. Herbert Hunt and Lamar Hunt, Plaintiffs, v. MOBIL OIL CORPORATION; Texaco Inc.; Standard Oil Company of California; The British Petroleum Company, Ltd.; Shell Petroleum Company, Ltd.; Exxon Corporation; Gulf Oil Corporation; Occidental Petroleum Corporation; Grace Petroleum Corporation and Gelsenberg A.G., Defendants.
Decision Date15 February 1983

557 F. Supp. 368

Nelson Bunker HUNT, W. Herbert Hunt and Lamar Hunt, Plaintiffs,
v.
MOBIL OIL CORPORATION; Texaco Inc.; Standard Oil Company of California; The British Petroleum Company, Ltd.; Shell Petroleum Company, Ltd.; Exxon Corporation; Gulf Oil Corporation; Occidental Petroleum Corporation; Grace Petroleum Corporation and Gelsenberg A.G., Defendants.

No. 75 Civ. 1160.

United States District Court, S.D. New York.

February 15, 1983.


557 F. Supp. 369

Philip J. Hirschkop, Lewis H. Goldfarb, Hirschkop & Grad, P.C., Alexandria, Va., Robert Weiner, Theodore Steingut, Berger, Steingut, Weiner, Fox & Stern, New York City, for plaintiffs.

Robert M. Osgood, William H. Knull, III, Sullivan & Cromwell, New York City, for defendant Exxon Corp.

Bruce A. Hecker, Joseph Ferraro, Shea & Gould, New York City, for defendant The British Petroleum Co., Ltd.

A. Randall Friday, Mark A. Brand, Gulf Oil Corporation, Houston, Tex., for defendant Gulf Oil Corp.

Edward F. Howrey, P.C., A. Duncan Whitaker, P.C., Mark D. Wegener, David C. Eddy, Howrey & Simon, Washington, D.C., N.E. Maryan, Jr., Mobil Oil Corporation, New York City, for defendant Mobil Oil Corp.

John R. Hupper, Douglas D. Broadwater, Cravath, Swaine & Moore, Thomas J. Sweeney, III, Davis, Markel, Dwyer & Edwards, New York City, for defendant The Shell Petroleum Co., Ltd.

Gordon B. Spivack, David H. Marks, Carolyn T. Ellis, James R. Eiszner, Jr., Lord, Day & Lord, New York City, Thomas E. Haven, Pillsbury, Madison & Sutro, San Francisco, Cal., for defendant Standard Oil Co. of California.

Charles F. Kazlauskas, Jr., Lawrence R. Jerz, Elizabeth P. Smith, Texaco Inc., White

557 F. Supp. 370
Plains, N.Y., Milton J. Schubin, Randolph S. Sherman, Kaye, Scholer, Fierman, Hays & Handler, New York City, for defendant Texaco Inc

Louis Nizer, Robert R. Salman, Janet P. Kane, Phillips, Nizer, Benjamin, Krim & Ballon, New York City, for defendant Occidental Petroleum Corp.

OPINION

EDWARD WEINFELD, District Judge.

The parties to this action have been engaged in litigation for eight years, and although a final judgment after a trial was entered as to some claims in November 1978, the end of the controversy is nowhere in sight. The action was commenced in 1975 by plaintiffs, Nelson Bunker Hunt, W. Herbert Hunt and Lamar Hunt ("the Hunts"), against the world's seven largest oil producing companies ("the majors"), Occidental Petroleum Corporation ("Occidental"), an independent oil producer, and other independents. Familiarity is assumed with the pertinent rulings by this Court prior to and after trial.1

The Hunts' complaint contained four separate claims. The first charged the defendants with a per se violation of the antitrust laws based upon a preexisting customer clause as defined in the Libyan Producers Agreement ("LPA"); the second, with conspiracy to withhold from plaintiffs millions of barrels of crude oil to which they were entitled under the LPA; the third, with conspiracy to eliminate and destroy the plaintiffs as a competitor by preventing them from reaching an agreement with the Libyan Government, which ultimately led to the Hunts' nationalization by the Libyan Government and their elimination from competition as a producer of Libyan oil; and the fourth, with breach of contract of the LPA because of failure to supply the Hunts with ninety million barrels of oil as required by the terms of the LPA. Prior to trial, the Court dismissed plaintiffs' third claim under the Act of State doctrine.2 It also stayed the fourth claim, the breach of contract claim, which was subject to arbitration under the LPA, pending a trial of the plaintiffs' first and second claims.3

Following extensive pretrial discovery, the case went to trial against only the seven majors and Occidental on plaintiffs' first and second claims and the defendants' counterclaims for restitution and recision. After an eight-week trial, with a record of more than 7,000 pages, and hundreds of exhibits, this Court filed its decision in October of 1978, dismissing the Hunts' claims upon the merits, observing that "whatever claims plaintiffs have, essentially they are for breaches of contract ... matters to be decided in an arbitration proceeding ... provided for under the LPA."4 The judgment was entered November 2, 1978, wherein the Court made a determination pursuant to Rule 54(b) of the Federal Rules of Civil Procedure that there was no just reason for delay and, based upon its findings of fact and conclusions of law, dismissed plaintiffs' first and second claims

557 F. Supp. 371
upon the merits and the defendants' counterclaims for failure of proof. The judgment, in its third decretal provision, "ORDERED and ADJUDGED
that the plaintiffs' fourth claim, the breach of contract claim, is subject to arbitration under the terms of the Libyan Producers' Agreement, and plaintiffs' claims thereunder and defendants' defenses thereto, and counterclaims which were not resolved in the instant action may be presented in said arbitration, and the stay of the arbitration previously granted pending determination of the antitrust issues is hereby vacated.

Following the entry of the aforesaid judgment, this Court heard nothing further of the matter until more than four years later when the majors and Occidental, by a motion dated December 1, 1982, and returnable December 14, moved for an order (1) enjoining the Hunts from commencing or prosecuting any claim or action that interferes with the continuation of the arbitration claims arising out of the LPA then pending before the American Arbitration Association, and (2) directing them to continue with the arbitration in accordance with the terms of the agreement and the prior orders of this Court. Thereafter the Hunts commenced a proceeding in the Supreme Court of the State of New York against the majors, Occidental, other independents who were parties to the pending arbitration and the American Arbitration Association. In that proceeding, the Hunts seek a judgment vacating an alleged final award by the Panel upon various grounds of alleged "misconduct" of the arbitrators, discussed hereafter. Thereupon, the defendants extended the scope of their motion to specifically enjoin the Hunts from proceeding with their state action. This was followed by a motion by the Hunts that this Court recuse itself pursuant to 28 U.S.C. § 455.

We first consider the defendants' motion that the Hunts be directed to continue with the arbitration and that they be enjoined from proceeding with their pending state action. Preliminarily, the Hunts challenge this Court's jurisdiction because (1) it did not order arbitration, and (2) there are no federal claims in this action remaining before the Court.

The essence of the lack of jurisdiction argument is that this Court did not "expressly" or "specifically" order "that the parties proceed to arbitration or that any judgment upon the arbitration award must be entered in this Court";5 that the judgment merely "stated" that the plaintiffs' fourth claim was subject to arbitration. This contention is sheer sophistry; it is not only a play on words, but disregards the determination made under Rule 54(b), as well as the history of the events that led to the lifting of the stay so that the arbitration could proceed as to plaintiffs' fourth claim and the defendants' counterclaims thereto, while the parties pursued their respective appeals.

A manifest purpose of the entry of judgment under Rule 54(b)6 and the ordering and adjudging of paragraph 3 was retention of jurisdiction over the fourth claim so that upon rendition of the final award by the arbitrators the parties could, as provided for by the United States Arbitration Act7, move to confirm, vacate, modify or correct a final award. If that was not the purpose, the fourth claim should have been dismissed. To accept Hunts' position that the Court did not "expressly" and "specifically" direct the parties to proceed to arbitration would mean that the Court's determination under Rule 54(b), which permitted the entry

557 F. Supp. 372
of judgment under claims 1 and 2 was a futile, unnecessary and meaningless act.8

Moreover, the entire history of the litigation leaves no room to doubt that the breach of contract claim remained subject to the Court's jurisdiction pending the determination of the arbitration claims of plaintiffs and the defendants' counterclaims thereto. As early as November, 1975, the issue of the arbitrability of the fourth claim came to the fore. At that time, defendants had moved to stay all proceedings with respect to that claim pending arbitration and Texaco had served a demand for arbitration. Thereupon plaintiffs cross-moved to stay Texaco's demand for immediate arbitration pending the Court's determination of the remaining antitrust claims. The Court then observed that the arbitrability of the fourth claim is "beyond dispute"9 and noted that "the breach of contract and antitrust claims are so inextricably interrelated, one with the other, that it would not be easy, in the light of the parties' contentions, for the arbitrators to avoid wandering into the thicket of complex antitrust issues."10 Thus, the Court granted plaintiffs' cross-motion for a stay of arbitration on the breach of contract claim. Additionally, it granted the defendants' motion "for a stay of proceedings of the fourth claim in this action ... except insofar as the breach of contract claim alleged therein is relevant and pertinent under the first and second antitrust claims."11 Thus, the Court not only stayed the arbitration proceeding pending the Court's disposition of the antitrust claims, but it also stayed its own proceedings in this action on the breach of contract claim pending the completion of the arbitration. It is significant that the Rule 54(b) judgment, entered in 1978, did not lift the Court's stay of its own proceedings on the breach of contract claim and, therefore, that stay continues...

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21 practice notes
  • Drexel Burnham Lambert, Inc. v. Valenzuela Bock, No. 88 Civ. 2815(PNL).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • October 11, 1988
    ...would have had ancillary power also to consider an application to compel under § 4 of the Arbitration Act. See Hunt v. Mobil Oil Corp., 557 F.Supp. 368, 371 (S.D.N.Y.1983) (Weinfeld, J.). The federal court action was, however, dismissed. At the time this petition was removed, there was no f......
  • Hunt v. Mobil Oil Corp., 75 Civ. 1160 (EW).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • February 23, 1987
    ...aff'd without opinion, 610 F.2d 806 (2d Cir.1979). 2 Hunt v. Mobil Oil Corp., 583 F.Supp. 1092 (S.D.N.Y.1984); Hunt v. Mobil Oil Corp., 557 F.Supp. 368 (S.D.N.Y.), aff'd on opinion below, 742 F.2d 1438 (2d Cir.1983); Hunt v. Mobil Oil Corp., 444 F.Supp. 68 (S.D.N.Y.1977); Hunt v. Mobil Oil ......
  • McCann v. Communications Design Corp., Civ. No. B-89-164 (JAC).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • June 28, 1991
    ...of a judge must rest on a factual basis and not on the whim of a litigant who asserts vague contentions." Hunt v. Mobil Oil Corp., 557 F.Supp. 368, 376 (S.D.N.Y.), aff'd, 742 F.2d 1438 (2d Cir. 1983). The test is not the subjective feelings or "beliefs" of the movants. Id.; M......
  • Matter of Nuclear Elec. Ins. & Central Power & Light, No. 96 Civ. 2661 (SHS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • May 24, 1996
    ...Indus., Inc. v. TM Wallcovering, Inc., 675 F.Supp. 867, 870 (S.D.N.Y.1987), aff'd, 871 F.2d 7 (2d Cir.1989); Hunt v. Mobil Oil Corp., 557 F.Supp. 368, 372 (S.D.N.Y.), aff'd, 742 F.2d 1438 (2d Cir.1983); Burger Chef Sys., Inc. v. Baldwin Inc., 365 F.Supp. 1229, 1233 (S.D.N.Y.1973); Network C......
  • Request a trial to view additional results
21 cases
  • Drexel Burnham Lambert, Inc. v. Valenzuela Bock, No. 88 Civ. 2815(PNL).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • October 11, 1988
    ...would have had ancillary power also to consider an application to compel under § 4 of the Arbitration Act. See Hunt v. Mobil Oil Corp., 557 F.Supp. 368, 371 (S.D.N.Y.1983) (Weinfeld, J.). The federal court action was, however, dismissed. At the time this petition was removed, there was no f......
  • Hunt v. Mobil Oil Corp., 75 Civ. 1160 (EW).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • February 23, 1987
    ...aff'd without opinion, 610 F.2d 806 (2d Cir.1979). 2 Hunt v. Mobil Oil Corp., 583 F.Supp. 1092 (S.D.N.Y.1984); Hunt v. Mobil Oil Corp., 557 F.Supp. 368 (S.D.N.Y.), aff'd on opinion below, 742 F.2d 1438 (2d Cir.1983); Hunt v. Mobil Oil Corp., 444 F.Supp. 68 (S.D.N.Y.1977); Hunt v. Mobil Oil ......
  • McCann v. Communications Design Corp., Civ. No. B-89-164 (JAC).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • June 28, 1991
    ...of a judge must rest on a factual basis and not on the whim of a litigant who asserts vague contentions." Hunt v. Mobil Oil Corp., 557 F.Supp. 368, 376 (S.D.N.Y.), aff'd, 742 F.2d 1438 (2d Cir. 1983). The test is not the subjective feelings or "beliefs" of the movants. Id.; M......
  • Matter of Nuclear Elec. Ins. & Central Power & Light, No. 96 Civ. 2661 (SHS).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • May 24, 1996
    ...Indus., Inc. v. TM Wallcovering, Inc., 675 F.Supp. 867, 870 (S.D.N.Y.1987), aff'd, 871 F.2d 7 (2d Cir.1989); Hunt v. Mobil Oil Corp., 557 F.Supp. 368, 372 (S.D.N.Y.), aff'd, 742 F.2d 1438 (2d Cir.1983); Burger Chef Sys., Inc. v. Baldwin Inc., 365 F.Supp. 1229, 1233 (S.D.N.Y.1973); Network C......
  • Request a trial to view additional results

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