Paul Allison, Inc. v. Minikin Storage of Omaha, Civ. No. 77-0-204.

• Citation: 452 F. Supp. 573
• Decision Date: 28 June 1978
• Docket Number: Civ. No. 77-0-204.
• Parties: PAUL ALLISON, INC., Plaintiff, v. MINIKIN STORAGE OF OMAHA, INC., Defendant and Third-Party Plaintiff, v. The TRAVELERS INDEMNITY COMPANY, Third-Party Defendant.
• Court: U.S. District Court — District of Nebraska

452 F. Supp. 573

PAUL ALLISON, INC., Plaintiff, v. MINIKIN STORAGE OF OMAHA, INC., Defendant and Third-Party Plaintiff, v. The TRAVELERS INDEMNITY COMPANY, Third-Party Defendant.

Civ. No. 77-0-204.

United States District Court, D. Nebraska.

June 28, 1978.

Theodore J. Stouffer, Omaha, Neb., for plaintiff.

Gordon R. Hauptman, Omaha, Neb., for defendant, Minikin Storage.

MEMORANDUM AND ORDER

DENNEY, District Judge.

This matter is before the Court upon the plaintiff's motion for summary judgment Filing # 4 and the defendant's motion to dismiss Filing # 7. As the motion to dismiss goes to the subject matter jurisdiction of this Court, it will be discussed first.

Motion to Dismiss

Paul Allison, Inc. and the Minikin Storage Corporation entered into a construction contract calling for the erection of warehouse facilities in Nebraska. A dispute arose, and the matter was submitted to arbitration in accordance with the contract. An award of $20,607.30 was entered for the plaintiff on September 16, 1975, in the state of Nebraska, a location not specifically designated as an arbitration site in the contract. Minikin Storage subsequently refused to pay the award, and Allison filed a petition in an Oklahoma state court to collect damages arising from the defendant's alleged breach of contract. This petition, which was filed on January 8, 1976, made no reference to the arbitration proceedings.

Minikin Storage, a Nebraska corporation, then filed a petition for removal of the litigation to federal district court in Oklahoma. Subsequent to removal, the Travelers Indemnity Company, a third-party defendant, raised the arbitration proceedings in its answer. Allison thereupon amended its complaint and stated that it would withdraw its claim for contractual damages if the award of arbitration was adjudged binding on both parties.

After argument on the law and the facts, a federal district court judge in Oklahoma granted the defendant's motion for a change of venue. The order authorizing the transfer of this case to the district of Nebraska was executed on June 30, 1977. Paul Allison, Inc. v. Minikin Storage of Omaha, Inc., 436 F.Supp. 444 (W.D.Okl. 1977).

Minikin Storage now argues that this Court has no subject matter jurisdiction to hear the merits of the arbitration claim. Alleging that 9 U.S.C.A. § 9 (1970) requires the confirmation of an arbitration award in a federal court within the district where the award was made, the defendant maintains that the federal court in Oklahoma had no power to confirm a sum awarded by arbitrators sitting in Nebraska. Since the Oklahoma court had no subject matter jurisdiction, Minikin reasons that it had no power to transfer this case under 28 U.S. C.A. § 1404(a) (1976), a venue statute. The defendant urges that the one year limitation on the enforcement of arbitration awards within 9 U.S.C.A. § 9 is mandatory, and precludes an independent application for an order confirming the award in this district at this late date.

It seems fairly clear from the applicable precedents that the Arbitration Act does not grant jurisdiction to federal courts over and above other bases of jurisdiction. See, e. g., Robert Lawrence Co. v. Devonshire Fabrics, Inc., 271 F.2d 402, 408 (2d Cir. 1959), cert. dismissed 364 U.S. 801, 81 S.Ct. 27, 5 L.Ed.2d 37 (1960). Normal jurisdictional prerequisites, satisfied here by the existence of diversity of citizenship between an Oklahoma plaintiff and a Nebraska defendant, must be fulfilled before a federal court has the power to hear a petition to enforce an arbitration award.

The question that must be answered in this litigation is the opposite of that confronted by the Second Circuit in the Robert Lawrence Co. case. The Court must consider whether Congress has limited the jurisdiction of federal courts in arbitration award affirmance cases to the district in which the award was granted. Some courts have so held. See, e. g., Arthur Imerman Undergarment Co. v. Local 162, International Ladies' Garment Workers' Union, 145 F.Supp. 14, 17 (D.N.J.1956).

While Congress has the power to restrict the jurisdiction of federal courts in the manner suggested by the defendant, the statute seems to suggest that the power has not been explicitly executed. The law in question provides as follows:

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made.

9 U.S.C.A. § 9 (1970).

Ordinary canons of statutory construction suggest that Congress would have used stronger language than "such application may be made" or "may apply" if the intention was to restrict the power of a federal court in Arbitration Act cases.

Interpretation of the federal statute as being a permissible rather than a mandatory method for the enforcement of arbitration awards is even more plausible in light of various federal decisions holding that passage of the Arbitration Act did not supersede common law enforcement of such awards. Kentucky River Mills v. Jackson, 206 F.2d 111, 120 (6th Cir. 1953), cert. denied 346 U.S. 887, 74 S.Ct. 144, 98 L.Ed. 392 (1953); Brown v. Bridgeport Rolling Mills Co., 245 F.Supp. 41, 45 n. 7 (D.Conn.1965). No jurisdictional restrictions under Title 9 apply to such a method of enforcement. Therefore, the Court concludes that the federal district court in Oklahoma had subject matter jurisdiction over ...