Filed: Feb. 03, 2006
Latest Update: Feb. 12, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 04-2000 ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED, Plaintiff - Appellant, versus DATAPATH, INCORPORATED, Defendant - Appellee. - PSI SYSTEMS, INCORPORATED, Movant. No. 04-2298 ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED, Plaintiff - Appellant, versus DATAPATH, INCORPORATED, Defendant - Appellee. No. 05-1169 ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED, Plaintiff - Appellant, versus DATAPATH, INCORPORATED, Defendant - Appellee. - PSI
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 04-2000 ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED, Plaintiff - Appellant, versus DATAPATH, INCORPORATED, Defendant - Appellee. - PSI SYSTEMS, INCORPORATED, Movant. No. 04-2298 ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED, Plaintiff - Appellant, versus DATAPATH, INCORPORATED, Defendant - Appellee. No. 05-1169 ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED, Plaintiff - Appellant, versus DATAPATH, INCORPORATED, Defendant - Appellee. - PSI ..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-2000
ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED,
Plaintiff - Appellant,
versus
DATAPATH, INCORPORATED,
Defendant - Appellee.
------------------
PSI SYSTEMS, INCORPORATED,
Movant.
No. 04-2298
ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED,
Plaintiff - Appellant,
versus
DATAPATH, INCORPORATED,
Defendant - Appellee.
No. 05-1169
ARROWHEAD GLOBAL SOLUTIONS, INCORPORATED,
Plaintiff - Appellant,
versus
DATAPATH, INCORPORATED,
Defendant - Appellee.
-----------------
PSI SYSTEMS, INCORPORATED,
Movant.
Appeals from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Chief
District Judge. (CA-04-391-A)
Argued: November 29, 2005 Decided: February 3, 2006
Before WILKINS, Chief Judge, DUNCAN, Circuit Judge, and HAMILTON,
Senior Circuit Judge.
Nos. 04-2000 and 05-1169 affirmed; No. 04-2298 dismissed by
unpublished per curiam opinion.
ARGUED: Michael J. Lockerby, Maria Christine Klein, HUNTON &
WILLIAMS, Richmond, Virginia, for Appellant. George D. Wenick,
SMITH, CURRIE & HANCOCK, Atlanta, Georgia, for Appellee. ON BRIEF:
John Charles Thomas, Barry T. Meek, HUNTON & WILLIAMS, Richmond,
Virginia, for Appellant.
2
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
3
PER CURIAM:
“Arbitration can be an effective way to resolve a dispute in
less time, at less expense, and with less rancor than litigating in
the courts.” Publicis Commc’n v. True North Commc’ns., 206 F.3d
725, 727 (7th Cir. 2000). Unfortunately, that truism does not
apply in the present case. Appellant, Arrowhead Global Solutions,
Inc. (“AGS”), and their former subcontractor, Appellee, Datapath,
Inc. (“Datapath”), present this court with a combination of three
separate appeals (and assorted motions) all stemming from an
acrimonious business arbitration between the parties.
Datapath alleged that AGS breached a contract between the
parties and demanded arbitration, which was commenced pursuant to
the contract. The resulting arbitration and subsequent litigation
led to three separate appeals. First, the arbitrators made an
award of immediate equitable relief (hereinafter the “Phase I
Award”) in favor of Datapath, enjoining AGS from performing certain
work. The district court confirmed the Phase I Award. That
confirmation is referred to as the “Confirmation Order.” AGS
appeals the Confirmation Order as No. 04-2000, arguing that the
Phase I Award should not have been confirmed both because it was
interlocutory and because it was wrongly decided on its merits.
While AGS was appealing the Confirmation Order, Datapath moved
in the district court to hold AGS in contempt of the Confirmation
Order. The district court, instead of ruling on this motion,
4
decided to remand the issue to the arbitrators to “clarify” their
Phase I Award. The parties refer to this decision as the “Remand
Order,” and AGS appeals it as No. 04-2298. Datapath moves to
dismiss No. 04-2298 for a lack of appellate jurisdiction.
Subsequently, the arbitrators ruled in Datapath’s favor
regarding damages in the case (hereinafter the “Phase II Award”).
The district court confirmed the Phase II Award, and AGS appeals
that confirmation as No. 05-1169.
For the reasons set forth below, we hold as follows: 1)in No.
04-2000, that the district court did have authority under the
Federal Arbitration Act (“FAA”) to confirm the Phase I Award and
that the district court did not err in confirming that Phase I
Award on its merits; 2)in No. 04-2298, that the panel does not have
appellate jurisdiction over the appeal because the Remand Order is
not a final order properly on appeal; and 3) in No. 05-1169, that
the district court did not err in confirming the Phase II Award.
I.
AGS designs, builds, and operates satellite and
telecommunications networks. AGS has a “Prime Contract” with the
Defense Information Systems Agency (“DISA”), which allows AGS to
bid for specific “tasks” from the DISA. When AGS is awarded a
task, it executes a more specific contract with DISA called a “Task
Order.”
5
AGS used Datapath as a subcontractor on a successful bid to
DISA that eventually became Task Order 27. Task Order 27 required
AGS to provide DISA with fourteen teleports--a complicated
satellite receiving device. The subcontract (hereinafter
“Subcontract”) between AGS and Datapath stated that Datapath would
supply, install, and test the teleports and AGS would manage the
work. The Subcontract contained nondisclosure agreements that
limited AGS’s use of Datapath’s protected, proprietary information.
The Subcontract also contained an arbitration clause.
While Task Order 27 was being completed, DISA solicited a
proposal from AGS for additional teleports. AGS’s proposal was
accepted, and this additional work was called “Annex E.” AGS did
not, however, award a subcontract for the Annex E work to Datapath.
Instead, AGS gave the work to Psi Systems, an entity partly owned
by AGS. Based on AGS’s actions, Datapath moved for arbitration
pursuant to the mandatory arbitration clause of the Subcontract.
At arbitration, Datapath alleged that AGS was acting in breach
of the Subcontract by sharing Datapath’s information with a third
party--Psi Systems. Datapath sought immediate equitable relief in
the nature of a preliminary injunction, ordering AGS to cease its
work with Psi Systems. The arbitrators bifurcated the arbitration
into Phase I (the immediate equitable relief) and Phase II
(liability and damages).
6
The arbitrators ruled in Datapath’s favor in the Phase I
proceedings and issued an award enjoining AGS from working with Psi
Systems.1 Datapath then moved to have the district court confirm
this Phase I Award to give it the force and effect of a court
order. After some initial hesitation, the district court confirmed
the Phase I Award; the parties refer to that order as the
Confirmation Order. AGS appealed the Confirmation Order to this
court as No. 04-2000, arguing both that the district court did not
have the authority to confirm the Award because it was
interlocutory, and that the arbitrators erred in deciding the
merits of the Phase I Award.
While the No. 04-2000 appeal was ongoing, Datapath alleged
that AGS was continuing to work with Psi Systems and moved in the
district court to find AGS in contempt of the Confirmation Order.
Instead of deciding whether AGS was in contempt of the Confirmation
Order, the district court remanded the issue to the arbitrators to
“clarify” the Confirmation Order--the so called “Remand Order.”
1
Paragraph one of the Phase I Award states that:
Effective upon receipt of this Award, Arrowhead is hereby
enjoined from the continued performance of its
subcontract with Psi Systems, Inc., or from otherwise
performing the Scope of Work identified by Datapath in
its Technical and Pricing Proposal for Annex E, by any
other party or by Arrowhead, without the consent of
Datapath.
J.A. at 12.
7
AGS appeals the Remand Order as No. 04-2298. Datapath moves to
dismiss this appeal for a lack of appellate jurisdiction.
Finally, the arbitrators decided the Phase II section of the
arbitration in Datapath’s favor and awarded damages of
$2,125,799.90, which included $917,499 of lost profits on the Annex
E work. The district court confirmed the Phase II Award, and AGS
appeals it as No. 05-1169.
II.
We review the district court decisions to confirm the
arbitration award de novo. Peoples Sec. Life Ins. Co. v.
Monumental Life Ins. Co., 991 F.2d 141, 145 (4th Cir. 1993). Both
we and the district court are confined by the federal law favoring
arbitration agreements. Courts are allowed to vacate arbitration
awards only if they meet the narrow statutory factors set forth in
9 U.S.C. § 10(a) or if the award demonstrates a “‘manifest
disregard’ of applicable law.” Gallus Investments, L.P. v.
Pudgie’s Famous Chicken,
134 F.3d 231, 233-34 (4th Cir. 1998).
More specifically,
[A] court's belief that an arbitrator misapplied the law
will not justify vacation of an arbitral award. Rather,
appellant is required to show that the arbitrators were
aware of the law, understood it correctly, found it
applicable to the case before them, and yet chose to
ignore it in propounding their decision.
Remmey v. PaineWebber, Inc., 32 F.3d 143, 149 (4th Cir. 1994).
8
III.
We first review No. 04-2000, the appeal of the Confirmation
Order. This appeal raises two issues. The first is whether the
district court had authority to confirm the Phase I Award under
section 9 of the FAA. The second is whether, if the district court
did have authority to confirm the Phase I Award, it erred in
confirming that Award on its merits. With respect to the first
issue, we conclude that the district court did have authority to
confirm the Award. While AGS correctly notes that piecemeal
litigation is generally disfavored, the law in this area indicates
that district courts do have the authority to confirm discrete
time-sensitive issues such as the Phase I Award. With respect to
the second issue, we hold that the district court did not err in
confirming the Award on its merits.
A.
Section 9 of the FAA, in relevant part, states that “at any
time within one year after the [arbitration] 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.” 9 U.S.C. § 9.
Notably, nothing in section 9 compelling the district court to
confirm an arbitration award mandates that the award must be final.
9
Section 10 of the FAA, however, notes that the district court “may
make an order vacating the award upon the application of any party
to the arbitration . . . where the arbitrators exceeded their
powers, or so imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was not made.” 9
U.S.C. § 10 (emphasis added).
AGS contends that the district court erred in not vacating the
Phase I Award because it did not meet this requirement of finality.
Specifically, AGS argues that the district court should not have
confirmed the Phase I Award while Phase II of the arbitration had
yet to occur. We reject this claim, persuaded by the well-reasoned
opinions of the other circuits that have considered similar
situations.
As the Seventh Circuit has recently recognized, “[a] ruling on
a discrete, time-sensitive issue may be final and ripe for
confirmation even though other claims remain to be addressed by the
arbitrators.” Publicis, 206 F.3d at 729. Other circuits agree
that “an 'interim' award that finally and definitively disposes of
a separate independent claim may be confirmed notwithstanding the
absence of an award that finally disposes of all the claims that
were submitted to arbitration.” Island Creek Coal Sales Co. v.
Gainesville,
729 F.2d 1046, 1049 (6th Cir. 1984) (internal
quotation omitted). This approach makes sense:
Temporary equitable relief in arbitration may be
essential to preserve assets or enforce performance
10
which, if not preserved or enforced, may render a final
award meaningless. However, if temporary equitable relief
is to have any meaning, the relief must be enforceable at
the time it is granted, not after an arbitrator's final
decision on the merits. Arbitrators have no power to
enforce their decisions. Only courts have that power.
Consequently, courts in other circuits that have been
faced with arbitrators' temporary equitable awards have
not characterized them as non-final awards on the merits
which can only be reviewed in extreme cases. Rather, they
have characterized them as confirmable, final awards on
an issue distinct from the controversy on the merits.
Pacific Reinsurance Management Corp. v. Ohio Reinsurance Corp., 935
F.2d 1019, 1022-23 (9th Cir. 1991) (internal citations omitted).
In short, as the other circuits to have addressed this issue
recognize, arbitration panels must have the power to issue
temporary equitable relief in the nature of a preliminary
injunction, and district courts must have the power to confirm and
enforce that equitable relief as “final” in order for the equitable
relief to have teeth. Accordingly, the question of whether the
district court had the power under section 9 to confirm the Stage
One Award collapses into the question of whether that Award was
“[a] ruling on a discrete, time-sensitive issue.” We conclude that
it was.
The Phase I Award represented equitable relief against AGS,
preventing it from misusing Datapath’s trade secrets. Had Datapath
been forced to wait until the resolution of the entire arbitration
in order to obtain this relief, it would have been powerless to
prevent AGS from misusing its proprietary information through AGS’s
subcontract with Psi Systems. This circumstance underscores the
11
need for the “discrete, time-sensitive” rule. Accordingly, we hold
that the district court correctly classified the Phase I Award “as
a discrete, separate, and definitive ruling apart from any decision
on the damages,” J.A. at 450, and reject AGS’s contention that the
Award should not have been confirmed as not final.2
B.
Having concluded that the district court had the authority to
confirm the Phase I Award under section 9 of the FAA, we next
consider whether the district court erred in confirming that Award
on its merits. AGS argues that the Phase I Award exceeds the
arbitrator’s authority and was in violation of public policy.
Considering the great deference that courts must give to
2
Though we review the legal status of the arbitration award de
novo and do not defer to the arbitration panel’s classification of
its own action, it is worth noting that the arbitration panel
believed that the Phase I Award was a final order:
The [Phase I] hearing was understood by the parties, and
intended to be a final resolution of all . . . equitable
claims. At the completion of the hearing the time for
submission of evidence was concluded and the record was
closed as to all requests for equitable relief. . . .
While the [Phase I] Award was “interim” in nature, i.e.,
made prior to a [sic] award on the damages portion of the
arbitration, it is, and was intended to be final and
enforceable by the court, and not interlocutory, as it
relates to all equitable relief sought in this
arbitration.
J.A. at 429 (emphasis in original).
12
arbitration awards, we affirm the district court’s Confirmation
Award.
1.
AGS first argues that the arbitrators exceeded their authority
by improperly adjudicating the rights and responsibilities of Psi
Systems and DISA, neither of whom are signatories to the
arbitration agreement. Specifically, AGS contends that, by
enjoining AGS from performing the Annex E work with Psi Systems for
DISA, the Phase I Award improperly impacted Psi Systems’s and
DISA’s rights. This argument is without merit.
AGS correctly notes that, as a matter of hornbook contract
law, arbitration panels cannot determine the legal rights and
obligations of non-parties to the arbitration agreement. E.g.,
4 Am Jur 2d Alternative Dispute Resolution § 83 (2004). Indeed,
neither Datapath, nor the arbitrators, nor the district court
dispute this fact. The arbitrators in this case, however, did not
impact the legal rights or obligations of DISA or Psi-Systems.
AGS concedes that the arbitrators have the power to dictate
the actions of AGS that relate to the subcontract. This power may,
as a practical matter, have an incidental effect on other parties.
That effect, however, does not prevent the arbitrators from
exercising the power that they do have to prohibit AGS from
profiting from information proprietary to Datapath. To hold
13
otherwise would leave both courts and arbitrators powerless to
issue relief in circumstances such as this.
We therefore affirm the district court’s conclusion that the
Phase I Award did not affect the legal rights and obligations of
non-parties to the arbitration.
2.
AGS also contends that the district court erred in confirming
the Phase I Award because the Award violated pubic policy. We
disagree.
AGS first argues that the Phase I Award violates the public
policy of Virginia because the confidential information was
eventually posted on the internet by a third party, which means
that the information is no longer a “trade secret” under Virginia
law. See Religious Tech. Ctr. v. Lerma, 908 F. Supp. 1362, 1368
(E.D. Va. 1995) (noting that “[o]nce a trade secret is posted on
the Internet, it is effectively part of the public domain,
impossible to retrieve”). AGS contends that the information was,
therefore, no longer a secret subject to a non-disclosure
injunction. To the extent AGS may be correct, this alleged
misapplication of Virginia trade secret law by the arbitrators is
simply an error of law.3 Errors of law are not one of the grounds
on which a court can overturn an arbitration award. Apex Plumbing
3
Though we need not reach the issue, we note that Datapath
challenges both the legal and factual bases underlying this claim.
14
Supply v. U.S. Supply Co., 142 F.3d 188, 193-94 (4th Cir. 1998).
(“Review of an arbitrator's award is severely circumscribed . . .
because to allow full scrutiny of such awards would frustrate the
purpose of having arbitration at all--the quick resolution of
disputes and the avoidance of the expense and delay associated with
litigation. . . . [A]s a matter of law neither misinterpretation of
a contract nor an error of law constitutes a ground on which an
award can be vacated." (internal citations and quotations omitted))
AGS next contends that Datapath did not post an appeals bond,
which would be required by Federal Rule of Civil Procedure 65 if
one views the Phase I Award as a preliminary injunction. Fed. R.
Civ. P. 65(c). AGS notes that failure to require Datapath to post
this bond frustrates the public policy behind preliminary
injunctions. This contention fails because, even assuming arguendo
that Datapath’s failure to post an appeals bond represents error,
the mis-interpretation of Rule 65 would be a non-reversible error
of law.
Finally, AGS argues that there is a general violation of
public policy in confirming an award that will make it difficult
for DISA to perform vital military operations. However, AGS makes
no such showing, and we are unable to infer it on the record before
us. We are unwilling to adopt, on these facts, a per se rule that
would preclude courts and arbitrators from ever issuing equitable
relief when a contract with the United States military is involved.
15
For the foregoing reasons, we reject AGS’s arguments
concerning the merits of the Phase I Award and affirm the district
court Confirmation Order in No. 04-2000.
IV.
Datapath moved in the district court to hold AGS in contempt
of the Confirmation Order, and the district court remanded that
Order to the arbitrators for “clarification.” AGS appeals that
“Remand Order” as improper. Datapath, while responding to the
appeal of the Remand Order on its merits, also moves to dismiss the
appeal for a lack of appellate jurisdiction.4 There are three
possible statutory bases for our appellate jurisdiction in this
case: 9 U.S.C. § 16(a)(4); 9 U.S.C. § 16(a)(1)(E); and 28 U.S.C.
§ 1292(a)(1). Because the Remand Order is not an appealable final
order under any of those statutes, we grant Datapath’s motion and
dismiss No. 04-2298 for a lack of appellate jurisdiction.5
4
“Motions to dismiss based on the ground that the appeal is
not within the jurisdiction of the Court . . . may be filed at any
time.” Local Rule 27(f).
5
AGS also attempts to bypass the jurisdictional statutes
entirely, arguing that “Datapath fails to acknowledge . . . that
this matter is already subject to the jurisdiction of this court”
by virtue of the pending appeal in No. 04-2000. AGS’s Opposition
to Datapath’s Motion to Dismiss for Lack of Jurisdiction at 1.
AGS, however, misapprehends our role as an appellate court. The
question for this court is not whether we have jurisdiction over
“this matter,” but whether we have jurisdiction over the order
being appealed. While the piecemeal path that this litigation has
taken may, in hindsight, have been unfortunate, we cannot extend
our jurisdiction without a valid statutory basis. AGS fails to
16
A.
Under the FAA, “[a]n appeal may be taken from . . . a final
decision with respect to an arbitration that is subject to this
title.” 9 U.S.C. § 16(a)(4). The Supreme Court has analyzed this
statute and noted that
the term “final decision” has a well-developed and
longstanding meaning. It is a decision that “ends the
litigation on the merits and leaves nothing more for the
court to do but execute the judgment.” Because the FAA
does not define “a final decision with respect to an
arbitration” or otherwise suggest that the ordinary
meaning of “final decision” should not apply, we accord
the term its well-established meaning.
Green Tree Fin. Corp. -Alabama v. Randolph, 531 U.S. 79, 86 (2000)
(citations omitted). Accordingly, we must decide whether the
Remand Order “ends the litigation on the merits and leaves nothing
more for the court to do but execute the judgment.” In this case,
it does not. Indeed, the Remand Order does not really do anything.
As AGS expressly concedes, “the District Court has held no
evidentiary hearings and made no fact findings or legal rulings on
the . . . contempt motions.” Appellant’s Second Supplemental Brief
at 14. Far from ending the litigation on its merits, the Remand
Order does nothing. The district court simply asks the arbitrators
for clarification, it takes no further judicial action. The
district court, in effect, announced that it would ask the
arbitrators for help in deciding whether to grant the contempt
provide that basis with respect to the Remand Order.
17
motion, but it has not yet issued a final order denying it.
Section 16(a)(4) does not provide this court with jurisdiction over
the mere request for assistance.
B.
AGS also argues that the panel has jurisdiction to appeal the
Remand Order because it is an order “modifying, correcting, or
vacating an award.” 9 U.S.C. § 16(a)(1)(E). Specifically, AGS
argues that the Remand Order is a de facto vacation of the
Confirmation Order. This argument is equally unavailing. If the
arbitrators issue a ruling that does modify, correct, or vacate the
Confirmation Order, and if the district court adopts that ruling,
then § 16(a)(1)(E) applies. Right now, however, neither action has
occurred. Only the district court or this court can modify,
correct, or vacate an award, and neither has done so. Section
16(a)(1)(E) is therefore inapplicable.
C.
AGS finally contends that the Remand Order is appealable under
28 U.S.C. § 1292(a)(1) as an order modifying an injunction. This
contention fails for the same reason that § 16(a)(1)(E) is
inapplicable--the Remand Order does not modify anything. It simply
asks the arbitrators to take action that might or might not
eventually lead to the modification of the Confirmation Order.
18
In summary, we do not have the statutory authority to hear the
appeal in No. 04-2298 and we therefore grant Datapath’s motion to
Dismiss for lack of appellate jurisdiction.
V.
The third and final piece of this appeal concerns the Phase II
Award, confirmed by the district court and appealed by AGS as No.
05-1169. AGS argues that the arbitrators did not have the power to
award Datapath damages on the Annex E work because Annex E was not
part of the original subcontract agreeing to arbitration. For the
reasons that follow, we disagree.6
Datapath and AGS did not contract to do the Annex E work.
Accordingly, there is no separate agreement to arbitrate the Annex
E work. Any power that the arbitrators have over Annex E must
therefore derive from the original Task Order 27 Subcontract. The
original Subcontract states that “[i]n the event that a dispute
6
AGS also makes various arguments that the award of lost
profits was in “manifest disregard” of Virginia law. Specifically,
it contends that the parties had contracted not to allow lost
profits, that Datapath did not mitigate its damages as required by
Virginia law, and that the alleged trade secrets at issue were
available on the internet, and therefore not trade secrets under
Virginia law. These arguments all fail.
In order to demonstrate “manifest disregard” of Virginia law,
AGS must demonstrate that “the arbitrators were aware of the law,
understood it correctly, found it applicable to the case before
them, and yet chose to ignore it in propounding their decision.”
Remmey, 32 F.3d at 149. AGS does not meet this exacting standard.
Accordingly, even if the arbitrators did misapply the law as
alleged by AGS, the district court still correctly followed the FAA
in confirming the Phase II Award.
19
shall arise during the performance of this Subcontract, the Parties
agree [to arbitrate the dispute.]” J.A. at 225. The question then
becomes--did the Annex E dispute arise “during the performance of”
the Task Order 27 Subcontract.
While this contractual language is somewhat ambiguous, the
Supreme Court has long noted that “as a matter of federal law, any
doubts concerning the scope of arbitrable issues should be resolved
in favor of arbitration, whether the problem at hand is the
construction of the contract language itself or an allegation of
waiver, delay, or a like defense to arbitrability.” Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983).
In this case, the Annex E work was not totally separate from
the Task Order 27 Subcontract, as AGS implies. Rather, it was an
extension of Task Order 27--involving an agreement with respect to
more of the same product that the parties were already providing to
DISA. In addition, AGS allegedly used the confidential information
that it obtained from Datapath during performance of the Task Order
27 Subcontract in deciding to award the Annex E subcontract to Psi
Systems. In short, Annex E, while technically a separate contract
from the Task Order 27 Subcontract, was intimately connected to the
Task Order 27 Subcontract. Accordingly, we follow the federal
policy of resolving disputes in favor of arbitrability and agree
with the district court that the Annex E dispute occurred “during
20
the performance of” the Task Order 27 Subcontract.7 We therefore
affirm the district court decision to confirm the Phase II Award.8
VI.
The district court in this case has noted that the piecemeal
approach taken in this litigation, when viewed with 20-20
hindsight, was unfortunate. See J.A. at 536 (“This doing it
piecemeal I guess in some cases will work, but I must say in this
one, it sure hasn’t.”). Unfortunate case management, however, does
not amount to reversible legal error. The final orders issued by
the district court in this case were correct. We lack jurisdiction
to determine whether the non-final order is correct. Therefore, we
7
AGS also argues that the Annex E damages were a thinly veiled
attempt to obtain contempt sanctions from the arbitrators for AGS’s
alleged violation of the Confirmation Order. AGS correctly notes
that only a court has the power to issue contempt sanctions.
However, the argument that the Annex E damages were an attempt to
obtain contempt sanctions in disguise fails on its face. Datapath
requested the Annex E damages before AGS’s alleged violation of the
Confirmation Order. Appellee’s Response To Appellant’s Second
Supplemental Brief at 13. As a matter of temporal logic, the Annex
E damages cannot be sanctions for activity that had yet to occur.
8
AGS also argues that the district court erred in confirming
the Phase II Award before ruling on a Rule 60(b) motion that AGS
filed challenging the Phase I Award. Once again, the parties
improperly attempt to conflate the separate issues in this appeal
into one meta-appeal. At some point, the district court will
consider and rule on AGS’s Rule 60 motion. At that point, either
AGS or Datapath will have a final order from the district court to
appeal to this court. Until that point, the fact that AGS has
filed post-judgment motions in No. 04-2000 does not prevent this
court from hearing an appeal of the final order in No. 05-1169.
21
affirm the final orders at issue in No. 04-2000 and No. 05-1169 and
dismiss No. 04-2298 for a lack of appellate jurisdiction.
Nos. 04-2000 and 05-1169 AFFIRMED
No. 04-2298 DISMISSED
22
