McKEAGUE, Circuit Judge.
This case poses the question whether a district court has jurisdiction to confirm an arbitration panel's interim award denying class arbitration. The district court, following guidance provided by this court in a closely related earlier ruling in the same case, determined that the requisite ripeness is lacking and dismissed the motion to confirm for lack of jurisdiction. Because we agree that appellant has failed to demonstrate that it is subject to cognizable hardship if immediate judicial review of the interim award is denied, we affirm.
Plaintiff-appellant Dealer Computer Services, Inc. ("DCS") provides computer hardware and software support to automobile dealers. It developed an electronic parts catalog system known as a Computerized Publication Display ("CPD") that enabled car dealers to display then current automobile parts, prices, descriptive data and parts visualizations. Defendant-appellee Dub Herring Ford, a Mississippi corporation, and sixty-three other originally named Ford dealers are a group of dealerships that were parties to written contracts with DCS for the provision of CPD systems and services. They are also putative class representatives of a class of some 2,470 similarly situated Ford dealerships across the country allegedly aggrieved by DCS's breaches of the CPD contracts. All of the CPD contracts contained an arbitration provision requiring that any contract-related controversy be submitted to arbitration under the Commercial Arbitration Rules of the American
In November 2006, the arbitration panel issued its Clause Construction Award, concluding that the applicable CPD contracts permit the present arbitration to proceed as a class arbitration. DCS moved the district court to vacate the clause construction award. The district court denied the motion on May 29, 2007. R. 23, Order; Dealer Computer Services, Inc. v. Dub Herring Ford, 489 F.Supp.2d 772 (E.D.Mich.2007). The district court concluded that it had jurisdiction to review the award even though it was not a final arbitration award, but denied the motion to vacate the award, concluding that the arbitration panel did not exceed its powers or manifestly disregard the applicable law. On appeal, we vacated the district court's order, holding that DCS's motion to vacate was not ripe for judicial review and that the district court therefore lacked jurisdiction. Dealer Computer Services, Inc. v. Dub Herring Ford, 547 F.3d 558 (6th Cir. 2008) ("DCS-I").
Next, in proceedings conducted from August to October 2008, the arbitration panel considered evidence and arguments regarding class certification. In December 2008, the arbitration panel issued its 37-page Partial Final Class Determination Award, denying class certification. DCS moved the district court to re-open the case and confirm the class determination award. Taking its lead from our earlier opinion on DCS's motion to vacate the interim clause construction award, the district court applied the prescribed three-factor ripeness test. The court determined that the arbitration panel's denial of class certification did not pose a likelihood of harm to DCS and that denial of immediate judicial review of the interlocutory award would pose no hardship to DCS. R. 43, Order; Dealer Computer Services, Inc. v. Dub Herring Ford, 2009 WL 1508210 (E.D.Mich., May 29, 2009) (unpublished). The district court therefore concluded that the matter was still not ripe and dismissed DCS's motion to confirm. In its appeal from this ruling, DCS argues that the district court misconstrued our earlier ruling, applied the wrong standard in assessing ripeness, and misapplied the standard that it did apply.
Although Dub Herring Ford has not moved to dismiss the appeal for lack of appellate jurisdiction, it has questioned DCS's asserted reliance on the collateral order exception to the final judgment rule of 28 U.S.C. § 1291 as a basis for this court's appellate jurisdiction. Indeed, the district court's dismissal order, essentially refusing to finally determine the propriety of the arbitration panel's class determination award, does not appear to meet the requirements of the collateral order exception. See In re Dow Corning Corp., 86 F.3d 482, 488 (6th Cir. 1996) (recognizing that an interlocutory order may be immediately reviewable under the collateral order exception if it: "(1) conclusively determines the disputed question; (2) resolves an important question completely separate from the merits of the action; and (3) is effectively unreviewable on appeal from the final judgment.").
In response, however, DCS has correctly noted that appeal is properly taken under 9 U.S.C. § 16(a)(1)(D), expressly allowing appeals from orders confirming or denying confirmation of arbitration awards and partial awards. See Bull HN Information Systems, Inc. v. Hutson, 229 F.3d 321, 327-28 (1st Cir.2000) (applying § 16(a)(1)(D) as permitting appeal from an order denying confirmation of an interim
The district court's determination that it lacked jurisdiction for lack of ripeness is subject to de novo review. DCS-I, 547 F.3d at 560. In our earlier ruling, we summarized the governing standards as follows:
Id. at 560-61 (citations omitted). See also Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., ___ U.S. ___, 130 S.Ct. 1758, 1767 n. 2, 176 L.Ed.2d 605 (2010) ("In evaluating a claim to determine whether it is ripe for judicial review, we consider both `the fitness of the issues for judicial decision' and `the hardship of withholding court consideration.'" (citation omitted)).
The ripeness inquiry is triggered by the fact that the instant interlocutory arbitration award, like the one at issue in our earlier ruling, is not a final arbitration award. A final award deciding the merits of the dealers' breach of contract claims would clearly be subject to confirmation under the Federal Arbitration Act, 9 U.S.C. § 9.
DCS concedes that the class determination award is an interim award, but argues that it is nonetheless subject to judicial review because it resolves a "separate, discrete, independent, severable issue" and therefore has sufficient "finality." See Island Creek Coal Sales Co. v. City of Gainesville, FL, 729 F.2d 1046, 1049 (6th Cir.1984), abrogated on other grounds by Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529 U.S. 193, 120 S.Ct. 1331, 146 L.Ed.2d 171 (2000). In Island Creek, the Sixth Circuit upheld the district court's authority to confirm an interim award that, far from merely deciding a procedural issue, granted injunctive relief to maintain the status quo during the pendency of arbitration proceedings. Specifically, the award "finally and definitively" resolved "a separate independent claim," i.e., the "self-contained issue" whether a party was required to perform under the contract during the pendency of arbitration. Id., 729 F.2d at 1049. In other words, the interim award directly and profoundly affected the parties' substantive rights in their contractual relationship, even though it did not finally dispose of all the claims submitted to arbitration. Id.
Here, in contrast, the interim class arbitration determination, albeit a significant procedural step in the arbitration proceedings, has no impact on the parties' substantive rights or the merits of any claim. The denial of class arbitration proceedings arguably disposes of a discrete, independent, severable issue, but it is a procedural issue—hardly the sort of final decision that warrants immediate judicial review in disruption of ongoing arbitration proceedings. Island Creek is thus distinguishable.
This very distinction is among the reasons why, in litigation (as opposed to arbitration), class certification decisions by the district courts were traditionally not deemed to have the requisite finality to warrant immediate appellate review. See
Hence, insofar as case law applying Rule 23(f) is relevant, by analogy, to assessment of the district court's jurisdiction to confirm the arbitration panel's denial of class arbitration in this case, it does not counsel in favor of a per se rule of appealability because the denial is sufficiently "final." Rather, it counsels in favor of requiring consideration of the very sort of ripeness factors that the district court did consider in accordance with our recent direction in DCS-I, 547 F.3d at 560-63.
DCS insists the DCS-I ruling expressly contemplated the immediate reviewability of the arbitration panel's class arbitration determination. DCS relies on the following language from our opinion:
Id. at 562-63 (bold-emphasis added).
DCS construes this language more broadly than warranted. DCS reads the language as reflecting our determination that the motion to vacate the clause construction award was not ripe because DCS would necessarily—i.e., irrespective of outcome—have another opportunity to obtain interlocutory judicial review of the class determination award. As indicated by the highlighted language, however, the contemplated judicial review of the class determination award is clearly contingent on the eventuality of an unfavorable award. Indeed, whether the arbitration panel ultimately decided to certify the class or not, the decision would be interlocutory. An interlocutory award, we made clear, is ripe for judicial review only if the three ripeness factors—i.e., likelihood of harm, hardship, and factual development—are met.
It is because of the importance of the hardship element to the ripeness assessment that this favorable/unfavorable distinction is not merely one of semantics. And it is the hardship requirement that undermines DCS's argument that because motions to confirm and to vacate are two sides of the same coin, both forms of judicial review should be mutually available. Yes, if Dub Herring Ford and the other dealers had moved the district court to vacate the class determination award under 9 U.S.C. § 10, they may very well have been able to establish the requisite hardship (e.g., in the form of the "death-knell" factor) to justify the exercise of jurisdiction notwithstanding the non-final nature of the award. In that case, yes, the district court would presumably be able to exercise supplemental jurisdiction over "the flip side of the coin," DCS's anticipated reciprocal motion to confirm the award. Yet, because the dealers have not moved to vacate the award, DCS, as the winning party, is handicapped in its efforts to obtain judicial review. Pursuant to DCS-I, which has newly been confirmed in material part by the Supreme Court in Stolt-Nielsen, DCS must meet the requirements of ripeness to trigger federal court jurisdiction.
This result, requiring either a final award or a sufficiently ripe interlocutory award, is consistent with the "national policy favoring arbitration." Hall Street, 552 U.S. at 588, 128 S.Ct. 1396. It "maintain[s] arbitration's essential virtue of resolving disputes straightaway" and avoids "open[ing] the door to the full-bore legal and evidentiary appeals that can `render informal arbitration merely a prelude to a more cumbersome and time-consuming judicial review process,' ... and bring arbitration theory to grief in post-arbitration process." Id. (citation omitted). See also Quixtar, Inc. v. Brady, 328 Fed.Appx. 317, 320-21 (6th Cir.2009) ("A district court should not hold itself out as an appellate tribunal during an ongoing arbitration proceeding, since applications for interlocutory relief result only in a waste of time, the interruption of the arbitration proceeding, and ... delaying tactics in a proceeding that is supposed to produce a speedy decision." (quoting Michaels v. Mariforum Shipping, S.A., 624 F.2d 411, 414 (2d Cir. 1980))). Accordingly, because the instant class determination award is undeniably an interim award, DCS has the burden of showing ripeness to establish jurisdiction for judicial review.
The district court granted Dub Herring Ford's motion to dismiss DCS's motion to
R. 43, Order, p. 3-4 (quoting DCS-I, 547 F.3d at 560). The district court's determination that the factual record is sufficiently developed to permit judicial review is not challenged. As to the other two factors, however, the court found that DCS could "not establish that it would suffer harm or a hardship if judicial review is denied at this stage of the proceedings." Id. at 4. The court reasoned that because Dub Herring Ford failed to obtain class certification, the potential harm to DCS involved in defending against class arbitration would never occur. Id. at 5.
The district court's analysis is faithful to the direction provided in DCS-I, where we observed, in holding that DCS's motion to vacate the clause construction award was unripe, that the "absence of hardship for DCS at this juncture renders DCS's motion to vacate the sort of premature adjudication the ripeness doctrine seeks to avoid." DCS-I, 547 F.3d at 563. The district court even parroted our reiteration of Judge Posner's colorful admonition that courts should remain "reluctant to invite a judicial proceeding every time the arbitrator sneezes." Id. (quoting Smart v. Int'l Bhd. of Elec. Workers, Local 702, 315 F.3d 721, 725 (7th Cir.2002)).
DCS contends the district court should not have applied this ripeness test, noting that other circuits apply a less rigid standard and that the Supreme Court itself has applied a two-part ripeness test, sans the likelihood-of-harm factor. The three-factor test set forth in DCS-I is essentially the law of the case and DCS has not presented any persuasive reason to abandon it in favor of any other circuit's standard. We acknowledge, however, that the Supreme Court, in Stolt-Nielsen, applied a two-factor ripeness test in a context practically identical to the situation faced in DCS-I. Is the two-factor test materially different? If it were applied here, would it produce a different result?
In Stolt-Nielsen, the Court reversed a Second Circuit decision. The Second Circuit had ordered that the district court's order vacating an arbitration panel's clause construction award be vacated. The Supreme Court ultimately held that the arbitration panel exceeded its powers by imposing class arbitration on parties whose contractual arbitration agreement was silent on the issue. Stolt-Nielsen, 130 S.Ct. at 1768-70. This substantive holding is not relevant to the present appeal. However, the Court had the occasion to consider the ripeness of the motion to vacate the clause construction award. Responding to objection by the dissent, the Stolt-Nielsen majority summarily held the matter was ripe based on two ripeness factors: "the fitness of the issues for judicial decision," and "the hardship of withholding judicial consideration." Id. at 1767 n. 2 (quoting National Park Hospitality Assn. v. Dep't of Interior, 538 U.S. 803, 808, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003)).
This test is nominally different from the three-factor standard we employed in DCS-I, but in practical effect, the distinction is one without a difference. In Stolt-Nielsen, the Court focused on the hardship element. The Court observed that "[t]he arbitration panel's award means that petitioners must now submit to class determination proceedings before arbitrators who, if petitioners are correct, have no authority
The facts and procedural posture of the case presented in Stolt-Nielsen are materially indistinguishable from those presented in DCS-I. Yet, what Stolt-Nielsen found to be ripe, we found not to be ripe. In this respect (i.e., the merits of the ripeness determination), the two decisions may be deemed in conflict.
In challenging the correctness of the district court's ripeness determination, DCS asserts a different form of harm or hardship than the district court considered. The district court held that the potential harm to DCS involved in defending against class arbitration would never occur and that therefore, DCS had failed to demonstrate that withholding judicial review would pose any hardship. On appeal, DCS acknowledges that it won the class determination battle and is no longer threatened, in this case, by the specter of class arbitration expenses and liability. Adopting a new approach, DCS now contends that the hardship posed by denial of immediate confirmation of the class determination award resides in the (a) postponement of judicial confirmation until after the arbitration panel renders its final award(s); and (b) the denial of repose and certainty of preclusive effect that would accompany a confirmed award.
DCS did not assert this argument in the district court. The issue is therefore forfeited. See In re Hood, 319 F.3d 755, 760 (6th Cir.2003) ("It is well-settled that this court will not consider arguments raised for the first time on appeal unless our failure to consider the issue will result in a plain miscarriage of justice."). A defect in the federal court's original jurisdiction is an issue that cannot be waived and must be raised sua sponte when noticed. See Ku v. State of Tenn., 322 F.3d 431, 433 (6th Cir.2003). Here, however, DCS failed to carry its burden of establishing that the district court had jurisdiction to consider its motion to confirm the interim award and now seeks to rehabilitate its failed effort based on arguments never made to the district court. To address the merits of DCS's new appellate arguments would be to permit an undeserved second bite at the apple under circumstances that do not implicate a miscarriage of justice. Yet, even if we consider the merits of the forfeited arguments, the outcome is unchanged.
DCS's new arguments are only weakly supported. First, DCS argues that its opportunity to obtain judicial review and confirmation of the class determination award may be entirely foreclosed if the one-year
Absent immediate confirmation of the class determination award, DCS further contends, the award lacks the preclusive effect DCS needs to protect it from other claimants' potential efforts to obtain class arbitration of similar breach of contract claims in other arbitration proceedings. In particular, DCS refers to another pending putative class arbitration proceeding involving similar claims and commenced just four months after the instant arbitration, Fox Valley Ford, et al. v. DCS, in which the claimants are represented by the same counsel as the claimants in this case. DCS contends that counsel for the Fox Valley Ford claimants have made clear their intentions to pursue class arbitration proceedings in that case if the class determination award in this case is not confirmed.
In response, Dub Herring Ford contends that Fox Valley Ford involves dissimilar breach of contract claims. Yet, in any event, we remain unpersuaded that such "collateral hardship" (i.e., potentially incurring expenses in another case) is cognizable in evaluating the ripeness of DCS's motion for confirmation of an interim arbitration award in this case. In evaluating ripeness, the Supreme Court has recognized that the disadvantages of premature review ordinarily outweigh the burden created by the additional costs of—even repetitive—litigation. See Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 735, 118 S.Ct. 1665, 140 L.Ed.2d 921 (1998). The Ohio Forestry Court thus held that the possibility of potential litigation costs in other cases was not sufficient hardship by itself to justify immediate review of an otherwise unripe matter. Id. at 734-35, 118 S.Ct. 1665. The Court observed that a case-by-case approach, albeit potentially frustrating and inefficient, is the traditional and normal mode of operation of the courts. Id. at 735, 118 S.Ct. 1665.
Further, even if such collateral consequences could be considered "hardship," DCS's showing of the likelihood of this harm coming to pass is sketchy and hardly compelling. We note that the Fox Valley Ford case does appear to be on a parallel track. When the arbitration panel issued a clause construction award permitting the Fox Valley Ford claimants to pursue class arbitration, DCS's motion to vacate the award was assigned to and denied by the same district judge who denied both DCS's motion to vacate and motion to confirm in this case. See Dealer Computer Services v. Fox Valley Ford, 2008 WL 1837229 (E.D.Mich.2008). DCS's appeal of that ruling was treated in conformity with our ruling in DCS-I. See Dealer Computer Services v. Fox Valley Ford, 310 Fed. Appx. 749 (6th Cir.2009) (vacating the order of the district court and remanding for dismissal for lack of ripeness). Since then, it appears further proceedings in the Fox Valley Ford case have been held in abeyance
In short, the new appellate arguments made by DCS in attempting to carry its burden of showing ripeness—if they are considered at all—are no better than the old arguments the district court rejected. The district court's order dismissing the motion to confirm for lack of ripeness must therefore be upheld.
Despite DCS's protestations that confirmation should be a simple procedure that would ultimately enhance efficiency in managing and resolving the dealers' arbitration claims, this very judicial review experience, still pending eighteen months after the arbitration panel's interim class determination award was issued, and having seemingly accomplished nothing but delay, starkly demonstrates why the courts should be vigilant to safeguard arbitration proceedings from unwarranted judicial interference. For all the foregoing reasons, the district court's order of dismissal is
SAMUEL H. MAYS, JR., District Judge, dissenting.
Dealer Computer Services, Inc. ("DCS") appeals from the district court's dismissal of its Motion to Confirm the arbitrators' award finding that Dub Herring Ford and the proposed class of automobile dealers whom it represents (collectively, the "Dealers") should not be allowed to go forward with their arbitration as a class arbitration. The district court found that DCS' action was not ripe, basing its conclusion on a prior published opinion of this court in this case. See Dealer Computer Servs., Inc. v. Dub Herring Ford, 547 F.3d 558, 559 (6th Cir.2008) ("DCS I"). Because, following the Supreme Court's recent decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., ___ U.S. ___, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010), this court's prior holding in DCS I is no longer the law of this or any other circuit and DCS has otherwise demonstrated that its Motion to Confirm is ripe, I respectfully dissent.
DCS sells computer software systems to automobile dealerships around the country. These systems allow Dealers to display currently available automobile parts and prices to their customers. The Dealers allege that DCS breached its contracts with them by failing to negotiate an extension of its agreement with Ford Motor Company allowing Dealers to continue to view Ford parts and their prices on DCS' system. Dealers filed a series of arbitration actions against DCS and sought to proceed as a class arbitration. The arbitrators ruled initially that the arbitration agreement found in all of DCS' form contracts with Dealers permitted the arbitrators to hear a class arbitration. DCS sued in federal district court to vacate the arbitrators' decision as exceeding their powers under the arbitration agreement and as in "manifest disregard of the law." DCS I, 547 F.3d at 560. The district court declined to vacate the arbitrators' decision, and DCS appealed to this court. In a published opinion, a panel of this court vacated the district court's judgment and remanded with instructions to dismiss
When the case returned, the arbitrators held, in a "Partial Final Class Determination Award," that the Dealers could not proceed with their claims as a class. DCS then returned to federal district court, seeking to confirm the arbitrators' class determination. See 9 U.S.C. § 9 (providing that federal district courts may enter orders confirming arbitration awards). The district court, following the ripeness analysis employed by this court in the parties' prior appeal, dismissed DCS' Motion as unripe. See Dealer Computer Servs., Inc. v. Dub Herring Ford Lincoln Mercury, Inc., No. 07-10263, 2009 WL 1508210, at *3, 2009 U.S. Dist. LEXIS 45325, at *9 (E.D.Mich. May 29, 2009). DCS timely appealed.
In Stolt-Nielsen, a corporation that regularly ships liquids via tanker vessels commenced an arbitration proceeding against Stolt-Nielsen, alleging that Stolt-Nielsen had conspired to violate the antitrust laws through price fixing. 130 S.Ct. at 1764-65. The corporation sought class arbitration status, and both parties agreed that their contract was silent about whether they had agreed to allow class claims in arbitration. Id. at 1765-66. The arbitrators, after hearing evidence, determined that a silent contract allows class arbitration. Id. at 1766. Stolt-Nielsen filed a motion in the district court seeking to vacate the arbitrators' construction of the arbitration agreement as 1) beyond their power and 2) in manifest disregard of the law. Id.; see also 9 U.S.C. § 10(a)(4) (allowing a court to vacate an award if the arbitrators "exceeded their powers"). The Supreme Court held that, absent a contractual basis, arbitrators may not hear class claims. Stolt-Nielsen, 130 S.Ct. at 1775. Where an agreement is silent, the arbitrators lack the power to hear a class arbitration. Id.
Importantly for this case, the Court also responded to the dissent's primary argument that Stolt-Nielsen's Motion to Vacate was premature because it was unripe. See id. at 1777 (Ginsburg, J., dissenting). The majority held that the claim was ripe because, if Stolt-Nielsen could not presently seek review, it "must now submit to class determination proceedings before arbitrators who ... have no authority to require class arbitration." Id. at 1767 n.2 (majority opinion). The Court also viewed it as certain that, had Stolt-Nielsen refused to abide by the arbitrators' decision, it would be subject to a motion to compel under 9 U.S.C. § 4 to force it to arbitrate the class claims. Id. Responding to the dissent's argument that the Court would allow parties to challenge merely procedural decisions by arbitrators, the majority reasoned that a shift from bilateral arbitration to class arbitration wrought "fundamental changes." Id. at 1776. Under the rules of the American Arbitration Association, participants in class arbitrations no longer enjoy "the presumption of privacy and confidentiality" that applies to bilateral arbitrations. Id. at 1776 (citing AAA Class Rule 9(a)). Class arbitrations "no longer resolve[ ] a single dispute between the parties to a single agreement, but instead resolve[ ] many disputes between hundreds or perhaps even thousands of parties." Id. Thus, parties must have the ability to seek court review of arbitrators' construction of a class clause in an arbitration agreement. Id.
Stolt-Nielsen arrived at the Supreme Court in the same procedural posture as DCS in its prior appeal to this court. As in Stolt-Nielsen, DCS had filed a Motion
Without the support of this court's prior holding, it is difficult to argue that a procedurally later development is unripe for consideration when the Supreme Court has held that an earlier procedural ruling is ripe for confirmation or vacatur. The arbitrators' decision rejecting class arbitration disposes of "a separate, discrete, independent, severable issue." See Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1049 (6th Cir.1984) (citation omitted). That is the standard this court has long applied for entertaining motions to confirm interim arbitral decisions. Id. The Dealers argue that a decision rejecting class arbitration is merely procedural and has no impact on the substantive rights or merits of any claim. Their argument echoes the objections of the Stolt-Nielsen dissenters, who argued that the Supreme Court's holding that a decision at an even earlier stage of class proceedings "was abstract and highly interlocutory." Stolt-Nielsen, 130 S.Ct. at 1778 (Ginsburg, J., dissenting). The Supreme Court majority rejected that analysis, noting that the "fundamental changes" effected by class arbitration status were enough to require federal court review when the issue of whether the arbitrators had the power to decide a class arbitration was in dispute.
Second, the concession that a motion to vacate the present award by the Dealers would be ripe effectively concedes that this court has jurisdiction over the present Motion. The provisions of the FAA are not severable. See 9 U.S.C. §§ 9-10 (statutory provisions conferring authority on the federal courts to confirm or vacate an arbitral award). Had the Supreme Court refused to vacate the arbitrators' decision in Stolt-Nielsen, that refusal would have had the same effect as confirming it. The language of the FAA makes this clear. A federal court "must grant [an order confirming an arbitral award] unless the award is vacated, modified, or corrected." 9 U.S.C. § 9 (emphasis added). Where there is jurisdiction to vacate an award, there is of necessity jurisdiction to confirm it. No authority — other than argument by analogy to this court's prior, abrogated decision — supports severing the FAA's remedies. The Dealers concede that, if this court concludes a motion to vacate by them would be ripe, DCS' current Motion to Confirm must also be ripe. Audio recording: Oral Argument at 21:30-22:11 (Aug. 4, 2010) (on file with the clerk of the court) [hereinafter "Oral Argument"].
The potential for an aggrieved party to vacate the award explains why failure to confirm would harm DCS. See 9 U.S.C. § 9 (noting that the only two requirements
Third, the Dealers appear to base much of their argument on the idea that allowing piecemeal adjudication would serve to undermine the "national policy favoring arbitration." Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 588, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). The Supreme Court undoubtedly had this policy preference in mind when considering its decision in Stolt-Nielsen. Nonetheless, the Court considered the change class status effects so "fundamental" as to require the possibility of federal court intervention through vacatur or confirmation. 130 S.Ct. at 1776. A public-policy principle cannot revive an abrogated case or overrule guidance from the Supreme Court. Moreover, principles of public policy are for elected legislators to balance. Congress has spoken on this policy: federal courts may confirm arbitral awards. 9 U.S.C. § 9.
This court denied DCS a decision on its prior Motion to Vacate. See DCS I, 547 F.3d at 564, abrogated by Stolt-Nielsen, 130 S.Ct. at 1767 n. 2; see also Stolt-Nielsen, 130 S.Ct. at 1779 (Ginsburg, J., dissenting) (noting that the Supreme Court majority abrogated DCS I). It is entitled to an order of confirmation now that the arbitrators have made their decision about whether class proceedings are appropriate. Because the court concludes otherwise, I respectfully dissent.
In contrast, we presumed in DCS-I that DCS "sought to avoid the `harm' of increased time, expense, complexity, and potential liability often associated with the defense against a class proceeding." DCS-I, 547 F.3d at 561. That is, we presumed that DCS was concerned about expenses and risks that would potentially materialize only if and after the arbitration panel, in a later interim award, "conclusively determine[d] that Dealers' claims should proceed as a class arbitration." Id. Because this hardship was contingent on "future events that may not occur as anticipated, or at all," we determined that "the likelihood of harm factor strongly weigh[ed] against finding the Clause Construction Award ripe for review." Id. at 562. Further, because DCS would have a prospective opportunity for judicial review if an unfavorable class determination award were forthcoming, we concluded that DCS would not "suffer any material hardship if review is withheld at this preliminary stage of arbitration." Id. at 563.
Thus, the difference in the two courts' ripeness determinations may be attributable not to application of two materially different ripeness standards, but to application of two substantially similar ripeness standards to similar but not identical types of hardship whose imminence or likelihood of occurrence was materially different. In light of this analysis, Stolt-Nielsen does not necessarily undermine the district court's ripeness ruling in this case. Also, in light of this analysis, it becomes apparent that Stolt-Nielsen is not necessarily at odds with our ripeness ruling in DCS-I, but may be distinguishable on the basis of the nature and imminence of the presumed hardship.
In assessing the significance of Stolt-Nielsen's teaching on ripeness, moreover, it is important to recognize that the majority's entire discussion of ripeness is confined to one footnote. Stolt-Nielsen, 130 S.Ct. at 1767 n. 2. The issue had not been argued by the parties or considered by the courts below. Id. The majority was reluctantly compelled to address the issue at all only because the dissent raised it. The Court had granted certiorari to decide "whether imposing class arbitration on parties whose arbitration clauses are `silent' on that issue is consistent with the Federal Arbitration Act." Id. at 1764. The Court did not grant certiorari in order to clarify the law of ripeness, but to clear up confusion stemming from its earlier decision in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003). The majority refused to be deterred by the dissent's suggestion that certiorari had been improvidently granted. This explains why the majority's ripeness discussion is summary and dismissive in nature, a fact that counsels against reading the decision's ripeness teaching more expansively than it deserves. See Levin, Tax Comm'r of Ohio v. Commerce Energy, Inc., ___ U.S. ___, 130 S.Ct. 2323, 2335, 176 L.Ed.2d 1131 (2010) (reversing the Sixth Circuit for having attributed unwarranted significance to an "unelaborated footnote" in an earlier Supreme Court opinion).