Cerveceria v. Montana Bvrg Co

• Court: Court of Appeals for the Fifth Circuit
• Decided: May 2, 2003
• Docket: 02-50982
• Status: Published

Opinion

United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS April 8, 2003 FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk

No. 02-50982 Summary Calendar

CERVECERIA CUAUHTEMOC MOCTEZUMA S.A. de C.V.; LABATT USA, LLC,

Plaintiffs-Appellees,

versus

MONTANA BEVERAGE COMPANY,

Defendant-Appellant.

-------------------- Appeal from the United States District Court for the Western District of Texas

--------------------

Before DAVIS, WIENER, and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:

Plaintiffs-Appellees, Cerveceria Cuauhtemoc Moctezuma S.A. de

C.V. and Labatt USA, LLC (collectively, “Cerveceria”) sued

Defendant-Appellant Montana Beverage Company (“Montana”) in

district court to collect more than $800,000 alleged to be

delinquent on its account for merchandise. Cerveceria also sought

cancellation of Montana’s distributorship for Cerveceria’s products

and attorneys’ fees. Montana responded by filing a motion to stay

proceedings and compel arbitration under the provisions of §

102.77(b) of the Texas Beer Industry Fair Dealing Law (“BIFDL”), Tex. Alco. Bev. Code Ann. § 102.71-81 (Vernon, 1995), which law was

incorporated by reference in the parties’ distributorship

agreement. The district court refused to stay the proceedings and

compel arbitration after finding no clear agreement to arbitrate,

and Montana appealed. We dismiss Montana’s appeal for lack of

appellate jurisdiction.

I. Facts and Proceedings

Montana appealed the district court’s denial of a stay and

refusal to compel arbitration, asserting that § 16(a)(1)(A) or (B)

of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 16(a)(1)(A) or

(B), allows an interlocutory appeal from a refusal to stay an

action pursuant to §§ 3 and 4 of the FAA. These provisions require

a stay when the trial court is satisfied that the issue involved in

the litigation is referable to arbitration under a clear agreement

to arbitrate. As Montana concedes in its appellate brief, however,

“[i]f there is no agreement [to arbitrate], then there is no

appellate jurisdiction.”

Cerveceria responded to Montana’s notice of appeal by filing

a motion to dismiss for lack of appellate jurisdiction. Cerveceria

contended that provisions of §§ 3, 4, and 16(a)(1)(A) and (B) of

the FAA do not confer interlocutory appellate jurisdiction from an

order refusing to compel arbitration when, as here, the district

court holds that there is no binding agreement to arbitrate.

Cerveceria’s motion was carried with this appeal. For the

2 following reasons, we conclude that we lack appellate jurisdiction

and therefore dismiss Montana’s appeal.

II. Analysis

Federal jurisdiction of this case is grounded in diversity

citizenship, which none contests. This appeal is from the district

court’s interlocutory order refusing to compel arbitration because,

the court ruled, there is no agreement between the parties to

arbitrate. As a generality, non-final, interlocutory orders are

appealable under only a limited number of circumstances, none of

which is present here. Thus, only if Montana is correct in

asserting the special appellate jurisdiction conferred by §§ 3, 4,

and 16(a)(1)(A) or (B) of the FAA can we entertain appellate review

of the subject order.

In support of its assertion that we have such jurisdiction,

Montana relies on the BIFDL, because the instant case arises from

or is connected with the beer distribution agreement between the

parties, which incorporates the BIFDL by reference. Pointing to

the cancellation provisions of the BIFDL, Montana notes that §

102.77(b) states that issues of good cause for cancellation of a

distributorship and the amount of reasonable compensation for a

canceled distributorship “may, at the option of either the

distributor or the manufacturer, be submitted to three

arbitrators....” Thus, reasons Montana, the public policy favoring

arbitration, in combination with the incorporation of the BIFDL by

reference into the distributorship agreement between Montana and

3 Cerveceria, makes the latter an agreement to arbitrate and, in

turn, makes the refusal by the district court to compel arbitration

immediately appealable under §§ 3 and 4 of the FAA. This argument

unavoidably intertwines the interpretation of the subject provision

of the BIFDL and the interlocutory appeal provisions of the FAA.

Consequently, even though lack of appellate jurisdiction for this

interlocutory appeal would prevent our addressing the issue of

arbitrability, we must do so, at least to a degree, to rule on our

own appellate jurisdiction. This was recognized implicitly in our

earlier order carrying with the case Cerveceria’s motion to dismiss

for lack of appellate jurisdiction, and comports with the

universally recognized truism that we have jurisdiction to

determine our own jurisdiction.

The order from which Montana appeals —— refusal to compel

arbitration —— is undeniably interlocutory as, inter alia, it

leaves the parties as litigants before the court and thus does not

totally dispose of their present dispute. As such, nothing in 28

U.S.C. §§ 1291 or 1292 permits an interlocutory appeal; neither is

there appellate certification by the district court under either §

1292 or Federal Rule of Civil Procedure 54(b). Nor do any

jurisprudential exceptions to the rule forbidding interlocutory

appeals, such as the collateral order doctrine, apply here. This

leaves only the pertinent provisions of the FAA as potential

sources of appellate jurisdiction. And, as noted, even though §

16(a)(1)(A) of the FAA permits interlocutory appeals from orders

4 refusing to stay litigation pursuant to §§ 3 or 4, a stay of

judicial proceedings is required only when the trial court’s

refusal to compel arbitration results from the court’s

determination that there is a clear agreement to arbitrate. Here,

the court found that no such agreement exists, thereby

pretermitting an interlocutory appeal.

Montana does not assert that the distributorship agreement

with Cerveceria actually contains an express arbitration agreement.

Rather, as noted, Montana contends that the distributorship

agreement’s incorporation by reference of the entire BIFDL, and

thus its arbitration provision, § 102.77(b), is the equivalent of

a clear expression of intent by the parties to resolve all disputes

by arbitration. Thus, for us to find that we have jurisdiction

under the FAA to hear Montana’s interlocutory appeal of the

district court’s refusal to compel arbitration, the district court

would have had to conclude that the contract’s incorporation by

reference of the BIFDL constituted the distributorship agreement a

clear agreement to arbitrate. As the district court held precisely

the opposite, i.e., no agreement to arbitrate, its refusal to

compel arbitration is an unappealable interlocutory decree.

Montana’s effort to trivialize the wording of § 102.77(b) of

the BIFDL by referring to “may” as rendering the statute “a little

bit ambiguous” does not change the facial certainty of the statute:

In addition to its use of the permissive “may,” the statute adds

“at the option of either the distributor or the manufacturer,”

5 falling well short of a mark of demonstrating that the parties

clearly and unambiguously intended to submit any and every dispute

to arbitration. This is accentuated by the observation that even

such permissive arbitration is applicable to only two narrow

issues: (1) existence of good cause for contract cancellation, and

(2) valuation of the terminated distributorship.

This litigation is, first and foremost, a suit on an open

account, which cannot be shoehorned under either of the two

discrete issues to which § 102.77(b) is appealable, despite the

additional inclusion of distributorship termination in the relief

sought. Absent express incorporation of binding arbitration (as

distinguished from the instant global incorporation of a

comprehensive regulatory act in which a narrowly limited,

permissive, i.e., non-mandatory, arbitration provision is found),

the agreement’s incorporation of arbitration by reference lacks

certainty and universality. See, e.g., Phillips v. ACS Municipal

Brokers, Inc., 888 S.W. 2d 872, 875 (Tx.App.-Dallas 1994 no writ);

Seal v. Roy and Mitchell Contracting Co., Inc., 321 S.W. 2d 149,

151 (Tx.Civ.App.-Austin 1959 writ ref’d). Furthermore, when the

subject agreement is read as a whole, as it must be, it is seen to

contain references to other methods of dispute resolution,

including mediation and litigation.

We are satisfied, as was the district court, that there is no

binding agreement to arbitrate all disputes arising from or

connected with the contract between the parties. Absent a clear,

6 unequivocal and unconditional agreement to arbitrate, as held by

the district court, Montana is not entitled to a stay of the

proceedings. And, absent such entitlement to a stay, § 3(d) of the

FAA is ineffective to confer appellate jurisdiction for us to

review the district court’s order refusing to stay litigation and

compel arbitration. In the absence of another provision or holding

that would confer appellate jurisdiction, we are constrained to

dismiss Montana’s appeal for lack of jurisdiction.

III. Conclusion

Inasmuch as the district court’s ruling is grounded in its

holding that, in their agreement, the parties did not clearly and

unequivocally demonstrate an intention to submit their disputes to

binding arbitration, the district court’s order refusing to grant

a stay of proceedings and compel arbitration is a non-appealable

interlocutory order. We thus have no appellate jurisdiction at

this stage of this case and must dismiss the instant appeal.

DISMISSED for lack of jurisdiction.