United Nuclear Corp. v. General Atomic Co.

651 P.2d 1277, 98 N.M. 633
CourtNew Mexico Supreme Court
DecidedSeptember 15, 1982
Docket13536
StatusPublished
Cited by12 cases

This text of 651 P.2d 1277 (United Nuclear Corp. v. General Atomic Co.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Nuclear Corp. v. General Atomic Co., 651 P.2d 1277, 98 N.M. 633 (N.M. 1982).

Opinion

OPINION

EASLEY, Chief Justice.

This complex billion-dollar dispute between United Nuclear Corporation (UNC) and General Atomic Company (GAC) has been in and out of numerous forums from coast-to-coast. An outline of the whole tangled procedural history would fill a sizeable book. We confine the recitation of facts as closely as possible to those that are material to a decision on the narrow issues raised in this, the most recent of two dozen or so times the case has been considered in our Court.

In this part of the controversy GAC appeals a decision of the Santa Fe District Court (the Santa Fe court) declaring void a California arbitration award favorable to GAC, and affirming the prior judgments favorable to UNC. The issues are:

1. Whether the decisions of the United States Supreme Court in General Atomic Co. v. Felter, 434 U.S. 12, 98 S.Ct. 76, 54 L.Ed.2d 199 (1977) (Felter I) and General Atomic Co. v. Felter, 436 U.S. 493, 98 S.Ct. 1939, 56 L.Ed.2d 480 (1978) (Felter II) prohibit the Santa Fe court from acting to void the arbitration award and affirm the prior judgments.

2. Whether the Santa Fe court had jurisdiction to void the arbitration award made in California under the Federal Arbitration Act procedures, on the grounds that the arbitration board had a duty to invoke the doctrine of res judicata and to give full faith and credit to our previous final decisions on all the issues raised in the arbitration hearings.

3. Whether the Federal Arbitration Act, 9 U.S.C. Sections 1-14 (1976), prevents the trial court from voiding the award.

4. Whether UNC’s claim for supplemental relief is cognizable under the New Mexico Declaratory Judgment Act, Sections 44-6-1 to -15, N.M.S.A.1978.

GAC contends the Santa Fe court’s decision exceeds its jurisdiction under federal law, violates the mandates in Felter I and Felter II, conflicts with the Federal Arbitration Act, and violates the declaratory judgment rules.

On the other hand, UNC claims that the trial court’s decision conforms in all details with the mandates in Felter I and Felter II. UNC further urges that the arbitration award was void under the doctrine of res judicata since the prior final decisions of this Court, which were denied certiorari by the United States Supreme Court, held that there was no agreement to be arbitrated. These decisions hold that GAC, by its own actions, forfeited any right to arbitrate and that the dispute was so enmeshed with antitrust claims as to preclude arbitration. UNC further defends that the arbitrators exceeded their authority and manifestly disregarded the outstanding final judgments and other applicable law and, moreover, that making claim for supplemental relief under the Declaratory Judgment Act was the proper procedure.

In 1975, UNC sued GAC in a declaratory judgment action to invalidate a uranium contract (1973 Supply Agreement). The Santa Fe court granted a preliminary injunction restraining GAC from “filing or prosecuting any other action * * * in any other forum * * including “arbitration proceedings.” We note here that the trial court did not restrain GAC from filing a motion in the Santa Fe court to stay the trial pending arbitration or from filing a motion to order arbitration. We affirmed the decision of the trial court. General Atomic Co. v. Felter, 90 N.M. 120, 560 P.2d 541 (1977), rev’d, Felter I. The United States Supreme Court on accepting the case on certiorari held that the injunction violated the supremacy clause in that it kept GAC from seeking relief in federal forums. Felter I.

GAC takes the position that every action taken by the Santa Fe court and every decision rendered in favor of UNC by this Court and the United States Supreme Court from the time the unconstitutional injunction was entered should be declared void and of no effect. The argument is that but for the erroneous restraint GAC could have sought arbitration, and that by the time the restraint was lifted, the adverse final judgments on the merits had already been issued.

However, in Felter I the United States Supreme Court noted that GAC had announced that it desired to defend itself by impleading UNC in federal lawsuits and federal arbitration proceedings then being pursued by utility companies, which were not parties to our case. “This, of course, is something which GAC has every right to attempt to do under Fed.Rule Civ.Proc. 14 and the Federal Arbitration Act.” Felter I, supra, 434 U.S. at 18, 98 S.Ct. at 79 (emphasis added) (footnote omitted). The Court held that GAC’s “right to pursue federal remedies and take advantage of federal procedures and defenses in federal actions” could not be restricted by a state court. Felter I, supra, at 18-19, 98 S.Ct. at 79, citing Donovan v. City of Dallas, 377 U.S. 408, 84 S.Ct. 1579, 12 L.Ed.2d 409 (1964).

We consider what Felter I did not do, in light of the claims of GAC that the trial court’s recent decision violated the mandate in Felter I. The United States Supreme Court did not accept GAC’s argument that the Santa Fe court had no jurisdiction to proceed on the merits. In fact, the opinion says that “the case is remanded to that court for further proceedings not inconsistent with this opinion.” Felter I, supra, 434 U.S. at 19, 98 S.Ct. at 79.

The whole impact of the opinion is that the Santa Fe court could not impede the access of GAC to federal forums. Thus, the Santa Fe court was left free to proceed to address the merits of the case, as it did. There is no other reasonable interpretation of the language in Felter I that supports GAC’s claim that the case precluded the Santa Fe court from making the most recent decisions.

In the meantime, the Santa Fe court proceeded with the trial of the case. Twenty-three months after the filing of the complaint and one month into the trial on the merits, GAC moved to stay the trial, alleging that it had started arbitration proceedings in San Diego. The Santa Fe court denied the motion and entered an order enjoining the San Diego arbitration, stating that enmeshed antitrust issues precluded arbitration, and that in any event, GAC had waived its right to arbitrate.

While its appeal on this decision in our Court was pending, GAC sought mandamus in the United States Supreme Court to set aside the judgment enjoining arbitration and the judgment determining that the claims were not arbitrable. The United States Supreme Court granted the petition but only insofar as it pertained to the injunction, and held that the Santa Fe court had done “precisely what we held that it lacked the power to do: interfere with attempts by GAC to assert in federal forums what it views as its entitlement to arbitration.” Felter II, supra, 436 U.S. at 496, 98 S.Ct. at 1940 (footnote omitted). The Court stated further:

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Bluebook (online)
651 P.2d 1277, 98 N.M. 633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-nuclear-corp-v-general-atomic-co-nm-1982.