Bombardier Corp. v. National Railroad Passenger Corp.

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 10, 2003 Decided July 1, 2003

No. 02-7125

BOMBARDIER CORPORATION,

APPELLEE

v.

NATIONAL RAILROAD PASSENGER CORPORATION,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 01cv02335)

Leslie Gordon Fagen argued the cause for appellant. With

him on the brief were Robert P. Parker, Timothy F. Brown

and Richard J. Webber. Evan S. Stolove entered an appear-

ance.

Philip Le B. Douglas argued the cause and filed the brief

for appellee.

Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

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Before: SENTELLE, ROGERS and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: National Railroad Passenger

Corporation brought this interlocutory appeal from the dis-

trict court’s denial of a motion to dismiss. Amtrak attempts

to invoke Section 16 of the Federal Arbitration Act, 9 U.S.C.

§ 16 (2000), which permits interlocutory appeal in enumerat-

ed cases. Because we conclude that this appeal does not fall

within the parameters of the limited grant of jurisdiction

under Section 16, we dismiss the appeal.

Background

In May 1996 appellant, National Railroad Passenger Cor-

poration (‘‘Amtrak’’), entered into three contracts with a

consortium of contractors including appellee Bombardier Cor-

poration for the design and manufacture of twenty Acela

high-speed trainsets and various maintenance facilities; the

design and manufacture of fifteen high-speed locomotives;

and maintenance of Acela trains for ten years. Each of the

contracts contains dispute resolution provisions for claims

‘‘arising from or relating to the contract.’’ According to these

provisions, initially, all claims are referred to the Contracting

Officer’s Representative for a non-binding determination. If

Bombardier finds that determination unsatisfactory, it may

appeal to the Contracting Officer, whose decision is final and

binding as to all matters except money damages and rulings

as to whether services or work required by a change order is

outside the general scope of the contract. Bombardier is

entitled to appeal these types of issues to a three-member

dispute resolution board, composed of one member of its

choosing, one of Amtrak’s choosing and a chairman selected

by those two appointed members. The board’s decisions are

binding only in disputes involving amounts of less than $5

million. With respect to claims for more than $5 million, the

board’s determination is binding only if the parties agree to

it. The board’s determination of the size of the dispute is

final and binding. Finally, the contract provides that if the

parties are unable to resolve their disputes through the board

or negotiation, they may pursue their rights ‘‘in law or in

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equity with respect to any Claim for which a final and binding

decision has not been issued.’’

Both Amtrak and Bombardier have recognized that the

design and construction of the Acela trainsets has been

delayed and complicated by the numerous disputes between

them. Bombardier claims that Amtrak repeatedly changed

its design specifications; supplied defective designs; meddled

in the design and construction process; and withheld prog-

ress payments. Amtrak claims that Bombardier violated the

terms of the contracts by delivering the trainsets late. In

March 2000, the parties began settlement negotiations and

Amtrak submitted a portion of the dispute, involving Bombar-

dier’s failure to deliver, to the initial stages of the contractual-

ly provided-for dispute resolution procedures. Both the Con-

tracting Officer’s Representative and the Contracting Officer

found in favor of Amtrak, but when Bombardier requested

that a dispute resolution board be empaneled pursuant to the

contract provisions, Amtrak refused, claiming such a board

would have no jurisdiction under the contract because of the

nature of the dispute.

On November 8, 2001, Bombardier filed this action in the

district court seeking more than $200 million in damages

caused by Amtrak’s alleged changes to the contracts, and

Amtrak filed a counterclaim for $200 million. On December

3, 2001, Amtrak moved to dismiss the claim pursuant to Rule

12(b)(6), on the grounds that Bombardier had not exhausted

the contract’s dispute resolution procedures, which it argued

were a condition precedent to litigation. Amtrak’s motion to

dismiss did not expressly argue that the contract contained an

arbitration clause enforceable under the Federal Arbitration

Act (‘‘FAA’’), although the motion contained some passing

references to arbitration and cited several FAA cases. The

district court denied the motion to dismiss. See Bombardier

Corp. v. Nat’l R.R. Passenger Corp., Civ. No. 01–2335 (D.D.C.

Sept. 30, 2002). The court held that the contract’s dispute

resolution procedures were essentially non-binding mediation

clauses, not a condition precedent to litigation. Further, the

court reasoned that sending the parties to dispute resolution

would be futile and inefficient, given the board’s inability to

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issue binding awards of more than $5 million. See id. at 5–7;

10.

On October 11, 2002, Amtrak appealed that decision, invok-

ing Section 16 of the FAA, 9 U.S.C. § 16, which permits, in

defined categories of cases, the immediate appeal of orders

hostile to arbitration, whether the orders are final or interloc-

utory. Amtrak then filed a motion for stay pending appeal,

which the district court denied on the grounds that the

contract’s dispute resolution procedure was not ‘‘arbitration’’

as covered by the FAA. Amtrak then moved for a stay in

this court. We entered an order denying such a stay as

unnecessary, because Amtrak’s appeal of the motion to dis-

miss was facially non-frivolous and thus the district court was

divested of jurisdiction over the underlying action until we

could determine the threshold issue of whether the dispute

between the parties is arbitrable under the FAA. See Bom-

bardier Corp. v. Nat’l R.R. Passenger Corp., No. 02–7125

(D.C. Cir. Dec. 12, 2002). Because we find that we have no

jurisdiction to hear the interlocutory appeal in this case, we

hereby dismiss that appeal.

Analysis

We review denials of motions to dismiss de novo. Kowal v.

MCI Communications Corp., 16 F.3d 1271, 1276 (D.C. Cir.

1994). The posture of this case requires that before we can

examine whether the district court was correct in dismissing

the motion, we must determine whether we have appellate

jurisdiction to hear such an appeal pursuant to Section 16 of

the FAA. That section provides the following in pertinent

part:

(a) An appeal may be taken from—

(1) an order—

(A) refusing a stay of any action under section 3 of

this title,

(B) denying a petition under section 4 of this title to

order arbitration to proceed,

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(C) denying an application under section 206 of this

title to compel arbitration,

(D) confirming or denying confirmation of an award

or partial award, or

(E) modifying, correcting, or vacating an award;

(2) an interlocutory order granting, continuing, or

modifying an injunction against an arbitration that is

subject to this title; or

(3) a final decision with respect to an arbitration that

is subject to this title.

9 U.S.C. § 16(a).

Generally, courts of appeal have appellate jurisdiction over

only ‘‘final decisions’’ of the district courts. 28 U.S.C. § 1291

(2000). Ordinarily, orders denying motions to dismiss are not

final decisions because such orders ensure that litigation will

continue in the district court. See Lauro Lines s.r.l. v.

Chasser, 490 U.S. 495, 498 (1989); United States v. Rose, 28

F.3d 181, 185 (D.C. Cir. 1994). Therefore, we would not have

jurisdiction to hear Amtrak’s appeal, absent the applicability

of a statute granting appellate authority, such as the provi-

sion above.

First, we recognize that Section 16 is a limited grant of

jurisdiction. In general, statutes authorizing appeals should

be narrowly construed. See Perry Educ. Ass’n v. Perry

Local Educators’ Ass’n, 460 U.S. 37, 43 (1983); accord Silk-

wood v. Kerr–McGee Corp., 464 U.S. 238, 247 (1984), and

Stone v. INS, 514 U.S. 386, 405 (1995). This principle is

particularly well-applied to the statute at issue here because

it authorizes not only appellate jurisdiction, but in some cases,

interlocutory appeals which constitute exceptions to the final

decision rule of Section 1291.

Under the plain language of Section 16, the district court’s

order denying the Rule 12(b)(6) motion to dismiss is not one

of those enumerated under Section 16(a)(1) or (2), allowing

for interlocutory appeal, and therefore, this court lacks juris-

diction to consider this appeal. Amtrak’s motion to dismiss

was neither a motion to compel arbitration under 9 U.S.C. § 4

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nor a motion to stay arbitration under 9 U.S.C. § 3. The

order denying the motion was certainly not a final decision,

qualifying for appellate review under Section 16(a)(3), because

it did not ‘‘end[ ] the litigation on the merits and leave[ ]

nothing more for the court to do but execute the judgment.’’

Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 86 (2000)

(quotation omitted). Despite the plain language of the stat-

ute Amtrak argues that dicta from the Supreme Court’s

decision in Green Tree demonstrates that this court does

indeed have jurisdiction over an appeal of the district court’s

order denying its motion to dismiss.

In Green Tree, in contrast to the facts of this case, the

Court considered whether an order granting, not denying, a

motion to dismiss for failure to arbitrate and compelling

arbitration was a ‘‘final decision with respect to arbitration’’

under Section 16(a)(3). Green Tree, 531 U.S. at 83–84. The

Court defined ‘‘final decision’’ as quoted above, and thus held

that an order dismissing the action falls within the meaning of

Section 16(a)(3). Id. at 89. The Court also observed that

Section 16 ‘‘generally permits immediate appeal of orders

hostile to arbitration, whether the orders are final or interloc-

utory, but bars appeal of interlocutory orders favorable to

arbitration.’’ Id. at 86.

Amtrak argues that the Court’s dicta indicates that any

order hostile to arbitration may be immediately appealed,

even if the type of order is not enumerated in Section 16. We

disagree. Amtrak’s interpretation of Green Tree would sig-

nificantly and improperly expand not only the scope of Sec-

tion 16, but of the Court’s opinion. The Court merely ob-

served that Section 16 ‘‘generally permits’’ the appeal of

orders hostile to arbitration, Green Tree, 531 U.S. at 86

(emphasis added), and indeed, the statute plainly permits the

appeal of six types of such orders. See 9 U.S.C.

§ 16(a)(1)(A)-(E), (a)(2). Despite its careful enumeration of

appealable orders, Congress did not include the denial of a

motion to dismiss. The Supreme Court did not attempt to

rewrite the FAA in Green Tree, and nor will we now. The

plain language of the statute precludes Amtrak’s interlocu-

tory appeal.

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Amtrak also argues that we should ‘‘treat’’ its motion to

dismiss as a motion to compel arbitration or a motion to stay

proceedings pending arbitration. The principle of narrow

construction we apply to statutes authorizing appeals counsels

against broad construction of a motion forwarded for review

under such a statute. However, even if we were to construe

a motion to dismiss more broadly in some circumstances, the

current case does not present a set of facts favoring broad

construction. A motion to compel under 9 U.S.C. § 4 or stay

under 9 U.S.C. § 3, by definition, invokes the FAA’s policy

favoring enforceability of arbitration agreements and asks the

Court to order arbitration, presupposing the party’s intent to

arbitrate its disputes. Amtrak’s motion did neither, therefore,

it was not analogous to either of those motions, and we will

not treat it as if it were.

Amtrak did not base its motion to dismiss on the FAA’s

requirement that arbitration agreements be strictly enforced.

It sought an outright dismissal under 12(b)(6) on the grounds

that Bombardier failed to comply with the dispute resolution

procedures, which it did not contend was arbitration. In the

memorandum supporting its motion, Amtrak repeatedly re-

ferred to the contractually provided procedures, but never as

arbitration. Neither did it suggest that the procedures were

covered by the FAA. More importantly, unlike a motion to

compel or stay under the FAA, Amtrak’s motion exhibited no

intent to pursue arbitration—indeed, it sought outright dis-

missal with no guarantee of future arbitration. Therefore, we

decline to ‘‘treat’’ Amtrak’s motion as anything other than

what it was—a motion for dismissal under 12(b)(6).

Conclusion

We therefore dismiss the appeals for lack of jurisdiction

because the district court’s order denying Amtrak’s motion to

dismiss is not among those types of orders entitled to appeal

under Section 16 of the FAA.