Opposition Brief — McLeland v. Syncor International Corp.

9¢-90 1» onan

No. JAN 14 (9%

Supreme Court of the United States

OCTOBER TERM 1997

+

In The me —

DAVID L. MCLELAND,

Petitioner,

v.

SYNCOR INTERNATIONAL CORPORATION,

Respondent.

+

On Petition for Writ of Certiorari to the

United States Court of Appeals for the

Fourth Circuit

+

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

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BENJAMIN L. BAILEY

RONDA L. HARVEY

Counsel of Record

BOWLES RICE McDAVID GRAFF & LOVE, P.L.L.C.

600 Quarrier Street

Post Office Box 1386

Charleston, West Virginia 25325-1386

(304) 347-1100

Counsel for a

LANTAGNE LEGAL PRINTING

801 East Main Street Suite 100 Richmoad, Virginia 23219 (800) 847-0477

i

RESTATEMENT OF QUESTIONS PRESENTED

Whether the Courts below properly construed an arbitration

agreement and ordered enforcement of an arbitrator’s decision

which was rendered ex parte, after notice to petitioner?

ii

TABLE OF CONTENTS

RESTATEMENT OF QUESTIONS PRESENTED ...... i

SOP EOCAUIMOMIHES.................. iii

OPINIONS BELOW ....... OE TY ee Fe eee eae 1

STATEMENT OF JURISDICTION ...............__. |

STATEMENT OFTHECASE.................. 2

A. Basis of Jurisdiction In the First Instance and

Procedural History ..................__ 2

MAMMENICEINEFACTS........... 5

REASONS FOR DENYING THE FRAMLION ......... 12

I. The Petition raises no new legal issues and

conflicts with the strong, clear federal policy

favoring arbitration. ............... 12

I. The ex parte Arbitration was Proper and

McLeland has Offered No Valid Basis for

Overturning the Award.............__. 14

A. This Case Presents No Conflict of Any

Issue Among the Circuit Courts . . . 15

B. The Arbitrator was Neutral, and was

Selected Solely by AAA with No Input

kaa 20

Tl. The Lower Courts Properly Decided that the

Matter was Arbitrable, and the Timing of that

Decision in this Case is Irrelevant ....._. 23

nn MMO eanaERET ontret a cepa tla 27

TABLE OF AUTHORITIES

STATUTES

SAE OTL ED SEONG). ccc ccc rccccccssscccces 1

CASES

Aronson _v. Dean Witter Reynolds, Inc., 675 F.Supp. 1324

GUAPO y in Sue SeieworG Ge Los. ie 25

America, 106 S.Ct. 1415, 475 U.S. 643 (1986) ........ 25

Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 221, 105

S.Ct. 1238, 1242, 84 L.Ed.2d 158 (1985) ............. 12

First Options of Chicago, Inc. v. Kaplan, 115 S.Ct. 1920, 1921

Cares 5 as Fo Oe oc cons bs bp bs bees Viiv cw cee 24

Gilmer v, Interstate/Johnson Lane Corp., 895 F.2d 195 (4th Cir.

a en av eebese nee 25

Peoples Sec, Life Ins. v. Monumental Life Ins. Co., 867 F.2d

BO og oe ak ccc dusaccces 12

Remmey vy. PaineWebber, Inc., 32 F.3d 143, 146 (4th Cir.

iv

477 F.2d

1128 (Sth Cir. (S.D.Tex.) 1973) cert. denied, 414 U.S. 1001

EPEAT OE ies iste eed ty Ma 17-19

107 S.Ct. 2332,

I We: 25

934 F.2d 557 (4th Cir.

i ES SiG aca ge aaa 15, 17, 19

1095, 834 F.2d 751 (9th Cir. (N.D.Calf.) 1987) 16, 17, 19, 24

OPINIONS BELOW

On March 29, 1995, the United States District Court for

the Southern District of West Virginia granted the Motion of

Syncor International Corporation (“Syncor”) to Enforce the

Final Award of Arbitrator, David V. Breen. Petitioner David L.

McLeland (“McLeland”) filed a Motion for a New Trial which

the District Court denied on August 19, 1996. McLeland

appealed to the Fourth Circuit Court of Appeals, and the Fourth

Circuit affirmed the District Court’s Order.

STATEMENT OF JURISDICTION

The United States Court of Appeals for the Fourth

Circuit entered its judgment on August 11, 1997. Petitioner

invokes this Court’s jurisdiction pursuant to 28 U.S.C. §

1254(1), 2101(c).

i

STATEMENT OF THE CASE

A. Basis of Jurisdiction In the First Instance

and Procedural History

This case arises out of dispute between David L.

McLeland (“McLeland”) and his employer, Syncor International

Corporation (“Syncor”). On May 18, 1995, Syncor submitted

an arbitration demand to the American Arbitration Association

(“AAA”), in accordance with the terms of an Arbitration

Agreement voluntarily entered into by McLeland with Syncor.

On July 12, 1995, the AAA scheduled the arbitration to take

place in Charleston, West Virginia on August 21, 1995, and

duly notified both parties. | Respondent’s Appendix A;

Petitioner’s Appendix D at D-7; Petitioner’s Appendix M at M-

11; Respondent’s Appendix B at B-7.

Upon the advice of his first attorney and the theory that

the dispute was not arbitrable, McLeland decided not to appear

at the arbitration. Petitioner’s Appendix E at E-4; Respondent’s

Appendix B at B-3 through B-4. Invoking the Federal

Arbitration Act, 9 U.S.C. 1, et seq., Syncor filed a Complaint

and Petition to Compel Arbitration on August 2, 1995 seeking

a hearing within five (5) days. When the District Court was

unable to hear Syncor’s Petition before August 21, 1995, the

arbitration proceeded ex parte as provided for in the AAA rules

which specifically governed the Arbitration Agreement.

McLeland’s answer to the original Complaint was filed two

days later, on August 23.

The arbitrator issued his lengthy written Arbitrator’ s

Final Award Including Factual Findings and the Reason on

Which the Decision is Based on September 29, 1995. He found

that McLeland had violated several agreements entered into

with Syncor and awarded Syncor damages including, among

other things, 100% of the stock in Princeton Diagnostic

Isotopes, Inc. (“PDI”). Petitioner’s Appendix M at M-1 through

M-18. On October 17, 1995, Syncor filed in the case before the

District Court a Motion to Enforce Arbitrator’s Final Award.

On March 12, 1996, the District Court conducted a

hearing on the Motion, and McLeland testified. On March 29,

1996, the District Court entered an Order granting Syncor’s

Motion to Enforce the Arbitrator’s Award.

McLeland then terminated his relationship with his

original lawyer and retained his present counsel. On April 8,

1996, McLeland moved for a new trial and to set aside Syncor’s

judgment. On April 25, 1996, Syncor filed a response.

Meanwhile, on April 15, 1996, Jeffrey Clanton, McLeland’s

alleged partner, filed a motion to join him as an indispensable

party. On May 2, 1996, Syncor filed its response to Mr.

Clanton’s motion. On August 19, 1996, the District Court

entered an Order denying both motions and upholding its

previous Order enforcing the Arbitrator’s Award.

On September 13, 1996, McLeland appealed the District

Court’s decision to the United States Circuit Court of Appeals

for the Fourth Circuit. Arguments were held on June 4, 1997,

and on August 11, 1997 the Fourth Circuit affirmed the District

Court's order in an unpublished per curiam opinion.

STATEMENT OF THE FACTS

McLeland was employed with Syncor in various

positions for more than ten (10) years. By 1994, he had

advanced to the position of regional pharmacy manager of

between five and ten Syncor pharmacies that generated annual

revenue of between ten and twenty-five million dollars.

Respondent’s Appendix B at B-4 through B-6. During the

course of his employment, McLeland executed various

employment agreements with Syncor. The agreement which is

the primary subject of this appeal is a 1995 Arbitration

Agreement (the “Arbitration Agreement”) in which McLeland

and Syncor agreed to binding arbitration, according to AAA

rules, of disputes arising out of separation from employment.

Petitioner's Appendix O at O-1 through O-2. McLeland

voluntarily entered into the Arbitration Agreement, and had no

concerns or misgivings about entering into it. Respondent’s

Appendix B at B-9 through B-10.

Other agreements between Syncor and McLeland

included a 1993 Employment Agreement (the “Employment

Agreement”). Petitioner’s Appendix K at K-1] through K-4 and

Petitioner’s Appendix L at L-1 through L-5. McLeland also

signed similar 1990 and 1995 Invention, Secrecy and Other

Matters Agreements (the “Secrecy Agreement”). Petitioner’s

Appendix Q at Q-1 through Q-6 . The Employment Agreement

prohibited McLeland from, among other things (i) enticing

other employees to leave Syncor and (ii) competing against

Syncor for a period of ninety (90) days following the

termination of his employment. Petitioner’s Exhibit K at K-1.

The Employment Agreement also created an irrevocable

Consulting Agreement Option during the term of the agreement

and for 90 days thereafter, and also provided for injunctive

relief and attorney’s fees as remedies for any dispute

thereunder. Petitioner’s Appendix K at K-3 through K-4;

Petitioner's Appendix L at L-1 through L-5. McLeland

admitted in open court that he voluntarily agreed to the

restrictive covenant against competition and to the provisions

regarding injunctive relief. Respondent’s Appendix B at B-9

through B-10. The Secrecy Agreement contained similar

provisions, and specifically prohibited McLeland from directly

or indirectly using propriety information to solicit, divert or

otherwise attempt to take away any of Syncor’s customers.

Petitioner’s Appendix Q.

In a letter dated November 28, 1994, Syncor informed

McLeland that, for business reasons, it was necessary for

Syncor to eliminate his position effective December 31, 1994.

Respondent’s Appendix C. Pursuant to company policy,

McLeland received 10 weeks severance pay. Respondent’s

Appendix C. McLeland also received an additional 12 weeks

of severance pay in exchange for signing an Agreement and

Release, releasing Syncor from any claims arising from his

separation of employment. Respondent’s Appendix C;

Petitioner’s Appendix R at R-1] through R-2. On January 5,

1995, McLeland was rehired by Syncor as a temporary

pharmacist. Petitioner’s Appendix Q at Q-1 through Q-6. At

that time, he voluntarily signed the Arbitration Agreement. In

March of 1995, his employment as a temporary pharmacist was

terminated. Respondent’s Appendix D.

Sometime in October or November 1994, on the eve of

the coming termination, McLeland began planning and

pursuing establishing a nuclear pharmacy in _ the

Beckley/Princeton area which he hoped to operate as a joint

venture with Syncor. Petitioner’s Appendix M at M-4 through

M-5. In November, 1994, Syncor rejected McLeland’s idea.

Petitioner’s Appendix M at M-8 through M-9. Although

McLeland was aware of Syncor’s disapproval, he convinced

Wade Hopkins, another Syncor employee, to help him establish

ee ee ee ee

the pharmacy, and Hopkins paid McLeland $20,000.00 for 50%

of its stock. Respondent’s Appendix E; Petitioner’s Appendix

M at M-4 through M-S. In violation of the Secrecy Agreement

and Employment Agreement, McLeland incorporated the

pharmacy as Princeton Diagnostic Isotopes, Inc. on January 31,

1995. Petitioner’s Appendix M at M-4 through M-5.

Without appropriate approval from Syncor, McLeland

also began soliciting Syncor’s customers including two (2) key

customers located in Raleigh County, West Virginia -- Raleigh

General Hospital and Beckley Hospital. Petitioner’s Appendix

M at M-5. At that time, the Beckley Hospital contract was

worth approximately $10,000 per month and the Raleigh

General Hospital contract was worth approximately $23,000 per

month. Petitioner's Appendix M at M-5. These customers

represented about 45% of the business of Syncor’s Huntington,

West Virginia pharmacy. Petitioner’s Appendix M at M-5.

In January or February 1995, after McLeland’s plans for

establishing a joint venture with Syncor had failed, Syncor

became aware of these efforts to establish a competing

pharmacy. Petitioner’s Appendix M at M-11. In February

1995, Mr. Haig Bagerdjian, Syncor’s general counsel, contacted

McLeland regarding his activities. Petitioner’s Appendix M at

M-11. McLeland immediately attempted to negotiate a deal

with Syncor to sell all or part of PDI to Syncor. Petitioner’s

Appendix M at M-11. Despite Syncor’s efforts to resolve this

matter, the parties could not come to terms. Petitioner’s

Appendix M at M-11.

On March 30, 1995, after these negotiations failed,

Syncor wrote McLeland to notify him that it intended to

exercise its option under the 1993 Employment Agreement, to

engage him as a consultant. McLeland refused to sign the

consulting agreement, and this dispute began in earnest, as set

forth in the procedural history in Section A, above.

Meanwhile, Syncor purchased Hopkins’ 50% interest in

PDI. Petitioner's Appendix M at M-11. However, McLeland

refused to transfer the stock certificates, claiming that the stock

was subject to a buy-sell agreement in favor of McLeland.

Petitioner’s Appendix M at M-11. Hopkins never entered into

any such buy-sell agreement. Petitioner’s Appendix M at M-1!1.

On August 21, 1995, as set forth in the procedural

history above, Syncor arbitrated this matter ex parte. The

arbitrator found that McLeland’s activities violated the 1993

Employment Agreement and the 1995 Secrecy Agreement.

Petitioner’s Appendix M at M-18. Pursuant to those

agreements, the arbitrator awarded Syncor 100% of the stock in

PDI, ordered McLeland to cease and desist from soliciting or

selling to Syncor’s customers, and ordered McL-land to cease

and desist from further violating the Agreements. Petitioner's

Appendix M at M-11; Petitioner’s Appendix N at N-1 through

N-3. It is this award, as enforced by both Courts below, which

McLeland seeks to avoid.

REASONS FOR DENYING THE PETITION

I. The Petition raises no new legal issues and conflicts

with the strong, clear federal policy favoring

arbitration.

This Court has directed federal courts to “rigorously

enforce agreements to arbitrate.” Witter Reynolds, Inc. v.

Byrd, 470 U.S. 213, 221, 105 S.Ct. 1238, 1242, 84 L.Ed.2d 158

(1985). The heavy presumption favoring arbitration is based on

the need for speedy and efficient decisions. Peoples Sec. Life

Ins. v. Monumental Life Ins. Co., 867 F.2d 809 (4th Cir. (Md.)

1989). Arbitration cases tend by their nature, to be fact-specific

and to turn on the specific language of the arbitration agreement

at issue. This case fits this model. Accordingly, nothing in this

case presents the sort of novel or critical legal issue which

would warrant granting the Petition.

Syncor obtained the arbitrator’s detailed decision in its

favor on September 29, 1995. Petitioner’s Appendix M at M-1

through M-8. That should have been the final word. McLeland

voluntarily entered into the Arbitration Agreement, and Syncor

had every reason to expect that arbitration would resolve its

dispute with McLeland. The result, however, has been

unnecessary, unwarranted and seemingly unending litigation.

By trying time and time again to avoid his legal obligations,

McLeland has spurned the federal policy favoring arbitration.

These efforts to change the outcome of an arbitration are

disfavored: “Parties may not seek a ‘second bite at the apple’

simply because they desire a different outcome. “To permit

such attempt would transform a binding process into a purely

advisory one.”” Remmey v. PaineWebber, Inc,, 32 F.3d 143,

146 (4th Cir. (N.C.) 1994), citing Richmond, Fredericksburg

Union 1992, 973 F.2d 276 (4th Cir. (Va.) 1992). In the spirit

13

of the strong and clear federal policy favoring arbitration and

for the other reasons set forth below, the Supreme Court should

deny McLeland’s petition.

Il. The ex parte Arbitration was Proper and McLeland

has Offered No Valid Basis for Overturning the

Award.

The Arbitration Agreement is governed explicitly by the

AAA rules. As both the District Court and the Fourth Circuit

concluded, the AAA “rules provide for an arbitration hearing to

proceed ex parte if a party who has received proper notice does

not participate in the hearing.” Memorandum Opinion;

Petitioner’s Appendix B at B-5; Appellate Opinion; Petitioner’s

Appendix A at A-6.

McLeland claims that the ex parte arbitration was

improper because, in his view, the AAA rules require joint

selection of the arbitrator. Since McLeland did not participate

in the selection of the arbitrator, he contends that the arbitration

proceeded in violation of the AAA rules. He further asserts that

the Fourth Circuit’s ruling in this case conflicts with the Fifth

and Ninth Circuits regarding the issue of arbitration

enforcement when the arbitrator was not selected in accordance

with the Arbitration Agreement. Petitioner’s argument is

flawed both legally and factually. First, the Fourth, Fifth and

Ninth Circuits are not in conflict over this issue. Second,

contrary to Petitioner’s assertion, the Arbitrator in this case was

selected in accordance with AAA rules.

A. This Case Presents No Conflict of Any Issue

Among the Circuit Courts.

McLeland asserts that the Fourth Circuit’s holding in

this case and in Sheet Metal Workers Intemational Association

Local Union v, Power City Plumbing & Heating, Inc,, 934 F.2d

557 (4th Cir. (N.D.W.Va.) 1991), that “if the opposing party

was served with proper notice and was aware of the arbitration

proceedings, ‘[t}he arbitration award is valid and fully

,

enforceable despite [that party’s] absence,’” conflicts with

decisions rendered by the Fifth Circuit and Ninth Circuit.

15

Specifically, McLeland claims that this holding is

contrary to the Ninth Circuit’s holding in Toyota of Berkeley v.

Automobile Salesman’s Union, Local 1095, 834 F.2d 751 (9th

Cir. (N.D.Calf.) 1987). Toyota of Berkeley and the Automobile

Salesman’s Union were parties to the collective bargaining

agreement. The Union submitted a grievance to Toyota after

Toyota discharged an automobile salesman. Several months

later the Union submitted a formal demand for arbitration. The

parties agreed on an arbitrator and an arbitration was scheduled,

but Toyota decided it would not participate in the arbitration

because it claimed the Union failed to comply with procedural

requirements. ~The Court in Toyota of Berkeley, construing the

agreement in that case, stated:

If an agreement provides that the parties shall

jointly select an arbitrator, however, the Court

may refuse to enforce an award made following

an ex parte hearing before an arbitrator selected

without the defaulting party’s cooperation on

the grounds that the party not in default should

have sued to compel arbitration.

16

ld, at 754 [emphasis added}. Since the parties had agreed on an

arbitrator before the arbitration, the Ninth Circuit's statement

was merely dicta, and the arbitration agreement in that case

differed from the one at issue in this Petition. Nevertheless,

the Ninth Circuit did not require a court to refuse to enforce an

award when join selection is mandated, but not followed.

Rather, the Ninth Circuit gave the court discretion to enforce

| such an award. Thus, Toyota of Berkeley does not conflict with

the Fourth Circuit’s decision in Power City and the present

case.

Likewise, Power City and the present case do not

conflict with the Fifth Circuit’s decision in Sam Kane Packing

Co. v. Amalgamated Meat Cutters, 477 F.2d 1128 (Sth Cir.

(S.D.Tex.) 1973) cert. denied, 414 U.S. 1001 (1973). Although

the facts in Sam Kane are different from the present case, the

holding again supports enforcement of Syncor’s arbitration

award.

17

Sam Kane involved a collective bargaining agreement

that allowed each party to nominate a representative with the

representative of each party jointly selecting a third arbitrator.

The collective bargaining agreement provided that if one party

did not participate in the arbitration, the representative

appointed by the single party would arbitrate the grievance and

his decision would bind both parties. The Fifth Circuit held that

this clause would be construed strictly to apply only where a

party failed to name a representative to the arbitration board.

Hence, this clause did not apply because Sam Kane Packing

Company named an arbitrator who refused to participate on the

grounds that the case was not arbitrable. The ex parte

arbitration failed to comply with the collective bargaining

agreement, and thus was not enforceable.

In this case, Syncor proceeded to arbitrate this matter in

full compliance with its Arbitration Agreement. The collective

bargaining agreement in Sam Kane contained requirements that

18

were not present in the arbitration agreements in the present

case, in Power City, or Toyota of Berkeley. Thus, Sam Kane

does not conflict with the Fourth or Ninth Circuit decisions.

In fact, the Fifth Circuit’s ruling actually supports the

district court’s enforcement of the arbitration award in this case.

In Sam Kane, the Fifth Circuit “note[d] that had there been a

method whereby an admittedly ‘neutral’ arbitrator was selected

and the company merely refused to participate in the hearing we

would be faced with a strong case for the award.” 477 F2d. at

1136. Contrary to McLeland’s assertions, as discussed below,

a neutral arbitrator was selected by the AAA, in accordance

with its rules, in the present case. Thus, the Fifth Circuit's dicta

in Sam Kane is in accordance with the Fourth Circuit's rulings

in Power City and the present case.

B. The Arbitrator was Neutral, and was

Selected Solely by AAA with No Input from

Syncor.

McLeland attempts to paint a picture of unfairness on

the basis that he failed to participate in the selection of the

arbitrator. Furthermore, he claims that joint selection of the

arbitrator is required by the AAA rules. McLeland’s argument

is factually flawed. First, as the District Court and Fourth

Circuit concluded, the AAA rules merely provide for “joint

input” and do not require joint selection. Secondly, and perhaps

more importantly, the arbitrator was selected completely by the

AAA with no input from Syncor.

The AAA Rules provide for the AAA to send each

party, simultaneously, a list of arbitrators for the parties to

review and make their objections and strikes, if any. These

rules were followed On May 23, 1995, AAA mailed each party

a list of proposed arbitrators and allowed each party to strike

three names from the list. AAA further allowed the parties to

20

list all remaining names in the order of preference on a form

provided by AAA. Syncor did not strike any names, and did

not list the arbitrators in any preferential order. Rather, Syncor

responded that it had no preference. See, Respondent's

Appendix F.

McLeland had his chance to participate in selecting an

arbitrator, but declined. So, the AAA proceeded to select the

arbitrator and schedule the arbitration. McLeland never

expressed any concern with the selection process in his Answer

(filed two days after the arbitration hearing) or in any District

Court brief. Nor did he testify regarding such concerns during

the hearing on Syncor’s Motion to Enforce the Arbitrator’s

Award. In fact, he never filed a brief with the arbitrator, and

never raised any objection to the selection process until he

appealed to the Fourth Circuit. If he had, the record would be

clearer.

21

McLeland complains about being deprived of his

strikes, but he has never made any claim that the arbitrator was

biased, and he has never objected to the choice of the arbitrator.

By his own admission, he was not prejudiced by his failure to

participate in the selection of, the arbitrator. As the Fourth

Circuit found, the AAA rules provide only for joint input, not

joint selection. Since the AAA rules also recognize the validity

of an ex parte arbitration, the Fourth Circuit properly concluded

that the selection of the arbitrator and the arbitration proceeding

itself were both valid despite McLeland’s failure to participate.

Ill. |The Lower Courts Properly Decided that the Matter

was Arbitrable, and the Timing of that Decision in

this Case is Irrelevant.

The District Court thoroughly analyzed the issue of

arbitrability, using the language of the Arbitration Agreement,

the Court found that the dispute was related “to the separation

of respondent from his employment with Syncor” (Petitioner

Appendix B at B-8); and concluded that the case was arbitrable.

The Fourth Circuit upheld that decision, and no basis exists for

revisiting it.

McLeland also claims, however, that the arbitration

should not have proceeded without an order from the Court on

the issue of arbitrability before the arbitration took place. As

a matter of law and policy, this claim should be rejected. The

issue of arbitrability, in every arbitration, is a distinct issue

which courts wills always review; the purposes of arbitration

would be foiled in this case if arbitrability had to be decided, by

a court, before arbitration commenced.

23

Cases cited by McLeland actually contradict his

assertion. In First Options of Chicago, Inc. v. Kaplan, 115 S.Ct.

1920, 1921 (1995), the Supreme Court held that if the parties

agreed to submit the question of arbitrability to the arbitrator,

“then the court should defer to the arbitrator’s arbitrability

decision. If not, then the court should decide the question

independently.” Because the issue is independent, it can be

decided either before or after the arbitration itseli. In First

Options, this Court seemed to anticipate that the arbitration

could take place before the court determines the issue of

arbitrability, to enable the reviewing court to “defer to the

arbitrator’s arbitrability decision.”

Likewise, in Toyota of Berkeley, the Court decided the

issue of arbitrability after the arbitration occurred. Thus,

although arbitrability is a question for the court, it is implicit in

Toyota of Berkeley’s decision that a court may resolve the issue

after the arbitration.

24

Allowing courts to rule on arbitrability after a matter is

arbitrated is also in accordance with the strong federal policy

favoring arbitration. See AT&T Technologies, Inc. v.

Communications Workers of America, 106 S.Ct. 1415, 475

U.S. 643 (1986) (doubts concerning arbitrability should be

resolved in favor of arbitration). Based on the policy favoring

arbitration, courts have placed the burden of proving a matter

is not arbitrable on the party contesting arbitrability. See

generally, Shearson/American Express, Inc. v. McMahon, 107

S.Ct. 2332, 482 U.S. 220 (1987); Gilmer v. Interstate/Johnson

Lane Corp., 895 F.2d 195 (4th Cir. (W.D.N.C.) 1990); Aronson

y. Dean Witter Reynolds, Inc., 675 F.Supp. 1324 (S.D.Fla.

1987).

The burden was on McLeland to prove that the matter

was not arbitrable. Tut nothing in the Arbitration Agreement

supports his argument that arbitrability had to be decided by a

court before the arbitration could begin. Since McLeland did

25

not even attempt to meet that burden prior to the arbitration,

which he could have done by replying promptly to the original

complaint filed by Syncor (See District Court Order, footnote

2, Petitioner’s Appendix B at B-6, 7) the facts of this case and

the federal policy supporting arbitration support the district

court’s resolution of the arbitrability issue after the arbitration.

26

CONCLUSION

The Court should deny McLeland’s petition. The

petition presents no conflict among the Circuits. Moreover, the

District Court properly determined that the case was arbitrable,

and properly enforced the arbitration award.

Respectfully submitted,

dl fale,

L. BAILEY

RONBDAL. HARVEY

BOWLES RICE McDAVID

GRAFF & LOVE, P.L.L.C.

600 Quarrier Street

P. O. Box 1386

Charleston, WV 25325-1386

CHS 136017

27