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USCA1 Opinion

May 12, 1992

____________________

No. 92-1133
CORION CORPORATION,
Plaintiff, Appellant,
v.
GIH-HORNG CHEN,
Defendant, Appellee.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
___________________
____________________
Before
Breyer, Chief Judge,
___________
Campbell, Senior Circuit Judge,
____________________
and Cyr, Circuit Judge.
_____________
____________________
Richard L. Alfred,
__________________

Robert A. Bertsche
___________________

and

Hill and Barlow


________________

Response to Order to Show Cause and Reply Memorandum Regard


Appellate Jurisdiction, for appellant.
Ellen J. Messing and Shilepsky, Messing & Rudavsky, P.C.,
_________________
_____________________________________
Memorandum in Opposition to Appellant's Response to Show Cause Or
and Reply Regarding Appellate Jurisdiction, for appellee.
____________________
____________________

Per Curiam.
__________
district court's

The question before

lengthy

memorandum and

us is whether the
order

determining

that the parties' dispute is arbitrable is a final appealable


order.

We

conclude

that

it

is

not.

We

turn

to

the

background.
I.
_
Plaintiff
Gih-Horng
Personnel

Chen.

Corion Corporation

Chen

Policies

then invoked a
Manual

situations involving . .

which

discharged defendant
provision in Corion's
provided

. termination . . .

that

"[i]n

, an aggrieved

employee who is
will

dissatisfied with top

be permitted

to have

impartial third party" and

management's decision

the grievance

arbitrated by

demanded arbitration.

an

Corion did

not agree to arbitration and instead filed the instant action


seeking 1)

arbitrate

the

declaration
(count 2).
no

declaration

that

discharge

Chen was

decision

that plaintiff

was

not

(count

entitled to

1)

entitled

to

and

2)

discharge Chen

Corion maintained that the personnel handbook had

contractual force, but, even

any right to

if it did,

Chen had waived

arbitrate by failing to attend

hearings Corion

had scheduled to obtain Chen's input.


Chen responded
the

court

to dismiss

with two motions.


count

two

The first asked

(Corion's request

for

declaration that Corion was entitled to discharge Chen).

a
The

second sought both a stay of all court proceedings (including

-2-

filing an answer) pending arbitration and an order compelling


arbitration.
After

briefing and

argument,

the district

court

issued an opinion
in the

concluding that the

manual was

contractually enforceable and

termination decisions.
had

As

waived any right to

that the arbitrator was


court's

arbitration provision
applied to

for Corion's argument

that Chen

arbitrate, the district court ruled


the one to decide

twenty-one page memorandum

that issue.

The

and order concluded with

the following paragraph:


For the foregoing reasons, Chen's
motion to stay and compel arbitration is
ALLOWED.
For the same reasons, this
Court has determined that an enforceable
agreement to arbitrate exists.
Chen's
Motion to
Dismiss Count II
of the
Complaint is ALLOWED.
The
case is
ordered administratively closed pending
the outcome of the arbitration.
No separate document embodying the order has entered.
II.
__
Corion
Corion

argues

has appealed from the memorandum and order.


that

decision appealable
entire

has

and

under 28 U.S.C.
been

adjudicated.

declaration that plaintiff

was entitled

has

lawsuit

the memorandum

order

is a

final

1291 because Corion's


Count

to discharge

(for

Chen)

been dismissed, and count 1 (for a declaration that Chen

is not entitled to arbitrate the discharge decision) has been


effectively resolved against plaintiff by granting the motion

-3-

to compel arbitration, Corion contends.

We disagree that the

order is final.
A
_
First,
judgment on

the

a piece

district
of paper

a separate document a

be

overlooked.

See
___

has

not

separate from

opinion as required by Fed. R.


of

court

Civ. P. 58.

entered

the underlying
Were the absence

mere formality, the omission might

Fiore v.
_____

Washington County Community


____________________________

Mental Health Center, Nos. 91-1027, 91-1842, slip op. 21 (1st


____________________
Cir. March 30, 1992)
rule by

appealing).

(appellant waives the separate document


But
___

cf.
__

Wang Laboratories, Inc.


________________________

Applied Computer Sciences, Inc., 926


________________________________
1991)

(case

remanded

separate document

to

district

where appellee

F.2d 92, 96
court

for

refused to

v.

(1st Cir.
entry

of a

waive separate

document requirement).
B
_
Here, however,
involved.

The

we think more

court did

not

labelled final judgment, which


that the case had concluded.

enter

than informality
a

is

separate document

would have signalled its view


Nor did it dismiss the

entire

action.

Rather,

proceedings

it

pending

granted defendant's
arbitration.

This

motion
suggests

to

stay

that the

district court itself did not intend to terminate its role or


to enter

a final judgment, but

retain jurisdiction

rather acted in

pending the outcome of

a manner to

arbitration.

To

-4-

be

sure,

the

district

"administratively
circumstances
equivalent

closed"

case

be

In

the

arbitration.

of dismissal.

1463 (10th Cir. 1987)

a showing of

breach of contract action);

See Quinn v.
___ _____

(dismissing appeal from

arbitration and ordering the

be reopened upon

order

the

of this case, however, we do not think this is

order compelling

Inc.,
____

directed that

pending

to a final judgment

CGR, 828 F.2d


___

to

court

case "closed,

good cause" entered

in a

Campbell v. Dominick & Dominick,


________
____________________

872 F.2d 358 (11th Cir. 1989) (dismissing appeal from


directing

and closing the

arbitration, staying

judicial proceedings,

case for statistical purposes entered

in an

action

seeking damages

Wright,

A.

Miller,

Procedure
_________

under

&

E.

the securities
Cooper,

act); 15B

Federal Practice and


______________________

3914.17 at p. 13 n.11 (1992) (concluding that the

result in

the Campbell case


________

the

for statistical

case

judgment").

"implies that an
purposes

does not

Rather, it is a reflection

order closing
make

a final

of the fact that the

case is likely to be dormant until arbitration concludes.


short,

C.

we

conclude that

the

district

court has

In

retained

jurisdiction.
In

previous

cases

where

district

retained jurisdiction pending the outcome


have concluded
arbitration

or

that

an order

directing

immediately appealable.

staying

has

of arbitration, we
proceedings

arbitration
De Fuertes
___________

court

is
v.

not

pending
final

or

Drexel, Burnham,
_________________

-5-

Lambert, Inc., 855 F.2d


_____________

10 (1st Cir. 1988),

is instructive.

There, the

plaintiff sought

securities.

Defendant

arbitration.

to compel defendant

moved

to refer

Plaintiffs opposed

agreement to arbitrate was not


lost

on

that point

in the

the controversy

arbitration,

district

pending

arbitration.

outcome of

This

court concluded that

the order

and

retaining jurisdiction

was

Plaintiffs

court, and

specifically retained

to

arguing the

valid but forged.

ordered arbitration, but


the

to deliver

the court

jurisdiction

Plaintiffs appealed.
compelling arbitration

not appealable

as a

final

decision because
no
judgment
determining the
entire
controversy
between the
parties has
entered.
Contrary
to
appellant's
assertion, the litigation has not ended.
Rather, it has moved to another forum
with the expectation that it will return
to the [district court] for entry of a
final judgment.
Id.
___

at

11.

The

arbitration order
exception

to

the

opinion

then went

was not
final

on

to

say that

immediately appealable
judgment rule

and

the

under any

dismissed

the

appeal.
Corion contends that De Fuertes is not
__________
and
It

relies on a

different line of

points out that most

controlling

cases for appealability.

courts have accepted

that an order

adjudicating an action which seeks nothing more than an order


to

compel arbitration

is a

final

appealable order.

See,
___

e.g., Abernathy v. Southern California Edison, 885 F.2d 525,


____ _________
___________________________

-6-

530 n.18 (9th Cir.


may

1989) ("[A]n order compelling arbitration

be immediately appealed if it is the full relief sought.

However, when the order

staying the proceeding or compelling

arbitration is only one step in the judicial proceedings

and

the case can be expected to return to the district court, the


order

is nonfinal

(citations

and

not subject

to immediate

omitted); 15C C. Wright,

Federal Practice and Procedure,


______________________________

appeal.")

A. Miller, & E. Cooper,

3914.17 at pp. 10

n.7 and

15-19 (1992) ("an order granting or denying arbitration in an


action that

seeks only

appealable
in

appealable

Chen)

seeking

as a

final

the district

seeking a

ordinarily is

as a final judgment; if the same order is entered

an action

because

to compel arbitration

other relief,

ordinarily

judgment").

It then

court dismissed

declaration that Corion was

and

effectively

disposed

of

dispute was

arbitrable, Corion's action is


the sole

not
that

(the count

entitled to discharge

of count
by

argues

count two

declaration

one in which

non-arbitrability)

it is

one

(seeking

deciding

that

a
the

now analogous to

issue is arbitrability

and the

same

finality

rules

litigant

desiring arbitration

structuring

should apply.

lawsuit

to

In

other

words, just

obtains a

seek

no

as a

final judgment

more

than

an

by

order

compelling arbitration, so too should a litigant who believes


a dispute

is

not

arbitrable

phrasing his action to

obtain a

final

seek no more than a

judgment

by

declaration that

-7-

the dispute is not


of

count two,

arbitrable.

Corion

is in

finality

should

not be

reaching

out prematurely

Now that,
the

defeated

through dismissal

position of
by

the

latter,

the district

court's

to assert jurisdiction

over post-

arbitration proceedings, or so the argument would run.


We leave for another
Corion's

day the question whether, had

action been limited to the request in count one for

a declaration

that the dispute was

not arbitrable, finality

could be defeated by the district court's purported retention


of

jurisdiction

pending

the

outcome

of

arbitration, see
___

University Life Ins. Co. v. Unimarc Ltd., 699 F.2d 846, 848_________________________
____________

50 (7th
in an
was

Cir. 1983) (finality of


independent action

not defeated

by

order directing arbitration

seeking only an

court's retention

arbitration order
of jurisdiction

resolve any future disputes or to enforce any

to

future award);

Cincinnati Gas & Elec. Co. v. Benjamin F. Shaw Co., 706 F.2d
___________________________
____________________
155, 157-58
but

(6th Cir. 1983)

retaining

jurisdiction

arbitration, entered
non-arbitrability
case.

Corion

arbitrability;

(order compelling
pending

in an

action seeking a

treated as

final), for

did

not

it also

ask

asked

the

the court

dismissed the second count in

that

the

personnel

manual

outcome

of

declaration of

that is

court

Corion was entitled to discharge Chen.


has

the

arbitration,

to

not this

decide

only

to determine

that

To be sure, the court

view of its determination

arbitration

provision

was

-8-

enforceable.
order,
dismissal

and

But it
it

may

has not
well

depending upon

purported

contemplate

the outcome

to enter

a final

re-examining

that

of arbitration.

For

example,
waived

the court
his right

issue

was

however,

for
agree

declined to

determine whether

to arbitrate,

as it

the

arbitrator.

with

Corion's

Chen had

concluded that

Should
position

the
that

that

arbitrator,
Chen

waived

arbitration, then, presumably, the court

may reinstate count

two.

the court

Until a

subject

to

orders.
has

final judgment

law of

the case

In short, we do

impermissibly

enters,

is free,

principles, to

re-examine its

not think that the

district court

reached

out

to

assert

or

retain

jurisdiction over the lawsuit.


Corion

points to

several

cases

which, it

says,

support its position that the district court's memorandum and


order

is final

representative
Middlesex
_________
1971),

and appealable.
of Corion's

address two

position.

First

v. Gevyn Constr. Corp., 450


_____________________

cert. denied, 405 U.S. 955 (1972).


____________

sought a declaration

which are

is County of
__________
53 (1st

Cir.

There, the county


to arbitrate

The defendant responded with

motion to compel arbitration and to enjoin the county from

spending the unpaid construction balance.


did

F.2d

that it was not obligated

various construction disputes.


a

We

not grant the injunction, but

stayed further judicial proceedings.

-9-

The district court

did order arbitration and


The county appealed the

arbitration order, and this

court decided the merits

appeal without discussing appealability.


court

of the

Subsequently, this

in Langley v. Colonial Leasing Co. of New England, 707


_______
___________________________________

F.2d 1 (1st Cir. 1983), in an effort to explain the basis for


appellate

jurisdiction in

"Middlesex
_________
district

declaratory judgment

court's

reality
Corion

was a

a full

the Middlesex
_________

'order

compelling

final judgment."

case,

stated that

action in

which the

arbitration'

Langley,
_______

707 F.2d

argues the same principles apply to it.

dismissal of count two

is in reality a

in

at 3.

The district

court's determination that the dispute is arbitrable


with its

was

coupled

full final

judgment.
Middlesex is
_________

distinguishable.

Middlesex case did not ask the


_________

The county

in the

court to decide the merits of

the parties' underlying dispute as did Corion in

the present

case

entitled to

by requesting

discharge Chen.

a declaration

Hence,

that it

was

the arbitration order

in Middlesex
_________

did dispose of the one substantive dispute -- arbitrability -

submitted

matter

to the

(albeit

leaving unresolved

of ancillary injunctive relief).

present

case,

Corion

adjudicate the
declining
paper,

court

has

asked

the

In contrast, in the
district

parties' dispute, and the

to enter a final

court

to

district court, by

judgment on a

has left open the possibility

the

separate piece of

that it may, depending

upon the results of arbitration, do just that.

-10-

Second,

Corion
______

points

Prescott Pub. Co., 614 F.2d 3


__________________
plaintiff

sued

contract.

his employer

The

arbitrate the

district

dispute even

to

Robbins v.
_______

(1st Cir. 1980).


for

breach

court ordered
though, under

applicable collective bargaining agreement,


the employee -the union
In

had the power

(not a party to

according appellate

There, the

of an
the

employment

defendant

the terms

of the

to initiate arbitration,

this court

to

the union -- not

the suit) had declined

review,

George W.
__________

but

to do so.

noted that

the

order might be appealable as a final judgment under 28 U.S.C.

1291 because, arbitration having been ordered, "it could be


thought that nothing was left for the court but supervision."
Ultimately, however,
because

it

this court

concluded

appealable under

that

did not definitely

even

if

the

order

so hold
was

1291, mandamus was appropriate in

not

view of

the importance of guarding against federal court interference


with the collective bargaining process.
here with such policy concerns.
the district court was
but
Chen

supervision."

We are not presented

Furthermore, we do not think

necessarily left with "nothing .

Rather, if

waived his right to

the arbitrator

arbitration, the court

. .

decides that
may end up

adjudicating exactly what Corion asked the court to decide -whether

Corion was

entitled to

discharge Chen.

On

these

grounds Robbins is not controlling.


_______
C
_

-11-

In addition
and the

wording

of

to the absence of
the

final

a separate document

paragraph

of

the

21-page

memorandum

and order,

policy

considerations influence

conclusion that no final judgment has entered in the

our

present

action and our disinclination to analogize the present action


to

one

seeking

no

more than

determination

concerning

arbitrability.
It
entered in

is

true that

an order

an action seeking

compelling arbitration

only an arbitration

order has

been considered final and immediately appealable by the party


resisting arbitration.
Union, Local 2
______________
(7th Cir.

That is

bifurcate a

the

second

the

merits

arbitrable) or

challenges to the

the dispute is

arbitrable).

F.2d at 528 n.13


an

termination into

concerning the forum and


(if

the

is

not

arbitrator's decision

(if

It is not.

dispute

See Abernathy, 885


___ _________

compelling arbitration

may

be

it is the complete relief sought.

recognize that

or

(9th Cir. 1989) ("We recognize that under

order

appealed if

14-16

is desirable

controversy over

separate lawsuits -- the first


either

F.2d 13,

not because it

two

1291

Graphic Communications
_______________________

v. Chicago Tribune Co., 779


____________________

1985).

efficient to

See, e.g.,
___ ____

permitting direct

inconsistent with

the

. . . We also

appeals of such

policies underlying

process.

Nevertheless, until the Supreme

acts, the

final judgment

the

orders is
arbitration

Court or Congress

cases require such

-12-

immediately

an outcome.");

Zosky
_____

v.

denied,
______

Boyer, 856
_____
488 U.S. 1042

Union, 779 F.2d at


_____
allows

F.2d 554,

an order

to

speedy

arbitration."

arbitrate

delay

review

be appealed

before

in

appellate court

arbitration

"frustrate[s]
of

labor

the

policy

disputes

F.2d 1371, 1373-74 n.3 (9th

arbitration

wrought

forum decision
having to hear

order and

setting aside)

through

plus

by

Cir. 1984).

immediate appellate

the inefficiency

two appeals (first

second from

the order

of an

from the

enforcing (or

the arbitrator's decision), rather

make for lengthier and

than one,

more expensive dispute resolution, at

least in circumstances where the dispute was arbitrable.


immediate appealability of an
which seeks

the

United Food & Commercial Workers Local 197 v.


__________________________________________

of the

arbitration

to

Immediate appellate review of an

resolution

Alpha Beta Co., 736


______________
The

1988), cert.
_____

15 ("it is rather a fluke in the law that

compelling

favoring

(3d Cir.

(1989) (same); Graphic Communications


______________________

arbitration is completed").
order

560

no more than

But

arbitration order in a lawsuit

an order directing

arbitration is

the price or consequence of the final judgment rule, for once


the

order to arbitrate enters, the court has disposed of the

entire controversy then before it.


Miller,

&

3914.17 at
concepts

E.

Cooper,

Federal Practice and Procedure,


________________________________

p. 26 (1992)
under

But see 15C C. Wright, A.


___ ___

(suggesting a revision

which an

arbitration

order

of finality

entered in

an

independent action brought solely to compel arbitration would

-13-

not be immediately appealable,

the theory being that

"it is

always

better to keep a case open after ordering arbitration

as the

most efficient

vehicle for reviewing

any subsequent

challenges and ordering enforcement").


The
immediate

appeals

predispose us,
judgment

systemic

rule,

of

delay

and

arbitration

whenever possible
to

interlocutory order

view

inefficiency

an

entered in

orders

caused

by

tend

to

will

consistent with

arbitration

order as

an ongoing lawsuit

the final
but

an

(and not

immediately appealable), rather than as a final resolution of

discrete

controversy.

explained, we think
resolved

the entire

Here, for

the

reasons

that the district court


controversy before

specifically

left open

the

decision

to

dismiss count

district

court's order

possibility
two

and

has not finally

it, but

the

that consequently

the

motion to

compel arbitration is not a final appealable order.

-14-

rather has

of revisiting

allowing Chen's

Appeal dismissed.
________________

earlier

stay and