The Supreme Court has not explicitly held that domestic arbitration clauses are arbitrable and courts since have split on this issue. See GKG Caribe, Inc. v. Nokia-Mobira, Inc., 725 F. Supp. 109 (P.R. 1989) (holding that antitrust laws of Puerto Rico are subject to arbitration clause); DJ Mfg. Corp. v. Tex-Shield, Inc., 998 F. Supp. 140 (P.R. 1998) (holding that domestic antitrust disputes are subject to arbitration); Gemco Latinoamerica, Inc. v. Seiko Time Corp., 623 F. Supp. 912 (P.R. 1985) (holding that the court was bound to apply the Federal Arbitration Act if: (1) the court finds a contract with an arbitration clause in effect when the dispute arose and (2) the claim is within the scope of the contract and is arbitrable); Nghiem v. NEC Electronic, Inc., 25 F.3d 1437 (9th Cir. 1994), cert. denied, 513 U.S. 1044, 115 S.Ct. 638, 130 L.Ed.2d 544 (1994). But see Coors Brewing Co. v. Molson Breweries, 51 F.3d 1511 (10th Cir. 1995) (an arbitration clause extends only to disputes "touching specified provisions of the agreement."
Accordingly, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985) (quoting Moses H. Cone, 460 U.S. at 24-25); McCarthy v. Azure, 22 F.3d 351, 355 (1st Cir. 1994); Commercial Union Ins. Co. v. Gilbane Bldg. Co., 992 F.2d 386, 388 (1st Cir. 1993); DJ Mfg. Corp. v. Tex-Shield, Inc., 998 F. Supp. 140, 143 (D.P.R. 1998). The court must compel the parties to arbitrate once it is satisfied that neither the making of the arbitration agreement nor the failure to comply therewith is at issue.
ns espoused by the parties in light of the "liberal federal policy favoring arbitration agreements", which "requires a liberal reading of [such] agreements, . . .". Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); KKW Enter., 184 F.3d at 49; Sec. Indus. Ass'n v. Connolly, 883 F.2d 1114, 1119, 1123 (1st Cir. 1989), cert. denied, 495 U.S. 956, 110 S.Ct. 2559, 109 L.Ed.2d 742 (1990); Dean Witter Reynolds, Inc. v. Sanchez Espada, 959 F. Supp. 73, 78 (P.R. 1997). The FAA further "`establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, . . .'" Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985), quoting, Moses H. Cone, 460 U.S. at 24-25, 103 S.Ct. 927; McCarthy v. Azure, 22 F.3d 351, 355 (1st Cir. 1994); Commercial Union Ins. Co. v. Gilbane Bldg. Co., 992 F.2d 386, 388 (1st Cir. 1993); DJ Mfg. Corp. v. Tex-Shield, Inc., 998 F. Supp. 140, 143 (P.R. 1998); and Sanchez Espada, 959 F. Supp. at 79. Where a written contract contains an arbitration clause, "there is a presumption of arbitrability" in the sense that a request for an order compelling arbitration should not be denied by the Court, "`unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.
The First Circuit has held that, when plaintiff's claims are interrelated and arbitration serves to "clarify and perhaps even simplify the remaining issues which must be litigated," "a stay of both the arbitrable and the nonarbitrable claims is within the trial court's sound discretion. Sevinor v. Merrill, Lynch, Pierce, Fenner Smith, Inc., 807 F.2d 16, 20 (1st Cir. 1986); see alsoD.J. Mfg. Corp. v. Tex-Shield, Inc., 998 F.Supp. 140, 146 (D. Puerto Rico 1998). In addition, the Agreement between the parties herein (plaintiff Audio Visual and defendant Smart Technologies) provides for the use of the International Rules of the American Arbitration Association at ¶ 9.
The federal policy in favor of arbitration would be eroded if this Court agrees with plaintiffs and exercises jurisdiction over FCC. See Lawson Fabrics, Inc. v. Akzona, Incorporated, 355 F. Supp. at 1146 (S.D.N.Y.) By forcing FCC to defend the present case, the Arbitration, which only awaits resolution on appeal, would be rendered meaningless and the clear intention of the parties to arbitrate issues arising out of the Acuerdo Marco would be invalidated. Such an exercise may also yield inconsistent results, see D.J. Manufacturing, Corp. v. Tex Shield, Inc., 998 F. Supp. 140, 147 (D.P.R. 1998), and position plaintiffs to have a second bite at the apple. Although the Arbitration award was adverse to their interests, plaintiffs had the opportunity in the Arbitration to fully argue their case, present evidence and litigate the issues now raised here.
This Court has articulated a three-pronged test to determine whether a particular dispute is subject to arbitration under the FAA. See Medika Int'l, Inc. v. Scanlan Int'l, Inc., 830 F. Supp. 81, 84 (D.P.R. 1993); DJ Mfg. Corp. v. Tex-Shield, Inc., et al., 998 F. Supp. 140, 144 (D.P.R. 1998). First, the Court must look at the contract "to determine if it contains an arbitration clause."
"Even without explicit statutory authority to do so, a court, in its sound discretion, may stay any case pending before it as an exercise of its inherent power to control its own docket." Cannavo v. Enterprise Messaging Servs., Inc., 982 F. Supp. 54, 59 (Mass. 1997) (Karol, M.J.). That authority is well established within the First Circuit. See, e.g., McCarthy, 22 F.3d at 361 n. 15; Sevinor v. Merrill, Lynch, Pierce, Fenner Smith, Inc., 807 F.2d 16, 20 (1st Cir. 1986); DJ Mfg. Corp. v. Tex-Shield, Inc., 998 F. Supp. 140, 145-46 (P.R. 1998); see also Moses H. Cone, 460 U.S. at 21 n. 23, 103 S.Ct. 927 ("In some cases . . . it may be advisable to stay litigation among the nonarbitrating parties pending the outcome of the arbitration."). Exercise of this Court's discretion to stay the instant suit is appropriate for two reasons.
Supplier moved to compel arbitration. The District Court, Casellas, J., 998 F.Supp. 140, required arbitration of claims relating to existing government contract, while staying disposition of remaining claims that bidding practices caused manufacturer to lose second contract, pending results of arbitration. Following arbitration award in its favor, supplier sought confirmation of award, entry of partial summary judgment on matters covered by arbitration, and stay of remaining claims pending appeal.
See id. at 628-29, 105 S.Ct. 3346. While the Mitsubishi Court carefully declined to address the viability of the American Safety doctrine as it applied to anti-trust claims resulting from domestic transactions, see id. at 629, 105 S.Ct. 3346, lower courts, including this one, have consistently interpreted the Mitsubishi holding expansively and have consequently subjected anti-trust claims arising from domestic transactions to arbitration. See Kotam Electronics, Inc. v. JBL Consumer Products, Inc., 93 F.3d 724, 727-28 (11th Cir. 1996), cert. denied, 519 U.S. 1110, 117 S.Ct. 946, 136 L.Ed.2d 835 (1997); Nghiem v. NEC Electronic, Inc., 25 F.3d 1437, 1441-42 (9th Cir. 1994); DJ Manufacturing Corp. v. Tex-Shield, Inc., 998 F. Supp. 140, 145 (P.R. 1998); Acquaire v. Canada Dry Bottling, 906 F. Supp. 819, 837 (E.D.N.Y. 1995). In addition, the Second Circuit has affirmed, without opinion, a district court holding that "the reasoning of Mitsubishi should apply with equal force to domestic claims."