United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
April 10, 2003
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
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No. 02-20431
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SATURN DISTRIBUTION CORPORATION,
Plaintiff-Appellee,
versus
PARAMOUNT SATURN, LTD.,
Defendant-Appellant.
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Appeal from the United States District Court
for the Southern District of Texas
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Before BENAVIDES, STEWART, and CLEMENT, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
Appellant Paramount Saturn (“Paramount”) asserts on appeal that the district court erred in
granting Appellee Saturn Distribution Corporation’s (“Saturn”) motion to compel arbitration. We
affirm.
I. FACTS AND PROCEEDINGS
Upon entering into a franchise agreement with Saturn in December 1997, Paramount became
a Saturn franchisee in Houston, Texas. Subsequently, Paramount sought to purchase three additional
dealerships from Saturn. Sat urn did not sell the dealerships to Paramount. As a result, Paramount
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alleged that Saturn breached its statutory duty of good faith and fair dealing. Although the franchise
agreement contained a broad arbitration provision, Paramount argued that the dispute was not
arbitrable because the Texas Motor Vehicle Board (“TMVB”) had exclusive jurisdiction over the
dispute. The only issue before the district court was whether to grant Saturn’s motion to compel
arbitration. The district court granted Saturn’s motion to compel arbitration and closed the case
without dismissing it. The order compelling arbitration was labeled “Final Judgment” and stated
“[t]his is a final judgment.”
II. STANDARD OF REVIEW
We review de novo the district court's decision to compel arbitration. Catholic Diocese of
Brownsville v. A.G. Edwards & Sons, Inc., 919 F.2d 1054, 1056 (5th Cir. 1990); United Offshore
Co. v. Southern Deepwater Pipeline Co., 899 F.2d 405, 407 (5th Cir. 1990).
III. DISCUSSION
The instant dispute presents this Court with two issues: (1) whether the district court’s order
to compel arbitration was a final and appealable decision; and (2) whether the dispute is arbitrable.
First, the plain language of the FAA makes “final” decisions, whether hostile to arbitration
or not, immediately appealable, 9 U.S.C. § 16(a)(3), but prohibits appeals from interlocutory orders
favorable to arbitration. 9 U.S.C. § 16(b); Sphere Drake Ins. PLC v. Marine Towing, 16 F.3d 666,
667-68 (5th Cir. 1994). The order compelling arbitration, which arose out of independent
proceedings, was a “final decision” pursuant to Green Tree Fin. Corp.-Ala. v. Rudolph, 531 U.S. 79,
87-89 (2000) (holding that orders arising out of embedded proceedings are final decisions when
accompanied by a dismissal of all other claims and there is no stay of federal court proceedings), for
three reasons: (1) the district court closed the case, Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702,
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708 (5th Cir. 2002); (2) the order was labeled “Final Judgment” and included the language “this is
a final judgment,” which clearly expressed the intention of the court to “effectively [end] the entire
matter on its merits and [leave] nothing more . . . to do but execute the judgment,” Id. at 707 (holding
that the phrase “this case is closed” achieves the same purpose); and (3) the order was not
accompanied by a stay of federal court proceedings, Green Tree, 531 U.S. at 87 n.2; Am. Heritage
Life, 294 F.3d at 708 (holding that an order compelling arbitration can be a final decision if the stay
only relates to state court proceedings).
Second, the dispute is arbitrable because the statutory duty on which Paramount bases its
claim arises out of the parties’ franchise agreement, which contains a broad arbitration provision. Tex.
Rev. Civ. Stat. Ann. art. 4413(36), § 6.06(e) (Vernon Supp. 2001) (“Each party to a franchise
agreement owes a duty of good faith and fair dealing to the other party”); United Offshore Co. v.
Southern Deepwater Pipeline Co., 899 F.2d 405, 409 (5th Cir. 1990) (ho lding that “when parties
choose [broad arbitration provisions such as ‘any controversy or claim arising out of or relating to
this agreement’], only the ‘the most forceful evidence of a purpose to exclude the claim from
arbitration’ would render the dispute non-arbitrable”) (quoting Mar-Len of Louisiana, Inc. v.
Parsons-Gilbane, 773 F.2d 633, 636 (5th Cir. 1985)).
There are no legal restraints external to the parties’ arbitration agreement that foreclose the
arbitration of their dispute because the TMVB does not have exclusive jurisdiction of contractual
disputes between franchisors and franchisees in the motor vehicle industry. Tex. Rev. Civ. Stat. Ann.
art. 4413(36), §§ 1.02, 3.01(a) (Vernon Supp. 2001). Even if it did, the strong federal policy favoring
arbitration preempts state laws that act to limit the availability of arbitration. Southland Corp. v.
Keating, 465 U.S. 1, 16 (1984) (holding that through the FAA, “Congress intended to foreclose state
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legislative attempts to undercut the enforceability of arbitration agreements”); Circuit City Stores,
Inc. v. Adams, 532 U.S. 105, 122 (2001) (discussing the holding and continued vitality of Southland).
IV. CONCLUSION
Accordingly, and for essentially the reasons given by the district court, the judgment of the
district court is AFFIRMED.
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