United States Court of Appeals
Fifth Circuit
F I L E D
April 30, 2003
REVISED MAY 2, 2003
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 02-20489
_______________
APACHE BOHAI CORPORATION, LDC,
Plaintiff-Appellant,
VERSUS
TEXACO CHINA, B.V.,
Defendant-Appellee.
__________________________
Appeal from the United States District Court
for the Southern District of Texas
_________________________
********************************
_______________
m 02-21158
_______________
IN THE MATTER OF:
APACHE BOHAI CORPORATION, LDC,
Petitioner.
__________________________
Petition for Writ of Mandamus to
the United States District Court
for the Southern District of Texas
_________________________
Before GARWOOD, SMITH, and BARKSDALE, I.
Circuit Judges. On April 2, 1998, Texaco entered into two
written farmin agreements1 with Apache China
JERRY E. SMITH, Circuit Judge: Corporation (“Apache China”), according to
which Apache China agreed to drill and pay
Apache Bohai Corporation, LDC (“Apache for three wells on two of Texaco’s acreage
Bohai”) appeals an order staying proceedings blocks in the Bohai Bay area of the People’s
in the district court and compelling arbitration Republic of China. In December 1998, Apa-
of its dispute with Texaco China, B.V. (“Tex- che China assigned its interests in the farmin
aco”). Because this court’s jurisdiction is con- agreements to Apache Bohai, its affiliate. By
tested, Apache Bohai filed a conditional peti- June 1999, however, Apache Bohai lost inter-
tion for writ of mandamus directing the district
court to vacate its order and enter an ap-
pealable final judgment. Concluding that we 1
A farmin agreement is a contract whereby one
lack jurisdiction, we dismiss the appeal. Find- company acquires an interest in an exploration or
ing no abuse of discretion, we deny mandamus production license by paying some of the past or
relief. future costs of another company that is re-
linquishing part of its interest.
2
est in the project and sent documents re-as- arbitration, § 16(b)(1). Therefore, our
signing all of its interests under the agreement jurisdiction turns on whether the district
to Texaco. Texaco signed and returned the court’s order constitutes a final decision.
relevant documents in January 2000.
A final decision is one that “ends the
These events gave rise to a dispute over the litigation on the merits and leaves nothing
parties’ respective obligations under the con- more for the court to do but execute the
tract, and in January 2001, Texaco initiated an judgment.” Green Tree Fin. Corp.-Alabama
arbitration proceeding against Apache China. v. Randolph, 531 U.S. 79, 86 (2000) (citations
Apache Bohai was not named in the arbitration and internal quotation marks omitted). Under
proceeding but took action anyway, filing suit this definition, a dismissal is a final decision.
in Texas state court requesting a declaratory Id. at 89. The district court, however, did not
judgment that the dispute was not arbitrable dismiss the claims, but entered a stay pending
and that it had no liability to Texaco. Texaco arbitration. An arbitration order entering a
removed the state court proceeding to federal stay, as opposed to a dismissal, is not an
district court and moved to dismiss or stay the appealable final order.3
litigation and to compel arbitration. The
district court granted both motions, issuing an Apache Bohai contends that when a district
order to compel arbitration and choosing to court enters an order staying an action and re-
stay rather than dismiss the litigation. ferring all disputed matters to arbitration, leav-
ing no live issues before the district court, this
II. court should consider the order to be, in effect,
Section 16 of the Federal Arbitration Act a de facto dismissal and thus a final decision
("FAA"), 9 U.S.C. § 16, governs appellate appealable under § 16(a)(3). Unlike a
review of arbitration orders. Congress’s intent dismissal, however, a stay, by definition, con-
in enacting § 16 was to favor arbitration,2 and stitutes a postponement of proceedings, not a
it did so by authorizing immediate appeals termination, and thus lacks finality. Further, as
from orders disfavoring arbitration and forbid- other courts have noted, entry of a stay rather
ding immediate appeals from orders favoring than a dismissal “suggests that the district
arbitration. Adams v. Ga. Gulf Corp., 237 court perceives that it might have more to do
F.3d 538, 540 (5th Cir. 2001) (citing Forsythe than execute the judgment once arbitration has
Int'l, S.A. v. Gibbs Oil Co., 915 F.2d 1017, been completed.” ATAC Corp. v. Arthur
1020 (5th Cir. 1990)). The provisions relevant Treacher’s, Inc., 280 F.3d 1091, 1099 (6th
to this dispute vest the courts of appeals with
jurisdiction over “final decision[s] with respect 3
to an arbitration . . .,” § 16(a)(3), while specif- See Cargill Ferrous Int’l v. Sea Phoenix MV,
No. 01-31193, 2003 WL 1524466, at *5 (5th Cir.
ically denying appellate jurisdiction over
Apr. 9, 2003); see also Green Tree, 531 U.S. at 87
nonfinal orders staying proceedings pending
n.2 (“Had the district court entered a stay instead
of a dismissal in this case, that order would not be
appealable.”); Saturn Distrib. Corp. v. Paramount
2
Gilmer v. Interstate/Johnson Lane Corp., 500 Saturn, Ltd., No. 02-20431, 2003 WL 1561908,
U.S. 20, 25 (1991) (citing Moses H. Cone Mem. at *1 (5th Cir. Apr. 10, 2003) (finding district
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 court order to be a final decision, in part because it
(1983)). was not accompanied by a stay of proceedings).
3
Cir. 2002). Consequently, although it may be Apache Bohai also cites Gulf Guar. Life
true that in some instances the entry of a stay Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d
disposes of most or all issues, that fact alone 476 (5th Cir. 2002), as an example of this
does not render it the functional equivalent of court’s willingness to find the existence of an
a dismissal.4 appealable final decision despite the lack of an
explicit dismissal. In Gulf Guaranty, id. at
Apache Bohai cites two cases in which we 480-81, the district court reopened a suit for
found appellate jurisdiction despite the plain the express purpose of consolidating it with a
absence of a dismissal; neither contradicts our later action. The order forming the basis for
conclusion that a stay is not a final decision. the appeal in Gulf Guaranty explicitly
In Am. Heritage Life Ins. Co. v. Orr, 294 F.3d dismissed the later action but failed to mention
702 (5th Cir. 2002), we held that an order the claims from the earlier suit. Id. We
compelling arbitration and “closing” the case concluded, in light of the various indications
was a reviewable final decision.5 The district that the court intended to dismiss both suits,
court in that case had issued an order staying that the order was a final decision.
state court proceedings, compelling
arbitration, and closing the case, leaving Far from expanding the definition of final
nothing to do but execute the judgment. Id. decision for purposes of § 16(a)(3), we merely
In that context, we held that “closing” the case recognized that “the intention, as well as the
was functionally indistinguishable from effect [of the order], was to dismiss [the
dismissal.6 In this case, by contrast, the court action]." Id. at 483.7 Here, there is no
did not purport to close the case indication that the district court intended to
administratively, nor did it attempt in any other dismiss the case but failed to do so through an
way to terminate its involvement in the oversight. Rather, it entered an order
proceedings. expressly granting a stay of the proceedings
pending arbitration.
III.
4
See ATAC Corp., 280 F.3d at 1099. In Green In the alternative, Apache Bohai seeks a
Tree, 531 U.S. at 87 n.2, the Court noted that had writ of mandamus directing the district court
the district court entered a stay rather than a dis- to vacate its order and enter an appealable final
missal, the order would have been unappealable. judgment. Mandamus is a drastic remedy
Thus, even where dismissal is appropriate, i.e., all reserved only for truly extraordinary situ-
claims have been referred to arbitration, the entry ations. Will v. United States, 389 U.S. 90,
of a stay rather than a dismissal bars appellate 106 (1967). The district court must have
jurisdiction. committed a “clear abuse of discretion” or
5
Am. Heritage, 294 F.3d at 708; but see ATAC
Corp., 280 F.3d at 1099 (holding that order to
7
compel arbitration and close proceedings is not an Indeed, our consideration in Gulf Guaranty of
appealable final decision). the intent underlying the district court’s order di-
rectly undercuts Apache Bohai’s position. If the
6
Am. Heritage, 294 F.3d at 708 (“[T]here is no primary consideration were the practical effect of
practical distinction between ‘dismiss’ and ‘close’ the order, as Bohai contends, there would have
for purposes of this appeal.”). been no need to evaluate the district court’s intent.
4
engaged in “conduct amounting to the usur- Indeed, we have held that a decision, under
pation of power.” Mallard v. United States similar circumstances, to issue a stay rather
Dist. Ct., 490 U.S. 296, 309 (1989) (citations than a dismissal was not an abuse of discretion
and internal quotation marks omitted). This warranting mandamus.10
burden is particularly heavy in the context of
mandamus review of a decision to enter a stay The appeal in No. 02-20489 is
pending arbitration, “because Congress has DISMISSED, and the petition for writ of
expressly limited interlocutory review of a dis- mandamus in No. 02-21158 is DENIED.
trict court decision on arbitration.” McDer-
mott Int’l, Inc. v. Underwriters at Lloyds, 981
F.2d 744, 748 (5th Cir. 1993). “Moreover, it
is more than well settled that a writ of
mandamus is not to be used as a substitute for
appeal[.]” Id.
To establish its entitlement to mandamus
relief, Apache Bohai is required to show clear-
ly and indisputably that the district court did
not have the discretion to stay the proceedings
pending arbitration.8 It has not made this
showing. Apache Bohai is unable to cite a sin-
gle case in which we held that a district court
abused its discretion by staying rather than
dismissing proceedings pending arbitration.9
8
See McDermott, 981 F.2d at 748 (citing Gulf-
stream Aerospace v. Mayacamas Corp., 485 U.S.
271, 289 (1988)).
9
Apache Bohai relies primarily on Alford v.
Dean Witter Reynolds, Inc., 975 F.2d 1161 (5th
Cir. 1992), to support its contention that the dis-
trict court’s order constitutes an abuse of discre- 9
(...continued)
tion. In Alford, we concluded that “the weight of 194 F.3d 674, 676 (5th Cir. 1999) (holding that
authority clearly supports dismissal of a case when “district courts have discretion to dismiss cases in
all of the issues raised in the district court must be favor of arbitration,” but not implying any
submitted to arbitration.” Id. at 1164 (emphasis obligation to do so).
omitted). In other words, Alford held merely that
10
dismissal was not an abuse of discretion. Id. The See McDermott, 981 F.2d at 748 (“[Peti-
court did not hold that dismissal was required tioner] has failed to satisfy this most demanding
under the circumstances, much less that failure to standard [mandamus standard]. The district court
dismiss would have been an abuse of discretion. did not clearly overstep its authority when it grant-
See id.; see also Fedmet Corp. v. M/V Buyalyk, ed the order compelling arbitration and stayed
(continued...) further proceedings pending that arbitration.”).
5