United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS April 8, 2003
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 02-50982
Summary Calendar
CERVECERIA CUAUHTEMOC MOCTEZUMA S.A. de
C.V.; LABATT USA, LLC,
Plaintiffs-Appellees,
versus
MONTANA BEVERAGE COMPANY,
Defendant-Appellant.
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Appeal from the United States District Court
for the Western District of Texas
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Before DAVIS, WIENER, and EMILIO M. GARZA, Circuit Judges.
PER CURIAM:
Plaintiffs-Appellees, Cerveceria Cuauhtemoc Moctezuma S.A. de
C.V. and Labatt USA, LLC (collectively, “Cerveceria”) sued
Defendant-Appellant Montana Beverage Company (“Montana”) in
district court to collect more than $800,000 alleged to be
delinquent on its account for merchandise. Cerveceria also sought
cancellation of Montana’s distributorship for Cerveceria’s products
and attorneys’ fees. Montana responded by filing a motion to stay
proceedings and compel arbitration under the provisions of §
102.77(b) of the Texas Beer Industry Fair Dealing Law (“BIFDL”),
Tex. Alco. Bev. Code Ann. § 102.71-81 (Vernon, 1995), which law was
incorporated by reference in the parties’ distributorship
agreement. The district court refused to stay the proceedings and
compel arbitration after finding no clear agreement to arbitrate,
and Montana appealed. We dismiss Montana’s appeal for lack of
appellate jurisdiction.
I. Facts and Proceedings
Montana appealed the district court’s denial of a stay and
refusal to compel arbitration, asserting that § 16(a)(1)(A) or (B)
of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 16(a)(1)(A) or
(B), allows an interlocutory appeal from a refusal to stay an
action pursuant to §§ 3 and 4 of the FAA. These provisions require
a stay when the trial court is satisfied that the issue involved in
the litigation is referable to arbitration under a clear agreement
to arbitrate. As Montana concedes in its appellate brief, however,
“[i]f there is no agreement [to arbitrate], then there is no
appellate jurisdiction.”
Cerveceria responded to Montana’s notice of appeal by filing
a motion to dismiss for lack of appellate jurisdiction. Cerveceria
contended that provisions of §§ 3, 4, and 16(a)(1)(A) and (B) of
the FAA do not confer interlocutory appellate jurisdiction from an
order refusing to compel arbitration when, as here, the district
court holds that there is no binding agreement to arbitrate.
Cerveceria’s motion was carried with this appeal. For the
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following reasons, we conclude that we lack appellate jurisdiction
and therefore dismiss Montana’s appeal.
II. Analysis
Federal jurisdiction of this case is grounded in diversity
citizenship, which none contests. This appeal is from the district
court’s interlocutory order refusing to compel arbitration because,
the court ruled, there is no agreement between the parties to
arbitrate. As a generality, non-final, interlocutory orders are
appealable under only a limited number of circumstances, none of
which is present here. Thus, only if Montana is correct in
asserting the special appellate jurisdiction conferred by §§ 3, 4,
and 16(a)(1)(A) or (B) of the FAA can we entertain appellate review
of the subject order.
In support of its assertion that we have such jurisdiction,
Montana relies on the BIFDL, because the instant case arises from
or is connected with the beer distribution agreement between the
parties, which incorporates the BIFDL by reference. Pointing to
the cancellation provisions of the BIFDL, Montana notes that §
102.77(b) states that issues of good cause for cancellation of a
distributorship and the amount of reasonable compensation for a
canceled distributorship “may, at the option of either the
distributor or the manufacturer, be submitted to three
arbitrators....” Thus, reasons Montana, the public policy favoring
arbitration, in combination with the incorporation of the BIFDL by
reference into the distributorship agreement between Montana and
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Cerveceria, makes the latter an agreement to arbitrate and, in
turn, makes the refusal by the district court to compel arbitration
immediately appealable under §§ 3 and 4 of the FAA. This argument
unavoidably intertwines the interpretation of the subject provision
of the BIFDL and the interlocutory appeal provisions of the FAA.
Consequently, even though lack of appellate jurisdiction for this
interlocutory appeal would prevent our addressing the issue of
arbitrability, we must do so, at least to a degree, to rule on our
own appellate jurisdiction. This was recognized implicitly in our
earlier order carrying with the case Cerveceria’s motion to dismiss
for lack of appellate jurisdiction, and comports with the
universally recognized truism that we have jurisdiction to
determine our own jurisdiction.
The order from which Montana appeals —— refusal to compel
arbitration —— is undeniably interlocutory as, inter alia, it
leaves the parties as litigants before the court and thus does not
totally dispose of their present dispute. As such, nothing in 28
U.S.C. §§ 1291 or 1292 permits an interlocutory appeal; neither is
there appellate certification by the district court under either §
1292 or Federal Rule of Civil Procedure 54(b). Nor do any
jurisprudential exceptions to the rule forbidding interlocutory
appeals, such as the collateral order doctrine, apply here. This
leaves only the pertinent provisions of the FAA as potential
sources of appellate jurisdiction. And, as noted, even though §
16(a)(1)(A) of the FAA permits interlocutory appeals from orders
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refusing to stay litigation pursuant to §§ 3 or 4, a stay of
judicial proceedings is required only when the trial court’s
refusal to compel arbitration results from the court’s
determination that there is a clear agreement to arbitrate. Here,
the court found that no such agreement exists, thereby
pretermitting an interlocutory appeal.
Montana does not assert that the distributorship agreement
with Cerveceria actually contains an express arbitration agreement.
Rather, as noted, Montana contends that the distributorship
agreement’s incorporation by reference of the entire BIFDL, and
thus its arbitration provision, § 102.77(b), is the equivalent of
a clear expression of intent by the parties to resolve all disputes
by arbitration. Thus, for us to find that we have jurisdiction
under the FAA to hear Montana’s interlocutory appeal of the
district court’s refusal to compel arbitration, the district court
would have had to conclude that the contract’s incorporation by
reference of the BIFDL constituted the distributorship agreement a
clear agreement to arbitrate. As the district court held precisely
the opposite, i.e., no agreement to arbitrate, its refusal to
compel arbitration is an unappealable interlocutory decree.
Montana’s effort to trivialize the wording of § 102.77(b) of
the BIFDL by referring to “may” as rendering the statute “a little
bit ambiguous” does not change the facial certainty of the statute:
In addition to its use of the permissive “may,” the statute adds
“at the option of either the distributor or the manufacturer,”
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falling well short of a mark of demonstrating that the parties
clearly and unambiguously intended to submit any and every dispute
to arbitration. This is accentuated by the observation that even
such permissive arbitration is applicable to only two narrow
issues: (1) existence of good cause for contract cancellation, and
(2) valuation of the terminated distributorship.
This litigation is, first and foremost, a suit on an open
account, which cannot be shoehorned under either of the two
discrete issues to which § 102.77(b) is appealable, despite the
additional inclusion of distributorship termination in the relief
sought. Absent express incorporation of binding arbitration (as
distinguished from the instant global incorporation of a
comprehensive regulatory act in which a narrowly limited,
permissive, i.e., non-mandatory, arbitration provision is found),
the agreement’s incorporation of arbitration by reference lacks
certainty and universality. See, e.g., Phillips v. ACS Municipal
Brokers, Inc., 888 S.W. 2d 872, 875 (Tx.App.-Dallas 1994 no writ);
Seal v. Roy and Mitchell Contracting Co., Inc., 321 S.W. 2d 149,
151 (Tx.Civ.App.-Austin 1959 writ ref’d). Furthermore, when the
subject agreement is read as a whole, as it must be, it is seen to
contain references to other methods of dispute resolution,
including mediation and litigation.
We are satisfied, as was the district court, that there is no
binding agreement to arbitrate all disputes arising from or
connected with the contract between the parties. Absent a clear,
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unequivocal and unconditional agreement to arbitrate, as held by
the district court, Montana is not entitled to a stay of the
proceedings. And, absent such entitlement to a stay, § 3(d) of the
FAA is ineffective to confer appellate jurisdiction for us to
review the district court’s order refusing to stay litigation and
compel arbitration. In the absence of another provision or holding
that would confer appellate jurisdiction, we are constrained to
dismiss Montana’s appeal for lack of jurisdiction.
III. Conclusion
Inasmuch as the district court’s ruling is grounded in its
holding that, in their agreement, the parties did not clearly and
unequivocally demonstrate an intention to submit their disputes to
binding arbitration, the district court’s order refusing to grant
a stay of proceedings and compel arbitration is a non-appealable
interlocutory order. We thus have no appellate jurisdiction at
this stage of this case and must dismiss the instant appeal.
DISMISSED for lack of jurisdiction.
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