Circuit Splits

1st Circuit Joins Deep Split Over Initial Judicial Review of Defense Base Act Awards

Last week in Truczinskas v. Director, Office of Workers’ Compensation Programs, the First Circuit pointed out that “the circuit courts are now almost evenly split on whether initial judicial review of [Defense Base Act] awards should be in the district or the circuit court.”

 The court summarized the split as follows:

Four circuits endorse review by the district court, ITT BaseServs. v. Hickson, 155 F.3d 1272, 1275 (11th Cir. 1998); Lee v. Boeing Co., 123 F.3d 801, 805 (4th Cir. 1997); AIFA/CIGNAWorldwide, 930 F.2d at 1116; Home Indem. Co. v. Stillwell, 597 F.2d 87, 89 (6th Cir.), cert. denied, 444 U.S. 869, 100 S. Ct. 145, 62 L. Ed. 2d 94 (1979), and three by the court of appeals, Serv. Emps. Int'l, Inc. v. Dir., Office of Workers' Comp. Programs, 595 F.3d 447, 452-55 (2d Cir. 2010); Pearce v. Dir., Office of Workers' Comp. Programs (Pearce II), 647 F.2d 716, 720 (7th Cir. 1981); Pearce v. Dir., Office of Workers' Comp. Programs (Pearce I), 603 F.2d 763, 766-71 (9th Cir. 1979).

The First Circuit, like the Supreme Court, has remained noncommittal on the issue:

This circuit, e.g., Air America, Inc. v. Director, Office of Workers' Compensation Programs, 597 F.2d 773, 775 (1st Cir. 1979), and the Supreme Court, Director, Office of Workers' Compensation Programs v. Rasmussen, 440 U.S. 29, 35, 99 S. Ct. 903, 59 L. Ed. 2d 122 (1979), have both assumed jurisdiction over appeals of DBA compensation awards after 1972 that never passed through the district court. But in neither these or other like instances did either court pass from assumption to express consideration of jurisdiction, so strictly speaking we are not bound to find jurisdiction in this case. Ariz. Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 1436, 1448, 179 L. Ed. 2d 523 (2011).

Until now...

Nevertheless, the Defense Base Act can be legitimately read to confer such jurisdiction upon us, and this reading accords with the overall congressional policy reflected in the 1972 Longshore Act amendments. Congress likely gave no thought at all to the wrinkle that concerns us; but, where statutory language permits a given reading and Congress' policy will be fostered by it,⁵ we think that reading should prevail--even if, as here, that statutory language would also permit a contrary reading at odds with Congress' statutory policy.

You can read the full opinion here: Truczinskas v. Director, Office of Workers’ Compensation Programs, No. 11-2503 (1st Cir. Nov. 20, 2012).

1st Circuit Addresses Applicability of "Manifest-Disregard" Doctrine to Arbitration Awards

As I noted back in June (here), a circuit split exists over whether, under the Federal Arbitration Act, courts may vacate arbitration awards where an arbitrator has manifestly disregarded the law (e.g., an award based on a coin flip rather than applicable case law). Last week Judge Michael Boudin, writing for the First Circuit in Bangor Gas Co., LLC v. H.Q. Energy Services U.S., noted that the courts of appeals are divided on this issue:

The manifest-disregard doctrine has been thrown into doubt by Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), where the Supreme Court "h[e]ld that [9 U.S.C. § 10] . . . provide[s] the FAA's exclusive grounds for expedited vacatur." Id. at 584 (emphasis added). This has caused a circuit split,³ with this court saying (albeit in dicta) that "manifest disregard of the law is not a valid ground for vacating or modifying an arbitral award in cases brought under the Federal Arbitration Act," Ramos-Santiago v. United Parcel Serv., 524 F.3d 120, 124 n.3 (1st Cir. 2008).

3. Compare Wachovia Sec., LLC v. Brand, 671 F.3d 472, 480 (4th Cir. 2012) (recognizing continuing validity of manifest disregard doctrine), Johnson v. Wells Fargo Home Mortgage, Inc., 635 F.3d 401, 415 n.11 (9th Cir. 2011) (same), Stolt-Nielsen SA v. Animal Feeds Int'l Corp., 548 F.3d 85, 94 (2d Cir. 2008), rev'd on other grounds, 130 S. Ct. 1758, 176 L. Ed. 2d 605 (2010) (same), and Coffee Beanery, Ltd. v. WW, L.L.C., 300 Fed. App'x 415, 418 (6th Cir. 2008) (unpublished opinion) (same), with Frazier v. CitiFinancial Corp., 604 F.3d 1313, 1324 (11th Cir. 2010) (rejecting manifest disregard doctrine as invalid), Citigroup Global Mkts., Inc. v. Bacon, 562 F.3d 349, 350 (5th Cir. 2009) (same), and Crawford Grp., Inc. v. Holekamp, 543 F.3d 971, 976 (8th Cir. 2008) (same).

No. 12-1386 (1st Cir. Sept. 26, 2012). As such, the court concluded, "[e]ven if the manifest-disregard doctrine were assumed to survive and were applied in this case, the award neither conflicts with the plain language of the Agreement nor did the arbitrators recognize the applicable law but ignore it."

[*Image courtesy of awrose on flickr.]

1st Circuit Strikes Down the Defense of Marriage Act, Calls for Guidance from the Supreme Court

In a unanimous decision yesterday, the First Circuit declared section 3 of Congress's Defense of Marriage Act unconstitutional. This provision states that "the word 'marriage' means only a legal union between one man and one woman as husband and wife, and the word 'spouse' refers only to a person of the opposite sex who is a husband or wife." 1 U.S.C. § 7.

The court noted in its opinion that the case was "difficult because it couples issues of equal protection and federalism with the need to assess the rationale for a congressional statute passed with minimal hearings and lacking in formal findings," adding, "only the Supreme Court can finally decide this unique case." You can read the First Circuit's opinion here: Massachusetts v. Health and Human Services Department, No. 10-2204 (1st Cir. May 31, 2012). Here are some of the initial reactions from around the web:

• Robert Barnes, Defense of Marriage Act unconstitutional, federal appeals court declares, WashingtonPost.com (May 31, 8:28 PM) (HTML) ("The decision by the Obama administration not to defend DOMA — a law that was signed but is now disavowed by Clinton — prompted an angry response from House Republican leaders. They hired Paul D. Clement, who was solicitor general in the administration of George W. Bush, to defend the law in court.").

• Jay Michaelson, DOMA Ruling is Test for Conservative Federalists, The Daily Beast (May 31, 2012 5:52 PM EDT) (HTML) ("Self-proclaimed federalists should be thrilled with the federal appeals court ruling overturning the Defense of Marriage Act ... but they probably won’t be.").

• Lyle Denniston, DOMA ban on gay marriage falls, SCOTUSblog (May 31, 2012 1:03 PM) (HTML).

And here is a video of the Wall Street Journal's Ashby Jones discussing the First Circuit's decision and how it might play out before the Supreme Court and in state courts across the country: