No Interlocutory ITC Review On Waiver of Arbitration

In Certain 3G Mobile Handsets, Investigation No. 337-TA-613 (Order No. 15; February 5, 2008) Administrative Law Judge Luckern denied Nokia’s request for interlocutory review and stay pending review of an earlier order on waiver of its right to arbitration. In support of Motion No. 613-21 Nokia argued that the administrative law judge in his Order No. 13 made the following three findings that should be certified to the Commission for interlocutory review:

First, the ALJ found that he, not the arbitrator, should determine whether Nokia had waived its right to arbitrate.

Second, the ALJ found that Nokia had waived its right to compel arbitration based at least in part on Nokia’s purported conduct in a Lanham Act action.

Third, the ALJ found that Nokia had waived its right to compel arbitration as to whether Nokia is licensed to all four of the asserted patents in this investigation, even though the ‘579 patent was not added to this investigation until November 1, 2007, and the ‘847 patent was not formally part of this investigation until after Nokia filed its motion to terminate.

Nokia further argued that the general issue of whether an administrative law judge can determine an equitable defense to an arbitration (waiver) and on that basis deny a motion to terminate, is one of first impression for the Commission, such that Order No. 13 was likely to provide a roadmap for how this issue will be dealt with by the Commission, and other litigants in the future.

According to Judge Luckern,

. . . Interlocutory review may be had if the administrative law judge determines that (1) the ruling involves a controlling question of law or policy as to which there is substantial ground for difference of opinion, and that (2) either an immediate appeal from the ruling may materially advance the ultimate completion of the investigation or subsequent review will be an inadequate remedy. See Commission Rule 210.24 . . .The “moving party bears the heavy burden of meeting both of the[se] criteria.” Certain Bearings and Packaging Thereof, Inv. No. 337-TA-469 (Bearings), Order No. 16,2002 ITC LEXIS 358, at “3 (July 10,2002) (Bearings). Interlocutory review under Commission rule 2 10.24(b)(1) requires “exceptional circumstances.” The Commission rules of procedure and the federal statute upon which our rules are based strongly disfavor interlocutory appeals. Indeed, to do otherwise would frustrate the legislative purposes underlying all 337 investigations and may jeopardize completion of the proceeding within the statutory time limits. Consequently, the moving party bears the heavy burden of meeting both of the criteria set forth above

. . . In support, it was argued that decisions concerning issues of first impression that will have an impact on the instant litigation, as well as potential future litigation, should be reviewed by the Commission, citing Certain Personal Computer/Consumer Electronic Convergent Devices. Components Thereof and Products Containing Same, Inv. No. 337-TA-558, Order No. 17 at 5 (Sept. 8,2006) (Convergent Devices) (citing Certain Airtig- ht Wood Stoves, Inv.No. 337-TA-92, Order No. 12, at 1, 1981 WL 178571 (August 21, 1981) (Wood Stoves); Certain Catalyst ComDonents and Catalysts for the Polymerization of Olefins, Inv. No. 337-TA-307, Order No. 15 at 6-7 (Apr. 11, 1990) (Olefins); and Bearings. The administrative law judge finds that each of said cases where review was granted involved a unique aspect of Commission practice or policy, a factor absent from Order No. 13. . . .

. . . Contrary to the cases cited by Nokia, the administrative law judge finds that the issue of whether an administrative law judge or an arbitrator must determine if prior litigation activities resulted in a waiver of a right to arbitration . . . does not involve a unique aspect of Commission practice or policy. Hence, the administrative law judge finds that Nokia’s “first impression” argument can not, by itself, satisfy the requirements of Commission rule 210.24(b)(l).

Nokia argued that Order No. 13 involves an interpretation and application of Supreme Court precedent upon which the circuit courts disagree, citing Howsam v. Dean Witler Revnolds, Inc. 537 U.S. 79 (2002). Order No. 13 at 17-19, however, dealt with said arguments of Nokia. Moreover additional cases, not cited in Order No. 13, show that decisions both before and after Howsam in the Second Circuit consistently recognize that waiver based on litigation conduct is an exception to the otherwise general rule that decisions on “gateway issues” relating to an arbitration agreement are for an arbitrator. See, e.g, Doctor’s Assocs., Inc. v. Distaio, 66 F.3d 438, 456 (2d Cir. 1995); Republic of Ecuador v. ChevronTexaco Corn., 376 F. Supp. 2d 334,
365-66 (S.D.N.Y. 2005).

Regarding Nokia’s argument relating to the Delaware Lanham Act action and its citation of Delmarva Power & Light Co. v. United States, 79 Fed. C1.205,212 (Fed. C1. 2007) which Nokia suggests is in conflict with PPG Indus., Inc. v. Webster Auto Parts Inc., 128 F.3d 103, 108 n.2 (2d Cir. 1997), in Delmarva, at issue was plaintiff Delmarva's motion to vacate an arbitration ruling between it and PSEG Nuclear, LLC (PSEG). Following the filing of Delmarva's motion to vacate the arbitration ruling, PSEG intervened for the limited purpose of opposing the motion to vacate. Delmarva, 79 Fed. C1. at 210. Thus, plaintiff Delmarva did not name PSEG as a defendant in that action, but instead had sued the United States in the Court of Federal Claims. See id 79 Fed. Cl. at 212. The Delmarva court ultimately denied plaintiffs motion to vacate, not because the court lacked a "percipient understanding'' of PSEG's actions in the arbitration or in other actions, but because it lacked jurisdiction over disputes between private parties. See Delmarva, 79 Fed. C1. at 212-13. Hence, the administrative law judge rejects Nokia's characterization of Delmarva as standing for a proposition of law that conflicts with PPG Indus.

Moreover, Nokia has not denied the fact, as Order No. 13 at 26 stated, that the issues in this investigation and the Delaware action "were so similar that [Nokia] filed a motion for a mandatory stay. . . pursuant to [28 U.S.C.] 1659 and that, during the Preliminary Conference in this investigation, counsel for Nokia claimed that the Delaware action 'involves issues that are going to be put before your Honor,' and pointed out the 'significant amount of overlap between the cases."' Delmarva, 79 Fed. C1. at 210. Thus, plaintiff Delmarva did not name PSEG as a Nokia argued that the administrative law judge's decision in Order No. 13 that Nokia waived its right to litigate issues concerning the '579 and '847 patents should be the subject to interlocutory review. However, like the decision on whether the Delaware Lanham Act litigation activities demonstrated a "disinclination to arbitrate,'' the administrative law judge finds that his decision with respect to the '579 and '847 patents does not involve a question of controlling law.

Nokia argued that the administrative law judge's decision in Order No. 13 that Nokia
waived its right to litigate issues concerning the '579 and '847 patents should be the subject to interlocutory review. However, like the decision on whether the Delaware Lanham Act litigation activities demonstrated a "disinclination to arbitrate,'' the administrative law judge finds that his decision with respect to the '579 and '847 patents does not involve a question of controlling law. Instead, it merely involved application of the facts to the law. Thus it was found in Order No. 13 that the '579 patent was a factor in the ITC investigation long before it was formally added to the investigation and further played a vital role in Nokia's successful argument in favor of consolidation. See Order No. 13 at 29. It was also found in Order No. 13 that Nokia specifically litigated issues surrounding the '579 patent in the Delaware district court case. See Order No. 13 at 27. The administrative law judge further found that Nokia's Delaware actions addressed issues concerning the power ramp-up patent family from which all the power ramp-up patents sprung, including the '847 patent be the sort of questions of controlling law or policy that justify interlocutory review of a ruling by the administrative law judge. See Order No. 13 at 27. Those factual determinations are found not to be the sort of questions of controlling law or policy that justify interlocutory review of a ruling by the administrative law judge. Supra EEPROM, supra.

In addition to the foregoing, the administrative law judge finds that, Nokia has not demonstrated that an immediate appeal is needed or that review after the initial determination on violation is an inadequate remedy. While Nokia has asserted that it will be irreparably harmed if it is required to litigate the merits of this investigation prior to review of Order No. 13, (Nokia's Memorandum in Support at 2), Nokia failed to provide a specific basis for this argument. See Agaicultural Tractors, supra, Order No. 73 at 2 (finding that respondents "did not submit any arguments that Order No. 69 concerning sanctions involved any 'controlling question of law or policy" and therefore denying request for interlocutory review).

Based on the foregoing, Nokia's request that Order No. 13 be certified to the Commission for interlocutory review is denied.