is only relevant to the Court's transfer analysis to the extent
that the "clause applies to the type of claims asserted in the
lawsuit." Terra Int'l, Inc. v. Miss. Chem. Corp.,
119 F.3d 688, 692 (8th Cir. 1997); see also S-Fer Int'l, Inc. v.
Paladion Partners, Ltd., 906 F. Supp. 211, 214 (S.D.N.Y. 1995)
(if plaintiffs claims do not fall within terms of forum
selection clause, the clause cannot support a transfer of
In responding to the Navajo Nation's argument, Peabody
defendants rely on language in Article VI that is arguably
broader than that in Article XXXVII. Article VI mandates that
Articles IV and VI of the Lease Amendments are the "sole and
exclusive method for the determination or readjustment of
royalty rates" under Lease No. 8580. However, Articles IV and VI
simply state that arbitration shall proceed pursuant to Article
XXXVII. Thus, Article VI suggests that any determination or
readjustment of royalty rates must be subject to arbitration
procedures. Yet, the arbitration procedures require only that
enforcement or appeal of an arbitration award be brought in the
District of Arizona. The arbitration clause does not state, for
example, that any action that would result in a readjustment of
royalty rates must be brought in the District of Arizona.
Rather, the forum selection clause (logically) applies only to
actions challenging arbitration awards — seeking to enforce or
appeal the award. Indeed, Article XXXVII applies only
"[w]henever . . . arbitration is required to take place." The
arbitration mandated by Article IV and VI occurs at the
conclusion of a ten-year period, after which the royalty rate
may be readjusted. Thus, the provisions of Article XXXVII apply
only to the arbitration proceedings and subsequent award in
1998. The forum selection clause does not apply to other
litigation that may or may not have an effect on the royalty
Peabody attempts to argue that the Court should look beyond
the substance of the Nation's complaint and view the instant
litigation as a request for a "determination or readjustment" of
the royalty rates at issue. See, e.g., Reply at 6 ("The
lawsuit before this Court seeks yet another determination of the
royalty rates applicable to the Coal Leases from February 1984
to present."); id. at 1 ("While characterized as an action for
damages, in reality, the Navajo Nation's suit in this Court is
nothing more than an attempt to avoid their contractual
commitment to negotiation and arbitration in Phoenix, Arizona as
the `sole and exclusive method' for determining or adjusting
royalty rates under the relevant Coal Lease."). However, in this
case, Navajo Nation alleges that defendants conspired to
improperly influence the federal government's decisions
regarding the leases. Defendants thus would convert the Navajo
Nation's RICO, federal trust, tort and contract claims into a
singular challenge to the 12.5% royalty rate.
Peabody defendants are hard put to argue that the instant
lawsuit, brought pursuant to RICO, falls within the scope of the
Lease Agreement's arbitration provisions. The Nation does seek a
declaration that, because of the alleged RICO violations, the
current royalty rates are "voidable" and that the Nation is
entitled to "reformation" of Lease Nos. 8580 and 9910. Am.
Compl. at ¶ 79. However, that the remedy sought may affect the
arbitration award does not change the fact that the Navajo
Nation's claims arise under RICO and trust law, and do not seek
to enforce or appeal the arbitration decision.
2. Effect of Forum Selection Clause on Claims Arising out
of Lease Nos. 9910 and 5743.
To the extent that the Peabody defendants argue that the
Court's limited involvement in the 1998 Peabody/Navajo
arbitration regarding Lease No. 8580 and Peabody's
recently-filed suit against the Navajo Nation purportedly to
enforce that arbitration weigh in favor of transfer, such
considerations are inapplicable to Lease Nos. 9910 and 5743.
There are no arbitration awards that Peabody may seek to enforce
with respect to the Hopi lease or Navajo Lease No. 9910.
Furthermore, to the extent that the Hopi Lease and Navajo
Lease No. 9910 do not contain language stating that the
arbitration provisions of the lease agreement constitute the
"sole and exclusive" means of determining or adjusting the
royalty rates, Peabody's arguments for transfer of this entire
matter are all the less persuasive.
Even if the arbitration clause in the lease agreements between
Navajo Nation and Hopi and Peabody covered the subject of the
instant litigation, Peabody would appear to have waived any
right to insist on further arbitration proceedings in Arizona.
The contention that this Court should transfer a case filed
almost three years ago because defendants have recently filed a
lawsuit in the Arizona District Court must fail to the extent
that the Court is not convinced by Peabody's argument that this
matter is covered by the lease agreements' arbitration clauses.
Thus, the Court need not reach the issue of whether the Peabody
defendants have waived the right to enforce the clause.
Nevertheless, the Court notes that Peabody has clearly acted
in a manner inconsistent with its assertion that the exclusive
forum for litigation is in Arizona.*fn3 It is apparent to the
Court that Peabody filed its motion to transfer or stay at least
in part in an attempt to further delay discovery in this matter.
A party to an arbitration agreement may not "manipulate the
legal process" by first participating in litigation and then
seeking to stay that litigation to enforce a previously
disregarded arbitration right. Nat'l Found. for Cancer Research
v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 776 (D.C.Cir.
4. Peabody's Other Arguments for Transfer are Unpersuasive
The Court's analysis of a transfer motion is grounded in an
"individualized, case-by-case consideration of convenience and
fairness." Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29,
108 S.Ct. 2239, 101 L.Ed.2d 22 (1988). Courts may take account
of a number of private and public considerations. The private
interests that may factor into a court's decision include the
plaintiffs choice of forum, the defendant's choice of forum, the
forum in which the claim arose, the convenience of parties,
witnesses and the ease of access to sources of proof. The
Wilderness Society v. Babbitt, 104 F. Supp.2d 10, 12 (D.C.
2000). Public interest considerations include the relative
familiarity of the two forums' courts with the governing law,
the courts' relative calendar congestion and the relative public
interests in having the controversy decided in the given forum.
This case is the first-filed action and, as such, should be
given priority over a later-filed action. See Columbia Plaza
Corp. v. Security Nat'l Bank, 525 F.2d 620, 627 (D.C.Cir.
1975). Furthermore, none of the traditional factors weighing in
favor of transfer are present in this case.
Although defendants argue that a transfer would be in the
interests of judicial efficiency, this case has been pending in
this Court for almost three years, during which time the Court
has considered and resolved a variety of potentially dispositive
motions and discovery disputes. In contrast, Peabody filed suit
in Arizona only in February, 2002. In addition, although
defendants argue that plaintiffs' "home forum" is the District
of Arizona, the home forum of the Hopi Tribe and the Navajo
Nation are, of course, their respective tribal courts. See,
e.g., Ninigret Dev. Corp. v. Narragansett Indian Wetuomuck
Housing Auth., 207 F.3d 21, 27 (1st Cir. 2000).
Peabody further suggests that a transfer to the District of
Arizona to allow consolidation with Peabody's newly filed action
to enforce the 1988 arbitration award would serve judicial
efficiency because this case involves questions of state law.
However, the bulk of claims at issue here are governed by
federal law, not by Arizona law. While Peabody defendants make
much of the Navajo Nation's contention that the question of
SRP's dismissal may be governed by Arizona law, this issue is
wholly separate from the claims against the Peabody defendants.
B. Motion to Stay
Under section 3 of the Federal Arbitration Act, 9 U.S.C. § 3,
a federal court must stay litigation of a case that is referable
to arbitration. Nat'l Railroad Passenger v. Consolidated Rail
Corp., 892 F.2d 1066, 1069 (D.C.Cir. 1990). However, Peabody is
not arguing that this case should be referred to arbitration,
and has not raised arbitration as a defense to plaintiffs'
claims. Indeed, Peabody, in its motion to dismiss, cited the
arbitration award as evidence that the Navajo Nation considered
the royalty rate of 12.5% to be reasonable, and argued that the
Navajo Nation had failed to, plead that it would not have agreed
to the arbitration award absent the alleged conspiracy. The
Court, therefore, finds that there is no basis for a stay.
This motion has resulted in extensive briefing and a delay of
discovery. In the future, the Court will not entertain the
filing of frivolous motions designed to delay litigation of this
matter and, if necessary, will impose appropriate sanctions.
See Fed.R.Civ.P. 11.
IV. Motions for Entry of Protective Order
Pending before the Court are two motions for entry of
protective order, filed on behalf of the Peabody defendants and
SCE. The Navajo Nation and the Hopi Tribe have submitted a joint
request for oral argument on the pending motions for protective
Peabody's motion for a protective order addresses plaintiffs'
contention that prior production of documents pursuant to a
protective order in the Court of Federal Claims litigation
operates as a waiver of any privilege claim in this case. The
documents at issue concern communications among Peabody counsel
concerning the coal lease negotiations between Peabody and the
Navajo Nation, and Peabody seeks now to assert attorney-client
and attorney work product privileges for these documents.
Similarly, SCE seeks to assert attorney-client and attorney
work product privileges for documents produced to the Navajo
Nation pursuant to a third-party subpoena in the Court of
Federal Claims litigation.
The instant discovery dispute stems from a long and
complicated history of discovery disputes in the Court of
Federal Claims. In the course of the Court of Federal Claims
proceedings, the Navajo
Nation subpoenaed documents relating to the lease negotiations
of the 1980s from Peabody and from the coal customers, SCE and
SRP. In order to facilitate discovery, a Confidentiality and
Protective Order ("CAPO") was negotiated by the United States,
the Navajo Nation, Peabody, SRP and SCE. This CAPO was endorsed
by the Court of Federal Claims on February 12, 1996 and, in
paragraph 17, provides in full:
Neither Peabody, Salt River Project, or Southern
California Edison hereby waives its attorney-client
privilege or attorney work-product privilege with
respect to any document that might otherwise be
subject to disclosure pursuant to this Protective
Order. If Peabody, Salt River Project or Southern
California Edison determines to claim such privilege,
it shall furnish the Navajo Nation and the United
States, no later than February 16, 1996, with a list
of those documents for which the privilege is
claimed, stating the author, all addressees and
recipients including those receiving or listed as
receiving copies, date and a general description of
all subjects raised or discussed in the document and
any attachments thereto for which the privilege is
claimed. Such description shall include sufficient
detail for the parties to evaluate the propriety of
the claim of privilege.
Peabody declined to produce numerous responsive documents on
the grounds that they were privileged or subject to work product
protection. Navajo Nation filed an opposed motion to compel
Peabody to produce these documents. At a hearing on the motion
in front of the Honorable Bohdan A. Futey of the Court of
Federal Claims, Peabody and Navajo Nation agreed, with the
approval of the Court, to production of the documents subject to
an agreement. The Court of Federal Claims subsequently described
the oral argument on the motion to compel:
At oral argument the parties agreed that Peabody
would release all nonprivileged documents presently
in dispute. . . . The Court warned that Peabody would
be permitted to assert privilege only by fully
describing the withheld documents and explaining how
they fit within the privilege claimed.
Navajo Nation v. United States, 46 Fed.Cl. 353, 355 (2000).