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Pan Am Flight 73 Liaison Group v. Davé

July 9, 2010

PAN AM FLIGHT 73 LIAISON GROUP, MOVANT,
v.
GIATRI DAVÉ & GARGI DAVÉ, RESPONDENTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

This action arises out of a dispute over the enforceability of a contract -- termed the Joint Prosecution Agreement ("JPA" or "the Agreement") -- by which victims of the 1986 hijacking of Pan Am Flight 73 agreed to pursue joint legal remedies. Giatri Davé and Gargi Davé, victims of the hijacking and the respondents here, brought suit in California state court challenging the scope and meaning of the JPA. The Pan Am Flight 73 Liaison Group ("the LG"), a defendant in the Davés' California action and the movant here, thereafter initiated this action to compel the Davés to arbitrate their claims. The Court granted the LG's motion to compel arbitration, reasoning that the Agreement's arbitration clause was enforceable and encompassed the Davés' claims. See Pan Am Flight 73 Liaison Group v. Davé, --- F. Supp. 2d ---, 2010 WL 1889167, at *4, 13 (D.D.C. May 12, 2010).*fn1

The Davés now seek a stay of that order pending appeal.*fn2 For the reasons discussed below, the Court will deny the motion.

STANDARD OF REVIEW

"A stay is an intrusion into the ordinary processes of administration and judicial review, and accordingly is not a matter of right, even if irreparable injury might otherwise result to the appellant." Nken v. Holder, 129 S.Ct. 1749, 1758 (2009) (citations and internal quotation marks omitted). "The party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion." Id. at 1761. In reviewing a motion for a stay pending appeal, the Court considers four factors: (1) whether the applicant will be irreparably injured absent a stay; (2) whether the applicant has made a strong showing that he is likely to succeed on the merits; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies. See id.; accord United States v. Phillip Morris, Inc., 314 F.3d 612, 617 (D.C. Cir. 2003). Although "[t]hese factors interrelate on a sliding scale and must be balanced against each other," Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1318 (D.C. Cir. 1998), "[t]he first two factors of the traditional standard are the most critical," Nken, 129 S.Ct. at 1761.

ANALYSIS

I. Irreparable Harm

According to the Davés, the irreparable harm here is the irrecoverable loss of resources available under the JPA as a result of the LG's decision to use those resources to pay for arbitration. See Davés' Mot. to Stay ("Davés' Mot.") [Docket Entry 41], at 13 ("[T]he aggregate Treaty Compensation will be substantially dissipated as the LG is using these funds to pay for arbitration . . . ."); id. at 14 ("Treaty Compensation funds used to finance arbitration in order to have the rights and obligations determined of all parties are not recoverable by any party . . . .").*fn3

But "the monetary cost of arbitration . . . does not impose . . . legally recognized irreparable harm," Emery Air Freight Corp. v. Local Union 295, 786 F.2d 93, 100 (2d Cir. 1986), because "[m]ere litigation expense, even substantial and unrecoupable cost, does not constitute irreparable injury," Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974); accord McSurely v. McClellan, 697 F.2d 309, 317 n.13 (D.C. Cir. 1982).

Nevertheless, the Davés suggest that the situation here is unique. They assert that because the LG is using JPA funds to pay for arbitration, their award share under the Agreement will be irrevocably reduced. And, in their view, this award reduction is separate from litigation costs, because they are already bearing their own arbitration costs by challenging the JPA.*fn4 See Davés' Reply in Supp. of Mot. to Stay ("Davés' Reply") [Docket Entry 44], at 10. But even if the Davés will bear some of the LG's arbitration costs, those costs are still just litigation costs, and therefore cannot constitute irreparable harm. See Renegotiation Bd., 415 U.S. at 24.

Moreover, even if the Court were to frame the potential decrease of the Davés' JPA award as an economic injury distinct from litigation costs, their argument would remain unavailing.

"[T]o successfully shoehorn potential economic loss into the irreparable harm requirement, a plaintiff must establish that the economic harm is so severe as to cause extreme hardship . . . or threaten [the plaintiff's] very existence." Sandoz, Inc. v. Food & Drug Admin, 439 F. Supp. 2d 26, 32 (D.D.C. 2006) (internal quotation marks omitted); accord Gulf Oil Corp. v. Dep't of Energy, 514 F. Supp. 1019, 1026 (D.D.C. 1981) (potential harm "must be more than simply irretrievable; it must also be serious in terms of its effect on the plaintiff"). Here, however, the Davés' have offered no evidence that obtaining a smaller award under the JPA would cause them extreme hardship; indeed, they fail to indicate that it would cause them any hardship at all. Although they assert without citation or explanation that a loss will be substantial, see Davés' Mot. at 13, such general, unsubstantiated statements are insufficient to demonstrate irreparable harm, see Nat'l Ass'n of Psychiatric Health Sys. v. Shalala, 120 F. Supp. 2d 33, 44 (D.D.C. 2000) (plaintiffs must offer "concrete, reliable evidence to support their contentions of irreparable harm"). Accordingly, the Davés have failed to carry their burden on this essential factor.

II. Likelihood of Success on the Merits

In opposing the LG's motion to compel arbitration, the Davés offered several arguments to demonstrate that the JPA's arbitration provision is unenforceable. The Court found each of these arguments unpersuasive, and therefore determined that "the Davés must arbitrate the claims brought in their California action." Pan Am Flight 73 Liaison Group, 2010 WL 1889167 at *13. They now suggest that they are likely to prevail on appeal with respect to two of the Court's conclusions. Specifically, the Davés press their argument that "they cannot be bound by the arbitration provision because it conflicts with the terms of federal legislation," id. at *11 (internal quotation marks omitted), ...


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