U N I T E D STATES COURT OF APPEALS

F O R THE SECOND CIRCUIT

A u g u s t Term, 2005

(Argued: J u n e 12, 2006 D e c i d e d : August 8, 2006)

D o c k e t No. 05-6299-cv

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A N T H O N Y L. ARCINIAGA,

Plaintiff-Appellee,

- v. -

G E N E R A L MOTORS CORPORATION,

Defendant-Appellant.

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Before: M c L A U G H L I N and RAGGI, Circuit Judges, and KARAS,

D i s t r i c t Judge. *

G e n e r a l Motors Corporation appeals from the denial of a

m o t i o n to compel arbitration and the grant of a motion to stay

a r b i t r a t i o n by the United States District Court for the Southern

D i s t r i c t of New York (Baer, J.).

REVERSED.

J A M E S C. McGRATH, Bingham McCutchen

L L P , Boston, MA (Carol E. Head and

D i a n e C. Hertz, on the brief), for D e f e n d a n t - Ap p e l l a n t .

STEVEN H. LaBONTE, Bellavia Gentile & Associates, LLP, Mineola, NY ( L e o n a r d A. Bellavia, Stephen A.

S o m e r s t e i n , and Christine Staiano, o n the brief), for Plaintiff A p p e l l e e.

M c L A U G H L I N , Circuit Judge: T h i s case arises from a dispute between Anthony L. Arciniaga a n d General Motors Corporation ("GM"). The merits of that d i s p u t e , however, are not today's concern. Instead, our task is t o determine if the Motor Vehicle Franchise Contract Arbitration F a i r n e s s Act of 2002 (the "MVFCAFA") limits GM's ability to e n f o r c e its arbitration agreement with Arciniaga. The district c o u r t found that it does. We find that it does not. Thus, we r e v e r s e the district court's denial of GM's motion to compel a r b i t r a t i o n and its grant of Arciniaga's motion to stay a r b i t r a t i o n.

BACKGROUND T h r o u g h its Motor Holdings program, GM co-invests in car d e a l e r s h i p s with individuals who lack the capital to open a d e a l e r s h i p on their own. GM contributes as much as eighty-five p e r c e n t of the necessary capital in exchange for the preferred s t o c k of the dealership, which is organized as a corporation.

T h e individual provides the remaining necessary capital in e x c h a n g e for common stock in the dealership, and assumes r e s p o n s i b i li t y for the dealership's day-to-day operations. If a l l goes smoothly, the dealership redeems GM's preferred stock t h r o u g h its profits until only the common stock remains, leaving t h e individual operator as the sole owner of the dealership.

T h r o u g h the separate but related Minority Dealer Development p r o g r a m , GM provides training and additional financial support to m i n o r i t y Motor Holdings program candidates. GM frequently d o n a t e s additional capital to dealerships participating in the M i n o r i t y Dealer Development program in order to reduce the number o f preferred shares that the dealerships must ultimately redeem.

A t some point in the mid-1990s, GM accepted Arciniaga into t h e Motor Holdings and Minority Dealer Development programs. GM h a d already purchased Douglaston Chevrolet-Geo, Inc. (d/b/a Bay C h e v r o l e t ) , a dealership in Douglaston, New York, from its p r e v i o u s owner. GM and Arciniaga intended that Arciniaga would b e c o m e the President and eventual sole owner of Bay Chevrolet t h r o u g h the Motor Holdings and Minority Dealer Development programs.

I n December 1995, GM, Arciniaga, and Bay Chevrolet entered i n t o a Stockholders Agreement. Pursuant to the terms of the a g r e e m e n t , Bay Chevrolet issued 2,100 shares of common stock and 1 1 , 9 0 0 shares of preferred stock. GM purchased all of the p r e f e r r e d stock for $1,190,000. Arciniaga purchased Bay C h e v r o l e t ' s common stock for $210,000,$125,000 of which came from a GM loan. The Stockholders Agreement provided that GM could p u r c h a s e all of Bay Chevrolet's common stock if at any point the d e a l e r s h i p suffered losses that exceeded $280,000. The agreement a l s o provided that all questions concerning its construction, v a l i d i t y , and interpretation were to be governed by New York law.

A r o u n d the same time, GM and Bay Chevrolet entered into a s e p a r a t e Dealer Sales and Service Agreement (the "Dealer A g r e e m e n t " ). Every GM dealership enters into this form agreement r e g a r d l e s s of whether its operator participates in the Motor H o l d i n g s or Minority Dealer Development programs. Under the t e r m s of the Dealer Agreement, GM authorized Bay Chevrolet "to s e l l and service [GM] products" and promised to supply Bay C h e v r o l e t with motor vehicles and to provide training for the d e a l e r s h i p 's employees. Bay Chevrolet, for its part, pledged to p r o m o t e , sell, and service GM products. The Dealer Agreement p r o v i d e d that disputes arising from the agreement should be s u b m i t t e d to non-binding arbitration. The agreement is governed b y Michigan law, and GM and Bay Chevrolet renewed it in November 2000. Significantly, Arciniaga is not a party to the Dealer Agreement.

I n October 1999, for reasons not pertinent to this dispute, G M , Arciniaga, and Bay Chevrolet agreed to a reorganization plan t h a t altered the terms of their investment relationship. Under t h i s plan, they agreed to terminate the 1995 Stockholders A g r e e m e n t and to enter into a new Stockholders Agreement (the " A m e n d e d Stockholders Agreement"). The Amended Stockholders A g r e e m e n t reduced the loss amount that would trigger GM's right t o purchase Bay Chevrolet's common stock from $280,000 to $200,000.

B o t h the reorganization plan and the Amended Stockholders A g r e e m e n t required GM, Arciniaga, and Bay Chevrolet to enter into a binding Arbitration Agreement, which they did in October 1999.

B y the terms of the Arbitration Agreement, each party waived its r i g h t to a jury trial and agreed to submit to mandatory and b i n d i n g arbitration any claims arising from or related to, inter a l i a , Arciniaga's investment in Bay Chevrolet, the business d e c i s i o n s or practices of any of the parties, and any other a g r e e m e n t entered into by the parties, including any Dealer Sales a n d Services Agreement executed before or after the Arbitration Agreement. The Arbitration Agreement also provided that the F e d e r a l Arbitration Act (the "FAA") governs the interpretation, e n f o r c e m e n t, and conduct of the arbitration, but Michigan law g o v e r n s all matters that the FAA does not cover.

B y February 2005, Bay Chevrolet was reporting losses well o v e r $200,000, thereby triggering GM's option to purchase all of t h e dealership's common stock. In March 2005, GM notified A r c i n i a g a that it was exercising that option. After Arciniaga r e f u s e d to resign as President of Bay Chevrolet, GM exercised its r i g h t to remove him. In June 2005, GM issued Arciniaga a check f o r the value of the common stock.

I n July 2005, Arciniaga sued GM in the United States D i s t r i c t Court for the Southern District of New York (Baer, J.).

H i s complaint alleges claims for (1) discrimination in the making o r enforcement of contracts in violation of 42U.S.C. § 1981; (2) v i o l a t i o n of the Automobile Dealers Day in Court Act (the " A D D C A " ) , 15U.S.C. § 1222; (3) breach of contract; (4) breach of t h e covenant of good faith and fair dealing; (5) breach of the f i d u c i a r y duty owed by a majority shareholder to a minority s h a r e h o l d e r; and (6) fraud.

I n August 2005, GM filed a demand for arbitration with the A m e r i c a n Arbitration Association. Arciniaga countered with a m o t i o n in the district court for a preliminary injunction staying a r b i t r a t i o n. GM filed a cross-motion to compel arbitration and t o stay the district court action. The district court granted A r c i n i a g a ' s motion to stay arbitration and denied GM's motion to c o m p e l arbitration. See Arciniaga v. General Motors Corp., 418 F . Supp. 2d 374 (S.D.N.Y. 2005).

G M now appeals.

DISCUSSION G M argues that the district court erred by granting A r c i n i a g a ' s motion to stay arbitration and denying GM's motion to c o m p e l arbitration. We agree.

W e have jurisdiction. The FAA permits interlocutory review o f both a denial of a motion to compel arbitration, 9U.S.C. § 1 6 ( a ) ( 1 ) ( C ), and a stay of arbitration, Id. § 16(a)(2). We r e v i e w de novo the district court's determination. LAIF X SPRL v . Axtel, S.A. de C.V., 390 F.3d 194, 198 (2d Cir. 2004).

D a t i n g "back to those days when the English judges opposed a n y innovation that would deprive them of their jurisdiction," L e a d e r t e x , Inc. v. Morganton Dyeing & Finishing Corp., 67 F.3d 2 0 , 24 (2d Cir. 1995), courts once possessed a "hostility" t o w a r d s arbitration agreements, Gilmer v. Interstate/Johnson Lane C o r p . , 500 U.S. 20, 24 (1991). Congress passed the FAA to tame t h a t antipathy. Id. Now, it is difficult to overstate the s t r o n g federal policy in favor of arbitration, and it is a policy w e "have often and emphatically applied." Leadertex, 67 F.3d at 25.

T h e FAA provides that an agreement to arbitrate is "valid, i r r e v o c a b l e, and enforceable." 9U.S.C. § 2. "Having made the b a r g a i n to arbitrate, the party should be held to it unless C o n g r e s s itself has evinced an intention to preclude a waiver of j u d i c i a l remedies for the statutory rights at issue." Mitsubishi M o t o r s Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). Thus, the burden lies with the party attempting to avoid a r b i t r a t i o n "to show that Congress intended to preclude a waiver o f a judicial forum" for his claims. Gilmer, 500 U.S. at 26 ( c i t i n g Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 2 2 7 (1987)).

H e r e , there is no dispute that Arciniaga and GM entered into a binding arbitration agreement; and there is no denying that t h e i r current disagreement falls within the scope of that agreement. The parties do dispute, however, whether Congress i n t e n d e d claims such as Arciniaga's to be nonarbitrable.

A r c i n i a g a claims, and the district court agreed, that the M V F C A F A limits the availability of arbitration in this case. The M V F C A F A , a 2002 amendment to the ADDCA, states: N o t w i t h s t a nd i n g any other provision of law, whenever a motor v e h i c l e franchise contract provides for the use of a r b i t r a t i o n to resolve a controversy arising out of or r e l a t i n g to such contract, arbitration may be used to settle s u c h controversy only if after such controversy arises all p a r t i e s to such controversy consent in writing to use a r b i t r a t i o n to settle such controversy.

1 5U.S.C. § 1226(a)(2).

B y its terms, the MVFCAFA applies only to "motor vehicle f r a n c h i s e contracts." Id. The statute does not affect a r b i t r a t i o n agreements in other types of contracts, even if they t o u c h on the relationship between an automobile manufacturer and a car dealership. The statute defines "motor vehicle franchise c o n t r a c t " as "a contract under which a motor vehicle m a n u f a c t u r er , importer, or distributor sells motor vehicles to a n y other person for resale to an ultimate purchaser and a u t h o r i z e s such other person to repair and service the m a n u f a c t u r er ' s motor vehicles." Id. § 1226(a)(1)(B).

A t oral argument, Arciniaga's counsel conceded that the c o m p l a i n t alleges only a breach of the Amended Stockholders A g r e e m e n t and not a breach of the Dealer Agreement. Moreover, t h e complaint confirms that the entirety of Arciniaga and GM's d i s p u t e relates to their investment relationship, which, of c o u r s e , is governed by the Amended Stockholders Agreement. The e s s e n t i a l question, then, is whether the Amended Stockholders A g r e e m e n t is a "motor vehicle franchise contract." We conclude i t is not.

T h e Amended Stockholders Agreement is not an agreement by w h i c h GM "sells motor vehicles to any other person for resale to a n ultimate purchaser." Nor does the agreement authorize anyone " t o repair and service" GM motor vehicles. Thus, by its plain a n d unambiguous language, the MVFCAFA does not apply to the A m e n d e d Stockholders Agreement. See Aslanidis v. U.S. Lines, I n c . , 7 F.3d 1067, 1072 (2d Cir. 1993) ("[A] court should presume t h a t the statute says what it means."); see also Pride v. Ford M o t o r Co., 341 F. Supp. 2d 617, 621 (N.D. Miss. 2004) (finding t h a t an automobile dealership investment and employment contract w a s not a "motor vehicle franchise contract").

C o n g r e s s ' s decision to define separately within the statute " m o t o r vehicle franchise contract" buttresses our reading of the p l a i n language of the MVFCAFA. The ADDCA, of which the MVFCAFA i s a part, defines "franchise" as "the written agreement or c o n t r a c t between any automobile manufacturer engaged in commerce a n d any automobile dealer which purports to fix the legal rights a n d liabilities of the parties to such agreement or contract." 1 5U.S.C. § 1221(b). This definition is broader than the M V F C A F A ' s definition of "motor vehicle franchise contract." That C o n g r e s s elected to separately define "motor vehicle franchise c o n t r a c t " instead of using a preexisting, more broadly defined, t e r m counsels against expansively construing the more narrowly d e f i n e d term. Cf. Barnhart v. Sigmon Coal Co., Inc., 534 U.S.

4 3 8 , 452 (2002) ("[W]hen Congress includes particular language in o n e section of a statute but omits it in another section of the s a m e Act, it is generally presumed that Congress acts i n t e n t i o n a ll y and purposely in the disparate inclusion or e x c l u s i o n . " (internal quotation marks omitted)).

A r c i n i a g a suggests two routes to circumvent the plain l a n g u a g e of the MVFCAFA. First, he points to the legislative h i s t o r y of the MVFCAFA. Second, he contends that all the a g r e e m e n t s involving himself, GM, and Bay Chevrolet should be r e a d as one agreement. These arguments are unavailing.

T o be sure, as the district court recognized, some of the M V F C A F A ' s legislative history lends support to Arciniaga's argument. According to the Senate Judiciary Committee's report, C o n g r e s s passed the statute because it was concerned that " [ m ] a n u f a c tu r e r s increasingly are inserting mandatory binding a r b i t r a t i o n clauses in non-negotiated side contracts with d e a l e r s , such as those governing dealer finance disputes." S.

R e p . No. 107-266 (2002). Thus, Congress might well have been c o n c e r n e d about situations such as Arciniaga's. Nevertheless, C o n g r e s s did not capture Arciniaga's plight in the plain and u n a m b i g u o u s language of the MVFCAFA.

W h e n a statute's language is clear, our only role is to e n f o r c e that language "`according to its terms.'" Arlington C e n t . Sch. Dist. Bd. of Educ. v. Murphy, 126 S. Ct. 2455, 2459 ( 2 0 0 6 ) (quoting Hartford Underwriters Ins. Co. v. Union Planters B a n k , N. A., 530 U.S. 1, 6 (2000)). We "do not resort to l e g i s l a t i v e history to cloud a statutory text that is clear" even i f there are "contrary indications in the statute's legislative history." Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994); s e e also Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992) ( " W e have stated time and again that courts must presume that a l e g i s l a t u r e says in a statute what it means and means in a s t a t u t e what it says there. When the words of a statute are u n a m b i g u o u s, then, this first canon is also the last: judicial i n q u i r y is complete." (internal quotations and citations omitted)). Because we have determined that the language of the M V F C A F A is clear and unambiguous, we need not ­ and thus do not ­ c o n s i d e r the statute's legislative history.

A r c i n i a g a ' s second argument is equally unavailing. He c o n t e n d s , based on state contract law, that all the agreements b e t w e e n himself, GM, and Bay Chevrolet are part of a "non s e v e r a b l e package," and from that package there emerges a "motor v e h i c l e franchise contract." Resort to state law in this fashion i s not unlike trying to fit the step-sister's foot into C i n d e r e l l a 's shoe. Such a practice would likely abandon "motor v e h i c l e franchise contracts" to the vagaries of different states' c o n t r a c t laws, an outcome potentially inconsistent with the " w e l l - r e c o gn i z e d interest in ensuring that federal courts i n t e r p r e t federal law in a uniform way." Williams v. Taylor, 529 U . S . 362, 389-390 (2000) (Stevens, J., concurring). In any e v e n t , we need not resolve this question.

N e w York law governs the Amended Stockholders Agreement, w h i l e Michigan law controls the Dealer Agreement. Under both s t a t e s ' law, multiple agreements may be read as one contract only i f the parties so intended, which we determine from the c i r c u m s t a n ce s surrounding the transaction. See Rudman v. Cowles C o m m c ' n s , Inc., 30 N.Y.2d 1, 13 (1972); Macomb County Sav. Bank v . Kohlhoff, 147 N.W.2d 418, 419 (Mich. Ct. App. 1967). The c i r c u m s t a n ce s here do not evince an intent by the parties to i n t e r p r e t the Amended Stockholders agreement and the Dealer A g r e e m e n t as one contract.

F i r s t , the parties to the Amended Stockholders Agreement and t h e Dealer Agreement are different. The former is between A r c i n i a g a , GM, and Bay Chevrolet while the latter is between GM a n d Bay Chevrolet. Cf. Rudman, 30 N.Y.2d at 13 (finding that m u l t i p l e contracts did not constitute one transaction because, i n t e r alia, "the agreements involved formally different p a r t i e s " ) ; Skimin v. Fuelgas Co., 64 N.W.2d 666, 668-69 (Mich.

1954).

S e c o n d , the contracts are not mutually dependent. The D e a l e r Agreement is GM's standard dealership agreement, r e g a r d l e s s of the financing of the dealership, and it does not n e c e s s a r i l y end if the Amended Stockholders Agreement fails.

T h i r d , the agreements are separate forms and they do not r e f e r to each other. Cf. Rudman, 30 N.Y.2d at 13 ("Although form i s not conclusive, that the parties entered into separate written a g r e e m e n t s with `separate assents' rather than a `single assent' i s influential."); Schonfeld v. Thompson, 663 N.Y.S.2d 166, 167 ( 1 s t Dep't 1997) (finding that written agreements that do not r e f e r to each other are separate contracts); Forge v. Smith, 580 N . W . 2 d 876, 881 (Mich. 1998) ("Where one writing references a n o t h e r instrument for additional contract terms, the two w r i t i n g s should be read together.").

F i n a l l y, the agreements serve separate purposes. The Dealer A g r e e m e n t governs the resale and servicing of GM vehicles by Bay C h e v r o l e t (quintessential attributes of a "motor vehicle f r a n c h i s e contract"). The Amended Stockholders Agreement p e r t a i n s to Arciniaga's and GM's investment relationship in Bay Chevrolet. Cf. Schonfeld, 663 N.Y.S.2d at 167 (agreements " s e r v i n g different purposes" are not a single contract); Shirey v . Camden, 22 N.W.2d 98, 101 (Mich. 1946).

CONCLUSION A r c i n i a g a ' s brief bristles with a jeremiad about "small b u s i n e s s m e n and businesswomen" compared to "large powerful m u l t i n a t i o na l automobile manufacturers." He suggests that if we r e v e r s e the district court's decision, the proverbial little guy w i l l not get his day in court. Of course, our decision today d o e s no such thing. Arciniaga's claims will be heard, but they w i l l be heard in the forum he agreed to and not in the forum he b a r g a i n e d away. See Mitsubishi Motors Corp., 473 U.S. at 628 ( " B y agreeing to arbitrate a statutory claim, a party does not f o r g o the substantive rights afforded by the statute; it only s u b m i t s to their resolution in an arbitral, rather than a j u d i c i a l , forum.").

F o r the foregoing reasons, we reverse the district court's d e n i a l of GM's motion to compel arbitration and its grant of A r c i n i a g a ' s motion to stay arbitration. The case is remanded to t h e district court to grant GM's motion to compel arbitration.

* The Honorable Kenneth M. Karas, of the United States District C o u r t for the Southern District of New York, sitting by d e s i g n a t i o n.