The opinion of the court was delivered by: Arthur J. Schwab United States District Judge
Pending before the Court is the parties' request that the Court determine the preclusive effect of the Arbitration Award, issued on August 25, 2006, in an arbitration between defendant Carnegie Mellon University (CMU) and Governors Refining Technologies (GRT) and Governors Technologies Corporation (GTC) (collectively referred to as "Governors"). See Hearing Memo of November 12, 2009 (doc. no. 242). This Court had granted CMU's motion to compel arbitration and ordered Plaintiffs Christian Bouriez ("Bouriez") and a corporation owned by Bouriez, Montanelle Beheer B.V. (collectively "Plaintiffs"), to participate in the arbitration proceeding in the International Centre for Dispute Resolution initiated by CMU against Governors, Plaintiffs and two other individuals. See Order of Court Regarding Arbitration (Doc. No. 22), February 27, 2003. Plaintiffs challenged that Order and, on appeal, the United States Court of Appeals for the Third Circuit agreed with Plaintiffs that they were not bound by the arbitration provision in the 1996 Master Agreement between CMU and Governors' predecessor and did not have to participate in said arbitration proceedings. Bouriez v. Carnegie Mellon Univ., 359 F.3d 292, 295 (3d Cir. 2004).
The Arbitration Award rescinded the agreement between Governors and CMU, and required CMU to refund all funds received by CMU from Governors pursuant to said agreement. The total amount of the award was $9,935,490.08, in damages, interest, costs, and fees. CMU did not appeal the award and paid the almost $10 million to Governors. Now, Plaintiffs ask this Court to recognize the preclusive effect of the final Arbitration Award to prohibit CMU's relitigation of the issues decided adversely to CMU therein.
The Court has reviewed and analyzed in detail the various excellent briefs filed by the parties relating to the preclusive effect, if any, of the Arbitration Award to this litigation, including Plaintiffs' related requests that the Court set aside its prior four (4) Orders granting certain Motions in Limine of Defendant (doc. nos. 178, 179, 182, and 183). The legal standard for issue preclusion (or collateral estoppel) under Pennsylvania law is accurately summarized by CMU in its Reply Brief (doc. no. 254) at 4, as follows:
(1) An issue decided in a prior action is identical to one presented in a later action;
(2) The prior action resulted in a final judgment on the merits;
(3) The party against whom collateral estoppel is asserted was a party to the prior action, or is in privity with a party to the prior action; and
(4) The party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior action.
Rue v. K-Mart Corp., 713 A.2d 82, 84 (Pa. 1998). See Witkowski v. Welch, 173 F.3d 192, 199 (3d Cir. 1999) (citing the Restatement (Second) of Judgments at 327) and Schubach v. Silver, 336 A. 2d 328, 334 (Pa. 1975).
Applying those standards to the Arbitration Award herein, this Court rules that said Award has preclusive effect on critical issues in this case and that, consistent with the issue preclusive Arbitration Award, three of the prior four Orders relating to CMU's Motions in Limine (doc. nos. 178, 179, and 182) should be vacated, but the Order re: Punitive Damages (doc. no. 183) should remain in effect.
This Court's Memorandum Opinion (doc. no. 234), dated August 30, 2009, granting CMU's Motion for Summary Judgment on all counts of the Complaint, and the reversal thereof by the Opinion and Judgment of the United States Court of Appeals for the Third Circuit, dated October 26, 2009 (doc. no. 240, 246), provides detailed descriptions of the factual allegations and legal ...