Hoffman Construction Company of Oregon, an Oregon Corporation v. Active Erectors and Installers, Inc., a Washington Corporation

969 F.2d 796 RICO Bus.Disp.Guide 8043 HOFFMAN CONSTRUCTION COMPANY OF OREGON, an Oregon Corporation, Plaintiff-Appellee, v. ACTIVE ERECTORS AND INSTALLERS, INC., a Washington Corporation, Defendant-Appellant. No. 90-35523. United States Court of Appeals, Ninth Circuit. Argued and Submitted Aug. 22, 1991. Decided July 8, 1992. Edward D. Campbell, Seattle, Wash., for defendant-appellant. Michael E. Kreger, Perkins Coie, Anchorage, Alaska, for plaintiff-appellee. Appeal from the United States District Court for the District of Alaska. Before: TANG, REINHARDT and RYMER, Circuit Judges. RYMER, Circuit Judge: 1 After receiving a favorable judgment against Hoffman Construction Company in Alaska state court, Active Erectors and Installers, Inc. filed a demand for arbitration of its RICO claim against Hoffman, a claim which Active had not litigated in state court. Hoffman then brought this suit for declaratory and injunctive relief in order to forestall such an arbitration. The district court granted a permanent injunction in Hoffman's favor. The court reasoned that Active waived its right to arbitrate its RICO claim when it opted to proceed in state court, and that the state court action,…

dissenting:

I respectfully dissent from the decision of the majority. I believe that the threshold question in this case is whether Active was justified in pursuing its effort to obtain a judicial determination of its RICO claim in early 1985; because it was, it should not be penalized for having done so. Moreover, Active did not subsequently for *800 feit its right to pursue its RICO claim separately, if only for the reason that it specifically preserved that right when it filed its state court action.

That the threshold determination must be whether Active was justified in keeping its RICO claim separate when it originally demanded arbitration in early 1985 can be seen by examining section III of the majority opinion. The opinion is dependent upon the proposition that the preclusive effect of a judgment includes any,claim that could have been raised in that proceeding; here, according to the majority that includes the RICO claim that Active split-off prior to the time the state court action was filed. See ante at 799 (citing DeNardo v. State, 740 P.2d 453, 456 (Alaska), cert. denied and appeal dismissed, 484 U.S. 919 , 108 S.Ct. 277 , 98 L.Ed.2d 239 (1987). Although the…

After receiving a favorable judgment against Hoffman Construction Company in Alaska state court, Active Erectors and Installers, Inc. filed a demand for arbitration of its RICO claim against Hoffman, a claim which Active had not litigated in state court. Hoffman then brought this suit for declaratory and injunctive relief in order- to forestall such an arbitration. The district court granted a permanent injunction in Hoffman’s favor. The court reasoned that Active waived its right to arbitrate its RICO claim when it opted to proceed in state court, and that the state court action, under the doctrine of res judicata, barred any subsequent attempt to arbitrate that claim.

On appeal, Active contends that its decision to proceed in state court on certain of its claims does not constitute a waiver of its right to seek a subsequent arbitration of its RICO claim. We believe, however, that the district court correctly found that Active’s waiver of arbitration in favor of an Alaska state court proceeding included a waiver of the right to arbitrate a potential RICO claim. That state court action therefore bars a subsequent RICO arbitration based on the same set of facts because of res…