Portland General Electric Co. v. Liberty Mutual Insurance Co.

If two parties enter a contract that both requires arbitration of their disputes and allows impleader of a third party, must a party that did not initiate the impleader arbitrate a dispute that arises out of the same transaction at issue in the arbitration with the impleaded third party? We hold, on the facts of this case, that this question is really a question about the scope of the arbitration clause for the arbitrator to decide. Since, instead, the district court undertook to decide that question, we vacate and remand.

BACKGROUND

This appeal concerns the interplay of three related contracts. In the first (the “Construction Contract”), entered into in June 2013, appellee Portland General Electric Company (“PGE”) hired several related contracting companies (collectively, the “Contractor”) to build an Oregon power plant. The Construction Contract allows PGE to terminate the agreement upon the Contractor’s default. A “Disputes” provision requires the parties to attempt to mediate any disputes, but if mediation fails, “each Party shall have the right to take whatever legal actions that they may choose.” A “Choice of Law; Jurisdiction” provision states that the agreement…