not suffice to ward off arbitration," thereby rejecting the concern that antitrust issues are "ill-adapted to the arbitral process." In this respect the Court noted, in particular, that "adaptability and access to expertise are hallmarks of arbitration," and that "even the courts following American Safety. . . have agreed that an undertaking to arbitrate antitrust claims entered into after the dispute arises is acceptable." Id. at 633 (emphasis in original). Next, the Court rejected, as another concern of the American Safety doctrine, the "proposition that an arbitration panel will pose too great a danger of innate hostility to the constraints on business conduct that antitrust law imposes." Id. at 634. Lastly, the Court addressed the ingredient it considered the "core of the American Safety doctrine -- the fundamental importance to American democratic capitalism of the regime of the antitrust laws." Id. After noting that the private cause of action, designed to afford compensation to injured competitors and to pose a deterrent to potential violators, plays a central role in enforcing this regime, and finding no reason to assume at the outset of the dispute that international arbitration will not provide an adequate mechanism, the Court concluded that "so long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function." Id. at 636-37. Thus, the Court found none of the four ingredients or concerns of the American Safety doctrine justified denying enforcement of an agreement to arbitrate antitrust claims arising from an international commercial transaction.
Syscomm contends that the American Safety doctrine is "still good law and has not been overturned by the United States Supreme Court or any other decision." In support of its position, Syscomm relies on Stendig International, Inc. v. B & B Italia, S.p.A., 633 F. Supp. 27 (S.D.N.Y. 1986), a 1986 district court decision, which held that because Mitsubishi did not overrule American Safety, American Safety was still binding on the court. The Stendig court therefore refused to compel arbitration of an antitrust claim arising from a domestic transaction. See id. at 28. However, Stendig was decided prior to the Supreme Court's decisions in Rodriguez de Quijas and McMahon, and more recent lower court cases have held that American Safety would no longer be followed by the Second Circuit, see, e.g., Hough v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 757 F. Supp. 283, 286 (S.D.N.Y.), aff'd without opinion, 946 F.2d 883 (2d Cir. 1991); Gemco Latinoamerica, Inc. v. Seiko Time Corp., 671 F. Supp. 972, 978-80 (S.D.N.Y. 1987), adhered to in part and dismissed in part on reconsideration, 685 F. Supp. 400 (S.D.N.Y. 1988); see also GKG Caribe, Inc. v. Nokia-Mobira, Inc., 725 F. Supp. 109, 111-13 (D.P.R. 1989) (concluding that the Supreme Court "would most certainly discard [the American Safety] doctrine").
Plaintiff also relies on a 1987 Second Circuit decision in Genesco, Inc. v. T. Kakiuchi & Co., 815 F.2d 840 (2d Cir. 1987), which Plaintiff misconstrues. Plaintiff contends that in Genesco the Second Circuit "ruled that agreements containing arbitration clauses involving international commerce permitted antitrust claims to be arbitrated while domestic commerce antitrust claims despite having broad arbitration clauses in their agreements was [sic] not arbitrable." Plaintiff's Reply Memorandum of Law, at 3. The Second Circuit held no such thing. Contrary to Syscomm's contention, the Second Circuit, although presented with the issue, did not rule in Genesco that domestic antitrust claims are not arbitrable. Rather, the Second Circuit recognized that the Supreme Court in McMahon would "decide the continued applicability of the American Safety doctrine to domestic commercial transactions," and remanded the issue to the district court with the suggestion that the district court not go forward with trial until the Supreme Court decided McMahon. Genesco, 815 F.2d at 854. Indeed, a more recent Second Circuit decision than Genesco is indicative of the continued expansion of the types of federal statutory claims that may be arbitrated. See Bird v. Shearson Lehman/American Express, Inc., 926 F.2d 116, 118-22 (2d Cir.), cert. denied, 501 U.S. 1251, 115 L. Ed. 2d 1056, 111 S. Ct. 2891 (1991). In Bird, the Second Circuit held that an agreement to arbitrate statutory ERISA claims is enforceable. Id. at 118-22.
While American Safety has not been explicitly overruled, this Court believes that in light of the federal policy favoring arbitration agreements that has fueled the expansion of the types of federal statutory claims that may be arbitrated, the Second Circuit would now hold that the principle of Mitsubishi is not limited to antitrust claims arising in international transactions, and that domestic antitrust claims are arbitrable. See Hough, 757 F. Supp. at 286; see also Gemco, 671 F. Supp. at 980 ("We find that none of the justifications for the American Safety doctrine retain their vigor and that our Court of Appeals would now hold that domestic antitrust claims are subject to arbitration."); cf. Bird, 926 F.2d at 118-22 (agreement to arbitrate statutory ERISA claims held enforceable).
Because Syscomm's antitrust claims fall within the Agreement's arbitration clause, and because those claims are arbitrable, SynOptics' request to compel arbitration is granted and Syscomm's motion for a stay of the pending Arbitration Proceeding is denied. Consequently, Syscomm must submit its antitrust claims against SynOptics to arbitration in accordance with the Agreement.
Syscomm's claim of prejudice if it is not permitted to pursue its antitrust claims in this action first is unavailing as a basis for refusing to compel arbitration and denying a stay of this action. See Seguros Banvenez, S.A. v. S/S Oliver Drescher, 761 F.2d 855, 862 (2d Cir. 1985). In rejecting a district court's view that section 3 of the Federal Arbitration Act, 9 U.S.C. § 3, grants a federal court plenary discretion over the proceedings, the Second Circuit cautioned in Seguros Banvenez:
Contrary to the [district] court's view, that section does not grant a court plenary discretion over the proceedings. Rather, "in passing on a § 3 application for a stay while the parties arbitrate, a federal court may consider only issues relating to the making and performance of the agreement to arbitrate." The court may not refuse to grant a stay under section 3 based on considerations of judicial economy.
Seguros Banvenez, 761 F.2d at 862 (quoting Prima Paint v. Flood & Conklin, 388 U.S. 395, 404, 18 L. Ed. 2d 1270, 87 S. Ct. 1801 (1967)). In addition, the fact that Syscomm does not have agreements with Anixter or Westcon to arbitrate antitrust claims between them does not justify denying the motion to compel or require one trial in this court, rather than sending only one of the three defendants, i.e., SynOptics, to arbitration. See Seguros Banvenez, 761 F.2d at 862; see, e.g., Steinberg & Lyman v. Takacs, 774 F. Supp. 885, 888 (S.D.N.Y. 1991) (holding that plaintiff's claim that notions of judicial economy favored court trying action at one time, rather than sending only two out of a number of defendants to arbitration, does not withstand mandate of 9 U.S.C. § 3).
For the reasons above, plaintiff Syscomm's motion for a stay of a certain pending arbitration proceeding is denied, and defendant SynOptics' request to compel arbitration is granted. Based on this determination, this action is stayed as against SynOptics pending arbitration.
LEONARD D. WEXLER
UNITED STATES DISTRICT JUDGE
Dated: Hauppauge, New York
June 28, 1994