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Bradford-Scott Data Corp. v. Physician Computer Network

United States Court of Appeals for the Seventh Circuit

September 19, 1997, Submitted ; October 14, 1997, Decided

Nos. 97-2415, 97-2568


 [*504]  Easterbrook, Circuit Judge. Bradford-Scott Data Corporation agreed to sell some computer software [**2]  written by VERSYSS Incorporated. The parties entered into two contracts, the Vertical Value-Added Reseller (VAR) Agreement and the Master License Agreement. Later VERSYSS was acquired by Physician Computer Network (PCN), which offers a software package competing with the VERSYSS package Bradford-Scott licensed. Bradford-Scott  [*505]  then filed this suit, contending that the acquisition and some of its subsequent conduct placed VERSYSS in violation of its obligations under the Master License Agreement. Bradford-Scott asked the district court to issue a preliminary injunction, which the judge declined to do; the court also held that Bradford-Scott is not required to arbitrate this dispute. The VAR Agreement contains a broad arbitration clause, covering "any dispute or controversy between the parties . . . relating to this Agreement"; the Master License Agreement has a narrow arbitration clause covering only "payments disputes concerning license or support fees". The district judge thought that the two clauses conflict, and he applied the clause in the Master License Agreement because Bradford-Scott's claims are based on that agreement rather than the VAR Agreement. The district court's conclusion [**3]  that the dispute is not arbitrable led it to deny the request to stay the litigation under 9 U.S.C. § 3. PCN and VERSYSS immediately appealed on the authority of ] 9 U.S.C. § 16(a)(1)(A), which permits an appeal from any order "refusing a stay of any action under section 3 of this title". The district court refused to stay discovery and trial pending appeal; PCN and VERSYSS now ask us for that relief.

The district judge's only reason--that he need not stay proceedings pending appeal, because he had not entered an appealable order--is untenable. The judge did not mention § 16(a)(1)(A), which authorizes appellate review in cases of this kind. For their part, the parties have approached the issue as if appellants were seeking a stay of an injunction, rather than a delay in proceedings. ] To obtain a stay of a district court's judgment, the appellant must establish irreparable harm and a significant probability of success on the merits, against a background norm that appellate courts are reluctant to disturb decisions in advance of full review. Judged by this standard, appellants' request would fail at the outset, for the costs of litigation are not irreparable injury. FTC v. Standard  [**4]   Oil Co., 449 U.S. 232, 244, 66 L. Ed. 2d 416, 101 S. Ct. 488 (1980); Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 24, 39 L. Ed. 2d 123, 94 S. Ct. 1028 (1974); Petroleum Exploration, Inc. v. Public Service Commission, 304 U.S. 209, 222, 82 L. Ed. 1294, 58 S. Ct. 834 (1938); PaineWebber Inc. v. Farnam, 843 F.2d 1050 (7th Cir. 1988).

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128 F.3d 504 *; 1997 U.S. App. LEXIS 28471 **

Bradford-Scott Data Corporation, Inc., Plaintiff-Appellee, v. Physician Computer Network, Inc., et al., Defendants-Appellants.

Prior History:  [**1]  Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 97-0426 C M/S. Larry J. McKinney, Judge.

Disposition: All proceedings in the district court concerning PCN and VERSYSS are stayed.


district court, arbitration, court of appeals, appeals, proceedings, License, frivolous, merits

Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, International Trade Law, Dispute Resolution, International Commercial Arbitration, Arbitration, Civil Procedure, Federal Arbitration Act, General Overview, Stay Pending Arbitration, Entry of Judgments, Stays of Judgments, Appeals, Appellate Jurisdiction, Lower Court Jurisdiction, State Court Review, Notice of Appeal, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Pretrial Matters, Judicial Review, Interlocutory Orders, Frivolous Appeals, Jurisdiction, Jurisdictional Sources