## Facts

- Syscomm International Corporation sued SynOptics Communications, Inc., along with Anixter, Inc. and Westcon, Inc., alleging violations of federal antitrust laws tied to Syscomm’s relationship with SynOptics as a distributor.
- Syscomm’s former wholly owned subsidiary, Romel Technology, Inc., acted as a wholesale distributor of computer products and distributed certain SynOptics networking products.
- On or about June 11, 1991, Romel and SynOptics entered a nonexclusive distributor agreement appointing Romel an authorized distributor of designated SynOptics products.
- The agreement ran for one year and renewed automatically for successive one-year terms unless terminated by mutual agreement or pursuant to the agreement’s termination provisions.
- The distributor agreement contained an arbitration clause requiring arbitration of disputes arising out of the agreement.
- SynOptics later issued a termination notice (effective in early 1994), and Romel initiated an American Arbitration Association (AAA) arbitration in San Francisco, asserting contract-based claims and related unfair-competition allegations arising from the parties’ commercial dealings.
- During the arbitration, Syscomm claimed it learned facts suggesting SynOptics’ conduct also violated federal antitrust law.
- Syscomm filed this federal action asserting antitrust claims and asked the district court to stay the ongoing arbitration while the court case proceeded.
- SynOptics opposed any stay and requested an order compelling arbitration of Syscomm’s antitrust claims under the arbitration clause.
- Syscomm resisted arbitration of the antitrust counts primarily on the ground that Second Circuit precedent (American Safety Equipment Corp. v. J.P. Maguire & Co.) had treated domestic antitrust claims as nonarbitrable.

## Issues

1. Should the court stay the parties’ pending AAA arbitration while Syscomm litigated its federal antitrust claims in court?
2. Are Syscomm’s domestic federal antitrust claims subject to compelled arbitration under the distributor agreement, notwithstanding older Second Circuit precedent treating such claims as nonarbitrable?

## Decision

- The court denied Syscomm’s motion to stay the pending AAA arbitration.
- The court granted SynOptics’ request to compel arbitration of Syscomm’s antitrust claims against SynOptics under the distributor agreement’s arbitration clause.
- The court reasoned that, in light of intervening Supreme Court decisions favoring arbitration of statutory claims, the Second Circuit would no longer apply American Safety to bar arbitration of domestic antitrust disputes.

## Legal Principles

- Under the Federal Arbitration Act, courts generally enforce written arbitration agreements according to their terms, including for federal statutory claims, absent a contrary congressional command.
- Antitrust claims may be arbitrated when they fall within a contract’s arbitration language and when Supreme Court arbitration doctrine indicates such statutory claims are not categorically barred from arbitration.
- A federal court may decline to halt an arbitration already in progress where the dispute is within the scope of a valid arbitration agreement and the party seeking a stay relies only on a judge-made nonarbitrability rule that has been weakened by later Supreme Court authority.
- In assessing whether older circuit precedent remains valid, a district court may consider whether intervening Supreme Court decisions have so changed the governing framework that the circuit would likely reach a different result today.

## Conclusion

Syscomm Intern. Corp. v. SynOptics Communications, Inc. held that Syscomm could not use its federal antitrust suit to stop the ongoing AAA proceeding and that its domestic antitrust claims against SynOptics had to be arbitrated under the parties’ “arising out of” arbitration clause, because later Supreme Court decisions made it unlikely the Second Circuit would continue to treat domestic antitrust claims as categorically nonarbitrable.


Syscomm Intern. Corp. v. SynOptics Communications, Inc., 856 F. Supp. 135 (1994)