In a decision filed on December 10, 2010, a unanimous panel of the United States Court of Appeals for the Tenth Circuit issued a decision in No. 09-5133, The Burlington Northern and Santa Fe Railway Co. v. Public Service Company of Oklahoma. The Court, in a twenty page slip opinion authored by Circuit Judge Tymkovich, affirmed a decision confirming an arbitration award in favor of Public Service Company of Oklahoma (“PSO”) and also directed the appellant, Burlington Northern and Santa Fe Railway Co. (“BNSF”), to pay PSO’s reasonably incurred appellate attorneys' fees.

This case involves a claim made by BNSF that PSO owed the railroad approximately $9.5 million dollars in alleged underpayments under a long-term coal transportation agreement. A three-member arbitration board rejected BNSF’s claim in its entirety, finding that PSO had paid the correct amounts due under the contract. The arbitration board’s decision was confirmed by the United States District Court for the Northern District of Oklahoma. BNSF appealed to the Tenth Circuit.

On appeal, BNSF argued that the Court should review the arbitration award “de novo” because, it alleged, the arbitration board exceeded the scope of its authority in denying BNSF’s claim. The Court rejected BNSF’s argument, holding, as did the District Court, that BNSF had expressly agreed to submit its claim to arbitration and, as a result, the arbitration board’s decision was entitled to “extreme deference” by reviewing courts (slip op. at 11). The Court proceeded to affirm the District Court’s confirmation of the arbitration board’s decision.

The Court also ordered BNSF to pay appellate attorney fees to PSO pursuant to an Oklahoma fee shifting statute, Okla. Stat. Ann. tit. 12, § 936. This statute directs courts to award attorney fees to prevailing parties in specified actions governed by Oklahoma contract law. The Court’s fee award follows on the heels of a recent decision by a Magistrate Judge recommending that the District Court order BNSF to pay PSO over $55,000 in attorney fees that PSO incurred in the contested confirmation proceedings in that court.

Slover & Loftus LLP represented PSO in the arbitration and in the subsequent judicial proceedings.

Questions on this decision may be directed to John LeSeur or Frank Pergolizzi at Slover & Loftus LLP