
USCA1 Opinion

	




                            United States Court of Appeals                                For the First Circuit                                 ____________________                                            No. 95-1495                           MENORAH INSURANCE COMPANY, LTD.,                                 Plaintiff-Appellee,                                          v.                             INX REINSURANCE CORPORATION,                                 Defendant-Appellant.                                 ____________________        No. 95-1497                           MENORAH INSURANCE COMPANY, LTD.,                                 Plaintiff-Appellant,                                          v.                             INX REINSURANCE CORPORATION                                 Defendant-Appellee.                                   _______________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                   [Hon. Jose Antonio Fuste, U.S. District Judge]                                  ____________________                                        Before                                 Lynch, Circuit Judge,                                        _____________                           Campbell, Senior Circuit Judge,                                     ____________________                                Watson,* Senior Judge.                                         _____________                                 ____________________            Luis  A.  Melendez-Albizu,  Jaime  Sifre  Rodriguez,  and Sanchez-            _________________________   _______________________       ________        Betances & Sifre, were on brief for Menorah Insurance Company, Ltd.        ________________            Juan  H.  Saavedra  Castro  was   on  brief  for  INX  Reinsurance            __________________________        Corporation.                                 ____________________                                  December 26, 1995                                 ____________________        _________________        *Of  the  United  States  Court of  International  Trade,  sitting  by        designation.                                         -2-                                 LYNCH,   Circuit   Judge.     After  unsuccessfully                      LYNCH,   Circuit   Judge.                               _______________            attempting to invoke arbitration under international business            contracts,  Menorah Insurance  Company  obtained an  $812,907            default judgment in an  Israeli court against INX Reinsurance            Corporation  and then  sought to  enforce the  judgment in  a            Puerto Rican court.  After waiting  a year, and on the eve of            having an exequatur judgment  entered against it, INX removed            the action to the  U.S. District Court for Puerto  Rico under            the Convention on the  Recognition and Enforcement of Foreign            Arbitral  Awards,  implemented  in 9  U.S.C.     201 et  seq.                                                                 __  ____            (1994).1   The  federal  court  found  that  INX  had  waived            arbitration and  remanded.   We affirm  because INX  has both            explicitly and implicitly waived arbitration.                      Under  seven  reinsurance  treaties  between  them,            Menorah,  an  Israeli  company,   and  INX,  a  Puerto  Rican            corporation, agreed  that "all disputes"   between them would            be arbitrated and should be  settled "in an equitable  rather            than  in a strictly legal manner."2  The locus of arbitration                                            ____________________            1.  The Convention was opened for signature on June 10, 1958,            330  U.N.T.S. 38,  and is  reprinted in  9 U.S.C.A.    201 n.            (West Supp. 1995).            2.  The  arbitration   clause  presented  by   INX  as  being            representative provides that:                      All disputes which  may arise between the                      two contracting parties with reference to                      the Interpretation or the carrying out of                      this   Agreement   or   to   any   matter                      originating  therefrom  or  in   any  way                      connected  with  the  same,  and  whether                                         -3-                                          3            was  to be  Tel Aviv, Israel.   Each  side was  to appoint an            arbitrator and  should the two arbitrators  disagree, then an            "Umpire," previously designated by the two arbitrators, would            decide.   There  was a  default provision  of sorts:  "In the            event of either party failing to appoint an umpire within two            months after  arbitration has  been supplied [sic]  for under            the  question  in dispute,  then  in  either  such  case  the            arbitrators and/or umpire shall  be appointed by the chairman            for   the  time   being   of  the   Israeli  Fire   Insurance            Association."                      Menorah made a claim to INX for over $750,000 under            the reinsurance treaties,  to which INX replied  that it owed            no more than $178,000 and intimated that fraud accounted  for            the  $500,000 difference.   After  unsuccessful negotiations,            Menorah,  on July  1, 1992,  informed INX  by letter  that it            would seek  arbitration, asked  INX to assent  to arbitration            and  appoint its arbitrator, said if INX failed to appoint an                                            ____________________                      arising before or  after the  termination                      of  notice under this  agreement shall be                      entitled  [sic]  in  an equitable  rather                      than a  strictly legal manner and in such                      cases the parties agree to submit  to the                      decision  of arbitrator, one to be chosen                      by  the  Company  and  the  other  by the                      Reinsurer   and   in    the   event    of                      disagreement between these  two, then  an                      Umpire, who shall have been chosen by the                      said  two  arbitrators previous  to their                      entering   upon    the   reference,   the                      arbitrators   and/or   umpire  shall   be                      managers  or  chief  officials   of  fire                      Insurance and/or reinsurance companies.                                         -4-                                          4            arbitrator, Menorah would ask that one  be appointed for INX,            and that if  INX failed  to assent, then  Menorah would  feel            "free  to  pursue  all  other  legal  and  judicial  measures            available."    INX  responded  promptly  that  it  would  not            arbitrate, that its financial  condition was precarious,  and            that even  if ordered  to arbitrate, its  financial condition            would preclude it from doing so.                        On September  10, 1992,  Menorah filed suit  in Tel            Aviv against INX.  Although actually served, INX chose not to            respond or contest, and  default judgment was entered against            it for $812,907, interest at an annual rate of 11%, costs and            attorneys' fees.   INX did not pay nor did  it seek to remove            the default.                      On September  2, 1993, Menorah filed  an exequatur3            action  in  the Superior  Court in  San  Juan to  enforce the            judgment.   INX moved to dismiss, claiming for the first time            that  the  controversies  between   the  parties  had  to  be            arbitrated.   On August 8, 1994, the court denied the motion,            finding that INX had waived arbitration  and that the Israeli            judgment was valid, and ordered INX to answer.  INX answered,            again claiming arbitration, and counterclaimed that Menorah's                                            ____________________            3.  "Exequatur"  refers to  an action  to execute  a judgment            from another  jurisdiction.   See Seetransport Wiking  Trader                                          ___ ___________________________            Schiffahrtsgesellschaft   MBH  &  Co.  v.  Navimpex  Centrala            _____________________________________      __________________            Navala, 29 F.3d 79, 81-82 (2d Cir. 1994).             ______                                                      -5-                                          5            failure to submit the exequatur action  to arbitration was in            breach of its contractual duty of good faith.  On October 14,            1994,  the Superior Court issued  an order to  show cause why            the  petition  for  exequatur  should  not  be  granted.   In            response, INX removed the action to the federal court under 9            U.S.C.   205.4                       The federal  court remanded  the case on  March 15,            1995,  finding  that  INX  had  waived  arbitration  and  the            remaining claims were not  subject to the federal arbitration            scheme.    Now, over  three  years  after Menorah's  original            request for arbitration  was refused and after the  travel of            this matter  internationally through three  different courts,                                            ____________________            4.  Section 205 provides:                      Where the subject matter  of an action or                      proceeding  pending  in  a   State  court                      relates  to  an arbitration  agreement or                      award falling under  the Convention,  the                      defendant or  the defendants may,  at any                      time  before  the  trial thereof,  remove                      such action or proceeding to the district                      court  of  the   United  States  for  the                      district and division embracing the place                      where   the   action  or   proceeding  is                      pending.   The  procedure for  removal of                      causes  otherwise  provided by  law shall                      apply, except that the ground for removal                      provided in this  section need not appear                      on the  face of the complaint  but may be                      shown in the  petition for removal.   For                      the purposes of  Chapter 1 of this  title                      any  action  or proceeding  removed under                      this section  shall  be deemed   to  have                      been  brought in  the  district court  to                      which it is removed.                                            -6-                                          6            INX asks us to reverse the district court and send the matter            to arbitration.                       Review  of  a  district  court's  determination  of            waiver of arbitration is plenary.  See Commercial Union  Ins.                                               ___ ______________________            Co. v. Gilbane  Bldg. Co., 992 F.2d 386, 390 (1st Cir. 1993);            ___    __________________            Leadertex,  Inc. v.  Morganton Dyeing  & Finishing  Corp., 67            ________________     ____________________________________            F.3d 20, 25  (2d Cir. 1995).  "[T]he  findings upon which the            [legal]  conclusion  [of  waiver]  is   based  are  predicate            questions of fact, which may not be overturned unless clearly            erroneous."  Price v. Drexel Burnham  Lambert, Inc., 791 F.2d                         _____    _____________________________            1156, 1159 (5th Cir. 1986).                        In the increasingly  international business  world,            the  use  of  arbitration   agreements  may  be  particularly            important to avoid the                      uncertainty [that] will almost inevitably                      exist  with  respect   to  any   contract                      touching two or more countries, each with                      its own substantive laws and conflict-of-                      laws  rules.    A  contractual  provision                      specifying  in advance the forum in which                      disputes shall  be litigated and  the law                      to  be applied  is, therefore,  an almost                      indispensable precondition to achievement                      of  the  orderliness  and  predictability                      essential  to any  international business                      transaction.            Scherk  v.  Alberto-Culver Co.,  417  U.S.  506, 516  (1974).            ______      __________________            These  same interests  motivated  this country  to adopt  and            implement the  Convention, under which this  case was removed            to federal court:                                         -7-                                          7                      The  goal  of  the  Convention,  and  the                      principal  purpose   underlying  American                      adoption and implementation of it, was to                      encourage the recognition and enforcement                      of  commercial arbitration  agreements in                      international contracts and to  unify the                      standards   by    which   agreements   to                      arbitrate   are  observed   and  arbitral                      awardsareenforcedinthesignatorycountries.            Id. at 520 n.15.            ___                      Against  this backdrop  of a  strong United  States            policy  favoring  arbitration,  INX  essentially   makes  two            arguments.   The district court  erred, it says,  in deciding            that it  waived arbitration in  the events of  1992.  In  any            event, INX says, it now has the right to have the question of            the enforceability of the  Israeli judgment, including  INX's            counterclaim, determined by an arbitrator.                      The district court did not  err on either the facts            or the law.  The explicit waiver came when INX was invited to            arbitrate in July 1992.  INX  expressly declined.  It is  not            saved from  that  declination by  the fact  that Menorah  had            offered  in the  July 1,  1992 letter  to have  an arbitrator            appointed for INX.   That offer too was declined and INX said            it  was  both unwilling  and  unable  to  participate in  the            arbitration.5                                              ____________________            5.  INX  claims  the  agreement  required  an  arbitrator  be                                             ________            appointed  for it  if it declined  to do  so.   The language,            hardly  a model of clarity, does not so directly provide, and            easily could have done so were that the intent.                                          -8-                                          8                      The implicit waiver  came from INX's entire  course            of conduct.  This court has repeatedly held that "parties may            waive their right to arbitration and present their dispute to            a  court."   Caribbean Insurance  Services, Inc.  v. American                         ___________________________________     ________            Bankers  Life Assurance Co., 715 F.2d 17, 19 (1st Cir. 1983).            ___________________________            In  Caribbean,  we  found  waiver where  the  party  claiming                _________            arbitration delayed doing  so until six  months after it  was            sued  and it had entered a stipulation  for a speedy trial in            exchange  for a  "reprieve from  a likely  contempt finding."            Id. at 20.   In Jones Motor Co. v.  Chauffeurs, Teamsters and            ___             _______________     _________________________            Helpers  Local Union  No. 633,  671 F.2d  38, 43  (1st Cir.),            _____________________________            cert.  denied, 459  U.S. 943  (1982), we  found waiver  where            _____  ______            eleven months  of litigation occurred before  arbitration was            first raised, saying:                      [T]o   require   that   parties   go   to                      arbitration despite their having advanced                      so  far  in   court  proceedings   before                      seeking   arbitration   would  often   be                      unfair, for it would effectively  allow a                      party sensing an adverse court decision a                      second chance in another forum.            That  sentiment applies here.   In Gutor Int'l  AG v. Raymond                                               _______________    _______            Packer  Co.,  493 F.2d  938, 945  (1st  Cir. 1974),  we found            ___________            waiver  where a  party unconditionally  submitted part  of an            arbitrable matter to the courts, but later attempted to  take            advantage of  the arbitration clause when  the opposing party            counterclaimed.    Cf.  Raytheon  Co.  v.  Automated Business                               ___  _____________      __________________            Systems,  Inc.,  882 F.2d  6,  8 (1st  Cir.  1989) (defendant            ______________                                         -9-                                          9            waived issue of  whether it  consented to  issue of  punitive            damages being  submitted to arbitration by  delaying and then            raising it  in desultory manner  on first day  of arbitration            and not pursuing it).                       It  has been the rule in this Circuit that in order            for plaintiffs  to prevail on  "their claim  of waiver,  they            must  show prejudice."    Sevinor v.  Merrill Lynch,  Pierce,                                      _______     _______________________            Fenner  &  Smith,  Inc., 807  F.2d  16,  18  (1st Cir.  1986)            _______________________            (finding  no   prejudice  where  defendants   explicitly  and            promptly raised arbitration as  a defense to a  suit); accord                                                                   ______            Commercial Union, 992 F.2d  at 390.  Because there  was ample            ________________            prejudice  here, as  the  district court  found,  we have  no            reason  to reconsider whether to  apply the litmus  test of a            showing  of  prejudice to  establish  waiver  or to  apply  a            totality of circumstances test,  as other circuits have done.            See Metz v. Merrill  Lynch, Pierce, Fenner & Smith,  Inc., 39            ___ ____    _____________________________________________            F.3d 1482, 1489 (10th Cir. 1994) (applying a "totality of the            circumstances"  test for  the determination of  waiver, where            prejudice was but  one factor);   S+L+H S.p.A. v.  Miller-St.                                              ____________     __________            Nazianz, Inc., 988 F.2d 1518, 1527 (7th Cir. 1993).             _____________                      Ignoring  its  failure  to appear  in  the  Israeli            action,6  INX characterizes  its  delay  of  over a  year  in                                            ____________________            6.  INX asserts  that its inaction during  the proceedings in            Israel was justified by  its desire to preserve its  right to            challenge the  jurisdiction of the  Israeli court.   But  INX            voluntarily  entered  into  reinsurance  agreements  with  an            Israeli  corporation that specified Tel  Aviv as the site for                                         -10-                                          10            seeking arbitration as insufficient to show prejudice.  There            is  no per  se  rule that  a  one  year delay  is  or is  not                   ___  __            sufficient to support waiver.  Cf. J & S Constr. Co., Inc. v.                                           ___ _______________________            Travelers Indem. Co., 520 F.2d 809 (1st Cir. 1975)  (thirteen            ____________________            month delay and participation in  discovery was not enough to            constitute a showing of prejudice).  The period of delay here            was  not  one in  which  information useful  to  the ultimate            resolution  of  the   dispute  was  being  procured   through            discovery.    Cf.  Cabinetree  of  Wis.,  Inc.  v.  Kraftmaid                          ___  ___________________________      _________            Cabinetry, Inc., 50 F.3d 388, 391 (7th Cir. 1995) (explaining            _______________            that delay alone  is not automatically a source  of prejudice            and that on occasion  it can comprise time the  parties spend            in  determining information  they would  need in  arbitration            anyway).   INX chose not to invoke arbitration from July 1992            until  October 1993 and Menorah bore  the costs of proceeding            to  try to  obtain the sums  it thought  owed.   See Van Ness                                                             ___ ________            Townhouses v. Mar  Indus. Co.,  862 F.2d 754,  759 (9th  Cir.            __________    _______________            1988) (waiver  found where  party made conscious  decision to            delay  demand   for  arbitration  while  continuing  to  seek            judicial determination  of arbitrable claims).   There was no            error in  the district court's finding  that Menorah incurred                                            ____________________            any  arbitration proceedings.   In  the commercial  context a            forum selection  clause,  even one  for arbitration,  confers            personal jurisdiction on the courts of the chosen forum.  See                                                                      ___            Unionmutual Stock  Life Ins.  Co. of Am.  v. Beneficial  Life            ________________________________________     ________________            Ins. Co., 774 F.2d 524, 527 (1st Cir. 1985).            ________                                         -11-                                          11            expenses as a  direct result of  INX's dilatory behavior  and            that that was prejudice enough.                      INX  suggests that  the  question of  arbitrability            should be decided  in the first  instance by the  arbitrator.            As  to that  and to  INX's  argument that  the  issue of  the            enforceability  of  the  Israeli   judgment  must  itself  be            arbitrated,  we are guided by  First Options of Chicago, Inc.                                           ______________________________            v. Kaplan,  115 S.  Ct. 1920  (1995).   There, the court  was               ______            faced  with  the question  of who  has  the primary  power to            decide  whether parties  agreed  to arbitrate  the merits  of            their dispute.  Id. at 1923.  Here, we face a variant of that                            ___            question -- who has  the primary power to decide  whether the            parties agreed to arbitrate the issue of enforceability of  a            default  judgment following  failure  to  arbitrate under  an            arbitration clause.  That  question is appropriate because it            is  conceivable   that   parties  could   decide  that   such            enforceability   disputes   are   subject   to   arbitration.            "[A]rbitration  is simply  a matter  of contract  between the            parties; it is a  way to resolve those  disputes -- but  only            those disputes -- that  the parties have agreed to  submit to            arbitration."7  Id. at 1924.                            ___                                            ____________________            7.  There is precedent that,  as a matter of law,  actions to            enforce  foreign  money   judgments,  even  those  confirming            arbitration awards, are not preempted by the Convention.  See                                                                      ___            Island Territory  of Curacao  v. Solitron Devices,  Inc., 489            ____________________________     _______________________            F.2d  1313, 1319 (2d Cir.  1973), cert. denied,  416 U.S. 986                                              _____ ______            (1974).  We think, however, the better rule here is to follow            First  Options.   See  also  Mastrobuono  v. Shearson  Lehman            ______________    ___  ____  ___________     ________________                                         -12-                                          12                      So we apply the  First Options rule: "Courts should                                       _____________            not assume that the parties agreed to arbitrate arbitrability            unless there  is 'clear and unmistakable'  evidence that they            did  so." Id. (citations omitted).   There is  nothing in the                      ___            agreement between  INX and  Menorah clearly stating  that the            question of  arbitrability of judgments should  be decided by            an arbitrator.  Thequestion is onefor resolution by thecourt.                      We  also  agree   with  the  district  court   that            arbitration of the enforceability  of the Israeli judgment is            not required.   "[G]iven the  principle that a  party can  be            forced  to arbitrate  only those  issues it  specifically has            agreed  to submit  to arbitration,"  id. at  1925, we  do not                                                 ___            interpret  the  silence of  the  agreement on  this  point to            create a right of arbitration.  And if the agreement could be            read for such an implication, INX has nevertheless waived its            right to arbitrate enforceability of the judgment.                       The  law does not  lend itself to  INX's claims and            ultimately,  the strong  policy reasons  favoring arbitration            and  underlying  the  adoption  of the  Convention  would  be            undercut,  not  served,  by  acceptance  of  INX's  position.            Arbitration clauses  were not meant  to be another  weapon in            the  arsenal  for imposing  delay  and costs  in  the dispute                                            ____________________            Hutton,  Inc., 115 S. Ct. 1212, 1216 (1995) (issue of whether            _____________            arbitrator may award punitive damages "comes down to what the            contract has  to say about the  arbitrability of petitioners'            claim for punitive damages").                                          -13-                                          13            resolution  process.    Underlying  the policy  of  enforcing            contracts to  arbitrate is  a belief that  where parties  can            agree  to a  mutually optimal  method and  forum for  dispute            resolution, it serves the interests of efficiency and economy            to allow them to do so.  Cf. Mitsubishi Motors Corp. v. Soler                                     ___ _______________________    _____            Chrysler-Plymouth, Inc.,  473 U.S.  614, 633 (1985);  Glass &            _______________________                               _______            Allied Workers  Int'l Union, Local 182B  v. Excelsior Foundry            _______________________________________     _________________            Co.,  56 F.3d  844, 848  (7th Cir.  1995) ("Arbitration  is a            ___            service sold in a  competitive market.  The rules  adopted by            the sellers  are presumptively efficient.");  see also Steven                                                          ___ ____            Shavell,   Alternative   Dispute   Resolution:  An   Economic                       __________________________________________________            Analysis,  24  J.  Legal  Stud.  1,  8-9  (1995)  (a  central            ________            rationale for  encouraging parties to contract  for their own            method of dispute resolution is that they are likely to agree            to the most efficient forum to serve their needs).                         In  the context  of  international  contracts,  the            opportunities for increasing the cost, time and complexity of            resolving disputes are magnified  by the presence of multiple            possible fora, each with its own different substantive rules,            procedural schematas,  and legal  cultures.  This  is fertile            ground for manipulation and mischief, and acceptance of INX's            arguments  would lead  to  the very  problems the  Convention            sought  to   avoid.     Cf.   Elizabeth  Warren,   Bankruptcy                                    ___                        __________            Policymaking in  an Imperfect World,  92 Mich.  L. Rev.  336,            ___________________________________            348-49   (1993)  (Differences  among  legal  systems  provide                                         -14-                                          14            incentives  for "nonproductive strategic behavior" as debtors            attempt to take advantage  of opportunities presented in ways            that  are wasteful  and  drive up  costs.).   "The  intention            behind   such  [arbitration]  clauses,  and  the  reason  for            judicial enforcement of  them, are not to  allow or encourage            parties to proceed, either  simultaneously or sequentially in            multiple forums."  Cabinetree, 50 F.3d at 390.                                 __________                      Neither  efficiency  nor  economy  are   served  by            adopting  INX's arguments.  The  scenario here --  in which a            party  knowingly opts out of the arbitration for which it has            contracted (even  if driven by looming  insolvency8), sits on            its  hands while  a default  judgment is  entered against  it            after service, refuses to pay, requires an enforcement action            be filed  against it,  and only  then cries  "arbitration" --            undermines  both  the   certainty  and  predictability  which            arbitration agreements  are meant to foster.   Cf. Mitsubishi                                                           ___ __________            Motors,  473  U.S.  at  631  (Courts  should  avoid  inviting            ______            "'unseemly  and mutually destructive jockeying by the parties            to secure tactical litigation  advantages. . . .   [It would]            damage the  fabric of  international commerce and  trade, and            imperil the  willingness and ability of  businessmen to enter                                            ____________________            8.  Ordinarily  in  a  dispute  between  on-going  commercial            players  "reputational" costs serve to soften inclinations to            obtain an advantage  in a single dispute.  But  where a party            is  in financial distress,  these reputational  checks become            far  less effective. Cf. Ronald J.  Gilson, Value Creation by                                 ___                    _________________            Business  Lawyers: Legal Skills and Asset Pricing, 94 Yale L.            _________________________________________________            J. 239, 289-90 (1984).                                         -15-                                          15            into international commercial agreements.'") (quoting Scherk,                                                                  ______            417  U.S.  at 516-17);    see  also  Gilmore v.  Shearson/Am.                                      ___  ____  _______     ____________            Express  Inc., 811  F.2d  108, 112  (2d  Cir. 1987)  (parties            _____________            should  not  be  permitted  to  use  a  delayed  assertion of            arbitration  as a "tactic in  a war of  attrition designed to            make the  litigation too  expensive for  plaintiff"); Allied-                                                                  _______            Bruce Terminix Cos. v. Dobson, 115 S. Ct. 834, 841 (1995) (in            ___________________    ______            interpreting  the  Federal Arbitration  Act court  notes that            Congress intended to help parties avoid costs and delay).                      The order remanding this case to the Superior Court            of Puerto  Rico  is also  appropriate,  under either  of  two            alternative interpretations of the  Convention.  Section  205            allows  removal if  the subject matter  of the  [state] court            action "relates  to an  arbitration agreement  . .  . falling            under the  Convention," and it  is arguable, though  far from            certain, that an action to enforce a default judgment where a            defense  is that the parties agreed to arbitrate is an action            "relating  to an  arbitration  agreement."   If  the case  is            viewed as being  properly removed  on the basis  of both  the            plaintiff's enforcement action and the counterclaim, then the            finding of  waiver ultimately  removed the basis  for federal            jurisdiction.9                                            ____________________            9.  Menorah   argues   that   this   court   lacks  appellate            jurisdiction  because the district  court's remand  order was            based on  a  determination  of  its lack  of  subject  matter            jurisdiction over  the  removed case  and  that 28  U.S.C.               1447(d)  (1994) bars the review of such a determination.  See                                                                      ___                                         -16-                                          16                      If, on the other hand, the removal was based on the            counterclaim alone,  the  pendent claim  could  be  remanded.            Principles of pendent jurisdiction allowed the district court            to exercise its discretion and relinquish jurisdiction over a            removed  case where all the federal claims were gone and only            pendent  exequatur claims remained.  See  28 U.S.C.   1367(c)                                                 ___            (1994); Carnegie-Mellon  Univ. v. Cohill, 484  U.S. 343, 348-                    ______________________    ______            52,  355 n.11 (1988); Rodriguez  v. Comas, 888  F.2d 899, 904                                  _________     _____            n.20 (1st  Cir.  1989).   Since  this case  had been  in  the            Commonwealth's courts for  over a year  prior to its  removal            and was on the  verge of resolution, the court's  exercise of            discretion  to  remand  the pendent  claims  was particularly            appropriate.                      The district  court's order  remanding the  case to            the  Superior Court  of  Puerto Rico,  so that  the exequatur                                            ____________________            Things Remembered,  Inc. v. Petrarca, 64  U.S.L.W. 4035, 4036            ________________________    ________            (U.S. Dec. 5, 1995).       Menorah   also  argues   that  the            district court  erred in granting removal  of the proceedings            in  the first place.  Since Menorah easily wins an affirmance            on  the substantive issue of waiver, we decline to decide the            jurisdictional issues raised  by it.  See Norton  v. Mathews,                                                  ___ ______     _______            427  U.S.  524, 528-33  (1976)  (where merits  can  be easily            resolved  in favor  of  the party  challenging  jurisdiction,            resolution of complex jurisdictional inquiry may be avoided);            Lambert v. Kysar, 983  F.2d 1110, 1118 n.11 (1st  Cir. 1993);            _______    _____            Rhode Island Hosp. Trust  Nat'l Bank v. Howard Communications            ____________________________________    _____________________            Corp., 980 F.2d 823, 829 (1st Cir. 1992).  INX in turn argues            _____            that there is no jurisdiction to hear Menorah's argument that            the case was improperly removed to federal court.  Because we            do  not  reach those  arguments,  we  need  not address  that            jurisdictional issue either.                                         -17-                                          17            action may proceed, is affirmed.  Double costs are awarded to                                   ________   ___________________________            Menorah.            _______                                         -18-                                          18
