                                                      United States Court of Appeals
                                                               Fifth Circuit
                                                            F I L E D
              IN THE UNITED STATES COURT OF APPEALS         January 27, 2004
                      FOR THE FIFTH CIRCUIT
                     _______________________            Charles R. Fulbruge III
                                                                Clerk
                              No. 02-41010
                        _______________________

AMERICAN CENTRAL EASTERN TEXAS GAS COMPANY, Limited Partnership;
AMERICAN CENTRAL GAS COMPANIES INC.,

          Plaintiffs – Appellees,

v.

UNION PACIFIC RESOURCES GROUP INC.; ET AL.,

          Defendants,

DUKE ENERGY FUELS LLC; DUKE ENERGY FIELD SERVICES INC.,

          Defendants – Appellants.

                         _______________________

          Appeal from the United States District Court
                for the Eastern District of Texas
                      USDC No. 01-CV-2208-T
                     _______________________

Before DeMOSS, DENNIS, and PRADO, Circuit Judges.1

EDWARD C. PRADO, Circuit Judge.

     Duke Energy, et al. (Duke) brings this appeal of the

district court’s confirmation of an arbitration award in favor of

Appellee, American Central Eastern Texas, et al. (ACET).      The

arbitration award at issue involved monopolization claims

asserted by ACET against Duke under § 2 of the Sherman Act.       The

     1
      Pursuant to 5th Cir. R. 47.5, this Court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5th Cir. R.
47.5.4.

                                   1
arbitrator found that Duke had a monopoly in gas processing in

Panola County, Texas, and that Duke had violated § 2 of the

Sherman Act by refusing to grant ACET a new gas processing

contract for additional gas volume with the purpose of preventing

ACET from competing with Duke.   Duke appeals the district court’s

confirmation of that award on the grounds that the arbitrator

manifestly disregarded the law in making the award, and that the

award is arbitrary and capricious, violates public policy, and is

beyond the scope of the arbitrator’s authority.

I.   BACKGROUND

     ACET and Duke are companies that participate in the natural

gas industry in Panola County, Texas.    ACET is predominately a

“gatherer” of natural gas liquids.   Gatherers contract with

“producers”—those who extract the gas from the ground—to gather

the extracted gas and then either ship it to a delivery point or

ship it to a processing plant.   ACET also offers “bundled”

gathering and processing services, whereby producers may hire

ACET to gather their gas and also have it processed for

them—essentially a one-stop shop.    ACET is able to offer bundled

services to its customers at a price that is still profitable

because ACET’s gathering technology is efficient and low-cost.

     Duke primarily operates as a gas “processor,” although it

also performs some gathering services.    In offering the bundled

services of gas gathering and processing, ACET subcontracted with



                                 2
Duke to process the gas gathered from ACET’s customers.    The

dispute in this case arises from ACET’s dealings with Duke for

its processing services, and ACET’s desire to increase its

customer base and its resulting need to acquire more processing

capacity in the Panola County market.

     When this suit was filed, Duke and its predecessor, Union

Pacific Resources Group (UPR), controlled 90-95% of the

processing market in Panola County.2    ACET entered the gathering

market in Panola County in 1994, and later considered opening its

own processing plant in Panola County.    ACET contended, however,

that UPR had an internal business plan to create a monopoly in

gas processing in the area, called the “Carthage Vision.”

According to ACET, UPR planned to stifle competition by

preventing construction of new processing plants.    To achieve

this goal, UPR planned to enter staggered, long-term contracts

with producers, so that any would-be entrants into the processing

market would be unable to muster enough gas from producer-

customers at any one time to offset the capital expense of a new

processing plant.   ACET contended that, because of the “Carthage

Vision,” it was unable to open its own plant in Panola County,

and was left with the sole option of entering one of the long-

term agreements with UPR for processing.    Thus, in 1997, ACET

contracted with UPR (the “1997 contract”) for processing


     2
      Duke purchased UPR in 1999.

                                 3
services.

     In 1999, ACET brought suit under §§ 1 and 2 of the Sherman

Act against UPR and Duke3 for monopolizing the gas processing

market in Panola County, and Koch Industries, Inc.4 for

conspiring with UPR in UPR’s quest for monopoly power.    Duke and

UPR moved to compel arbitration on the § 2 claims against them,

leaving the § 1 claims and § 2 conspiracy claim in district

court.    In 2000, former state judge Harlan Martin arbitrated the

parties’ dispute (“First Arbitration”) and found that UPR

willfully acquired and maintained monopoly power and abused that

power to overcharge ACET under the terms of the “uncompetitive”

1997 gas processing contract.    UPR eventually settled with ACET

and the First Arbitration award was vacated.

     By 1999, ACET required additional processing capacity,

because it was fully utilizing all of the capacity allocated to

it under the 1997 contract.    However, ACET again determined that

opening its own plant was not a viable option, because too many

producers were already tied up in staggered, long-term contracts

with Duke.    Therefore, ACET argued, it again had no choice but to

enter contract negotiations with Duke for additional processing

capacity.

     3
        Duke was added as a defendant after it purchased UPR in
1999.
     4
      ACET essentially contended that Koch agreed to stay out of
the gas processing market in exchange for UPR’s promise to
provide processing services to Koch on favorable terms.

                                  4
     The ensuing contract negotiations between ACET and Duke

collapsed.   With antitrust claims still in the district court,

ACET added a new monopolization claim against Duke for violating

§ 2 of the Sherman Act.   ACET stated that Duke had asked for the

same terms and prices for additional capacity as in the 1997

contract, which had been deemed supracompetitive in the First

Arbitration.   In addition, ACET asserted that Duke intentionally

proposed terms that Duke knew were unrealistic or completely

unviable terms to ACET.   Thus, ACET claimed that Duke was

refusing to deal with ACET in order to exclude ACET from

competition with Duke in the Panola County gas processing market.

     Upon Duke’s request, the district court referred the new § 2

monopolization claims against Duke back to arbitration (“Second

Arbitration”) before Harlan Martin, the arbitrator from the First

Arbitration.   The arbitrator found in favor of ACET.   In the

Second Arbitration award, the arbitrator made the following

findings, among others: (1)   that Duke possessed monopoly power

in the gas processing market in Panola County; (2) that Duke had

not negotiated in good faith; (3) that Duke had refused to

contract with ACET in order to prevent ACET from competing with

Duke or to maintain a supracompetitive price for processing

services in Panola County; (4) that ACET had suffered “antitrust

injury” in that it was denied the opportunity to process

additional volumes of gas at competitive prices; and (4) that

others had lost the opportunity to purchase processing or bundled

                                 5
services from ACET as a result.   The arbitrator ordered, by

mandatory injunction, that Duke offer ACET a new processing

contract for additional capacity, which would contain the same

terms as the 1997 contract but incorporate the reduced price

terms of a similar contract between Duke and Pennzoil (Pennzoil

contract).5

      Duke moved for vacatur of the Second Arbitration award in

the district court.   Duke asserted that the award was in manifest

disregard of the law, arbitrary and capricious, and violated

public policy.   The district court denied Duke’s motion to

vacate, and confirmed the arbitration award.    Duke timely

appealed the district court’s confirmation of the Second

Arbitration award.

II.   STANDARD OF REVIEW

      In reviewing a district court’s confirmation of an

arbitration award, this Court reviews questions of law de novo

and findings of fact only for clear error.     See First Options of

Chicago v. Kaplan, 514 U.S. 938, 947-48 (1995); Williams v. Cigna

Fin. Advisors Inc., 197 F.3d 752, 757 (5th Cir. 1999).     Where

parties have agreed to arbitrate their dispute, they may still



      5
      ACET asserted that the Pennzoil contract contained terms
that were more favorable to purchaser of processing capacity than
the terms Duke had offered to ACET. ACET argued that the
preferable terms of the Pennzoil contract resulted from a
temporary rise of competition, which occurred during a time when
Koch threatened to enter the Panola County market.

                                  6
seek judicial review of the arbitration award; however, the

“court will set that decision aside only in very unusual

circumstances.”    See First Options, 514 U.S. at 942.     Generally,

an arbitration award need only have a foundation in reason or

fact.   See Teamster, Chaffeurs, Warehousemen, Helpers and Food

Processers, Local Union v. Stanley Structures, Inc., 735 F.2d

903, 905 (5th Cir. 1984).    Moreover, if the award is rationally

inferable from the facts before the arbitrator, it must be

affirmed.   Valentine Sugars, Inc. v. Donau Corp., 981 F.2d 210,

214 (5th Cir. 1993).

     There are a very limited number of grounds upon which a

district court may vacate an arbitration award.       One of those

grounds for vacatur, which is asserted by the appellant, is when

the arbitrator exceeded his powers in making the award. 9 U.S.C.

§ 10(a).    When examining whether an arbitrator exceeded his

powers, the reviewing court must resolve all doubts in favor of

arbitration.    Executone Info. Systems, Inc. v. Davis, 26 F.3d

1314, 1320-1321 (5th Cir. 1994).       If the arbitrator’s findings

are reasonable and supportable by law or custom in the field,

then the arbitrator did not exceed his authority.       See Int’l

Union of Electrical, Radio & Machine Workers, AFL-CIO-CLC v.

Ingram Mfg. Co., 715 F.2d 886, 891-892 (5th Cir. 1983).

     In addition, this Court has recognized certain common law

grounds warranting vacatur of an arbitration award.       A district


                                   7
court may vacate awards that are arbitrary and capricious, see

Williams, 197 F.3d at 758, or that are contrary to an explicit,

well-defined, and dominant public policy, see Prestige Ford v.

Ford Dealer Computer Servs., Inc., 324 F.3d 391, 396 (5th Cir.

2003); Exxon Corp. v. Baton Rouge Oil & Chem. Workers, 77 F.3d

850, 853 (5th Cir. 1996).

     An arbitration award may also be vacated if the district

court finds that the arbitrator manifestly disregarded the law.

In Prestige Ford v. Ford Dealer Computer Servs., Inc., 324 F.3d

391, 395 (5th Cir. 2003), this Court adopted the Second Circuit’s

interpretation of “manifest disregard”:

     . . . it clearly means more than error or
     misunderstanding with respect to the law. The error
     must have been obvious and capable of being readily and
     instantly perceived by the average person qualified to
     serve as an arbitrator. Moreover, the term “disregard”
     implies that the arbitrator appreciates the existence
     of a clearly governing principle but decides to ignore
     or pay no attention to it. Id. at 396. (Emphasis
     added).

As indicated, the “manifest disregard of the law” standard is

extremely narrow and has limited applicability.    Prestige Ford,

324 F.3d at 395-396.    However, where federal statutory rights are

involved, the manifest disregard review must be sufficient to

ensure that the arbitrator complied with the statutory

requirements at issue.    Williams, 197 F.3d at 761.   This Court

set out a two-part test for applying this standard in Williams v.

Cigna.   Id.   The reviewing court must determine (1) whether it

                                  8
was manifest that the arbitrator acted contrary to applicable

law; and (2) if so, whether upholding the award would result in

significant injustice.   Id. at 762.   In other words, even if this

Court finds manifest disregard of the law by the arbitrator, the

award must still be upheld unless doing so would produce

significant injustice.   Id.

III. ANALYSIS

     On appeal, Duke asserts that the district court erred in

confirming the arbitration award.    In support of its argument,

Duke claims that the following findings and conclusions of the

arbitrator manifestly disregarded the law under the test set

forth in Williams, and were arbitrary and capricious: (1) that

ACET suffered antitrust injury, and therefore possessed standing

to sue under the Sherman Act; (2) that Duke possessed “monopoly

power” in the alleged market; and, (3) that Duke engaged in

exclusionary conduct necessary to create liability for

monopolization.   Duke further contends that the arbitrator

exceeded his authority by mandating a contract between the

parties in the award, that the contractual award violates

antitrust principles, and that the award grants greater relief to

ACET than requested.

A.   The Arbitrator’s Finding That ACET Suffered “Antitrust

     Injury”

     Duke contends that the district court’s confirmation of the


                                 9
arbitration award was erroneous because the arbitrator’s finding

that ACET suffered antitrust injury was in manifest disregard of

the law, and was arbitrary and capricious.       Specifically, the

arbitrator found that “Duke and [ACET] compete in selling gas-

gathering services and in selling gas-processing services in

Panola County, Texas,” and that

     [ACET] and others have suffered and continue to suffer
     antitrust injury in that [ACET] has been denied the
     opportunity to process additional volumes of gas at a
     competitive price; [ACET] has lost the opportunity for
     additional sales of gas processing and gas gathering;
     others have lost the opportunity to purchase from
     [ACET], as a reseller and bundler of gas processing and
     gas gathering at a competitive price

     (emphasis added).

     In suits brought under §§ 1 or 2 of the Sherman Act, this

Court has held that standing to sue exists only if a plaintiff

shows: (1) injury-in-fact, which is an injury to the plaintiff

proximately caused by the defendant’s conduct; (2) antitrust

injury; and (3) proper plaintiff status, meaning that other

parties are not better situated to bring suit.       See Doctor's

Hosp. of Jefferson, Inc., v. Southeast Med. Alliance, Inc., 123

F.3d 301, 305 (5th Cir. 1997) (emphasis added).       In Brunswick

Corp. v. Pueblo Bowl-O-Mat, Inc., the Supreme Court described

"antitrust injury" as an "injury of the type the antitrust laws

were intended to prevent and that flows from that which makes the

defendants' acts unlawful. . . .       It should, in short, be the

type of loss that the claimed violations . . . would be likely to

                                  10
cause."    See 429 U.S. 477, 489 (1977).

     Duke challenges only the second component of standing

recited in Doctor’s Hospital—antitrust injury to the plaintiff.

Duke argues that the arbitrator’s finding was incorrect because

Duke does not compete with ACET.      Duke posits that ACET is a mere

“reseller” of Duke’s processing services, or a “middleman,”

rather than a “competitor,” and could therefore not suffer injury

of the type contemplated by the antitrust laws.

     In support of its argument that ACET and Duke do not

compete, Duke relies heavily on this Court’s decision in Almeda

Mall for the proposition that ACET can not compete with Duke

because it is “a mere reseller” of Duke’s services.       Almeda Mall,

Inc. v. Houston Lighting & Power Co., Westwood Mall, Inc. v.

Houston Lighting & Power Co., 615 F.2d 343 (5th Cir. 1980).      In

Almeda Mall, several shopping malls sued their utility company

under the Sherman Act for refusing to allow the malls to install

a single electricity meter and then resell the electricity to its

tenants.   The malls claimed that the utility was denying them

their rights to compete in the market by refusing to sell them

electricity for resale.    Id. at 348.     This Court found that the

malls lacked the antitrust injury necessary to sue under the

Sherman Act.   We noted that “the Malls generate no electricity.

They transmit none.” Id. at 353.      Further, “the activity sought

by the appellants is more akin to mere ‘substitution’ than to

                                 11
competition. . . . [A]ppellants will merely be plugging

themselves into the flow of electricity and reaping profits as a

non-competitive middleman.”   Id. at 353-354.

     Duke also contends that, if not a reseller, ACET is similar

to a distributor of Duke’s processing services, and distributors

do not compete with suppliers.   Duke asserts that “[w]hen a

manufacturer elects to market its goods through distributors, the

latter are not, in an economic sense, competitors of the

producer, even though the producer also markets some of its goods

itself.”   Red Diamond Supply, Inc. v. Liquid Carbonic Corp., 637

F.2d 1001, 1005 (5th Cir. 1981).

     Notwithstanding these arguments, it is not manifest to this

Court that the arbitrator disregarded the applicable law in

finding that ACET suffered antitrust injury.     The Sherman Act

allows “any person who shall be injured in his business or

property by reason of anything forbidden in the antitrust laws”

to bring suit.   15 U.S.C. § 15(a).    Competitor status is not

requisite to establish standing.      See Almeda Mall, 615 F.2d at

354 (the antitrust laws were intended to protect competition, not

necessarily competitors) (emphasis added).     Relief for antitrust

claims is not confined “to consumers, or to purchasers, or to

competitors, or to sellers . . . The Act is comprehensive in its

terms and coverage, protecting all who are made victims of the

forbidden practices.”   Blue Shield of Virginia v. McCready, 457


                                 12
U.S. 465, 472 (1982).

       Furthermore, the facts in Almeda Mall are distinguishable

from those in the instant case.    In Almeda Mall, the malls’

proposed contract offered no real advantage to the consumer–the

malls added nothing to the market and would not be able to offer

consumers a better price for the electricity.    See 615 F.2d at

353.    While ACET does not process gas itself, just as the malls

did not produce electricity, the bundled package of services

offered by ACET adds to the market a different product than that

offered by Duke.    Moreover, consumers may benefit from purchasing

processing in a package with their gathering services, and ACET

is able to offer both services on terms that are profitable to

ACET as well as economically valuable to the consumer.

       A review of the arbitration record, including the pleadings

and exhibits submitted to the arbitrator, transcripts, and the

arbitrator’s award and findings, indicates that the arbitrator

was fully apprised of both parties’ arguments, the applicable

law, and that he developed an extensive familiarity with the

case.    The Court concludes that the arbitrator’s finding that

ACET competes with Duke in the processing market and that ACET

suffered antitrust injury is not obviously erroneous, arbitrary,

or capricious; nor is it evident to this Court that the

arbitrator purposely ignored the applicable law in making the




                                  13
award.6   Accordingly, the district court correctly confirmed the

arbitration award on this issue.

B.   The Arbitrator’s Finding That Duke Possesses Monopoly Power

     in Panola County

     Duke also contends that the arbitrator manifestly

disregarded the law in finding that Duke possesses monopoly power

in the gas processing market in Panola County, and that this

finding is arbitrary and capricious.   Duke asserts that the

arbitrator fundamentally misunderstood “monopoly power” and the

appropriate market for determining the existence of such power.

The record shows, however, that arbitrator in this case was

particularly familiar with the applicable antitrust law, the

parties, and the historical, procedural, and factual context of

the matters in dispute, because he also served as the arbitrator

in the First Arbitration involving antitrust claims by ACET

against Duke.   Furthermore, it was Duke that requested that the

instant dispute be referred to arbitration, even after Duke had

been found to be a monopolist in Panola County in a previous

arbitration before this very arbitrator.   Thus, the Court finds



     6
      See Prestige Ford, 324 F.3d at 396. We do not address the
second step of the manifest disregard analysis, namely whether
the award will result in significant injustice, because that step
is undertaken only when it is first manifest that the arbitrator
acted contrary to the applicable law. We likewise will not
proceed to the “significant injustice” analysis in the following
discussion if it is not warranted by an initial finding of
manifest disregard of the law by the arbitrator.

                                14
unconvincing Duke’s argument that the arbitrator misunderstood

the meaning of monopoly power.

     Moreover, the record indicates that Duke controls

approximately 90-95% of all gas processing in Panola County.

While high market share, in the absence of significant entry

barriers, can “overestimate a firm’s market power,” see Colorado

Interstate Gas Co. v. Natural Gas Pipeline Co. of Am., 885 F.2d

683, 695-696 (10th Cir. 1989), the Supreme Court has held that it

is frequently indicative of monopoly power, see United States v.

Grinnell Corp., 384 U.S. 563, 571 (1966) (“[t]he existence of

such [monopoly] power ordinarily may be inferred form the

predominant share of the market”).    Duke contends there are no

barriers to entry into the Panola County market, and that Duke’s

market power did not prevent ACET from opening its own plant in

Panola County.   However, ACET presented extensive evidence to the

arbitrator in support of its arguments that: the real barrier to

entry into the Panola County market was lack of sufficient gas

volume to offset the capital expense of a new plant, which ACET

argued was a result of Duke’s continuation of UPR’s “Carthage

Vision” contracts; and, that Duke’s contract negotiations with

ACET illustrated Duke’s power to “control prices or exclude

competition.”    See United States v. E.I. duPont de Nemours & Co.,

351 U.S. 377, 391 (1956) (defining “monopoly power” as “the power




                                 15
to control prices or exclude competition”).7

     The Court concludes that it is not manifest that the

arbitrator disregarded the law in finding that Duke retained

monopoly power in Panola County, and that this finding was not

irrational, arbitrary, or capricious.   Accordingly, the district

court did not err in its confirmation of the arbitration award on

this basis.

C.   Arbitrator’s Finding That Duke Engaged in “Exclusionary

     Conduct”

     A finding of monopolization requires proof of exclusionary,

anticompetitive conduct.   Duke argues that the arbitrator’s

finding of fact that Duke engaged in exclusionary conduct was in

manifest disregard of antitrust law.    Duke contends that it did

not refuse to deal with ACET, that any purported refusal to deal

was based on a lawful business purpose, and that ACET’s true

complaint was that Duke simply demanded too high a price.

     A refusal to deal does not, in itself, constitute an

antitrust violation, see United States v. Colgate & Co., 250 U.S.



     7
      Duke suggests that ACET failed to prove that Duke possessed
monopoly power in the relevant market, because ACET did not
submit evidence on this issue and relied completely, as did the
arbitrator, on the finding in the First Arbitration that Duke
held monopoly power. Further, Duke correctly asserts that it
retained the right to any preclusive effect the prior arbitration
award might have afforded. However, the Court observes that the
district court, in its order referring the instant claims to
arbitration, specifically permitted the arbitrator to consider
the record of the First Arbitration and the trial record.

                                16
300, 307 (1919).   In Aspen Skiing Co. v. Aspen Highlands Skiing

Corp., the Supreme Court held that even monopolists are free to

choose with whom they do business, but that businesses may not

refuse to deal with the purpose of creating or maintaining a

monopoly.   472 U.S. 585, 602 (1985); Aladdin Oil Co. v. Texaco,

Inc., 603 F.2d 1107, 1115 (5th Cir. 1979).

     In the recent case of Verizon Communications, Inc. v. Law

Offices of Curtis V. Trinko, L.L.P., No. 02-682, 2004 WL 51011,

at *7 (Jan. 13, 2004), the Supreme Court warned that courts must

be careful in determining that a business’s refusal to deal is

based on anticompetitive motives versus a valid business

strategy.   In Verizon, the Court determined that Verizon’s

refusal to offer certain communications services was not

anticompetitive.   However, in coming to this conclusion, the

Court observed that Verizon’s challenged conduct did little to

support a suspicion of anticompetitiveness.    For example, unlike

the defendant in Aspen Skiing, 472 U.S. 585 (1985), Verizon had

no prior course of dealing with its rival that it unilaterally

terminated.   Verizon, No. 02-682, 2004 WL 51011, at *7.    Further,

the Court emphasized that the presence of a regulatory structure,

which monitors and enforces fair dealing in the industry, was of

particular importance in determining that there was no

anticompetitive harm to Verizon’s rival.     Id., at *8.   The Court

stated that when there is not a built-in regulatory scheme that

                                17
performs an antitrust function, the benefits of enforcing the

antitrust laws are worth its disadvantages.   Id.

     In the present case, the arbitrator found that Duke had

engaged in exclusionary conduct, stating that Duke had refused to

“negotiate fairly and in good faith” with ACET “in order to

prevent [ACET] from competing with Duke . . . and in order to

maintain a supra competitive price for gas processing in Panola

County,” and that this refusal to deal represented a “willful

maintenance of Duke’s monopoly power in the relevant market and a

violation of the Sherman Antitrust Act,” without any “lawful

business justification.”   See Taylor Publ’g Co. v. Jostens, Inc.,

216 F.3d 465, 475 (5th Cir. 2000) (the conduct of a business must

have a “rational business purpose other than its adverse effects

on competitors,” or it will be deemed exclusionary).   The record

shows that ACET presented considerable evidence to the arbitrator

that Duke refused to deal with ACET for anticompetitive reasons.

Among this evidence was testimony that Duke was concerned that

ACET’s increased presence in the Panola County market would

inject added competition into the market.   In addition, ACET

submitted evidence to the arbitrator that Duke intentionally

excluded ACET from the market, not only by demanding a high price

for additional capacity, but also by proposing an array of

contract terms that Duke knew were completely unviable to ACET.

     Courts admittedly must be cautious in finding exception to


                                18
the right to refuse to deal.   See Verizon, No. 02-682, 2004 WL

51011, at *6.   However, the Court notes that Duke refused to deal

in the context of a prior course of dealing with ACET.   Further,

there was no regulatory regime in this case to ensure Duke’s

actions were competitive.   See id., at *8.   Having willingly

submitted its case to arbitration, Duke left it to the arbitrator

to determine whether the protection of the antitrust laws was

warranted in this case.   The arbitrator made the initial factual

findings that Duke was a monopoly, that it refused to deal with

ACET by acting in bad faith and offering contract terms that were

anticompetitive, and that Duke had no valid business

justification for refusing to deal with ACET.   Finally, based on

the sizable amount of evidence proffered by ACET, the arbitrator

found that Duke’s exclusionary conduct was illegal under the

Sherman Act.

     This Court observes that the arbitrator, in coming to its

finding, was well-versed in the legal elements that constituted

exclusionary, anticompetitive conduct, as well as the facts of

the case.   The Court concludes that a reasonable arbitrator could

have found that Duke’s conduct was anticompetitive and in

furtherance of its monopoly power under the exception noted in

Aspen Skiing.   Accordingly, this Court determines that the

arbitrator’s factual finding of exclusionary conduct was not

clearly erroneous, nor was it in manifest disregard of the law.


                                19
The district court was correct in its confirmation of the

arbitration award with regard to this finding.

D.   The Arbitrator’s Award of a Contractual Remedy

1.   Public Policy

     Duke further claims that the district court erred in

confirming the arbitration award, because the remedy fashioned by

the arbitrator violates public policy.      The award ordered Duke,

by mandatory injunction, to offer ACET a new processing contract

for additional capacity under the same terms as the 1997 contract

between ACET and UPR, but which incorporated the more competitive

prices of the Pennzoil contract cited by ACET in the arbitration

proceedings.   Duke contends that this contract erects market-

entry barriers “through arbitrator-created price controls,

effectively thwarting the introduction of competition into the

market.”   In making this argument, Duke principally relies on a

legal treatise, which discusses an injunction that required a gas

pipeline monopoly to grant capacity to a plaintiff at judicially-

determined prices:

     Such a solution is nothing less than price regulation
     of the kind undertaken by regulatory agencies—something
     for which both the federal courts and the antitrust
     litigation process are extremely ill-suited and which
     is, in any event, inconsistent with the antitrust’s
     fundamental “market” orientation to problems of lack of
     competition. The second problem . . . is that the
     order either removes or reduces the plaintiff’s
     incentive to develop its own independent capacity for
     transporting gas to the market.

3A AREEDA & HOVENKAMP, ANTITRUST LAW (2d ed. 2002).

                                   20
     As we have previously noted, this Court does not find error

in the findings of the arbitrator that Duke possessed monopoly

power, that Duke’s contract negotiations with ACET were in bad

faith and with the intent “to prevent [ACET] from competing with

Duke . . . and in order to maintain a supra competitive price for

gas processing in Panola County.”   Thus, the arbitrator found

that ACET was unable “to develop its own independent capacity for

transporting gas into the market” due to Duke’s exclusionary

conduct, see id., and that Duke’s contract terms and negotiations

were actually harming or decreasing competition in Panola County.

Rather than thwarting the introduction of competition into the

market, as asserted by Duke, the contract set out in the award

was created to “restore competition in the market.”   See Pac.

Coast Agric. Export Assoc. v. Sunkist Growers, Inc., 526 F.2d

1196, 1208 (9th Cir. 1975) (injunction, which prevented a

producer from refusing to sell to qualified exporters, and

directing that price be determined by court-devised formula, was

well within the court’s broad remedial discretion).   Further,

“[i]njunctive remedies under § 16 of the Clayton Act may be as

broad as necessary to ensure that the ‘threatened loss or damage’

does not materialize or that prior violations do not recur.”

Woolen v. Surtran Taxicabs, Inc., 801 F.2d 159, 167 (5th Cir.

1986).

     The Court also notes that Dukes’s blanket assertion that,


                               21
“assuming monopolization of a relevant market, any arbitrator-

imposed remedy would impact the future of that market for all

consumers,” is contradicted by Duke’s specific request of a

contractual remedy (emphasis added).   In the pleadings submitted

to the arbitrator, Duke explicitly requests that, should the

arbitrator grant injunctive relief, that he structure a “new

processing contract that contains appropriate and reasonable

terms that will remedy the alleged antitrust injury.”   Duke

proposed that the arbitrator appoint a consultant knowledgeable

in the gas market to assist him in determining reasonable

contract terms.   The arbitrator, however, ultimately decided the

appointment of a consultant would result in undue delay and “add

nothing to the resolution of the issue.”   As this arbitrator

possessed an intense familiarity with the parties, facts, and

particular market at issue, his decision to devise the award

without the assistance of a consultant was proper.

     Consequently, the Court concludes that the arbitrator heeded

the principles of antitrust law in fashioning the contractual

award, and that the award does not violate public policy.   The

district court did not err in confirming the award on these

grounds.

2.   Arbitrator’s Authority

     Finally, Duke claims that the district court should have

vacated the award because the arbitrator exceeded his authority


                                22
by granting ACET more relief than it requested.     Duke asserts

that throughout this dispute, ACET asked for a contract that

would be exactly like the one UPR granted to Pennzoil.     However,

the arbitrator ordered a contract containing the lower price of

the Pennzoil contract, but having the same terms as the UPR-ACET

1997 contract.   Duke argues that the combination of the ACET

contract terms with the Pennzoil contract prices made for a

contract that is actually more favorable to ACET than the

Pennzoil-type contract requested by ACET.

     An arbitrator does not exceed his authority as long as his

findings are reasonable and supportable by law or custom in the

field.   See Int’l Union of Elec., Radio & Machine Workers, AFL-

CIO-CLC v. Ingram Mfg. Co., 715 F.2d 886, 891-892 (5th Cir.

1983); see also 9 U.S.C. § 10(a).      With regard to relief in

antitrust cases, this Court recognizes that injunctive relief may

be as broad as necessary to correct or prevent antitrust

violations.   See Woolen, 801 F.2d at 167.

     At the close of arbitration, neither Duke nor ACET got

everything they petitioned for.    ACET did not obtain a long-term

contract as it requested and which is customary in the gas

industry.   Duke requested a contractual remedy, and even

suggested that an informed party set out contract terms.     The

mere fact that the arbitrator did not accept the particular

contract terms proposed by Duke, and that ACET, as the victim of


                                  23
monopolist conduct, benefitted from the contract set out in the

award, does not signify that the contract terms were unreasonable

or that arbitrator overstepped his authority.8    Conversely, the

Court finds that the arbitrator merely tailored the contractual

award to rectify anticompetitive conduct by Duke in the Panola

County market.     Accordingly, the Court concludes that the

district court properly confirmed the arbitration award with

regard to the injunctive relief granted by the arbitrator.

IV.   CONCLUSION

      Based on the foregoing analysis, the Court concludes that

the district court did not err in confirming the arbitration

award.    The arbitrator was mindful of and adhered to the

applicable law, and did not exceed his authority.     The

arbitrator’s findings at issue on appeal were neither arbitrary

or capricious, nor violated public policy.     As a result, this

Court AFFIRMS the district court’s confirmation of the

arbitration award.

AFFIRMED.




      8
      But see Totem Marine Tug & Barge, Inc. v. North Am. Towing,
Inc., 607 F.2d 649, 652 (5th Cir. 1979) (award of arbitration
panel of an unrequested amount of damages that was three times
larger than any item claimed was improper).

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