CRESCENT BAR – The Ninth Circuit Court of Appeals in San Francisco ruled on Monday that the lawsuit brought by residents of Crescent Bar two years ago against Grant PUD and the Port of Quincy will stay in U.S. District Judge Justin L. Quackenbush's court.

Port of Quincy and Grant PUD had tried to force arbitration and were turned down by Quackenbush. They then appealed to the Ninth Circuit to try to have Quackenbush's decision overturned. A 3-judge panel agreed with Quackenbush that the Port and PUD had waived that right through their own actions.

Residents of Crescent Bar, a Columbia River resort community, filed their lawsuit in an effort to remain at Crescent Bar on land leased from the PUD through the Port. The leases had run out, and the PUD had ordered the residents to vacate.

Up to the point that the Port and PUD went to the appeals court, all of Quackenbush's decisions on substantive issues had favored the residents. He even opined there was evidence to support the residents' claims that the PUD had offered new long-term leases in return for support of its relicensing effort to operate Wanapum and Priest Rapids Dams.

“PUD and Port waited 11 months after the lawsuit was filed to demand arbitration, actively litigating the case in district court,” the Ninth Circuit said. “The parties conducted discovery and litigated motions, including a preliminary injunction and a motion to dismiss. Such activity is inconsistent with preserving the right to compel arbitration.”

The residents filed their lawsuit in January of 2011. Roughly 14 months later, the PUD/Port sought to remove the lawsuit from Quackenbush’s court and compel the parties to enter into arbitration.

According to their attorney Dale Foreman, the residents resisted the PUD/Port attempt to remove the case from federal court because of the potentially enormous expense of arbitration and the potential prejudice to their achievements to date in federal court.

In the summer of 2012, Quackenbush ruled against the PUD/Port on its motion for arbitration. Days later, the PUD appealed the ruling to the Ninth Circuit. In November, the Ninth Circuit heard oral arguments on the appeal.

“The district court properly determined that both PUD and Port waived their right to compel arbitration,” The Ninth Circuit said Monday.

“We agree with the district court that appellees would be prejudiced by compelling them to arbitrate their claims,” the Ninth Circuit added. “A late shift to an arbitrator would force the parties to bear the expense of educating arbitrators and threaten to require the appellees to re-litigate matters decided by the district judge. It would waste the time and money spent by the appellees in federal court.”

In the same Jan. 13 memorandum, the Ninth Circuit said the Port/PUD could re-appeal. But it set strict guidelines for doing so and allowed only 14 days

The Ninth Circuit said a party should seek panel rehearing only if one or more of the following grounds exist:

• A material point of fact or law was overlooked in the decision;
• A change in the law occurred after the case was submitted which
• appears to have been overlooked by the panel; or
• An apparent conflict with another decision of the Court was not
• addressed in the opinion.

“Do not file a petition for panel rehearing merely to reargue the case,” the Ninth Circuit said.

Speaking for the PUD Tuesday, Public Information Officer Thomas Stredwick said the PUD has decided not to pursue that option. He said the PUD will seek to achieve all of its goals in Quackenbush's District Court for the Eastern District of Washington.