and 02-2898 CTF HOTEL HOLDINGS, INC v. Marriott International, Inc.

PRECEDENTIAL
UNITED STATES COURT OF
APPEALS
FOR THE THIRD CIRCUIT
No. 02-2732 and 02-2898
CTF HOTEL HOLDINGS, INC.,
v.
MARRIOTT INTERNATIONAL, INC.;
RENAISSANCE HOTEL OPERATING
COMPANY;
AVENDRA L.L.C.
Marriott International, Inc.,
Renaissance Hotel Operating
Company,
Appellants No. 02-2732
CTF Hotel Holdings, Inc.,
Cross-Appellant No. 02-2898
On Appeal from the United States
District Court
for the District of Delaware
(Civil Action No. 02-CV-271)
District Judge: Hon. Sue L. Robinson
Argued: November 3, 2003
Before: McKEE, SMITH and WEIS,
Circuit Judges.
(Opinion Filed: August 23, 2004)
EMM ET T. FLOOD, ESQ. (Argued)
GREGORY B. CRAIG, ESQ.
KENNETH C. SMURZYNSKI, ESQ.
BRENDAN V. SULLIVAN, JR., ESQ.
Williams & Connelly LLP
725 12th Street, N.W.
Washington, DC 20005
DANIEL A. DREISBACH, ESQ.
JESSE A. FINKELSTEIN, ESQ.
Richards, Layton & Finger, P.A.
P.O. Box 551
Wilmington, DE 19899
Attorneys for Appellants and Cross-
Appellees,
Marriott International, Inc., and
Renaissance Hotel Operating Co.
JONATHAN J. LERNER, ESQ.
(Argued)
MAURA B. GRINALDS, ESQ.
TIMOTHY G. NELSON, ESQ.
Skadden, Arps, Slate, Meagher & Flom
LLP
4 Times Square
New York, NY 10036
EDWARD P. WELCH, ESQ.
STEPHEN D. DARGITZ, ESQ.
Skadden, Arps, Slate, Meagher & Flom
LLP
1 Rodney Square
P.O. Box 636
Wilmington, DE 19899

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Attorneys for Appellee and Cross-
Appellant,
CTF Hotel Holdings, Inc.
OPINION OF THE COURT
McKEE, Circuit Judge.
We are asked to determine if the
District Court erred in ruling that CTF
Holdings, Inc., was not obligated to
arbitrate its breach of contract dispute with
Marriott International and Renaissance
Hotels (together “Marriott”). We are also
asked to determine if the court erred in
staying that litigation pending resolution of
related arbitration between Marriott and
Hotel Property Investments Ltd. (“HPI”).
For the reasons that follow, we will affirm
the court’s ruling that CTF was not
required to go to arbitration, but we will
reverse the District Court’s decision to stay
CTF’s suit against Marriott for breach of
contract pending resolution of Marriott’s
arbitration with HPI.
I. FACTS AND PROCEDURAL
HISTORY
In 1993, Renaissance signed an
agreement with CTF to manage the 20
CTF hotels at issue here (“the CTF Master
Agreement”).1 In 1995, Renaissance
signed an agreement with HPI to manage
44 other hotels (“the HPI Master
Agreement”). Marriott International
purchased Renaissance in 1997 and
continued to operate it as a wholly-owned
subsidiary. In 1999, Marriott, HPI and
CTF entered into an agreement governing
all of the aforementioned 64 hotels and
incorporating the CTF and HPI Master
Agreements (“the 1999 Agreement”).2
Section IX.K of the 1999
Agreement addresses dispute resolution
and states:
Governing Law ; Dispute
Resolution. . . . In the event
of any dispute or difference
arising out of or relating to
this Agreement, if such
dispute or difference relates
to or arises out of a Hotel
owned or leased by CTF (or
otherwise governed by the
CTF Master Agreement),
then such dispute or
difference shall be subject to
the dispute resolution
provisions in the CTF
1 Renaissance Hotel was then known as
“Ramada Hotel Operating Company” and
CTF was then known as “Stouffer Hotel
Holdings, Inc.” JA 211.
2 The 1999 Agreement was produced
after CTF notified Marriott that Marriott
had breached the CTF Master Agreement
in 1998, and gave Marriott a final notice of
default in April 1999.

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3
Master Agreement;3
and if such dispute or
difference relates to
or arises out of a
Hotel owned o r
leased by HPI (or
otherwise governed
by the HPI Master
Agreemen t), then
such dispute or
difference shall be
subject to the dispute
resolution provisions
in the HPI Master
A g r e e m e n t . 4
Nothing herein is
intended to require
arbitration of any
dispute under the
C T F M a s t e r
Agreement or to
limit any right any
party may have to
proceed in federal or
state court on any
dispute under the
C T F M a s t e r
Agreement.5
The CTF Master Agreement is
silent as to the duty to arbitrate and
therefore imposes no such obligation.
However, the HPI Master Agreement
contains the following section requiring
arbitration:
9.6 Governing Law :
Arbitration: Consent to
Jurisdiction. The parties
hereto shall use their best
efforts to settle any disputes
or differences arising out of
o r r e l a t i n g t o t h i s
Agreement. . . . If they do
not reach [a] solution within
a period of thirty (30) days,
t h e n t h e d i s p u t e or
difference shall be finally
settled by arbitration in
accordance with the rules of
the American Arbitration
Association.
In 2001 and 2002, CTF and HPI
began questioning Marriott’s performance
under the 1999 Agreement, and in March
2002, CTF notified Marriott that it was in
default under that Agreement.6 Marriott
thereafter initiated arbitration against CTF
and HPI seeking declaratory relief
regarding the issues that had been
identified in the default notice. One such
issue involved proceeds from an audio-
visual program conducted in certain hotels
3 We shall refer to the portion of
Section IX.K up to this footnote as
“Clause 1."
4 We shall refer to the portion of
Section IX.K from the end of Clause 1 to
this footnote as “Clause 2.”
5 We shall refer to the portion of
Section IX.K from the end of Clause 2 to
this footnote as “Clause 3.”
6 This was the second notice of default
that CTF had issued Marriott. See supra
note 2.

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4
operated by Marriott (the “Molloy
dispute”). Another issue involved the
scope of CTF’s and HPI’s rights to review
and audit the amount of unrestricted
allowances Marriott received under its
management agreements (the “audit
dispute”).
HPI did not dispute that it was
obligated to arbitrate the Molloy and audit
disputes with Marriott under the 1999
Agreement. However, CTF maintained
that it was not obligated to arbitrate. It
filed a 21-count complaint against Marriott
and a third defendant, Avendra LLC,7 in
the District Court. The complaint included
issues involving the Molloy and audit
disputes as well as other claims for relief.8
CTF also petitioned the District Court to
enjoin Marriott’s attempt to require it to
arbitrate its disputes, and Marriott moved
to compel CTF to arbitrate pursuant to the
Federal Arbitration Act, 9 U.S.C. § 4.
As noted earlier, the District Court
granted CTF’s motion to enjoin arbitration
of its claims and denied Marriott’s motion
to compel CTF to arbitrate. However, the
court then stayed litigation of CTF’s
breach of contract suit pending the
resolution of Marriott’s arbitration with
HPI. The court explained that it was doing
so “in order to promote some efficiencies
of judicial administration and in light of
the participation in this litigation of
defendant Avendra (a non-party to the
Master and 1999 Agreements).”
Thereafter, Marriott appealed the
court’s refusal to compel CTF to arbitrate,
and CTF cross-appealed the court’s order
staying CTF’s breach of contract suit
pending resolution of the arbitration
between Marriott and HPI.9
7 Marriott describes Avendra as “an
independent company founded by Marriott
International, Inc., Hyatt Corporation, Bass
Hotels & Resorts, Inc., Fairmont Hotels
Inc., and Club-Corp., Inc. to provide
centralized procurement services with
improved quality and pricing of goods and
services through the aggregation of
purchasing power.” Appellant’s Br. at 6.
8 Count 2 of the complaint raises the
disputes over both the audit provision and
the returns from the Molloy program.
CTF’s complaint also states the following
claims against Marriott: breach of contract,
breach of fiduciary duty, intentional
m i s r e p r e s e n t a t i o n , n e g l i g e n t
misrepresentation, fraud, conversion, and
breach of the covenant of good faith and
fair dealing. The other counts in the
complaint accuse Marriott International
and Avendra of aiding and abetting breach
of fiduciary duty and tortious interference
with contract, and state claims against all
three defendants for unjust enrichment,
civil RICO violations, and Robinson-
Patman Act violations.
9 Marriott also filed a motion to dismiss
CTF’s appeal arguing that the District
Court’s stay was not a final order. We
consider Marriott’s motion to dismiss the
appeal together with the merits.

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II. JURISDICTION
We may review the denial of
Marriott’s motion to compel arbitration
under 9 U.S.C. § 16(a)(1)(B), which
provides for jurisdiction over appeals from
orders “denying a petition under [9 U.S.C.
§ 4] to order arbitration to proceed[.]”
Marriott questions whether we have
jurisdiction over CTF’s cross-appeal of the
District Court’s stay, and has moved to
dismiss CTF’s appeal for lack of subject-
matter jurisdiction. Marriott argues that
the stay is not a final order and is therefore
not appealable. We agree that a stay is
usually not a final order because it
provides only a temporary respite from
litigation. Marcus v. Twp. of Abington, 38
F.3d 1367, 1370 (3d Cir. 1994). However,
when a stay amounts to an effective
dismissal of the underlying suit, it may be
subjected to appellate review. Cheyney
State Coll. Faculty v. Hufstedler, 703 F.2d
732, 735 (3d Cir. 1983) (citing Moses H.
Cone Hosp. v. Mercury Constr. Corp., 460
U.S. 1 (1983)); see also United States v.
Spears, 859 F.2d 284, 287 (3d Cir. 1988)
(holding that appellate review was
effectively foreclosed unless we exercised
pendent jurisdiction because the issues
would become moot and untouchable
because of the procedural limbo in which
the decision placed the case). We have
also recognized that an indefinite stay
order that unreasonably delays a plaintiff’s
right to have its case heard is appealable.
Hufstedler, 703 F.2d at 735; see also
Haberern v. Lehigh & New England Ry.,
554 F.2d 581, 584 (3d Cir. 1977) (holding
that a stay order of indefinite length which
singles out a claim for extended delay,
while others of a similar nature proceed, is
appealable).
Here, the District Court decided
two important legal issues. First, it found
the 1999 agreement did not require CTF to
arbitrate the Molloy and audit disputes in
CTF’s complaint. Second, it delayed
CTF’s litigation so that it would not
proceed until after the arbitration between
HPI and Marriott was resolved. In a very
practical sense, CTF – which admittedly
has the right to bring suit in the federal
court – has been blocked from proceeding
in that forum until the issues are resolved
in the arbitration.
The stay order at issue here is not
“indefinite” per se because the District
Court stated that it would “reconsider [the
stay] if it appears that the arbitration is not
proceeding apace.” There is, however, no
way of foretelling how long CTF’s suit
must remain in limbo. Moreover, we see
no way for CTF to attempt to expedite
HPI’s arbitration with Marriott because
CTF is not a party to it.
If CTF’s suit must suffer
indeterminate delay pending the outcome
of HPI’s arbitration with Marriott, CTF
will be without any way of challenging the
propriety of the District Court’s stay or the
procedural limbo that inevitably results
from it. CTF will certainly not be able to
challenge the order at the conclusion of
that arbitration because the stay will
become moot and unreviewable. Time
only runs in one direction. Accordingly,
we can not correct any error the District

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6
Court may have made in staying CTF’s
suit unless we review it now.
We have recognized the concept of
pendent appellate jurisdiction where a case
is “rife with special circumstances which
bring it outside the general rule and so
limit its precedential value as to not
measurably weaken our continued
aversion to piecemeal appeals.” Haberern,
554 F.2d at 584. However, in Swint v.
Chambers Cty. Comm’n., 514 U.S. 35, 48
(1995), the Supreme Court “counsel[ed]
resistance to expansion of appellate
jurisdiction . . . ”. In doing so, however,
the Court noted that it had “not universally
required courts of appeals to confine
review to the precise decision
independently subject to appeal.” Id. at 50
(citing Thornburgh v. American College
of Obstetricians and Gynecologists, 476
U.S. 747, 755-57 (1986)). Swint did not
resolve “whether or when it may be proper
for a court of appeals, with jurisdiction
over one ruling, to review, conjunctively,
related rulings that are not themselves
independently appealable.” 514 U.S. at
50-51.
Following Swint, we concluded that
the Supreme Court had limited the
doctrine of pendent appellate jurisdiction
to two circumstances: “inextricably
intertwined orders or review of the non-
appealable order where it is necessary to
ensure meaningful review of the
appealable order.” E.I. Dupont de
Nemours & Co. v. Rhone Poulenc Fiber &
Resin Intermediates, S.A.S., 269 F.3d 187,
203 (3d Cir. 2001). As Judge Smith
correctly points out, the merits of the
District Court’s stay order here involve
“consideration of myriad factors affecting
judicial economy, the ‘hardship or
inequity’ that Marriott would face in going
forward with the litigation, and the injury
that a stay would inflict on CTF.”
Concurring and Dissenting Op. at 2 (citing
Landis v. N. Am. Co., 299 U.S. 248, 254-
55 (1936)). As our colleague also points
out, those “considerations are distinct
from the questions of contract
interpretation presented in Marriott’s
appeal.” Id. The fact that they are
“distinct” does not mean, however, that
they are not “intertwined.”
Since the District Court’s stay order
would be unreviewable and moot at the
conclusion of HPI’s arbitration with
Marriott, the umbilical connection
between it and the District Court’s stay is
not neatly severed. As will be evident
from our discussion below, “there is
sufficient overlap in the facts relevant to
both the appealable and non-appealable
issues to warrant plenary review.” Palcko
v. Airborne Express, Inc., 372 F.3d 588,
594 (3d Cir. 2004) (emphasis in original)
(quoting E.I. Dupont de Nemours & Co.,
269 F.3d at 203). The case is therefore
“rife with special circumstances” allowing
for appellate review without running afoul
of this court’s “continued aversion to
piecemeal appeals[,]” Haberern, 554 F.2d
at 584, or the Supreme Court’s holding in
Swint. In addition, at this point of the
proceedings, we are unable to determine
what preclusive effect, if any, the
arbitration may have on CTF’s suit in the
District Court. Accordingly, we hold that

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7
we may properly exercise pendent
appellate jurisdiction over the District
Court’s order staying that suit while HPI
proceeds with its arbitration against
Marriott.
III. DISCUSSION
A. Marriott’s Appeal10
Marriott appeals the District
Court’s conclusion that the Agreements
allow CTF to litigate its claims and do not
require arbitration. Marriott argues that
t h e d i s p u t e s a t is su e i n v ol v ed
interpretation of provisions of the 1999
Agreement, and that CTF must arbitrate
any disputes relating both to CTF and HPI
hotels under the dispute resolution
provision in that agreement.
“Arbitration is strictly a matter of
contract. If a party has not agreed to
arbitrate, the courts have no authority to
mandate that [it] do so.” Bel-Ray Co. v.
Chemrite, 181 F.3d 435, 444 (3d Cir.
1999). Principles of contract law therefore
govern our inquiry. When interpreting
contracts, we are required to read contract
language in a way that allows all the
language to be read together, reconciling
conflicts in the language without rendering
any of it nugatory if possible. New Castle
Cty. v. National Union Fire Ins. Co., 174
F.3d 338, 349 (3d Cir. 1999).
Thus, Section IX.K of the 1999
Agreement controls our analysis. Marriott
argues that Clause 2, which states that a
dispute relating to a Hotel owned or leased
by HPI must be resolved under the HPI
Master Agreement, governs the disputes at
issue. According to Marriott, the instant
disputes relate to both HPI hotels and CTF
h o tels as is evident from th e
litigation/arbitration involving M arriott,
CTF, and HPI. Therefore, argues M arriott,
its dispute with CTF has to be governed by
Clause 2 and the HPI Master Agreement
controls. As noted above, the HPI Master
Agreement contains a dispute resolution
clause requiring “the parties [thereto]” to
arbitrate disputes that can not be settled by
the good faith efforts of those parties.
However, CTF was not a party to
that agreement. Moreover, Marriott’s
interpretation ignores that Clause 1 of
Section IX.K is also relevant to the
disputes at issue here because they relate
to CTF hotels as well as HPI hotels and
thus implicate the CTF Master Agreement.
As noted above, the CTF Master
Agreement does not require arbitration of
disputes between CTF and Marriott. As
also noted above, we are obligated to
interpret contracts in a manner that gives
meaning to every word. If we read
Clauses 1 (“such dispute . . . relates to . . .
a Hotel owned or leased by CTF”) and 2
(“such dispute . . . relates to . . . a Hotel
owned or leased by HPI”) as mutually
exclusive, the confusion disappears along
with the conflict. Under this
interpretation, where a dispute relates to
CTF, the CTF Master Agreement governs
10 We exercise plenary review over the
District Court’s legal conclusions about
contract provisions for arbitration. Harris
v. Green Tree Fin. Corp., 183 F.3d 173,
176 (3d Cir. 1999).

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and there is no duty to arbitrate pursuant to
Clause 1; but where a dispute relates to
HPI, the HPI Master Agreement governs
and there is a duty to arbitrate pursuant to
Clause 2. Accordingly, under New Castle
County, we read Clauses 1 and 2 as
mutually exclusive in order to eliminate
the conflict and give meaning to every
word in the relevant clauses of the 1999
Agreement.
M o r e o v e r , t h e r e s u l t i n g
interpretation is eminently reasonable.
The 1999 Agreement maintained the
separate CTF and HPI Master Agreements
with their corresponding dispute resolution
provisions. As CTF observes, “the lack of
a unitary arbitration provision for disputes
common to CTF and HPI in Section IX.K
is no accident . . . .” Brief at 21. Clause 3
makes this crystal clear. As noted above,
Clause 3 provides that: “Nothing herein is
intended to require arbitration of any
dispute under the CTF Master Agreement
or to limit any right any party may have to
proceed in federal or state court on any
dispute u n de r t he C TF M aste r
Agreement.” Marriott’s interpretation
requires that we strike Clause 3 from the
1999 Master Agreement. Of course, we
can not do that.
If the parties really intended the
result Marriott urges upon us here, they
could easily have provided for it by simply
requiring that any dispute that similarly
involves Marriott’s operation of both CTF
and HPI hotels be governed by the HPI
Master Agreement or be subject to
arbitration, notwithstanding anything to
the contrary in the CTF Master
Agreement. No such language appears,
and Clause 3 is precisely to the contrary.
That Clause clearly provides for certain
disputes arising under the 1999 Agreement
to be excepted from arbitration. It
therefore vitiates Marriott’s argument that
Clause 2 gives rise to a presumption that
all disputes arising under the 1999
Agreement must be arbitrated. Such a
presumption is applicable only in “the
absence of any express provision
excluding a particular grievance from
arbitration. . . .” AT & T Tech., Inc. v.
Comm. Workers of America, 475 U.S. 643,
650 (1986) (internal citation and quotation
marks omitted). Moreover, even if the
disputes regarding CTF hotels are identical
to those regarding HPI hotels, CTF’s claim
pertains only to its hotels. Such disputes
are subject to the CTF Master Agreement,
and CTF is therefore not required to
arbitrate.
Marriott argues that evidence
outside the parties’ contracts establishes
that CTF and HPI have an identity of
interests that makes them functionally the
same corporation, thus binding CTF to
HPI’s contractual obligation to arbitrate
disputes. Marriott also argues that, even if
CTF is not actually contractually obligated
to arbitrate these disputes, CTF should be
estopped from litigating its claim because
the parties’ correspondence indicates that
it relied on the HPI Master Agreement to
assert its rights. Both arguments require
us to consider evidence extrinsic to the
written contract. Such evidence is
admissible to explain the terms of a written
contract when there is ambiguity in the

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contract. 58 N.Y. JUR. 2d Evidence and
Witnesses §586 (2003).11 The contracts
here leave no ambiguity regarding the
t er m s of the dispute resolutio n
mechanisms. Therefore, extrinsic
e v i d e n c e s u c h a s t h e p a rt i e s’
correspondence can not properly be
considered. This leaves these arguments
without any foundation.
Thus, the District Court correctly
held that CTF is not required to arbitrate
its dispute with Marriott, and it properly
denied Marriott’s motion to compel
arbitration and enjoined the arbitration of
CTF’s disputes.
B. The Cross-Appeal
As we noted earlier, CTF cross-
appeals the District Court’s stay of its
claim against Marriott and Avendra. It
argues that the District Court abused its
discretion by staying litigation pending
resolution of the separate arbitration
proceeding between Marriott and HPI.
CTF claims that the stay abrogated its right
to resolve its disputes through litigation, a
right that the District Court acknowledged
in denying Marriott’s motion to compel
arbitration. According to CTF, the District
Court took away with one hand the very
thing it awarded with the other. We
agree.12
The District Court identified two
grounds for staying the litigation,
Avendra’s participation and judicial
efficiency. Neither justifies the stay.
Judicial efficiency does not, by
itself, allow a federal court to refuse to
exercise its jurisdiction in favor of
proceedings in an alternative forum. The
Supreme Court has stated: “[g]enerally, as
between state and federal courts, the rule is
that the pendency of an action in the state
court is no bar to proceedings concerning
the same matter in the Federal court
having jurisdiction,” noting that federal
courts have a “virtually unflagging
obligation . . . to exercise the jurisdiction
given them.” Colorado River Water
Conservation Dist. v. United States, 424
U.S. 800, 817 (1976) (internal citations
and quotation marks omitted); see
genera lly E RWIN C HEMERINSKY,
FEDERAL JURISDICTION § 14.2 (3d ed.
1999). The Court later reaffirmed this
holding, stating that its task as a reviewing
court was “not to find some substantial
reason for the exercise of federal
jurisdiction by the District Court; rather,
the task is to ascertain whether there exist
‘exceptional’ circumstances, the ‘clearest
of justifications,’ that can suffice under
Colorado River to justify the surrender of
that jurisdiction.” Moses H. Cone Hospital
v. Mercury Const. Corp., 460 U.S. 1, 25-
26 (1983) (citing to Colorado River).
Indeed, if the reverse were true, federal 11 The parties agreed that disputes will
be governed by New York law in Section
IX.K of the 1999 Agreement.
12 We review to see if the District Court
abused its discretion in issuing the stay.
Moses H. Cone Memorial Hosp. v.
Mercury Construction Corp., 460 U.S. 1,
19 (1983).

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10
courts would be able to rely upon judicial
economy and stay litigation whenever
plaintiffs elected to file state actions
related to their pending federal claims. See
FEDERAL JURISDICTION, supra, at § 14.2
(“[R]equiring federal court dismissal
would give litigants a powerful tool to
keep cases out of federal court or remove
cases to state court simply by filing a
parallel suit in state court.”)
We recognize the potential for
judicial efficiency that lies in possible
collateral estoppel because the arbitrator
could make determinations relevant to
CTF’s federal claims. However, we have
already explained that staying litigation for
that reason effectively denies CTF its
contracted for day in court. The right to
litigate would mean little if the substance
of the litigation, when CTF’s day in court
finally dawns, may be driven by something
that may have occurred during arbitration.
Similarly, Avendra’s presence does
not provide a satisfactory basis for the
stay. The Supreme Court has said that,
when a District Court decides whether to
stay a suit pending the outcome of another
suit in the same forum, “the suppliant for
a stay must make out a clear case of
hardship or inequity in being required to
go forward. . . .” Landis v. North Am. Co.,
299 U.S. 248, 255 (1936). Although the
situation here differs because the District
Court had to decide whether to stay this
litigation pending the outcome of an
arbitration, the same logic applies. The
opposing party must state a clear
countervailing interest to abridge a party’s
right to litigate. Marriott argues that it can
make out the clear hardship or inequity
needed to support the District Court’s stay
and, unlike Avendra, it filed a formal
motion in support of this argument.
However, the District Court did not stay
the litigation based on any hardship to
Marriott; it stayed the litigation based on
Avendra’s presence in the litigation and
considerations of judicial efficiency.
Accordingly, any hardship Marriott may
now claim is not before us.
Nor is there any evidence to support
a finding of hardship or inequity to
Avendra in the record. Avendra stated “a
preference” that the arbitration proceed
first when it spoke briefly to the District
Court at a hearing on Marriott’s motion to
compel arbitration and CTF’s motion for
preliminary injunction. The basis for its
preference was that it would be forced to
defend itself twice – once in arbitration,
once in litigation – unless the litigation
was stayed in favor of the arbitration. It
believed that the arbitration was likely to
settle claims relating to it and this would
prevent it from ever having to deal with
CTF or defend in the litigation. However,
Avendra’s convenience can not defeat
CTF’s contractual right to litigate.
Moreover, it is not at all clear that it would
actually be inequitable to expect Avendra
to defend itself against two claims brought
by two separate corporations.
IV. CONCLUSION
For all of the above reasons, we
will affirm the order of the District Court
denying Marriott’s request to compel

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arbitration against CTF, and we will
reverse the District Court’s order staying
CTF’s litigation against M arriott.
CTF HOTEL HOLDINGS, INC. V.
MARRIOTT INTERNATIONAL, INC.
(NOS. 02-2732 & 02-2898)
SMITH, Circuit Judge, Concurring in Part
and Dissenting in Part:
I agree with the majority that the
contract between the parties is “crystal
clear” that disputes between CTF Hotel
Holdings, Inc. (“CTF”) and Marriott
International, Inc. (“M arriott”) are not
subject to mandatory arbitration. Slip Op.
at 13. I part company with my colleagues
in their decision to exercise jurisdiction
over CTF’s cross-appeal from the District
Court’s discretionary stay order. The
majority correctly observes that “a stay is
usually not a final order because it
provides only a temporary respite from
litigation.” Slip Op. at 7 (citing Marcus v.
Twp. of Abington, 38 F.3d 1367, 1370 (3d
Cir. 1994)). Nevertheless, the majority
concludes that the District Court’s order is
reviewable under the doctrine of pendent
appellate jurisdiction. Because the stay
order in this case is neither “inextricably
intertwined with” nor “necessary to ensure
meaningful review of” the District Court’s
order granting CTF’s motion to enjoin
arbitration and denying Marriott’s motion
to compel arbitration, I respectfully
dissent. E.I. Dupont De Nemours & Co. v.
R hone P o u l e n c F i b e r & R e s i n
Intermediaries, S.A.S., 269 F.3d 187, 203
(3d Cir. 2001) (quoting Swint v. Chambers
County Comm’n, 514 U.S. 35, 50-51
(1995)).
The question whether the District
Court abused its discretion in granting the
stay involves the District Court’s
consideration of myriad factors affecting
judicial economy, the “hardship or
inequity” that Marriott would face in going
forward with the litigation, and the injury
that a stay would inflict on CTF. Landis v.
N. Am. Co., 299 U.S. 248, 254-55 (1936).
These considerations are distinct from the
questions of contract interpretation
presented in Marriott’s appeal. Indeed, the
majority has no difficulty extricating
Marriott’s appeal from CTF’s cross-
appeal. The majority first interprets the
contract between the parties (correctly, I
may add), and then proceeds to the
factually and analytically distinct question
presented in the cross-appeal. The
majority’s opinion demonstrates that it
“can readily decide” the meaning of the
parties’ contract “ w ithout at all
considering” whether the stay order was a
valid exercise of the District Court’s
discretion. E.I. Dupont De Nemours, 269
F.3d at 204 (quoting Rein v. Socialist
People’s Libyan Arab Jamahiriya, 162
F.3d 748, 759 (2d Cir. 1998)); see also In
re Montgomery County, 215 F.3d 367,
375-76 (3d Cir. 2000). Accordingly, the
issues raised in the appeal and the

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cross-appeal are not “inextricably
intertwined.”
Nor is it necessary to exercise
jurisdiction over the cross-appeal in order
to meaningfully adjudicate Marriott’s
appeal. I am sympathetic to the majority’s
concern that staying CTF’s litigation
pending the arbitration between Hotel
Property Investments Ltd. (“HPI”) and
Marriott effectively denies CTF the benefit
of its bargain with Marriott. We have
determined that the parties bargained for a
two-track dispute resolution procedure,
with HPI subject to mandatory arbitration
and CTF free to go to court. Nevertheless,
the freedom from arbitration that CTF
bargained for is not unqualified. Instead,
CTF’s right to litigate its disputes with
Marriott is necessarily subject to the
District Court’s “pow er to sta y
proceedings [which] is incidental to the
power inherent in every court to control
the disposition of the causes on its docket
with economy of time and effort for itself,
for counsel, and for litigants.” Landis, 299
U.S. at 254. Returning the case to the
District Court without disturbing the stay
puts CTF in precisely the position it
bargained for, i.e., that of any other litigant
subject to the ordinary incidents of
litigation, including the court’s inherent
power to control its docket.
T h i s c a s e i s t h e r e f o r e
distinguishable from Palcko v. Airborne
Express, Inc., 372 F.3d 588 (3d Cir. 2004),
decided after oral argument in this case. In
Palcko, the district court denied a motion
to compel arbitration on two grounds: (1)
because the arbitration agreement was
exempted from the coverage of the Federal
Arbitration Act such that arbitration could
not be compelled under Federal law; and
(2) because this FAA exem ption
preempted enforcement of the arbitration
agreement under state law. Id. at 591.
This Court affirmed the district court’s
ruling that the arbitration agreement was
exempted from enforcement under the
FAA, exercising jurisdiction under 9
U.S.C. § 16(a). Palcko, 372 F.3d at 591,
594. We exercised pendent appellate
jurisdiction over the district court’s second
ruling—that t he F AA e x em ption
preempted enforcement of the arbitration
agreement under state law—holding that
review of both issues was “necessary to
ensure meaningful review of the District
Court’s order in its entirety.” Id. at 595.13
In Palcko, the appealable and non-
appealable issues were both necessary
conditions to the same order— the denial
of the motion to dismiss. Resolving either
issue in defendant’s favor would have
required reversal of the order, triggering
arbitration proceedings. Id. at 596
(reversing the district court’s preemption
ruling and remanding for enforcement of
the arbitration agreement under state law).
Had we not exercised jurisdiction over the
district court’s preemption ruling,
defendant would have been required to
defend the discrimination action in federal
district court. If, on a subsequent appeal
13 9 U.S.C. § 16(a) only covers motions
to compel under the FAA, and does not
cover motions to compel under state law.
Palcko, 372 F.3d at 594.

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from a final order in that action, we were
to reverse the district court’s preemption
ruling, the right to arbitration would
already have been lost. A victory at that
stage would be meaningless because the
defendant employer would have already
been subjected to the protracted litigation
that it sought to avoid through the
arbitration agreement.
In this case, the District Court’s
stay order is independent of its order on
Marriott’s motion to compel, and was not
a necessary condition to its refusal to
compel arbitration. Thus, unlike the
situation in Palcko, resolution of the non-
appealable issue does not necessitate a
particular ruling on the appealable order.
And as discussed above, the stay order
does not threaten to destroy CTF’s right to
litigate. CTF is not a party to the HPI
arbitration, and the stay order does not
force CTF into arbitration. Although
CTF’s lawsuit has been delayed, CTF’s
right to litigate remains intact, subject to
the District Court’s inherent power to
manage its docket.
I am also sympathetic to the
majority’s concern that the District Court’s
stay order may expire and become moot
before an appealable final order can issue.
Slip Op. at 8.14 This, however, is true of
every stay order, and therefore does not
support jurisdiction by itself. E.g.,
Marcus, 38 F.3d at 1370 (stay pending
completion of parallel state court criminal
proceedings not appealable). Ordinarily,
we guard against the danger of a stay order
becoming “effectively unreviewable” by
applying the collateral order doctrine. See
Moses H. Cone Memorial Hospital v.
Mercury Constr. Corp., 460 U.S. 1, 11-12
(1983) (citing Cohen v. Beneficial Indus.
Loan Corp., 337 U.S. 541 (1949)). An
order staying litigation pending other
proceedings may be an appealable
collateral order where it puts a litigant
“effectively out of court.” Moses H. Cone,
460 U.S. at 10 & n.11. But where those
other proceedings will have no preclusive
effect on the federal litigation, the litigant
cannot be said to be “effectively out of
court,” and the stay order is not
appealable. Id. at 10, 12; Marcus, 38 F.3d
at 1371; Trent v. Dial Med. of Fla., Inc.,
33 F.3d 217, 221 (3d Cir. 1994).
CTF— the party invoking pendent
appellate jurisdiction—insists that the HPI
arbitration will have no preclusive effect
against CTF in its lawsuit against Marriott.
Accordingly, CTF cannot suggest that the
stay order has put it “effectively out of
court.” Instead, the effect of the stay is
“delay, and delay alone.” Marcus, 38 F.3d
14 Of course, it is also possible that the
stay order will be vacated by the District
Court prior to the termination of the HPI
arbitration, or that CTF and M arriott will
settle their dispute. The potential that
CTF’s cross-appeal will be mooted by the
expiration of the stay must therefore be
balanced against the possibility that the
stay may terminate under circumstances
acceptable to CTF.

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at 1371.15
Because the District Court’s stay
order is not an appealable final or
interlocutory order, and because I believe
that review of the stay order is not
“necessary to ensure meaningful review
of” the order enjoining arbitration, I would
dismiss CTF’s cross-appeal for lack of
jurisdiction.
15 While a stay of indefinite and
unreasonable duration may be appealable,
we are not confronted with such an order
in this case. See Haberern v. Lehigh &
New England Ry., 554 F.2d 581, 584 (3d
Cir. 1977) (vacating stay pending
proceedings that had been ongoing for ten
years and whose “expected longevity . . .
exceed[ed] that of the plaintiff”).

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