Justia Arbitration & Mediation Opinion Summaries

Trinity Energy Services, L.L.C. ("Trinity Energy") and Southeast Directional Drilling, L.L.C. ("Southeast Drilling") were involved in a subcontract for constructing natural gas pipelines. Disputes arose over liability for "stand-by costs" incurred during construction delays. The parties agreed to arbitration, where a panel awarded Southeast Drilling $1,662,000 in stand-by costs from Trinity Energy. Trinity Energy petitioned to vacate the arbitration award, but the district court denied the petition and confirmed the award. Trinity Energy then appealed.The United States District Court for the Northern District of Texas initially denied Trinity Energy's petition to vacate the arbitration award and granted Southeast Drilling's motion to confirm it. Trinity Energy appealed this decision, but the appeal was dismissed as interlocutory by the United States Court of Appeals for the Fifth Circuit. Subsequently, the district court granted Southeast Drilling's cross-motion to confirm the arbitration award, leading to Trinity Energy's timely appeal.The United States Court of Appeals for the Fifth Circuit reviewed the district court's order de novo and emphasized the narrow and deferential standard of review for arbitration awards. The court found that the arbitration panel had construed the subcontract and based its decision on its terms, thus not exceeding its authority under 9 U.S.C. § 10(a)(4). The court also rejected Trinity Energy's argument that the panel manifestly disregarded Texas law, noting that "manifest disregard of the law" is not a valid ground for vacatur under the Federal Arbitration Act. Consequently, the Fifth Circuit affirmed the district court's judgment confirming the arbitration award. Southeast Drilling's request for sanctions against Trinity Energy was denied due to procedural deficiencies. View "Trinity Energy Services v. SE Directional Drilling" on Justia Law

Maria Wilson purchased an insurance policy from Union National Fire Insurance Company (UNFIC) through agent Robin Wilson. The policy covered personal property at 2170A Tillman Chapel Road, which included a house and a travel trailer. Maria, who is illiterate, relied on Robin's verbal description of the policy. After a fire destroyed the house and her personal property, Maria filed a claim, which was denied by UNFIC, citing that she did not live in the house, a purported requirement for coverage.Maria sued UNFIC, Kemper Corporate Services, Robin Wilson, and others in the Circuit Court of Claiborne County, Mississippi, alleging breach of contract, negligence, fraud, and other claims. The defendants removed the case to federal court, asserting diversity jurisdiction and claiming that the non-diverse defendants were improperly joined. The district court agreed, denied Maria's motion to remand, and compelled arbitration based on the policy's arbitration clause. The arbitrator ruled in favor of the defendants, and the district court confirmed the arbitration award.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court erred in denying Maria's motion to remand because non-diverse defendant Robin Wilson was properly joined. The court found that the insurance policy did not clearly require Maria to live in the house for her personal property to be covered, thus her negligence claim against Robin Wilson was viable. Consequently, the Fifth Circuit reversed the district court's denial of the motion to remand, vacated the order compelling arbitration and the confirmation of the arbitration award, and remanded the case to the district court with instructions to remand it to state court. View "Wilson v. Kemper Corporate Services" on Justia Law

Doctors Scott Sullivan and Frank DellaCroce, along with their associated business entities, entered into a turnkey agreement with Stewart Feldman and his associated entities to pool their risks through certain insurance arrangements. The agreement included an arbitration provision. The doctors later alleged that Feldman and his entities misled them about the insurance arrangements and failed to wind down the insurance entities upon request, leading to multiple arbitration proceedings.The United States District Court for the Southern District of Texas was involved in compelling and managing these arbitrations. The court initially allowed multiple arbitrations to proceed simultaneously and later confirmed four arbitration awards, despite their inconsistencies. The district court also issued a stay order to prevent further arbitrations until the existing ones were resolved.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the Glasser, Baker, and Kutcher arbitration awards, finding no grounds under the Federal Arbitration Act to vacate them. The court also affirmed in part the Jones arbitration award but reversed it in part concerning defendant Jeff Carlson, who was not bound by the arbitration agreement. The court vacated and remanded the district court’s order staying further arbitrations, allowing the parties to resolve the inconsistencies among the awards through additional arbitration if they choose. View "Sullivan v. Feldman" on Justia Law

In 2017, Baker Hughes Saudi Arabia Co., Ltd. (Baker Hughes) and Dynamic Industries Saudi Arabia, Ltd. (Dynamic) entered into a subcontract for an oil-and-gas project in Saudi Arabia. The subcontract included provisions for resolving disputes through arbitration, with Dynamic having the option to demand arbitration in Saudi Arabia. If Dynamic did not demand arbitration in Saudi Arabia, either party could initiate arbitration under the rules of the Dubai International Financial Centre’s joint partnership with the London Court of International Arbitration (DIFC-LCIA). In 2021, the United Arab Emirates abolished the DIFC-LCIA and created a new arbitral institution. A contract dispute arose, and Baker Hughes sued in state court, which was then removed to federal court. Dynamic moved to dismiss for forum non conveniens or to compel arbitration under Schedule E of the subcontract. The district court denied Dynamic’s motion, stating that the designated forum no longer existed, making the forum-selection clause unenforceable.The United States District Court for the Eastern District of Louisiana reviewed the case and denied Dynamic’s motion to dismiss or compel arbitration, reasoning that the DIFC-LCIA no longer existed, thus invalidating the forum-selection clause.The United States Court of Appeals for the Fifth Circuit reviewed the case and held that the district court erred in refusing to compel arbitration. The appellate court found that the subcontract’s Schedule E designated only the rules of arbitration, not a specific forum. Even if the DIFC-LCIA was considered the designated forum, the court concluded that the forum-selection clause was not integral to the subcontract. The court reversed the district court’s decision and remanded the case for further proceedings, instructing the district court to consider whether the DIFC-LCIA rules could be applied by another available forum, such as the LCIA, DIAC, or a forum in Saudi Arabia, and to compel arbitration accordingly. The court also partially granted and denied Baker Hughes’s motion to strike portions of Dynamic’s reply brief. View "Baker Hughes v. Dynamic Industries" on Justia Law

The Fifth Circuit held that, because the matter was not ripe at the time the district court entered judgment in this case, the district court's judgment was void for lack of subject matter jurisdiction. Therefore, the court vacated the judgment. The court explained that, even though subsequent intervening events have created a controversy that was now ripe, the court could not retroactively resurrect the district court's void judgment under the facts of this case. Nevertheless, because the basic underlying controversy, originally raised and pursued by these same parties, was now ripe, the court remanded the case to the district court for such orders and proceedings as the district court deemed necessary and appropriate. View "Lower Colorado River Authority v. Papalote Creek II LLC" on Justia Law

Plaintiff filed suit against his former employer, GE, alleging claims of discrimination and retaliation. The district court granted GE's motion to compel arbitration and dismissed the case, only to reopen it later to withdraw its prior order compelling the arbitration. The Fifth Circuit held that the district court lacked subject matter jurisdiction to withdraw its order compelling arbitration and reopen the case due to a default in the arbitral process. Therefore, the Fifth Circuit vacated and remanded for further proceedings, noting that the district court's jurisdiction was limited to determining whether an agreement to arbitrate still existed and enforcing that agreement. View "Salas v. GE Oil & Gas" on Justia Law

Defendant and the chief financial officer of NRMC signed three documents detailing terms upon which defendant would provide audit services for NRMC. Defendant moved to compel arbitration and to stay proceedings in federal district court pending arbitration. The district court denied the motions. At issue in this interlocutory appeal was whether the "minutes rule," also known as the "minutes requirement," under Mississippi law pertains to the issue of the contract's validity, or instead more closely resembles whether the alleged obligor NRMC ever signed the contract. The court concluded that, with respect to the 2010 and 2012 engagement letters, the minutes rule pertains to whether written agreements between NRMC and defendant were formed in each of those years. Therefore, whether written contracts were consummated was a question for the courts rather than an arbitrator. The court also concluded that because of the minutes requirement, the 2010 and 2012 engagement letters were not contracts to which NRMC was a party. Therefore, NRMC was not a party to the arbitration provisions contained in the 2010 and 2012 engagement letters. The court further concluded that the minutes of NRMC's board reflect that an agreement with defendant was reached in 2009. Therefore, the minutes rule does not pertain to that contract's formation. On remand, the district court should determine the scope of the arbitration agreement. Finally, the court concluded that the Mississippi minutes rule was one of general applicability to Mississippi contracts with public entities and the requirement of section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, that courts must place arbitration agreements on an equal footing with other contracts does not foreclose its application in this case. The court affirmed as to the 2010 and 2012 engagement letters, vacated as to the 2009 engagement letter, and remanded. View "Lefoldt, Jr. v. Rentfro" on Justia Law

This case stems from the collapse of Allen Stanford's Ponzi scheme. The court concluded that the Receiver cannot be compelled to arbitrate its claims against any of the defendants; the court did not reach the Receiver's argument that these particular arbitration agreements at issue are additionally unenforceable because they were instruments of the fraud inasmuch as the privacy they provided facilitated the fraud and because the Stanford entities were coerced into accepting them by Stanford as part of his Ponzi scheme; the court also did not reach the Receiver's similar but broader policy argument that the underlying purpose of the federal equity receivership statutes is at odds with the Federal Arbitration Act's, 9 U.S.C. 1 et seq., mandate in favor of arbitration; and the court rejected arguments raised by some of the defendants that the district court’s order exceeded the scope of the court's mandate in Alguire III. The court explained that, because the Receiver properly brings his Texas Uniform Fraudulent Transfer Act, Tex. Bus. & Comm. Code 24.009, claims on behalf of the Stanford International Bank, which did not consent to arbitration with any of the defendant employees, other than Luis Giusti, it cannot be compelled to arbitrate with those defendants. Moreover, because Giusti waived his right to arbitration, the Receiver cannot be compelled to arbitrate its claims against him either. Accordingly, the court affirmed the judgment. View "Janvey v. Alguire" on Justia Law

Plaintiff, individually and on behalf of other similarly situated individuals, filed suit against his former employer, IBC, contending that IBC violated the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., by failing to pay proper overtime rates. The district court denied IBC's motion to compel arbitration. The court concluded that, upon a motion to compel arbitration, a court should address the arbitrability of the plaintiff’s claim at the outset of the litigation. Therefore, the district court was required to consider the arbitrability of plaintiff's claim before conditionally certifying the collective. The court further concluded that, because the arbitration agreement contains a delegation clause, any disputes about the arbitrability of plaintiff's claim or the scope of the arbitration agreement must be decided by the arbitrator, not the courts. Accordingly, the court concluded that the district court erred in denying the motion to compel arbitration and the court reversed and remanded. The court vacated the stay pending appeal. View "Reyna v. Int'l Bank of Commerce" on Justia Law

Plaintiff appealed the district court's orders refusing to enjoin arbitration and confirming an award in favor of the WestEnd Parties. The court concluded that it has jurisdiction to review the Injunction Order; the WestEnd Parties did not substantially invoke the judicial process and thus have not waived arbitration; and the district court did not err in refusing to enjoin arbitration based on res judicata where the temporary restraining order (TRO) suit and the arbitration claims do not arise from the same transaction. The court applied the vacatur standards of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a)(2), and concluded that plaintiff points to no specific facts that lead to the conclusion that the Arbitrator was biased in the WestEnd Parties’ favor, and the Arbitrator did not exceed his powers in making the award. Accordingly, the court affirmed the judgment. View "Cooper v. WestEnd Capital Mgmt, LLC" on Justia Law