Articles Posted in U.S. Court of Appeals for the Fifth Circuit

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Appellants, investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme, alleged that Appellee, a clearing broker for Stanford Group Company, failed to disclose adverse financial information. A FINRA panel rejected appellants' claims but awarded them $10,000 in compensation for certain arbitration-related expenses. In this interlocutory appeal, appellants challenge the district court's denial of their motion to dismiss, for lack of subject matter jurisdiction, appellee's motion to confirm an arbitration award. At issue was whether the amount in controversy for establishing diversity jurisdiction over a petition to confirm an arbitration award is the amount awarded by the arbitration panel or the amount previously sought in the arbitration proceeding. The court affirmed the judgment and adopted the better reasoned approach to the amount in controversy under these circumstances. The court held that monetary amount sought in the underlying arbitration is the amount in controversy for purposes of diversity jurisdiction. View "Pershing, LLC v. Kiebach" on Justia Law

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Appellants, investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme, alleged that Appellee, a clearing broker for Stanford Group Company, failed to disclose adverse financial information. A FINRA panel rejected appellants' claims but awarded them $10,000 in compensation for certain arbitration-related expenses. In this interlocutory appeal, appellants challenge the district court's denial of their motion to dismiss, for lack of subject matter jurisdiction, appellee's motion to confirm an arbitration award. At issue was whether the amount in controversy for establishing diversity jurisdiction over a petition to confirm an arbitration award is the amount awarded by the arbitration panel or the amount previously sought in the arbitration proceeding. The court affirmed the judgment and adopted the better reasoned approach to the amount in controversy under these circumstances. The court held that monetary amount sought in the underlying arbitration is the amount in controversy for purposes of diversity jurisdiction. View "Pershing, LLC v. Kiebach" on Justia Law

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Plaintiff, a former employee of J&K, filed suit claiming unpaid overtime wages. On appeal, defendants challenged the district court's order compelling collective arbitration of plaintiff's complaint. After disposing of preliminary arguments, the court concluded that the district court correctly applied Pedcor Management Co. Inc. Welfare Benefit Plan v. Nations Personnel of Texas, Inc. In Pedcor, the court concluded that a clause submitting any dispute in connection with the agreement included determinations of class or collective arbitration. In this case, the court concluded that section (g) of the arbitration agreement is unambiguous evidence of the parties' intention to submit arbitrability disputes to arbitration and that arbitration was properly compelled. Accordingly, the court affirmed the judgment. Arbitration of plaintiff's claims, including whether class procedures are permissible, should proceed as ordered with JAMS as the arbitral forum. View "Robinson v. J & K Admin. Mgmt. Servs." on Justia Law

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After Pauline Tillman Wagner and Ida Roberson died in Mississippi nursing homes run by Golden Living Southaven and Golding Living Center Batesville, Wagner's son (Sammy Gross) and Roberson's daughter (Shirley Cotton) filed suit against the nursing homes. After removal to federal court, the district court subsequently denied Southaven and Batesville's motion to compel arbitration based on arbitration agreements that the adult children had signed for their mothers when admitting them to the homes. The court held that the Mississippi Supreme Court would not adopt the district court’s formal device requirement and would instead permit parties to establish the existence of an agency relationship with other types of evidence. The court concluded that Gross's sworn testimony is competent evidence on the question of Gross’s agency and its scope. Because the existence and scope of an actual agency relationship is a question of fact the district court did not reach, the court could not decide the actual agency issue as a matter of law. Therefore, the court remanded for the district court for a factual finding on this issue in the first instance. Likewise, the same situation applies to Cotton, and the court remanded for the district court for a factual finding on this issue in the first instance. The court rejected defendant's estoppel argument. Finally, the court concluded that Batesville's apparent authority argument fails because it failed to put forth evidence of detrimental reliance; the district court properly rejected Batesville's ratification theory based on insufficient evidence; and the court declined to address the forum issue. Accordingly, the court vacated and remanded. View "Gross v. GGNSC Southaven, LLC" on Justia Law

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Plaintiff filed suit against his former employer, Watch House, alleging that he was discharged in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., and Chapter 21 of the Texas Labor Code. The district court granted Watch House's motion to compel arbitration and dismissed plaintiff's suit without prejudice. The court concluded that the three-part test in Lizalde v. Vista Quality Markets remains an accurate statement of Texas law and applied Lizalde to the language of Watch House's Arbitration Plan at issue. The court agreed with plaintiff that the Plan is illusory because it fails to include an In re Halliburton-type savings clause that requires advance notice of termination. In this case, the Plan provides that Watch House may make unilateral changes to the Plan, purportedly including termination, and that such a change “shall be immediately effective upon notice to” employees. Watch House’s retention of this unilateral power to terminate the Plan without advance notice renders the Plan illusory under a plain reading of Lizalde, which is supported by recent decisions from Texas intermediate courts. Consequently, plaintiff is not bound by the Plan and Watch House may not compel arbitration. The court reversed and remanded for further proceedings. View "Nelson v. Watch House Int'l, LLC" on Justia Law

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The court previously found that NOV Norway had a contractual right to arbitration before the International Chamber of Commerce (ICC). The remaining defendants, nonsignatories to that agreement, contend that they are also entitled to arbitration. The district court found that NOV LP was contractually entitled to arbitration and ordered arbitration within the Southern District of Texas. The district court's order was interlocutory. Consistent with the purpose of Section 16 of the Federal Arbitration Act (FAA), 9 U.S.C. 16(b)(3), and every circuit that has considered the issue, the court held that Section 16 forbids appellate review. The court also concluded that the court lacks jurisdiction under the collateral order doctrine. Additionally, despite having nothing to appeal, NOV Norway was listed as an appellant within the defendants’ notice of appeal. The appeals brought by NOV LP and NOV Norway are dismissed. View "Al Rushaid v. National Oilwell Varco, Inc." on Justia Law