Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Dayana Garcia worked as a server at Gloria’s Restaurant for several months. After her employment ended, she filed a Fair Labor Standards Act (FLSA) suit against the restaurant's management entities and co-founder, alleging failure to pay minimum wage. The defendants initially participated in litigation, including answering the lawsuit, engaging in discovery, and mediating. They also filed a joint status report stating they had no intent to arbitrate. Five months after the lawsuit was filed, the defendants moved to compel arbitration.The United States District Court for the Northern District of Texas denied the motion to compel arbitration, finding that the defendants had waived their right to arbitrate by substantially invoking the judicial process. The defendants appealed the decision.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court noted that the defendants had engaged in several litigative actions, including filing an answer without mentioning arbitration, participating in discovery, and mediating the dispute. The court also highlighted the defendants' explicit statement in the joint status report that they were not considering arbitration. The court concluded that these actions constituted a substantial invocation of the judicial process, thereby waiving the right to arbitrate. The Fifth Circuit affirmed the district court's denial of the motion to compel arbitration. View "Garcia v. Fuentes" on Justia Law

Jesus Yanez was hired by EchoStar Communications Corporation in 2001 and signed an arbitration agreement as part of his employment. Over the years, EchoStar underwent several corporate changes, including a name change to DISH Network Corporation and the creation of a new company, EchoStar Corporation. Yanez was terminated in 2018 and subsequently filed discrimination claims. After receiving right to sue letters, he sued in Texas state court, alleging age and nationality discrimination. The case was removed to federal court, where the district court granted a motion to compel arbitration and transferred the case. The arbitration proceeded slowly, and the district court eventually dismissed the case without prejudice due to the parties' failure to file a status report.The United States District Court for the Western District of Texas granted the motion to compel arbitration and stayed the case pending arbitration. The case was transferred to the Western District of Texas, El Paso division. The district court issued multiple show cause notices due to slow arbitration proceedings and ultimately dismissed the case without prejudice when the parties failed to file a required status report. Yanez filed a motion to alter or amend the judgment, which was denied by the district court, citing a recent Supreme Court decision.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's decision to compel arbitration, finding that the arbitration agreement was valid and enforceable under Texas law. However, the court reversed the district court's dismissal of the case, holding that the dismissal was effectively with prejudice due to the statute of limitations and did not meet the heightened standard required for dismissals with prejudice. The case was remanded for further proceedings consistent with the ruling. View "Yanez v. Dish Network" on Justia Law

Emergency air medical providers challenged award determinations made under the No Surprises Act (NSA). The NSA, enacted in 2022, protects patients from surprise bills for emergency services from out-of-network providers by creating an Independent Dispute Resolution (IDR) process for billing disputes between providers and insurers. Guardian Flight transported a patient in Nebraska, and a dispute arose with Aetna over the service value. Similarly, Guardian Flight and its affiliates provided emergency services to patients insured by Kaiser, leading to disputes over payment amounts. Both disputes were submitted to Medical Evaluators of Texas (MET) as the IDR entity, which sided with the insurers.The United States District Court for the Southern District of Texas consolidated the cases. The court dismissed Guardian Flight’s claims against Aetna and Kaiser, ruling that the providers failed to plead sufficient facts to trigger vacatur of the awards. However, the court denied MET’s motion to dismiss based on arbitral immunity, leading to MET’s cross-appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the NSA does not provide a general private right of action to challenge IDR awards, incorporating Federal Arbitration Act (FAA) provisions that allow courts to vacate awards only for specific reasons. The court affirmed the district court’s dismissal of the providers’ claims against Aetna and Kaiser, finding that the providers did not allege facts sufficient to show that the awards were procured by fraud or undue means under the FAA.Additionally, the Fifth Circuit addressed MET’s claim of arbitral immunity. The court concluded that MET, functioning as a neutral arbiter in the IDR process, is entitled to the same immunity from suit typically enjoyed by arbitrators. Consequently, the court reversed the district court’s judgment on this point and remanded with instructions to dismiss the providers’ claims against MET. View "Guardian Flight, L.L.C. v. Aetna Health, Inc." on Justia Law

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

Karen Ashley, the former Chief Nursing Officer of Clay County Memorial Hospital (CCMH), raised concerns about patient safety issues, including missing fentanyl and procedural errors in blood transfusions. She reported these issues internally and publicly at a CCMH Board meeting. Ashley also advocated for CCMH to terminate its contract with Concord Medical Group PLLC and partner with ACPHealth. Following this advocacy, Ashley alleges that the County, CCMH, and the Foundation retaliated against her by terminating her employment, violating her First Amendment rights.Ashley filed suit against the County and Concord Medical Group, alleging retaliation under the Texas Occupations Code and 42 U.S.C. § 1983. The County moved to dismiss, asserting it was not Ashley’s employer and had taken no adverse actions against her. Ashley amended her complaint to add CCMH as a defendant and narrowed her claims against the County. The County maintained it was not Ashley’s employer and moved to dismiss on governmental immunity grounds. CCMH invoked an arbitration clause in Ashley’s employment agreement and moved to compel arbitration. The district court compelled the County to arbitration alongside CCMH and denied the County’s motion to dismiss as moot.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court erred by not addressing the County’s governmental immunity defense before compelling arbitration. The appellate court reversed the district court’s order compelling arbitration and remanded the case with instructions for the district court to resolve the issue of governmental immunity as it pertains to the County’s motion to dismiss before ruling on the motion to compel arbitration. View "Ashley v. Clay County" on Justia Law

A union representing over 9,000 pilots employed by an airline alleged that the airline violated the Railway Labor Act (RLA) by intimidating and disciplining pilots who affiliated with the union. The union claimed that the airline had a history of isolating a special category of pilots known as "check pilots" and "standards check pilots," who are responsible for training and evaluating other pilots. The union alleged that the airline unilaterally established working conditions for check pilots without bargaining and that check pilots were threatened with losing their qualifications if they affiliated with the union. The union also claimed that the airline retaliated against a pilot, Captain Timothy Roebling, by stripping him of his check-pilot qualifications after he joined a union committee.The United States District Court for the Northern District of Texas dismissed the union's complaint, concluding that the dispute was subject to arbitration under the RLA and that no exception applied to vest the court with jurisdiction. The district court found that the airline had an arguable basis for its actions under the collective bargaining agreement, making the dispute a "minor" one subject to arbitration.The United States Court of Appeals for the Fifth Circuit reviewed the case and concluded that the union had sufficiently pleaded the anti-union animus exception to the RLA's arbitration requirement. The court found that the union's allegations, including threats and retaliatory actions against check pilots, supported the claim that the airline's actions were intended to weaken or destroy the union. The court reversed the district court's dismissal and remanded the case for further proceedings, holding that the union's complaint sufficiently alleged anti-union animus to warrant judicial intervention. View "Southwest Airlines Pilots Assn v. Southwest Airlines" on Justia Law

Ultra Deep Picasso Pte. Limited (Ultra Deep) is a contractor specializing in undersea vessel operations for marine construction. Dynamic Industries Saudi Arabia Ltd. (Dynamic) subcontracted Ultra Deep for a project related to a contract with Saudi Aramco. Ultra Deep completed work worth over ten million dollars but alleged that Dynamic failed to pay, breaching their agreement. Ultra Deep filed a complaint in the Southern District of Texas, seeking breach of contract damages and a maritime attachment and garnishment of Dynamic’s funds allegedly held by Riyad Bank.The district court granted Ultra Deep an ex parte order for attachment of Dynamic’s assets at Riyad Bank. Dynamic responded with motions to dismiss for lack of personal jurisdiction, improper venue, and to compel arbitration, which were denied. Dynamic and Riyad Bank then moved to vacate the attachment order, arguing that Ultra Deep failed to show Dynamic had property in the Southern District of Texas. The magistrate judge held a hearing and found that Ultra Deep did not present evidence that Dynamic’s property was within the district. The district court adopted the magistrate judge’s recommendation, vacated the attachment order, and dismissed the case with prejudice.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that for a valid Rule B attachment, the property must be found within the district. It concluded that a bank account is located where its funds can be withdrawn. Since Ultra Deep failed to show that Dynamic’s property was within the Southern District of Texas, the court affirmed the district court’s decision to vacate the attachment order and dismiss the case. View "Ultra Deep Picasso v. Dynamic Industries Saudi Arabia Ltd." on Justia Law