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

Articles Posted in Arbitration & Mediation
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A federal whistleblower statute, 41 U.S.C. 4712, does not render unenforceable an arbitration agreement between plaintiff and his former employer, Intratek. The Fifth Circuit held that the district court correctly enforced the arbitration agreement between plaintiff and Intratek. However, the court held that the district court erred in compelling arbitration of claims not covered by that agreement. Finally, the court held that the district court did not abuse its discretion by denying plaintiff's motion to amend the complaint. Therefore, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Robertson v. Intratek Computer, Inc." on Justia Law

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After a panel of arbitrators issued an arbitration award dismissing all of plaintiff's claims against Ameriprise and three of its franchise advisors, plaintiff then filed a petition in Louisiana state court to vacate that arbitration award, as to certain defendant parties. Defendants removed to state court; plaintiff moved to remand; and the district court held that it did have subject-matter jurisdiction over the petition to vacate and thus denied remand. The district court ruled on the removed petition to vacate, denying plaintiff's claims with prejudice. At issue in this appeal is the jurisdiction of the federal court over the petition to vacate.The Fifth Circuit affirmed and held that, applying the look-through analysis, the district court correctly found that the federal claim against Ameriprise in the FINRA arbitration proceeding meant that there was federal subject-matter jurisdiction over the removed petition to vacate the FINRA arbitration dismissal award. Therefore, the district court correctly denied plaintiff's motion to remand the action to vacate to Louisiana state court. View "Badgerow v. Walters" on Justia Law

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OOGC filed suit to vacate two arbitration awards favoring Chesapeake on the basis of an arbitrator's failure to disclose connections with certain non-parties. The Fifth Circuit vacated the district court's decision to vacate the awards and remanded with instructions to confirm the arbitration awards within thirty days of the issuance of the mandate. The court held that the district court erred by vacating the arbitration awards for "evident partiality" under 9 U.S.C. 10(a)(2). Furthermore, resolving all doubts or uncertainties in favor of upholding the awards, the court held that OOGC has not shown an adequate basis for vacatur under 9 U.S.C. 10(a)(4) and rejected OOGC's argument that the arbitrator exceeded his powers here.The court affirmed the district court's denial of the arbitrator's motion to intervene because the district court was without jurisdiction to rule upon the intervention motion once the plaintiff had filed his notice of appeal. Because the court vacated the district court's decision, the court denied the arbitrator's motion to intervene as moot. View "OOGC America, LLC v. Chesapeake Exploration, LLC" on Justia Law

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The Commission alleged that the Army violated the Randolph-Sheppard Act by failing to give priority to blind vendors in the bidding process for a vending facility services contract at an Army base cafeteria. After the arbitration panel found in favor of the Army, the Commission appealed the panel's decision.The Fifth Circuit affirmed the district court's grant of summary judgment in favor of the Commission. The court held that the statutory language is ambiguous; applied the presumption against ineffectiveness; supported a broader interpretation of "operate" in the context in which it is used within the Act; and held that the district court did not err in holding that the Act may apply to Dining Facility Attendant (DFA) contracts generally. In this case, the DFA contract at issue is subject to the Act and the Army violated the Act by not giving the Commission priority in the bidding process. View "Texas Workforce Commission v. United States Department of Education" on Justia Law

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After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's order confirming a $622 million arbitration award. The parties are oil and gas companies incorporated in different countries, and the dispute arose from the Agreement for the Provision of Drilling Services (DSA). About two years into the DSA's term, Vantage and Petrobras executed the Third Novation and Amendment Agreement, which included an arbitration clause.As a preliminary matter, the court stated that it need not decide the issue of whether the appeal waiver was enforceable. On the merits, the court held that there was no public policy bar to confirmation of the arbitration award. In this case, the district court did not engage in inappropriate deference to the arbitrator's decision and the district court did not base its decision just on "mutual mistake." The court also held that Petrobras has not shown that the district court abused its discretion in denying the discovery motions. Finally, the court rejected Petrobras' motion to vacate the arbitration award. View "Vantage Deepwater Co. v. Petrobras America, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's order compelling arbitration, holding that plaintiff is not exempt from the Federal Arbitration Act (FAA) under the Transportation Worker Exemption. Plaintiff primarily supervised 25 part-time and 2 full-time ticketing and gate agents at the airport. In this case, plaintiff's duties could at most be construed as loading and unloading airplanes. The court held that plaintiff was not engaged in an aircraft's actual movement in interstate commerce. Therefore, the exemption in the FAA does not apply to her and arbitration was validly ordered to resolve her dispute. View "Eastus v. ISS Facility Services, Inc." on Justia Law

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The Fifth Circuit denied defendant's motion for sanctions against Sun Coast under Federal Rule of Appellate Procedure 38 for pursuing a frivolous appeal. The court noted that the case for Rule 38 sanctions is strongest in matters involving malice, not incompetence.The court found that Sun Coast acted with incompetence, not malice, and therefore exercised its discretion in not granting defendant's request to impose sanctions under Rule 38. In this case, where Sun Coast failed to disclose that it cited Opalinski II rather than Opalinski I to the arbitrator, the court observed that the best that may be said for Sun Coast is that it badly misreads the record. Furthermore, where Sun Coast misunderstood the federal appellate process in its demand for oral argument, Sun Coast acted with incompetence, not malice. View "Sun Coast Resources, Inc. v. Conrad" on Justia Law

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Plaintiff brought an overtime claim under the Fair Labor Standards Act (FLSA) against Sun Coast in arbitration on behalf of a class of similarly situated employees. In a clause construction award, the arbitrator determined that the agreement clearly provides for collective actions.The Fifth Circuit affirmed the district court's determination that the arbitrator had interpreted the arbitration agreement and that the arbitrator did not exceed his powers. In this case, Sun Coast forfeited its challenge to class arbitrability by not presenting it to the arbitrator at all and then by not presenting it in a timely manner to the district court. Finally, the court rejected Sun Coast's claim that deciding this case without oral argument would be akin to cafeteria injustice. Rather, the court stated that dispensing with oral argument where the panel unanimously agrees it is unnecessary, and where the case for affirmance is so clear, is not cafeteria justice—it is simply justice. View "Sun Coast Resources, Inc. v. Conrad" on Justia Law

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Plaintiff filed suit in Louisiana state court seeking substantial damages against one out-of-state defendant and two in-state defendants. The out-of-state defendant was served with process and immediately removed the case to federal court before the in-state defendants were served. The district court denied plaintiff's motion to remand and entered judgment on the pleadings, dismissing plaintiff's claims with prejudice.The Fifth Circuit affirmed, holding that a non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be "properly joined and served" is a citizen of the forum state. Therefore, the case was properly retained in federal court. The court also held that the relief, purported harm, and alleged wrongdoing here show that plaintiff's claims, at heart, are in fact an unauthorized collateral attack on the arbitration. Accordingly, the district court correctly dismissed the challenge. Finally, the court denied plaintiff's motion to supplement the record, because the evidence would not change that Section 10 of the Federal Arbitration Act was the appropriate means of challenging the arbitrators' acts, and collateral attacks are not allowed. View "Texas Brine Co., LLC v. American Arbitration Ass'n, Inc." on Justia Law