Justia U.S. 5th Circuit Court of Appeals Opinion Summaries
Articles Posted in Arbitration & Mediation
American Home Assurance Co, et al. v. Cat Tech L.L.C.
This case arose when Cat Tech sought indemnification from its insurers after Cat Tech damaged several components of a hyrotreating reactor owned by Ergon Refining, Inc. and arbitrators entered an award against Cat Tech for the damage. Insurers subsequently denied the claim, contending, inter alia, that the "your work" exclusion found in the policies precluded coverage for damage to the reactor. The district court found that insurers had no duty to indemnify Cat Tech. The court held that the information contained in the arbitration award was insufficient to properly apply the "your work" exclusion. As such, the court concluded that the district court erred when it relied on the award in granting insurer's summary judgment motion. On remand, the district court should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon's reactor was limited only to those components upon which Cat Tech worked, or instead included other components unrelated to Cat Tech's operations. Accordingly, the judgment was reversed and the case remanded for further proceedings.
Paper, Allied-Industrial Chemical and Energy Workers Int’l Union v. Exxon Mobil Corp.
The Union, representing certain employees at ExxonMobil's Baton Rouge refinery and chemical plant, brought suit to compel ExxonMobil to arbitrate two labor grievances pursuant to the parties' collective bargaining agreement. The court held that it was within the province of the courts to decide whether "a good faith claim by one party that the other party had violated a written provision" of the bargaining agreement had been asserted. The court also held that, in light of the clairty of the parties' agreement, the Union's claim that ExxonMobil violated Section 1131 of the agreement when the language of that section explicitly authorized its actions was not colorable and could not constitute a good faith claim within the meaning of the arbitration clause. The court agreed with ExxonMobil that Baton Rouge Oil & Chemical Workers Union v. ExxonMobil Corp foreclosed reliance on Section 1151 of the agreement as an independent basis for the arbitrability of the contracting-out grievance. The court further held that for the same reasons that the court held that the contracting-out grievance was not arbitrable under Section 1151, Section 1151 could not serve as a basis for requiring arbitration of the post-reduction claim. Accordingly, the court reversed the district court's grant of the Union's motion for summary judgment with regard to the contracting-out grievance, affirmed the district court's denial of the Union's motion for summary judgment with regard to the post-reduction grievance, and reversed the district court's denial of ExxonMobil's motion for summary judgment.
Covington, et al. v. Aban Offshore, Ltd.
Plaintiffs challenged the district court's conclusion that they, as agents of Beacon Maritime, Inc. (Beacon), were bound by Beacon's agreement to arbitrate disputes with Aban Offshore Limited (Aban). The court held that under settled principles of agency and contract law, plaintiffs were not personally bound by Beacon's agreement with Aban and therefore, the court reversed the district court's order compelling arbitration and remanded for further proceedings.
DK Joint Venture 1, et al. v. Weyand, et al.
Defendants appealed from a district court's order confirming an arbitration award where plaintiffs, six business entities, claimed to have been defrauded by defendants. At issue was whether the arbitration panel had exceeded its jurisdiction by rendering an award against defendants because they had never consented to arbitration. The court reversed the district court's order because under ordinary principles of contract and agency law, defendants, as the CEO and CFO of the defendant corporations, were not personally bound by the arbitration agreements their corporations entered into. Therefore, the court held that the arbitration panel lacked jurisdiction to render an award against defendants.
Janvey v. Alguire, et al.
This case arose when the SEC brought suit against Stanford Group Company (SGC), along with various other Stanford entities, including Stanford International Bank (SIB), for allegedly perpetrating a massive Ponzi scheme. In this interlocutory appeal, defendants appealed the preliminary injunction that the receiver subsequently obtained against numerous former financial advisors and employees of SGC, freezing the accounts of those individuals pending the outcome of trial. The court held that the district court had the power to decide the motion for preliminary injunction before deciding the motion to compel arbitration; the district court did not abuse its discretion in granting a preliminary injunction; the preliminary injunction was not overbroad; and the district court acted within its power to grant a Texas Uniform Fraudulent Transfer Act (TUFTA), Tex. Bus. & Com. Code Ann. 24.005(a)(1), injunction rather than an attachment; and that the court did not have jurisdiction to rule on the motion to compel arbitration. Accordingly, the court affirmed and remanded the motion to compel arbitration for a ruling in the first instance.
