Justia U.S. 5th Circuit Court of Appeals Opinion SummariesArticles Posted in Arbitration & Mediation
Bowles v. OneMain Financial Group, LLC
Plaintiff appealed the district court's order compelling arbitration of her federal age discrimination action against OneMain. The Fifth Circuit held that, although the district court correctly rejected plaintiff's meeting of the minds argument, it erroneously referred her procedural unconscionability challenge to the arbitrator. In this case, procedural unconscionability goes to contract formation under Mississippi law, and thus the district court should have ruled on this objection. Therefore, the court reversed and vacated the order, remanding for the district court to decide on the merits of the procedural unconscionability claim. View "Bowles v. OneMain Financial Group, LLC" on Justia Law
YPF S.A. v. Apache Overseas, Inc.
When the parties to a contract agree to arbitrate, rather than litigate, certain disputes that might later unfold, Congress directs federal courts to honor the parties' wishes. Under the Federal Arbitration Act, courts generally enforce any resulting arbitration award, barring specific circumstances—such as when the arbitrator exceeds his legal authority or otherwise jeopardizes the fair arbitration process. In this case, the Fifth Circuit affirmed the district court's confirmation of the arbitration award and rejected Apache's challenges to the contrary. The court held that KPMG issued a "reasoned award" here where it noted that it based its analysis on the parties' statements and accounting records, pointed to its finding on the accrual of liabilities, and explained what documentation it found relevant in evaluating the proper refund amount. View "YPF S.A. v. Apache Overseas, Inc." on Justia Law
McDonnel Group, LLC v. Great Lakes Insurance SE
After insurers denied McDonnel's claim, McDonnel initiated a declaratory and breach of contract action. The Fifth Circuit affirmed the district court's dismissal of the action in favor of arbitration and held that the insurance policy's conformity provision did not negate the agreement to arbitrate. The court held that the state statute, La. Rev. Stat. Ann. 22:868, was preempted by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and thus the statute did not and could not apply to McDonnel's policy. Consequently, there was no conflict between the policy and the state statute. Therefore, the court held that the conformity provision was not triggered, and its inapplicability leads only to the conclusion that the arbitration provision survives, undiminished by state law. View "McDonnel Group, LLC v. Great Lakes Insurance SE" on Justia Law
Light-Age, Inc. v. Ashcroft-Smith
Light-Age petitioned the district court to vacate an arbitration panel award, arguing that the panel was improperly constituted. The Fifth Circuit affirmed the district court's judgment, holding that Light-Age waived its challenge to the constitution of the panel by failing to object at the time of the arbitration hearing. In this case, Light-Age had constructive knowledge that one of the "non-lawyer" arbitrators worked for a law firm as a payroll manager at the time of the arbitration hearing because it could have discovered that Jackson Walker, LLC was a law firm simply by clicking on the link provided by the arbitrator's email signature or running a brief internet search. View "Light-Age, Inc. v. Ashcroft-Smith" on Justia Law
Adam Joseph Resources v. CNA Metals Limited
After Brown Sims, a Houston law firm, successfully obtained a favorable result for its client, AJR, the client colluded with the opposing party, CNA and its attorneys, to consummate a settlement just between themselves. After settlement, the district court dismissed the case as moot. The Fifth Circuit held that the district court had subject matter jurisdiction over Brown Sims's claims against CNA. The court also held that Brown Sims met all of Federal Rule of Civil Procedure 24's criterion for intervention as of right and the district court erred in concluding otherwise. Furthermore, the district court erred in denying the Rule 60(b)(5) and (b)(6) motions. Accordingly, the court reversed in part, vacated in part, and remanded for further consideration. View "Adam Joseph Resources v. CNA Metals Limited" on Justia Law
In Re: JPMorgan Chase & Co.
Chase petitioned for writ of mandamus after the district court conditionally certified a Fair Labor Standards Act (FLSA) collective action and directed that approximately 42,000 current and former Chase employees receive notice of the litigation. Chase claimed that arbitration agreements waived most of the employees' right to proceed collectively against Chase and that those agreements were enforceable under their terms. The Fifth Circuit denied the petition and held that, although Chase has shown that the issue presented was irremediable on ordinary appeal and that the writ of mandamus was appropriate under the circumstances, Chase has not shown a clear and indisputable right to the writ. The court held, however, that the district court erred by ordering that notice be sent to employees who signed arbitration agreements and by requiring Chase to provide personal contact information for the Arbitration Employees. Therefore, the court continued the stay of the district court's December 10, 2018, order for thirty days to give the court full opportunity to reconsider that order. View "In Re: JPMorgan Chase & Co." on Justia Law
Forby v. One Technologies, L.P.
Forby filed a state court class action against Tech for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) and unjust enrichment under Illinois law. In its notice of removal, Tech did not reference arbitration but argued that Forby’s claims were baseless and that no class should be certified. Tech later moved to dismiss for failure to state a claim and, in the alternative, moved to transfer the case, arguing that Forby’s claims were subject to arbitration in Texas and that an Illinois district court could not compel arbitration outside of its district. After the case was transferred, Tech filed a 12(b)(6) motion to dismiss that did not mention arbitration. In its reply to Forby’s response, Tech again did not mention compelling arbitration. The district court denied the motion with respect to Forby’s ICFA claim and dismissed the unjust enrichment claim. Four days after attending a Rule 26(f) conference and receiving Forby’s requests for production, Tech filed its motion to compel arbitration and an expedited motion to stay discovery. The court granted the motions, finding that Tech had substantially invoked the judicial process but that Forby had not suffered prejudice. The Fifth Circuit reversed. When a party will have to re-litigate in the arbitration forum an issue already decided by the district court in its favor, that party is prejudiced. View "Forby v. One Technologies, L.P." on Justia Law
Griggs v. S.G.E. Management
The Fifth Circuit affirmed the district court's dismissal of a class action filed by plaintiff, alleging claims under the Racketeer Influenced and Corrupt Organizations Act (RICO). The court held that the district court's dismissal without prejudice supported appellate jurisdiction. The court also held that the district court did not abuse its discretion by dismissing the case for want of prosecution in response to plaintiff's disobedience to its prior order compelling arbitration. View "Griggs v. S.G.E. Management" on Justia Law
Hebbronville Lone Star Rentals, LLC v. Sunbelt Rentals Industrial Services, LLC
This appeal stemmed from the parties' dispute over Lone Star's proposed adjustments to a Revenue Calculation that provided payment to Sunbelt. The arbitrator agreed with Lone Star's upward judgment to the revenue attributable to its former customers, but reformed the contract after concluding that the parties had made a mutual mistake when their agreement listed the revenue target for the former Lone Star clients. The court affirmed and remanded for reconsideration of the mutual mistake claim. The court held that, because the parties did not agree in either the asset purchase agreement or the engagement letter to have the arbitrator decide reformation, the court must decide the issue. View "Hebbronville Lone Star Rentals, LLC v. Sunbelt Rentals Industrial Services, LLC" on Justia Law
Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar
The Fifth Circuit granted TKM's, the intervenor plaintiff, motion for panel rehearing and denied the motion for rehearing en banc. The court withdrew the prior opinion and substituted the following opinion. Daewoo filed suit against AMT, seeking an order compelling AMT to arbitrate and an attachment of pig iron owned by AMT. TKM attached the same pig iron in Louisiana state court and then intervened in the federal suit. The court held that it had subject matter jurisdiction under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, because Daewoo's suit related to a covered arbitration agreement. In this case, the parties dispute whether Louisiana's non-resident attachment statute allowed for attachment in aid of arbitration. The court declined to adopt a categorical approach to this issue and held that, because Louisiana law allowed for attachment in aid of yet-to-be-brought actions, non-resident attachment may be available in aid of arbitration when an eventual confirmation suit was contemplated. The court affirmed the district court's judgment, nonetheless, because Daewoo did not strictly comply with the attachment statute's procedural requirements. View "Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar" on Justia Law