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

Aviles worked for ADT, installing security systems in customers’ homes; he spied on customers using cameras he had installed. ADT discovered Aviles’s misconduct, fired him, and reported him to the authorities. The Richmonds, citizens of Texas, among Aviles’s victims, sued Aviles and ADT in Texas state court. The Richmonds’ contract with ADT contained an arbitration clause. ADT filed a federal suit under the Federal Arbitration Act, alleging complete diversity between the Richmonds and ADT, which is a citizen of Florida and Delaware.The Fifth Circuit vacated the dismissal of the suit. A federal court can hear a suit to compel arbitration only if it could hear “a suit arising out of the controversy between the parties,” 9 U.S.C. 4. To define that “controversy,” a federal court must “look through” the FAA petition “to the parties’ underlying substantive controversy.” If a federal court could hear a suit arising from that “whole controversy,” then that court can hear the FAA suit. The district court looked through ADT’s federal suit to the Richmonds’ state-court complaint, which named Aviles and ADT as defendants, and concluded that the “whole controversy” included Aviles, ADT, and the Richmonds. Those parties lacked diversity of citizenship because Aviles is from Texas. The district court erred in extending the “whole controversy” analysis to define the “parties” to that controversy. View "ADT, L.L.C. v. Richmond" on Justia Law

Gezu worked for Charter, 2017-2019. In October 2017, Charter sent an email to all active, non-union employees announcing a new employment-based legal dispute resolution program. The email instructed employees about their right to opt out. The arbitration agreement, which was available in full on Charter’s intranet, required arbitration of all disputes, claims, and controversies that could be asserted in court or before an administrative agency.During his employment, Gezu allegedly suffered discrimination based on his race and national origin and Charter did not take any action to address the discrimination despite being made aware of it. Charter terminated Gezu in May 2019, based on what Gezu alleges were pretextual reasons. Gezu, acting pro se, asserted claims under Title VII of the Civil Rights Act and 42 U.S.C. 1981. The Fifth Circuit affirmed an order granting Charter’s motion to compel arbitration and to dismiss. There was a valid modification to Gezu’s employment contract, consisting of notice and acceptance. View "Gezu v. Charter Communications" on Justia Law

The Fifth Circuit affirmed the district court's conclusion confirming an Indian arbitration award and enjoined further litigation. In this case, after defendant secured an arbitral award for his maritime injuries, he continued to pursue litigation against the alleged wrongdoers and disputes that there was an enforceable agreement to arbitrate at all.The court rejected defendant's contention that the district court lost its jurisdiction to enforce the award in 2002, when it remanded the pre-arbitration suit to state court. Rather, the court concluded that the remand order lacked preclusive effect and the district court had subject matter jurisdiction to confirm the arbitral award. The court further concluded that it was precluded from from revisiting the issue of whether the deed contains an enforceable arbitration clause. Likewise, defendant's argument that Neptune's signature was required would have fared no better in this court. Finally, the court concluded that the state court's ruling is preclusive on the question of whether the district court erred in barring him from litigating against Talmidge, American Eagle, and Britannia because only Neptune was a party to the deed. View "Neptune Shipmanagement Services PTE, Ltd. v. Dahiya" on Justia Law

The Fifth Circuit previously ruled that One Tech waived its right to arbitrate plaintiffs' state law claims in a class action alleging that One Tech duped consumers into signing for "free" credit reports that were not really free. Here, the court considered whether One Tech also waived its right to arbitrate federal claims added after remand. The court followed its precedent holding that waivers of arbitral rights are evaluated on a claim-by-claim basis and held that One Tech did not waive its right to arbitrate the new federal claims. The court concluded that the district court erred in holding otherwise. Accordingly, the court reversed and remanded. View "Forby v. One Technologies, LP" on Justia Law

Colulmbia City seeks to compel IMA to arbitrate a dispute involving unreimbursed medical fees. The parties are connected by a series of intermediary agreements within a preferred provider organization (PPO) network that allows patients in covered health plans to receive medical services from participating hospitals at discounted rates, and one of these agreements contains an arbitration clause. It is undisputed that IMA is not a party or signatory to the Hospital Agreement that contains the arbitration clause.The Fifth Circuit affirmed the district court's denial of Columbia Hospital's motion to compel arbitration. Applying Texas law, the court concluded that the district court correctly applied this circuit's precedent that knowledge of the agreement requires knowledge of the contract's basic terms. In this case, the district court did not clearly err in concluding, based on the record before it, that IMA lacked the requisite knowledge of the Hospital Agreement and its basic terms to be compelled to arbitrate under direct benefits estoppel. Alternatively, the court declined, contrary to Columbia Health's assertions, to construe the series of contracts between IMA, PPOplus, HealthSmart and Columbia Hospital as a unified contract. View "IMA, Inc. v. Columbia Hospital Medical City" on Justia Law

The Fifth Circuit reversed and remanded with instructions to deny IEVM's motion to compel arbitration and to enter judgment for UEG. The court concluded that the parties failed to contract around the general rule that courts resolve litigation-conduct waivers. Therefore, the arbitrators exceeded their authority in resolving the issue here.Applying the substantial invocation analysis, the court concluded that IEVM substantially invoked the judicial process to UEG's detriment. In this case, IEVM sued UEG in state court without saying anything about arbitration; demanded a jury trial and paid the required fee; filed a motion to remand the action to state court and appealed the district court's denial of that motion; vigorously defended the existence of personal jurisdiction in Texas and appealed the district court's personal jurisdiction dismissal; and sought rehearing en banc after this court affirmed the district court's removal and jurisdictional holdings. Furthermore, UEG has made the requisite showing of prejudice where, among other things, IEVM's persistent pursuit of litigation required UEG to defend its interests, and UEG incurred significant fees and costs. View "International Energy Ventures Management, LLC v. United Energy Group, Ltd." on Justia Law

The Fifth Circuit reversed the district court's order denying Polyflow's motion to compel arbitration with Specialty and its president. After determining that there is federal jurisdiction under a "look-through" analysis, the court concluded that the district court erred by denying the motion to compel arbitration in a single-sentence order without analysis.Applying the strong presumption in favor of arbitrability, the court concluded that the arbitration language in the parties' settlement agreement is broad. The court then applied a claim-by-claim review and concluded that it reinforces the contract's language. The court explained that the bulk of Specialty's arguments to the contrary are for an arbitrator to review. The court answered the question of law and concluded that Polyflow did not waive arbitration by availing itself to the judicial process. Accordingly, the court remanded with instructions that the parties be ordered into arbitration. View "Polyflow, LLC v. Specialty RTP, LLC" on Justia Law

After plaintiff agreed to arbitrate employment disputes with her former employer, Michaels, the arbitrator ruled against her. Plaintiff then tried to sue Michaels in federal court, challenging the same termination on a different theory: that it amounted to discrimination and retaliation in violation of Title VII. A new arbitrator ruled that res judicata barred the Title VII claims because they arose from the same transaction at issue in her first arbitration.The Fifth Circuit affirmed the district court's confirmation of the arbitration order. The court explained that the district court correctly recognized some murkiness in the circuit's manifest-disregard caselaw. The court emphasized that manifest disregard of the law as an independent, nonstatutory ground for setting aside an award must be abandoned and rejected. See Citigroup Glob. Mkts., Inc. v. Bacon, 562 F.3d 349, 358 (5th Cir. 2009). The court concluded that Citigroup Global is still binding precedent and resolves this case. In this case, plaintiff relies on manifest disregard as a freestanding ground for vacatur, untethered to any of the Federal Arbitration Act's (FAA) four grounds for vacatur. Because plaintiff does not invoke any statutory ground for vacatur, her appeal cannot overcome the court's instruction that "arbitration awards under the FAA may be vacated only for reasons provided in 9 U.S.C. 10." View "Jones v. Michaels Stores, Inc." on Justia Law

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

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