REVISED OCTOBER 2, 2008

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-30262

SAFETY NATIONAL CASUALTY CORPORATION,

Plaintiff–Appellee,

LOUISIANA SAFETY ASSOCIATION OF TIMBERMEN–SELF INSURERS

FUND,

Intervenor Plaintiff–Appellee,

v.

CERTAIN UNDERWRITERS AT LLOYD’S, LONDON; ET AL.,

Defendants,

CERTAIN UNDERWRITERS AT LLOYD’S, LONDON,

Defendant–Appellant.

CERTAIN UNDERWRITERS AT LLOYD’S, LONDON,

Plaintiff–Appellant,

v. 

SAFETY NATIONAL CASUALTY CORPORATION; LOUISIANA SAFETY

ASSOCIATION OF TIMBERMEN,

Defendant–Appellee.

United States Court of Appeals

Fifth Circuit

F I L E D

September 29, 2008

Charles R. Fulbruge III

Clerk
No. 06-30262

1 15 U.S.C. § 1011.

2 June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3.

2

Appeal from the United States District Court 

for the Middle District of Louisiana

No. 02-W-1146-A

No. 05-W-262-A

Before KING, DeMOSS, and OWEN, Circuit Judges.

PRISCILLA R. OWEN, Circuit Judge:

The basis for this interlocutory appeal pursuant to 28 U.S.C. § 1292(b) is

the district court’s denial of a motion to compel arbitration of a contractual

dispute among three insurers. The district court concluded that because of the

McCarran–Ferguson Act,1the Convention on the Recognition and Enforcement

of Foreign Arbitral Awards (Convention)2 and federal legislation providing that

the Convention shall be enforced in United States courts, found in 9 U.S.C.

§§ 201-208, are reverse preempted by LA. REV. STAT. ANN. § 22:629. We

disagree.

I

Louisiana Safety Association of Timbermen–Self Insurers Fund (LSAT) is,

as its name implies, a self-insurance fund operating in Louisiana. It provided

workers’ compensation insurance for its members. Certain Underwriters at

Lloyd’s, London (the Underwriters) provided excess insurance to LSAT by

reinsuring claims for occupational-injury occurrences that exceeded the amount

of LSAT’s self-insurance retention. Each reinsurance agreement contained an

arbitration provision. 
No. 06-30262

3 LA. REV. STAT. ANN. § 22:629.

3

Safety National Casualty Corporation (Safety National) also provides

excess workers’ compensation coverage and alleges that in a loss portfolio

transfer agreement, LSAT assigned its rights under the reinsurance agreements

with the Underwriters to Safety National. The Underwriters refused to

recognize the assignment, contending that LSAT’s obligations were strictly

personal and therefore non-assignable.

Safety National sued the Underwriters in federal district court. The

Underwriters filed an unopposed motion to stay proceedings and compel

arbitration. The district court initially granted that motion and stayed the

lawsuit.

The Underwriters initiated arbitration proceedings with Safety National

and LSAT; however, the parties could not agree upon how arbitrators were to be

selected. The Underwriters then filed a motion to lift the stay in order to join

LSAT as a party in the district court and to compel arbitration to resolve the

dispute about how to compose the arbitration panel. In response, LSAT moved

to intervene, lift the stay, and quash arbitration. LSAT asserted that the

arbitration agreements were unenforceable under Louisiana law. While those

motions were pending, the Underwriters filed a separate action against Safety

National and LSAT seeking recovery of unpaid premiums under the policies.

The district court consolidated the two actions.

The district court ultimately reconsidered its initial decision and granted

LSAT’s motion to quash arbitration. The district court concluded that although

the Convention would otherwise require arbitration, a Louisiana statute3that

has been interpreted to prohibit arbitration agreements in insurance contracts

was controlling. The district court reasoned that since that statute had “the

purpose of regulating the business of insurance” within the meaning of the
No. 06-30262

4 See generally U.S. Dept. of Treasury v. Fabe, 508 U.S. 491, 507 (1993) (“Ordinarily,

a federal law supersedes any inconsistent state law. The first clause of [§ 1012(b)] reverses

this by imposing what is, in effect, a clear-statement rule, a rule that state laws enacted ‘for

the purpose of regulating the business of insurance’ do not yield to conflicting federal statutes

unless a federal statute specifically requires otherwise.”).

5 LA. REV. STAT. ANN. § 22:629. 

6 See Doucet v. Dental Health Plans Mgmt. Corp., 412 So. 2d 1383, 1384 (La. 1982)

(“Classification of the contract at issue as an insurance contract renders the arbitration

provisions of that contract unenforceable under R.S. 22:629.”); see also McDermott Int’l, Inc.

v. Lloyds Underwriters of London, 120 F.3d 583, 586 (5th Cir. 1997) (“Compulsory arbitration

4

McCarran–Ferguson Act, the Louisiana statute reverse preempted the

Convention.4 The district court subsequently certified that its order embodying

these rulings involves a controlling question of law as to which there is

substantial ground for difference of opinion and an immediate appeal pursuant

to 28 U.S.C. § 1292(b) may materially advance the termination of the litigation.

We granted leave to appeal.

II

The Louisiana statute at issue provides:

A. No insurance contract delivered or issued for delivery in this

state and covering subjects located, resident, or to be performed in

this state . . . shall contain any condition, stipulation, or agreement:

. . . .

(2) Depriving the courts of this state of the jurisdiction of

action against the insurer.

. . . .

C. Any such condition, stipulation, or agreement in violation of this

Section shall be void, but such voiding shall not affect the validity

of the other provisions of the contract.5

Although itis not clear from this provision’s text that arbitration agreements are

voided, Louisiana courts have held that such agreements are unenforceable

because of this statute.6
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clauses in certain insurance contracts are unenforceable in Louisiana because of La.R.S.

22:629 . . . .”); W. of Eng. Ship Owners Mut. Ins. Ass’n (Luxembourg) v. Am. Marine Corp., 981

F.2d 749, 750 n.5 (5th Cir. 1993) (“Louisiana has prohibited arbitration clauses in insurance

policies” (citing LA. REV. STAT. ANN. § 22:629; Doucet, 412 So. 2d at 1384)).

7 15 U.S.C. § 1011.

8

Id. § 1012(b); see also id. §1101; Fabe, 508 U.S. at 507 (explaining that the first clause

of [§ 1012(b)] mandates that state statutes “regulating the business of insurance” do not yield

to conflicting federal statutes unless a federal statute specifically requires otherwise). 

9 15 U.S.C. § 1012(b).

10 See Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 129 (1982) (explaining that

“three criteria relevant in determining whether a particular practice is part of the ‘business of

insurance’” include “whether the practice has the effect of transferring or spreading a

5

The McCarran–Ferguson Act provides that “Congress hereby declares that

the continued regulation and taxation by the several States of the business of

insurance is in the public interest, and that silence on the part of the Congress

shall not be construed to impose any barrier to the regulation or taxation of such

business by the several States.”7 The Act further provides, “[n]o Act of Congress

shall be construed to invalidate, impair, or supersede any law enacted by any

State for the purpose of regulating the business of insurance, or which imposes

a fee or tax upon such business, unless such Act specifically relates to the

business of insurance . . . .”8

The Convention does not specifically relate to the business of insurance.

Nor do Underwriters challenge the district court’s conclusion thatLA.REV.STAT.

ANN. § 22:629, when applied to disputes arising under reinsurance agreements

between insurers, regulates the business of insurance within the meaning ofthe

McCarran–Ferguson Act.9 Accordingly, we will assume, without deciding, that

the Louisiana statute does regulate the business of insurance, although the

matter is not entirely free from doubt. One of the criteria for determining

whether a law regulates the business of insurance is whether it has the effect of

spreading or transferring a policyholder’s risk.10 The Supreme Court has
No. 06-30262

policyholder’s risk,” although “[n]one of these three criteria is necessarily determinative in

itself”); cf. Ky. Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329, 338 (2003) (explaining, albeit

in the context of ERISA, “that conditions on the right to engage in the business of insurance

must also substantially affect the risk pooling arrangement between the insurer and the

insured”).

11 See, e.g., Preston v. Ferrer, 128 S. Ct. 978, 987 (2008) (“By agreeing to arbitrate a

statutory claim, a party does not forgo the substantive rights afforded by the statute; it only

submits to their resolution in an arbitral . . . forum.” (omission in original) (quoting Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985))).

12 9 U.S.C. § 1 et seq.

13 See 436 F.3d 490, 494 (5th Cir. 2006) (holding that a state law prohibiting “required

arbitration of disputes stemming from the uninsured motorist coverage provisions . . .

regulates risk by subjecting all [such] policy disputes . . . to the possibility of a jury trial”).

14 15 U.S.C. § 1012(b) (“No Act of Congress shall be construed to invalidate, impair, or

supersede any law enacted by any State for the purpose of regulating the business of

insurance. . . .”).

6

emphasized that arbitration agreements are forum-selection provisions and do

not displace substantive rights afforded by a statute or other substantive law.11

An argument could be made that at least in theory, resolving claims in an

arbitration rather than in a court before a jury does not substantially affect the

risk pooling arrangement between the insurer and the insured. However, this

court has held in American Bankers Insurance Co. of Florida v. Inman that the

Federal Arbitration Act12was reverse preempted by the McCarran–Ferguson Act

in the context of a dispute between an injured insured and his insurer regarding

underinsured-motorist coverage governed by Mississippi law.13 Therefore, this

issue is foreclosed in this circuit and in any event is not before us. 

The Underwriters set forth three issues: whether (1) the Convention on the

Recognition and Enforcement of Foreign Arbitral Awards is an “Act of Congress”

within the meaning of the McCarran–Ferguson Act,14 (2) the

McCarran–Ferguson Act applies to international commercial transactions, and

(3) the Convention takes precedence over the McCarran–Ferguson Act even if

the latter applies to international transactions. For the reasons we consider
No. 06-30262

15 Reid v. Covert, 354 U.S. 1, 18 (1957) (plurality opinion) (“[An] Act of Congress . . . is

on a full parity with a treaty . . . .”); Breard v. Greene, 523 U.S. 371, 376 (1998) (per curiam)

(same) (quoting Reid, 354 U.S. at 18); see also Egle v. Egle, 715 F.2d 999, 1013 (5th Cir. 1983)

(“Under our Constitution, treaties and statutes are equal in dignity. If a treaty and a statute

are inconsistent, ‘the one last in date will controlthe other . . . .’” (omission in original) (quoting

Whitney v. Robertson, 124 U.S. 190, 194 (1888))).

16 Breard, 523 U.S. at 376 (quoting Reid, 354 U.S. at 18); see also Medellin v. Texas, 128

S. Ct. 1346, 1359 n.6 (2008) (“[A] later-in-time federal statute supersedes inconsistent treaty

provisions.”).

17 Medellin, 128 S. Ct. at 1364 (citing Cook v. United States, 288 U.S. 102, 119 (1933)).

7

below, we are persuaded that Congress did not intend to include treaties within

the scope of an “Act of Congress” when it used those words in the

McCarran–Ferguson Act, and we therefore do not reach other issues pressed by

the Underwriters.

III

LSAT contends that treaties stand on equal footing with acts of Congress,

the Convention was not self-executing and could only have effect in the courts

of this country when Congress passed enabling legislation, and therefore, the

Convention’s enabling legislation is the equivalent of an “Act of Congress” within

the meaning of the McCarran–Ferguson Act. LSAT is correct that an act of

Congress is on full parity with a treaty.15 “‘[W]hen a statute which is subsequent

in time is inconsistent with a treaty, the statute to the extent of conflict renders

the treaty null.’”16 The Underwriters maintain that the Convention was ratified

after the McCarran–Ferguson Act was enacted and that in any event, the

Convention is self-executing, which means that it did not require an act of

Congress to have effect in United States courts. The Underwriters assert that

a “later-in-time self-executing treaty supercedes a federal statute if there is a

conflict.”17 The Convention is not an act of Congress, the Underwriters
No. 06-30262

18 Id. at 1357.

19 Apr. 24, 1963, 1970 21 U.S.T. 77, 596 U.N.T.S. 261.

20 Apr. 24, 1963, 1970 21 U.S.T. 325, 596 U.N.T.S. 487.

21 Medellin, 128 S. Ct. at 1353.

22 Id. at 1358.

23 Id. 

24 Id.

8

alternatively contend, even if the Convention was not self-executing, because a

treaty is more than an act of Congress.

It is unclear whether the Convention is self-executing. The Supreme

Court’s recent decision in Medellin v. Texas instructs that “[t]he interpretation

of a treaty, like the interpretation of a statute, begins with its text.”18 In

Medellin, the Court examined the Vienna Convention on Consular Relations19

and the Optional Protocol Concerning the Compulsory Settlement of Disputes

to the Vienna Convention20 to determine whether a judgment of the

International Court of Justice (ICJ) was “directly enforceable as domestic law in

a state court in the United States.”21 The United States had agreed to submit

disputes arising out ofthe Vienna Convention to the ICJ, butthe Supreme Court

recognized that “submitting to jurisdiction and agreeing to be bound are two

different things.”22 The Court observed that the Optional Protocol “says nothing

about the effect of an ICJ decision and does not itself commit signatories to

comply with an ICJ judgment.”23 The Court went on to consider any obligations

imposed by Article 94 of the United Nations Charter, finding that it also “does

not provide that the United States ‘shall’ or ‘must’ comply with an ICJ decision,

nor indicate that the Senate that ratified the U.N. Charter intended to vest ICJ

decisions with immediate legal effect in domestic courts.”24 By contrast, the

Convention on the Recognition and Enforcement of Foreign Arbitral Awards
No. 06-30262

25 Art. II(3), June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38.

26 See id. arts. III, IV.

27 See Medellin, 128 S. Ct. at 1366 (“Congress is up to the task of implementing non-selfexecuting treaties, even those involving complex commercial disputes. The judgments of a

number of internationaltribunals enjoy a different status because of implementing legislation

enacted by Congress. [citing 9 U.S.C. §§ 201-208] . . . Such language demonstrates that

Congress knows how to accord domestic effectto international obligations when it desires such

a result.” (citation omitted)); see also Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15

(1974) (observing, although not in the context of whether the Convention was self-executing,

“Congress passed Chapter 2 of the United States Arbitration Act in order to implement the

Convention” (citation omitted)).

9

expressly states that courts “shall” compel arbitration when requested by a party

to an international arbitration agreement: 

The court of a Contracting State, when seized of an action in

a matter in respect of which the parties have made an agreement

within the meaning of this article, shall, at the request of one of the

parties, refer the parties to arbitration, unless it finds that the said

agreement is null and void, inoperative or incapable of being

performed.25

The Convention additionally sets forth at least some procedures to be followed

in obtaining enforcement of an arbitration award.26 However, the Supreme

Court indicated in dicta in Medellin that at least the provisions of the

Convention pertaining to the enforcement of judgments of international

arbitration tribunals are not self-executing.27 This reference in Medellin could

be read to imply that the Convention in its entirety is not self-executing,

although such a conclusion cannot be drawn with any certainty from the brief

discussion in the Court’s opinion.

But even if the Convention required legislation to implement it in United

States courts, that does not mean that Congress intended an “Act of Congress,”

as that phrase is used in the McCarran–Ferguson Act, to include a treaty.

Implementing legislation does not replace or displace a treaty. A treaty remains

something more than an act of Congress. It is an international agreement or
No. 06-30262

28 SeeU.S.CONST. art. II § 2 (“[The President] shall have Power, by and with the Advice

and Consent of the Senate, to make Treaties, provided two thirds of the Senators present

concur . . . .”). 

29 Am. Ins. Ass’n v. Garamendi, 539 U.S. 396, 401 (2003).

30 Id. at 406.

10

contract negotiated by the Executive Branch and ratified by the Senate,28 not

Congress. The fact that a treaty stands on equal footing with legislation when

implemented by Congress does not mean that it ceases to be a treaty and

becomes an “Act of Congress.”

The Supreme Court has indicated that the preemptive reach of the

McCarran–Ferguson Act was not intended to extend to the conduct of foreign

affairs. The Supreme Court considered in American Insurance Ass’n v.

Garamendi whether a state law, aimed at aiding Holocaust victims by requiring

insurers to disclose information about insurance policies sold in Europe before

and during World War II, interfered with the Federal Government’s conduct of

foreign relations.29 The President of the United States had entered into an

executive agreement with Germany’s chancellor in which the United States

agreed that whenever a German company was sued in an American court

regarding a Holocaust-era claim, the United States government would submit

a statement that “it would be in the foreign policy interests of the United States

for the Foundation to be the exclusive forum and remedy for the resolution of all

asserted claims against German companies arising from their involvement in the

National Socialist era and World War II.”30 This and other executive agreements

regarding Holocaust claims had not been ratified as treaties by the United

States Senate but were instead acts solely of the Executive Branch. The

Supreme Court observed that “[g]enerally, . . . valid executive agreements are

fit to preempt state law, just as treaties are, and if the agreements here had

expressly preempted laws like [California’s law], the issue would be
No. 06-30262

31 Id. at 416-17.

32 Id. at 420-26.

33 Id. at 427-28.

34 15 U.S.C. § 1012(b).

11

straightforward.”31 The Court ultimately concluded that the state law conflicted

with Presidential foreign policy as expressed in executive agreements with

foreign nations and was preempted.32 In addressing California’s argument that

in the McCarran–Ferguson Act “Congress authorized state laws of [the] sort

[California had enacted],” the Court said, 

As the text itself makes clear, the point of McCarran–Ferguson’s

legislative choice of leaving insurance regulation generally to the

States was to limit congressional preemption under the commerce

power, whether dormant or exercised . . . . [A] federal statute

directed to implied preemption by domestic commerce legislation

cannot sensibly be construed to address preemption by executive

conduct in foreign affairs.33

We think it unlikely that when Congress crafted the McCarran–Ferguson

Act, it intended any future treaty implemented by an act of Congress to be

abrogated to the extent that treaty conflicted in some way with a state law

regulating the business of insurance if Congress’s implementing legislation did

not expressly save the treaty from reverse preemption by state law. If this had

been Congress’s intent, it seems probable that Congress would have included “or

any treaty requiring congressional implementation” or similar language

following “Act of Congress” and “such Act” when it said, “[n]o Act of Congress

shall be construed to invalidate, impair, or supersede any law enacted by any

State for the purpose of regulating the business of insurance . . . unless such Act

specifically relates to the business of insurance.”34 There is no indication in the

McCarran–Ferguson Act that Congress intended, through the preemption

provision and the use of the term “Act of Congress,”to restrictthe United States’
No. 06-30262

35 Stephens v. Am. Int’l Ins. Co., 66 F.3d 41, 45 (2d Cir. 1995).

36 Id.

37 Id. at 43.

12

ability to negotiate and implement a treaty that might affect some aspect of

international insurance agreements in the same way that other international

agreements would be affected by the terms of the treaty. If that were Congress’s

intent, it would seem, as we have said, that Congress would have more clearly

articulated its design.

Most importantly, there is no apparent reason why Congress would have

chosen to distinguish in the McCarran–Ferguson Act between treaties that are

self-executing and those that are not. It is undisputed that if the provisions in

the Convention directing courts to enforce international arbitration agreements

were self-executing, then the McCarran–Ferguson Act would have no preemptive

effect because self-executing treaties are not an “Act of Congress.” No rationale

has been offered by anyone as to why Congress would have intended to include

a treaty that requires implementation by Congress within the reach of the

McCarran–Ferguson Act’s reverse preemption provisions but not self-executing

treaties. 

We are aware that the Second Circuit has held that“the Convention is not

self-executing, and therefore, relies upon an Act of Congress for its

implementation.”35 As a consequence, the Second Circuit held Congress’s

“implementing legislation [did] not preempt”36 a Kentucky statute that

“subordinated” all“choice of law or arbitration provisions” in a contract to which

an insolvent insurer in liquidation proceedings was a party.37 The court

reasoned that “when the terms of [a treaty] import a contract—when either of

the parties engages to perform a particular act, the treaty addresses itself to the

political, not the judicial department; and the legislature must execute the
No. 06-30262

38 Id. at 45.

39 Id.

40 252 U.S. 416 (1920).

41 Id. at 431.

13

contract, before it can become a rule for the court.”38 The court then quoted the

“[n]o Act of Congress” provision in the McCarran–Ferguson Act and said,

“[a]ccordingly, the implementing legislation does not preempt the Kentucky

Liquidation Act . . . .”39

We agree, of course,that when provisions of a treaty are not self-executing,

they cannot be enforced in a court in this country unless and until those

provisions are implemented by Congress. But, we submit, this does not answer

the question of what Congress intended when it used the terms “[n]o Act of

Congress” and “such Act” in 1945 or why Congress would have addressed only

treaties that required implementation by Congress. The text of the

McCarran–Ferguson Act does not support the inclusion by implication of “a

treaty implemented by an Act of Congress.” Because we give the phrases “Act

of Congress” and “such Act” their usual, commonly understood meaning, we

conclude that treaties, self-executing or not, are not reverse preempted by the

McCarran–Ferguson Act.

The Supreme Court’s decision in Missouri v. Holland40reflects that a

treaty followed by implementing legislation, may accomplish more than either

treaty or an Act of Congress, standing alone. The United States had

consummated a treaty with Great Britain to protect migratory birds, and the

treaty stated that “the two powers would take or propose to their lawmaking

bodies the necessary measures for carrying the treaty out.”41 Accordingly, the

treaty was not self-executing. An act was passed giving effect to the Convention,

directing the Secretary of Agriculture to promulgate regulations and prohibiting
No. 06-30262

42 Id. at 431-32.

43 Id. at 430-31.

44 Id. at 433.

45 Id. at 432.

46 Id. at 433.

47 Id.

48 Id. at 435.

14

the killing of migratory birds except as permitted by regulations compatible with

the treaty.42 The State of Missouri sought to prohibit the enforcement of the

Migratory Bird Treaty Act and the Secretary’s regulations, arguing that the

statute interfered with rights reserved to the States by the Tenth Amendment.43

The Supreme Court recognized a difference between acts of Congress and

“a treaty followed by such an act.”44 It observed that “[a]n earlier act of Congress

that attempted by itself and not in pursuance of a treaty to regulate the killing

of migratory birds within the States had been held bad . . . .”45 The Court said,

“[w]hether the two cases cited [holding the prior Acts of Congress “bad”] were

decided rightly or not they cannot be accepted as a test of the treaty power. Acts

of Congress are the supreme law of the land only when made in pursuance of the

Constitution, while treaties are declared to be so when made under the authority

of the United States.”46 The Court continued, “[w]e do not mean to imply that

there are no qualifications to the treaty-making power; but they must be

ascertained in a different way. It is obvious that there may be matters of the

sharpest exigency for the national well being that an act of Congress could not

deal with but that a treaty followed by such an act could . . . .”47 The Supreme

Court ultimately concluded “that the treaty and statute must be upheld.”48

In the present case, as in Holland, the treaty followed by the

implementing legislation, must be considered as the sum of its parts, not
No. 06-30262

49 473 U.S. 614 (1985).

50 Id. at 616 (citations omitted).

51 Id. at 626-27.

52 Id. at 627.

53 Id. (emphasis added).

54 Id. at 628.

15

piecemeal, in determining what Congress meant when it used the words “Act of

Congress” and “such Act” in the McCarran–Ferguson Act.

Our focus on congressional intent and the conclusion that referral to

arbitration is required in this case is reinforced by the Supreme Court’s analysis

in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,

49 although the

McCarran–Ferguson Act was not implicated in that case. The question was the

“arbitrability, pursuant to the Federal Arbitration Act and the [Convention], of

claims arising under the Sherman Act and encompassed within a valid

arbitration clause in an agreement embodying an international commercial

transaction.”50 The Court held such claims were arbitrable.51 But in the process,

the Supreme Court explained that “not . . . all controversies implicating

statutory rights are suitable for arbitration.”52In determining which are not, the

Court said “[j]ust as it is the congressional policy manifested in the Federal

Arbitration Actthat requires courts liberally to construe the scope of arbitration

agreements covered by that Act, it is the congressional intention expressed in

some other statute on which the courts must rely to identify any category of

claims as to which agreements to arbitrate will be held unenforceable.”53

Importantly, the Court said, “[w]e must assume that if Congress intended the

substantive protection afforded by a given statute to include protection against

waiver of the right to a judicial forum, that intention will be deducible from text

or legislative history.”54
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55 Id. at 638 (quoting Convention on Recognition and Enforcement of Foreign Arbitral

Awards art. V(2)(b), June 10, 1958, 21 U.S.T 2517, 330 U.N.T.S. 3).

56 Id. at 639 n.21 (“And it appears that before acceding to the Convention the Senate

was advised by a State Department memorandum that the Convention provided for such

exceptions.”).

57 Id.

58 Id.

59 Id. (emphasis added).

60 15 U.S.C. § 1012(b).

16

Later in the Mitsubishi decision, the Supreme Court observed that “[t]he

Convention reserves to each signatory country the right to refuse enforcement

of an award where the ‘recognition or enforcement of the award would be

contrary to the public policy of that country.’”55 The Court also noted that “Art.

II(1) ofthe Convention, which requires the recognition of agreements to arbitrate

that involve ‘subject matter capable of settlement by arbitration,’ contemplates

exceptions to arbitrability grounded in domestic law.”56 “Yet in implementing

the Convention by amendment to the Federal Arbitration Act, Congress did not

specify any matters it intended to exclude from its scope.”57“Doubtless,

Congress may specify categories of claims it wishes to reserve for decision by our

own courts without contravening this Nation’s obligations under the

Convention.”58 But the Court “decline[d] to subvert the spirit of the United

States’ accession to the Convention by recognizing subject-matter exceptions

where Congress has not expressly directed the courts to do so.”59

The question, then, is whether the use of “no Act of Congress” and “such

Act” in the McCarran–Ferguson Act is an express direction by Congress that a

treaty such as the Convention is preempted to the extent it “invalidate[s],

impair[s], or supersede[s]”60 a state law that renders arbitration clauses

unenforceable. For the reasons considered above, the text and context of the
No. 06-30262

61 Mitsubishi, 473 U.S. at 638.

62 Id. (quoting Convention on Recognition and Enforcement of Foreign Arbitral Awards

art. V(2)(b), June 10, 1958, 21 U.S.T 2517, 330 U.N.T.S. 3).

63 Id.

17

McCarran–Ferguson Act compel us to conclude that it contains no such express

congressional direction.

The McCarran–Ferguson Act embodies a strong policy that the states have

an interest in the regulation of the business of insurance. A reinsurance

contract that has the potential to affect policyholders within a state

unquestionably relates to the business of insurance. But concerns that a state’s

regulatory policies regarding such contracts may not be recognized in an

international arbitration are ameliorated by provisions in the Convention and

are not a basis for refusing to require that an arbitration go forward. The

Supreme Court explained in Mitsubishi, in the context of federal antitrust law,

that “[h]aving permitted the arbitration to go forward, the national courts of the

United States will have the opportunity at the award-enforcement stage to

ensure that the legitimate interest in the enforcement of the antitrust laws has

been addressed.”61 As already noted, the Court recognized, “[t]he Convention

reserves to each signatory country the right to refuse enforcement of an award

where the ‘recognition or enforcement of the award would be contrary to the

public policy of that country.’”62 The Court observed ‘[w]hile the efficacy of the

arbitral process requires that substantive review at the award-enforcement

stage remain minimal, it would not require intrusive inquiry to ascertain that

the tribunaltook cognizance of the antitrust claims and actually decided them.”63

The same is true of any Louisiana laws that apply to the reinsurance

agreements presently at issue.

The Supreme Court emphasized in Mitsubishi that “[a]s international

trade has expanded in recent decades, so too has the use of international
No. 06-30262

64 Id.

65 Id. at 638-39 (quoting Kulukundis Shipping Co. v. Amtorg Trading Corp., 126 F.2d

978, 985 (2d Cir. 1942)).

66 Art. I(3), 21 U.S.T., at 2561 n.3. 

18

arbitration to resolve disputes arising in the course of that trade.”64 The Court

admonished:

If they are to take a central place in the international legal

order, national courts will need to “shake offthe old judicial hostility

to arbitration,” and also their customary and understandable

unwillingness to cede jurisdiction of a claim arising under domestic

law to a foreign or transnational tribunal. To this extent, at least,

it will be necessary for national courts to subordinate domestic

notions of arbitrability to the international policy favoring

commercial arbitration.65

We note that as ratified by the United States,the Convention applies “only

to differences arising out of legal relationships . . . which are considered as

commercial under the national law of the State” ratifying or acceding to the

Convention.66 There is no doubt that the present dispute among three insurers

arises out of legal relationships that are commercial. We are not called upon to

explore the outer bounds of what “commercial” legal relationships may

encompass.

In sum, the McCarran–Ferguson Act does not cause LA. REV. STAT. ANN.

§ 22:629 to reverse preempt the Convention with regard to the dispute before us.

IV

We finally consider Safety National’s request that we affirm the district

court’s ruling that the rights under the policies are assignable. The order

embodying that ruling, dated August 13, 2003, has not been certified by the
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67 See Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 205 (1996) (“The court of

appeals may not reach beyond the certified order to address other orders made in the case.”).

19

district court under 28 U.S.C. § 1292(b). We therefore lack appellate jurisdiction

to consider it.67

* * *

We REVERSE the district court’s denial of the motion to compel

arbitration and remand for further proceedings consistent with this opinion.