Court Opinion

ID: 9941944
Source: CourtListenerOpinion
Date Created: 2024-02-19 19:00:26.828375+00
Date Added: 2024-06-11T13:47:28.585108
License: Public Domain

Case: 23-30181   Document: 109-1      Page: 1   Date Filed: 02/19/2024

       United States Court of Appeals
            for the Fifth Circuit                            United States Court of Appeals
                        ____________                                  Fifth Circuit

                                                                    FILED
                          No. 23-30181                       February 19, 2024
                        ____________
                                                               Lyle W. Cayce
                                                                    Clerk
Cameron Parish Recreation #6,

                                                    Plaintiff—Appellee,

                             versus

Indian Harbor Insurance Company; QBE Specialty
Insurance Company; General Security Indemnity
Company of Arizona; United Specialty Insurance
Company; Lexington Insurance Company; Safety
Specialty Insurance Company; Old Republic Union
Insurance Company,

                                                Defendants—Appellants,

                     consolidated with
                       _____________

                         No. 23-30182
                       _____________

Police Jury of Cameron Parish,

                                                    Plaintiff—Appellee,

                             versus

Indian Harbor Insurance Company; QBE Specialty
Insurance Company; Steadfast Insurance Company;
General Security Indemnity Company of Arizona;
Case: 23-30181     Document: 109-1        Page: 2   Date Filed: 02/19/2024

United Specialty Insurance Company; Lexington
Insurance Company; Safety Specialty Insurance
Company; Old Republic Union Insurance Company,

                                                    Defendants—Appellants,

                        consolidated with
                          _____________

                            No. 23-30183
                          _____________

School Board of Cameron Parish,

                                                        Plaintiff—Appellee,

                                 versus

Indian Harbor Insurance Company; QBE Specialty
Insurance Company; Steadfast Insurance Company;
General Security Indemnity Company of Arizona;
United Specialty Insurance Company; Lexington
Insurance Company; Safety Specialty Insurance
Company; Old Republic Union Insurance Company,

                                      Defendants—Appellants.
              ______________________________

              Appeal from the United States District Court
                 for the Western District of Louisiana
               USDC Nos. 2:22-CV-5287, 2:22-CV-5348,
                            2:22-CV-5283
              ______________________________

Before Jones, Haynes, and Douglas, Circuit Judges.
Per Curiam:
      This appeal involves an underlying dispute over arbitration. Cameron
Parish Recreation #6, Police Jury of Cameron Parish, and School Board of

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Case: 23-30181       Document: 109-1        Page: 3      Date Filed: 02/19/2024

                                 No. 23-30181
                           c/w Nos. 23-30182, 23-30183

Cameron Parish (collectively, “Plaintiffs”) each purchased nearly identical
surplus lines insurance policies from a group of insurance companies
(“Defendants”) to provide coverage for commercial properties located in
Louisiana.
       Each policy is structured as a single overall policy that provides
component coverage parts supplied by each insurer. But each policy notes
that it should be construed “as a separate contract between the Insured and
each of the Underwriters.” The policies also include an arbitration clause:
       All matters in difference between the Insured and the
       Companies (hereinafter referred to as “the parties”) in
       relation to this insurance, including its formation and validity,
       and whether arising during or after the period of this insurance,
       shall be referred to an Arbitration Tribunal in the manner
       hereinafter set out.
       After Plaintiffs were denied coverage for damage to their properties
from Hurricane Laura, they each filed separate lawsuits against Defendants
in Louisiana state court. Defendants removed the cases to federal court and
filed motions to compel arbitration pursuant to 9 U.S.C. §§ 4 and 202. They
also moved to stay the case pursuant to 9 U.S.C. § 3.
       The district court refused the stay and ordered what it phrased as
“limited discovery” into arbitrability. Defendants filed separate appeals, all
of which were ultimately consolidated in this court. Plaintiffs contend that
we lack appellate jurisdiction.
       We disagree.      We have appellate jurisdiction under 9 U.S.C.
§ 16(a)(1)(A) over the district court’s refusal to stay the case. Cf. Salas v. GE
Oil & Gas, 857 F.3d 278, 280 (5th Cir. 2017) (concluding the court had
appellate jurisdiction under § 16(a)(1) because the district court’s order
withdrawing a prior order that had granted a motion to compel arbitration
effectively denied an application to compel arbitration); Koveleskie v. SBC

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Case: 23-30181       Document: 109-1        Page: 4     Date Filed: 02/19/2024

                                No. 23-30181
                          c/w Nos. 23-30182, 23-30183

Cap. Mkts., Inc., 167 F.3d 361, 363 (7th Cir. 1999) (concluding the court had
appellate jurisdiction under § 16(a)(1) because the district court’s refusal to
compel arbitration until further discovery was conducted constituted a denial
of the motion to compel arbitration).
       We also conclude that discovery is not needed to determine whether
there is a valid agreement to arbitrate because the dispute can be decided as
a matter of law. See Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381
(5th Cir. 2008) (per curiam) (explaining that in determining whether a party
agreed to arbitrate a dispute, the court asks two questions—one, is there a
valid agreement to arbitrate the claims, and two, does the dispute fall within
the scope of the arbitration agreement). Thus, even if we review under an
abuse of discretion standard, the district court improperly refused to grant
the stay.
       Because the district court did not expressly address whether
arbitration is proper, we determine that it is appropriate to give the district
court the first instance and have it determine whether to grant arbitration
based upon the policy. See Montano v. Texas, 867 F.3d 540, 546 (5th Cir.
2017) (noting that as a court of review, not first view, we generally do not
“decide facts or make legal conclusions in the first instance” (quotation
omitted)). Accordingly, we VACATE the discovery order and REMAND
for the district court to immediately grant a stay of the case pending its
decision on arbitration. This is a full remand; we do not retain the case.

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