Court Opinion

ID: 28780
Source: CourtListenerOpinion
Date Created: 2010-04-25 09:29:35+00
Date Added: 2024-06-11T14:56:51.971684
License: Public Domain

REVISED SEPTEMBER 27, 2002

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                            No. 01-60582
                        ____________________

     GULF GUARANTY LIFE INSURANCE COMPANY

                                         Plaintiff - Appellant

     v.

     CONNECTICUT GENERAL LIFE INSURANCE COMPANY; CIGNA
     REINSURANCE COMPANY

                                         Defendants - Appellees

_________________________________________________________________

          Appeal from the United States District Court
            for the Southern District of Mississippi

_________________________________________________________________
                         August 30, 2002

Before KING, Chief Judge, and PARKER, Circuit Judge, and ELLISON,
District Judge.*

KING, Chief Judge:

     Plaintiff-Appellant Gulf Guaranty Life Insurance Company

filed an initial claim in the district court in 1996 alleging

that Defendant-Appellee Connecticut General Life Insurance

     *
        District Judge of the Southern District of Texas,
sitting by designation.
Company breached a reinsurance contract between them.    Gulf

Guaranty subsequently filed claims in the district court in 2000

alleging that Connecticut General breached an agreement to

arbitrate the reinsurance dispute, as well as claims for

conspiracy and malice allegedly committed by Connecticut General

with respect to Connecticut General's conduct in the arbitration

process.   The district court consolidated the 1996 and 2000

actions and compelled arbitration of the consolidated action.

The district court further denied a motion by Gulf Guaranty to

re-open discovery and granted a motion by Connecticut General to

remove a chosen arbitrator, Gary Fagg, from service.    For the

following reasons, we AFFIRM the district court's order

compelling arbitration of all disputes between Gulf Guaranty and

Connecticut General in the consolidated action; we AFFIRM the

district court's decision dismissing Gulf Guaranty's claims for

breach of the arbitration agreement and for conspiracy and

malice; we AFFIRM the district court's decision denying Gulf

Guaranty's motion to re-open discovery; but we REVERSE the

district court's decision granting the motion to strike Fagg from

service as an arbitrator.

                I.   FACTUAL AND PROCEDURAL HISTORY

     In 1981, Plaintiff-Appellant Gulf Guaranty Life Insurance

Company (“Gulf Guaranty”) entered into a contract with Defendant-

Appellee Connecticut General Life Insurance Company (“Connecticut

                                 2
General”) by which Connecticut General agreed to reinsure Gulf

Guaranty on certain credit life insurance certificates issued by

Gulf Guaranty.   Their reinsurance contract contained an

arbitration provision governing disputes under the contract.1    In

1991, a third-party holder of one of the insurance certificates

sued Gulf Guaranty for payment.   Following judgment in favor of

that certificate holder, Gulf Guaranty sought reimbursement from

Connecticut General pursuant to their reinsurance contract.

Connecticut General offered Gulf Guaranty payment in an amount

that Gulf Guaranty found unsatisfactory.   On or about September

17, 1996, Gulf Guaranty sued Connecticut General and Defendant-

Appellee Cigna Reinsurance Company (“Cigna”)2 (collectively, “the

Defendants”) in Mississippi state court for breach of contract

and “wrongfully placing conditions on payment.”   This was the

1996 first-filed suit.

     1
        The arbitration provision in the Gulf Guaranty-
Connecticut General reinsurance contract reads in relevant part:

     Should a disagreement arise between the two companies
     regarding the rights or liabilities of either company
     under any transaction under this agreement, the same
     will be referred to arbitrators, one to be chosen by
     each company from among the officers of other life
     insurance companies and a third to be chosen by the
     said two arbitrators before entering upon arbitration.
     The arbitrators will regard this document as an
     honorable agreement and not merely as a legal
     obligation, and their decision will be final and
     binding upon both companies.
     2
        Cigna was a non-signatory to the arbitration agreement
between Gulf Guaranty and Connecticut General that acted as
Connecticut General’s agent.

                                  3
     The 1996 first-filed suit was removed to federal court in

October of 1996.   Connecticut General and Cigna sought to compel

arbitration pursuant to the Connecticut General-Gulf Guaranty

reinsurance contract.   In January of 1997, a magistrate judge

stayed all proceedings in the 1996 first-filed suit against

Connecticut General and compelled arbitration of the reinsurance

dispute.   In April of 1997, the district court likewise stayed

the action against non-signatory Cigna pending arbitration.

     In September of 1999, Gulf Guaranty appointed Gary Fagg as

its arbitrator of choice.   In January of 2000, the Defendants

appointed Oscar R. Scofield as their arbitrator of choice.

It is undisputed that Scofield and Fagg discussed selection of

Peter Jaynes to serve as the third arbitrator.   Whether the two

arbitrators agreed upon and appointed Jaynes as the third

arbitrator, or whether his selection was merely discussed between

them, is a matter of dispute.3   Based on this dispute over

selection of arbitrators, on August 23, 2000, Gulf Guaranty filed

a second lawsuit in Mississippi state court that alleged breach

of the arbitration agreement by the Defendants, alleged waiver of

the Defendants’ right to arbitrate, and alleged conspiracy and

     3
        Gulf Guaranty contends that Scofield and Fagg agreed on
Jaynes's selection and in fact appointed Jaynes to serve.
Scofield, Connecticut General's chosen arbitrator, counters that
Jaynes's appointment as the third arbitrator was merely discussed
between Scofield and Fagg, but that those two arbitrators never
agreed upon, nor appointed, Jaynes to serve.

                                 4
malice and reckless disregard for Gulf Guaranty’s rights.    This

was the 2000 second-filed suit.

     The 2000 second-filed suit was likewise removed to federal

court.   On December 14, 2000, the district court re-opened the

1996 first-filed suit and consolidated it with the 2000 second-

filed suit.   On June 22, 2001, upon motion by the Defendants to

compel arbitration and to dismiss the 2000 second-filed suit, the

district court issued an order finding that the Defendants had

not waived their right to arbitrate.   In that June 22 order, the

court also granted the Defendants’ motion to compel arbitration

and granted the Defendants motion to "Dismiss the lawsuit filed

by Plaintiff Gulf Guaranty on August 23, 2000," making no mention

of the status of the 1996 first-filed suit component of the

underlying consolidated action as stayed or dismissed.   In the

same June 22 order, the district court further denied Gulf

Guaranty’s motion to re-open discovery and granted the

Defendants’ motion to strike Fagg from service as an arbitrator.

     On July 26, 2001, the district court stayed enforcement of

its June 22 order compelling arbitration pending appeal of that

order to this court.   On September 18, 2001, the district court

denied a motion by Gulf Guaranty for relief from the district

court’s judgment pursuant to FED. R. CIV. P. 60(b).   Gulf

Guaranty now timely appeals the district court’s order of June

22, 2001 that compelled arbitration and dismissed Gulf Guaranty’s

                                  5
claims for waiver, breach and conspiracy; denied Gulf Guaranty’s

motion to re-open discovery; and struck arbitrator Fagg.

               II.   THE ORDER COMPELLING ARBITRATION

A.   This Court's Jurisdiction Over Appeal of the District Court's
                June 22 Order Compelling Arbitration

     The parties agree that this court should have jurisdiction

over the district court's June 22 order compelling arbitration of

the consolidated action, but such agreement is insufficient to

confer jurisdiction on this court.      Due to procedural ambiguity

within the June 22 arbitration regarding the precise status of

the 1996 first-filed suit of the consolidated action as stayed or

dismissed, there is some question as to whether this court has

jurisdiction subsequent to the Supreme Court's decision in Green

Tree Fin. Corp. - Ala. v. Randolph, 531 U.S. 79 (2000).         In Green

Tree, the Supreme Court addressed the appealability of orders

compelling arbitration under the Federal Arbitration Act, 9

U.S.C. § 16(a)(3) (1999) ("the FAA").4       The Supreme Court held

in Green Tree that, when a district court issues an order

compelling arbitration, that order is appealable as a final

decision under section 16(a)(3) only if the district court

dismisses the underlying action.       See 531 U.S. at 86-87.   The

court further held in Green Tree that when a district court

     4
        Section 16(a)(3) of the FAA states in relevant part:
"(a) An appeal may be taken from -- ... (3) a final decision with
respect to an arbitration that is subject to this title." 9
U.S.C. § 16(a)(3).

                                   6
compels arbitration but "enter[s] a stay instead of a dismissal [

of the underlying action,] ... that order would not be

appealable" under the FAA.   Id. at 87 n.2 (citing 9 U.S.C.

§ 16(b)(1) (1999)).5

     It is undisputed that the district court's June 22 order

explicitly dismissed the underlying 2000 second-filed suit that

was filed on August 23, 2000.   However, because the district

court neglected to explicitly address the status of the 1996

first-filed suit, which 1996 suit that court acknowledged it had

re-opened for the purpose of consolidating the 1996 suit with the

2000 second-filed suit, this court must determine, pursuant to

the dictates of Green Tree, whether we can hear this appeal of

the June 22 order compelling arbitration.   Because we conclude

that the record shows clear intent by the district court that its

June 22 order compelling arbitration be immediately appealable to

this court pursuant to the Supreme Court's mandate in Green Tree,

we further conclude that we have jurisdiction to hear appeal of

that order under § 16(a)(3) of the FAA, and in accordance with

Green Tree.

     The Supreme Court's decision in Green Tree did not confront

the circumstance of consolidated actions.   Subsequent to that

decision, no other court of appeals has yet confronted the

     5
        Section 16(b)(1) of the FAA states: "Except as otherwise
provided in section 1292(b) of title 28, an appeal may not be
taken from an interlocutory order -- granting a stay of any
action under section 3 of this title ...." 9 U.S.C. § 16(b)(1).

                                 7
precise circumstance of this case of determining appellate

jurisdiction over an order compelling arbitration of a

consolidated action that explicitly dismissed only a portion of

the claims in that action and neglected to declare the status of

the remaining claims as stayed or dismissed.   The Supreme Court

noted in Green Tree that Congress did not define the term "final

decision" as it is used within the FAA.   See 531 U.S. at 86.    The

court thus held that the term final decision should be

"accord[ed] its well established meaning [,]" as "a decision that

ends the litigation on the merits and leaves nothing more for the

court to do but execute the judgment."    Id. (citations and

quotation omitted).

     We recently construed a district court's order compelling

arbitration that did not precisely conform with the dismissal

language of Green Tree as providing the functional equivalent of

the required dismissal of the underlying case, and thus to allow

for our exercise of jurisdiction over that appeal in accordance

with Green Tree.   See Am. Heritage Life Ins. Co. v. Orr, 294 F.3d
702, 706-08 (5th Cir. 2002) (citing Green Tree, 531 U.S. at 89).

In the order compelling arbitration at issue in that case, the

district court used the term "clos[ed]" rather than "dismiss[ed]"

to indicate the status of the underlying case.    See id.   We

concluded that there "is no practical distinction between

'dismiss' and 'close' for purposes of this appeal," where “the

application of each word results in a termination on the merits,

                                8
leaving the judgement-rendering [sic] court with nothing more to

do but execute the judgment" so that we determined "the decision

[to be] 'final' within the contemplation of § 16(a)(3) of the

FAA."   Id.   Thus, we have previously inferred that an order that

did not precisely conform with the Supreme Court's requirement in

Green Tree that claims be dismissed per se to allow appellate

jurisdiction nonetheless constituted a final decision for the

purposes of our jurisdiction in conformance with Green Tree.

     The district court in the instant case took the following

actions that suggest that court's intent to issue a final

decision in its June 22 order compelling arbitration that would

be immediately appealable to this court, in full accord with

Green Tree.   We note first that the district court lifted the

stay on the 1996 first-filed suit by re-opening that case when it

consolidated the actions, so that no stay of the first-filed suit

remained in effect.   We further note that there was no motion

before the district court by any party to stay any portion of the

consolidated action at the time that court issued its June 22

order compelling arbitration of the entire consolidated action.

Rather, there was only a motion to dismiss filed by the

Defendants along with the Defendants' motion requesting the

district court to re-compel the parties to arbitrate their entire

                                  9
dispute.6    In its June 22 order compelling arbitration, the

district court did dismiss the 2000 second-filed suit in order to

compel the entire action to arbitration in accord with the

previous order compelling arbitration of the 1996 first-filed

suit.

     Additionally, in its subsequent order of July 26, 2001, the

district court stayed enforcement of its June 22 order compelling

arbitration pending appeal to this court of that June 22 order,

referencing the cause numbers of both the 1996 and 2000 filed

suits in that July 26 stay order.     Moreover, in that July 26

order, the district court expressly referenced its June 22 order

compelling arbitration and described that order as follows: "This

[June 22] Order is considered a final judgment for the purposes

of appeal.   See 9 U.S.C. § 16(a)(3); Green Tree Fin. Corp. v.

Randolph, 531 U.S. 79 (2000)."   The district court's express

reference to Green Tree when describing its June 22 order is very

compelling evidence that the district court clearly intended to

issue a final decision compelling arbitration in its June 22

order for the purposes of this court's jurisdiction to entertain

immediate appeal of that order fully in accord with Green Tree.

     Last, the district court subsequently entertained and denied

a motion made by Gulf Guaranty pursuant to FED. R. CIV. P. 60(b)

     6
        We acknowledge that this motion by the Defendants
seeking an order re-compelling arbitration of the entire dispute
only requested dismissal of the 2000 second-filed suit.

                                 10
for relief from the district court's judgment of June 22.     We

note that trial courts have no jurisdiction to entertain Rule

60(b) motions for relief from a judgment except from an order

that is a "final judgment, order, or proceeding ...."    FED. R.

CIV. P. 60(b).7   Thus, the district court's acceptance of

jurisdiction over, and denial of, Gulf Guaranty's Rule 60(b)

motion further evinces that court's belief that its June 22 order

constituted a final decision immediately appealable to this

court.    We conclude from this record that the district court's

order of June 22 compelling arbitration of the entire instant

consolidated action constitutes a final decision within the

meaning of Green Tree, 531 U.S. at 85.    The district court’s

failure to reference explicitly the 1996 first-filed suit as

dismissed in the court's June 22 order compelling arbitration of

the entire consolidated action was simply an oversight.      Clearly,

the intention, as well as the effect, was to dismiss it.

 B.   No Waiver By Connecticut General of Its Right to Arbitrate

      In the 2000 second-filed suit, Gulf Guaranty claimed that

Connecticut General waived its right to arbitrate based on

Connecticut General's alleged attempted veto of the selection of

Jaynes as a third arbitrator by Scofield and Fagg.    Based on this

dispute over arbitrator selection, Gulf Guaranty alleged that

      7
         Rule 60(b) states in relevant part: "On motion ... the
court may relieve a party ... from a final judgment, order, or
proceeding for the following reasons: (1) mistake ...." FED. R.
CIV. P. 60(b).

                                 11
Connecticut General refused to move forward with arbitration,

took active steps to prevent arbitration, and attempted to

"counsel or coerce" Scofield into repudiating an agreement that

Gulf Guaranty alleges was completed between Scofield and Fagg and

appointed Jaynes as the third arbitrator.   The district court

granted the Defendants' motion to dismiss the waiver claim.    We

agree with the district court that, even taking Gulf Guaranty's

allegations as true at the motion to dismiss stage, such

allegations regarding Connecticut General's participation in the

dispute over the composition of the arbitration panel do not

indicate sufficient overt acts evincing a desire by Connecticut

General to litigate, instead of arbitrate, the reinsurance

dispute that would constitute waiver of Connecticut General's

contractual right to arbitrate.

     This court reviews de novo a district court's dismissal of a

claim that a party waived its right to arbitrate.   See Subway

Equip. Leasing Corp. v. Forte, 169 F.3d 324, 326 (5th Cir. 1999)

(waiver); Copeland v. Wasserstein, Perella & Co., Inc., 278 F.3d
472, 477 (5th Cir. 2002) (motion to dismiss).   As the district

court correctly set forth, a party claiming that another party

waived the contractual right to arbitrate bears a heavy burden to

establish the claim.   "There is a strong presumption against" a

finding that a party waived its contractual right to arbitrate,

and "any doubts thereabout must be resolved in favor of

arbitration."   Texaco Exploration & Prod. Co. v. AmClyde

                                  12
Engineered Prods. Co., Inc., 243 F.3d 906, 911 (5th Cir. 2001)

(citing Subway, 169 F.3d at 329).     Ordinarily a party waives its

right to arbitrate when it "initially pursues litigation and then

reverses course and attempts to arbitrate ...."     Id.   However,

waiver "can also result from 'some overt act in Court that

evinces a desire to resolve the arbitrable dispute through

litigation rather than arbitration.'"     Id. (quoting Subway, 169
F.3d at 329).

       However, "mere delay falls far short of the waiver

requirements ...."    Id. (citing Subway, 169 F.3d at 326).   In

Subway, for example, this court rejected a claim of waiver even

where it was alleged a party sought related judicial bankruptcy

proceedings involving issues separate from the arbitration in an

affirmative attempt to delay that arbitration.     See 169 F.3d at

329.    Similarly, in Texaco Exploration, this court rejected a

claim of waiver based on a party's seeking litigation of another

dispute with the same opposing party that was separate from the

arbitrable dispute, even where this court recognized that the

unrelated litigation had the effect of delaying the arbitration

and narrowing its scope. 243 F.3d at 911-12.   This court has

further recognized that, even where a party takes substantial

steps toward litigation of the arbitral dispute, or participates

substantially in litigation procedures, it ordinarily will not

waive the right to arbitrate.    See Tenneco Resins, Inc. v. Davy

Int'l, AG, 770 F.2d 416, 420-21 (5th Cir. 1985) (collecting

                                 13
cases).   In Tenneco, for example, this court found that a party

had not waived its right to arbitrate when it waited "almost

eight months before moving that the district court proceedings be

stayed pending arbitration, and in the meantime participated in

discovery."   Id.   This court noted that "this and other courts

have allowed such actions as well as considerably more activity

without finding that a party has waived a contractual right to

arbitrate."   Id. at 421 (citing Southwest Indus. Import & Export,

Inc. v. Wilmod Co., Inc., 524 F.2d 468 (5th Cir. 1975)); see also

Gen. Guar. Ins. Co. v. New Orleans Gen. Agency Inc., 427 F.2d
924, 928-29 (5th Cir. 1970) (finding no waiver although a party

filed an answer to a court claim denying liability and filed

counterclaims, as well as attempted to implead parties and

allowed taking of two depositions before demanding arbitration).

     In contrast, in one of the few cases in which we have

recognized a party's waiver of the right to arbitrate, we found

that the party had "demonstrated a clear and unmistakable

'disinclination' to arbitrate" to "substantial detriment and

prejudice" of the other party, including the bringing of a state

court suit that did not "rely on or even mention the arbitration

clause," and where the parties did not attempt to schedule an

arbitration hearing until almost three years later.    See Miller

Brewing Co. v. Fort Worth Distrib. Co., Inc., 781 F.2d 494, 497

(5th Cir. 1986); cf. Ernst, Inc. v. Manhattan Constr. Co. of

Tex., 559 F.2d 268, 269 (5th Cir. 1977) (finding that "extensive

                                 14
postsuit [sic] actions in all phases of this complex litigation

served as waiver of [a party's] right to demand" that an opposing

party arbitrate grievances).   Connecticut General did not

initiate any litigation action in this case; it merely defended

itself against Gulf Guaranty's court claims.   Gulf Guaranty

offers no authority supporting its proposition that, even taking

its allegations as true, Connecticut General's participation in

the dispute over the composition of the arbitration panel -- even

if protracted and deliberately causing delay in arbitration --

rises to the level of the type of overt act that would indicate

Connecticut General’s desire to resolve the underlying

reinsurance dispute via litigation rather than arbitration for

the purposes of waiver.   We find no such authority either.    We

thus agree with the district court that Connecticut General did

not waive its right to arbitrate its dispute with Gulf Guaranty.

   III. DISMISSAL OF GULF GUARANTY'S CLAIMS FOR BREACH OF THE
     ARBITRATION AGREEMENT AND CONSPIRACY AND DENIAL OF GULF
              GUARANTY'S MOTION TO REOPEN DISCOVERY

A. Dismissal of Gulf Guaranty's Remaining Claims for Damages for
 Breach of the Arbitration Agreement, Conspiracy, and a Tort of
  Malicious, Willful, or Reckless Disregard for Gulf Guaranty's
                              Rights

     We review a district court's grant of a motion to dismiss

claims de novo.   See Copeland, 278 F.3d at 477.   In Gulf

Guaranty's August 23, 2000 complaint alleging that Connecticut

General "refused to move forward with arbitration" based on the

dispute over selection of Jaynes as a third neutral arbitrator,

                                15
Gulf Guaranty claimed that Connecticut General breached the

arbitration agreement, conspired to deprive Gulf Guaranty of its

rights under the reinsurance agreement, and committed malicious,

willful, or reckless disregard for Gulf Guaranty's rights, which

latter claim Gulf Guaranty indicated constituted an "independent

tort."   Gulf Guaranty sought actual damages, attorneys’ fees and

costs, as well as "punitive damages in an amount sufficient to

punish these defendants and to deter others from similar

misconduct ...."   In its June 22 order, once the district court

found that Connecticut General did not waive its right to

arbitrate and compelled arbitration, that court granted the

Defendants' motion to dismiss the entire lawsuit filed on August

23, thus including Gulf Guaranty's claims for breach, conspiracy

and malice.   The court did so without any further reference by

the court to those claims or discussion of their merits.

     The dismissal without discussion suggests that the district

court declined to reach the merits of those claims.   Gulf

Guaranty argues that this was an improper dismissal of the claims

on the merits and further contends that, even if its pleaded

allegations failed to make out its claim of waiver, Gulf

Guaranty's allegations of breach and conspiracy and malice, if

taken as true, are nevertheless sufficient to survive a motion to

dismiss.   The Defendants contend that the district court properly

dismissed these three claims on their merits and posit that the

district court must have done so based on a conclusion by that

                                16
court that such claims were merely reiterative of Gulf Guaranty's

failed waiver claim.

     We disagree with the parties' assumption that the district

court dismissed Gulf Guaranty's claims for damages for breach,

conspiracy and reckless and malicious behavior on the merits.    We

acknowledge that it is not entirely clear from the June 22 order

upon which ground the district court based its dismissal of those

two claims -- whether on the merits or without reaching the

merits.   However, we are "not restricted to ruling on the

district court's reasoning, and may affirm a district court's

grant of a motion to dismiss on a basis not mentioned in the

district court's opinion."   See In re Comshare, Inc. Sec. Litig.,

183 F.3d 542, 548 (6th Cir. 1999) (citation omitted); see also

Razzoli v. Fed. Bureau of Prisons, 230 F.3d 371, 376 (D.C. Cir.

2000) (explaining that an appellate court "can affirm a correct

decision even if on different grounds than those assigned in the

decision under review")(internal quotation and citation omitted).

Consequently, because we conclude that it was proper for the

district court, when compelling arbitration, to dismiss Gulf

Guaranty's breach, conspiracy and malice claims without reaching

the merits of those claims, we affirm the order dismissing those

claims.

     Gulf Guaranty offers no basis for a court's jurisdiction to

adjudicate claims for damages of the type made by Gulf Guaranty

that arise from the alleged failure or breach of the agreed upon

                                17
arbitral process with respect to selection of Jaynes as

arbitrator, and we find none.   No court appears to have addressed

the precise instant circumstance in which a party alleges failure

of the arbitral process and seeks damages, rather than compelled

arbitration, from the court for breach of a valid arbitration

agreement, as well as damages for conspiracy and tort.    However,

review of the applicable principles regarding a court's limited

authority to intervene in the arbitral process when there is a

valid and enforceable arbitration agreement indicates that it was

proper for the district court to dismiss Gulf Guaranty's breach,

conspiracy, and malice claims without addressing the merits of

those claims.

     Under the FAA, jurisdiction by the courts to intervene into

the arbitral process prior to issuance of an award is very

limited.   See Larry's United Super, Inc. v. Werries, 253 F.3d
1083, 1085 (8th Cir. 2001).   Courts are limited to determinations

regarding whether a valid agreement to arbitrate exists and the

scope and enforcement of the agreement, including the

arbitrability of given underlying disputes under the agreement.

See id. at 1085-86 ("'[A] court compelling arbitration should

decide only such issues as are essential to defining the nature

of the forum in which a dispute will be decided.'") (quoting

Great Western Mtg. Corp. v. Peacock, 110 F.3d 222, 230 (3d Cir.

1997)); Republic of Nicaragua v. Standard Fruit Co.,     937 F.2d
18
469, 478 (9th Cir. 1991) ("Our role is strictly limited to

determining arbitrability and enforcing agreements to arbitrate

....").   Section 4 of the FAA provides for a court's role in the

arbitral process prior to issuance of an award in the event of a

claimed "default" of that process pursuant to a valid agreement:

     A party aggrieved by the alleged failure, neglect, or
     refusal of another to arbitrate under a written
     agreement for arbitration may petition ... [a] district
     court ... for an order directing that such arbitration
     proceed in the manner provided for in such agreement
     .... The court ... upon being satisfied that the making
     of the agreement for arbitration or the failure to
     comply therewith is not in issue, ... shall make an
     order directing the parties to proceed to arbitration
     in accordance with the terms of the agreement .... If
     the making of the arbitration agreement or the failure,
     neglect, or refusal to perform the same be in issue,
     the court shall proceed ... to the trial thereof ....
     If the jury find that an agreement for arbitration was
     made in writing and that there is a default in
     proceeding thereunder, the court shall make an order
     summarily directing the parties to proceed with the
     arbitration in accordance with the terms thereof.

9 U.S.C. § 4 (1999).   The FAA does not provide therefore for any

court intervention prior to issuance of an arbitral award beyond

the determination as to whether an agreement to arbitrate exists

and enforcement of that agreement by compelled arbitration of

claims that fall within the scope of the agreement even after the

court determines some default has occurred.   Moreover,

enforcement of an agreement to arbitrate under the FAA does not

appear to include any mechanism beyond those geared toward

returning the parties to arbitration, thus appearing not to

authorize compensation by a court to parties in the form of

                                19
damages prior to issuance of an arbitral award.     Cf. Moses H.

Cone Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 22 (1982) ("The

[FAA] provides two parallel devices for enforcing an arbitration

agreement: a stay of litigation in any case raising a dispute

referable to arbitration, 9 U.S.C. § 3, and an affirmative order

to engage in arbitration, § 4.   Both of these sections call for

an expeditious and summary hearing, with only restricted inquiry

into factual issues.").

     We have at least once rejected a claim for damages arising

from an alleged failure in the arbitral process and ordered the

parties instead to resume arbitration.     See Folse v. Richard Wolf

Med. Instruments Corp., 56 F.3d 603, 604-06 (5th Cir. 1995).       In

Folse, we found that a district court erred by refusing to compel

parties to return to arbitration and refusing to stay a court

action that included a claim for damages from "failure of

arbitration" arising from an arbitral process that was ongoing

for more than three years without resulting in an award.     Id.    In

so doing, we noted that, although it was "unfortunate" that the

arbitration "has failed the expectations of at least one, if not

both, of the parties[,] ... [n]onetheless, ... these facts do not

permit us to intervene until the parties see this arbitration

through to a final award."   Id. at 606.

     Additionally, this court follows the rule by which

challenges to the procedural aspects of arbitration are for the

arbitrator to decide, while challenges to the substantive

                                 20
arbitrability of disputes are for the courts to decide.     See

Smith Barney Shearson, Inc. v Boone, 47 F.3d 750, 753-54 (5th

Cir. 1995) (finding that a party's claim that arbitration was

time-barred was a proper dispute regarding arbitration procedure

for the arbitrator where rules regarding timeliness were

incorporated into the agreement to arbitrate and the parties

agreed to have any dispute between them resolved by arbitration);

Ala. Educ. Ass'n v. Ala. Prof'l Staff Org., 655 F.2d 607 (5th

Cir. Unit B Sept. 8, 1981) (citing United Steelworkers v. Am.

Mfg. Co., 363 U.S. 564 (1960)); see also Livingston v. John Wiley

& Sons, Inc., 313 F.2d 52, 62 (2d Cir. 1963) ("[I]ssues of

compliance with grievance and arbitration procedure ... are

properly within the competence of the arbitrator.").    As the

Fourth Circuit has explained, "[g]enerally, objections to the

nature of arbitral proceedings are for the arbitrator to decide

in the first instance ... [f]airness objections should generally

be made to the arbitrator subject only to limited post-

arbitration judicial review as set forth in section 10 of the

FAA."   See Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 940-41

(4th Cir. 1999).       There are circumstances in which courts will

intervene in the arbitral process when a challenge goes to the

making of the agreement or suggests that the agreement is void or

warrants rescission.    In Hooters of America, for example, the

Fourth Circuit found that a party "materially breached" its

                                  21
arbitration agreement by promulgating rules under that agreement

that were so biased in favor of an employer that the rules were

tantamount to unconscionability, thus requiring the extreme
                                                   8
remedy of rescission of the agreement.   See id.       We have

recently similarly determined that a court may entertain a

challenge to the enforcement of arbitration agreements based on a

theory that the agreement is void as against public policy.      See

Inv. Partners, L.P. v. Glamour Shots Licensing, Inc., No. 01-

60651, 2002 WL 1498721, at *3 (5th Cir. July 15, 2002).      However,

Gulf Guaranty's claims for damages arising from breach of the

arbitration agreement, and from conspiracy and a tort of malice,

based on its allegations regarding Connecticut General's

     8
        The Fourth Circuit in Hooters of America strictly
limited the reach of its decision on the egregious nature of the
facts of that case, cautioning:

     [O]ur decision[s] [should not] be misunderstood as
     permitting a full scale assault on the fairness of
     proceedings before the matter is submitted to
     arbitration .... This case ... is the exception that
     proves the rule: fairness objections should generally
     be made to the arbitrator subject only to limited post-
     arbitration judicial review as set forth in section 10
     of the FAA. By promulgating this system of warped
     rules, [employer] Hooters so skewed the process in its
     favor that [the employee] has been denied arbitration
     in any meaningful sense of the word. To uphold the
     promulgation of this aberrational scheme under the
     heading of arbitration would undermine, not advance,
     the federal policy favoring alternative dispute
     resolution.
173 F.3d at 941.

                               22
responsibility for failure in the arbitrator selection process,

make no such challenges to the making of or validity of the

arbitration agreement, nor do these claims suggest that the

agreement is void, unenforceable, or worthy of rescission based

on public policy or any other ground.    Rather, Gulf Guaranty

appears improperly to attempt to cast challenges that essentially

go to the procedure of arbitration, specifically the arbitrator

selection process, and to the alleged unfairness of that process,

as claims for damages for breach of contract and tort injury.    We

find no authority under the FAA for a court to entertain such

challenges prior to issuance of the arbitral award.

      The parties do not dispute that they have a valid agreement

to arbitrate and that their underlying reinsurance dispute is

arbitrable under that agreement.     The district court has already

provided for enforcement of the valid agreement pursuant to the

mechanisms outlined in the FAA via that court's June 22 order

compelling arbitration.   As we indicated in Folse, prior to

issuance of an arbitral award, a party's prayer for actual and

punitive damages for any alleged failure of that process does not

appear to fall within the ambit of a court's authority to enforce

a valid arbitration agreement under the FAA.     See 56 F.3d at 603-

05.   We conclude, therefore, based on a court's limited authority

under the FAA to intervene in the arbitral process prior to

issuance of an award, that it was appropriate for the district

court in this case to dismiss Gulf Guaranty's claims seeking

                                23
damages for breach, conspiracy, and malice without addressing

their merits when that court issued an order re-compelling the

parties to arbitration.

     B.   Denial of Gulf Guaranty's Motion to Re-open Discovery

     We review a district court's refusal to re-open discovery

for abuse of discretion.   See Martin's Herend Imports v. Diamond

& Gem Trading, 195 F.3d 765, 775 (5th Cir. 1999).   Gulf Guaranty

requested that the district court re-open discovery with respect

to the issue of whether Scofield in fact agreed with Fagg to

appointment of Jaynes as a third arbitrator.   Once the district

court disposed of Gulf Guaranty's other claims, that court denied

the discovery motion in its June 22 order without further

discussion.   Under this circumstance, we conclude that decision

was proper.     The district court properly found that any alleged

coercion regarding the composition of the panel, including

whether Jaynes was appointed as an arbitrator, was insufficient

as a matter of law to constitute waiver of Connecticut General's

right to arbitrate.   Any further evidence regarding the dispute

over Jaynes' appointment would not alter that finding.

Additionally, once the district court properly dismissed Gulf

Guaranty's other claims for breach of the arbitration agreement,

conspiracy, and malice, and then compelled any remaining disputes

between the parties to arbitration, no court claims remained

before the district court for which discovery by Gulf Guaranty

                                24
would have been necessary at that time.   Moreover, in the event

that arbitration resolved all of the issues between the parties,

such discovery in pursuit of Gulf Guaranty's court claims would

have been wasteful.   We conclude, therefore, that the district

court did not abuse its discretion by denying Gulf Guaranty's

motion to re-open discovery regarding the dispute over Jaynes's

appointment as an arbitrator.

IV.   THE STRIKING OF FAGG AS AN ARBITRATOR BY THE DISTRICT COURT
              PRIOR TO ISSUANCE OF AN ARBITRAL AWARD

      The Defendants filed a motion with the district court to

strike Gulf Guaranty's chosen arbitrator, Gary Fagg, from

service.   The district court interpreted the language of the

arbitration agreement to require that only executives of a "life

insurance company" may serve as arbitrators.   The court thus

concluded that, because Fagg is the executive of a reinsurance

company, which the court concluded is not a "life insurance

company," then Fagg's "qualifications" fail to satisfy a

"condition precedent" in the arbitration agreement for Fagg to

serve as an arbitrator.   The district court thus granted the

Defendants' motion to strike Fagg from service as an arbitrator.

Gulf Guaranty appeals that decision on the ground that the

district court erred in determining that the court had authority

to remove Fagg from service as an arbitrator prior to issuance of

                                25
an arbitral award based on any qualification of Fagg to serve.9

We agree.

     As the Supreme Court has acknowledged, the congressional

purpose of the FAA is to "move the parties to an arbitrable

dispute out of court and into arbitration as quickly and easily

as possible."     Moses H. Cone Hosp., 460 U.S. at 22.

Additionally, the FAA does not expressly provide for court

authority to remove an arbitrator prior to issuance of an

arbitral award.    Under the FAA, courts may intervene into the

arbitral process to select an arbitrator upon application of a

party, if the parties fail to avail themselves of a method for

arbitrator selection within their agreement or "if for any reason

there shall be a lapse in the naming of an arbitrator."     See 9

U.S.C. § 5 (1999).10    However, there is no authorization under

     9
        Because we determine that the district court lacked
authority to remove Fagg as an arbitrator on the ground of Fagg's
qualification to serve, we need not address Gulf Guaranty's
alternative argument that the district court erred in that
court's interpretation of the arbitration agreement to determine
that Fagg was not qualified to serve.
     10
          Section 5 of the FAA states in relevant part:

        If in the agreement provision be made for a method
     of naming or appointing an arbitrator ... or an umpire,
     such method shall be followed; but if no method be
     provided ... or if a method be provided and any party
     thereto shall fail to avail [itself] of such method, or
     if for any other reason there shall be a lapse in the
     naming of an arbitrator ... or in filling a vacancy,
     then upon application of either party to the
     controversy the court shall designate and appoint an
     arbitrator or arbitrators or umpire, as the case may
     require ....

                                  26
the FAA's express terms for a court to remove an arbitrator from

service.   Rather, even where arbitrator bias is at issue, the FAA

does not provide for removal of an arbitrator from service prior

to an award, but only for potential vacatur of any award.     See 9

U.S.C. § 10 (1999).11   Thus, the FAA does not expressly endorse

court inquiry into the capacity of any arbitrator to serve prior

to issuance of an arbitral award.     More importantly, the FAA

appears not to endorse court power to remove an arbitrator for

any reason prior to issuance of an arbitral award.12

9 U.S.C. § 5.
     11
        Section 10 of the FAA authorizes appeal to the courts
seeking vacatur of an arbitral award as follows:

     In any of the following cases the United States court
     ... may make an order vacating the [arbitral] award
     upon application of any party to the arbitration - (1)
     Where the award was procured by corruption, fraud, or
     undue means. (2) Where there was evident partiality or
     corruption in the arbitrators .... (3) Where the
     arbitrators were guilty of misconduct in refusing to
     postpone the hearing, upon sufficient cause shown, or
     in refusing to hear evidence pertinent and material to
     the controversy; or any other misbehavior by which the
     rights of any party have been prejudiced. (4) Where
     arbitrators exceed their powers, or so imperfectly
     execute them that mutual, final, and definite award ...
     was not made ....

9 U.S.C. § 10.

     12
        The district court conceded that if the Defendants
challenged that Fagg was biased, the court had no power to review
a challenge to Fagg's ability to serve on that basis prior to
issuance of an arbitral award.

                                 27
     As the district court conceded, it is well established that

prior to issuance of an award, a court may not make inquiry into

an arbitrator's capacity to serve based on a challenge that a

given arbitrator is biased.   See Aviall, Inc. v. Ryder Sys.,

Inc., 110 F.3d 892, 895 (2d Cir. 1997) ("Although the FAA

provides that a court can vacate an award 'where there was

evident partiality or corruption in the arbitrators,' ... it does

not provide for pre-award removal of an arbitrator.") (quoting 9

U.S.C. § 10).13   This court has never confronted the question

whether, prior to issuance of an arbitral award, a court has

authority to remove an arbitrator, as did the district court,

based on the type of challenge to the arbitrator's qualification

to serve under the terms of the arbitration agreement that is

made here.   The Second Circuit has found that the FAA's

prohibition on removal of arbitrators prior to issuance of an

award extends to prohibit "'judicial scrutiny of [either] an

arbitrator's qualifications to serve,’" or bias "'other than in a

     13
        As the Defendants correctly note, the single unpublished
district court decision relied upon by Gulf Guaranty in support
of its argument that the district court lacked authority to
entertain a challenge to Fagg's qualifications, Nat'l Union Fire
Ins. Co. v. Holt Cargo Sys., Inc., No. 99 Civ. 3699, 2000 WL
328802, at *1 (S.D.N.Y. Mar. 28, 2000), involved only a court
claim filed by a party prior to an arbitral award, which claim
sought removal of an arbitrator for bias. That case did not
implicate other qualifications of the arbitrator to serve under
the terms of the arbitration agreement of the type asserted by
the Defendants in this case. See id. We agree with the
Defendants, therefore, that National Union Fire is not persuasive
in this circumstance.

                                 28
proceeding to confirm or vacate an award, which necessarily

occurs after the arbitrator has rendered his service.'"     Id.

(quoting Florasynth, Inc. v. Pickholz, 750 F.2d 171, 174 (2d Cir.

1984) (citing Michaels v. Mariforum Shipping, S.A., 624 F.2d 411,

414 n.4 (2d Cir. 1980)); see also Cox v. Piper, Jaffray &

Hopwood, Inc., 848 F.2d 842, 843-44 (8th Cir. 1988) ("Appellants

cannot obtain judicial review of the arbitrators' decisions about

the qualifications of the arbitrators ... prior to the making of

an award.") (citing Stroh Container Co. v. Delphi Indus., Inc.,

783 F.2d 743, 748-49 (8th Cir. 1986)).   In Aviall, the Second

Circuit further acknowledged, however, that a court would have

the power to remove an arbitrator pursuant to section 2 of the

FAA if "the agreement to arbitrate before a particular arbitrator

... is subject to attack under general contract principles ...."
110 F.3d at 895 (citing 9 U.S.C. § 2 (1999)).14   However, the

Second Circuit in Aviall indicated that such removal power

"simply manifest[s] the FAA's directive that an agreement to

arbitrate shall not be enforced when it would be invalid under

general contract principles."   Id. at 896.   The Second Circuit

further suggested that it was appropriate for courts to

adjudicate claims regarding the capacity of arbitrators to serve

     14
        Section 2 of the FAA provides in relevant part: "A
written provision ... in any ... contract ... involving commerce
to settle by arbitration a controversy ... arising out of such
contract ... shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation
of any contract." 9 U.S.C. § 2.

                                29
only when there is a claim, for example, that there was "fraud in

the inducement" or some other "infirmity in the contracting

process" regarding the parties' establishing arbitral

qualifications, which ground would invalidate the agreement to

arbitrate.    Id.   The Aviall court thus affirmed a district

court's summary judgment that it was premature for a court to

hear a claim requesting a declaratory judgment that an appointed

arbitrator "could not arbitrate the underlying suit."       Id. at

895.

       In Aviall, the terms of the arbitration agreement required

that arbitral disputes would only be submitted to the designated

arbitrator if it were an "'independent auditor'" of both parties

to the agreement.     Id. at 894.   The party seeking removal of the

arbitrator claimed that the designated accounting arbitrator was

not "independent" from one of the parties, as required by the

express terms of the agreement, but partial due to a "business

relationship" with one of the parties.      Id. at 893.   The Second

Circuit affirmed the district court's decision not to adjudicate

the dispute over which arbitrator would hear the underlying

arbitral dispute because that court of appeals found that the

dispute over whether the auditor arbitrator was sufficiently

"independent" to satisfy the terms of the arbitration agreement

did not constitute a claim "invalidating the contract" or a claim

of some type of fraud in the inducement that would suggest that

the validity of the agreement to arbitrate is under attack under

                                    30
general contract principles.   See id. at 895-97.   We agree with

this approach by the Second Circuit interpreting the FAA to mean

that a court may not entertain disputes over the qualifications

of an arbitrator to serve merely because a party claims that

enforcement of the contract by its terms is at issue, unless such

claim raises concerns rising to the level that the very validity

of the agreement is at issue.15

     We further note that, as one district court within the

Second Circuit correctly pointed out, a "prime objective of

arbitration law is to permit a just and expeditious result with a

minimum of judicial interference" and any other such rule could

"spawn endless applications [to the courts] and indefinite delay"

and that otherwise "there would be no assurance that [the party

seeking removal] would be satisfied with [the removed

     15
        We acknowledge that at least two lower courts have
entertained disputes over the qualifications of arbitrators to
serve in a manner that arguably supports court intervention into
the challenge made by the Defendants' to Fagg's qualification to
serve. See Jefferson-Pilot Life Ins. Co. v. LeafRe Reinsurance
Co., No. 00-C-5257, 2000 WL 1724661, at *2(N.D. Ill. Nov. 20,
2000) (finding by the district judge that "whether a party
challenges an arbitrator's qualifications - just like a party who
challenges bias - must wait until the post award stage to
complain ... I do not think that is necessary"); In re
Arbitration Between Certain Underwriters at Lloyds, London, 1997
WL 461035, at *4, 5 (N.D. Ill. Aug. 11, 1997) (arguably
misconstruing Aviall, 110 F.3d at 895-97, to endorse the district
court's conclusion that it could entertain a party's challenge to
an arbitrator's qualification to serve based on the arbitrator's
status as an "executive officer" pursuant to the terms of the
arbitration agreement in that case). We find however, that these
decisions conflict with the purpose of the FAA and its policy
favoring arbitration of disputes prior to court intervention.

                                  31
arbitrator's] successor and would not bring yet another

proceeding to disqualify him or her."     Marc Rich & Co. v.

Transmarine Seaways Corp., 443 F. Supp. 386, 387-88 (S.D.N.Y.

1995) (finding that "this objective can best be achieved by

requiring an arbitrator ... to declare any possible

disqualification, and then to leave it to his or her sound

judgment to determine whether to withdraw ... of course be[ing]

aware that such a decision would be subject to judicial review

after the award had been made" pursuant to the limits of section

10 of the FAA).   We agree with this assessment by that district

court of the danger prior to issuance of an arbitral award in

allowing courts to adjudicate a challenge such as that made by

the Defendants to Fagg's qualification to serve, based on whether

Fagg is the executive of a reinsurer or an insurer pursuant to

the terms of the arbitration agreement.     We conclude, therefore,

that the dispute regarding Fagg's qualification to serve,

although framed as a request to the court to enforce the

arbitration agreement by its terms, is not the type of challenge

that the district court was authorized to adjudicate pursuant to

the FAA prior to issuance of an arbitral award.    We further

conclude, therefore, that the district court had no authority to

strike Fagg from service as an arbitrator and reverse that

decision.

                          V.   CONCLUSION

                                 32
     For the foregoing reasons, we AFFIRM the district court’s

order compelling arbitration of the entire dispute between Gulf

Guaranty and Connecticut General in this consolidated action.    We

also AFFIRM the district court's decision dismissing Gulf

Guaranty's claims for breach of the arbitration agreement, and

dismissing Gulf Guaranty's claims for breach, conspiracy, and

some tort of malice.   We likewise AFFIRM the district court's

decision denying Gulf Guaranty's motion to re-open discovery.

However, we REVERSE the district court's decision granting the

Defendants' motion to strike Gary Fagg from service as an

arbitrator.   Costs shall be borne by Gulf Guaranty.

                                33