Court Opinion

ID: 32094
Source: CourtListenerOpinion
Date Created: 2010-04-25 18:49:32+00
Date Added: 2024-06-11T16:47:25.139234
License: Public Domain

United States Court of Appeals
                                                                        Fifth Circuit
                                                                     F I L E D
                  UNITED STATES COURT OF APPEALS                       July 18, 2003

                         FOR THE FIFTH CIRCUIT                   Charles R. Fulbruge III
                          ____________________                           Clerk

                             No. 03-30042
                           Summary Calendar
                         ____________________

                  CARGILL FERROUS INTERNATIONAL,
                  a Department of Cargill, Inc.,

                                                         Plaintiff-Appellee,

                                versus

    HIGHGATE MV, her engines, tackle, apparel, etc., Et Al.,

                                                                 Defendants,

         SATIN SHIPPING CORP.; SOCIETE ANONYME MONAGASQUE
              D’ADMINISTRATION MARITIME ET AERIENNE,
                    (S.A.M.A.M.A.) in personam,

                                           Defendants-Appellants.
_________________________________________________________________

           Appeal from the United States District Court
               for the Eastern District of Louisiana
                            (02-CV-510)
_________________________________________________________________

Before BARKSDALE, DeMOSS, and BENAVIDES, Circuit Judges.

PER CURIAM:*

     Cargill   Ferrous   International,     a    Department     of    Cargill,

Incorporated   (Cargill),    filed   this       action    against     numerous

defendants, including Satin Shipping Corporation (Satin)and Societe

     *
        Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Anonyme Monagasque d’Administration Maritime et Aerienne (SAMAMA).

After filing an answer in which they demanded London arbitration

pursuant to the terms of a charter party and other contracts of

carriage,    Satin   and   SAMAMA   moved   to    dismiss,    or,   in   the

alternative, to stay this action pending arbitration.

      The district court ruled that Satin and SAMAMA’s inaction in

failing to respond to correspondence from Cargill (delivered five

and   a   half   months    before   defendants’    answer),    insist    on

arbitration, or nominate an arbitrator constituted a waiver of the

right to arbitration.

      Pursuant to 9 U.S.C. § 16(a), Satin and SAMAMA appeal.             The

refusal to stay an action pending arbitration is reviewed de novo.

See Steel Warehouse Co., Inc. v. Abalone Shipping Ltd. of Nicosai,

141 F.3d 234, 236-37 (5th Cir. 1998).

      Prejudice to the party opposing arbitration is determinative

of waiver.   E.g., Price v. Drexel Burnham Lambert, Inc., 791 F.2d

1156, 1162 (5th Cir. 1986).     “Normally, waiver occurs when a party

initially pursues litigation and then reverses course and attempts

to arbitrate, but waiver can also result from ‘some overt act in

Court that evinces a desire to resolve the arbitrable dispute

through litigation rather than arbitration’.”         Texaco Exploration

and Prod. Co. v. AmClyde Engineered Prods. Co., Inc., 243 F.3d 906,

911 (5th Cir. 2001) (quoting Subway Equipment Leasing Corp. v.

Forte, 169 F.3d 324, 329 (5th Cir. 1999)).            In this analysis,

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“[t]here is a strong presumption against waiver, and any doubts ...

must be resolved in favor of arbitration”.             Id. (emphasis added).

     Cargill contends delay and inaction by Satin and SAMAMA has

hindered resolution of this matter.          Delay, as well as the extent

of   the    movant’s     participation        in     judicial        proceedings,

is a material factor in assessing prejudice vel non.                  Price, 791

F.2d at 1161.      “[M]ere delay[, however,] falls far short of the

waiver requirements....”          Texaco, 243 F.3d at 912.             Moreover,

“generalized      protestations     about     the    costs      of    delay   are

insufficient” to establish waiver.          Walker v. J.C. Bradford & Co.,

938 F.2d 575, 578 (5th Cir. 1991).

     Cargill’s contention is further undermined by Tenneco Resins,

Inc. v. Davy Int’l, AG, 770 F.2d 416, 421 (5th Cir. 1985):               “[W]hen

only a minimal amount of discovery has been conducted ... the court

should not ordinarily infer waiver based upon prejudice to the

party opposing the motion to stay litigation ... particularly when

... the defendant clearly stated the desire to arbitrate the matter

in its original answer....”        As noted, Satin and SAMAMA raised the

arbitrability of the dispute in their original answer.                 Moreover,

Cargill    does   not   contend    they     took    advantage    of,    or    even

participated in, the discovery process.            Cargill has failed to show

it has been materially prejudiced by the delay; therefore, it has

failed to overcome the strong federal presumption in favor of

arbitration.      See e.g., Walker, 938 F.2d at 578.         Restated, Satin

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and   SAMAMA   have   not   waived       their   right   to   arbitration.

Accordingly, we VACATE and REMAND for further proceedings not

inconsistent with this opinion.

                                                 VACATED AND REMANDED

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