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Bordelon Marine, LLC v. Bibby Subsea Rov, LLC

United States District Court, E.D. Louisiana

January 30, 2017

BORDELON MARINE, LLC
v.
BIBBY SUBSEA ROV, LLC

         SECTION I

          ORDER AND REASONS

          LANCE M. AFRICK UNITED STATES DISTRICT JUDGE.

         Bordelon v. Bibby drones on. In the latest iteration of the parties' procedural jockeying, Bibby Subsea ROV, LLC (“Bibby Subsea”) asks this Court to reopen[1] this matter and order[2] Bordelon Marine, LLC (“Bordelon”) to arbitrate (in Texas) claims raised in a Texas lawsuit Bordelon filed against various affiliates of Bibby Subsea as well as employees and directors of those various affiliates (“the Bibby affiliate defendants”). Bibby Subsea is not a defendant in the Texas action, which presently alleges that the Bibby affiliate defendants committed common law fraud and conspiracy to commit common law fraud during the construction of the M/V BRANDON BORDELON. See Bordelon Marine, L.L.C. v. Bibby Line Grp. Ltd., No. 3:16-282, Dkt. 6.

         Even though the Bibby affiliate defendants are not parties to this lawsuit (the “Louisiana action”)[3] and Bibby Subsea is not a party to the Texas action, Bibby Subsea argues that it is entitled to assert both its own and the Bibby affiliate defendants' third-party rights to assert Bibby Subsea's rights under the arbitration clause in the BRANDON BORDELON charter party agreement. But Bibby Subsea does not convince this Court that it is appropriate for this Court to order the arbitration of the Texas dispute in Texas.

         I.

         Under Section 4 of the Federal Arbitration Act,

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.

9 U.S.C. § 4. Section 4 further explains that, after receiving such a request, “the court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” Finally, Section 4 requires that “[t]he hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed.”[4]

         As the Fifth Circuit has explained, Section 4 “facially mandates that two conditions must be met before a district court may compel arbitration: (1) that the arbitration be held in the district in which the court sits; and (2) that the arbitration be held in accordance with the agreement of the parties.” National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326, 331 (5th Cir. 1987). Given that the arbitration agreement that Bibby Subsea is seeking to enforce requires that the arbitration occur in Texas, see R. Doc. No. 54-2, at 38, this Court lacks the authority to order the Texas arbitration Bibby Subsea seeks, see, e.g., Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational Prods., Inc., 660 F.3d 988, 997 (7th Cir. 2011) (“[I]f an arbitration clause contains a choice of venue provision, only a court within the same district of that venue can enter an order compelling arbitration.”).

         This Court acknowledges that it previously ordered Bordelon and Bibby Subsea to arbitrate the Louisiana action in Texas. See R. Doc. No. 27. But it only did so based upon the Fifth Circuit's rule that “where the party seeking to avoid arbitration brings a suit . . . in a district other than that in which arbitration is to take place under the contract, ” such as Bordelon did in this matter, “the party seeking arbitration may assert its Section 4 right to have the arbitration agreement performed in accordance with the terms of the agreement.” Dupuy-Busching Gen. Agency, Inc. v. Ambassador Ins. Co., 524 F.2d 1275, 1278 (5th Cir. 1975).

         Under the Fifth Circuit's rule in Dupuy, a party waives the right to object to the venue of the Court ordering arbitration “[b]y bringing suit in a district other than the districts designated in the forum selection clause.” National Iranian Oil Co., 817 F.2d at 331. But Bordelon did not file the Texas action in Louisiana. It filed it in Texas. Thus, the Dupuy waiver rule does not apply to the Texas action. See, e.g., id. (explaining that “there has been no [Dupuy] waiver” because the party did not file the lawsuit “in a district other than the districts designated in the forum selection clause”).

         This Court declines Bibby Subsea's additional invitation to yet further expand Dupuy's waiver principle. Though Dupuy takes a less-than-literal reading of the Federal Arbitration Act, the Court does not believe Dupuy licenses this Court to take no heed of the statutory text. Such an argument is not only belied by the Fifth Circuit's refusal in National Iranian Oil Co. to countenance an anything-goes approach, but it is also seemingly contrary to the traditional rules of statutory interpretation.

         After all, the drafters of the Federal Arbitration Act knew full-well how to draft permissive venue provisions. See, e.g., 9 U.S.C. §§ 9-11; see also Cortez Byrd Chips, Inc. v. Bill Habert Constr. Co., 529 U.S. 193, 204 (2000). Section 4 itself uses such language when describing the courts in which a party may petition for an order compelling arbitration. See, e.g., 9 U.S.C. § 4 (“A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.”). But the drafters of the Federal Arbitration Act did not use such permissive language when indicating the judicial districts in which a court may order arbitration. Instead, the drafters used mandatory language: “The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed.” See Id. (emphasis added). Therefore, under the rules of statutory interpretation, Section 4's use of the term “shall” should be seen as imposing a mandatory rule that a court may only order arbitration to occur in the district in which the court sits. See Kingdomware Techs., Inc. v. United States, 136 S.Ct. 1969, 1977 (2016) (“When a statute distinguishes between ‘may' and ‘shall, ' it is generally clear that ‘shall' imposes a mandatory duty.”). But see Cortez, 529 U.S. at 200 (“The answer is not to be had from comparing phrases.”).[5]

         Accordingly, although this Court is bound to follow Dupuy, the plain language of the Federal Arbitration Act and the rules of statutory interpretation caution against awarding the relief that Bibby Subsea seeks here. This Court will not significantly enlarge Dupuy's seemingly limited exception to Section 4's otherwise mandatory rule that a Court may only order arbitration in the district in which it sits. The Court ...


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