United States District Court, E.D. Louisiana
ORDER AND REASONS
M. AFRICK UNITED STATES DISTRICT JUDGE.
v. Bibby drones on. In the latest iteration of the
parties' procedural jockeying, Bibby Subsea ROV, LLC
(“Bibby Subsea”) asks this Court to
reopen this matter and order 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.
though the Bibby affiliate defendants are not parties to
this lawsuit (the “Louisiana
action”) 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.
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
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
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.
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”).
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
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
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 ...