Petition for Writ of Certiorari — Talmidge International, Ltd. v. Dahiya

04 567 OCT 25208

No. 04-

IN THE

Supreme Court of the United States

TALMIDGE INTERNATIONAL, LTD., NEPTUNE

SHIPMANAGEMENT SERVICES (PTE) LTD., AMERICAN

EAGLE TANKERS, INC., LTD., AMERICAN EAGLE

TANKERS AGENCIES, INC. AND THE BRITANNIA

STEAMSHIP INSURANCE ASSOCIATION, LTD.,

Petitioners,

V. «

VINOD KUMAR DAHTIYA,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES Court OF APPEALS FOR THE FIFTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

Gary A. HEMPHILL

TERRIBERRY, CARROLL

& Yancey, L.L.P.

3100 Energy Centre,

1100 Poydras Street

New Orleans, LA 70163

(504) 523-6451

Attorneys for Petitioners

190209 ce

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

ne ee

i

QUESTIONS PRESENTED

In practical effect, the rulings in the courts below were

that an act of the Louisiana legislature nullifies a treaty of

the United States and that a district court remand order to

that effect is immune from appellate review. What is therefore

ultimately at stake in this case is whether Louisiana can in

fact abrogate a treaty ratified by Congress and in so doing

jeopardize the power of the United States to enforce the treaty

in other countries. The court of appeals did not reach this

issue, concluding against a strong dissent that it lacked

jurisdiction and thus raising the following issues for this

Court:

1. (a) Did the court of appeals depart from the rule

established by this Court in Thermtron Products, et al v. H.

David Hermansdorfer, 423 U.S. 336, 96 S. Ct. 584,

46 L. Ed. 2d 542 (1976) and as a result erroneously rely on

28 U.S.C. § 1447(d), which provides that remand orders

based on a perceived lack of subject matter jurisdiction are

not appealable, even though the district court did not state

its order was based on lack of jurisdiction and the underlying

claim was patently within the district court’s original

jurisdiction?

(b) Was the ruling of the court of appeals in this respect

in conflict with the holding of the Fourth Circuit in Kolibash

v. Committee on Legal Ethics of the West Virginia Bar,

872 F. 2d 571 (4 Cir. 1989) in which a remand order based

on state law public policy grounds, the same basis for the

remand order in this case, was held to be reviewable on

appeal?

il

(c) Did Congress intend for there to be two different

jurisdictional standards for appellate review of cases arising

under The Convention on the Recognition and Enforcement

of Foreign Arbitral Awards, one for cases originating in

federal court and another for cases originating in state court?

2. How should a federal court of appeals reconcile the

ostensibly conflicting rule of non-appealability of remand

orders found in 28 U.S.C. § 1447(d) with the right of

immediate appeal of orders denying arbitration found in the

Convention?

3. Is the denial of a motion to compel arbitration in a

dispute covered by the Convention appealable as a separable

and collateral order under this Court’s holding in City of Waco

v. United States Fidelity & Guaranty Company, 293 U.S. 140,

55 S. Ct. 6, 79 L. Ed. 244 (1934)?

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CORPORATE DISCLOSURE STATEMENT

The caption of this matter contains the name of all parties

to the proceeding. In compliance with Rule 29.6 of the Rules

of the Supreme Court, there are no non-party parent

corporations or publicly traded companies that are required

to be identified.

iv |

TABLE OF CONTENTS |

Page

PPT ESTE Trier reer ee i

Corporate Disclosure Statement ................ iil

Table EGE no Sax Cas FhKs Sabb coe es keeatees iv |

Tae OE CAINE RII oko oss eb ctvndactnas V |

THEO CE ARUOITIOGE onion cc ccc cccccsncipascs Vill |

SNES Sid cdaceuyadeusecnavacubegeene ] |

Statement of Jurisdiction .........ccccecsscecs 2 |

NOUN FUOUIIIOD ook cccccckcreticssensades 2

Facts Material to the Questions Presented ........ 5

Argument and Reasons for Granting the Petition .. 9

Cr og ee ao abel eas 21

Vv

TABLE OF CITED AUTHORITIES

Page

Cases:

Beiser v. Weyler,

284 F.3d 665 (5™ Cir. PO 5 AEE 13

M/S BREMEN v. Zapata Off-Shore Co.,

407 USS. 1, 92 S. Ct. 1907,

32 L. Ed. 2d 513 OTE) 355i EO 10, 20

City of Waco v. United States Fidelity

& Guaranty Company,

793 U.S. 140, 55 S. Ct. 6,

79 L. Bd. 244 (1934) ----- errr ii, 18

Francisco v. M/T STOLT ACHIE VEMENT,

293 F.3d 270, 2002 A.M.C. 1529

(Cle, ME) 6 OE ae 6

In re Digicon Marine, Inc.,

966 F.2d 158 (5™ Cir (OOD) ci cksa ee 12, 13

Kolibash v. Committee on Legal Ethics

of the West Virginia Bar,

872 F.2d 571 (4 Cir. 2 eRe tate i, 14, 15

Lejano v K.S. Bandak, et al.,

CA No. 00-2990 “RE” dated May 27, 2004

7

(Not officially reported.) ...-----crrrrrn

vi

Cited Authorities

Page

Moses H. Cone Memorial Hospital

v. Mercury Constr. Corp.,

460 U.S. 1, 103 S. Ct. 927,

oy F F fi, Peer ee ee 20

ee

te inte

Quackenbush y. Allstate Insurance Company,

517 U.S. 706, 116 S. Ct. 1712,

BSD Eee Gs A 8 CRD on ncnaeeeevareseiaee 20

Russell Corp. v. American Home

Assurance Company,

266 F.36 1060 (11% Cie, 208) ccccsccssvscsse 15

Southland Corp. v. Keating,

465 U.S. 1, 104 S. Ct. 852,

OPS % FF). | Meer rr ry eee 1]

Thermtron Products, et all.

v. H. David Hermansdorfer,

423 U.S. 336, 96 S. Ct. 584,

46 L. Ed. 2d 542 (1976) ........ so oedy Nees dane

vil

Cited Authorities

Page

Statutes:

DUS.C. § 1, 68 909. --ecer reer 6

DUS.C.A. $16 ..---eccrrerrrrren nnn 2, 11,17, 19

SUBC. OBA .02-scncsncccsecerornere 6,9

PUBL GID on con ccassnesesesennreee 16

OUS.C.A. § 205 .--eeeeerrr re 3, 16, 17

PEIBC. § BOB ..nncccesnesesssr renee 6, 16, 17

2B US.C.§ 125M 1) --eereree re 2

2B USC. § 1291 .--cerrrereee 20

28 U.S.C. § 1292 ----2eer 3

28 US.C. § 1447 «eee passim

Louisiana Revised Statutes 93-921 ...eeeeereee’ 5, 6

Vili

TABLE OFAPPENDICES

Appendix A — Opinion Of The United States Court

Of Appeals For The Fifth Circuit Filed May 18,

2004

eC Bee see GOs @2@ee se OOeseeecase ees O0ee ee odes es ea é ea

Appendix B — Order And Reasons Of The United

States District Court For The Eastern District Of

Louisiana Filed October 11, 2002

Lan @ ee fs 2 © oe

Appendix C — Order Of The United States Court

Of Appeals For The Fifth Circuit Denying Petition

For Rehearing Filed July 27, 2004

Bingen net: | & = @

Page

4la

l

No. 04-

IN THE

Supreme Court of the United States

TALMIDGE INTERNATIONAL, LTD., NEPTUNE

SHIPMANAGEMENT SERVICES (PTE) LTD.,

AMERICAN EAGLE TANKERS, INC., LTD., AMERICAN

EAGLE TANKERS AGENCIES, INC. AND THE

BRITANNIA STEAMSHIP INSURANCE

ASSOCIATION, LTD.,

Petitioners,

V.

VINOD KUMAR DAHIYA,

‘Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE FirtH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

OPINIONS BELOW

The District Court opinion is reported at 2002 WL

31962151, 2002 AMC 2429 (E. D. La. 2002). The Fifth

Circuit panel opinion is reported at 371 F.3d 207 (5® Cir.

2004). The denial of the petition for rehearing en banc is

reported at 380 F.3d 218 (5 Cir. 2004).

2

STATEMENT OF JURISDICTION

The United States Court of Appeals for the Fifth Circuit

filed its opinion May 18, 2004 and denied petitioners’ petition

for en banc rehearing on July 27, 2004. The jurisdiction of

this Court is invoked pursuant to 28 U.S.C. § 1254(1).

RELEVANT PROVISIONS

9 U.S.C.A. § 16 Appeals

(a) An appeal may be taken from —

(1) an order —

(A) refusing a stay of any action under

section 3 of this title,

(B) denying a petition under section

4 of this title to order arbitration

to proceed,

(C) denying an application under

section 206 of this title to compel

—— arbitration,

(D) confirming or denying

confirmation of an award or

partial award, or

(E) modifying, correcting, or vacating

an award;

bi as

RPMs a See th aR a STATE lar a TRAN a i Rs Nie BG NG,

3

(2) an interlocutory order granting, continuing,

or modifying an injunction against an arbitration

that is subject to this title; or

(3) a final decision with respect to an arbitration

that is subject to this title;

(b) Except as otherwise provided in section 1292(b) of

title 28, an appeal may not be taken from an interlocutory

order —

(1)

(2)

(3)

(4)

granting a stay of any action under section

3 of this title;

directing arbitration to proceed under

section 4 of this title;

compelling arbitration under section 206 of

this title; or

refusing to enjoin an arbitration that is

subject to this title.

9 U.S.C.A. § 205. Removal of cases from State courts

Where the subject matter of an action or

proceeding pending in a State court relates to an

arbitration agreement or award falling under the

Convention, the defendant or the defendants may,

at any time before the trial thereof, remove such

action or proceeding to the district court of the

United States for the district and division

embracing the place where the action or

proceeding is pending. The procedure for removal

4

of causes otherwise provided by law shall apply,

except that the ground for removal provided in

this section need not appear on the face of the

complaint but may be shown in the petition for

removal. For the purposes of Chapter 1 of this

title any action or proceeding removed under this

_ section shall be deemed to have been brought in

the district court to which it is removed.

28 U.S.C.A. § 1447. Procedure after removal generally

(c) A motion to remand the case on the basis

of any defect other than lack of subject matter

jurisdiction must be made within 30 days after

the filing of the notice of removal under section

1446(a). If at any time before final judgment it

appears that the district court lacks subject matter

jurisdiction, the case shall be remanded. An order

remanding the case may require payment of just

costs and any actual expenses, including attorney

fees, incurred as a result of the removal. A certified

copy of the order of remand shall be mailed by

the clerk to the clerk of the State court. The State

court may thereupon proceed with such case.

(d) An order remanding a case to the State

court from which it was removed is not reviewable

on appeal or otherwise, except that an order

remanding a case to the State court from which it

was removed pursuant to section 1443 of this title

shall be reviewable by appeal or otherwise.

5

Louisiana Revised Statutes 23:921

(2) The provisions of every employment contract

or agreement, or provisions thereof, by which any

foreign or domestic employer or any other person

or entity includes a choice of forum clause or

choice of law clause in an employee’s contract of

employment or collective bargaining agreement,

or attempts to enforce either a choice of forum

clause or choice of law clause in any civil or

administrative action involving an employee, shall

be null and void except where the choice of forum

clause or choice of law clause is expressly,

knowingly, and voluntarily agreed to and ratified

by the employee after the occurrence of the

incident which is the subject of the civil or

administrative action.

FACTS MATERIAL TO THE

QUESTIONS PRESENTED

Vinod Dahiya was a seaman and a citizen of India who

was injured in November, 1999 on the high seas, outside of

Louisiana waters, on a foreign flag and foreign-owned cargo

vessel. Prior to joining the ship, Dahiya signed an

employment contract or “Deed” which governed the terms

of his employment. One of the provisions of the contract

required that all disputes arising out of Dahiya’s employment

be referred to arbitration in either India or Singapore.

Notwithstanding this requirement, Dahiya subsequently filed

suit in Louisiana state court, asserting claims under the Jones

Act and the general maritime law.

6

Petitioners removed the state court suit to the United

States District Court for the Eastern District of Louisiana

pursuant to The Convention on the Recognition and

Enforcement of Foreign Arbitral Awards'. Petitioners then

moved the district court to compel arbitration and to stay, or,

alternatively, dismiss the litigation. Dahiya subsequently filed

a motion to remand on the basis, among other things, of a

1999 Louisiana statute which purports to invalidate forum

selection clauses in any “foreign or domestic” contract of

employment.”

The district court found that the arbitration clause at issue

was nearly indistinguishable from one at issue in another

Convention case, Francisco v. M/T STOLT ACHIEVEMENT?

in which the Fifth Circuit affirmed an order compelling

arbitration, but nonetheless concluded that the Convention

did not apply because the arbitration agreement here

contravened the public policy of the State of Louisiana as

expressed in Louisiana Revised Statutes 23:921. The district

court wrote:

The forum selection clause in Dahiya’s

employment contract states that arbitration shall

occur in either Singapore or India. While it is

undisputed that both countries are signatories to

1. The treaty appears in full following 9 U.S.C. § 201. It is

occasionally described in the literature as the New York Convention,

but here will be referred to as the “Convention”. The Federal

Arbitration Act, 9 U.S.C. § 1, et seq., is referred to as the “Act”.

The Act is incorporated into the Convention at 9 U.S.C. § 208.

2. See La. Revised Statutes 23:921(A) (2) at page 5, supra.

3. 293 F.3d 270, 2002 A.M.C. 1529 (5® Cir. 2002).

7

the Convention, the forum selection clause is

invalid because it contravenes Louisiana express

public policy. Therefore, the employment contract

does not provide for arbitration in the territory of

a Convention signatory, and the Court finds that

no arbitration agreement exists to justify removal

under § 205.‘

In the same order, the district court denied petitioners’

motion to compel arbitration and granted plaintiff’s motion

to remand. It is important to note for the appellate jurisdiction

issue now before this Court that the district court did not

find that it lacked subject matter jurisdiction; in fact, the

court never mentioned the term jurisdiction at all.° For the

district court to find that it lacked subject matter jurisdiction

would have been inconceivable since the underlying suit,

involving as it did a maritime personal injury claim, so clearly

falls within the court’s original admiralty and maritime

jurisdiction.

In any event, a timely notice of appeal was filed in the

United States Court of Appeals for the Fifth Circuit.

Petitioners moved the court of appeals to stay the remand

order pending the outcome of the appeal. Dahiya moved to

4. See district court opinion, R. Pet. App. 41a. In a subsequent

and unrelated case, the district judge recanted this decision, saying

that on further reflection he had concluded that his decision in this

case was in error although he was without jurisdiction to correct it.

Lejano v K.S. Bandak, et al, CA No. 00-2990 “F”. See footnote 1

at pages 2-3 of district court’s order and reasons dated May 27, 2004.

(Not officially reported.)

5. In his submissions to the district court, Dahiya likewise did

not argue that the district court lacked subject matter jurisdiction.

8

dismiss the appeal for lack of jurisdiction. Both motions were

carried with the case. On May 18, 2004, the Fifth Circuit

panel ruled 2-1, Judge DeMoss dissenting, that appellate

jurisdiction was lacking on the basis of § 1447(d) and that

the district court ruling was not separately appealable as a

collateral order. On July 27, 2004, petitioners’ petition for

rehearing en banc was denied over the dissent of Judges

DeMoss and Smith. This petition for certiorari followed.

After the federal court of appeals declined to act on

petitioners’ request for a stay of the remand order, petitioners

requested on the basis of the Convention a stay of litigation

pending arbitration in the Louisiana state court to which the

case had been remanded. This request was denied by the

state court and ultimately the case was tried on the merits.

The state court trial judge, however, has yet to rule.

WHAT IS SOUGHT

Petitioners ask that +he Court for the following reasons

remand the case to the court of appeals for a ruling on the

underlying substantive issue of whether an act of the

Louisiana legislature can abrogate a treaty of the United

States:

1. The district court’s remand of the case does

not fall within the scope of prohibited appeals

defined by 28 U.S.C. § 1447(d) and this

Court’s ruling in Thermtron Products, et al.,

v. H. David Hermansdorfer in that the remand

was not based on a perceived lack of subject

matter jurisdiction, and indeed could not have

been given that the allegations of the

complaint and of the petition for removal

9

brought it clearly within the district court’s

original subject matter jurisdiction;

2. Even if the district court ruling is one as to

which § 1447(d) would otherwise preclude

appellate review, the conflicting provisions

of the Convention should be given precedence

as a matter of statutory construction; and

3. The district court order of remand and its

denial of petitioners’ motions to stay and to

compel arbitration are appealable as separable

and collateral orders within the scope of this

Court’s holding in City of Waco v. United

States Fidelity & Guaranty Company.

ARGUMENT AND REASONS FOR

GRANTING THE PETITION

The Convention was concluded in New York on June

10, 1958 and entered into force in the United States December

29, 1970. It has now been ratified by some 114 countries.®

The ratifying nations include both of the two countries in

which the arbitration in this case was to go forward, India

and Singapore, the former being Dahiya’s home country. In

ratifying the treaty, both nations, as well as the United States

for that matter, agreed on the basis of reciprocity to apply

the Convention to enforce arbitral awards from another

Contracting State.’

6. See comments following 9 U.S.C. § 201.

7. See 9 U.S.C. § 201, footnotes 12 (India), 22b (Singapore)

and 29 (United States).

10

Article XIV of the Convention is critical to the

substantive issues underlying this appeal. It provides:

A Contracting State shall not be entitled to

avail itself of the present Convention against other

Contracting States except to the extent that it is

itself bound to apply the Convention.

The posture of this case at present throws into question

whether the United States is or would be entitled to avail

itself of the Convention in either Singapore or India since

the law of the case is that the Convention is not enforceable

in this country if it conflicts with the law of an individual

state, in this instance Louisiana.® Further, the law of the case

at this juncture is that if the suit originates in Louisiana state

court, is removed to federal court pursuant to the Convention

but is then remanded, the federal court of appeals is powerless

even to review the case notwithstanding the immediate appeal

provisions of the Act and which are incorporated into the

Convention.

If the case had originally been filed in federal court, there

is no question but that a denial of a motion to compel

8. The Convention provides that its enforcement may be refused

in the country where enforcement is sought if enforcement would

be, “.. .contrary to the public policy of that country.” (emphasis

added). There is no indication in the Convention or otherwise that

this exception was intended to include and give deference to the public

policy of an individual state of the United States, especially when

the express public policy of the United States is categorically contrary.

See, e.g., M/S BREMEN v. Zapata Off-Shore Co., 407 U.S. 1, 92

S. Ct. 1907, 32 L. Ed. 2d 513 (1972) in which the Court observed,

“The expansion of American business and industry will hardly be

encouraged if, notwithstanding solemn contracts, we insist on a

parochial concept that all disputes must be resolved under our laws

and in our courts.”

a Lt ee Le eg ee

11

arbitration would have been immediately appealable.’ The

ruling of the Fifth Circuit has thus created a dual path of

appellate review depending solely on where the case is

originally filed, contrary to this Court’s instruction in

Southland Corp. v. Keating."

It is against this backdrop that each of the questions

presented must be considered.

I.

The first question is whether the court of appeals

incorrectly applied § 1447(d) to deny appellate review of

the district court’s remand order, contrary to this Court’s

holding in Thermtron.

While § 1447(d) of the removal statute prohibits in

general the appellate review of district court remand orders,

in Thermtron this Court limited the application of § 1447(d)

to those remand orders issued under § 1447(c). It is now

well settled that only remand orders based on a lack of subject

matter jurisdiction are immune from appellate review.

The question, then, is whether the remand order was

based on a lack of subject matter jurisdiction. It was not.

9. See9 U.S.C. § 16.

10. 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984). “We are

unwilling to attribute to Congress the intent, in drawing on the

comprehensive powers of the Commerce Clause, to create a right to

enforce an arbitration contract and yet make the right dependent for

its enforcement on the particular forum in which it is asserted.”

12

The court of appeals characterized, or more accurately

mischaracterized, the district court’s remand order as having

been based on a lack of subject matter jurisdiction even

though the district court order said no such thing. In fact, the

remand order did not even mention the word jurisdiction.’

Moreover, in his Motion to Remand as well as in his

Opposition to Petitioner’s Motion to Compel Arbitration,

Dahiya never once argued that the district court was without

subject matter jurisdiction.

The reason that neither Dahiya nor the district court made

mention of the supposed lack of subject matter jurisdiction

is obvious. In his state court petition, Dahiya asserted claims

under the Jones Act and the general maritime law, both of

which are clearly within the federal district court’s original

subject matter jurisdiction. Because the action could have

been brought in the federal court originally as a maritime

action, the district court had subject matter jurisdiction.'”

The case could also have been brought originally in

federal court pursuant to the Convention since it involves an

arbitration agreement to which the Convention applies.

As the Fifth Circuit correctly noted in a prior Convention

case:

... Whenever an arbitration agreement falling

under the Convention could conceivably affect the

11. The Court of Appeals was apparently not without doubt on

the issue because at page 5 of the Opinion, the majority wrote,

“The district court appears to have concluded that it lacked subject

matter jusrisdiction and to have remanded on that basis” (emphasis

added).

12. Compare Jn re Digicon Marine, Inc., 966 F.2d 158, 160

(5® Cir 1992).

13

outcome of the plaintiff’s case, the agreement

“relates to” the plaintiff’s suit. Thus, the district

court will have jurisdiction under § 205 over just

about any suit in which a defendant contends that

an arbitration clause falling under the Convention

provides a defense. As long as the defendant’s

assertion is not completely absurd or impossible,

it is at least conceivable that the arbitration clause

will impact the disposition of the case. That is all

that is required to meet the low bar of

“relates to.”

Far from being a determination that it lacked jurisdiction,

the district court’s remand order was based solely on its

conclusion as a matter of substantive law that a provision of

Louisiana statutory law rendered the Convention

inapplicable. This is precisely what the district court said it

was doing; “. . . the forum selection clause is invalid because

it convenes Louisiana express public policy. Therefore, the

employment contract does not provide for arbitration in the

territory of a Convention signatory and the Court finds that

no arbitration agreement exists to justify removal under

§ 205.”"* Even if this language is interpreted to mean the

district court concluded it was without removal jurisdiction,

this is not tantamount to a finding it lacked subject matter

jurisdiction which is the only relevant jurisdictional inquiry

under § 1447(d).'°

13. Beiser v. Weyler, 284 F.3d 665 at 669 (5® Cir. 2002).

14. See district court Order and Reasons dated October 11, 2002

Pet. App. 46a.

15. See In re Digicon Marine, supra, 966 F.2d 158 at 160.

14

The district court remand order was actually a ruling on

the merits insofar as it considered whether an anti-forum

selection statute of the state of Louisiana could abrogate on

pubic policy grounds an arbitration agreement that otherwise

fell within the scope of the Convention. Because the remand

order was based on the merits, not on a perceived lack of

subject matter jurisdiction, Thermtron teaches that § 1447(d)

does not bar appellate review.

The Fifth Circuit’s holding to the contrary is not only in

conflict with Thermtron, but also with the holding of the

Fourth Circuit in Kolibash v. The Committee on Legal Ethics

of the West Virginia Bar.'* The question in both Kolibash

and the case at bar is the extent to which Thermtron authorizes

appellate review of remand orders based on the application

of state law public policy considerations. In Kolibash, state

court disciplinary proceedings were brought against two

attorneys accused of ethical misconduct. The case was

removed to. federal court but the district court granted a

motion to remand the action to the state system, holding that

the licensing of professionals was basically a function of state

law. In the ensuing appeal, the Fourth Circuit at the outset

considered the plaintiff’s contention that appellate review

of the district court’s remand order was precluded by

§ 1447(d). Rejecting this argument and finding that it had

appellate jurisdiction, the court of appeals wrote:

The remand order represented a discretionary

decision by the district court not to hear a certain

case on the grounds of public policy and is

therefore reviewable on appeal. As the Supreme

Court recognized in Thermtron, Congress did not

16. 872 F.2d 571 (4 Cir 1989).

15

intend “to extend carte blanche authority to the

district courts to revise the federal statutes

governing removal by remanding cases on

grounds that seem justifiable to them but which

are not recognized by the controlling statute.”"”

The Fifth Circuit holding in this case is also in conflict

with the Eleventh Circuit’s holding in Russell Corp. v.

American Home Assurance Company ‘* where the district

court remanded on the ground the citizenship unanimity

requirement for removal had not been met but only after it

first interpreted an insurance policy’s service of suit clause.

Because the district court’s order was based on the threshold

interpretation of a contract provision, the Eleventh Circuit

found that the remand order did not fall within the prohibition

of § 1447(d) and therefore was subject to appellate review.

This is contrary to the result in this case where the district

court remand order was also based on a substantive evaluation

of issues that had nothing to do with subject matter

jurisdiction and everything to do with the merits of the case.

This Court should resolve the issue at the heart of this

conflict between the Circuits, especially in light of its impact

in this case on the overarching issue of the treaty obligations

of the United States.

Finally, the conclusion of the Fifth Circuit that the district

court remanded the case for lack of jurisdiction flies in the

17. Kolibash v. The Committee on Legal Ethics of the

West Virginia Bar, supra, 872 F.2d 571, 573, quoting Thermtron

Products, Inc, the Hermansdorfer, supra, 423 U.S. 336, 351,

96 S. Ct. 584, 593.

18. 264 F 3d 1040 (11 Cir, 2001).

16

face of the plain language of the Convention’s enabling

legislation. Section 203 of Title 9 provides that an action

falling under the Convention shall be deemed to arise under

the laws and treaties of the United States while § 205 provides

that an action removed from state court, “shall be deemed to

have been brought in the district court to which it is

removed.” That is to say that the district court had original

subject matter jurisdiction over the removed case by virtue

of the allegation in the removal petition that the underlying

dispute was subject to an arbitration agreement subject to

the Convention.'® Taken together these provisions show that

the district court’s remand order was not, and could not

possibly have been, based on a perceived lack of subject

matter jurisdiction. Dismissal of the appeal on the basis of

§ 1447(d) was therefore error and of a type that undermines

the international treaty obligations of the United States.

Il.

The second question presented need be considered only

if the first is decided adversely to petitioners and it is found

that the remand order does in fact fall within the scope of

§ 1447(d). That is, how should a federal court of appeals

reconcile the ostensibly conflicting provisions of § 1447(d)

with those of the Convention and the Act authorizing

immediate appeals from orders denying a stay of arbitration.

The conflict between the statute and the Convention is

more apparent than real. The Federal Arbitration Act is

19. This is because, unlike removal pursuant to the general

removal statue, the grounds for removal of a Convention case do not

have to appear on the face of the plaintiff’s state court complaint but

may be shown in the petition for removal. See 9 U.S.C. § 208.

17

incorporated into the Convention by 9 U.S.C. § 208. Section

16(a)(1)(c) of the Act expressly provides for an immediate

appeal from an order denying an application to compel

arbitration. The panel majority concluded that this right to

an immediate appeal is overridden by the strictures of

§ 1447(d) because § 205 of the Convention provides that,

““.. the procedure for removal of causes otherwise provided

by law shall apply.” 7°

The panel majority failed to take notice, however, of the

final sentence of § 205:

For the purposes of Chapter 1 of this title any

action or proceeding removed under this section

shall be deemed to have been brought in the

district court to which it is removed.

Chapter 1 of the title is the Federal Arbitration Act — it

includes the right of immediate appeal. When read together,

then, these provisions of the Convention and the Act show

Congress’s intent that removed Convention cases be treated

for appeal purposes just as though they had been brought in

federal court originally. If this action had in fact been brought

originally in federal court, § 16 of the Act makes clear that

the district court’s denial of petitioners’ motion to compel

arbitration would have been subject to immediate appellate

review. This right of appellate review, vested in a treaty of

20. The Fifth Circuit panel cited three cases from the Eight,

Second and Seventh Circuits which the majority concluded supported

their conclusions. While each of those cases is distinguishable, they

show in any case that this is a recurring issue among the Circuits and

one which this Court should therefore address in light of the

implications of the case for the international treaty obligations of

the United States.

18

the United States, should not be so tenuous as to be lost to.

petitioners simply because the case started out in state court.

In light of the international implications of the issue in

this and other Convention cases, the Court should grant

certiorari to resolve the question.

Hil.

The third and final question presented is whether the

denial of petitioners’ motion to compel arbitration, if not

reviewable under Thermtron, is appealable as a collateral

order pursuant to this court’s holding in City of Waco v. United

States Fidelity & Guaranty Company.’!

_ In City of Waco, this Court found that an appellate court

could review an order dismissing a cross-action that

accompanied a remand for lack of diversity jurisdiction

because, “... in logic and in fact the decree of dismissal

preceded that of remand and was made by the district court

while it had control of the cause.”” In this case, the district

court’s conclusion on the merits that the Convention did not

apply to the arbitration agreement by virtue of a Louisiana

statute also preceded the remand order “in logic and in fact”.

That is clear because in order for the district court to have

remanded an otherwise properly removed case falling within

the scope of the Convention, it must first have necessarily

considered the substance of Louisiana statutory law. It is the

district court’s analysis of this substantive issue that

petitioners seek to have reviewed on appeal.

21. 293 U.S. 140, 55 S. Ct. 6, 79 L. Ed. 244 (1934).

22. City of Waco v. United States Fidelity & Guaranty Co.,

supra, 293 U.S. 140 at 143.

19

Given that the district court’s ruling on the effect of the

Louisiana statute on the petitioners’ right to arbitrate preceded

the order of remand in logic and in fact and is therefore not

immunized from appellate review by § 1447(d), there remains

only the question of whether there is a legal basis for an

immediate appeal. There are two bases for an immediate

appeal — the Federal Arbitration Act and the collateral order

doctrine. Section 16 of the Act authorizes an immediate

appeal from an order denying an application under the

Convention to compel arbitration or refusing a stay of

litigation involving a dispute subject to arbitration. This, of

course, is precisely what the district court did in this case so

it could hardly be more clear that Congress has spoken

unequivocally on this issue.”

23. The dissenting judge in the court of appeals concluded he

could not rely on Section 16 to establish the appealability of the

district court order because the district court had concluded the

Convention did not apply. Although the dissent’s subsequent

evaluation of the collateral order doctrine led it to conclude the order

was appealable nonetheless, it also noted with regard to Section 16

that,

This Catch-22 problem cries out for immediate remedy

from the Supreme Court in this case and, ultimately, from

Congress for all comparable cases that are sure to follow.

It seems entirely absurd — in light of the Supreme Court’s

and Congress’s extremely clear intentions that arbitration

properly subject to the Federal Arbitration Act. . . and

the Convention be treated and interpreted favorably and

that denials of arbitration properly subject to the FAA

and the Convention be immediately appealable — (1) that

a state could successfully legislate an end run to defeat

preferred federal removal jurisdiction in cases where

there can scarce be doubt that the arbitration agreement

(Cont’d)

20

The district court order is also separately reviewable

under principles established in a line of decisions by this

Court culminating in Quackenbush v. Allstate Insurance

Company.” In that case, the issue was whether an abstention-

based remand order (i.e., an order, like the one involved in

this case, outside the scope of § 1447(c) and (d)) was

appealable as a final order under 28 U.S.C. § 1291. Finding

the issue was resolved by its prior decision in Moses H. Cone

Memorial Hospital v. Mercury Constr. Corp,” this Court held

that a remand order was appealable as a final decision under

§ 1291 because it effectively put the litigants out of court.

Quackenbush controls disposition of this question

and yields the only result consistent with the strong

pro-arbitration Congressional policy embodied in the Act and

the Convention and in a series of cases decided by this Court

beginning with M/S BREMEN v. Zapata Off-Shore Company,

supra.

(Cont’d)

at issue falls under the auspices of the Convention and

was validly invoked, and (2) that district courts could

apply that state’s law to ignore preemptive federal

arbitration law.

See footnote 3 at Pet.App. 17a.

24. 517 U.S. 706, 116 S. Ct. 1712, 135 L. Ed. 2d 1 (1996).

25. 460 U.S. 1, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983).

21

CONCLUSION

The Court should grant certiorari in this case because of

the important international implications of the underlying

federal issues and because the ruling of the court of appeals

is contrary to precedent of this Court and in conflict with the

rulings of other courts of appeals. As the case stands, an act

of the Louisiana legislature has nullified a treaty of the United

States and the district court order to that effect, though

recanted by the judge who issued it, has been held immune

from appellate review. Congress could not possibly have

intended such a result, one which threatens the ability of the

United States to enforce the treaty in other countries.

The Court should also grant certiorari in order to clarify

for the lower courts the interplay between the immediate

appeal provisions of the Convention and of the Act with the

restrictions of 28 U.S.C. § 1447(d), particularly as the issue

has arisen frequently and is likely to become even more

prevalent with the continuing growth of international trade

between countries signatory to the Convention.

Respectfully submitted,

Gary A. HEMPHILL

TERRIBERRY, CARROLL & YANCEY, L.L.P.

3100 Energy Centre,

1100 Poydras Street

New Orleans, LA 70163

(504) 523-6451

Attorneys for Petitioners

APPENDIX

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APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

FILED MAY 18, 2004

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 02-31068

VINOD KUMAR DAHTYA,

Plaintiff-Appellee,

versus

TALMIDGE INTERNATIONAL, LTD., NEPTUNE

SHIPMANAGEMENT SERVICES (PTE) -LTD.,

AMERICAN EAGLE TANKERS, INC., LTD., AMERICAN

EAGLE TANKERS AGENCIES, INC., BRITANNIA

STEAM SHIP INSURANCE ASSOCIATION, LTD.,

Defendants-Appellants.

Before BARKSDALE, DeMOSS and BENAVIDES,

Circuit Judges.

BENAVIDES, Circuit Judge:

Defendants-Appellants filed a motion for rehearing

complaining of this court’s order of dismissal entered March

11, 2004. After considering this motion for rehearing, which

we treat as a petition for reconsideration, the motion is

GRANTED, the previous order of dismissal is withdrawn,

and the following opinion is entered in lieu thereof.

PON a Soa

Sati

SeeeGR oe 37

BE DUR aaa oS ney REE TOR RAR SPE ENO i SN RUN AS NN Et

2a

Appendix A

Plaintiff-Appellee Vinod Kumar Dahiya filed this

maritime personal injury action in Louisiana state court

against several Defendants-Appellants: his employer,

Neptune Shipmanagement Services; the owner of the ship

on which he was injured, Talmidge International; co-owners

of the fleet to which the ship belongs, American Eagle

Tankers and American Eagle Tankers Agencies; and the ship’s

insurer, Brittania Steam Ship Insurance Association.

Appellants removed to federal court on the grounds that their

dispute with Dahiya was subject to an arbitration agreement

governed by the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards (the “Convention”),

9 U.S.C.A. §§ 201-208 (West 1999 & Supp.2003). The

district court remanded the case to state court for lack of

subject matter jurisdiction and denied Appellants’ motions

to compel arbitration and to stay the proceedings. Because

this remand deprives us of appellate jurisdiction to consider

any part of the district court’s order, we dismiss this appeal.

I.

In 1999, Dahiya and Neptune signed two documents—a

“deed” and a “bond”—in New Delhi, India. Together, the

documents provided that Dahiya would receive two years of

training, then work for Neptune for two years. The deed

included an arbitration clause providing that any dispute

arising out of the deed would be subject to arbitration in

Singapore or India.'

1. The bond included a similar arbitration clause, but only the

deed’s arbitration clause is at issue in this case because the dispute

arose during Dahiya’s training.

3a

Appendix A

As part of his training, Dahiya worked on the M/T

EAGLE AUSTIN, a vessel owned by Talmidge. Dahiya

suffered burns while operating the vessel’s incinerator and

was later evacuated to a Louisiana hospital, where he received

treatment.

Dahiya returned to India, but he sued Neptune, Talmidge,

and the three other Appellants in Louisiana state court.

Dahiya’s suit, brought under the Savings to Suitors Clause,

28 U.S.C.A. § 1333(1) (West 1993), alleged that Appellants

had breached obligations under the Jones Act, 46 U.S.C.A.

app. § 688 (West 2003), general maritime law, and other

applicable law.

Appellants invoked federal jurisdiction as a federal

question, see 28 U.S.C.A. § 1441(b) (West 1994), and under

§ 205 of the Convention, 9 U.S.C.A. § 205 (West 1999),?

and removed to federal court. Appellants filed their renoval

petition more than thirty days after receiving notice of

Dahiya’s suit. Generally, such a delay would preclude

removal. See 28 U.S.C.A. § 1446(b) (West 1994). Section

205, however, allows removal at any time prior to trial, and

Dahiya does not dispute that Appellants filed their petition

before trial.

2. Section 205 provides that “[w]here the subject matter of an

action or proceeding pending in a State court relates to an arbitration

agreement or award falling under the Convention, the defendant or

the defendants may, at any time before the trial thereof, remove such

action or proceeding to the district court of the United States for the

district and division embracing the place where the action or

proceeding is pending.”

DEAR ORIEL EE CO AOE MOELLER OO RIE I IOI TT AI CA IR. Oe ES MBN

4a

Appendix A

Once in federal court, Appellants moved to compel

arbitration and to stay the proceedings or, in the alternative,

to dismiss Dahiya’s suit. Dahiya moved to remand. Dahiya

argued that the deed’s terms did not qualify as an arbitration

agreement under the Convention and therefore could not

support removal under § 205.

The district court sided with Dahiya and, in a single order,

remanded the case to state court and denied Appellants’

motions to stay proceedings and to compel arbitration. The

court began its order by assessing the validity of what it called

the “forum selection clause’”—1.e., the arbitration clause in

the deed between Dahiya and Neptune. The court held that

this clause was invalid because forum selection clauses

contravene Louisiana public policy. The court then turned

directly to the question of its jurisdiction. The court began

by noting that because Appellants failed to remove within

thirty days, federal jurisdiction hinged entirely on § 205. With

respect to jurisdiction under § 205, the court reasoned that

because the deed contained no valid forum selection clause,

the parties had not entered an agreement to arbitrate valid

under the Convention. The court therefore concluded that it

had no jurisdiction under § 205, remanded the case, and

denied Appellants’ pending motions.

Appellants sought review of the district court’s order and

moved for a stay of the the ongoing state court proceedings.

Dahiya moved to dismiss for lack of appellate jurisdiction.

Both motions have been carried with the case.’

3. While this appeal was pending, Dahiya’s state court suit

proceeded. Even before we heard oral arguments, a Louisiana trial

(Cont’d)

Sa

Appendix A

Il.

Our analysis begins and ends with Dahiya’s motion to

dismiss, for in the absence of appellate jurisdiction, we have

no authority to review the district court’s order.

We cannot review the remand itself. After a district court

remands a case to state court for lack of subject matter

jurisdiction, 28 U.S.C. § 1447(d) bars a federal appellate

court from reviewing the remand ruling “no matter how

erroneous.” Arnold v. State Farm Fire & Cas. Co., 277 F.3d

772, 775 (Sth Cir.2001); see 28 U.S.C.A. § 1447(c), (d) (West

1994). The district court appears to have concluded that it

lacked subject matter jurisdiction and to have remanded on

that basis. Thus, under § 1447(d), we cannot review the

remand.

(Cont’d) ;

court overruled Appellants’ exceptions regarding arbitration and

jurisdiction. Subsequently, Appellants unsuccessfully sought

supervisory writs from the Louisiana Court of Appeals and the

Louisiana Supreme Court.

Based on the denial of these writs, Dahiya filed in this Court a

motion to dismiss for res judicata. Dahiya claimed that the Louisiana

trial court rulings and the denial of supervisory writs constituted final

judgments and precluded Appellants from seeking a motion

compelling arbitration from this Court. Appellants failed to respond

in time, and we dismissed the appeal. Appellants promptly filed a

motion for panel rehearing, which we treated as a motion for panel

reconsideration. Because we have granted that motion, we now turn

to the other issues in this case. .

6a

Appendix A

That Appellants removed under § 205 of the Convention

does not vest us with jurisdiction despite § 1447(d). In cases

removed under § 205, “[t]he procedure for removal of causes

otherwise provided by law shall apply.” 9 U.S.C.A. § 205.

This “procedure for removal” includes the strictures of

§ 1447(d). Transit Cas. Co. v. Certain Underwriters at

Lloyd’s of London, 119 F.3d 619, 624-625 (8th Cir.1997);

LaFarge Coppee v. Venezolana De Cementos, S.A.C.A., 31

F.3d 70, 71-72 (2d Cir.1994); In re Amoco Petroleum

Additives Co., 964 F.3d 706, 712-13 (7th Cir.1992).

Thus, when a case removed under § 205 is subsequently

remanded for lack of subject matter jurisdiction, an appellate

court cannot review the order of remand.

Appellants contend that, regardless of whether we can

review the remand itself, we have jurisdiction to review the

district court’s denial of arbitration and denial of stay under

9 U.S.C. § 16, which provides that appeals may be taken

from orders refusing stays or denying motions to compel

arbitration, see 9 U.S.C.A. § 16(a)(1)(A),(C) (West 1999).4

We lack jurisdiction under § 16 because the denials of

Appellants’ motions to stay and to compel arbitration

accompanied a remand for lack of subject matter jurisdiction.

See Transit Cas., 119 F.3d at 623-625. Any order remanding

for lack of subject matter jurisdiction necessarily denies all

other pending motions, for “[u]nless a federal court possesses

subject matter jurisdiction over a dispute, ... any order it

makes (other than an order of dismissal or remand) is void.”

John G. & Marie Stella Kenedy Mem'’l Found. v. Mauro,

4. Section 16 is not a part of the Convention, but its provisions

are applicable to cases brought under the Convention. See 9 U.S.C.A.

§ 208 (West Supp.2003).

Ta

Appendix A

“21 F.3d 667, 674 (Sth Cir.1994) (quoting Shirley v. Maxicare

Tex., Inc., 921 F.2d 565, 568 (Sth Cir.1991)). Motions to stay

proceedings and to compel arbitration will be common if

not universal in cases removed under § 205. Thus, in the

vast majority of cases removed under § 205, an order of

remand will be the effective equivalent of a denial of motions

to stay proceedings and to compel arbitration. Recognizing

appellate review of such remand orders under § 16 would

circumvent § 1447(d) by affording review of remand orders

issued in nearly every case removed under § 205. Section

205, by expressly invoking “[t]he procedure for removal of

causes otherwise provided by law,” forecloses such a result.

District court determinations accompanying an order of

remand are reviewable in spite of § 1447(d) if they meet the

requirements first outlined in City of Waco, Texas v. United

States Fidelity & Guaranty Co., 293 U.S. 140 (1934). Under

Waco, a federal appeals court can review a pre-remand

decision made by a district court if that decision is

“separable” from the remand order and independently

reviewable through a mechanism such as the collateral order

doctrine. Heaton v. Monogram Credit Card Bank, 297 F.3d

416, 421 (Sth Cir.2002). To be separable, the decision must

meet two criteria. First, the decision must have preceded the

remand order “in logic and in fact” such that the decision

was “made by the [district [c]ourt while it had control of

the cause.” Waco, 293 U.S. at 143. Second, the decision must

be “conclusive,” i.e., “functionally unreviewable in state

courts.” Arnold, 277 F.3d at 776.

The district court’s refusal to compel arbitration and to

stay proceedings is not reviewable under Waco because that

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Appendix A

refusal was not conclusive. Our precedent “has defined

conclusiveness in terms of whether the order was

‘substantive’ or ‘jurisdictional’: if a decision is simply

jurisdictional it is not conclusive.” Doleac ex rel. Doleac v.

Michalson, 264 F.3d 470, 486 (Sth Cir.2001). Thus, in

Soley v. First National Bank of Commerce, 923 F.2d 406,

410 (Sth Cir.1991), we considered whether we could review

a pre-remand ruling on ERISA preemption and concluded

that “because we interpret[ed] the remand order as

jurisdictional, the state court [would] have an opportunity to

consider the appellants’ preemption defense and the district

court’s order [would] have no preclusive effect.” Likewise,

in Linton v. Airbus Industrie, 30 F.3d 592, 597 (Sth Cir.1994),

we considered whether we could review a district court’s

pre-remand rulings on foreign sovereign immunity and held

that “[i]n light of the district court’s ultimate conclusion that

the entire case had to be remanded for lack of subject matter

jurisdiction, the district court’s [foreign sovereign immunity]

determination [could] be deemed a jurisdictional finding

under the facts of this case and, as such, [could] be reviewed

by the state court upon remand.” Most recently, in Angelides

v. Baylor College of Medicine, 117 F.3d 833, 837 (Sth

Cir.1997), we explained that a district court’s pre-remand

immunity and exhaustion determinations “were not

‘conclusive’ because, as jurisdictional decisions, they [could]

be reviewed in the state court.” In sum, when a district court

makes a determination in the process of remanding a case

for lack of jurisdiction, that determination is jurisdictional

and can be revisited by a state court upon remand.

In this case, the district court determined that the

arbitration clause was invalid in the process of ascertaining

9a

Appendix A

whether it had subject matter jurisdiction. Under Soley,

Linton, or Angelides, that determination is jurisdictional and

therefore has no preclusive effect in state court. Thus, because

the district court’s refusals to compel arbitration and to stay

proceedings were not conclusive, those refusals are not

reviewable under Waco.

In their efforts to circumvent § 1447(d), Appellants rely

on Beiser v. Weyler, 284 F.3d 665 (Sth Cir.2002). Beiser does

not control this case. In Beiser, as in this case, defendants

removed to federal court under § 205. Jd. at 666-67. The

district court in Beiser, however, determined that it had

jurisdiction and denied the plaintiff’s motion to remand.

Id. at 667. Thus, in Beiser we did not confront the bar to

appellate jurisdiction established in § 1447(d), which inheres

only after remand.°

Appellants insist, and we recognize, that the argument

for remand advanced by Dahiya and accepted in the district

court closely resembles the argument for remand we

disapproved in Beiser.° If we could review that argument,

5. In Beiser, we speculated in dicta about what would have

happened had the district court remanded the case. Jd. at 672-74.

We recognized that § 1447(d) would have deprived us of appellate

jurisdiction and led to the unappealing result of having state courts

handle questions of federal arbitration law. Jd.

6. In Beiser, the plaintiff argued that the district court should

have remanded because his case did not “relate to” the arbitration

agreement on which defendants relied. Jd. at 668. We rejected the

plaintiff’s theory as inconsistent with the plain language of § 205

and the federal policy favoring arbitration. Jd. at 668-74. In particular,

(Cont’d)

10a

Appendix A

we might reject it for many of the reasons outlined in Beiser.

Section 1447(d), however, forecloses appellate review even

of egregiously mistaken district court remands. See Arnold,

277 F.3d at 775.

Il.

Because we lack appellate jurisdiction to review any facet

of the district court’s order, we cannot address the district

court’s discussion of international arbitration law.

We therefore GRANT Dahiya’s motion to dismiss this appeal

and DENY as moot Appellants’ motion to stay proceedings

pending arbitration.

DISMISSED.

(Cont’d)

we advised district courts against conflating a jurisdictional analysis

with an evaluation of the merits of a defendant’s motion to compel

arbitration. /d. at 670-72.

lla

Appendix A

DeMOSS, Circuit Judge, dissenting:

I agree with the majority that if the district court’s remand

determination was based on a lack of removal jurisdiction,

28 U.S.C. § 1447(d) likely precludes us from reviewing the

remand order itself.' However, I respectfully disagree with

1. I would like to point out that while the separate removability

provision under 9 U.S.C. § 205 of the Convention Treaty (the

“Convention”), enabled at 9 U.S.C. § 201 et seq., states “the

procedure for removal of causes otherwise provided by law shall

apply,” it also explicitly relaxes certain requirements under 28 U.S.C.

§ 1446. That is, removals under the Convention are not subject to

the 30-day and one-year time limitations and can occur “at any time

before the trial,” and the ground for removal! (here, the arbitration

provision in an international agreement) does not have to appear on

the face of the plaintiff’s state court complaint “but may be shown in

the petition for removal.” 9 U.S.C.A. § 205 (West 2004).

Furthermore, the terms of 9 U.S.C. § 16(a)(1)(C) (which is made

applicable to the Convention by 9 U.S.C. § 208) expressly provide

for an appeal from an order “denying an application under section

206 of this title to compel arbitration,” which immediate appealability

is unique to denials of arbitration under the Convention. 9 U.S.C.A.

§ 16(a)(1)(C) (West 2004). The language of § 203 expressly states

that “[a]n action or proceeding falling under the Convention shall be

deemed to arise under the laws and treaties of the United States,”

9 U.S.C.A. § 203 (West 2004), and under § 205 an action removed

from state court “shall be deemed to have been brought in the district

court to which it is removed.” Id. § 205. These distinctions suggest a

fundamental difference between removal of a case under 28 U.S.C.

§ 1441 et seg. and removal of a case under 9 U.S.C. § 205. Under §§

1441-1446, the purpose is to change the forum in which the same

case will be tried as would have been tried in the state court; whereas,

(Cont’d)

]2a

Appendix A

the majority’s dismissal for lack of jurisdiction and would

conclude that we have appellate jurisdiction over the order

denying arbitration and that the district court erred in refusing

to order arbitration under the Convention Treaty (the

“Convention”), 9 U.S.C. § 201 et seq.

I. This Court can review the district court’s denial of the

motion to compel arbitration and stay proceedings.

I firmly believe that an order denying arbitration, such

as the district court entered here, is reviewable as a separable

(Cont'd)

under § 205, the purpose is to allow the removing party to assert in

federal court the existence of an agreement to arbitrate under the

Convention and compel such arbitration in lieu of the trial that would

otherwise occur in the state court.

Thus, in a typical removal under § 1441 et seq., the

nonappealability of a remand order is a reflection of the congressional

policy to prevent delays of the trial on the merits by appeals over the

validity of the remand order. But removal under § 205 raises the

issue of whether there should be a trial on the merits at all; and the

immediate appeals process authorized under 9 U.S.C. § 16 reflects

the strong congressional policy of giving preference to arbitration

over litigation as to agreements covered by the Convention. It seems

that Congress intended to treat removals under the Convention

differently and more leniently than removals under the general

removal statutes. There may be an argument that the language of the

Convention should control, rather than § 1447(d), when dealing with

an agreement to arbitrate under the Convention. However, no case

purports to resolve this apparent conflict between 28 U.S.C. § i1447(d)

and 9 U.S.C. § 16; so I do not conclude here that the remand order

itself is reviewable under § 16.

13a

Appendix A

and collateral order. See Doleac ex rel. Doleac v. Michalson,

264 F.3d 470, 478 (Sth Cir.2001). There are two distinct steps

in the consideration: (1) whether the order is separable from

the remand to overcome the bar of § 1447(d); and (2) whether

the order is appealable under 28 U.S.C. § 1291 or otherwise.

Id. at 478-79, 485. The order denying arbitration here meets

both requirements.

A. Separability of the denial of arbitration.

In City of Waco v. United States Fidelity & Guaranty

Co., 293 U.S. 140 (1934), the Supreme Court found the

appellate court could review an order dismissing a cross-

action that accompanied a remand for lack of diversity

jurisdiction because it “in logic and in fact . . . preceded that

of remand and was made by the District Court while it had

control of the cause.” Jd. at 143. To be found separable, the

order also must be conclusive, in that it has the “preclusive

effect of being functionally unreviewable in the state court.”

Doleac, 264 F.3d at 482 (quoting Angelides v. Baylor Coll.

of Med., 117 F.3d 833, 837 (Sth Cir.1997)).

In the district court’s single order, the determination that

no agreement to arbitrate existed did precede the remand

order “in logic.” Naturally, without a valid arbitration

agreement in play, any motion to compel arbitration would

have to be denied. Here, the finding that no valid arbitration

agreement existed under Louisiana policy and law also

provided the basis “in logic” to consider remand; it served

as the “impetus for remanding the case.” Doleac, 264 F.3d

at 483 (quoting 7illman v. CSX Transp., Inc., 929 F.2d 1023,

1026 (Sth Cir.1991)).

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14a

Appendix A

Likewise, although the denial of arbitration and the

remand stemmed from the same physical order, the arbitration

determination also preceded the remand “in fact.” It would

have had to, because the opposite sequence of events

(remand, then denial of arbitration) would have meant the

district court rendered a meaningless denial of arbitration

because at that point of remand jurisdiction would have

already passed to the state court. Also, the “in fact” inquiry

considers if:

[T]he issue has independent relevance in

adjudging the rights of the parties (1.e., relevance

beyond determining the existence of federal

subject matter jurisdiction), the decision is

separable and falls within the reasoning of City

of Waco—even if it also happens to have an

incidental effect on the court’s jurisdiction.

Doleac, 264 F.3d at 486 (quoting Powers v. Southland Corp.,

4 F.3d 223, 228 (3d Cir.1993)). Here, the district court

determined whether the arbitration clause in Dahiya’s deed

was valid under Louisiana law. While this determination did

affect jurisdiction in that an invalid arbitration clause meant

there could be no arbitration agreement under the Convention

for proper removal under § 205, it also had powerful

“relevance beyond determining [] jurisdiction.” It cut

Appellants off from their right to have their dispute with

Dahiya settled by an arbitrator, outside the courtroom.

After considering whether the order is separable

“in logic” and “in fact,” this Court must determine whether

the order is conclusive, that is, functionally unreviewable in

15a

Appendix A

the state court. Doleac, 264 F.3d at 482. “[O]ur court has

defined conclusiveness in terms of whether the order was

‘substantive’ or ‘jurisdictional’: if a decision is simply

jurisdictional, it is not conclusive.” Id. at 486. However, a

“substantive” decision will have a preclusive effect in the

state court. Jd. at 487. Dahiya argues, in essence, that the

district court’s finding on the issue of arbitration is just

jurisdictional because it can have no preclusive collateral

estoppel effect on the state court. The doctrine of collateral

estoppel has three requirements: (1) the prior federal decision

resulted in a “judgment on the merits”; (2) the same fact

issue must have been “actually litigated” in the federal court;

and (3) the disposition of that issue must have been

“necessary to the outcome” of the prior federal litigation.

Falcon v. Transportes Aeros de Coahuila, S.A., 169 F.3d

309, 312 (Sth Cir.1999) (quoting Parklane Hosiery Co., Inc.

v. Shore, 439 U.S. 322, 326 n.5 (1979)).

Usually, a determination that a court lacks jurisdiction

is not considered a judgment on the merits for collateral

estoppel to apply. See Nilsen v. City of Moss Point, Miss.,

701 F.2d 556, 562 (Sth Cir.1983) (en banc). But legal findings

that serve as prerequisites to and are thus necessary to make

a lack of jurisdiction decision can have a collaterai estoppel

effect in state court. See Falcon, 169 F.3d at 312-13.

Here, a finding that no valid arbitration agreement existed

equated precisely to a “judgment on the merits” of the efficacy

of such arbitration clause and shut off any arbitration

proceedings brought by Appellants. Unlike in Doleac where

the amendment allowing joinder merely changed the court

in which the same claims would be litigated, 264 F.3d at

l6a

Appendix A

487-88, the denial of arbitration here closed the “non-court”

forum off entirely from Appellants.’

As for the arbitration issue having been “actually

litigated” and “necessary to the outcome,” we indicated in

Falcon that when a federal district court determines it does

not have subject matter jurisdiction, findings necessary to

make that decision have collateral estoppel consequences in

a state court. 169 F.3d at 312-13 (citation omitted). Thus,

here, because the district court’s determinatior. that no

arbitration agreement existed was a legal finding “necessary”

to its decision that it did not have § 205 removal jurisdiction,

Dahiya could attempt to preclude Appellants’ defense of

arbitration by raising collateral estoppel in the state court.

B. Appealability of the denial of arbitration.

Having found the arbitration determination separable,

the second step under Doleac is that the separable ruling must

also be appealable as a final decision under 28 U.S.C. § 1291

or under an exception to finality. 264 F.3d at 489. A denial

of a motion to compel arbitration is not a final decision per

§ 1291. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706,

712 (1996). However, this Court has noted the importance

of a party’s right and ability to appeal decisions by district

2. The situation here is analogous to the resubstitution order

we found separable in Mitchell v. Carlson, 896 F.2d 128, 133 (Sth

Cir.1990), where an entity not otherwise subject to litigation was

resubstituted as a party and thus became subjected to suit. Doleac ex

rel. Doleac v. Michalson, 264 F.3d 470, 487 (Sth Cir.2001).

Appellants have become subjected to litigation since the district court

determined they had ne valid arbitration defense.

17a

Appendix A

courts refusing to enforce arbitration under the Convention.

Beiser v. Weyler, 284 F.3d 665, 673 (Sth Cir.2002).

Here, Appellants argue that 9 U.S.C. § 16 provides direct

appealability of the denial of arbitration. Section 16(a)(1)(A)

clearly does provide for direct appeals from orders “refusing

a stay of any action under section 3 of this title,” and

§ 16(a)(1)(C) clearly allows for direct appeals from orders

“denying an application under section 206 of this title to

compel arbitration.” 9 U.S.C.A. § 16(a) (West 2004).

However, because the district court ultimately did not believe

it had removal jurisdiction under the legislation adopting the

Convention, 9 U.S.C. § 201 et seq., its denial of Appellants’

motion to compel arbitration could not have been under

§ 206 and likewise its denial of Appellants’ motion to stay

proceedings pending arbitration could not have been under

§ 3. Thus, this Court cannot rely on 9 U.S.C. § 16 itself for

the order’s appealability.’

3. This Catch-22 problem cries out for immediate remedy from

the Supreme Court in this case and, ultimately, from Congress for all

comparable cases that are sure to follow. It seems entirely absurd—

in light of the Supreme Court’s and Congress’s extremely clear

intentions that arbitration properly subject to the Federal Arbitration

Act (the “FAA”), 9 U.S.C. § 1 et seg., and the Convention be treated

and interpreted favorably and that denials of arbitration properly

subject to the FAA and the Convention be immediately appealable—

(1) that a state could successfully legislate an end run to defeat

preferred federal removal jurisdiction in cases where there can scarce

be doubt that the arbitration agreement at issue falls under the

auspices of the Convention and is validly invoked, and (2) that district

courts could apply that state’s law to ignore preemptive federal

arbitration law.

ates ene “4

18a

Appendix A

I. Cohen exception to finality rule.

To determine whether a nonfinal order is appealable, the

common analysis entails the approach first outlined in Cohen

v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546-47

(1949), used to determine whether district court orders not

appealable as final decisions under 28 U.S.C. § 1291 can

nonetheless be reviewed as collateral orders. In Doleac this

Court restated this four-step analysis: the decision (1) cannot

be tentative, informal, or incomplete; (2) must deal with

claims of right separable from, and collateral to, rights

asserted in the action; (3) must be effectively unreviewable

on the appeal from final judgment; and (4) must involve an

issue too important to be denied review. 264 F.3d at 490-91

(citing Cohen, 337 U.S. at 546). Whether an order denying

arbitration is appealable as a collateral exception to § 1291

is a res nova issue for this Court.‘

4. This Court has previously decided that district court decisions

that favor or accommodate arbitration, such as orders compelling

arbitration and grants of stays of legal proceedings pending

arbitration, are not appealable under the Cohen v. Beneficial

Industrial Loan Corp., 337 U.S. 541 (1949), collateral order

exception. West of England Ship Owners Mut. Ins. Assoc.

(Luxembourg) v. Am. Marine Corp., 981 F.2d 749, 751 (5th

Cir.1993) (order compelling arbitration and staying litigation);

Turboff v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 867 F.2d

1518, 1520 n. 5 (Sth Cir.1989) (same); Jolley v. Paine Webber

Jackson & Curtis, Inc., 864 F.2d 402, 404 (Sth Cir.1989),

supplemented, 867 F.2d 891 (Sth Cir.1989) (order staying litigation).

This Court has also previously decided that a district court order .

denying a stay of litigation, where pending litigation in the same

district court concerned the question of arbitrability of a dispute, is

(Cont'd)

19a

Appendix A

First, the denial of arbitration by the district court

here was anything but tentative, informal, or incomplete.

The determination that no valid arbitration clause existed

due to Louisiana law and policy conclusively decided the

disputed legal question of the validity of Appellants’

arbitration defense.

Second, the denial of arbitration did not in any way affect,

nor was it affected by, the underlying merits of Dahiya’s Jones

Act maritime action. The district court’s denial of arbitration

dealt solely with Appellants’ separate right to assert

arbitration as a defense, not with any right of Dahiya to

recover on his negligence and unseaworthiness claims.

Third, as already discussed in Part I.A., because the state

court could be bound by collateral estoppel on remand as to

the district court’s finding on the validity of Dahiya’s

arbitration agreement, the denial of arbitration would be

effectively unreviewable on the appeal from final judgment.°

(Cont'd)

not appealable as a Cohen collateral order. Rauscher Pierce Refsnes,

Inc. v. Birenbaum, 860 F.2d 169, 171-72 (Sth Cir.1988) (noting such

decision was not effectively unreviewable because the final judgment

of the declaratory judgment action could be appealed and set aside

in favor of arbitration). However, these cases addressed entirely

different questions than what this Court considers here, whether anti-

arbitration decisions are appealable as collateral orders.

5. This is analogous to the situation presented in Moses H. Cone

Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1

(1983). There, plaintiff filed suit in state court seeking a declaratory

judgment that there was no right to arbitration under the construction

(Cont'd)

20a

Appendix A

Lastly, the denial of a party’s right to enforce arbitration

and thus not be subject to litigation in court is an issue too

important to be denied appellate review. Congress expressed

that very policy by enacting 9 U.S.C. § 16. See H.R.Rep.

No. 100-889, at 36-37 (1988), reprinted in 1988

U.S.C.C.A.N. 5982, 5997.

Because in Moses H. Cone Memorial Hospital v.

Mercury Construction Corp., 460 U.S. 1 (1983), the

Supreme Court found a district court stay that effectively

denied arbitration appealable within the Cohen exception to

finality rule, the step to an outright denial of arbitration also

constituting an exception to finality under § 1291 is small

indeed. In fact, the Fourth Circuit made this exact step in

Peoples Security Life Insurance Co. v. Monumental Life

Insurance Co., 867 F.2d 809, 812 (4th Cir.1989). I would

take that same step and find the district court’s denial of

Appellants’ motion to compel arbitration and stay

proceedings pending arbitration appealable as a collateral

order exception to § 1291.

(Cont’d) |

contract with defendant. Jd. at 7. Defendant then filed a diversity

suit in federal district court, seeking an order compelling arbitration

under § 4 of the Federal Arbitration Act (the “FAA”), 9 U.S.C. § 1

et seq. Id. The district court stayed the federal case pending resolution

of the state action. Jd. The Supreme Court found the district court’s

refusal to decide the arbitration issue appealable under the Cohen

exception to the finality rule. Jd. at 11. “[T]his order would be entirely

unreviewable if not appealed now. Once the state court decided the

issue of arbitrability, the federal court would be bound to honox that

determination as res judicata.” Jd. at 12.

2la

Appendix A

2. Interlocutory decision appealable per

28 U.S.C. § 1292.

The Cohen collateral order exception is not the only

means to achieve appellate review of the district court’s denial

of arbitration. See Peoples, 867 F.2d at 812 (easily conflating

an order denying arbitration falling under the Cohen

exception and also being appealable of right as an

interlocutory decision refusing an injunction under

§ 1292(a)). Where a district court disfavors arbitration by

staying arbitration proceedings pending outcome of litigation,

this Court has found such stays appealable as interlocutory

injunctions under § 1292(a)(1), which grants appealability

over certain nonfinal interlocutory decisions. 28 U.S.C.A.

§ 1292(a)(1) (West 2004); Tai Ping Ins. Co., Ltd. v. M/V

WARSCHAU, 731 F.2d 1141, 1143, 1146 (Sth Cir.1984)

(noting “only the most exceptional circumstances will justify

any action ... that serves to impede arbitration of an

arbitrable dispute”); City of Meridian, Miss. v. Algernon

Blair, Inc., 721 F.2d 525, 529 (5th Cir.1983) (reversing

injunction of arbitration where district court wrongly

determined case was not arbitrable).

In Sedco, Inc. v. Petroleos Mexicanos Mexican National

Oil Co. (Pemex), 767 F.2d 1140 (Sth Cir.1985), this Court

determined that the Convention abrogated a longstanding rule

of admiralty law that otherwise would have barred appeal of

the district court’s refusal to enforce an arbitration clause.

Id. at 1147, 1149 (citation omitted). In finding the denial of

arbitration appealable under 28 U.S.C. § 1292(a)(1) as an

appeal from an interlocutory decision that refused injunctive

relief, this Court reasoned that if the defendant’s motion had

es ee ee ee ee ein! ae

22a

Appendix A

been granted instead of denied, the court’s order would have

required the plaintiff to participate in arbitration in a set

location. Jd. at 1149 (“Such an order would be, in effect, a

mandatory injunction.”). Therefore, even though it was not

styled as such, the district court’s order had “all the earmarks

of a denial of injunctive relief under 28 U.S.C. § 1292.” Id.

In National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d

326 (Sth Cir.1987), although the Convention did not apply

because Iran was not a signatory and we did not mention

Sedco, this Court likewise found that the district court’s

interlocutory order declining to compel arbitration and stay

litigation was a denial of injunctive relief directly appealable

under 28 U.S.C. § 1292(a)(1). Jd. at 330.°

6. While this Court decided National Iranian Oil v. Ashland

Oil, Inc., 817 F.2d 326 (Sth Cir.1987), against the backdrop of the

Enelow-Ettelson doctrine, Enelow v. New York Life Ins. Co., 293

U.S. 379 (1935), overruled in Gulfstream Aerospace Corp. v.

Mayacamas Corp., 485 U.S. 271, 287 (1988), which had provided

that an order granting or denying a stay of litigation where a party

had set up an equitable defense to an action at law was, in effect, a

an interlocutory injunction appealable under § 1292(a)(1), this does

not foreclose us from finding that denials of arbitration are appealable

as injunctions under § 1292(a)(1). The Supreme Court in Gulfstream

stressed that § 1292(a)(1) would “continue to provide appellate

jurisdiction over orders that grant or deny injunctions and orders

that have the practical effect of granting or denying injunctions and

have serious, perhaps irreparable, consequence.” 485 U.S. at 287-88

(citations and internal quotes omitted).

In our cases following Gulfstream, we have denied § 1292(a)(1)

review of district court decisions both denying and granting stays of

litigation, but only where either the arbitration question was still

(Cont'd)

23a

Appendix A

Title 9’s section 16 on appeals was enacted by Congress

in 1988 and amended in 1990. 9 U.S.C.A. § 16 note (West

2004). Thus, we decided Tai Ping, City of Meridian, Sedco,

and National Iranian Oil against a backdrop where the FAA

and the Convention did not specifically provide for

immediate appeals of denials of arbitration (in admiralty or

otherwise). See also Peoples, 867 F.2d at 812 (finding, also

before § 16’s enactment, that a district court’s denial of

arbitration and of a stay pending arbitration under an

(Cont’d)

actively pending in the district court or where the arbitration question

had already been decided in favor of arbitration. See Adams v.

Georgia Gulf Corp., 237 F.3d 538, 542 (Sth Cir.2001) (stay denied

after arbitrable dispute found under Convention); Jolley, 864 F.2d at

404 (stay granted pending arbitration), supplemented, 867 F.2d at

892 (finding nonreviewability of decision that granted stay pending

arbitration consistent with proarbitration intent of Congress in then-

numbered § 15 of the FAA); Rauscher, 860 F.2d at 169, 171 (stay

denied where declaratory judgment action to determine arbitrability

under the parties’ contract was still pending in same district court,

such that denying stay entailed no serious or potentially irreparable

consequences and final judgment in declaratory judgment action

could “be set aside on appeal in favor of arbitration”).

Here, the district court has already clearly decided the

arbitrability question in the negative against Appellants. Without

immediate appellate review of the denial to compel arbitration and

associated denial of stay of proceedings, Appellants face the serious

consequence of being forced to litigate a dispute Dahiya already

agreed to have submitted to arbitration. See City of Meridian, Miss.

v. Algernon Blair, Inc., 721 F.2d 525, 529 (Sth Cir.1983) (noting

how an injunction against arbitration causes irreparable harm due to

the expense of litigation). The situation is also potentially irreparable

because the state court on remand may be collaterally estopped from

reviewing the validity of Dahiya’s agreement to arbitrate

TP ye ee hy eRe ae RS ae ee Be

24a

Appendix A

arbitration clause qualifying under the FAA was appealable

of right under § 1292(a)); Becker Autoradio U.S.A., Inc. v.

Becker Autoradiowerk GmbH, 585 F.2d 39, 42 n. 7 (3d

Cir.1978) (noting same). There is nothing to indicate that

these cases’ common holding as to denials of arbitration being

appealable as mandatory injunctions under § 1292(a)(1) has

been abrogated; in fact, such a holding is entirely consistent

with the proarbitration policy behind § 16.’ See KKW Enters.,

Inc. v. Gloria Jean’s Gourmet Coffees Franchising Corp.,

184 F.3d 42, 47 (1st Cir.1999) (finding order staying pending

arbitration immediately appealable as an injunction under

both § 1292(a) and 9 U.S.C. § 16(a)(2)).°

7. The proarbitration viewpoint of Congress, as it pertains to

the appellate process, could not be clearer. The purpose of § 16, as

indicated by its legislative history, is to provide for interlocutory

appeals when a trial court rejects the contention that a dispute is

arbitrable under an agreement of the parties and instead requires the

parties to litigate. H.R.Rep. No. 100-889, at 36-37 (1988), reprinted

in 1988 U.S.C.C.A.N. 5982, 5996-97 (discussing then-numbered

§ 15 of Title 9). In direct contrast, interlocutory appeals are

specifically prohibited when the trial court finds that the parties have

agreed to arbitrate the dispute. Jd. at 37 (same).

8. However, § 16(b) provides that nonfinal orders that grant or

favorably treat arbitration under the FAA or the Convention are not

directly appealable except as provided by the certification process

in § 1292(b). See Cargill Ferrous Int'l vy. SEA PHOENIX MV, 325

F.3d 695, 697 (Sth Cir.2003); West of England, 981 F.2d at 751

(disallowing appeal of order compelling arbitration and grant of stay

of litigation pending arbitration under § 16(b)); Zurboff, 867 F.2d at

1520 (disallowing same under then-numbered § 15 of the FAA);

Jolley, 867 F.2d at 892 (supplementing prior decision and finding

grant of stay pending arbitration not appealable under then-numbered

§ 15 of the FAA).

25a

Appendix A

In Tejidos de Coamo, Inc. v. International Ladies’

Garment Workers’ Union, 22 F.3d 8, 10 (1st Cir.1994), even

though the FAA expressly excludes employment contracts

from its scope and so the labor dispute at issue was not

properly subject to § 16, the First Circuit looked to the strong

congressional policy in favor of immediate appeal of denials

of arbitration that led to § 16’s enactment. The First Circuit

accepted the distinction based on proarbitration policy that

decisions favoring arbitration are considered appealable

injunctions under § 1292(a) while decisions disfavoring

arbitration are not. Tejidos, 22 F.3d at 10-11. Accordingly,

the First Circuit held that even where § 16 of the FAA is not

formally applicable to a particular order staying arbitration,

such order is immediately appealable as denial of an

injunction under § 1292(a)(1). Jd. at 11.

This Court has already agreed with the First Circuit that

district court decisions favorable to arbitration, such as orders

compelling arbitration and grants or denials of stays of legal

proceedings pending arbitration of claims found arbitrable,

are not appealable as injunctions under § 1292(a). Adams v.

Georgia Gulf Corp., 237 F.3d 538, 542 (Sth Cir.2001); Jolley

v. Paine Webber Jackson & Curtis, Inc., 864 F.2d 402, 403-

04 (Sth Cir.1989), supplemented, 867 F.2d 891 (Sth Cir.1989).

This Court has also held that a denial of a stay pending

arbitration, where the district court had not yet ruled on the

arbitrability of the dispute, was not appealable under

§ 1292(a)(1). Rauscher Pierce Refsnes, Inc. v. Birenbaum,

860 F.2d 169, 171 (Sth Cir.1988). However, post-7ai Ping,

City of Meridian, Sedco, and National Iranian Oil, and post-

§ 16 enactment, we have not yet held that decisions ruling

against arbitration, not formally subject to § 16, are otherwise

26a

Appendix A

directly appealable as interlocutory injunctions under

§ 1292(a)(1).

Though the district court here determined that the

arbitration clause in Dahiya’s deed did not fall under the

Convention due to its invalidity under Lovisiana law, this

does not change the fact that Appellants sought an injunction

favoring the enforcement of arbitration, which the district

court refused. As explained earlier, this denial entails serious

and potentially irreparable effects. Therefore, I would find

the reasoning and analysis of Tejidos persuasive. Thus, even

though here direct appealability would not otherwise be

formally available under § 16(a)(1)(A) or § 16(a)(1)(C) of

the FAA and the Convention, the district court’s refusal to

grant Appellants’ motion to compel arbitration and stay

proceedings pending arbitration should be appealable as an

interlocutory denial of an injunction under § 1292(a)(1).

II. The district court erred in denying Appellants’ motion

to compel arbitration and stay proceedings.

Because of what I feel to be the tremendous importance

of the issues this case presents not only on the question of

reviewability but also on the merits, I address those merits

here. This Court reviews a district court’s refusal to compel

arbitration and stay litigation de novo. Cargill Ferrous Int’l

v. SEA PHOENIX MV, 325 F.3d 695, 697 (Sth Cir.2003).

Likewise, the enforceability of a forum selection clause is a

question of law that we review de novo. Haynsworth vy. The

Corporation, 121 F.3d 956, 961 (Sth Cir.1997) (citation

omitted).

27a

Appendix A

A. Presumption of validity of forum selection clauses’

under M/S BREMEN vy. Zapata Off-Shore Co.,

407 U.S. 1 (1972).

The Supreme Court in The BREMEN found that forum

selection clauses in international agreements “are prima facie

valid and should be enforced unless enforcement is shown

by the resisting party to be ‘unreasonable’ under the

circumstances.” 407 U.S. at 10. One way to show a clause

unreasonable is if enforcement of the forum selection clause

at issue “would contravene a strong public policy of the forum

in which suit is brought, whether declared by statute or by

judicial decision.” Jd. at 15. But the party resisting the clause

must meet a “heavy burden of proof.” Jd. at 17.'° Here, the

district court agreed with Dahiya’s contention that the forum

selection clause in his employment deed is unreasonable

under The BREMEN, and therefore unenforceable, because

enforcement of Section II.8 of Dahiya’s deed would violate

strong public policy of Louisiana.

9. The Supreme Court and the Fifth Circuit have explicitly

declared “foreign arbitration clauses are but a subset of foreign forum

selection clauses in general.” Haynsworth v. The Corporation, 121

F.3d 956, 963 (Sth Cir.1997) (quoting Vimar Seguros y Reaseguros,

S.A. v. M/V SKY REEFER, 515 U.S. 528, 534 (1995)).

10. The Supreme Court-has enforced every forum

selection clause in an international contract that has come before it.

See M/V SKY REEFER, 515 U.S. 528, 540-42 (1995); Carnival

Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991); Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 640

(1985); Scherk v. Alberto-Culver Co., 417 U.S. 506, 519-20 (1974).

I, ch hE tee, ee FR ee ee an oe

Sate aie 2k

et ik,

28a

Appendix A

Appellants argue that Louisiana law is completely

inapposite. However, this Court in Haynsworth, 121 F.3d at

965-69, has considered Texas public policy while affirming

the enforceability of a forum selection clause in certain

investors’ agreements with a foreign underwriting exchange.

The investors had argued, in part, that the clause was

unreasonable per The BREMEN because it contravened

Texas public policy as embodied in Texas securities laws

and the Texas Deceptive Trade Practices Act (“DTPA”).

There, we decided that the investors did not overcome the

strong presumption of enforceability established by

The BREMEN. Haynsworth, 121 F.3d at 966-69. Dahiya

claims that Louisiana public policy as expressed in La. R.S.

§ 23:921 overcomes the strong presumption of enforceability

established by The BREMEN of the arbitration clause in his

deed with Neptune.

There would appear to be two competing policy interests

here. By enacting § 23:921, the Louisiana legislature has

expressed its concern that in order for forum selection and

choice of law clauses in employment contracts to be valid,

employees must ratify them subsequent to the incidents

giving rise to the claims. La. R.S. § 23:921A(2) (West 2004).

The Louisiana Supreme Court, in Sawicki v. K/S

STAVANGER PRINCE, 802 So.2d 598, 603 (La.2001),

stated that the statutory requirement that employees agree to

the forum (arbitration versus court, or choice of court) and

the law to be applied after the fact of their injury or dispute

occurs reflects Louisiana’s strong public policy concerning

forum selection clauses. See also Lim v. Offshore Specialty

Fabricators, Inc., No. Civ.A. 02-2126, 2003 WL 193518,

29a

Appendix A

at *2 (E.D.La. Jan.28, 2003) (unpublished) (“Louisiana has

expressed its hostility to forum selection clauses. .. .”).!!

However, the federal policy indicated by the Supreme

Court in The BREMEN pulls in the opposite direction

entirely. In The BREMEN, the ship at issue “was to traverse

the waters of many jurisdictions.... That the accident

occurred in the Gulf of Mexico and the barge was towed to

Tampa in an emergency were mere fortuities.” 407 U.S. at

13. The Court explained that the international contracting

parties wanted to provide a neutral forum beforehand, so that

there would be no question as to what would happen in case

of a dispute. Id. This strong federal policy regarding the

validity of pre-dispute selections of forum arises from

“sensitivity to the need of the international commercial

system for predictability in the resolution of disputes.” Sedco,

767 F.2d at 1149 (citation omitted). This Court must also

recognize the related, strong federal policy in favor of

rigorously enforcing the specific forum choice of arbitration

and arbitration awards, as reflected by Congress in enacting

the FAA and the Convention. See Southland Corp. v.

11. Lim v. Offshore Specialty Fabricators, Inc., No. Civ.A.

02-2126, 2003 WL 193518 (E.D.La. Jan.28, 2003) (unpublished), is

currently awaiting disposition in this Court. I mention first, that the

panel in Lim does not face the § 1447(d) remand bar to appellate

jurisdiction to address the merits of the validity of the arbitration

clause at issue there under the Convention, which the majority feels

was encountered here; and second, that the merits questions in that

case as to the application of M/S BREMEN v. Zapata Off-Shore

Co., 407 U.S. 1 (1972), and the preemption of Louisiana law hostile

to arbitration by the FAA and the Convention are virtually identical

to those in the instant case.

bier aitt

30a

Appendix A

Keating, 465 U.S. 1, 10 (1984); Scherk v. Alberto-Culver

Co., 417 U.S. 506, 520 n.15 (1974).

Predictability in the resolution of disputes is precisely

what Appellants desired and what Dahiya expressly agreed

to in his deed here, and precisely what § 23:921 conflicts

with and frustrates. If an accident or incident were to occur

during and relating to Dahiya’s training and employment

under Neptune, notwithstanding in which body of water,

Section II.8 of Dahiya’s deed clearly anticipated the procedure

to be followed—arbitration in either India or Singapore

before a specific arbitrator who would apply Indian

arbitration law. That this incident occurred in international

waters near Louisiana and Dahiya received emergency

treatment in Louisiana are “mere fortuities” because Dahiya

and Neptune had already agreed to submit to arbitration

elsewhere.

Section 23:921 works to presumptively void all

arbitration clauses in employment contracts, no matter what

their terms dictate. Not only does this policy directly conflict

with The BREMEN’s presumption of validity for forum

selection clauses in general, but it conflicts with the

proarbitration policy set out by Congress in the FAA and the

Convention that similarly presumes arbitration provisions to

be “valid, irrevocable, and enforceable.” 9 U.S.C.A. § 2 (West

2004). The presumption of validity of arbitration clauses is

also what another public policy of Louisiana heavily favors,

as evidenced by its legislature’s enactment of La. R.S.

§ 9:4201, which closely mirrors § 2 of the FAA. See id.;

La. R.S. § 9:4201 (West 2004). Thus, Louisiana’s general

policy on arbitration is consistent with federal policy that

3la

Appendix A

arbitration clauses should be considered presumptively valid.

Given the relative weight of these competing policy concerns,

I would find Dahiya has not met his heavy burden of showing

that the forum selection clause in his deed is unreasonable,

and the district court erred in concluding Dahiya had made

such a showing.

B. Preemption of state statutes invalidating

arbitration agreements.

In addition, any argument that the arbitration clause in

Dahiya’s deed is foreclosed by La. R.S. § 23:921 must be

tried and tested by preemption analysis. Federal statutes

enacted pursuant to the United States Constitution are the

supreme law of the land. “[A]ny state law, however clearly

within a State’s acknowledged power, which interferes with

or is contrary to federal law, must yield.” Gade v. Nat’l Selid

Wastes Mgmt. Ass’n, 505 U.S. 88, 108 (1992) (citation

omitted). Section 2 of the FAA, enacted by Congress pursuant

to the Commerce Clause and incorporated by the Convention

in 9 U.S.C. § 208, “is a congressional declaration of a liberal

federal policy favoring arbitration agreements,

notwithstanding any state substantive or procedural policies

to the contrary.” Moses H. Cone, 460 U.S. at 24.

In Southland the Supreme Court held that the FAA

preempts conflicting state law and concluded that even state

courts cannot apply state statutes which invalidate arbitration

agreements. 465 U.S. at 16.'* The Court determined that the

12. The Supreme Court affirmed its decision regarding the

FAA’s preemption of state law in Mastrobuono v. Shearson Lehman

Hutton, Inc., 514 U.S. 52 (1995), and Allied-Bruce Terminix Cos.,

Inc. v. Dobson, 513 U.S. 265.

32a

Appendix A

no-waiver provision of the California Franchise Investment

Law, which required judicial consideration of claims brought

under the law, see Cal. Corp.Code § 31512, directly conflicted

with the FAA and violated the Supremacy Clause. Jd. This

Court has closely adhered to Southland in its decisions.

For example, in Commerce Park at DFW Freeport v.

Mardian Construction Co., 729 F.2d 334, 337 (Sth Cir. 1984),

the real estate partnership plaintiff contended that the DTPA’s

no-waiver provision, see Tex. Bus. & Com.Code Ann. § 1742,

precluded the resolution of DTPA claims by arbitration

because it reserved such claims to a judicial forum. We noted

that the broad arbitration clause in the franchise agreement

in Southland was similar to that found in the construction

contract between the parties in Commerce Park. 729 F.2d at

337-38. Thus, we found Southland dispositive, and held that

the no-waiver provision of the DTPA would abrogate § 2 of

the FAA and thus violated the Supremacy Clause. Id. at 338."°

Likewise, in OPE International LP vy. Chet Morrison

13. See also Saturn Distrib. Corp. v. Paramount Saturn, Ltd.,

326 F.3d 684, 687 (Sth Cir.2003) (noting under Southland Corp. v.

Keating, 465 U.S. 1 (1984), that to extent Tex.Rev.Civ. Stat. Ann.

art. 4413(36) §§ 1.02 and 3.01(a), now repealed, gave Texas Motor

Vehicle Board exclusive jurisdiction over franchise disputes, statute

would be preempted by the FAA because it limited availability of

arbitration); Miller v. Public Storage Mgmt., Inc., 121 F.3d 215,

219 (Sth Cir.1997) (applying Southland and holding the FAA

preempts conflicting state anti-arbitration laws); Ommani v. Doctor’s

Assocs., Inc., 789 F.2d 298, 299-300 (Sth Cir. 1986) (“[T]o the extent

that [the Texas Deceptive Trade Practices Act] provides a remedy

parallel to and often overlapping claims that may fall within the scope

of the Federal Arbitration Act, we find the Southland decision clearly

apposite.”).

33a

Appendix A

Contractors, Inc., 258 F.3d 443, 447 (Sth Cir.2001), this

Court found that La. R.S. § 9:2779, which voided as against

public policy any provision in certain construction contracts

that required a suit or arbitration be brought outside

Louisiana, was preempted by the FAA. There, because the

Louisiana statute conditioned the enforceability of arbitration

agreements on selection of a Louisiana forum, a requirement

not applicable to contracts generally, we found § 9:2779 in

direct conflict with § 2 of the FAA. OPE Int’l, 258 F.3d

at 447.

The Convention was negotiated in 1958 and entered into

by the United States in 1970 pursuant to the Constitution’s

Treaty power. 9 U.S.C.A. § 201 note (West 2004). That same

year Congress adopted enabling legislation, 9 U.S.C. § 201

et seq., to make the Convention “the highest law of the land.”

Id.; Sedco, 767 F.2d at 1145. As aratified international treaty,

the Convention, with its incorporated FAA provisions, also

preempts any state law which would invalidate arbitration

agreements.'*

14. Where there is a conflict between a treaty and the provisions

of a state constitution or of a state statute, the treaty will control.

Zschernig v. Miller, 389 U.S. 429, 440-41 (1968); Clark v. Allen,

331 U.S. 503, 508 (1947); see, e.g., David L. Threlkeld & Co. v.

Metallgesellschaft Ltd. (London), 923 F.2d 245, 250 (2d Cir.1991)

(finding the FAA and the Convention preempted a Vermont statute

that required any agreement to arbitrate be displayed prominently in

the contract or contract confirmation and be signed by the parties);

F.A. Richard & Assocs., Inc. v. Gen. Marine Catering Co., Inc.,

688 So.2d 199, 201-02 (La.Ct.App.1997) (finding the Convention

preempted La. R.S. § 22:629 that prohibited enforcement of insurance

contract provisions which would divest Louisiana courts of

jurisdiction over insurance actions).

34a

Appendix A

Here, the Louisiana statute cited by Dahiya and relied

on by the district court, La. R.S. § 23:921, presumptively

voids any choice of forum or choice of law clause in any

employment contract unless expressly ratified by the

employee after the occurrence of the subject of the action.

This ex post facto approval requirement directly conflicts

with § 2 of the FAA, which presumes written provisions for

arbitration to 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.A. § 2 (West 2004)

(emphasis added).

By enacting § 2 of the FAA, incorporated by the

Convention in 9 U.S.C. § 208, “Congress precluded States

from singling out arbitration provisions for suspect status,

requiring instead that such provisions be placed upon the

same footing as other contracts.” Doctor’s Assocs., Inc. v.

Casarotto, 517 U.S. 681, 687 (1996) (finding a Montana

statute that voided arbitration clauses unless they were typed

in underlined capital letters to be preempted by the FAA)

(internal quotations and citations omitted).

Therefore, because § 23:921 targets forum selection

clauses in employment contracts and regards them as suspect,

I would find § 23:921 preempted by both the FAA and the

Convention, at least as applied to employment agreements.

containing arbitration clauses. Thus, I would hold the district

court erred by concluding § 23:921 invalidated the arbitration

clause in Dahiya’s deed.

35a

Appendix A

C. The arbitration clause in Dahiya’s deed and the

Convention.

It is clear that both Congress, in enacting the FAA and

the Convention, and the Supreme Court, in interpreting their

application to arbitration agreements, have expressed a liberal

federal policy favoring the enforcement of arbitration

provisions. See Mitsubishi Motors Corp. v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614, 625 (1985) (citation omitted).

This strong presumption in favor of arbitration “applies

with special force in the field of international commerce.”

Id. at 631. In light of the strong federal policy favoring

arbitration, courts are to conduct a “very limited inquiry”

when deciding whether to compel arbitration pursuant to the

Convention. Francisco v. STOLT ACHIE VEMENT MT, 293

F.3d 270, 273 (Sth Cir.2002) (citation omitted).

Thus, this Court has outlined a simple four-step analysis

for courts to perform: whether “(1) there is an agreement in

writing to arbitrate the dispute, (2) the agreement provides

for arbitration in the territory of a Convention signatory,

(3) the agreement arises out of a commercial legal

relationship, and (4) a party to the agreement is not an

American citizen.” /d. (citing Sedco, 767 F.2d at 1144-45).

Once an arbitration agreement is found to fall under the

Convention, the district court is authorized by 9 U.S.C.

§ 206 to order arbitration pursuant to the parties’ agreement,

within or outside the United States. In fact, the Convention

mandates that courts order arbitration. Francisco, 293 F.3d

at 273 (citation omitted); see also Sedco, 767 F.2d at 1145,

1151 (“9 U.S.C. § 206 does not confer discretion in

compelling arbitration.”). I would find that Dahiya’s

36a

Appendix A

arbitration clause easily meets all four requirements of the

Convention and that the district court erred in not compelling

arbitration and staying the proceedings per Appellants’

motion.

For the Convention to apply, there must be an agreement

in writing to arbitrate the dispute. Francisco, 293 F.3d at

273. This Circuit has already decided in Sphere Drake

Insurance PLC v. Marine Towing, Inc., 16 F.3d 666, 669

(Sth Cir.1994), that the Convention’s definition of “agreement

in writing” includes “either (1) an arbitral clause in a contract

or (2) an arbitration agreement, (a) signed by the parties or

(b) contained in an exchange of letters or telegrams.”

The signature or exchange of letters qualification only applies

to arbitration agreements, not arbitration clauses found within

contracts. Id.; see also Francisco, 293 F.3d at 273

(determining that a Filipino seaman who had signed an

employment contract containing an arbitration clause was

enough to constitute an agreement in writing to arbitrate the

dispute per the Convention).

Here, seaman Dahiya signed a deed covering his

12 months of practical training at-sea, which time would be

applied to his three-year Diploma in Maritime Studies.

He also agreed in the deed to serve as an employee to Neptune

or a company of Neptune’s choosing for a bonded period of

two years after receiving his degree and passing his Class V

exam. Though Dahiya is correct in saying that Neptune did

not explicitly sign the deed, Section 1.16 of the deed specifies

that the company—Neptune—’”’ covenants on its part to cause

the Engine Cadet to be trained in the business of Marine

Engineering and duties of an Engine Cadet onboard the

37a

Appendix A

company’s ships and provide the Cadet with sufficient

board[.]” Section I.17 outlined how much Neptune would

pay Dahiya as “wages” for the two years remaining before

receiving his degree—the first consisting of his at-sea training

and the second year consisting of his attendance of classes

at the National Maritime Academy in Singapore. Because

both sides exchanged promises in the deed, it functioned as

an employment contract.!°

Like the seaman in Francisco, Dahiya signed an

employment deed that contained an express arbitration

clause. Section II.8 of Dahiya’s deed provided:

Any dispute arising out of this Agreement shall

be subject to Arbitration under the Arbitration and

Conciliation Act, 1996. The said proceedings shall

take place either in Singapore or in India at the

option of the Company. Capt. Karanjit Singh, A

64/3, SFS Flats, Saket, New Delhi, shall be

appointed as the arbitrator in these proceedings.

This deed was, as in Sphere Drake and Francisco, a contract

between Neptune and Dahtya that indisputably contained an

arbitral provision whereby “[a]ny dispute arising from

[Dahiya’s deed] shall be subject to Arbitration.” Thus, no

15. In its October 11, 2002, Order and Reasons, the district

court stated: “Dahiya signed an employment contract before starting

work on the EAGLE AUSTIN.” Dahiya’s deposition testimony also

indicates that he understood the deed document he signed to govern

his employment aboard the EAGLE AUSTIN and that Neptune was

his employer.

38a

Appendix A

signature was required; the arbitration clause found within

Dahiya’s deed constitutes an agreement in writing under the

Convention.'®

Dahiya also argues that this tort suit is not a dispute

covered by the scope of the arbitration clause.'’ He alleged

in his original petition that at the time of his injuries,

“fo]n or about November 13, 1999, [Dahiya] was serving

aboard the M.T. EAGLE AUSTIN as an Assistant Engineer

in the employ of defendants.” The deed’s arbitration clause,

Section II.8, clearly provided for arbitration for “[a]ny dispute

arising out of this Agreement” without limitation. Thus, as

we outlined in Francisco, 293 F.3d at 278, although Dahiya’s

deed allowed a remedy for work-related personal injuries,

the similarly broad language of Section II.8 covers this tort

dispute arising from injuries Dahiya sustained on the EAGLE

AUSTIN during his on-board training pursuant to his

employment “Agreement.” Accordingly, I would find the first

requirement met.

16. I do not pursue a discussion of Dahiya’s remaining defense

to arbitration, that nonsignatories of an agreement cannot compel

arbitration. Suffice to say, this defense fails entirely as to Neptune,

see Sphere Drake Insurance PLC v. Marine Towing, Inc., 16 F.3d

666, 669- 70 (Sth Cir. 1994), because Neptune was a party to Dahiya’s

employment contract containing the arbitration clause. However,

should Dahiya be able to show that the rest of Appellants do not

meet either requirement under Westmoreland v. Sadoux, 299 F.3d

462, 467 (Sth Cir.2002), allowing nonparties to an agreement to

compel arbitration, Dahiya’s defense as to them would succeed.

17. Generally, whenever the scope of an arbitration clause is in

question, courts are to construe the clause in favor of arbitration.

See Mitsubishi, 473 U.S. at 626.

39a

Appendix A

The second requirement for the Convention to apply is

that the agreement must provide for arbitration in the territory

of a Convention signatory. Francisco, 293 F.3d at 273.

Dahiya’s deed explicitly provides for arbitration, which

clause (as explained above) the district court erroneously

found to be invalid. As for the location of such arbitration,

the clause provides for arbitration proceedings to take place

in either India or Singapore. In 1960, India acceded to the

Convention; in 1986, Singapore acceded to the Convention.

9 U.S.C.A. § 201 note (West 2004). Therefore, I would find

the second requirement met.

The third requirement for the Convention to apply is that

the agreement arises out of a commercial legal relationship.

Francisco, 293 F.3d at 273. After detailed analysis in

Francisco, this Court held seaman employment contracts to

be commercial legal relationships covered by the Convention,

even though they are excepted by the FAA. Id. at 274-75.

Therefore, I would find the third requirement met.

The final requirement for the Convention to apply is that

there must be a party to the agreement who is not an American

eitizen. Id. at 273. It is clear that Dahiya himself is not an

American citizen but an Indian citizen. Further, the other

party to the deed, Neptune, is not an American corporation

but a Singapore corporation. Thus, I would find the fourth

requirement met.

All four requirements having been met here, I would find

the arbitration agreement in Dahiya’s deed satisfies the very

limited, “low bar” inquiry Congress intended courts to apply

when determining whether arbitration agreements fall under

40a

Appendix A

the Convention. See Beiser, 284 F.3d at 674 (“[E]asy removal

is exactly what Congress intended in § 205.”). The district

court clearly erred when it refused to compel arbitration and

stay proceedings under the Convention per Appellants’

motion.

4la

APPENDIX B — ORDER AND REASONS OF THE

UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF LOUISIANA FILED

OCTOBER 11, 2002

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

NO. 02-2135

SECTION “F”

VINOD KUMAR DAHIYA

VERSUS

TALMIDGE INTERNATIONAL, LTD., ET AL.

ORDER AND REASONS

Before the Court is plaintiff's Motion to Remand and

defendants’ Motion to Compel Arbitration and Stay, or,

Alternatively, to Dismiss. For the reasons that follow, the

plaintiff’s motion is GRANTED and the defendants’ motion is

DENIED.

Background

The plaintiff, Vinod Kumar Dahiya, an Indian national,

was a crew member on the M/T EAGLE AUSTIN pursuant

to an employment agreement with defendant Neptune

Shipmanagement Services. The EAGLE AUSTIN is registered

in Singapore. Plaintiff was injured on November 13, 1999 while

operating the vessel’s incinerator. He received medical treatment

in Louisiana, and has since returned to India.

42a

Appendix B

Dahiya signed an employment contract before starting

work on the EAGLE AUSTIN. The contract provides:

Any dispute arising out of this Agreement shall

be subject to Arbitration under the Arbitration and

Conciliation Act, 1996. The said proceedings shall

take place either in Singapore or in India at the

option of the Company.

On March 4, 2002, Dahiya sued Neptune and four others

in Louisiana state court for damages under the Saving to

Suitors clause, 28 U.S.C. § 1333(1). Defendants removed

the case to federal court. However, they did not file the

removal notice within thirty days of plaintiff’s initial

pleading. Plaintiff now moves to remand to state court, and

defendants move to compel arbitration or, in the alternative,

to dismiss.

I. Validity of the Forum Selection Clause

in Dahiya s Contract

The Court begins with an analysis of the contract’s forum

selection clause. The Supreme Court, in M/S BREMEN vy.

Zapata Off-Shore Co., 407 U.S. 1 (1972), affirmed that forum

selection clauses in international agreements are

- presumptively valid. This presumption of validity may be

overcome, however, by a clear showing that the clause is

“unreasonable under the circumstances.” THE BREMEN,

407 U.S. at 10.

A forum selection clause is unreasonable if: (1) the

incorporation of the clause into the agreement was the product

43a

Appendix B

of fraud or overreaching; (2) the party seeking to escape

enforcement “will for all practical purposes be deprived of

his day in court” because of the grave inconvenience of

unfairness of the selected forum; (3) the fundsmental

unfairness of the chosen Jaw will deprive the plaintiff of a

remedy; or (4) enforcement of the clause would contravene

a strong public policy of the forum state. Haynsworth v..

Lloyd's of London, 121 F.3d 956, 963 (Sth Cir.1998) (citing

THE BREMEN, 407 U.S. at 12-13).

Plaintiff contends that the contract’s forum selection

clause is invalid because its enforcement would violate a

strong public policy in Louisiana. A state’s strong public

policy can be “declared by statute or by judicial decision.”

THE BREMEN, 407 U.S. at 15. Louisiana’s strong public

policy against forum selection clauses in employment

contracts is evident by both statute and the Louisiana

Supreme Court. La.R.S. § 23:921(A)(2) states:

The provisions of every employment contract or

agreement, or provisions thereof, by which any

foreign or domestic employer or any other person

or entity includes a choice of forum clause or

choice of law clause in an employee’s contract of

employment or collective bargaining agreement,

or attempts to enforce either a choice of forum

clause or choice of law clause in any civil or

administrative action involving an employee, shall

be null and void except where the choice of forum

clause or choice of law clause is expressly,

knowingly, and voluntarily agreed to and ratified

by the employee after the occurrence of the

44a

Appendix B

incident which is the subject of the civil or

administrative action. (Emphasis added).

Moreover, the Louisiana Supreme Court has held that

La. R.S. § 23:921 invalidated the forum selection clause of a

Polish seaman’s employment contract. The high court wrote:

[Tjhe United States Supreme Court in [THE

BREMEN| held that forum selection clauses will

be upheld unless they contravene a strong public

policy of the forum in which the suit is brought.

La.Rev.Stat. 23:921(A)(2) is an expression of

strong Louisiana public policy concerning forum

selection clauses.

Sawicki y. K/S STAVANGER PRINCE, 802 So.2d 598, 603

(La.2002).

This Court finds that the unequivocal language of both

La.R.S. § 23:921 and the Louisiana Supreme Court

demonstrate that employment contract forum selection

clauses contravene strong Louisiana public policy. The record

is silent on the issue of plaintiff’s ratification and plaintiff

has specifically denied any form of ratification occurred.

Il. Removal Under 9 U.S.C. § 205

“Any civil action of which the district courts have

original jurisdiction founded on a claim or right arising under

the Constitution, treaties or laws of the United States shall

be removable without regard to the citizenship or residence

of the parties.” 28 U.S.C. § 1441(b). Under § 203 of the

45a

Appendix B

Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, “[a]n action or proceeding failing under the

Convention shall be deemed to arise under the laws and

treaties of the United States.” 9 U.S.C. § 203.

While defendants’ failure to file a notice of removal

within thirty days of plaintiff’s initial pleadings waives most

of their subject matter jurisdiction claims, § 205 of the

Convention permits removal at any time before trial. § 205

states:

Where the subject matter of an action or

proceeding pending in a State court relates to an

arbitration agreement or award falling under the

Convention, the defendant or the defendants may,

at any time before the trial thereof, remove such

action or proceeding to the district court of the

United States for the district and division

embracing the place where the action or

proceeding is pending.

9 U.S.C. § 205.

An agreement to arbitrate exists within the meaning of

§ 205 if: (1) there is an agreement in writing to arbitrate the

dispute, (2) the agreement provides for arbitration in the

territory of a Convention signatory, (3) the agreement arises

out of a commercial legal relationship, and (4) a party to the

agreement is not an American citizen. See Francisco v.

STOLT ACHIEVMENT MT, 293 F.3d 270, 273 (Sth Cir.2002);

U.S. Titan, Inc. v. Guangzhou Zhen Hua Shipping, 241 F.3d

135, 146 (2d Cir.2001).

46a

Appendix B

The Court finds that Dahiya’s employment contract fails

to satisfy the second element of an “arbitration agreement”

under § 205. The forum selection clause in Dahiya’s

employment contract states that arbitration shall occur in

either Singapore or India. While it is undisputed that both

countries are signatories to the Convention, the forum

selection clause is invalid because it contravenes Louisiana

express public policy. Therefore, the employment contract

does not provide for arbitration in the territory of a

Convention signatory, and the Court finds that no arbitration

agreement exists to justify removal under § 205.!

Accordingly,

The plaintiff’s Motion to Remand is GRANTED. Thus,

defendants’ Motion to Compel Arbitration and Stay, or,

Alternatively, to Dismiss is DENIED.

s/ Martin C. Feldman

MARTIN C. FELDMAN

UNITED STATES DISTRICT JUDGE

1. In Francisco, the Fifth Circuit held that the Convention

governed an employment contract containing arbitration and forum

selection agreements nearly indistinguishable from those in Dahiya’s

contract. See id. at 278. The Francisco plaintiffs, however, did not

assert that Louisiana’s public policy contravened forum selection

clauses in employment contracts. Thus, Francisco is not controlling.

47a

APPENDIX C — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

DENYING PETITION FOR REHEARING

FILED JULY 27, 2004

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 02-31068

VINOD KUMAR DAHIYA,

Plaintiff-Appellee,

V.

TALMIDGE INTERNATIONAL LTD; NEPTUNE

SHIPMANAGEMENT SERVICES (PTE.) LTD;

AMERICAN EAGLE TANKERS INC. LTD; AMERICAN

EAGLE TANKERS AGENCIES INC.; BRITANNIA STEAM

SHIP INSURANCE ASSOCIATION LTD,

Defendants-Appellants.

Appeal from the United States District Court for the

Eastern District of Louisiana, New Orleans

ON PETITION FOR REHEARING EN BANC

(Opinion 5/18/04, Sth Cir., , F.3d )

Before BARKSDALE, DeMOSS, and BENAVIDES, Circuit

Judges.

48a

Appendix C

PER CURIAM:

Treating the Petition for Rehearing En Banc as

Panel Rehearing, the Petition for Panel Rehearing is

DENIED. The court having been polled at the request of one

of the members of the court and a majority of the judges

who are in service not having voted in favor (FED. R. App. P.

and 5tH Cir. R. 35), the Petition for Rehearing

En Banc is DENIED.

STARE

49a

Appendix C

DeMOSS, Dissenting from Refusal to Reconsider En Banc,

joined by Judge Smith.

For the following reasons, I respectfully dissent from

the refusal of our Court to reconsider en banc the panel

decision in this case:

1. The agreement to arbitrate at issue in this case was

entered into in writing between Dahiya, a citizen of

the country of India, and Neptune Shipmanagement

Services (PTE) Ltd. (“Neptune”), his employer, a

corporate entity organized under the laws of the

country of Singapore. Both the country of India and

the country of Singapore are signatories to the

Convention on the Recognition and Enforcement of

Foreign Arbitral Awards (the “Convention’”).

2. The United States of America is a signatory to the

Convention, and Congress enacted special statutory

provisions, 9 U.S.C. § 201 et seq. (the “Act’”), to

provide for the enforcement of the Convention

within the United States. As an acti enabling a treaty,

the Act comprises “the highest law of the land.”

3. The State of Louisiana is not a signatory to the

Convention, and whatever its statutory or decisional

law may indicate to be its public policy either

favoring or disfavoring agreements to arbitrate, that

policy is irrelevant and immaterial to the application

and enforcement of the Act.

50a

Appendix C

4. The district court clearly erred in considering that

the statutory and decisional law of Louisiana

invalidated the agreement to arbitrate between

Dahiya and his employer Neptune and clearly erred

again in determining that the suit which Dahiya filed

against his employer in state court in Louisiana did

not relate to the arbitration agreement between them

and that removal to federal court under § 205 was

not proper.

5. The district court erred in not granting the motion

of Dahiya’s employer Neptune to compel arbitration

under § 206 of the Act and such error was

immediately appealable under the provisions of

9 U.S.C. § 16(a)(1)(C) of the Federal Arbitration Act

(the “FAA”’), incorporated into the Act by § 208.

6. The district court erred in granting the motion to

remand the controversy between Dahiya and his

employer Neptune to state court.

7. The Fifth Circuit panel erred in determining that the

district court’s order to remand was entered in

accordance with the provisions of 28 U.S.C. § 1447

(c) and that consequently the panel did not have

appellate jurisdiction under § 1447(d).

The net result of the foregoing errors is to frustrate the

intention of Congress as reflected by the FAA and the Act to

give foreign parties the right to choose arbitration as a form

of dispute resolution designed to save the parties time, money,

and effort by substituting for the litigation process the

rer

sO

Sla

Appendix C

advantages of speed, simplicity, and economy associated with

arbitration. If the provisions of § 1447(d) will always trump

the provisions of 9 U.S.C. § 16, then the Convention will be

unenforceable in the State of Louisiana and the procedural

pattern utilized by Dahiya’s counsel in this case will become

a pattern for subjecting foreign defendants to litigation in

Louisiana state court with personal injury claimants with

whom agreements to arbitrate had in fact been made. I am

disappointed that my colleagues on this Court seem to

conclude that two wrongs make a right and that Congress’s

elaborate efforts in Title 9 to give parties the right to choose

arbitration in place of litigation can now be frustrated by the

age-old controversy as to whether litigation was going to

occur in the state courts or the federal courts.