DK Joint Venture 1, et al v. Richard Weyand, et al

Filing

PUBLISHED OPINION FILED. [09-11000 Reversed and Remanded] Judge: WED , Judge: JLW , Judge: JLD Mandate pull date is 08/25/2011 [09-11000]

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IN THE UNITED STATES COURT OF APPEALS
United States Court of Appeals
FOR THE FIFTH CIRCUIT
Fifth Circuit

FILED
August 4, 2011

No. 09-11000

Lyle W. Cayce
Clerk

DK JOINT VENTURE 1; DK JOINT VENTURE 2; VANDALAI, L.L.C., and/or
LLLP; PARLAI, INC., and/or LLLP; JEFF WEEKS; KCR INVESTMENTS, INC.;
RICHARD BUSH; RTB HOLDINGS, L.P., and/or Ltd.,
Plaintiffs - Appellees
v.
RICHARD W. WEYAND; PETER THIESSEN,
Defendants - Appellants

Appeal from the United States District Court
for the Northern District of Texas

Before DAVIS, WIENER, and DENNIS, Circuit Judges.
DENNIS, Circuit Judge:
This is an appeal from a district court’s order confirming an arbitration
award. The plaintiffs-appellees are six business entities which claim to have
been defrauded by the defendant-appellants, Richard Weyand and Peter
Thiessen. Weyand and Thiessen were respectively the chief executive officer
(CEO) and chief financial officer (CFO) of several corporations, which are
hereinafter referred to as the defendant corporations. The plaintiffs and the
defendant corporations entered into certain contracts which contained
arbitration agreements. The plaintiffs initiated arbitration proceedings
against the defendant corporations and also against Weyand and Thiessen as

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individuals. Weyand and Thiessen protested that they had not agreed to
arbitrate anything. Nevertheless, an arbitration panel rendered an award of
damages and attorneys’ fees against, inter alia, Weyand and Thiessen. The
plaintiffs then filed a motion for confirmation of the arbitration award in
federal district court. Weyand and Thiessen argued that the arbitration
panel had exceeded its jurisdiction by rendering an award against them,
because they had never consented to arbitration. However, the district court
issued an order confirming the arbitration award. We reverse the district
court’s order because under ordinary principles of contract and agency law,
Weyand and Thiessen were not personally bound by the arbitration
agreements that their corporations entered into, and therefore the arbitration
panel lacked jurisdiction to render an award against them.
BACKGROUND
The underlying proceedings are complex, but the facts that are relevant
to this appeal are as follows. The plaintiffs-appellees are business entities
named DK Joint Venture 1, DK Joint Venture 2, Vandalai L.L.L., Parlai
L.L.L., KCR Investments, Inc., and RTB Holdings, Ltd. In 2007, the
plaintiffs filed arbitration demands with the Dallas office of the American
Arbitration Association. They alleged that the defendants — including
Weyand, Thiessen, fifteen corporations controlled by them, and two other
individuals who are not relevant to this appeal — had committed fraud,
breach of contract, breaches of fiduciary duty, and other wrongs in order to
induce the plaintiffs to invest money in a purported oil and gas venture.
Weyand and Thiessen are the only defendants who are parties to this appeal.
In seeking arbitration, the plaintiffs relied on arbitration provisions that were

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contained in contracts (called Subscription Agreements) between the
plaintiffs and some of the defendant corporations.1
Next, the plaintiffs filed two petitions in Texas state courts, making the
same allegations and seeking to compel all the defendants to arbitrate the
dispute. While these two actions were pending before the state courts, 19
investors (18 individuals and one corporation) intervened in one of the
actions, asserting the same claims and allegations that the original plaintiffs
had asserted.
The defendants removed the two state-court suits to the United States
District Court for the Northern District of Texas. The federal district court
consolidated the actions into one. On January 29, 2008, the district court
issued an order which, as relevant here, held that all the defendants
(including Weyand and Thiessen) were bound by the arbitration agreements.
The district court’s order “administratively closed” the case “pending the
conclusion of the arbitration proceedings.”
The arbitration proceedings took place before a panel of three
arbitrators appointed by the American Arbitration Association.2 The

1

The arbitration provisions, which were all the same, read as follows:
Arbitration. Any controversy, dispute or disagreement arising out of or
relating to this Agreement, the breach thereof, or the subject matter thereof,
shall be settled by binding arbitration, which shall be conducted in Dallas,
Texas in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and which to the extent of the subject mater [sic] of the
arbitration, shall be binding not only on the parties to the Agreement, but on
any other entity controlled by, in control of or under common control with the
party to the extent that such affiliate joins in the arbitration, and judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.

2

During the arbitration proceedings, four of the defendant corporations filed Chapter
7 bankruptcy petitions. Weyand and Thiessen argue that these bankruptcy filings affected
the arbitration panel’s jurisdiction over the entire arbitration proceeding. We need not
address this issue because we conclude on other grounds that the arbitration panel lacked
jurisdiction to render an award against Weyand and Thiessen.

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intervenors did not participate in the arbitration proceeding. After
conducting an evidentiary hearing, the panel issued a decision on April 1,
2009, awarding the plaintiffs damages and fees totaling $13,317,381 against
Weyand and $311,329 against Thiessen.3
The plaintiffs (but not the intervenors) then filed a motion in the
federal district court, seeking confirmation of the arbitration award. The
court did not treat this motion as continuing the previous action, but instead
assigned it a new docket number and treated it as a new case. It is unclear
why the district court handled the case in that way, but the parties did not
object. On September 2, 2009, the court issued an order granting the
plaintiffs’ motion. On September 3, the court entered judgment against
Weyand and Thiessen, ordering them to pay “the amounts awarded by the
arbitrators on April 1, 2009.” Weyand and Thiessen filed a timely notice of
appeal as to both the order and the judgment.
ANALYSIS
I.
The central question in this appeal is whether Weyand and Thiessen, in
their personal capacities, are bound by the arbitration agreements that were
entered into by the defendant corporations, of which they were the CEO and
CFO. Applying well-established general principles of contract and agency
law, we conclude that Weyand and Thiessen are not personally bound by the
arbitration agreements.
The standard of review for a district court’s confirmation of an
arbitration award is de novo, using the same standard as the district court.
Brown v. Witco Corp., 340 F.3d 209, 216 (5th Cir. 2003). Under the Federal
Arbitration Act, an arbitration award can be vacated for any of several
3

The arbitration panel also held another individual defendant, Kelly G. Rogers, liable
for a total of $730,123. Rogers is not a party to this appeal.

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enumerated reasons, one of which is that “the arbitrators exceeded their
powers.” 9 U.S.C. § 10(a)(4); Citigroup Global Markets, Inc. v. Bacon, 562
F.3d 349, 352 (5th Cir. 2009).
We have stated that “[o]rdinary principles of contract and agency law
may be called upon to bind a nonsignatory to an [arbitration] agreement
whose terms have not clearly done so.” Bridas S.A.P.I.C. v. Gov’t of
Turkmenistan, 345 F.3d 347, 356 (5th Cir. 2003). We need not decide in this
case whether those principles should be drawn from Texas law or federal
law,4 because both bodies of law lead us to the same conclusion. See Railroad
Mgmt. Co. v. CFS La. Midstream Co., 428 F.3d 214, 222 (5th Cir. 2005)
(“Where there are no differences between the relevant substantive laws . . . ,
there is no conflict, and a court need not undertake a choice of law analysis.”).
Weyand and Thiessen, as CEO and CFO of the defendant corporations,
were the corporations’ agents. Under general principles of contract and
agency law, the fact that the defendant corporations entered into the
Subscription Agreements did not cause their agents, Weyand and Thiessen,
who acted only as officers on behalf of the corporations, to be personally
bound by those agreements. For instance, the Restatement (Third) of Agency
4

The Subscription Agreements themselves state that they are to be governed by Texas
law. The Supreme Court’s opinion in First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938
(1995) supports the application of state law: “When deciding whether the parties agreed to
arbitrate a certain matter (including arbitrability), courts generally . . . should apply ordinary
state-law principles that govern the formation of contracts.” Id. at 944. However, our court
has stated that “the federal substantive law of arbitrability” applies to the question of “to what
extent a non-signatory is bound by an arbitration provision contained in a contract she is suing
under.” Wash. Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 267 n.6 (5th Cir. 2004). (The
question in Washington Mutual was similar to, but distinct from, the question we are deciding
here, which is whether Weyand and Thiessen, who are non-signatories, are bound by
arbitration provisions contained in contracts under which they are being sued.) The Texas
Supreme Court has stated that, given the uncertainty about whether federal or state law
governs the question of whether a nonsignatory is bound by an arbitration agreement, “we
have determined to apply state substantive law and endeavor to keep it consistent with federal
law.” In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (citing In re Weekley
Homes, 180 S.W.3d 127, 130-31 (Tex. 2005)).

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states: “When an agent acting with actual or apparent authority makes a
contract on behalf of a disclosed principal, (1) the principal and the third
party are parties to the contract; and (2) the agent is not a party to the
contract unless the agent and third party agree otherwise.” Restatement
(Third) of Agency § 6.01 (2006). The Restatement (Second) of Agency says
substantively the same thing: “Unless otherwise agreed, a person making or
purporting to make a contract with another as agent for a disclosed principal
does not become a party to the contract.” Restatement (Second) of Agency §
320 (1958).
A recent Texas appellate decision, Roe v. Ladymon, 318 S.W.3d 502
(Tex. App.–Dallas 2010, no pet.), applied these general principles to a set of
facts very similar to those of the present case. Roe, a homeowner, entered
into a contract with Metro LLP, a contractor. Id. at 507. Ladymon signed the
contract in his capacity as a partner of Metro. Id. When Roe was unsatisfied
with Metro’s work, she pursued arbitration against both Metro and Ladymon.
Id. at 508. The arbitrator awarded damages to Roe and held that Metro and
Ladymon were jointly and severally liable for those damages. Id. at 509.
However, when Roe filed suit to confirm the arbitration award, the state trial
court “held that the arbitrator had exceeded his authority in rendering an
award against Ladymon individually.” Id. The court of appeals affirmed.
The court explained that “by signing the contract as an agent for a disclosed
principal, Ladymon did not become personally bound by the terms of that
contract, including the arbitration clause.” Id. at 521.
The Roe court explained why that case was different from another class
of cases, in which courts have held that plaintiffs who had signed arbitration
agreements could be compelled to arbitrate their disputes with nonsignatory
defendants. Such cases include In re Vesta Insurance Group, Inc., 192 S.W.3d
759 (Tex. 2006), in which “a signatory to a contract containing an arbitration
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clause filed . . . suit [in court] against non-signatory officers and agents of the
other party to the contract,” thereby attempting to avoid arbitration. Roe,
318 S.W.3d at 520 (citing Vesta, 192 S.W.3d at 762-63). In other words, “[t]he
signatory plaintiff [in Vesta] was resisting arbitration while the non-signatory
defendants sought to hold the signatory plaintiff to abide by his agreement to
arbitrate.” Id. The Roe court explained, “Vesta stands for the proposition
that a signatory plaintiff cannot avoid its agreement to arbitrate disputes
simply by bringing . . . claims against the [nonsignatory] officers, agents, or
affiliates of the other signatory to the contract.” Id. This proposition is based
on “estoppel principles” because it essentially involves holding the plaintiff to
his agreement to arbitrate. See id. But Roe was fundamentally different
from Vesta because in Roe, “the party resisting arbitration did not sign the
agreement to arbitrate [in his individual capacity].” Id. Thus, in Roe there
was no “basis to ‘estop’ [the defendant] from refusing to arbitrate because he
never agreed to arbitrate.” Id. at 520-21. The present case is like Roe and
unlike Vesta because here, the parties resisting arbitration, Weyand and
Thiessen, never personally agreed to arbitrate. Thus, under Roe, Weyand
and Thiessen are not bound by the arbitration agreements.5
Federal courts addressing similar fact patterns have followed
essentially the same reasoning used by the Roe court, and have reached
analogous results. In Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435 (3d
Cir. 1999), the Third Circuit partially reversed a district court’s order
compelling arbitration; the appellate court held that only the defendant

5

The district court in this case erroneously relied on McMillan v. Computer Translation
Systems & Support, Inc., 66 S.W.3d 477 (Tex. App.–Dallas 2001, no pet.), a case whose fact
pattern was like that of Vesta: in McMillan, the plaintiff, a business which was a signatory to
an arbitration agreement, was compelled to arbitrate its claims against individuals who were
agents of the defendant corporation, even though those individuals had not personally agreed
to arbitrate. McMillan is inapposite for the same reasons as Vesta.

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corporation and not its individual directors and officers were bound by an
arbitration agreement, because the directors and officers had not personally
agreed to arbitrate. Id. at 446. The Third Circuit reasoned, “Arbitration is
strictly a matter of contract. If a party has not agreed to arbitrate, the courts
have no authority to mandate that he do so.” Id. at 444. And in Merrill
Lynch Investment Managers v. Optibase, Ltd., 337 F.3d 125 (2d Cir. 2003), the
Second Circuit upheld a preliminary injunction preventing a plaintiff from
pursuing arbitration proceedings against a defendant which was not a party
to the arbitration agreement. Id. at 132. The defendant resisting arbitration
in Merrill Lynch was a corporation which was affiliated with another
corporation that had entered into the arbitration agreement. Id. at 130.
The Bel-Ray and Merrill Lynch courts both distinguished a prior case,
Pritzker v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 7 F.3d 1110 (3d Cir.
1993), in which plaintiffs who had signed an arbitration agreement had been
compelled to arbitrate claims against two nonsignatory defendants (an
individual and a corporation) that were agents of the other party to the
agreement. The Second Circuit succinctly explained that Pritzker was
distinguishable because “it matters whether the party resisting arbitration is
a signatory or not.” Merrill Lynch, 337 F.3d at 131; see also Bel-Ray, 181 F.3d
at 444-45. This was the same distinction that the Roe court employed in
distinguishing Vesta.
The Supreme Court’s decision in First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938 (1995), is also instructive, as it involved a similar set of
facts, although the Court’s opinion focused on a slightly different question —
the threshold issue of whether the parties had “agree[d] to submit the
arbitrability question itself to arbitration.” Id. at 943. In that case, the
plaintiff (First Options) had entered into an arbitration agreement with a
corporate defendant (MKI) and sought to compel MKI’s owner and his wife
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(the Kaplans) to arbitrate, even though the Kaplans were not parties to the
arbitration agreement. The arbitration panel ruled that it had the power to
enter an award against the Kaplans despite their unwillingness to arbitrate.
But “the Third Circuit agreed with the Kaplans that their dispute was not
arbitrable,” id. at 941, and the Supreme Court affirmed, id. at 949.6
In summary, both the Texas and federal courts have recognized that “it
matters whether the party resisting arbitration is a signatory or not.” Merrill
Lynch, 337 F.3d at 131. In this case, the parties resisting arbitration —
Weyand and Thiessen in their individual capacities — are not signatories.
Under ordinary principles of contract and agency law, their status as the
CEO and CFO and agents of the defendant corporations is insufficient to
personally bind them to the arbitration agreements.
Nonetheless, the plaintiffs argue that we must defer to the arbitration
panel’s determination that it had jurisdiction over Weyand and Thiessen,
because the arbitration provisions in the Subscription Agreements gave the

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One federal appellate court has reached the opposite result on a set of facts that was
analogous to those of First Options, Bel-Ray, Merrill Lynch, and Roe. See Lee v. Chica, 983
F.2d 883 (8th Cir. 1993). However, in light of more recent Supreme Court and Eighth Circuit
cases, Lee seems to have been impliedly overruled.
In Lee, the Eighth Circuit held that an employee of a securities brokerage firm was
personally bound by an arbitration agreement that the firm had entered into with a customer,
even though the employee was not a party to that agreement. Id. at 887. But Lee is
contradicted by a more recent Eighth Circuit case, Nitro Distributing, Inc. v. Alticor, Inc., 453
F.3d 995 (8th Cir. 2006), in which the Eighth Circuit made the same distinction that the BelRay and Merrill Lynch courts made — explaining that “situations where a nonsignatory
attempts to bind a signatory to an arbitration agreement” are crucially different from those
where “the signatory[] is attempting to bind the nonsignatory . . . to the arbitration
agreement.” Id. at 999. Relying on this distinction, the Nitro court held that the nonsignatory
plaintiffs in that case were not bound by an arbitration agreement they had not signed. Id.
While the Nitro court did not expressly address Lee, the Nitro court most likely regarded Lee’s
holding as having been superseded by the Supreme Court’s intervening decision in First
Options.

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arbitration panel the power to determine its own jurisdiction.7 Relying on our
court’s opinion in Agere Systems, Inc. v. Samsung Electronics Co., 560 F.3d
337 (5th Cir. 2009), the plaintiffs contend that the arbitration panel’s decision
regarding its own jurisdiction must be accepted unless it is “wholly
groundless.” Id. at 340 (quoting Qualcomm Inc. v. Nokia Corp., 466 F.3d
1366, 1371 (Fed. Cir. 2006)) (internal quotation marks omitted). However,
Agere is inapposite here because in Agere, an arbitration agreement
undisputedly existed between the parties, and the dispute was over “whether
the arbitration clause [was] still in effect.” Id. By contrast, the present case
involves a simpler type of dispute which, we have held, is for the courts and
not the arbitrator to decide in the first instance: a dispute over whether the
parties entered into any arbitration agreement in the first place. “[I]t is clear
that because arbitration is a matter of contract, where a party contends that
it has not signed any agreement to arbitrate, the court must first determine if
there is an agreement to arbitrate before any additional dispute can be sent
to arbitration.” Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 218
(5th Cir. 2003). We held in Will-Drill “that where a party attacks the very
existence of an agreement, as opposed to its continued validity or
enforcement, the courts must first resolve that dispute.” Id. at 219.8 Because
7

This argument relies on a sentence in the Subscription Agreements which says that
arbitration “shall be conducted . . . in accordance with the Commercial Arbitration Rules of the
American Arbitration Association [AAA].” Rule 7 of the AAA’s rules states, “The arbitrator
shall have the power to rule on his or her own jurisdiction, including any objections with
respect to the existence, scope, or validity of the arbitration agreement.” Some of our sister
circuits have held that an arbitration agreement that refers to the AAA’s rules thereby clearly
and unmistakably demonstrates that the parties to the agreement to arbitrate intended to give
the arbitrator the power to determine whether an issue or dispute is arbitrable. See
Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1373 (Fed. Cir. 2006) (citing Contec Corp. v.
Remote Solution Co., 398 F.3d 205, 208 (2d Cir. 2005)); Terminix Int’l Co. v. Palmer Ranch Ltd.
P’ship, 432 F.3d 1327, 1332 (11th Cir. 2005).
8

See also In re Morgan Stanley & Co., 293 S.W.3d 182, 189 (Tex. 2009) (agreeing with
Will-Drill on this point).

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that is the type of dispute we are addressing here, we do not owe deference to
the arbitration panel’s determination of its own jurisdiction.9
The plaintiffs also argue that Weyand and Thiessen should be barred
by judicial estoppel10 from claiming that they did not personally agree to
arbitrate. This argument is based on the fact that Weyand, in his role as a
defendant in a separate lawsuit in another federal district court involving
different plaintiffs, successfully filed a motion to compel arbitration, requiring
the plaintiffs in that case to arbitrate their claims against him personally
rather than seeking relief in court. Patterson Co. v. Weyand, No. CIV-09-133RAW (D. Okla. July 31, 2009). Weyand’s motion in that case was based on an

9

Moreover, our opinion in Agere itself explains why the “wholly groundless” standard
does not apply to this case: that standard applies only when “the parties ‘unmistakably
intend[ed] to delegate the power to decide arbitrability to an arbitrator.’” 560 F.3d at 340
(quoting Qualcomm, 466 F.3d at 1371). Likewise, the Supreme Court held in First Options
that “[c]ourts should not assume that the parties agreed to arbitrate arbitrability unless there
is ‘clear and unmistakable’ evidence that they did so.” 514 U.S. at 944 (alterations omitted)
(quoting AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 649 (1986)). In this
case, given that Weyand and Thiessen did not personally agree to arbitrate at all, it certainly
follows that there is no “clear and unmistakable” evidence that they agreed to delegate
questions of arbitrability to the arbitrator. The arbitration provisions in the Subscription
Agreements may be sufficient to show that the parties to those agreements intended to confer
that power on the arbitration panel, but — as explained above — Weyand and Thiessen are
not personally bound by the Subscription Agreements.
10

“The doctrine of judicial estoppel prevents a party from asserting a claim in a legal
proceeding that is inconsistent with a claim taken by that party in a previous proceeding.”
New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting 18 Moore’s Federal Practice
§ 134.30, at 134-62 (3d ed. 2000)) (internal quotation marks omitted). “[J]udicial estoppel ‘is
an equitable doctrine invoked by a court at its discretion.’” Id. at 750 (quoting Russell v. Rolfs,
893 F.2d 1033, 1037 (9th Cir. 1990)). “[S]everal factors typically inform the decision whether
to apply the doctrine in a particular case: First, a party’s later position must be ‘clearly
inconsistent’ with its earlier position.” Id. (quoting United States v. Hook, 195 F.3d 299, 306
(7th Cir. 1999)). “Second, courts regularly inquire whether the party has succeeded in
persuading a court to accept that party’s earlier position, so that judicial acceptance of an
inconsistent position in a later proceeding would create ‘the perception that either the first or
the second court was misled.’” Id. (quoting Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 599
(6th Cir. 1982)). “A third consideration is whether the party seeking to assert an inconsistent
position would derive an unfair advantage or impose an unfair detriment on the opposing
party if not estopped.” Id.

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arbitration provision that is identical to the arbitration provisions that are at
issue in the present case. However, we are not persuaded by the plaintiffs’
judicial estoppel argument because, in light of the distinction explained
above, there is no genuine inconsistency between Weyand’s positions in the
other case and the present case. Again, “it matters whether the party
resisting arbitration is a signatory or not.” Merrill Lynch, 337 F.3d at 131. In
the present case, the parties resisting arbitration are Weyand and Thiessen,
who are not signatories or parties to the contracts at issue. By contrast, in
the other case, the parties resisting arbitration were signatories to the
contract. Because Weyand has not taken inconsistent positions, the plaintiffs’
judicial estoppel argument fails.
The plaintiffs additionally argue that Weyand and Thiessen are bound
by the arbitration provisions in the Subscription Agreements because of
language in the agreements referring to “affiliates.” The plaintiffs contend
that the agreements purport to bind “affiliates” of the defendant corporations,
and they further claim that Weyand and Thiessen count as “affiliates.”11
However, this argument fails because, even if the Subscription Agreements
could be interpreted in that manner, the defendant corporations lacked the
authority to bind Weyand and Thiessen personally. As the Third Circuit
explained in Bel-Ray, “under traditional agency principles, [unless the agent
agrees to be personally bound,] the only other way . . . an agent can be bound
by the terms of a contract is if she is made a party to the contract by her
principal acting on her behalf with actual, implied, or apparent authority.”

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The district court’s order of January 29, 2008 explained the basis of this argument
as follows: “Regulation 13.03, which is found in Exhibit A to the Subscription Agreements . . .
states that the regulations include the entire agreement of the Members and their Affiliates.
Paragraph 16 of the Subscription Agreement[s], which is the arbitration clause, describes
affiliates as any other entity controlled by, in control of, or under common control with a
party.” Slip Op. at 8.

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181 F.3d at 445. The plaintiffs have not identified anything in the record
which would establish that the defendant corporations (the principals) had
any type of authority to bind Weyand and Thiessen (the agents) personally.
In the absence of such authority, the language about “affiliates” in the
Subscription Agreements cannot have been sufficient to make the arbitration
provisions binding on Weyand and Thiessen.
II.
Finally, we address Weyand and Thiessen’s argument that this court
lacks jurisdiction to review the district court’s judgment of September 3.
There is no doubt that we at least have jurisdiction to review the district
court’s order of September 2, which granted the plaintiffs’ motion to confirm
the arbitration award. See 9 U.S.C. § 16(a) (“An appeal may be taken from
. . . an order . . . confirming or denying confirmation of an award or partial
award . . . .”). However, we must consider whether we also have jurisdiction
to review the September 3 judgment, because we are required to be careful
about the limits of our jurisdiction. See, e.g., Beiser v. Weyler, 284 F.3d 665,
674 (5th Cir. 2002) (“[F]ederal courts are courts of limited jurisdiction. We
thus make especially certain that we take jurisdiction only over such cases as
Congress has provided by statute.”).
According to Weyand and Thiessen, the September 3 judgment was not
an appealable “final decision” under 28 U.S.C. § 1291 because it did not
dispose of all parties and claims in the case. As we explained in Bader v.
Atlantic International, Ltd., 986 F.2d 912 (5th Cir. 1993), “[i]n a lawsuit
which contains multiple claims and/or multiple parties, [an appealable] final
judgment exists only if it meets one of two conditions: The judgment must
either adjudicate all claims, rights, and liabilities of all parties or the district
court must expressly conclude that no just reason exists for delaying the
entry of final judgment and must expressly order the entry of that judgment
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pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.” Id. at 91415.12 Likewise, in Bridgmon v. Array Systems Corp., 325 F.3d 572 (5th Cir.
2003), we reasoned that “[i]f the district court did not enter a final judgment
disposing of all parties and claims (or certify claims upon which judgment
was granted as a partial final judgment under Rule 54(b)) then this court
would not have jurisdiction over this appeal.” Id. at 574 n.2 (citing 28 U.S.C.
§ 1291). Here, the district court did not make the express determination
required by Rule 54(b) when it entered the September 3 judgment; therefore,
the judgment was an appealable final decision only if it disposed of all the
parties and claims in the case.
Weyand and Thiessen’s specific argument is that the September 3
judgment failed to dispose of all parties and claims because it did not address
the claims of the 19 intervenors who were parties to one of the two original
state-court suits that were removed and consolidated in federal court. Those
intervenors were still parties to that consolidated case when the district court
entered the order of January 29, 2008, holding that all the defendants were
bound by the arbitration agreement and “administratively clos[ing]” the case
pending the arbitration proceedings. However, after the arbitration panel
issued its award and the plaintiffs filed their motion to confirm the award,
the district court treated that motion as commencing a new case rather than

12

Rule 54(b) states:
Judgment on Multiple Claims or Involving Multiple Parties. When an
action presents more than one claim for relief -- whether as a claim,
counterclaim, crossclaim, or third-party claim -- or when multiple parties are
involved, the court may direct entry of a final judgment as to one or more, but
fewer than all, claims or parties only if the court expressly determines that
there is no just reason for delay. Otherwise, any order or other decision,
however designated, that adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.

14

Case: 09-11000

Document: 00511562679

Page: 15

Date Filed: 08/04/2011

No. 09-11000
reopening the old one.13 The district court gave the case a new docket
number, and did not treat the intervenors as being included among the
parties to the new case. The intervenors did not participate in the new case
(nor had they participated in the arbitration proceeding). Therefore, when
the district court entered the judgment of September 3, it disposed of all the
claims and parties that were actually in the case. Consequently, the
judgment of September 3 was a final decision under § 1291, and we have
jurisdiction to review it.
CONCLUSION
Under ordinary principles of agency law, whether drawn from Texas or
federal law, Weyand and Thiessen’s roles as the CEO and CFO of the
defendant corporations are insufficient to bind them personally to arbitration
agreements that the corporations entered into. The plaintiffs have failed to
identify any valid basis for Weyand and Thiessen to be personally bound by
the arbitration agreements. Accordingly, we REVERSE the district court’s
order of September 2 and its judgment of September 3, and REMAND the
case for further proceedings consistent with this opinion.

13

Weyand and Thiessen insist that the district court must have really reopened an old
case, rather than commencing a new one, because the plaintiffs, in filling out a form that they
filed with their motion for confirmation of the arbitration award, checked a box marked
“Reinstated or Reopened.” However, this does not alter the fact that the district court, once
it received the motion, treated it as commencing a new case. None of the parties raised any
objection to the district court’s doing so.

15