Outokumpu Stainless USA, LLC v. Converteam SAS

Filing 110

ORDER ADOPTING 107 REPORT AND RECOMMENDATIONS as the opinion of this Court. The 87 Joint MOTION to Remand by All Plaintiffs is GRANTED and this action is remanded to the Circuit Court of Mobile County, Alabama. Signed by Chief Judge Kristi K. DuBose on 04/18/2019. (nah)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
OUTOKUMPU STAINLESS USA,
LLC, et al.
Plaintiffs,
v.
CONVERTEAM SAS, a foreign
corporation now known as
GE ENERGY POWER CONVERSION
FRANCE SAS, CORP,
Defendant.

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Civil Action No. 16-0378-KD-C

ORDER
This action is before the Court on the Report and Recommendation wherein the
Magistrate Judge recommends remand of this action to the Circuit Court of Mobile County,
Alabama (doc. 107), the objection filed Defendant GE Energy Power Conversion France SAS,
Corp. (GE Energy) (doc. 108), and the joint response to the objection filed by Plaintiffs
Outokumpu Stainless USA LLC, Sompo Japan Insurance Company of America, Pohjola
Insurance Limited, AIG Europe Limited, Tapiola General Mutual Insurance Company, AXA
Corporate Solutions Assurance SA UK Branch, HDI Gerling UK Branch, MSI Corporate Capital
Ltd., and Royal & Sun Alliance PLC (doc. 109).
Defendant, GE Energy, objects to the Report and Recommendation arguing that the Court
failed to follow the Court of Appeals for the Eleventh Circuit’s directive in analyzing whether
jurisdiction exists under 9 U.S.C. § 205 (The United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (the Convention)).

The Eleventh Circuit directed the District Court, “upon removal” to “engage in a two-step
inquiry”. (Doc. 83, p. 12). First, the District Court is to “employ[] the test articulated in Bautista[
v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005)] to the four corners of the arbitration agreement
and ask[] whether the removing party has articulated a non-frivolous basis (1) that there is an
agreement in writing, that is, an arbitral clause in a contract or an arbitration agreement, signed
by the parties ….” (Id.) (emphasis added). The Eleventh Circuit found that this first factor, had
been satisfied because “GE Energy has identified the arbitration clauses in the Outokumpu-Fives
Contracts” and “the Contracts are signed by Outokumpu and Fives”. (Id., p. 13). The Eleventh
Circuit also determined that GE Energy had adequately alleged facts on the other Bautista
factors. (Id., p. 12-13).
The second step requires the District Court to determine “whether there is a non-frivolous
basis to conclude that [the] agreement sufficiently ‘relates to’ the case before the court such that
the agreement to arbitrate could conceivably affect the outcome of the case.” (Id., p. 12). Again,
the Eleventh Circuit found that GE Energy had sufficiently “alleged in the pleadings, [that] the
present lawsuit against GE Energy concerns the performance of the Outokumpu-Fives Contracts,
and the arbitration agreement contained in those Contracts is sufficiently related to the instant
dispute such that it could conceivably affect the outcome of this case.” (Id., p. 13) (emphasis
added).
After determining that the District Court had correctly asserted jurisdiction, the Eleventh
Circuit then found under a more rigorous analysis of the Bautista factors, specifically the first,
that GE Energy could not prevail on its motion to compel arbitration. (Id., p. 14-15) (“Here, our
inquiry starts and ends with the first factor because we find that there is no agreement in writing
within the meaning of the Convention.”).
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GE Energy argues that this Court should now ignore the factual finding by the Eleventh
Circuit that “there is no agreement in writing within the meaning of the Convention” when
determining its jurisdiction under 9 U.S.C. § 205. (Doc. 108). Instead, GE Energy urges this
Court to rely on its pleadings which assert otherwise.
The undersigned declines GE Energy’s invitation to re-evaluate the wisdom of the
Eleventh Circuit. In sum, the Eleventh Circuit’s finding of fact makes GE Energy’s assertion to
the contrary, frivolous. Accordingly, GE Energy cannot meet the Bautista factors. Thus the
Court need not engage in any discussion of whether the agreement “relates to” the case before
the Court.
Accordingly, after due and proper consideration of the issues raised, and a de novo
determination of those portions of the recommendation to which objections were made, the
recommendation of the Magistrate Judge made under 28 U.S.C. § 636(b)(l)(B) and dated March
19, 2019 (doc. 107) is ADOPTED as the opinion of this Court. The Motion to Remand is
GRANTED and this action is remanded to the Circuit Court of Mobile County, Alabama.
DONE this 18th day of April 2019.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
CHIEF UNITED STATES DISTRICT JUDGE

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