Bordelon Marine, LLC v. Bibby Subsea ROV, LLC

Filing 77

ORDER AND REASONS re 74 Motion to Re-Open Case to Have Court Decide Motion to Compel Arbitrability of Recently-Filed Texas Lawsuit. IT IS ORDERED that Bibby Subsea's motion to compel arbitration is DENIED. IT IS FURTHER ORDERED that Bibby Subsea's motion to reopen is DENIED. Signed by Judge Lance M Africk. (bwn)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
BORDELON MARINE, LLC

CIVIL ACTION

VERSUS

No. 16-1106

BIBBY SUBSEA ROV, LLC

SECTION I

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

R. Doc. No. 74.
R. Doc. No. 54.
3 The Louisiana action originally sought compensation for the breach of two contracts
between Bordelon and Bibby. The first dispute—now settled (R. Doc. No. 67, at 23)—concerned Bordelon’s allegation that Bibby Subsea failed to pay certain invoices
related to the SHELIA BORDELON. R. Doc. No. 1-1, at 2-3 ¶¶ III-VII (emphasis
1
2

Subsea argues that it is entitled to assert both its own and the Bibby affiliate
defendants’ third-party rights to assert Bibby Subsea’s rights under the arbitration
clause in the BRANDON BORDELON charter party agreement. But Bibby Subsea
does not convince this Court that it is appropriate for this Court to order the
arbitration of the Texas dispute in Texas.
I.
Under Section 4 of the Federal Arbitration Act,
A party aggrieved by the alleged failure, neglect, or refusal of another to
arbitrate under a written agreement for arbitration may petition any United
States district court which, save for such agreement, would have jurisdiction
under Title 28, in a civil action or in admiralty of the subject matter of a suit
arising out of the controversy between the parties, for an order directing that
such arbitration proceed in the manner provided for in such agreement.
9 U.S.C. § 4. Section 4 further explains that, after receiving such a request, “the court
shall hear the parties, and upon being satisfied that the making of the agreement for
arbitration or the failure to comply therewith is not in issue, the court shall make an
order directing the parties to proceed to arbitration in accordance with the terms of
the agreement.”

Finally, Section 4 requires that “[t]he hearing and proceedings,

under such agreement, shall be within the district in which the petition for an order
directing such arbitration is filed.” 4

added). The second dispute concerned Bordelon’s allegation that Bibby Subsea
breached an agreement to “pay” Bordelon a daily rate for the use of “property owned
by” Bordelon. R. Doc. No. 1-1, at 3 ¶ 13. (The somewhat-vague reference to “property
owned” by Bordelon refers to the BRANDON BORDELON. R. Doc. No. 27, at 2 n.5.)
4 Bibby Subsea also moves for a stay pending arbitration under 9 U.S.C. § 3.
However, Section 3 only permits the Court “in which such suit is pending,” 9 U.S.C.
§ 3 (emphasis added) to stay an action pending arbitration. As the Texas action is
not pending before this Court, Section 3 of the Federal Arbitration Act does not
2

As the Fifth Circuit has explained, Section 4 “facially mandates that two
conditions must be met before a district court may compel arbitration: (1) that the
arbitration be held in the district in which the court sits; and (2) that the arbitration
be held in accordance with the agreement of the parties.” National Iranian Oil Co. v.
Ashland Oil, Inc., 817 F.2d 326, 331 (5th Cir. 1987). Given that the arbitration
agreement that Bibby Subsea is seeking to enforce requires that the arbitration occur
in Texas, see R. Doc. No. 54-2, at 38, this Court lacks the authority to order the Texas
arbitration Bibby Subsea seeks, see, e.g., Kawasaki Heavy Indus., Ltd. v. Bombardier
Recreational Prods., Inc., 660 F.3d 988, 997 (7th Cir. 2011) (“[I]f an arbitration clause
contains a choice of venue provision, only a court within the same district of that
venue can enter an order compelling arbitration.”).
This Court acknowledges that it previously ordered Bordelon and Bibby
Subsea to arbitrate the Louisiana action in Texas. See R. Doc. No. 27. But it only did
so based upon the Fifth Circuit’s rule that “where the party seeking to avoid
arbitration brings a suit . . . in a district other than that in which arbitration is to
take place under the contract,” such as Bordelon did in this matter, “the party seeking
arbitration may assert its Section 4 right to have the arbitration agreement
performed in accordance with the terms of the agreement.” Dupuy-Busching Gen.
Agency, Inc. v. Ambassador Ins. Co., 524 F.2d 1275, 1278 (5th Cir. 1975).

empower this Court to issue the stay Bibby Subsea seeks. Therefore, Bibby Subsea
must justify a stay of the Texas action pending arbitration under the more demanding
standard for obtaining relief under the All Writs Act—a standard which, see infra
Part II, Bibby Subsea cannot meet.
3

Under the Fifth Circuit’s rule in Dupuy, a party waives the right to object to
the venue of the Court ordering arbitration “[b]y bringing suit in a district other than
the districts designated in the forum selection clause.” National Iranian Oil Co., 817
F.2d at 331. But Bordelon did not file the Texas action in Louisiana. It filed it in
Texas. Thus, the Dupuy waiver rule does not apply to the Texas action. See, e.g., id.
(explaining that “there has been no [Dupuy] waiver” because the party did not file the
lawsuit “in a district other than the districts designated in the forum selection
clause”).
This Court declines Bibby Subsea’s additional invitation to yet further expand
Dupuy’s waiver principle. Though Dupuy takes a less-than-literal reading of the
Federal Arbitration Act, the Court does not believe Dupuy licenses this Court to take
no heed of the statutory text. Such an argument is not only belied by the Fifth
Circuit’s refusal in National Iranian Oil Co. to countenance an anything-goes
approach, but it is also seemingly contrary to the traditional rules of statutory
interpretation.
After all, the drafters of the Federal Arbitration Act knew full-well how to draft
permissive venue provisions. See, e.g., 9 U.S.C. §§ 9-11; see also Cortez Byrd Chips,
Inc. v. Bill Habert Constr. Co., 529 U.S. 193, 204 (2000). Section 4 itself uses such
language when describing the courts in which a party may petition for an order
compelling arbitration. See, e.g., 9 U.S.C. § 4 (“A party aggrieved by the alleged
failure, neglect, or refusal of another to arbitrate under a written agreement for
arbitration may petition any United States district court which, save for such

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agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of
the subject matter of a suit arising out of the controversy between the parties, for an
order directing that such arbitration proceed in the manner provided for in such
agreement.”).

But the drafters of the Federal Arbitration Act did not use such

permissive language when indicating the judicial districts in which a court may order
arbitration.

Instead, the drafters used mandatory language: “The hearing and

proceedings, under such agreement, shall be within the district in which the petition
for an order directing such arbitration is filed.” See id. (emphasis added). Therefore,
under the rules of statutory interpretation, Section 4’s use of the term “shall” should
be seen as imposing a mandatory rule that a court may only order arbitration to occur
in the district in which the court sits. See Kingdomware Techs., Inc. v. United States,
136 S. Ct. 1969, 1977 (2016) (“When a statute distinguishes between ‘may’ and ‘shall,’
it is generally clear that ‘shall’ imposes a mandatory duty.”). But see Cortez, 529 U.S.
at 200 (“The answer is not to be had from comparing phrases.”). 5
Accordingly, although this Court is bound to follow Dupuy, the plain language
of the Federal Arbitration Act and the rules of statutory interpretation caution
against awarding the relief that Bibby Subsea seeks here. This Court will not
significantly enlarge Dupuy’s seemingly limited exception to Section 4’s otherwise
mandatory rule that a Court may only order arbitration in the district in which it

See also Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 132-33 (1989) (“[G]iven the
parallel structures of these provisions it would be a flouting of the text to imply . . . a
sanction not only withheld there but explicitly granted elsewhere. When such an
interpretation is allowed, the art of draftsmanship will have become obsolete.”).
5

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sits. The Court concludes that Section 4 denies this Court the statutory authority to
compel arbitration of the Texas dispute in Texas. 6
II.
Because the Federal Arbitration Act does not provide a basis for the order that
Bibby Subsea seeks, this Court next examines whether the All Writs Act can serve as
an alternative ground.

The All Writs Act empowers courts to “issue all writs

necessary or appropriate in aid of their respective jurisdictions and agreeable to the
usages and principles of law.” 28 U.S.C. § 1651(a). “The power conferred by the Act
extends, under appropriate circumstances, to persons who, though not parties to the
original action or engaged in wrongdoing, are in a position to frustrate the
implementation of a court order or the proper administration of justice, and
encompasses even those who have not taken any affirmative action to hinder justice.”
United States v. N.Y. Tel. Co., 434 U.S. 159, 174 (1977) (citations omitted).

That

“authority, though, is firmly circumscribed, its scope depending on the nature of the
case before the court and the legitimacy of the ends sought to be achieved through
the exercise of the power.” Netsphere, Inc. v. Barron, 703 F.3d 296, 307 (5th Cir. 2012)
(internal quotation marks omitted).

Bibby Subsea purports to bring the Section 4 claim on behalf of itself as well as the
Bibby affiliate defendants. The Court notes doubts as to whether Bibby Subsea may
bring a Section 4 claim on behalf of the Bibby affiliate defendants. See, e.g.,
Kawasaki, 660 F.3d at 999 (explaining that a party does not have standing to assert
third parties’ right to arbitrate). Nonetheless, in light of this Court’s conclusion that
it lacks the statutory authority to issue the order that Bibby Subsea seeks, the Court
need not definitively resolve the issue.

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Bibby Subsea argues that an order either compelling arbitration or staying the
Texas action is necessary to prevent the frustration of this Court’s prior order
compelling arbitration of the Louisiana action between Bibby Subsea and Bordelon.
The Court disagrees.
According to the Fifth Circuit, “[t]hree elements must be satisfied for the
district court to act pursuant” to the All Writs Act, “and the burden of establishing
them” is on the party seeking an injunction. Moore v. Tangipahoa Parish Sch. Bd.,
507 F. App’x 389, 397 (5th Cir. 2013). Bibby Subsea does not carry that burden.
First, “the party seeking” the order “must have no other adequate means to
attain the relief he desires.” Id. (internal quotation marks omitted). But Bibby
Subsea as well as the Bibby affiliate defendants have a more than adequate means
to obtain the relief they seek: filing a motion to compel or stay arbitration in the Texas
action. Therefore, the All Writs Act does not authorize this Court to issue the order
Bibby Subsea seeks: “When alternative means of relief are available, the court should
not issue a writ.” Id. 7

Bibby Subsea argues that the Bibby affiliate defendants are hindered in seeking
relief in Texas because the Texas courts may not have personal jurisdiction over the
Bibby affiliate defendants. See R. Doc. No. 75. This Court rejects that suggestion.
Objections regarding personal jurisdiction may be waived. See, e.g., Ins. Corp. of Ire.,
Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982) (“Because the
requirement of personal jurisdiction represents first of all an individual right, it can,
like other such rights, be waived.”). Therefore, the only “hindrance” to the Bibby
affiliate defendants petitioning for relief in Texas is their own unwillingness to
appear. That does not constitute a legitimate obstacle under the All Writs Act. Cf.
Pa. Bureau of Corr. v. U.S. Marshals Serv., 474 U.S. 34, 43 (“Although that Act
empowers federal courts to fashion extraordinary remedies when the need arises, it
does not authorize them to issue ad hoc writs whenever compliance with statutory
procedures appears inconvenient or less appropriate.”).

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Second, the party requesting the order must show that the party’s “right to
issuance of the writ is clear and indisputable.” Id (internal quotation marks omitted).
A party may show a clear and indisputable right to an order under the All Writs Act
by, for example, demonstrating “a direct affront to a district court’s [prior] order.” Id.
But Bibby Subsea demonstrates no such direct affront here. This Court’s prior order
compelled arbitration of “the claims raised in Bordelon’s state-court petition” (i.e., the
Louisiana action). R. Doc. No. 27, at 19. The claims raised in the Texas action—
while certainly overlapping in some regards—are not identical to the claims raised in
the Louisiana action that this Court previously compelled to arbitration. Nor do the
Texas claims threaten to divest this Court of jurisdiction over the Louisiana action.
Therefore, the filing of the Texas action is not a “direct affront” to this Court’s order
compelling arbitration—indeed, the filing of the Texas is not even necessarily a clear
violation of it. Without being able to demonstrate a clear violation of this Court’s
prior order compelling arbitration, Bibby Subsea cannot demonstrate the necessary
“clear and indisputable” right to a remedy. See, e.g., Wis. Right to Life, Inc. v. FEC,
542 U.S. 1305, 1306 (Rehnquist, Circuit Justice 2004).
Because Bibby Subsea can demonstrate neither of the first two prerequisites
for obtaining relief under the All Writs Act, this Court need not consider the third
factor: whether the order is “appropriate under the circumstances.” Moore, 507 F.
App’x at 398 (internal quotation marks omitted). The Court denies Bibby Subsea’s
request for an order pursuant to the All Writs Act either (1) compelling arbitration of
the Texas action or (2) staying the Texas action.

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III.
Finally, Bibby Subsea asks this Court to invoke the first-to-file rule and order
that the Texas action be either compelled to arbitration or dismissed, stayed, or
transferred. The Court sees at least two problems with Bibby Subsea’s request.
In the first place, Bibby Subsea and the Bibby affiliate defendants are moving
too fast. Under the first-to-file rule, the Bibby affiliate defendants are supposed to
move in the second court for the second court to dismiss, stay, or transfer the action.
Cf. W. Gulf Maritime Ass’n v. ILA Deep South Local 24, 751 F.2d 721, 722 (“We hold
that the district court [in which the second action was filed] should have dismissed or
stayed the action or should have transferred it to the” court in which the related
action was first filed). Then, to the extent that the Bibby affiliate defendants disagree
with the district court’s ruling, that decision is ultimately reviewed by the Fifth
Circuit—and not this Court—for an abuse of discretion.

See, e.g., Cadle Co. v.

Whataburger of Alice, Inc., 174 F.3d 599, 603 (5th Cir. 1999) (setting out standard of
review).

Accordingly, this Court will not permit Bibby affiliate defendants to

circumvent proper procedure and avoid appearing before the Texas judge under the
guise of the first-to-file rule.
But even more importantly, the first-to-file rule does not permit this Court to
disregard otherwise mandatory statutory language. Where an issue “is controlled by
statute,” the “first to file rule must yield” regardless of “concerns about comity.”
Sutter Corp. v. P&P Indus., Inc., 125 F.3d 914, 917 (5th Cir. 1997) (internal quotation
marks omitted).

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Here, absent a Dupuy waiver, the Federal Arbitration Act requires a judge to
order arbitration in the district in which the judge sits. Given that clear statutory
command, the first-to-file rule cannot empower this Court to issue the relief—an
order compelling arbitration of the Texas action in Texas—that Bibby Subsea seeks. 8
Therefore, Bibby Subsea’s request that this Court utilize the first-to-file rule to
compel arbitration is denied.
IV.
The request for relief sought here is properly addressed to the U.S. District
Judge presiding over the Texas action. The Court expresses no view on whether the
Texas action should be arbitrated.
Accordingly,
IT IS ORDERED that Bibby Subsea’s motion to compel arbitration is
DENIED.
IT IS FURTHER ORDERED that Bibby Subsea’s motion to reopen is
DENIED.

Were the Texas action transferred to this Court, this Court would have the power
to stay the action pending arbitration (assuming, of course, that the dispute is
referable to arbitration). See 9 U.S.C. § 3. However, although “[i]n many cases . . . a
§ 3 stay is quite adequate to protect the right to arbitration,” Moses H. Cone Memorial
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 27 (1983), the Court suspects that a mere
§ 3 stay would be inadequate here. Given the parties’ persistent inability to agree on
the proper panel to arbitrate in front of—a dispute that is unlikely to go away
regardless of the Fifth Circuit’s resolution of the pending appeal concerning the
proper panel to hear the Louisiana action (No. 16-30847 (5th Cir. 2016))—judicial
efficiency favors maintaining this action in Texas so that the parties are before a
tribunal with the ability to compel arbitration in Texas.

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New Orleans, Louisiana, January 30, 2017.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

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