Lafourche Parish v. Indian Harbor Insurance Company et al

Filing 47

ORDER AND REASONS: IT IS ORDERED that Plaintiff's 35 Motion to Lift Stay as to the Defendant domestic insurers is DENIED. Signed by Judge Susie Morgan on 3/10/2025. (Reference: All Cases)(pp)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PARISH OF LAFOURCHE

CIVIL ACTION

VERSUS

NO. 23-3472 c/w
23-3479, 23-3475

INDIAN HARBOR
INSURANCE COMPANY, ET AL.

SECTION: “E” (5)

Applies to: All Cases
ORDER AND REASONS
Before the Court is a Motion to Lift Stay 1 filed by Plaintiff, the Parish of
Lafourche. Defendants, Certain Underwriters at Lloyds, London, Certificate Number
AMR-41329-06, Indian Harbor Insurance Company, QBE Specialty Insurance
Company, Steadfast Insurance Company, General Security Indemnity Company of
Arizona, United Specialty Insurance Company, Lexington Insurance Company, Safety
Specialty Insurance Company, Old Republic Union Insurance Company, and HDI
Global Specialty SE, oppose the Motion. 2 Plaintiff filed a reply. 3 The parties filed
supplemental briefing.4
Some of the subscribers to the Lloyds, London, Certificate Number AMR-4132906, and HDI Global Specialty SE are foreign insurers.5 The remaining Defendants are
domestic companies.

1 R. Doc. 35.
2 R. Doc. 36.
3 R. Doc. 37.

4 R. Docs. 43, 46.

5 R. Doc. 36. Plaintiff originally three separate lawsuits, naming the domestic insurers in one suit and the

two foreign insurers in separate suits, respectively. The Court granted Defendants’ unopposed motion to
consolidate the suits. R. Doc. 16.

1

BACKGROUND
This is a dispute over insurance coverage in the wake of Hurricane Ida, which
struck the Louisiana coast in August 2021 and damaged many of the Parish’s
governmental buildings. 6 Sedgwick, an insurance adjusting service retained by the
Defendants, produced a rough estimate of approximately $35 million in damages to the
Parish’s buildings and other property.7 Nevertheless, the Defendants tendered only $19
million to the Parish—$16 million less than the adjustment. The Parish alleges the
amount tendered is “arbitrary,” “capricious,” and evidence of “bad faith.”8
On June 15, 2023, the Parish sued Defendants in the 17th Judicial District Court,
LaFourche Parish.9 On August 16, 2023, the Defendants removed the suit to this Court
pursuant to 9 U.S.C. §§ 202, 203, 205, and 18 U.S.C. § 1332.10 Defendants’ primary basis
for the removal is their contention that the insurance policy at issue in this case contains
a “valid arbitration clause [that] is governed by” the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (the “Convention”), which gives rise to federal
jurisdiction.11 Defendants also assert that, if there is no federal question jurisdiction,
there exists complete diversity of citizenship.12
On October 31, 2023, Defendants moved to compel arbitration and stay these
proceedings on the basis that the insurance contract contained a valid arbitration clause
governed by the Convention. 13 On November 1, 2023, Plaintiff filed a motion to
6 R. Doc. 1-2 at pp. 1–4.
7 Id. at p. 6.
8 Id.

9 See generally id.
10 R. Doc. 1. Plaintiffs filed three suits against Defendants in state court, each removed to federal Court

and consolidated with this action. R. Doc. 16. See also Civ. A. No. 23-cv-3479 (E.D. La. Aug. 16, 2023);
Civ. A. No. 23-cv-3475 (E.D. La. Aug. 16, 2023).
11 See generally R. Doc. 1.
12 Id.
13 R. Doc. 19.

2

remand14 the claims against all Defendants, which this Court denied on February 2,
2024.15 The Court determined that it has diversity jurisdiction over the action as well as
federal question jurisdiction under the Convention and the F.A.A., and that Burford
abstention is not appropriate in this case.16
The Plaintiff’s opposition to the original motion to stay and compel arbitration
centered on the argument that the insurers waived their right to arbitration as a result of
the policy endorsements containing service-of-suit and applicable law clauses. 17 The
Court examined whether the service-of-suit clause guarantees the Plaintiff the right to
pursue the suit in court and is, in effect, a waiver of the right to compel arbitration
because an arbitration tribunal is not a court of competent jurisdiction.18 The Court held
the “service-of-suit clause does not constitute a waiver of Defendants’ rights under the
arbitration clauses;” rather, the service-of-suit clause complements the arbitration
clause by establishing a forum where the parties may enforce the arbitration award.19 On
February 2, 2024, the Court granted Defendants’ motion to stay and compelled
arbitration.20
Relevant to the instant motion, Plaintiff requests that the Court reconsider its
prior order21 and lift the stay solely as to the Defendant domestic insurers because of an

14 R. Doc. 20.
15 R. Doc. 33.

16 See generally id.
17 R. Doc. 23.

18 R. Doc. 34, p. 5.

19 Id. at p. 7. Although not raised by the parties, the Court additionally noted “that although a plaintiff may
have separate contracts with each of the insurers, the application of equitable estoppel against an
argument that arbitration does not apply to non-signatories is appropriate.” Id. at n.39 (collecting cases).
20 See generally id.
21 Id.

3

intervening change in the law.22 The parties agree to continue to arbitrate as to the
foreign insurers.23
LAW AND ANALYSIS
The Court granted Defendants’ motion to stay and compel arbitration as to all
foreign and domestic insurers on February 2, 2024. 24 The Plaintiff argues that the
recent decision in Police Jury of Calcasieu Parish v. Indian Harbor Insurance Co.,25 in
which the Louisiana Supreme Court answered certified questions from the district court
in the Western District of Louisiana, justifies this Court reconsidering its prior
decision.26 Plaintiff argues that the Louisiana Supreme Court in Police Jury determined
that domestic insurer defendants “are prohibited under Louisiana law from invoking the
doctrine of equitable estoppel to enforce an arbitration clause contained in another
insurer’s policy – because doing so conflicts with the positive law of La. R.S. 22:868.”27
As a result, Plaintiffs argue that, as to the domestic insurers, this Court should
reconsider its prior order, lift the stay, and vacate the order compelling arbitration.28
Defendants argue that Police Jury has no bearing on the Convention-governed
arbitration agreement between the parties.29 Defendants argue that, in this case, federal
common law preempts Louisiana law, the relevant equitable estoppel framework is
provided by federal rather than state law, and federal equitable estoppel requires the

22 R. Doc. 35-1, p. 1.

23 See R. Doc. 35 (“Motion to Lift Stay Against the Domestic Insurance Carriers”); R. Doc. 43, p. 4 (“[T]he
Parish of Lafourche[] request[s] that this Court lift its stay, vacate its order compelling arbitration, and
allow this case against domestic insurers to proceed to trial.”); See R. Doc. 46, p. 11 (“[T]he court should
. . . maintain the Court’s current orders staying the litigation and compelling the plaintiff to arbitrate all
matters in dispute against all insurers, domestic and foreign.”).
24 R. Doc. 34.
25 395 So. 3d 717 (La. 2024), reh'g denied, 397 So. 3d 424 (La. Dec. 12, 2024).
26 See R. Doc. 35.
27 Id. at p. 5.
28 R. Doc. 35-1, p. 7.
29 R. Doc. 36, p. 3.

4

case remain stayed as to all insurers under the Convention.30 Defendants rely on “Fifth
Circuit binding precedent [that] controls and requires denial of [Plaintiff’s] motion[].”31
I.

Bufkin Enterprises, LLC v. Indian Harbor Insurance Co.,32 which is
binding on this Court, permits domestic insurers to compel
arbitration using federal common law equitable estoppel.
In 2000, in Grigson v. Creative Artists Agency, LLC, the Fifth Circuit held that a

nonsignatory to an arbitration clause in a distribution agreement may be compelled to
arbitration through the doctrine of equitable estoppel. 33 The Fifth Circuit based its
decision on whether the plaintiff raised allegations of “interdependent and concerted
misconduct” between a signatory and non-signatory defendant. 34 The Fifth Circuit
concluded that a nonsignatory may be compelled to arbitration if the plaintiff alleges
that the nonsignatory engaged in “interdependent and concerted misconduct” with the
signatory to the arbitration agreement, resulting in claims that are “intertwined with,
and dependent upon” the agreement. 35 The Fifth Circuit reasoned that equitable
estoppel is appropriate in this situation because “[a]lthough [the signatory was] not
sued (an obvious attempt to make an end-run around the arbitration clause, . . .), [the
signatory] nevertheless will be involved extensively—and, no doubt, quite expensively—
in this dispute . . . .”36
In 2024, in Bufkin, the Fifth Circuit endorsed the Grigson reasoning on equitable
estoppel to allow nonsignatory domestic insurers in a surplus lines policy to compel
arbitration. The Bufkin plaintiff obtained surplus lines insurance coverage through ten

30 Id. at pp. 6-9.
31 Id. at p. 9.

32 96 F.4th 726, 732 (5th Cir. 2024) (per curiam).
33 Grigson v. Creative Artists Agency L.L.C., 210 F.3d 524, 530-31 (5th Cir. 2000).
34 Id. at 528.

35 Id. at 530-31.
36 Id. at 530.

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insurers: two foreign insurers and eight domestic insurers. 37 The policy contained
language stating that “this contract shall be constructed as a separate contract between
[plaintiff] and each of the [insurers].”38 The insurance policy contained an arbitration
provision, which required the parties to arbitrate any dispute in New York. 39 After
Hurricane Ida, plaintiff sued only the domestic insurers in Louisiana state court,
alleging that those insurers as a group withheld payment under the policy.40 Plaintiff
filed an amended petition, naming the foreign insurers as defendants and alleging they
engaged in the same conduct alleged against the domestic insurers.41 The Fifth Circuit
surmised that the “amended petition was expressly filed for the purpose of then
dismissing the foreign insurers” with prejudice so that Plaintiff could circumvent
arbitration under the Convention.42 After dismissing the foreign insurers with prejudice,
the domestic insurers then removed the action to federal court, claiming both federal
question and diversity jurisdiction. 43 The domestic insurers subsequently moved to
compel arbitration.44
The district judge for the Western District of Louisiana originally denied the
motion to compel arbitration, reasoning that the Convention did not apply to the
domestic insurers because the insurance policy contained “separate contracts” as to each
insurance provider.45 The district court further held that “equitable estoppel could not

37 Bufkin, 96 F.4th at 727.
38 Id.

39 Id. at 728.
40 Id.
41 Id.

42 Id.
43 Bufkin Enters. LLC v. Indian Harbor Ins. Co., No. 2:21-CV-04017, 2023 WL 2393700, at *2 (W.D. La.

Mar. 7, 2023), rev'd and remanded sub nom., Bufkin Enters., L.L.C. v. Indian Harbor Ins. Co., 96 F.4th
726 (5th Cir. 2024).
44 Bufkin, 96 F.4th at 728.
45 Id. at 729. Accordingly, the court reasoned that no domestic insurer was party to a Conventiongoverned arbitration agreement with a foreign insurer.

6

be a basis to invoke the Convention because [plaintiff’s] claims were asserted only
against the domestic insurers after the foreign insurers had been dismissed with
prejudice” from the case.46
The Fifth Circuit reversed the district court, finding the district court abused its
discretion by failing to apply federal common law equitable estoppel and compel
arbitration under the Convention. 47 Applying Grigson, the Fifth Circuit held that
equitable estoppel may be applied to enforce arbitration agreements, even as to nonsignatories,48 when “a signatory to a contract containing an arbitration clause raises
allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more signatories to the contract.”49 The Fifth Circuit noted that, in
her amended petition, plaintiff did not “differentiate between conduct of foreign and
domestic insurers,” and she alleged the foreign insurers engaged in the same culpable
conduct as the domestic insurers.50 The court concluded that, because plaintiff alleged
there was “substantially interdependent and concerted conduct by the domestic and
foreign insurers,”51 equitable estoppel was appropriate to compel arbitration under the
Convention.52 The Fifth Circuit further noted that the district court improperly focused
on the fact that the plaintiff had dismissed the domestic insurers from the action with
46 Id.

47 Id. The Court did not conclude whether the Policy was “one overarching policy agreement” or whether it

was “ten separate contracts” because, even assuming ten contracts existed, the plaintiff alleged
“substantially ‘interdependent and concerted misconduct by both the non-signatory and one or more of
the signatories to the contract.” Id. at 730-31.
48 Id. (“If we presume there are ten separate contracts, the signatories to the arbitration agreements
subject to the Convention are [plaintiff] and the foreign insurers. The domestic insurers are nonsignatories.”).
49 Id. at 730 (internal quotation marks omitted) (quoting Pontchartrain Nat. Gas Sys. v. Tex. Brine Co.,
317 So. 3d 715, 743 (La. Ct. App. 1st Cir. 2020); Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524,
527 (5th Cir. 2000)).
50 96 F.4th at 731-32.
51 Id. at 731.
52 Id. at 732 (“Grigson simply asks whether the signatory to the arbitration agreement (here, Bufkin)
raises allegations of substantially interdependent and concerted misconduct by both a non-signatory (the
domestic insurers) and one or more signatories to the contract (the foreign ones).”).

7

prejudice because “indulging [plaintiff]'s pleading-and-then-dismissing gamesmanship
by denying arbitration turns on its head the axiom that ‘[t]he linchpin for equitable
estoppel is equity—fairness.’” 53 Finally, the Fifth Circuit concluded that “there is no
tension between [the application of equitable estoppel] and Louisiana law.”54
The Fifth Circuit in Bufkin cautioned that whether foreign insurers are formally
named in the action is not dispositive; rather,
On the record before us, Bufkin has alleged substantially
interdependent and concerted conduct by the domestic and foreign
insurers. Bufkin's amended petition does not differentiate between
conduct of foreign and domestic insurers . . . . It is of no moment
that Bufkin is no longer pursuing claims against the foreign
insurers; Grigson does not require that. Grigson simply asks
whether the signatory to the arbitration agreement (here, Bufkin)
raises allegations of substantially interdependent and concerted
misconduct by both a non-signatory (the domestic insurers) and
one or more signatories to the contract (the foreign ones) . . . .
While Bufkin was certainly free to name and then dismiss the
foreign insurers, the district court was not free to disregard them in
considering the domestic insurers' motion to compel arbitration.
Yet in focusing on Bufkin's dismissal of the foreign insurers, the
district court neglected to consider the foreign insurers' part in the
seamless coverage agreement struck by the parties, and Bufkin's
interactions with the insurers. Honing in, that coverage
arrangement included the arbitration clause that afforded the
insurers—foreign and domestic—“predictability in resolving
disputes dealing with the substantial risks presented by a surplus
lines insurance policy.” The district court failed to apply Grigson's
“interdependent and concerted misconduct” test. This was an abuse
of discretion.55

53 Id.
54 Id. at 733. The Court also explained that La. R.S. § 22:868 “does not reverse preempt the Convention
because the McCarran-Ferguson Act does not apply to treaties.” 96 F.4th at 732 (citing Safety Nat'l Cas.
Corp. v. Certain Underwriters at Lloyd's London, 587 F.3d 714, 718 (5th Cir. 2009) (en banc)). “[T]he
McCarran-Ferguson Act permits states to reverse-preempt an otherwise applicable ‘Act of Congress’ by
enacting their own regulations of the insurance industry.” McDonnel Grp., L.L.C. v. Great Lakes Ins. SE,
UK Branch, 923 F.3d 427, 431 (5th Cir. 2019), as revised (June 6, 2019). The Fifth Circuit has held that
this Act does not “reverse-preempt” the Convention because the Convention is a treaty, which is not an
“Act of Congress.” Safety National, 587 F.3d at 731.
55 Bufkin, 96 F.4th at 731-32.

8

The Fifth Circuit applied federal principles of equitable estoppel to stay a case
and compel a nonsignatory to arbitration under the Convention in both Grigson and
Bufkin.56 In Bufkin, the Fifth Circuit described the distinction between interpretation of
La. R.S. § 22:868 under Louisiana law and the application of equitable estoppel to
compel arbitration under the Convention—referred to by the Fifth Circuit as “Grigson
estoppel”—as two separate legal questions: “Having resolved this appeal on Grigson
estoppel grounds, § 22:868's impact is not a live issue in this dispute.” 57 Applying
Grigson estoppel, the Bufkin court compelled the domestic insurers to arbitration based
on application of federal common law. Bufkin instructs district courts to apply federal
common law equitable estoppel to compel domestic insurers to arbitrate, even when the
domestic insurers are nonsignatories to an agreement with foreign insurers. Bufkin and
Grigson continue to be good law in the Fifth Circuit, and “[a] district court must apply
circuit precedent unless that precedent has been overruled.”58 As a result, the Court will
apply federal common law principles of equitable estoppel to determine arbitrability in
this case.

56 210

F.3d 524 (5th Cir. 2000); 96 F.4th 726 (5th Cir. 2024). Other circuit courts have compelled
arbitration against non-signatories based on principles of equitable estoppel. See Reeves v. Enter.
Products Partners, LP, 17 F.4th 1008 (10th Cir. 2021); MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942
(11th Cir. 1999); Usme v. CMI Leisure Mgmt., Inc., 106 F.4th 1079, 1088 (11th Cir. 2024) (applying
interconnected and intertwined analysis, like in Grigson, and reversing district court order compelling
arbitration against nonsignatory employees because employees “did not rely on their employment
contracts to assert their Jones Act and general maritime claims”).
57 Bufkin, 96 F.4th at 733. Plaintiff points out that the district court in Belmont Commons premised its
decision on the assumption that Bufkin involved a determination of the applicable law under Erie R. Co.
v. Tompkins. See R. Doc. 43, p. 2 (citing Certain Underwriters at Lloyd’s London v. Belmont Commons
LLC, No. 22-3874, 2025 WL 239087, at *6 (E.D. La. Jan. 17, 2025) (“Judge Fallon’s analysis specifically
included an examination of ‘whether the applicable equitable estoppel jurisprudence is a matter of state
law, meaning that the Louisiana Supreme Court controls, or a matter of federal law, meaning that the
Fifth Circuit controls.’”). Neither the Bufkin nor Grigson courts found it necessary to conduct an “Erie
guess” on any issue of Louisiana law.
58 United States v. Martin, No. 6:20-CR-00047-01, 2024 WL 129337 (W.D. La. Jan. 11, 2024) (citing St.
Paul Mercury Ins. Co. v. Williamson, 224 F.3rd 425, 442 (5th Cir. 2000)).

9

Furthermore, the application of federal common law equitable estoppel in
Grigson and Bufkin is in line with Supreme Court precedent as to the determination of
whether a court should apply principles of federal common law—rather than state law.
In

Boyle v. United Technologies Corporation, the United States Supreme Court

promulgated a two-part test for determining whether a court should apply federal
common law rather than state law.59 First, a court assesses whether the case presents a
uniquely federal interest necessitating the application of federal common law.60 Second,
the court assesses whether application of state law either conflicts with or frustrates
specific objectives of federal legislation.61 The Supreme Court in Boyle noted that “where
the federal interest requires a uniform rule, the entire body of state law applicable to the
area conflicts and is replaced by federal rules.”62
On remand from the Supreme Court in GE Energy Power Conversion France
SAS, Corp. v. Outokumpu Stainless USA, LLC,63 Judge Tjoflat of the Eleventh Circuit
concluded that it is necessary to apply federal common law principles of equitable
estoppel to disputes arising under the Convention. 64 Applying the test under Boyle,
Judge Tjoflat concluded:
[A]s to the first part of the test, we have a quintessential “uniquely federal
interest.” The New York Convention is an international treaty with
international obligations. The whole goal of the New York Convention is to
standardize the enforcement of international arbitration agreements, and
there is a strong federal interest in making sure that the United States lives
up to its treaty obligations . . . . As to the second part of the test, allowing
each state or international law to impose its own test for threshold
59 487 U.S. 500, 506-07 (1988).
60 Id. at 507.
61 Id.

62 Id. at 508.

63 590 U.S. 432 (2020).
64 Outokumpu Stainless USA, LLC v. Coverteam SAS, No. 17-10944, 2022 WL 2643936, at *6 (11th Cir.
July 8, 2022) (Tjoflat, J., concurring) (noting that the Eleventh Circuit “must apply federal common law
in determining whether equitable estoppel applies in New York Convention cases”) (on remand from GE
Energy, 590 U.S. 432).

10

questions of arbitrability would create an unmanageable tangle of
arbitration law in the United States, lead to forum shopping, and frustrate
the uniform standards the New York Convention and Chapter 2 of the FAA
were enacted to create . . . . In short, the Boyle test counsels in favor of
applying federal common law to threshold questions of arbitrability.65
Various courts across the federal circuits have similarly concluded the
Convention presents a uniquely federal interest necessitating the application of uniform
federal common law.66 “In cases involving the New York Convention, in determining the
arbitrability of federal claims by or against non-signatories to an arbitration agreement,
[a court] appl[ies] ‘federal substantive law,’ for which [the court] look[s] to ‘ordinary
contract and agency principles.’” 67 “While it is recognized that state law determines
questions concerning the validity, revocability, or enforceability of contracts generally,
Section 2 of the Federal Arbitration Act, 9 U.S.C.A. § 2, and the Convention . . . enforced
by 9 U.S.C.A. §§ 201 et seq., create a body of federal substantive law of arbitrability
applicable to any arbitration agreement within the coverage of the Act.”68
The Court is persuaded by Judge Tjoflat’s Boyle conclusion, as well as the
analysis employed by the Second, Fifth, Seventh, and Ninth Circuits, that arbitrability
under the Convention serves a unique federal interest that must be subject to principles
of federal common law.

65 Id. (citations omitted) (applying Boyle).

66 See, e.g., Todd v. Steamship Mut. Underwriting Ass'n (Bermuda) Ltd., 601 F.3d 329, 335 n.12 (5th Cir.

2010) (“Like the FAA, the Convention also creates ‘a body of federal substantive law of arbitrability,’
displacing inconsistent state law.”); Certain Underwriters at Lloyd's London v. Argonaut Ins. Co., 500
F.3d 571 (7th Cir. 2007); Chemaly v. Lampert, 717 F. Supp. 3d 1248, 1272 (S.D. Fla. 2024) (“The Court
similarly applies federal law to determine whether equitable estoppel applies to Non-Signatories here.”);
Smith/Enron Cogeneration Ltd. P'ship, Inc. v. Smith Cogeneration Intern., Inc., 198 F.3d 88, 96 (2d Cir.
1999) (“When we exercise jurisdiction under Chapter Two of the FAA, we have compelling reasons to
apply federal law, which is already well-developed, to the question of whether an agreement to arbitrate is
enforceable.”); Setty v. Shrinivas Sugandhalaya LLP, 3 F.4th 1166, 1168 (9th Cir. 2021).
67 Setty, 3 F.4th at 1168 (quoting Letizia v. Prudential Bache Secs., Inc., 802 F.2d 1185, 1187 (9th Cir.
1986)).
68 Michael A. Rosenhouse, Application of Equitable Estoppel Against Nonsignatory to Compel
Arbitration Under Federal Law, 43 A.L.R. Fed. 2d 275 (2010) (updated December 2024).

11

II.

Police Jury is not binding on this Court, and it did not address the
applicability of the Convention when domestic and foreign insurers
issued the policy, as existed in Bufkin.
In Police Jury, like in Bufkin, the plaintiff sued several foreign and domestic

insurers to resolve a coverage dispute after Hurricane Ida.69 The policy provided that
each insurer in the syndicate has its own separate contract with the plaintiff.70 Four days
after filing suit in state court, plaintiff dismissed the two foreign insurers with
prejudice.71 After removing the case to the district court for the Western District of
Louisiana, the insurers moved to stay the case and compel arbitration.72 In their motion,
the insurers argued that Bufkin required the district court to compel arbitration under
the Convention through equitable estoppel.73 Noting tension between the relevant Fifth
Circuit cases and Louisiana law, the district judge for the Western District issued an
order certifying three questions to the Louisiana Supreme Court.74
The Louisiana Supreme Court in Police Jury answered the three certified
questions 75 from the Western District of Louisiana, including the relevant third
question:
[W]hether a domestic insurer may invoke the doctrine of equitable
estoppel to enforce an arbitration clause contained in another insurer's
policy,76 thereby circumventing the prohibition of arbitration clauses
69 Police Jury of Calcasieu Par. v. Indian Harbor Ins. Co., No. 2:24-CV-00342, 2024 WL 1545135, at *1
(W.D. La. Apr. 9, 2024), certified question accepted, 2024-00449 (La. 6/19/24), 386 So. 3d 306, and
appeal dismissed, No. 24-30261, 2024 WL 4553973 (5th Cir. June 25, 2024), and certified question
answered, 395 So. 3d 717 (La. 2024), reh'g denied, 397 So. 3d 424 (La. 2024).
70 Id.
71 Id.
72 Id.
73 Id.
74 Id. at *2-3.
75 See No. 24-342, R. Doc. 34 (W.D. La.) (docketed Louisiana Supreme Court order answering certified
questions); 395 So. 3d 717, 720 n.1 (La. 2024) (explaining procedure for federal district courts to certify
questions under Louisiana Supreme Court Rule XII).
76 “Another insurer’s policy” relates to the “separate contracts” in surplus lines policies between each
insurer and the insured, making the domestic insurers nonsignatories to the foreign insurance policies.
See 395 So. 3d at 729 (“The first prong [of the third question] questions whether a domestic insurer may
use equitable estoppel under Louisiana law to enforce arbitration via a foreign insurer's policy.”).

12

under La. R.S. 22:868(A)(2) . . . . [and] whether estoppel can be
applied to political subdivisions without satisfying the heightened
standard adopted by this Court for its application to public bodies.77
The Louisiana Supreme Court addressed the Fifth Circuit’s application of federal
equitable estoppel to compel arbitration in Bufkin:
With all due respect, we disagree with the Federal Court's recent per
curiam in Bufkin Enterprises, L.L.C. v. Indian Harbor Ins. Co. . . . this
conclusion [is] flawed and not supported by Louisiana law. Notably,
domestic insurers do not fall under the rules of the Convention. . . . The
Bufkin court failed to acknowledge that Louisiana has positive law on this
issue. Indeed, La. R.S. 22:868 precludes domestic insurers’ use of estoppel
to compel arbitration. Defendants’ reliance on Bufkin is misplaced. Thus,
we find a domestic insurer may not resort to equitable estoppel under
Louisiana law to enforce an arbitration clause in another insurer's policy
in contravention of the positive law prohibiting arbitration in La. R.S.
22:868(A)(2).78
The Louisiana Supreme Court in Police Jury further noted that in 2024, after
Bufkin was decided, the Fifth Circuit correctly applied Louisiana law in S. K. A. V.,
L.L.C. v. Indep. Specialty Ins. Co.79 and held that “La. R.S. 22:868 prohibits arbitration
clauses in all Louisiana-issued insurance contracts.”80
This Court notes that, while S. K. A. V., L.L.C. involved interpretation of La. R.S.
22:868, the case is distinguishable from Bufkin. S. K. A. V., L.L.C. did not involve
foreign insurers, nor did it involve the application of the Convention.81 In S. K. A. V.,
L.L.C., the dispute centered on a surplus lines policy between the plaintiff and a

77 Id. at 720.

78 Id. at 729.
79 103 F.4th 1121, 1124 (5th Cir. 2024).

80 395 So. 3d at 728. The district court for the Western District of Louisiana, applying Police Jury, lifted

the stay as to the domestic insurers without issuing a written opinion. Police Jury, No. 24-342, R. Doc. 35
(W.D. La. Oct. 31, 2024). The insurers appealed this order. Id. at R. Doc. 37.
81 See 103 F.4th at 1122. See Bros. Petrol., L.L.C. v. Certain Underwriters at Lloyd's, No. CV 23-445, 2024
WL 4443966, at *5 (E.D. La. Oct. 8, 2024) (“[T]hat case did not implicate the New York Convention
because no foreign parties were involved. Accordingly, S.K.A.V. does not disrupt prior settled case law
holding that ‘§ 22:868 does not come into play’ in cases that fall under the Convention because the
Convention, as an international treaty, controls.”).

13

domestic insurer—no foreign insurer was party to the policy. 82 The Fifth Circuit,
venturing an “Erie guess,”83 held that La. R.S. § 22:868’s arbitration prohibition voided
the arbitration provision in the surplus lines policy.84 Unlike the Fifth Circuit’s decisions
in Grigson and Bufkin, which applied federal common law estoppel under the
Convention, the Fifth Circuit in S. K. A. V., L.L.C. interpreted only La. R.S. § 22:868
under Erie based on Louisiana state law as the case involved a Louisiana hotel owner
and a domestic insurer, Independent Specialty Insurance Company, which issued
coverage under a surplus lines policy.85 The case made no reference to the Convention.86
The Louisiana Supreme Court in Police Jury did not consider the impact of there
being foreign insurers under the surplus lines policy, which is what renders the policy
subject to the Convention, as occurred in Bufkin.87 As recognized in Bufkin, the Fifth
Circuit has held that the Convention–a treaty—preempts La. R.S. 22:868 and is
interpreted and applied according to federal common law principles of equitable
estoppel.88
Instead, the analysis in Police Jury focused solely on the interpretation of La.
R.S. 22:868 under Louisiana law—not on whether “the arbitration agreement between
the parties is [governed by] the Convention through [federal common law] equitable

82 See 103 F.4th at 1122.

83 Id. (“This appeal raises a question of state law on which federal district courts in Louisiana disagree:

Does § 22:868 of the Louisiana Revised Statutes void an arbitration provision in a contract for surplus
lines insurance? We venture an Erie guess and answer ‘yes.’”).
84 Id.; id. at 1125 (“General principles of contractual freedom, however normatively attractive in the
surplus lines insurance business, cannot trump specific statutory commands.”).
85 Id. at 1122.
86 See generally id.
87 The Court notes it is possible the Louisiana Supreme Court did not address the effects of the Convention
because the foreign insurers had been dismissed from the action. However, Bufkin instructs this is not
dispositive as to the applicability of equitable estoppel in compelling arbitration under the Convention. 96
F.4th 726, 732 (5th Cir. 2024) (per curiam).
88 See Safety Nat'l Cas. Corp. v. Certain Underwriters at Lloyd's London, 587 F.3d 714, 718 (5th Cir.
2009) (en banc).

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estoppel.”89 While it is true the Louisiana Supreme Court in Police Jury disagreed with
the Fifth Circuit’s application of federal common law estoppel in Bufkin, this Court is
not bound by Police Jury on matters of federal common law. Given the uniquely federal
interest apparent in matters subject to the Convention and no intervening Fifth Circuit
decision, the Court remains bound by the Fifth Circuit’s application of “Grigson
estoppel” under the Convention in Bufkin.90
Several other sections of this Court have addressed motions to lift stays based on
the Louisiana Supreme Court’s decision in Police Jury. In Certain Underwriters at
Lloyd’s London v. Belmont Commons LLC, the trial judge originally entered an order
staying the case and compelling arbitration with eleven insurers, including both
domestic and foreign insurers. 91 In addition to compelling arbitration against the
foreign insurers under the Convention, the court compelled arbitration against the
domestic insurers based on the doctrine of equitable estoppel as recognized by Bufkin.92
After the Police Jury decision was handed down, in Belmont Commons, the judge
granted a motion to lift the stay and vacated the arbitration order, stating that the
“Court agrees with Plaintiffs that Police Jury conclusively establishes that § 22:868(A)
operates to invalidate arbitration clauses in insurance contracts.” 93 The court in
Belmont Commons further held that “whether a plaintiff can be compelled to arbitrate
with a domestic insurer based on the plaintiff's arbitration agreement with a foreign
89 Police Jury of Calcasieu Parish v. Indian Harbor Ins. Co., 395 So. 3d 717, 733 (La. 2024).
90 See Bufkin Enters., L.L.C., v. Indian Harbor Ins. Co., 96 F.4th 726, 731-33 (5th Cir. 2025).
91 Certain

Underwriters at Lloyd's London v. Belmont Commons LLC, No. CV 22-3874, 2025 WL
239087, at *2 (E.D. La. Jan. 17, 2025).
92 Id. (“The United States Court of Appeals for the Fifth Circuit has held that ‘application of equitable
estoppel is warranted when [a] signatory to the contract containing an arbitration clause raises allegations
of substantially interdependent and concerted misconduct by both the nonsignator[ies] and one or more
of the signatories to the contract.’”) (internal quotation marks omitted) (citing Grigson v. Creative Artists
Agency LLC, 210 F.3d 524, 527 (5th Cir. 2000)).
93 Id. at *5.

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insurer [and equitable estoppel] is a matter of state law, not federal law.”94 In reaching
this conclusion, the district court relied upon the Supreme Court case GE Energy Power
Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, explaining that GE
Energy “clearly contemplated that state principles of equitable estoppel, and not federal
ones, apply” to compel arbitration under the Convention. 95 The Belmont Commons
court concluded that the “Louisiana Supreme Court, rather than the Fifth Circuit,
controls on the issue of estoppel.” 96 Thus, in Belmont Commons, the trial judge
determined that the Convention did not apply to contracts with domestic insurers
because “the Louisiana Supreme Court, in Police Jury, unambiguously rejects the use of
equitable estoppel to subject domestic insurers to the Convention.”97 As a result, the
trial court granted the Plaintiff’s motion to lift the stay and vacated the order compelling
arbitration.98
Several other sections of this Court have adopted the Belmont Commons’
analysis, reversed their prior issuances of stays, and ordered plaintiffs to arbitration
with domestic insurers, also without considering the effect of these foreign insurers also

94 Id. at *8 (discussing GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA,
LLC, 590 U.S. 432, 440 (2020)). The district court characterizes the issue as turning on whether the
Convention applies: “[I]f the Convention applies to the dispute, it controls and the arbitration agreement
is enforceable. However, if the Convention does not apply, state law invalidating arbitration agreements in
insurance contracts can reverse-preempt the FAA and control. With that in mind, the Court now turns to
the instant dispute. The parties agree that as to the Plaintiffs’ contracts with the foreign insurers, the
Convention applies and the arbitration agreements are therefore enforceable. However, Plaintiffs contend
that in the wake of Police Jury, the arbitration agreements in their contracts with the domestic insures are
invalid because (1) state law, indeed, operates to invalidate the arbitration clauses and (2) equitable
estoppel does not apply to subject the domestic parties to the Convention through the foreign parties’
contracts.” Id. at *4.
95 Id. at *7; 590 U.S. at 440.
96 2025 WL 239087, at *7 (citing Ward v. State Farm Mut. Auto. Ins. Co., 539 F.2d 1044, 1050 (5th Cir.
1976) (“[T]he Supreme Court of Louisiana [ ] is the ultimate authority on questions of state law.”)).
97 Id. at *8.
98 Id. at *10. The Court further determined that a continued discretionary stay was not warranted, and
“Plaintiffs would be more drastically harmed by an adverse decision on the entry of a stay.” Id.

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being parties to the insurance policy has on the analysis.99 The Court notes that, while
the district court in Belmont Commons relied on GE Energy to support its reliance on
Louisiana state law, “[i]n GE Energy, the Supreme Court specifically concluded, ‘[w]e
hold only that the New York Convention does not conflict with the enforcement of
arbitration agreements by non-signatories under domestic-law equitable estoppel
doctrines.’ The Supreme Court ‘did not determine whether GE Energy could enforce the
arbitration clauses under principles of equitable estoppel or which body of law governs
that determination.’”100 As a result, this Court is unpersuaded that GE Energy dictates
the conclusion that Louisiana law governs the applicable principles of equitable
estoppel. This Court finds that Police Jury is not an intervening change in the law in this
case.
The other district court cases applying Police Jury focus on whether principles of
equitable estoppel are matters of state law or federal law, without analyzing whether the
plaintiff alleges concerted misconduct amongst both the domestic and foreign insurers,
subjecting the nonsignatory domestic insurers to the Convention.101 Applying Bufkin
and Grigson, the Court finds the application of equitable estoppel to enforce arbitration
under the Convention is a matter of federal common law. Guided by Bufkin, the Court
will continue to apply Grigson estoppel—federal common law estoppel—to this case.

99 See, e.g., Crescent City Surgical Operating Co. v. Certain Underwriters at Lloyd's, London, No. CV 22-

2625, 2025 WL 239404, at *6 (E.D. La. Jan. 17, 2025) (“Accordingly, the Court finds no reason to depart
from its holding in Belmont and affirms that Police Jury constitutes an ‘intervening change in the
controlling law.’”). This case similarly involved a surplus lines policy with foreign and domestic insurers,
and the foreign insurers were still party to the action. See, e.g., 3501 N. Causeway Ass’ns., LLC v. Certain
Underwriters at Lloyd’s, London, No. CV 22-3787, 2025 WL 388627, at *1 (E.D. La. Feb. 4, 2025); Apex
Hospitality Grp., LLC v. Indep. Specialty Ins. Co., No. CV 23-2060, 2025 WL 457874 (E.D. La. Feb. 11,
2025).
100 3 F.4th at 1168 (quoting 590 U.S. 432, 445 (2020) (emphasis added)).
101 See, e.g., Belmont Commons, 2025 WL 239087, at *6-7.

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III.

Applying Bufkin, the instant case will remain stayed, and Plaintiff’s
motion will be denied.
“In determining whether the Convention requires compelling arbitration in a

given case, courts conduct only a very limited inquiry.”102 For an arbitration agreement
to fall under the Convention, “(1) there is a written agreement to arbitrate the matter;
(2) the agreement provides for arbitration in a Convention signatory nation; (3) the
agreement arises out of a commercial legal relationship; and (4) a party to the
agreement is not an American citizen.”103 In the Fifth Circuit, the doctrine of equitable
estoppel subjects nonsignatories to arbitration “when [a] signatory to the contract
containing an arbitration clause raises allegations of substantially interdependent and
concerted misconduct by both the nonsignator[ies] and one or more of the signatories to
the contract.”104
In this case, the first element is met as the policy contains an arbitration clause,
requiring arbitration of “[a]ll matters in difference between the Insured and the
Companies . . . in relation to this insurance . . . .”105 The second element is met as the
agreement provides for arbitration in a Convention signatory nation: the agreement
requires arbitration in New York,106 which is located in the United States, a signatory
nation to the Convention. The third element is met as the “agreement arises out of a
commercial legal relationship,” or a contract for insurance coverage.

102 Freudensprung v. Offshore Tech. Svcs., Inc., 379 F.3d 327, 339 (5th Cir. 2004).
103 Id.

104 Grigson v. Creative Artists Agency LLC, 210 F.3d 524, 527-28 (5th Cir. 2000); see Washington Mut.
Fin. Group, LLC v. Bailey, 364 F.3d 260 (5th Cir. 2004); Bufkin, 96 F.4th 726.
105 R. Doc. 19-2, p. 37.
106 Id.

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Under the fourth element,107 as to the domestic insurers, the “Contract Allocation
Endorsement” to the insurance policy provides that “[t]his contract shall be constructed
as a separate contract between the Insured and each of the Underwriters.”108 Under this
language alone, there is facial inapplicability of the Convention as to the domestic
insurers, because neither party to the bilateral insurance agreements between plaintiff
and those Defendants is a foreign citizen. Under Grigson and Bufkin, the Court next
assesses “the foreign insurers’ part in the seamless coverage agreement struck by the
parties”109 and whether a “signatory to the contract containing an arbitration clause
raises allegations of substantially interdependent and concerted misconduct by both the
nonsignator[ies] and one or more of the signatories to the contract.”110
Plaintiff alleges in the Complaint that “[a]ll of the above-named insurers hired
Sedgwick and its adjusters to adjust petitioner’s claim for damages.”111 Plaintiff alleges
the insurers through Sedgwick failed to “perform an inspection and/or adjustment of
damages on the contents of all buildings” and failed to “timely adjust this claim.”112
Plaintiff alleges “the above-named insurers have failed to tender those amounts owed
and due” and have “acted arbitrarily and capriciously by holding Petitioner’s funds
without just cause,” breaching their duty of good faith and fair dealing.113 Plaintiff prays
that Defendants be held liable “jointly, separately, and in solido” for damages. 114
Defendants’ conduct alleged in the complaint “does not differentiate between conduct of
107 The parties do not dispute that some of the subscribers to the Policy issued by Certain Underwriters at

Lloyds, London, and HDI Global Specialty SE, foreign insurers in this case, are not American citizens and
remain compelled to arbitrate under the Convention.
108 R. Doc. 19-2, p. 4.
109 96 F.4th 726, 732 (5th Cir. 2024).
110 Grigson v. Creative Artists Agency LLC, 210 F.3d 524, 527 (5th Cir. 2000).
111 R. Doc. 1-2, p. 2.
112 Id. at p. 7.
113 Id. at pp. 6-7.
114 Id. at p. 8.

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foreign and domestic insurers,” 115 other than emphasizing that the policy contained
separate contracts of coverage with each insurer.116 As a result, because the Plaintiff has
alleged “substantially interdependent and concerted misconduct”117 amongst all insurer
defendants who provided coverage under one surplus lines policy, the “arbitration
agreement between the parties is subject to the Convention through equitable estoppel”
and “[t]here is no tension between this position and Louisiana law.”118
The Louisiana Supreme Court’s interpretation of La. R.S. § 22:868 in Police Jury
does not alter this outcome as this Court is bound by Fifth Circuit decisions determining
arbitrability under the Convention. 119 As a result, this case will remain stayed, and
Plaintiff’s motion to lift the stay will be denied.
Accordingly;
CONCLUSION
IT IS ORDERED that Plaintiff’s Motion to Lift Stay 120 as to the Defendant
domestic insurers is DENIED.121
New Orleans, Louisiana, this 10th day of March, 2025.
________________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE
115 Bufkin Enters., L.L.C., v. Indian Harbor Ins. Co., 96 F.4th 726, 731 (5th Cir. 2024).
116 R. Doc. 1-2, pp. 1-2.

117 Grigson v. Creative Artists Agency LLC, 210 F.3d 524, 527 (5th Cir. 2000); Bufkin, 96 F.4th at 731-33.

118 Bufkin, 96 F.4th at 733. And, La. R. S. § 22:868 does not reverse preempt the Convention “because the
McCarran-Ferguson Act does not apply to treaties.” Id. at 732 (citing Safety Nat'l Cas. Corp. v. Certain
Underwriters at Lloyd's London, 587 F.3d 714, 718 (5th Cir. 2009) (en banc)).
119 See In re Bonvillian Marine Serv., Inc., 19 F.4th 787, 789 (5th Cir. 2021) (noting that district courts are
not free to overturn Fifth Circuit decisions).
120 R. Doc. 35.
121 Additionally, the action remains stayed as to the two foreign insurer Defendants: Certain Underwriters
at Lloyds, London, and HDI Global Specialty SE. See 3501 N. Causeway Assocs., LLC v. Certain
Underwriters at Lloyd's, London, No. CV 22-3787, 2025 WL 388627, at *6 (E.D. La. Feb. 4, 2025)
(“Plaintiff's agreement to arbitrate with the foreign insurers fall under the Convention and thus remains
enforceable.”).

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