Acosta v. Master Maintenance and Constr., Inc., Civ.A.98-1065 A.
| Decision Date | 02 March 1999 |
| Docket Number | No. Civ.A.98-1065 A.,Civ.A.98-1065 A. |
| Citation | 52 F.Supp.2d 699 |
| Parties | Ken ACOSTA, et al. v. MASTER MAINTENANCE & CONSTRUCTION, INC., et al. |
| Court | U.S. District Court — Middle District of Louisiana |
Diane Adele Owen, Robert H. Schmolke, Robert H. Schmolke, P.L.C., Baton Rouge, Louisiana, Lewis Unglesby, Unglesby & Koch, Baton Rouge, Louisiana, Donald T. Carmouche, Victor L. Marcello, Talbot, Sotile, Carmouche, Marchand & Marcello, P.L.C., Gonzales, Louisiana, Edward Frank Strauss, III, Keogh, Cox & Wilson, L.T.D., Baton Rouge, Louisiana, Joseph Jerry McKernan, Michael V. Clegg, McKernan Law Firm, Baton Rouge, Louisiana, for plaintiffs.
Patrick A. Juneau, Jr., Thomas R. Juneau, The Juneau Firm, Lafayette, Louisiana, for Master Maintenance and Construction, Inc. and Lexington Insurance Co., defendants.
Emile C. Rolfs, III, Luis Arturo Leitzelar, Breazeale, Sachse & Wilson, L.L.P., Baton Rouge, Louisiana, F. Barry Marionneaux, F. Charles Marionneaux, Marionneaux & Marionneaux, Plaquemine, Louisiana, Reginald R. Smith, King & Spalding, Houston, Texas, for Georgia Gulf Corporation.
Ann E. Levine, Monroe & Lemann, New Orleans, Louisiana, Henri Wolbrette, III, Mcglinchey Stafford Lang, P.L.L.C., New Orleans, Louisiana, James M. Garner, Sher, Garner, Cahill, Richter, Klein, McAlister & Hilbert, L.L.C., New Orleans, Louisiana, for Payne & Keller Company, Inc.
Amy L. Baird, Hal Clayton Welch, Dwight C. Paulsen, III, Michael S. Sepcich, Lemle, Kelleher, Kohomeyer, Dennery, Hunley, Moss & Frilot, L.L.P., New Orleans, Louisiana, Leo Phillip Canova, Jr., Thomas C. Delahaye, Canova & Delahaye, Plaquemine, Louisiana, for Louisiana Intrastate Gas Company, LLC, Louisiana Intrastate Gas Corporation, and Lig Liquids Company, LLC.
Ronald A. Johnson, Salvadore A. Faso, II, Michael W. Mallory, Johnson, Johnson Barrios & Yacoubian, P.C., New Orleans, Louisiana, for Amoco Pipeline Company, Amoco Energy Trading Corp., Amoco Production Company.
Thomas E. Schwab, Barkley & Thompson, L.C., New Orleans, Louisiana, for X.L. Insurance Company.
H. Alston Johnson, III, Marshall M. Redmon, Virginia Y. Trainor, Phelps, Dunbar, L.L.P., Baton Rouge, Louisiana, for Primex, LTD.
Eric Alan Shuman, Elizabeth P. Blitch, McGlinchey Stafford Lang, P.L.L.C., New Orleans, Louisiana, for Hydrochem Industrial Services, Inc.
D. Russell Holwadel, Jesse R. Adams, Jr., Adams, Johnson & Oreck, New Orleans, Louisiana, for Associated Electric & Gas Insurance Services, LTD.
RULING ON MOTION TO REMAND
This matter is before the court on a motion to remand by plaintiffs, Kent Acosta, et al. The defendants, Georgia Gulf, Primex, Ltd. and X.L. Insurance Co., Ltd., oppose this motion. Oral arguments were held on January 15,1999. Removal jurisdiction is allegedly based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 201, et seq.
This action arose from a mustard gas leak at the Georgia Gulf facility in Plaquemine, Louisiana on September 25,1996. The plaintiffs are Kent Acosta, who was working for a Georgia Gulf subcontractor during the leak, and his family, who alleges that they may have come into contact with the gas after Mr. Acosta returned home.1 At the time of the incident that gave rise to these claims, the defendant, Georgia Gulf, was insured by the defendants, Primex, Ltd, ("Primex") and X.L. Insurance Company ("X.L."). Primex is a Barbados corporation and X.L. is a Bermuda corporation.
On October 11, 1996, the plaintiffs filed an action in the 18th Judicial District for the Parish of Iberville against several defendants including Georgia Gulf. Pursuant to Louisiana's Direct Action Statute, Primex and X.L. were also named as defendants. In October of 1998, the plaintiffs and other parties in similar suits amended their claims to assert an intentional tort claim against Georgia Gulf. Basically, plaintiffs' amended claims allege that the release of mustard gas occurred over an extended period of time.
On December 23, 1998, the defendants, X.L. and Primex, removed this action to this court.2 In their notice of removal, the defendants allege that the grounds for removal is a dispute over coverage between the foreign insurers and Georgia Gulf. The two foreign insurers claim that their insurance policies require that all coverage issues between Georgia Gulf and themselves be resolved through arbitration outside the United States. X.L.'s policy requires that all such disputes shall be conducted in London, England. Primex's contract with Georgia Gulf provides that coverage disputes shall be conducted in Barbados.
Primex and X.L. argue that because of the recent intentional tort allegations, a dispute has arisen between Georgia Gulf and themselves regarding coverage under their respective insurance contracts. Relying on 9 U.S.C. § 201 et seq., all three defendants argue that the insurance companies have a right to remove the entire case to this court because the arbitration clauses contained in their respective policies are subject to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The defendants assert that the subject matter of the plaintiffs' state court action is "related to" this agreement and likewise, is subject to removal.
Plaintiffs, however, disagree with the defendants' argument. They contend that removal was not proper, and this case should be remanded to state court for several substantive and procedural reasons. Plaintiffs argue that: (1) any dispute between Georgia Gulf and its insurers was waived because the insurers knew of coverage disputes but continued to provide a defense; (2) removal in this case was not timely because it did not take place before the resolution or argument of substantive issues of law or fact by the state court; (3) removal of this case does not satisfy the requirements under 9 U.S.C. § 201, et. seq. ("the Convention Act") because there is no "relevant arbitration agreement ... between the parties to the litigation"; (4) removal should not be allowed because not all defendants have consented to removal; and (5) in the alternative, the state court issues should be severed and remanded to state court.
In October of 1968, the United States Senate ratified the United Nation's Convention on the Recognition of Foreign Arbitral Awards ("the Convention").3 The goal of the Convention was "to encourage the recognition and enforcement of commercial arbitration agreements and international contracts and to unify the standard by which the agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries".4 The United States and Barbados, Primex's domiciliary country, are signatories to the Convention.5 Bermuda, X.L.'s domiciliary country, is bound by the Convention pursuant to the United Kingdom's Instrument of Accession and subsequent extensions to Bermuda.6
Under the provisions of the Convention, the United States may only avail itself of the benefits of the Convention against other signatories to the extent it agrees to bind itself.7 Therefore, the Convention Act, 9 U.S.C. § 201, et seq., was enacted by Congress to implement the Convention and bind the United States to its terms. Federal jurisdiction under these statutes is provided for in 9 U.S.C. § 203. It states:
An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States (including the courts enumerated in section 460 of Title 28) shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.
In addition to the jurisdictional grant provided in 9 U.S.C. § 203, Congress also provided a separate and distinct statute for removal of Convention cases from state court. 9 U.S.C. § 205 provides:
According to the Fifth Circuit, the Congress, in creating and providing for original federal jurisdiction, also intended to provide the broadest removal statute in the federal code. The purpose behind such a liberal removal provision was to insure that there would be a uniform federal common law regarding international arbitral obligations.8
According to the Fifth Circuit, "an agreement falls under the Convention if the agreement: (1) is in writing; (2) is an agreement to arbitrate a dispute; (3) provides that arbitration will take place in the territory of a signatory to the convention; (4) arises out of a commercial legal relationship; and (5) is not entirely between citizens of the United States".9 The two insurance contracts each contain an arbitration clause in which the parties (one of which is a foreign citizen) agree to arbitrate their disputes. Therefore, this court clearly has jurisdiction over a dispute between the parties to the insurance agreement.
Plaintiffs, however, argue that there is no real coverage dispute between the insurers and Georgia Gulf. They claim that Primex and X.L.'s allegations of newly discovered coverage disputes are "demonstratively untrue".10 The plaintiffs assert that as early...
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