Valero Refining, Inc. v. M/T Lauberhorn

• Decision Date: 27 March 1987
• Docket Number: No. 86-2561,86-2561
• Citation: 813 F.2d 60
• Parties: , RICO Bus.Disp.Guide 6583 VALERO REFINING, INC., Plaintiff-Appellant, v. M/T LAUBERHORN (ex Trade Endeavor), etc., et al., Defendants-Appellees. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 60

813 F.2d 60

1987 A.M.C. 2100, RICO Bus.Disp.Guide 6583

VALERO REFINING, INC., Plaintiff-Appellant, v. M/T LAUBERHORN (ex Trade Endeavor), etc., et al.,

Defendants-Appellees.

No. 86-2561

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

March 27, 1987.

Ross, Griggs & Harrison, J. Douglas Sutter, David E. Black, Houston, Tex., for plaintiff-appellant.

Eastham, Watson, Dale & Forney, William A. Durham, Francis J. Gonynor, Houston, Tex., for defendants-appellees.

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

Before CLARK, Chief Judge, GARWOOD and HILL, Circuit Judges.

ROBERT MADDEN HILL, Circuit Judge:

Valero Refining, Inc. (Valero) appeals the judgment of the district court ordering to arbitration its claim under the Racketeer Influenced and Corrupt Organizations Act (RICO) against Trade and Transport, Inc. (Trade). Valero also appeals the district court's denial of its motion for discovery sanctions against Trade. We conclude that the district court properly ordered the RICO claim to arbitration and that we do not have jurisdiction to consider whether the district court abused its discretion in denying sanctions against Trade. Accordingly, we affirm in part and dismiss in part.

I.

Although the central issue in this appeal involves the arbitrability of Valero's RICO claim, we provide a short description of the events behind this claim. Valero's claim initially arose from a contractual arrangement between it and Trade for the shipment of oil from Oman and Kuwait to Texas aboard the M/T LAUBERHORN. The agreement between the two parties, called a charter party, contained an arbitration clause that stated that "any and all differences and disputes of whatsoever nature arising out of this Charter" would be arbitrated. Valero contends that the captain and four of the crew aboard the M/T LAUBERHORN conspired with Trade, which owned the LAUBERHORN, to steal approximately 9200 barrels of the oil that the ship was hired to deliver to Valero in Texas.

Valero subsequently filed an action against the LAUBERHORN in rem and against Trade in personam. Valero initially sought to recover damages for the alleged short delivery and contamination of its petroleum. Valero subsequently amended its complaint and asserted that Trade, along with various crew members of the LAUBERHORN, violated the RICO Act, 18 U.S.C. Sec. 1961, et seq.

Trade filed a motion to stay the proceedings pending arbitration. On October 31, 1985, the district court granted Trade's motion and ordered arbitration of all of Valero's claims. Valero subsequently filed a motion for reconsideration. On April 12, 1986, the district court granted the motion with respect to the RICO claim because of our decision in Smokey Greenhaw Cotton Co., Inc. v. Merrill Lynch, Pierce, Fenner and Smith, Inc., 785 F.2d 1274, modified on petition for reh'g, 785 F.2d 1282 (5th Cir.1986). The district court rejected Valero's contention that Trade had waived its right to arbitrate the other claims. It also denied Trade's motion for sanctions against Valero for delaying the naming of an arbitrator persuant to the arbitration clause.

Valero proceeded with discovery on the RICO claim while Trade filed a motion for reconsideration of the court's ruling regarding the non-arbitrability of the RICO claim as well as a motion to quash depositions noticed by Valero. The district court referred these motions to the magistrate who denied both of them. Trade then filed an objection to the ruling of the magistrate and also failed to follow the magistrate's order requiring it to comply with the deposition notices. In response, Valero filed a motion for sanctions as well as for a default judgment.

On June 25, 1986, the district court held a hearing on all the pending motions. At that hearing the court ordered that the entire case would be arbitrated as originally ordered in light of the panel's decision to modify its earlier opinion in Smokey Greenhaw "to refuse to decide the arbitrability vel non of the plaintiffs' RICO claim." 785 F.2d at 1282. The court also denied Valero's motion for sanctions. The court noted that both parties had "contributed equally to the delayed resolution" of the case and that Trade's failure to comply with the magistrate's order was offset by Valero's resistance to arbitration. The court entered a written order to this effect on July 18, 1986. Valero appeals from the district court's July 18 order.

II.

Valero contends that (1) the district court erred in granting Trade's motion to compel arbitration of its RICO claim; (2) the parties did not intend to arbitrate a RICO claim; (3) Trade waived its right to arbitrate any dispute between it and Valero; and (4) the district court abused its discretion in denying its motion for sanctions due to Trade's failure to obey the magistrate's order. We examine each contention in turn.

A.

In arguing that the district court erred in granting Trade's motion to compel arbitration of its RICO claim, Valero explicitly requests us to overrule our decision in Mayaja, Inc. v. Bodkin, 803 F.2d 157 (5th Cir.1986), cert. pending, 55 U.S.L.W. 3523 (1987). In Mayaja the court held that Congress did not preclude arbitration of RICO claims. 803 F.2d at 166. Valero argues at great length that Mayaja is incorrectly decided. We are foreclosed, however, from considering Valero's argument:

It is well settled that one panel of this court cannot disregard the precedent set by a prior panel even if it disagrees with the prior panel decision. Absent an overriding Supreme Court decision or a change in the statutory law, only the court sitting en banc can do this.

Girard v. Drexel Burnham Lambert, Inc., 805 F.2d 607, 610 (5th Cir.1986).

Valero argues in the alternative that we should distinguish Mayaja on the basis that this case involves a "sophisticated conspiracy" whereas Mayaja involved a "garden variety fraud." We are unpersuaded by Valero's attempted distinction. We fail to see how the purported criminal conduct at issue in this case is less amenable to arbitration than the securities fraud at issue in Mayaja. Valero also attempts to make a distinction based on the purposes of Congress in passing the RICO statute. This is just another method of asking us to reexamine Mayaja's careful analysis of the legislative history of the RICO statute and is a task which we are neither inclined nor have the power to do. ¹

B.

Apart from arguing that Mayaja was incorrectly decided, Valero argues that the arbitration clause between the two parties does not cover a RICO claim. We disagree. As a preliminary matter we note that the contracts before us involve a "maritime transaction" within sections one and two of the Federal Arbitration Act (the Act), 9 U.S.C. Sec. 1 et seq., sufficient to invoke sections three and four of the Act. ² We now consider whether "the issue involved in [this] suit or proceeding is referable to arbitration under [the charter party]." 9 U.S.C. Sec. 3.

We find that the broad language of the arbitration clause encompasses Valero's claims. As we have already noted, the arbitration clause in the charter party states in part that "any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration." Valero's claim alleges that cargo was stolen and that there was a conspiracy to steal the cargo of oil during the voyage of the LAUBERHORN. The RICO claim is based on this wrongdoing. Thus, this dispute is within the ambit of the arbitration clause.

Valero also argues that the arbitration clause in the agreement is not enforceable because the charter party document was neither signed nor dated. Thus, Valero contends, there is no evidence that both parties agreed to the terms of the charter party. We disagree. While the Arbitration Act provides that courts can only enforce written agreements to arbitrate, 9 U.S.C. Sec. 3, ³ there is no question that the arbitration agreement is in writing; the charter party was provided to the district court and is in the record. We note also that section three of the Act does not require that a charter party be signed in order to enforce an arbitration agreement contained within it. It is established that a party may be bound by an agreement to arbitrate even in the absence of his signature. See, e.g., McAllister Bros., Inc. v. A & S Transportation Co., 621 F.2d 519, 524 (2d Cir.1980); First Citizens Municipal Corp. v. Pershing Division of Donaldson, Lufkin & Jenrette Securities Corp., 546 F.Supp. 884, 887 (N.D.Ga.1982). Ordinary contract principles determine who is bound by a written arbitration agreement. Fisser v. International Bank, 282 F.2d 231, 233 (2d Cir.1960) (lack of signature on charter party does not preclude valid arbitration agreement); see also A/S Custodia v. Lessin International, Inc., 503 F.2d 318, 320 (2d Cir.1974); Interpool Ltd. v. Through Transport Mutual Insurance Association Ltd., 635 F.Supp. 1503, 1505 (S.D.Fla.1985).

Throughout the proceedings in the district court, Valero acknowledged the validity of the charter party. Valero's original complaint stated that it entered into a charter party with Trade for the LAUBERHORN, referred to the arbitration clause, and explicitly stated that it reserved its right to arbitrate its disputes with Trade. In its first amended complaint, Valero also stated that it had executed the charter party. Finally, counsel for Valero stated in an evidentiary hearing before the district court that no problem existed with regard to the authenticity of the charter party. We therefore conclude that there is sufficient evidence in the record to demonstrate that the parties agreed to the charter party including the arbitration clause. ⁴

Valero asserts that the arbitration clause is unenforceable because, at the time the charter party agreement was entered into in May 1985 there was no indication that RICO claims would be arbitrable. Furthermore, Valero...