In this case, a Louisiana federal court denied a motion for
remand of a former machinist's asbestos-related claim, finding
that an English insurer's removal from state court was
appropriate and that the dispute could relate to an underlying
arbitration agreement contained in an insurance policy.
The background of this case can be found . In short,
plaintiff filed a personal injury action in Louisiana state court
against defendants Cove Shipping, Inc. and Maritime Management
Corp. (together, "Cove Shipping"), alleging that he now
suffers from lung cancer as a result of asbestos exposure from
years spent working as a machinist onboard several oil tankers in
the early 1980s while he was working for Cove Shipping. Via the
Louisiana Direct Action Statute, plaintiff also named West of
England Shipowners Mutual Insurance Association, a P&I Club
("West of England") as a defendant, for its role as Cove
Shipping's insurer during the years in question. West of
England subsequently removed the action, invoking the removal
provision of the Uniform Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (the
As justification for using the Convention for removal, West of
England cited an arbitration clause found in its Club Rules that it
contends were in effect at the time of plaintiff's alleged
employment and now apply to his lawsuit, notwithstanding the fact
that plaintiff is a third-party to the insurance agreement between
West of England and Cove Shipping. In his motion for remand,
plaintiff made various arguments in support of the contention that
he is not bound by the arbitration clause and, thus, the case
should be remanded: First, West of England has failed to
demonstrate it is entitled to arbitration under documents it
submitted with removal as the arbitration agreement at issue was
not attached. Second, English law forbids the application of this
arbitration agreement to non-signatories such as plaintiff. Third,
the arbitration agreement is unenforceable because the prohibitive
costs of the agreement prevent plaintiff from vindicating his
federal statutory rights. Fourth, West of England waived its right
to arbitrate. Fifth, Jones Act Claims are not subject to
arbitration. And sixth, the law of Louisiana forbids arbitration in
insurance disputes, which does not run afoul of the Convention.
Rejecting all of plaintiff's arguments and/or finding them
premature merit-based challenges to arbitration, the Louisiana
federal court denied the motion to remand, finding that removal of
the direct action plaintiff's lawsuit against a foreign insurer
was appropriate based on the existence of an arbitration clause
found in the Club Rules of the insurer. The court noted that what
was at issue in the present motion was a jurisdictional question,
and that the plaintiff is not left without redress, as merit-based
arguments may be presented in the form of an opposition to a motion
to compel arbitration, which is typically the first matter to be
raised after removal under 9 U.S.C. § 205 of the Convention.
Finally, the court found that the arbitration clause at issue could
conceivably have an effect on the outcome of plaintiff's
lawsuit, such that the two are related, and that therefore section
205 of the Convention confers subject matter jurisdiction on the
court, making removal of the case by West of England proper.
O'Connor v. Maritime Management Corp., et al., No. 16-16201
(E.D. La. Mar. 16, 2017).
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