June 2025 saw opinions from the Fifth Circuit Court of Appeals addressing issues including the authority of a court to dismiss a case that had been stayed pending an arbitration and the sequence of decision-making when a court faces a motion to compel and a motion to remand. In Garcia v. Fuentes Rest. Mgmt. Services Inc., the Court of Appeals updated its standard for deciding whether a party has waived arbitration.
Supreme Court of the United States
CC/Devas (Mauritius) Ltd. v. Antrix Corp. Ltd., 145 S. Ct. 1572, 1578 (2025). Order dismissing confirmation action for lack of personal jurisdiction reversed. The Foreign Sovereign Immunities Act (“FSIA”) is the “the sole basis for obtaining jurisdiction over a foreign state in our courts.” The text and structure of the FSIA demonstrate that Congress did not require ‘minimum contacts’ over and above the contacts already required by the Act's enumerated exceptions to foreign sovereign immunity.”
Opinions of the Fifth Circuit Court of Appeals
Odom Indus., Inc. v. Sipcam Agro Sols., L.L.C., No. 24-60410, 2025 WL 1576800 (5th Cir. June 4, 2025). Order remanding to state court reversed and case remanded to decide a motion to compel arbitration. “When a district court remands an action to state court due to its interpretation of a ‘contractual forum selection clause,’ the case is ‘immediately appealable.’” “Ours is a system of ordered procedure. It begins with jurisdiction. Once that threshold is crossed, a district court must address motions in the sequence that the law demands. When a motion to compel arbitration is pending and jurisdiction is secure, that motion comes first. The Federal Arbitration Act (the “FAA”) says so and has for nearly a century.” A contractual forum-selection clause does not deprive a district court of subject matter jurisdiction. The district court erred in deciding the motion to remand based on forum selection prior to deciding the motion to compel arbitration.
Guardian Flight, L.L.C. v. Med. Evaluators of Tex. ASO, L.L.C., 140 F.4th 613 (5th Cir. 2025). Decision on the No Surprises Act which incorporates the FAA. Under § 10(a)(1), “[f]raud requires a showing of bad faith during the arbitration proceedings, such as bribery, undisclosed bias of an arbitrator, or willfully destroying or withholding evidence.” “Undue means” “connotes behavior that is immoral if not illegal.” “Because an arbitrator's role is functionally equivalent to a judge's role, courts of appeals have uniformly extended judicial and quasi-judicial immunity to arbitrators.” “[A]rbitral immunity is essential to protect decision-makers from undue influence and protect the decision-making process from reprisals by dissatisfied litigants.”
Yanez v. Dish Network, L.L.C., 140 F.4th 626 (5th Cir. 2025). Order compelling arbitration affirmed, and order of dismissal reversed. The arbitration clause named affiliates that could enforce the arbitration agreement. To contest the arbitration agreement, employee was required to both unequivocally deny that he agreed to arbitrate and produce some evidence supporting his position. The district court had dismissed the case following the parties’ failure to provide a report on the status of the arbitration. “[W]e hold that a district court may still dismiss with prejudice a case stayed pending arbitration when it has a separate reason, so long as that reason comports with our own heightened dismissal with prejudice standard. Because the dismissal here did not meet that heightened standard, it constituted an abuse of discretion.”
Wheatfall v. HEB Grocery Co., L.P., No. 24-20257, 2025 WL 1703637 (5th Cir. June 18, 2025). Order dismissing action to vacate an award for improper service of process vacated. Sections 9 and 10 of the FAA lack the “look-through instruction” found in Section 4, and the “look-through” theory was expressly rejected by the U.S. Supreme Court. “To establish federal question jurisdiction, then, ‘an obvious place’ to look ‘is the face of the application itself.’” Claims under sections of the FAA to vacate an award did not establish subject matter jurisdiction.
Garcia v. Fuentes Rest. Mgmt. Services Inc., No. 24-10699, 2025 WL 1739491 (5th Cir. June 24, 2025). Order finding waiver of arbitration affirmed. Following Morgan v. Sundance. 596 U.S. 411 (2022), the Fifth Circuit now articulates its standard for waiver of arbitration as “whether the party “knowingly relinquish[ed] the right to arbitrate by acting inconsistently with that right.” “This does not overhaul [the] circuit's jurisprudence with respect to waiver of the right to arbitrate. Instead, substantial invocation of the judicial process is merely one way of demonstrating that a party waived its right; after all, substantial invocation of the judicial process is an intentional abandonment of a known right.” The totality of the circumstances are considered in determining whether a party has waived its right to arbitrate. In general, “participation in discovery does not weigh heavily in favor of waiver.”
Opinions of United States District Courts
Motions to Compel Arbitration
Janis v. Rent-A-Ctr. E. Inc., No. 2:25-CV-00141, 2025 WL 1616412 (W.D. La. June 6, 2025) (e-bike rental). Motion to compel granted in part and denied in part. Louisiana law recognizes two types of estoppel through which a party may be bound to arbitrate under an agreement he did not sign: equitable estoppel and direct benefits estoppel. Direct benefit estoppel applies when non-signatories have “embraced” the contract and then seek to repudiate the arbitration clause in litigation. A non-signatory may embrace a contract either by (1) knowingly seeking and obtaining “direct benefits” from it or (2) seeking to enforce the terms of the contract or asserting claims that must be determined by reference to it. Personal injury claims asserted by non-signatory bystanders were not compelled to arbitration under estoppel. The motion to compel arbitration was granted as to the survival claim but denied as to the wrongful death and bystander causes of action.
Intent Performance LLC v. Intent Sports & Fitness, LLC, No. 2:23-CV-86-TBM-RPM, 2025 WL 1601045, (S.D. Miss. June 5, 2025) (notice of appeal filed) (limited liability company agreement). Motion to compel denied. Under Mississippi law, a request for a jury trial “is inconsistent with asserting the right to arbitration, standing alone it does not constitute waiver.” The parties’ agreement provided for arbitration of “Member Disputes” defined as “any dispute or disagreement solely between or among any of them arising out of, relating to or in connection with this Agreement or the Company or its organization, formation, business or management ...” Because claims asserted included defendants that were not currently members of the limited liability company, the claims were determined to be outside the scope of the arbitration agreement.
Stephens v. DFW LinQ Transp., Inc., No. 3:24-CV-00352-N, 2025 WL 1697537 (N.D. Tex. June 16, 2025) (employment). Motion to compel granted. Allegation that a supervisor became frustrated with the amount of time plaintiff was required to visit her doctor during pregnancy, without more, did not constitute an allegation of unwelcome conduct of a sexual nature under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.
Motions to Confirm/Vacate Awards
Jennings v. Vandergriff Honda, No. 3:24-CV-3046-D, 2025 WL 1755671 (N.D. Tex. June 25, 2025). Dismissed for lack of subject matter jurisdiction. Claims derived directly from § 10 of the FAA cannot establish an independent basis for jurisdiction.
Ryan v. Whataburger Restaurants, LLC, No. 3:25-CV-614-S-BN, 2025 WL 1799964 (N.D. Tex. June 9, 2025) (Horan, Mag. J.), report and recommendation adopted, No. 3:25-CV-0614-S-BN, 2025 WL 1798282 (N.D. Tex. June 30, 2025). Dismissed for lack of subject matter jurisdiction.
Freeman v. Syneos Health, LLC, No. 3:25-CV-126-S-BN, 2025 WL 1799966 (N.D. Tex. June 4, 2025) (Horan, Mag. J.), report and recommendation adopted, No. 3:25-CV-0126-S-BN, 2025 WL 1797552 (N.D. Tex. June 30, 2025). Dismissed for lack of subject matter jurisdiction.
Scott v. Syneos Health, LLC, No. 3:25-CV-44-S-BN, 2025 WL 1799967 (N.D. Tex. June 4, 2025) (Horan, Mag. J.), report and recommendation adopted, No. 3:25-CV-0044-S-BN, 2025 WL 1797913 (N.D. Tex. June 30, 2025) Dismissed for lack of subject matter jurisdiction. District courts may not “look through” an application to confirm or vacate an award to the underlying claims to find a basis for subject matter jurisdiction. “Instead, ‘when a party applies to a district court to confirm, modify, or vacate an arbitral award, it must establish on the face of the application a basis for subject matter jurisdiction separate and apart from the FAA. To accomplish this, it must be shown that (1) there is complete diversity among the parties and the amount in controversy exceeds $75,000, or (2) that federal law ... entitles the applicant to relief.’”
