Fifth Circuit Dismisses Appeal Over Arbitrator Selection for Lack of Subject Matter Jurisdiction

The United States Court of Appeals for the Fifth Circuit has dismissed a company’s appeal from a lower court’s order confirming the selection of a panel of arbitrators due to lack of subject matter jurisdiction.  In Bordelon Marine, LLC v. Bibby Subsea ROV, LLC, No. 16-30847 (5th Cir. Apr. 14, 2017), two companies, Bordelon and Bibby, were ordered to arbitrate a contract dispute related to the charter of an offshore vessel.  Before the dispute could be arbitrated, however, the two companies disagreed over the appointment of the arbitrators who would consider the case.

Bordelon filed a “Motion to Re-Open Case to Enforce the Method of Appointment of Arbitrators,” with the trial court and Bibby responded by asking the court to confirm the arbitrability of the matter and compel Bordelon to engage in arbitration proceedings before the selected arbitrators.  The trial court granted Bibby’s request and denied Bordelon’s motion.  After that, Bordelon filed an appeal with the nation’s Fifth Circuit Court of Appeals.

On appeal, the Fifth Circuit focused on whether the court had appellate jurisdiction to consider the case.  First, Bordelon unsuccessfully argued the court had jurisdiction because the lower court’s order was a final decision.  After that, the company claimed its motion before the trial court was an appealable petition under § 4 of the Federal Arbitration Act (“FAA”).  Once again, the appellate court disagreed and found that Bordelon’s motion was not appealable pursuant to § 5 of the FAA.

According to the court:

The district court resolved the dispute under section 5. The court spent three pages explaining our precedent drawing the boundaries of a district court’s power under section 5.4 Furthermore, “jurisdiction over an appeal ‘must be determined by focusing upon the category of order appealed from, rather than upon the strength of the grounds for reversing the order.’” In re Deepwater Horizon, 579 F App’x 256, 258 (5th Cir. 2014) (per curiam) (quoting Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 628 (2009)). Therefore, we reject Bordelon’s attempt to re-characterize the district court’s section 5 order appointing arbitrators as an order denying Bordelon’s motion under section 4. Indeed, the district court unquestionably did not deny arbitration; it ordered arbitration in this case. Bordelon’s argument is not based on a failure of the district court to order arbitration but on a failure, in Bordelon’s view, to select arbitrators in a way Bordelon views as correct—a section 5 issue. Section 16(a)(1)(B) does not provide for an appeal of an interlocutory order granting or denying a motion under section 5. Because the order that Bordelon appeals is not a “den[ial of] a petition under section 4,” appellate jurisdiction does not exist under section 16(a)(1)(B).

Because “nothing in 28 U.S.C. §§ 1291 or 1292 permits an appeal, and there was no certification by the district court under either section 1292 or Federal Rule of Civil Procedure 54(b)” the Fifth Circuit Court of Appeals dismissed Bordelon’s appeal for lack of subject matter jurisdiction.

Photo credit: milos milosevic via Foter.com / CC BY