*1 INTERNATIONAL, ENSCO
INCORPORATED,
Plaintiff-Appellee, AT
CERTAIN UNDERWRITERS Companies and Insurance
LLOYD’S
Subscribing Policy Numbers PE0500247,
Cover Notes
LDC070105(B), LCD070105(A), and
B0621ELOEN0105; BC Asso Johnson Johnson,
ciates, LLC; Bryan De
fendants-Appellants.
No. 08-10451. Appeals,
United States Court of
Fifth Circuit.
Aug. (argued),
David Wallace Holman Hol- Firm, PC, Maloney, man Law Michael J. Maloney, Associates, Houston, Martin & TX, Plaintiff-Appellee. for Makowski, Joseph Royston Chester Rayzor, (argued), Harold K. Watson Chris- Dove, Locke, Benjamin Lord, topher Bis- L.L.P., Liddell, Houston, TX, sell & Defendants-Appellants.
443 the The Underwriters removed matter court, asserting rights federal removal to the on the Recognition under OWEN, JOLLY, SMITH and Before Foreign and Enforcement Arbitral Judges. Circuit (the “Convention”). Awards See 9 U.S.C. remand, § 205.1 moved to ENSCO assert- SMITH, Judge: JERRY E. Circuit clause, by that forum ing the selection dispute over This case arises from establishing jurisdiction, “exclusive” effect- (the “Policies”) by policies insurance issued right ed a waiver of the to remove. The (collectively, the the defendants “Under- motion, granted district court and the writers”) Internation- plaintiff ENSCO appeal. Underwriters (“ENSCO”). al, Inc. The sole issue is Policies contain waiver whether the II. Analysis. case to federal right to remove the waiver, Concluding is a court. that there appeal hinges This on construction of of re- affirm the district court’s order we the Policies’ forum selection clause. We mand. first, consider the relevant for standard waiver, second, and that application of Background
I. standard. Katrina, an During Hurricane offshore rig by and insured drilling owned ENSCO A. The McDermott Standard. sustained serious
by
pre
“For a contractual clause to
damage.
paid for
The Underwriters
party
exercising
vent a
its
rig
for
total loss of the
but not
constructive
removal, the
clause must
a ‘clear and
rig
fell
removal of debris from
unequivocal’
right.” City
waiver of that
platform
near a
owned
to the sea floor
Inc.,
Servs.,
v. Mun.
New Orleans
Admin.
ENSCO, asserting that
company.
another
(5th Cir.2004).
501,
504
The New
removal,
Policies covered that
sued
court cited McDermott Interna
Orleans
in Dallas
state
tional,
Underwriters,
Lloyds
Inc. v.
944
County,
with the Policies’ forum
consistent
(5th Cir.1991),
very
few
F.2d
one
(titled
of Law &
selection clause
“Choice
addressing
federal cases
removal
Jurisdiction”),
provides,
proper
which
“The
Convention,
under the
for
clear-
rights
law of
insurance shall be
and exclusive
this
and-unequivocal
Id.2
are
standard.
There
Any disputes arising
law.
under or
Texas
ways
may clearly
a party
three
which
subject
it
in connection with shall be
unequivocally
rights:
waive
Dal-
and
its
of the Courts of
exclusive
so,
by explicitly stating
it is
County,
doing
“[1]
las
Texas.”
adopts
parties disagree
the forum
law
as to whether the Con
selection clause
Texas
applies,
we
not decide that.
proper
vention
need
law
"[t]he
and exclusive
of this
ap
evidently
it
insurance,”
The district court
assumed
argues
party
neither
ENSCO,
plies.
which contends in a footnote
applicability
court should consider the
of the
apply,
cites
its own
does not
Act,
Texas Arbitration
Tex. Civ. Prac. & Rem.
ade
motion
remand
has therefore not
seq.
§ 171.001 et
Code
quately
the issue. See United States
briefed
Jackson,
(5th Cir.2008)
n. 6
Co.,
Also in Suter v. Munich Reinsurance
(stating
"[a]rgument by reference is not
(3d Cir.2000),
the court
Collins,
(citing
permitted”)
Yohey v.
support
its
cited McDermott as
for
"clear
1993)), petition
cert.
Cir.
224-25
unambiguous language” standard.
08-8714).
(Feb. 12, 2009) (No.
Although
filed
[2]
by allowing
the other
party
“explicit”
“express”
explaining
choose
venue, or
[3]
by establishing
an waiver standard. Because all waivers that
the contract.” venue within
do not use the term
“remove”
exclusive
“waive” or
*3
Orleans,
by
“implicit,”
are
The Underwriters
that
McDermott
only
under
the first
those
The McDermott court’s choice of
applicable
in
methods
the Convention
not
terms
bear the
that
the
weight
does
effect, they
In
a
propose
“magic
context.
apply. Contrary
to the Un
McDer-
approach to
The
words”
waiver.
reading,
actually
derwriters’
the court
for
court, however,
mott
never stated that
it
its
ways,
mulated
waiver test
in several
reject purported
that
would
waivers
do not
a number of
using
phrases.
terms and
specific
incant the
the
fact,
words that
Under-
the McDermott court
the terms
used
claim
required.
writers
are
The Under-
“express,”
“explicit,”
and
“unambiguous,”
rely
reading
writers
instead on a literal
unequivocal”
“clear
and
inter
almost
the McDermott court’s use of the words
words,
course,
changeably.4 These
argument,
McDermott,
oral
"express
3. At
the Underwriters took
rule as an
waiver rule.”
argument
logical
to its
conclusion:
at
944 F.2d
Q: Well,
Second,
suppose you
explaining
"precedent”
contract
when
had a
that
that
agree
"And we
supported
holding,
said:
that there shall be no
its
the McDermott court
litigation
"[ejven
in this matter that shall occur
that
observed
do not
cases that
else, ever,
else,
anywhere
anywhere
except
FSIA,
many
involve
Convention or the
County”?
the state
courts of Dallas
federal courts have
contrac-
refused to find a
suffice, your
A: I don’t think that would
rights
tual waiver of removal
a clear
absent
is,
problem
Honor....
it
[T]he
doesn't call
unequivocal’ expression
and
of intent
parties'
they
attention to what
are do-
rights.”
particu-
waive those
Id. at 1212. In
ing.
lar,
explained
City
City
it
Rose
Co.,
(5th
Nutmeg Insurance
2. McDermott and way in which the Convention affected The court McDermott then considered waiver of removal rights: The Convention rejected analogy an to Nutmeg —a applies agreements to arbitration and arbi- involving case not the Convention—in tration involving awards United States citi- which similar provision contractual was zens foreign and at least one citizen. That deemed waive removal. The Nutmeg was in the case McDermott.9 In McDer- McDermott, business abroad.” parties F.2d at 8. application have not briefed the & 1205-06 n. 10. Because the underwriters present of that rule case. description, in McDermott fit that the court interpretation especially likely. found McDermott, ("The 9. See par- recognize ties suit an concerns arbi- interpretation 7. This of McDermott is consis- agreement entirely tration and is not between Browning-Ferris with tent tries, Waters v. Indus- citizens, Inc., (5th United so the States Convention Act 797-98 Cir. 2001). difficult, given McDemott court’s
mott, explained above—the though —as imagine panel’s coming approach, made defendants of international presence pre- if it had explanation more same conclusion been to the personal as, e.g., language & n. with such “Un- Id. at 1205-06 sented plausible. domestic, hereon, request at the parties were derwriters Nutmeg, all juris- to the likely less the exclusive seemed Assured will submit to therefore parties would competent jurisdic- court that McDermott court diction objections per- waived us specifically tion.” Nor McDemott does at 1207. Thus See id. jurisdiction. sonal think that waiver rule would reason to gave of the applicability ways render contractual be applied court another reason the McDemott meaningless. terms ambiguity.10 Though McDermott find interpreting McDemott re- No decision many ways, distinguished Nutmeg contrary urged by quires the conclusion affected that the Convention it never said Weyler, In Beiser v. the Underwriters. the waiver standard.11 Cir.2002), the court contrac- that neither the Having shown explained: estab- w]e “[In to in- analogy nor an language itself tual a clear rule for waivers of lished statement other terpretations of similar A party litigant’s rights under a conclusion that compelled eases to remove may only waive his under waived, the McDemott rights had been by clearly explicitly [Convention] had “exe- parties that the court concluded agreement.” That lan- saying so *6 disa- ambiguous contract and cuted an unambiguous support though, is not guage, regarding intent any expressed vowed A for “clear position. the Underwriters’ rights,” removal of Convention wavier does not mean the same statement rule” Id. at that waiver existed. meaning no “explicit as an statement rule.” thing If the McDermott contract had 1209. Beiser, rate, not involve an at did parties to it unambiguous, or if the been rule, of the McDermott so the application waive expressed intent somehow language is at dictum. Nor quoted best rights, presumably the court removal it explain Beiser court what means did the despite a would have found waiver explicit.” for to be “clear and a waiver lack of applicability Convention’s Moreover, the New court made Orleans magic words. distinguish approach its no effort Interpretations McDemott. S. McDemott’s-, of New Or- waiver special a above, gave court no indication of the two leans the law described Given requirement applies clear-and-unequivocal explicit waiver implicit for bases only in Convention cases. McDermott’s in the New Orleans formulation waiver does, of waiver in the Convention con- explicit discussion work as well as basis indistinguishable from It text almost involving the Convention. seems even in cases fact, case.”) opinion, the McDermott governs (citing 9 11. Later its this U.S.C. act). 1212-13, implementation part the Convention’s of marshaled Nut- "unequivocal expres- meg support for the ("The of alter id. at 1206-07 existence See Nutmeg ground that the sion rule” on meanings possible nate service-of-suit be unam- found the contract before it to distinguishes policy in the here at issue clause biguous. Orleans, Nutmeg.”). at 504- In New F.3d adopted interpretation of the court this Nutmeg. of explanation Application. forum selec- B. tion in New Orleans. The question whether the Policies meet jurisdiction
A party’s consent to
in one
the McDermott waiver
is proper-
standard
necessarily
forum
not
does
waive
ly
unequiv-
answered under the “clear and
right to
an
have
action heard
another.
explicated
ocal”
in New
test
Orleans. We
For a forum
clause to be
selection
exclu-
Policies, by any
consider whether the
sive, it
go beyond establishing
must
the means the New Orleans court men-
jurisdiction
a particular forum will have
tioned, necessarily
continued
exclude
exer-
clearly
and must
par-
demonstrate the
rights.
cise
The Underwriters
jurisdiction
ties’ intent make that
ex-
conceded,
effectively
in their briefs
clusive.
argument,
rejection
and at oral
our
Orleans,
New
proposed interpretation
their
McDer-
mott disposes
appeal.
of their
Orleans,
then, explains why
McDermott contract was not deemed
The third New Orleans basis for
fact,
waiver.
the McDermott court
specification
juris
waiver—contractual
very
could have
it
used
when
way
“clearly
diction in a
demonstrates
explained that the forum selection
clause
parties’
intent to make that
interpreted
personal
was waiver
exclusive”—is
one that
relevant
jurisdiction. The McDermott contract al-
Orleans,
here. New
OWEN, Judge, concurring: Circuit parties “the provisions, ha[d] tue of these confirmation effectively of the consented to only. I judgment concur in the Suter, (adopting an "ex- which inter Id. " rule”). press waiver 'clear unam changeably referred to an "ex biguous language’ standard” and to *8 ("There why are four reasons we 4. Id. at 1209 press requirement,” the Third Circuit waiver explicit give waivers of will effect “resolv[e] explained that it would ambi (find- rights.”); Act removal 1212 language against waiver.” guity in contract reasoning ing "persuasive” that a waiver "express Regardless Suter's references waiver,” rights Foreign under the Sover- of removal apparently no recom court has Act, 1441(d), § eign Immunity 28 U.S.C. must unambiguous disregarding contractu mended " ”) 'explicit' (quoting Delta America magic be In re they merely lack al terms because Co., 890, (6th 1990)). Cir. Re Ins. 894 words. 411, 418, 149 5. 121 S.Ct. 532 U.S. way to of—and 14. is the best make sense That (2001) ("The question presented 623 L.Ed.2d clause's effect to—the forum selection is the Tribe has waived its immuni- "disputes arising whether under or in reference to ty.”). with” the Policies. connection (5th Cir.2004). Id. at 419. 1. F.3d 501 376 6. (5th 1991). 7. Id. Cir.
2.
tribe had Circuit sovereign immunity dissenting: was whether “tribe’s waiver [was] ”11 However, ‘clear.’ in answering that Owen, Judge Like I that Judge believe question, Supreme quoted Court opinion mistakenly Smith’s relies upon Sokaogon Seventh Circuit’s decision in City Municipal New Orleans v. Admin- Gaming Enterprise Corp. v. Tushie-Mont Services., Inc., istrative Associates, Inc.,12 gomery stating that the Cir.2004), a case which considered removal following passage from that decision was a pursuant § to 28 U.S.C. The Under- “cogent observation holds well [that] pursuant writers removed this action the case we confront”13: “The im [tribal § U.S.C. and the removal af- munity] implicit ... waiver rather than forded therein cannot be waived any- explicit only if a of sovereign waiver immu thing express less than an statement of nity, to be explicit, deemed must use the Int’l, waiver. Lloyds Inc. v. ‘sovereign immunity.’ words No case has London, ever held that.”14 I apply the same (5th Cir.1991). however, disagree, I reasoning regarding to remove with Judge Owen’s conclusion the ex- under U.S.C. 205. clusive clause at issue here
I
effective,
would not demand that
express
to be
constitutes an
waiver of removal
rights
waiver of
rights.
under 9
Purporting
apply
U.S.C.
this Court’s
§ 205 must
standard,
contain the word
express
“remove” or
suggests
she
or a
“removal”
reference to
the statute.
be implicitly express.
I re-
*9
Cir.1996).
(7th
8. Id.
12.
451 added). 1209, 1211, Look- (emphases 1213 the failure of both spectfully dissent Orleans, our apply prec- ignores he Judges ing City and Owen Smith § in McDermott. edent 1441 differences between and important § 205. I. today majority panel correctly A our and Recognition on the The Convention analysis City concludes that the Newof Awards Foreign Arbitral Enforcement of general limited to removal un- Orleans is (9 205) § right a removal U.S.C. provides § binding. der 1441. McDermott is substantially than the one broader is (28 in the removal statute general found 1441). II. v. § See Acosta Master
U.S.C. Inc., and Const. Maintenance standard appropriate With the estab- (5th Cir.2006); 373, Wey- v. 376-77 Beiser lished, question remains whether the Cir.2002). ler, 665, This 674 expressly waived their by § 205 consistent with the low bar set to removal. The Underwriters consented of the Convention. See Scherk policy goals the exclusive of the Courts Co., 506, 520 n. 417 U.S. v. Alberto-Culver County. One can from this of Dallas infer (1974) 2449, 41 270 L.Ed.2d S.Ct. have waived their of unified stan- importance (noting federal court. remove to Under of arbi- and consistent enforcement dards analysis, give we normal contract McDermott, 944 F.2d agreements); tration to this waiver. But under the ex- effect of reci- (noting importance at 1209-11 rule, an inferred waiver is not press waiver procity). sufficient. policy with these concerns accord rights, removal grant 205’s extensive immunity Judge The tribal cases Owen only will rights of these removal a waiver substantially relevant in relies on are not express explicit. if it is enforced be policy Act context.1 The the Convention McDermott, F.2d at 1209-13. See underlying immunity favor concerns tribal around Judge attempts to maneuver Smith immunity. Sokaogon Gaming waiver McDermott, clearly repeatedly Tushie-Montgomery As- Corp. Enter. are inescapable: “There holding stated (7th Cir.1996). socs., 659-60 effect why we will four reasons underlying concerns the Con- policy re- of Convention Act explicit waivers however, Act, waiver of vention disfavor adopt express rights”; moval “we rights. pro- rule to afford maximum waiver here McDermott, Judge Reavley, in noted rely all who on Con- tection to those “bright-line express that under vention”; express waiver rule mini- “[o]ur rule,” long- Act no Convention cases would by providing bright- danger mizes this time-consuming by fo- bogged er be down determining parties when line standard McDermott, 944 disputes. rum-choice panoply full surrender Reavley’s hopes and Judge F.2d at 1213. “[fjuture choice dis- forum rights”; Act espoused ruled he bright-line will languish cases putes in Convention majori- holding of dimmed been bright-line express court under our McDermott, ty- waiver rule.” 411, 417, 121 S.Ct. dard. U.S. Enterprises, L Inc. v. Band In C & Citizen *10 Oklahoma, (2001). Indian Tribe Potawatomi L.Ed.2d 623 Supreme applied a waiver stan- "clear” Court
III. above,
For the reasons stated I would
not remand this case to court. state Ac- I
cordingly, respectfully dissent. America,
UNITED STATES
Plaintiff-Appellee, Anthony CLARO,
John Defendant-
Appellant.
No. 07-20732. Appeals,
United States Court of
Fifth Circuit.
Aug.
