Employers' Innovative Network, LLC v. Bridgeport Benefits, Inc.

At a glance

Parties

Employers' Innovative Network, LLC and Jeff Mullins (plaintiffs–appellants) v. Bridgeport Benefits, Inc., Capital Security, Ltd., Universal Risk Intermediaries, Inc., Voluntary Benefit Specialists, LLC, Stephen Salinas, Wayne Blasman, Jeana Nordstrom and Casey Blasman (defendants–appellees)

Case no.

United States Court of Appeals for the Fourth Circuit, No. 24-1350 (appeal from S.D. W. Va., No. 5:18-cv-01082)

Forum and rules

US federal court; Federal Arbitration Act, Chapters 1–3 (9 U.S.C. §§ 1 et seq., 201 et seq., 301 et seq.)

Treaty

New York Convention (as implemented by FAA Chapter 2); Panama Convention also considered

Court

United States Court of Appeals for the Fourth Circuit: Chief Judge Diaz, Judge Agee and Judge Richardson (opinion by Judge Richardson)

Underlying award(s)

Arbitral award rendered in Bermuda by sole arbitrator Delroy Duncan in favour of the appellees; enforced by the Southern District of West Virginia on 18 March 2024

Sector

Health insurance; employee benefit plans

Outcome

Published opinion of 18 July 2025 vacating the district court's enforcement judgment and remanding for factfinding on whether FAA Chapter 1 or Chapter 2 governs.

The dispute

Employers' Innovative Network, a human resources services company, and its president Jeff Mullins contracted in 2016 with Bridgeport Benefits, Capital Security and other providers that set up and administer health insurance plans. In April 2018 they sued the providers in West Virginia state court for breach of contract, fraud, slander and violation of the West Virginia Unauthorized Insurers Act. After removal, the federal court stayed the case under a clause requiring arbitration in Bermuda under Bermudian law. The appellees won the arbitration before Delroy Duncan. The appellants then alleged that Duncan had undisclosed conflicts arising from a lawsuit against his firm, Trott & Duncan. The appellees sought enforcement under FAA Chapter 2. The appellants resisted on the public policy ground in Article V(2)(b) of the New York Convention.

Key holdings

1. No waiver. The appellants' failure to appeal the Bermuda Arbitration Institute's decision to the Bermuda Supreme Court does not bar them from opposing enforcement. The FAA does not make opposition to enforcement conditional on exhausting remedies in the arbitral process. p. 7 n. 3
2. The choice of FAA chapter is decisive. If only Chapter 1 applies, the appellants may rely on the "evident partiality" ground in § 10(a)(2). For foreign awards within Chapter 2 or 3, the Chapter 1 defenses are supplanted by the treaty grounds, which do not expressly address bias (§§ 207, 208, 302, 307). pp. 13–15
3. The arbitration falls within Chapter 1 because it arises from a contract evidencing a transaction involving commerce. It falls outside Chapter 3 because Bermuda has not ratified or acceded to the Panama Convention (§ 304). p. 15
4. Whether Chapter 2's carveout for relationships entirely between US citizens applies depends on Capital Security's citizenship. Capital Security is a Bermudian limited company. Whether it is a "corporation" under § 202 is left open. Its principal place of business is uncertain because it told the district court Florida and later said Bermuda. The district court must decide both points. pp. 16–17
5. Even if the carveout applies, Chapter 2 may still govern if the relationship involves property abroad, envisages performance or enforcement abroad, or has another reasonable relation with a foreign state. The record does not show this. The court notes that § 202 should, as far as possible, be read consistently with the Convention's application to all arbitrations seated in other signatory states. pp. 17–18 & n. 16
6. The court left open two questions. The first is whether a bias defense can be read into Article V through the public policy ground. The second is whether Chapter 1 defenses are available for US-seated awards that are also governed by the Convention. The judgment was vacated and the case remanded. pp. 14–15 nn. 12–13; p. 19

Procedural history

1. 2016The appellants enter into contracts with Bridgeport Benefits, Capital Security and others for a health insurance policy covering their employee benefit plan.
2. April 2018The appellants sue in West Virginia state court. The case is removed to federal court and stayed pending arbitration in Bermuda.
3. November 2019The Chartered Institute of Arbitrators, Bermuda Branch, proposes three arbitrators, all disqualified for conflicts. Delroy Duncan is then chosen from a list recommended by the Bermuda Arbitration Institute.
4. Date not statedFinal award in favour of the appellees. Duncan declines the appellants' challenge to withdraw. The Bermuda Arbitration Institute rejects their appeal, and they do not appeal to the Bermuda Supreme Court.
5. 18 March 2024The Southern District of West Virginia (Chief District Judge Frank W. Volk) orders enforcement of the award under FAA Chapter 2.
6. 10 December 2024Argument before the Fourth Circuit.
7. 18 July 2025Fourth Circuit published opinion: judgment vacated and case remanded for factfinding on which FAA chapter applies.

Tribunal, counsel and experts

Decided by

• Delroy Duncan Sole arbitrator, Arbitral tribunal (Bermuda) (challenge rejected by Bermuda Arbitration Institute)

For the claimant

Spilman Thomas & Battle, PLLC

For the respondent

Cooper Law Offices, PLLC · Taft Stettinius & Hollister LLP · Keith Robinson

Run a conflict check on these names →

Keywords

• enforcement of foreign arbitral award
• New York Convention
• Federal Arbitration Act Chapter 2
• 9 U.S.C. § 202
• FAA Chapter 1
• Panama Convention
• evident partiality
• arbitrator bias
• public policy defense
• Article V(2)(b)
• waiver
• exhaustion
• corporate citizenship
• principal place of business
• Bermuda
• Bermuda Arbitration Institute
• health insurance
• remand

Summary generated with AI from the published documents — refer to the award for the authoritative text.