Transportation Conslt v. Certain Undwr

At a glance

Parties

Transportation Consultants, Incorporated, doing business as TCI Trucking (plaintiff–appellee), v. Certain Underwriters at Lloyd's, London, severally subscribing to Certificate No. AMR-36854-07; Indian Harbor Insurance Company; QBE Specialty Insurance Company; Steadfast Insurance Company; General Security Indemnity Company of Arizona; United Specialty Insurance Company; Lexington Insurance Company; HDI Global Specialty SE; Old Republic Union Insurance Company; GeoVera Specialty Insurance Company; Transverse Specialty Insurance Company (defendants–appellants)

Case no.

Fifth Circuit No. 25-30372; on appeal from USDC No. 2:23-CV-6585 (E.D. La.)

Court

United States Court of Appeals for the Fifth Circuit, on appeal from the United States District Court for the Eastern District of Louisiana

Forum and rules

US federal court; New York Convention as implemented by 9 U.S.C. §§ 201–05; Federal Arbitration Act § 3 (stay)

Treaty

Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, 330 U.N.T.S. 3

Panel

Circuit Judges Stewart, Higginson and Ho; opinion by Circuit Judge Stephen A. Higginson

Sector

Insurance; surplus lines commercial property insurance; Hurricane Ida claims

Outcome

Affirmed in part, vacated in part and remanded (3 September 2026). The court affirmed the order compelling the foreign insurers to arbitrate and the refusal to compel arbitration with the domestic insurers. It vacated the order lifting the stay of litigation against the domestic insurers.

The dispute

Transportation Consultants owns property in Louisiana insured under one surplus lines commercial property policy subscribed by nine domestic and two foreign insurers. The policy refers "all matters in difference" to an arbitration tribunal. A Contract Allocation Endorsement provides that the policy is to be construed as a separate contract between the insured and each underwriter. After a coverage dispute following Hurricane Ida, the insured sued all eleven insurers in Louisiana state court. The insurers removed the case to federal court under the New York Convention and moved to compel arbitration against all of them. The district court first granted that motion. After the Louisiana Supreme Court's decision in Police Jury of Calcasieu Parish v. Indian Harbor Insurance Co., it reconsidered and refused arbitration with the domestic insurers. On appeal the insurers sought arbitration with the domestic insurers too, or at least a stay of litigation against them pending the arbitration with the foreign insurers.

Key holdings

1. The court followed its unpublished decision in Crescent City Surgical Operating Co. v. Interstate Fire & Casualty Co. and its binding precedent in Town of Vinton v. Indian Harbor Insurance Co. The policy contains separate agreements between the insured and each insurer. The agreements with the domestic insurers therefore fall outside the Convention. Part IV, p. 7
2. Louisiana law governs the contracts with the domestic insurers. As held in Police Jury (La. Rev. Stat. Ann. § 22.868), that law prohibits enforcement of arbitration clauses in insurance contracts. The insurers cannot use equitable estoppel to get around it. The denial of the motion to compel arbitration against the domestic insurers is affirmed. Part IV, p. 7
3. The Convention supersedes the Louisiana statute where a foreign insurer is a party to the agreement. The order compelling the foreign insurers to arbitrate is affirmed. Parts III and V, pp. 3–4, 8
4. The order lifting the stay of litigation against the domestic insurers is vacated and remanded. The district court must reconsider a stay, with full updated briefing, in the first instance. When it lifted the stay, Town of Vinton and Crescent City had not been decided and no stay factors had been briefed. Part IV, pp. 7–8
5. The Rainier/Waste Management factors decide whether litigation against non-signatories should be stayed under FAA § 3. The factors are: same operative facts, inherently inseparable claims, and a critical impact of the litigation on the arbitration. The FAA works as a gap-filler for the Convention. The factors therefore apply where the foreign insurers remain parties and are subject to the Convention. Part III and n. 2, pp. 5–6, 8
6. The insurers argued that Town of Vinton was wrongly decided. They raised the point only to preserve it for further review, and the court did not address it. n. 1, p. 5

Procedural history

1. Date not statedTransportation Consultants sues all eleven insurers in Louisiana state court. The insurers remove the case to the Eastern District of Louisiana under the New York Convention.
2. Date not statedThe district court grants the insurers' motion to compel arbitration against all insurers and stays the litigation.
3. Date not statedAfter Police Jury, the district court grants reconsideration. It refuses to compel arbitration with the domestic insurers and lifts the stay as to them, but keeps the order compelling the foreign insurers to arbitrate. The insurers appeal.
4. 3 September 2026Fifth Circuit judgment: affirmed in part, vacated in part (lifting of the stay as to the domestic insurers) and remanded.

Tribunal, counsel and experts

Decided by

• Stephen A. Higginson Judge, Court of Appeals for the Fifth Circuit — appointed by a court

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Keywords

• New York Convention
• motion to compel arbitration
• stay pending arbitration
• Federal Arbitration Act § 3
• La. Rev. Stat. § 22.868
• insurance arbitration clause
• equitable estoppel
• non-signatories
• Waste Management factors
• Rainier factors
• Hurricane Ida
• surplus lines insurance
• Lloyd's
• foreign insurers
• Town of Vinton
• Crescent City
• Police Jury of Calcasieu Parish
• separate contract endorsement

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