Craig Jalbert v. Peter Leibold, et al.

At a glance

Parties

Craig Jalbert (the Trustee) v. Peter Leibold, et al.

Case no.

Civil Action No. 1:18-cv-788 (U.S. District Court, Western District of Louisiana, Alexandria Division)

Court

U.S. District Court, Western District of Louisiana; Judge Dee D. Drell

Treaty

New York Convention, as implemented by 9 U.S.C. §201 et seq.

Sector

Insurance; bankruptcy

Outcome

Motion to remand granted and case sent back to Louisiana's 28th Judicial District Court in LaSalle Parish; defendants' motion to dismiss denied for lack of jurisdiction; motion for oral argument denied as moot.

The dispute

Craig Jalbert, described in the judgment as "the Trustee", sued Peter Leibold and others in Louisiana's Twenty-Eighth Judicial District Court in LaSalle Parish. The claims were state-law claims only. The defendants removed the case to federal court. They relied on three statutes: the general removal statute (28 U.S.C. §1441); the New York Convention removal provisions (9 U.S.C. §§202 and 205), on the ground that the action "relates to" an arbitration agreement in a "VOV policy"; and the bankruptcy removal statute (28 U.S.C. §1452), on the ground that the case was related to pending bankruptcies. The plaintiff moved to remand. The Magistrate Judge recommended remand on the ground that not all defendants had consented to removal, and the defendants objected.

Key holdings

1. Removal under 28 U.S.C. §1441 was improper because not all defendants consented. However, consent of all defendants is not required for removal under 9 U.S.C. §§202 and 205 or 28 U.S.C. §1452, so lack of consent could not be the only basis for remand. The Court therefore adopted the Report and Recommendation only in part. p. 1
2. To remove under the Convention, defendants must show two things: that the arbitration clause "falls under the convention" (§202), and that the subject matter of the action "relates to" that clause (§205). p. 1
3. The action does not "relate to" the arbitration agreement in the VOV policy. That agreement covers the allocation of defence costs or loss only where claims are brought against both insureds and non-insureds, against both insureds and the policyholder, or on both covered and non-covered grounds. The Trustee's claims fit none of these scenarios, and there is no dispute over allocation. Removal under 9 U.S.C. §205 was therefore improper. p. 2
4. The Court left open whether the case is "related to" the bankruptcies under 28 U.S.C. §1452. It held that it must abstain anyway under 28 U.S.C. §1334(c)(2), because all four conditions for mandatory abstention were met: there was no independent basis for federal jurisdiction; the proceeding was non-core, with exclusively state-law claims (citing In re Galaz, 765 F.3d 426 (5th Cir. 2014)); the action had been commenced in state court; and nothing showed it could not be decided in time there. pp. 2–3
5. The motion to remand was granted and the case was remanded to the 28th Judicial District Court. The defendants' motion to dismiss was denied based on the lack of jurisdiction, and their motion for oral argument was denied as moot. p. 3

Procedural history

1. The Trustee filed suit in Louisiana's Twenty-Eighth Judicial District Court, LaSalle Parish. The defendants removed the case to federal court.
2. The plaintiff moved to remand. The Magistrate Judge's Report and Recommendation (Doc. 38) recommended granting remand and denying the motion to dismiss. The defendants filed objections (Doc. 40).
3. 28 February 2019District Court judgment, signed February 2019 and filed 1 March 2019: case remanded to state court; motion to dismiss denied.

Tribunal, counsel and experts

Decided by

• Dee D. Drell Judge, U.S. District Court, Western District of Louisiana

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Keywords

• New York Convention
• removal
• remand
• 9 U.S.C. §205
• "relates to" arbitration agreement
• insurance policy arbitration clause
• VOV policy
• bankruptcy removal
• 28 U.S.C. §1452
• mandatory abstention
• 28 U.S.C. §1334(c)(2)
• consent of all defendants
• non-core proceeding
• Louisiana
• allocation of defense costs

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