On June 11, 2013, in Gautreaux v. Tassin Intl., Inc., E.D. La. C/A No. 12-2987, 2013 WL 2635173 Judge Morgan held that a cross claim concerning the validity of a foreign arbitration clause could effectively bind plaintiff’s maritime claims, brought in state court, to a federal district court.  The Judge held that Louisiana law did not predominate over the plaintiff’s initial Jones Act, LHWCA, and general maritime law claims, and therefore refused to allow a plaintiff to sever and remand his claims when a defendant’s cross claim was governed by a London arbitration agreement.

The initial claim arose when Gautreaux was allegedly injured working for Tassin Intenational (“Tassin”) while loading a marsh buggy onto a Tassin barge.  Gautreaux filed suit against Tassin in Plaquemines Parish under the Jones Act, the LHWCA, and the general maritime law. Gautreaux then amended his complaint to include two new defendants, Certain MEL Underwriters (“MEL Underwriters”) and American Interstate Insurance Company (“AIIC”), Tassin’s alleged insurers at the time of the accident. Gautreaux later dismissed him claims against MEL Underwriters without prejudice.

In October 2012, AIIC filed a cross claim against MEL Underwriters alleging that Certain underwriters were responsible for insuring against the type of claims alleged in the initial petition.  Underwriters subscribing severally to a Maritime Employers Liability Policy (“MEL Underwriters”) then stepped in and removed the action to the Eastern District of Louisiana claiming that they were the correct defendant for AIIC’s cross claim.  MEL underwriters removed the case on the grounds that the policy that formed the basis of AIIC’s cross claims was governed by a London arbitration agreement and therefore contained a federal question under the Convention on Recognition and Enforcement of Foreign Arbitral Awards (“The Convention”). 9 U.S.C. § 201.

Gautreaux filed a motion to sever and remand his initial claims.

The majority of Judge Morgan’s Order was devoted to detailing why removal was proper, but subsequently she analyzed whether Gautreaux’s claims were severable and should be remanded.  The main focus of Judge Morgan’s severability analysis was whether state law predominated over Gautreaux’s claims.  The Judge cited 28 U.S.C. § 1441(c) which states that a district court has the discretion to decide and retain jurisdiction over only federal issues, and must remand all claims in which state law predominates.

Judge Morgan held that state law did not predominate over the plaintiff’s original claims, and as such, she denied the motion to sever and remand, stating:

Gautreaux’s state law claims do not predominate in this case. . .  Gautreaux “supplements all causes of action with Louisiana state law,” but his claims arise primarily under federal law. The LHWCA is a federal statute and claims brought under the “general maritime law,” such as a claim for unseaworthiness, are inherently federal. In addition, claims brought under the Jones Act may be brought in either state or federal court, but it is clear from Gautreaux’s petition that he intends for federal law to apply to all his claims.

Judge Morgan’s decision suggests that so long as a single cross claim is governed by a London arbitration agreement, the entire action is removable.  More importantly, any of the plaintiff’s claims that arise out of the Jones Act, the LHWCA, or the general maritime law appear to be bound to the federal court at the judge’s discretion. Ironically, the sole reason for removal is to stay the arbitrable claim, which would leave only the Jones Act claim, otherwise non-removable, now alone in federal court.

Disclosure:  Duncan & Sevin represented MEL Underwriters in this matter.