Texas Brine Co., LLC v. American Arbitration Ass'n, Inc., No. 18-31184 (5th Cir. 2020)Annotate this Case
Plaintiff filed suit in Louisiana state court seeking substantial damages against one out-of-state defendant and two in-state defendants. The out-of-state defendant was served with process and immediately removed the case to federal court before the in-state defendants were served. The district court denied plaintiff's motion to remand and entered judgment on the pleadings, dismissing plaintiff's claims with prejudice.
The Fifth Circuit affirmed, holding that a non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be "properly joined and served" is a citizen of the forum state. Therefore, the case was properly retained in federal court. The court also held that the relief, purported harm, and alleged wrongdoing here show that plaintiff's claims, at heart, are in fact an unauthorized collateral attack on the arbitration. Accordingly, the district court correctly dismissed the challenge. Finally, the court denied plaintiff's motion to supplement the record, because the evidence would not change that Section 10 of the Federal Arbitration Act was the appropriate means of challenging the arbitrators' acts, and collateral attacks are not allowed.