As you may or may not recall, we discussed the doctrine of McCarran-Ferguson Reverse Preemption some time ago and noted that it was working its way through the Texas Courts of Appeals. This past week (on January 11 actually), the Fifth Circuit weighed in, affirming a trial court denial of a motion to compel arbitration on McCarran Ferguson grounds. Under Mississippi law, an uninsured motorist automobile insurance policy cannot require arbitration of claims arising under it. Mississippian Jack Inman got into a coverage dispute with his UM carrier which the carrier tried to send to arbitration, arguing that the FAA preempted the Mississippi statute. The district court disagreed, holding that since the Mississippi law was designed to regulate the business of insurance, the McCarran Ferguson Act precluded its preemption by the FAA. The Fifth Circuit affirmed and provided a short opinion (link is to .pdf file) that nicely explains the doctrine of McCarran Ferguson Reverse Preemption in the circuit. American Bankers Ins. Co. of Florida v. Inman, Cause No. 04-61131 Technorati Tags: arbitration, ADR, Fifth Circuit, Texas Supreme Court

On Friday, the Third Court of Appeals handed down an opinion on a petition for writ of mandamus holding that a Burnet County judge abused his discretion in failing to compel arbitration of a breach of contract claim brought by a partner and his wife against a partnership. The Court held that, under Federal Arbitration Act analysis, Texas law governs questions of whether a valid arbitration clause exists and whether the claims asserted fall within its scope, but the scope of an arbitration clause is defined by federal law. In this case, the Court found both that the clause in question was broad enough to cover the asserted claims and that the partner’s wife, a non-signatory, was also bound by the arbitration clause. Technorati Tags: arbitration, litigation, Third Court of Appeals, law

Yesterday, the Fifth Ciruit Court of Appeals handed down an opinion affirming a decision from the Northern District of Texas to vacate an arbitral award where the single arbitrator failed to disclose that he had worked with one of the attorneys in the case on a large piece of patent litigation in the 1990s. The arbitrator and the attorney in question were two of thirty-four lawyers representing Intel in the prior case over the course of several years, and they never met or spoke prior to the arbitration, but the district court found that the arbitrator still had an obligation to disclose the prior relationship, and the failure to disclose required that the District Court vacate the award. The Fifth Circuit agreed. The opinion (download .pdf version of opinion here), written by Justice Reavley, explains in detail the history of Fifth Circuit Jurisprudence on the question of arbitrator disclosure of potential conflicts, and confirms that the rule in the Circuit is “when in doubt, at all, disclose.” Positive Software v. New Century Mortgage Corp., et al. Cause No. 04-11432 (designated for publication).

On Wednesday, The Third Court of Appeals issued an opinion overturning a trial court summary judgment and rendering judgment in a case which involved the calculation of royalty fees under an oil and gas lease. Cause No. 03-04-00820-CV, Tana Oil & Gas Corp. v. Cernosek, et al.