United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS July 18, 2003
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
____________________ Clerk
No. 03-30042
Summary Calendar
____________________
CARGILL FERROUS INTERNATIONAL,
a Department of Cargill, Inc.,
Plaintiff-Appellee,
versus
HIGHGATE MV, her engines, tackle, apparel, etc., Et Al.,
Defendants,
SATIN SHIPPING CORP.; SOCIETE ANONYME MONAGASQUE
D’ADMINISTRATION MARITIME ET AERIENNE,
(S.A.M.A.M.A.) in personam,
Defendants-Appellants.
_________________________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(02-CV-510)
_________________________________________________________________
Before BARKSDALE, DeMOSS, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Cargill Ferrous International, a Department of Cargill,
Incorporated (Cargill), filed this action against numerous
defendants, including Satin Shipping Corporation (Satin)and Societe
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Anonyme Monagasque d’Administration Maritime et Aerienne (SAMAMA).
After filing an answer in which they demanded London arbitration
pursuant to the terms of a charter party and other contracts of
carriage, Satin and SAMAMA moved to dismiss, or, in the
alternative, to stay this action pending arbitration.
The district court ruled that Satin and SAMAMA’s inaction in
failing to respond to correspondence from Cargill (delivered five
and a half months before defendants’ answer), insist on
arbitration, or nominate an arbitrator constituted a waiver of the
right to arbitration.
Pursuant to 9 U.S.C. § 16(a), Satin and SAMAMA appeal. The
refusal to stay an action pending arbitration is reviewed de novo.
See Steel Warehouse Co., Inc. v. Abalone Shipping Ltd. of Nicosai,
141 F.3d 234, 236-37 (5th Cir. 1998).
Prejudice to the party opposing arbitration is determinative
of waiver. E.g., Price v. Drexel Burnham Lambert, Inc., 791 F.2d
1156, 1162 (5th Cir. 1986). “Normally, waiver occurs when a party
initially pursues litigation and then reverses course and attempts
to arbitrate, but waiver can also result from ‘some overt act in
Court that evinces a desire to resolve the arbitrable dispute
through litigation rather than arbitration’.” Texaco Exploration
and Prod. Co. v. AmClyde Engineered Prods. Co., Inc., 243 F.3d 906,
911 (5th Cir. 2001) (quoting Subway Equipment Leasing Corp. v.
Forte, 169 F.3d 324, 329 (5th Cir. 1999)). In this analysis,
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“[t]here is a strong presumption against waiver, and any doubts ...
must be resolved in favor of arbitration”. Id. (emphasis added).
Cargill contends delay and inaction by Satin and SAMAMA has
hindered resolution of this matter. Delay, as well as the extent
of the movant’s participation in judicial proceedings,
is a material factor in assessing prejudice vel non. Price, 791
F.2d at 1161. “[M]ere delay[, however,] falls far short of the
waiver requirements....” Texaco, 243 F.3d at 912. Moreover,
“generalized protestations about the costs of delay are
insufficient” to establish waiver. Walker v. J.C. Bradford & Co.,
938 F.2d 575, 578 (5th Cir. 1991).
Cargill’s contention is further undermined by Tenneco Resins,
Inc. v. Davy Int’l, AG, 770 F.2d 416, 421 (5th Cir. 1985): “[W]hen
only a minimal amount of discovery has been conducted ... the court
should not ordinarily infer waiver based upon prejudice to the
party opposing the motion to stay litigation ... particularly when
... the defendant clearly stated the desire to arbitrate the matter
in its original answer....” As noted, Satin and SAMAMA raised the
arbitrability of the dispute in their original answer. Moreover,
Cargill does not contend they took advantage of, or even
participated in, the discovery process. Cargill has failed to show
it has been materially prejudiced by the delay; therefore, it has
failed to overcome the strong federal presumption in favor of
arbitration. See e.g., Walker, 938 F.2d at 578. Restated, Satin
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and SAMAMA have not waived their right to arbitration.
Accordingly, we VACATE and REMAND for further proceedings not
inconsistent with this opinion.
VACATED AND REMANDED
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