IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 12, 2009
No. 08-10451
Charles R. Fulbruge III
Clerk
ENSCO INTERNATIONAL INCORPORATED,
Plaintiff-Appellee,
versus
CERTAIN UNDERWRITERS AT LLOYD’S
and Insurance Companies Subscribing to Policy Numbers and Cover Notes
PE0500247, LDC070105(B), LCD070105(A), and B0621ELOEN0105;
BC JOHNSON ASSOCIATES LLC; and BRYAN JOHNSON,
Defendants-Appellants.
Appeal from the United States District Court
for the Northern District of Texas
Before JOLLY, SMITH, and OWEN, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
This case arises from a dispute over insurance policies (the “Policies”) is-
sued by the defendants (collectively, the “Underwriters”) to plaintiff ENSCO In-
ternational, Inc. (“ENSCO”). The sole issue is whether the Policies contain a
waiver of the right to remove the case to federal court. Concluding that there is
No. 08-10451
a waiver, we affirm the district court’s order of remand.
I. Background
During Hurricane Katrina, an offshore drilling rig owned by ENSCO and
insured by the Underwriters sustained serious damage. The Underwriters paid
for the constructive total loss of the rig but not for the removal of debris from the
rig that fell to the sea floor near a platform owned by another company.
ENSCO, asserting that the Policies covered that removal, sued the Underwriters
in state court in Dallas County, consistent with the Policies’ forum selection
clause (titled “Choice of Law & Jurisdiction”), which provides, “The proper and
exclusive law of this insurance shall be Texas law. Any disputes arising under
or in connection with it shall be subject to the exclusive jurisdiction of the Courts
of Dallas County, Texas.”
The Underwriters removed the matter to federal court, asserting removal
rights under the Convention on the Recognition and Enforcement of Foreign Ar-
bitral Awards (the “Convention”). See 9 U.S.C. § 205. 1 ENSCO moved to re-
mand, asserting that the forum selection clause, by establishing “exclusive” jur-
isdiction, effected a waiver of the right to remove. The district court granted the
motion, and the Underwriters appeal.
II. Analysis.
This appeal hinges on construction of the Policies’ forum selection clause.
1
The parties disagree as to whether the Convention applies, but we need not decide
that. The district court evidently assumed it applies. ENSCO, which contends in a footnote
that it does not apply, cites only its own motion to remand and has therefore not adequately
briefed the issue. See United States v. Jackson, 549 F.3d 963, 972 n.6 (5th Cir. 2008) (stating
that “[a]rgument by reference is not permitted”) (citing Yohey v. Collins, 985 F.2d 222, 224-25
(5th Cir. 1993)), petition for cert. filed (Feb. 12, 2009) (No. 08-8714). Although the forum selec-
tion clause adopts Texas law as “[t]he proper and exclusive law of this insurance,” neither par-
ty argues that this court should consider the applicability of the Texas Arbitration Act, TEX .
CIV . PRAC . & REM . CODE § 171.001 et seq.
2
No. 08-10451
We consider first, the relevant standard for waiver, and second, the application
of that standard.
A. The McDermott Standard.
“For a contractual clause to prevent a party from exercising its right to re-
moval, the clause must give a ‘clear and unequivocal’ waiver of that right.” City
of New Orleans v. Mun. Admin. Servs., Inc., 376 F.3d 501, 504 (5th Cir. 2004).
The New Orleans court cited McDermott International, Inc. v. Lloyds Underwrit-
ers, 944 F.2d 1199 (5th Cir. 1991), one of very few federal cases addressing waiv-
er of removal rights under the Convention, for the clear-and-unequivocal stan-
dard. Id.2 There are three ways in which a party may clearly and unequivocally
waive its removal rights: “[1] by explicitly stating that it is doing so, [2] by allow-
ing the other party the right to choose venue, or [3] by establishing an exclusive
venue within the contract.” New Orleans, 376 F.3d at 504.
The Underwriters claim, however, that under McDermott only the first of
those methods is applicable in the Convention context. In effect, they propose
a “magic words” approach to waiver. The McDermott court, however, never stat-
ed that it would reject purported waivers that do not incant the specific words
that the Underwriters claim are required. The Underwriters rely instead on a
literal reading of the McDermott court’s use of the words “explicit” and “express”
in explaining its waiver standard. Because all waivers that do not use the term
“waive” or “remove” are by definition “implicit,” the Underwriters say, there is
no waiver here.3
2
Also in Suter v. Munich Reinsurance Co., 223 F.3d 150, 159 (3d Cir. 2000), the court
cited McDermott as support for its “clear and unambiguous language” standard.
3
At oral argument, the Underwriters took this argument to its logical conclusion:
Q: Well, suppose you had a contract that said: “And we agree that there shall
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3
No. 08-10451
The McDermott court’s choice of terms does not bear the weight that the
Underwriters apply. Contrary to the Underwriters’ reading, the court actually
formulated its waiver test in several ways, using a number of terms and phrases.
In fact, the McDermott court used the terms “explicit,” “express,” “unambiguous,”
and “clear and unequivocal” almost interchangeably.4 These words, of course,
3
(...continued)
be no litigation in this matter that shall occur anywhere else, ever, anywhere
else, except in the state courts of Dallas County”?
A: I don’t think that would suffice, your Honor. . . . [T]he problem is, it doesn’t
call the parties’ attention to what they are doing.
4
One section of the McDermott opinion is titled “The Express Waiver Rule,” but two
paragraphs into that section, the court said that “we will give effect only to explicit waivers.”
McDermott, 944 F.2d at 1209. It then stated twice that it was adopting “the express waiver
rule.” Id.
The McDermott court also mentioned the “clear and unequivocal” standard. First, it
referred to courts holding that Foreign Sovereign Immunities Act (“FSIA”) cases are to be
tried “in federal court unless the parties unequivocally choose otherwise.” Id. at 1212 (citing
In re Delta Am. Re Ins. Co., 900 F.2d 890 (6th Cir. 1990)). The court then said that it found
“this reasoning persuasive and applicable to Convention Act cases.” Id. The Delta court,
though, used the terms “explicit” and “unequivocal” interchangeably. Compare Delta, 900 F.2d
at 893 (“Against the backdrop of the FSIA, however, the principle that waiver must be clear
and unequivocal assumes even greater significance.”); with id. at 894 (“[W]e hold that any
claimed waiver of the right of removal stemming from contractual language must be explicit.”).
The McDermott court later referred to the Delta rule as an “express waiver rule.” McDermott,
944 F.2d at 1213.
Second, when explaining that “precedent” supported its holding, the McDermott court
observed that “[e]ven in cases that do not involve the Convention or the FSIA, many federal
courts have refused to find a contractual waiver of removal rights absent a ‘clear and unequiv-
ocal’ expression of intent to waive those rights.” Id. at 1212. In particular, it explained that
City of Rose City v. Nutmeg Insurance Co., 931 F.2d 13 (5th Cir. 1991), a non-Convention case
that we discuss at length infra, was “conceptually consistent with the ‘unequivocal expression
rule.’” McDermott, 944 F.2d at 1212-13. The McDermott court, in other words, used cases dis-
cussing the “clear and unequivocal” standard as support for its express (or explicit) waiver
standard.
The Third Circuit’s language in Suter is similar. That court used the terms “clear and
unambiguous” and “express” interchangeably in describing waiver of removal in Convention
cases. See Suter, 223 F.3d at 158 (“[T]here can be no waiver of a right to remove under the
(continued...)
4
No. 08-10451
mean different things, and none of them demands the reading that the Un-
derwriters urge.5 To understand the McDermott standard, we must therefore
consider the McDermott court’s actual reasoning, and a close reading of McDer-
mott shows that the Underwriters misunderstand the standard it articulates.
Although waiver must be clear and unequivocal, it may be implicit where neces-
sary to give effect to all contractual provisions.
1. The McDermott Contract.
McDermott’s precise holding is not that Convention removal waivers must
contain magic words, as the Underwriters claim, but merely that the following
language from the contract’s “service of suit clause” was insufficient to waive the
right of removal to federal court of the particular question being litigated:
It is agreed that in the event of the failure of Underwriters hereon
to pay any amount claimed to be due hereunder, Underwriters here-
on, at the request of the Assured will submit to the jurisdiction of
any court of competent jurisdiction within the United States and
will comply with all requirements necessary to give such Court jur-
isdiction and all matters arising hereunder shall be determined in
accordance with the law and practice of such court.
4
(...continued)
Convention Act in the absence of clear and unambiguous language requiring such a waiver[.]”);
id. at 159 (“[A]n express waiver requirement will serve the various purposes of the Convention
Act[.]”); id. (“Our adoption of the ‘clear and unambiguous language’ standard is supported . . .
also by . . . [McDermott]. [In McDermott, the Fifth Circuit] found that an express-waiver rule
served the Convention Act’s goals of reciprocity, uniformity, and speed and was consistent with
circuit precedent.”).
5
This court, sitting en banc more than a year before McDermott was decided, held that
“express” can mean “implied.” See Kelly v. Lee’s Old Fashioned Hamburgers, Inc., 908 F.2d
1218, 1220 (5th Cir. 1990) (per curiam) (en banc) (concluding that the Federal Rule of Civil
Procedure 54(b) “express determination” rule is satisfied whenever “the district court’s unmis-
takable intent” is discernable and that the district court therefore need not “mechanically re-
cite” any particular words); id. at 1222 (Smith, J., joined by Clark, C.J., and Gee, Johnson,
Williams, Jolly, and Barksdale, JJ., dissenting) (“[T]he en banc majority . . . has declared that
‘express’ means ‘implied.’”).
5
No. 08-10451
McDermott, 944 F.2d at 1200 (citations omitted). That provisionSSbecause it
allowed one party to select a venueSSsuperficially appears consistent with the
second of the three New Orleans bases for waiver, but it is not explicit.
If the McDermott court had required actual reference to “waiver” and “re-
moval,” the analysis of the McDermott contract would have been straightfor-
ward: The court could merely have decided that because no such reference was
present, there was no waiver. But the McDermott court did not do so; quite to
the contrary, it began its analysis by observing that “[w]hen a policy’s ser-
vice-of-suit clause applies, its probable effect is to waive the insurer’s removal
rights.” Id. at 1204-05 (citing Nutmeg, 931 F.2d at 15-16). The McDermott
court, in other words, would have considered accepting a waiver based on the
second ground used in New Orleans, notwithstanding the fact that such a waiver
would have been implicit.
Other aspects of the contract, however, persuaded the McDermott court
that the service-of-suit clause did not in fact constitute a waiver and that the
contract’s apparent consistency with the second New Orleans basis was illusory.
The venue question in McDermott was venue for “disputes concerning the proper
forum to decide arbitrability questions.” Id. at 1205. That question, though, was
covered not only by the service-of-suit clause but by a potentially “co-equal forum
selection clause” governing venue for arbitration. The McDermott contract was
therefore ambiguous, and the service-of-suit clause did not answer the venue
question. Id.
The court also observed that the service-of-suit clause could be read as a
waiver of personal jurisdiction only, therefore leaving open the possibility of sub-
sequent removal.6 The court reasoned as follows:
6
“Consent to personal jurisdiction is of value especially with respect to defendants that
are incorporated and have their principal place of business abroad.” McDermott, 944 F.2d at
(continued...)
6
No. 08-10451
Underwriters’ exercise of its federal removal right is not necessarily
inconsistent with any of its obligations under the service-of-suit
clause. Underwriters may remove a case after submitting to the jur-
isdiction of Louisiana’s courts and complying with all necessary re-
quirements to give Louisiana’s courts power over the suit. There
would be no final decision in that court for Underwriters to abide by
if it exercised its removal right. All matters would be determined in
accordance with the practice and law of the court chosen by McDer-
mott in the sense that all state courts follow the removal law estab-
lished by Congress.
Id. at 1206. Not only was the McDermott contract’s service-of-suit clause ambig-
uous with respect to venue, but the venue selected in accordance with it would
not be exclusive.
In short, instead of merely relying on the contract’s lack of explicit refer-
ences to waiver and venue, the McDermott court showed, in great detail, that the
contract did not plainly set a venue at all and could in fact permit invocation of
federal removal from a state venue. The Underwriters’ proposed rule would
treat that discussion as redundant. It is evident, nonetheless, that the McDer-
mott court found no waiverSSnot because the other bases for waiver later set out
in New Orleans were inapplicable, but because they were not satisfied.7
2. McDermott and Nutmeg.
The McDermott court then considered and rejected an analogy to Nutmeg
SSa case not involving the ConventionSSin which a similar contractual provision
was deemed to waive removal. The Nutmeg contract had only a single forum sel-
ection clause reading:
6
(...continued)
1205-06 & n.10. Because the underwriters in McDermott fit that description, the court found
that interpretation especially likely.
7
This interpretation of McDermott is consistent with Waters v. Browning-Ferris In-
dustries, Inc., 252 F.3d 796, 797-98 (5th Cir. 2001).
7
No. 08-10451
[W]e, at your request agree to submit to the jurisdiction of any
Court of Competent jurisdiction within the United States and will
comply with all requirements necessary to give such Court jurisdic-
tion and all matters arising hereunder shall be determined in ac-
cordance with the law and practice of such court.
Nutmeg, 931 F.2d at 14. That language, of course, also resembles the second of
the three New Orleans bases for waiver of removal, but it is neither “explicit” nor
“express.” The McDermott courtSSif it had adopted the rule that the Underwrit-
ers urgeSScould easily have distinguished Nutmeg just by pointing this out and
explaining that although an implied waiver was adequate in Nutmeg, it could
never be enough in the context of the Convention. Instead, the court demon-
strated that although the Nutmeg contract was unambiguous, the McDermott
contract was not.
The McDermott court, 944 F.2d at 1207, pointed out that the Nutmeg deci-
sion resulted partly from the rule that contracts are to be construed against the
drafter and that that rule was inapplicable to the McDermott contract.8 The
McDermott court also observed that the Nutmeg contract had only a single rele-
vant venue provision instead of two potentially conflicting ones. Id. McDermott
suggested only one way in which the Convention affected waiver of removal
rights: The Convention applies to arbitration agreements and arbitration
awards involving United States citizens and at least one foreign citizen. That
was the case in McDermott.9 In McDermott, thoughSSas explained aboveSSthe
presence of international defendants made the personal jurisdiction explanation
more plausible. Id. at 1205-06 & n.10. In Nutmeg, all the parties were domestic,
and it therefore seemed less likely to the McDermott court that the parties would
8
The parties have not briefed the application of that rule to the present case.
9
See McDermott, 944 F.2d at 1208 (“The parties recognize that this suit concerns an
arbitration agreement and is not entirely between United States citizens, so the Convention
Act governs this case.”) (citing 9 U.S.C. § 202, part of the Convention’s implementation act).
8
No. 08-10451
have specifically waived objections to personal jurisdiction. See id. at 1207.
Thus the applicability of the Convention gave the McDermott court another rea-
son to find ambiguity.10 Though the McDermott court distinguished Nutmeg in
many ways, it never said that the Convention affected the waiver standard.11
Having shown that neither the contractual language itself nor an analogy
to interpretations of similar language in other cases compelled a conclusion that
removal rights had been waived, the McDermott court concluded that the parties
had “executed an ambiguous contract and disavowed any expressed intent re-
garding wavier of Convention removal rights,” meaning that no waiver existed.
Id. at 1209. If the McDermott contract had been unambiguous, or if the parties
to it had somehow expressed intent to waive removal rights, the court presum-
ably would have found a waiver despite the Convention’s applicability and the
lack of magic words.
3. Interpretations of McDermott.
Given the law described above, the two implicit bases for clear-and-une-
quivocal waiver in the New Orleans formulation work as well as the explicit ba-
sis does, even in cases involving the Convention. It is difficult, given the McDer-
mott court’s approach, to imagine that panel’s coming to the same conclusion if
it had been presented with language such as, e.g., “Underwriters hereon, at the
request of the Assured will submit to the exclusive jurisdiction of any court of
competent jurisdiction.” Nor does McDermott give us any reason to think that
its waiver rule would be applied in ways that render contractual terms meaning-
10
See id. at 1206-07 (“The existence of alternate possible meanings for the service-of-
suit clause in the policy here at issue distinguishes Nutmeg.”). In New Orleans, 376 F.3d at
504-05, the court adopted this interpretation of Nutmeg.
11
Later in its opinion, in fact, the McDermott court, 944 F.2d at 1212-13, marshaled
Nutmeg as support for the “unequivocal expression rule” on the ground that the Nutmeg court
found the contract before it to be unambiguous.
9
No. 08-10451
less.
No decision interpreting McDermott requires the contrary conclusion
urged by the Underwriters. In Beiser v. Weyler, 284 F.3d 665, 672 (5th Cir.
2002), the court explained: “[In McDermott w]e established a clear statement
rule for waivers of a litigant’s rights under § 205. A party may only waive his
right to remove under the [Convention] by clearly and explicitly saying so in the
agreement.” That language, though, is not unambiguous support for the Under-
writers’ position. A “clear statement rule” does not mean the same thing as an
“explicit statement rule.” Beiser, at any rate, did not involve an application of
the McDermott rule, so the quoted language is at best dictum. Nor did the Beiser
court explain what it means for a waiver to be “clear and explicit.”
Moreover, the New Orleans court made no effort to distinguish its ap-
proach to waiver from McDermott’s; the New Orleans court gave no indication
of a special explicit waiver requirement that applies only in Convention cases.
McDermott’s discussion of waiver in the Convention context seems almost indis-
tinguishable from the explanation of waiver by forum selection in New Orleans.
A party’s consent to jurisdiction in one forum does not necessarily
waive its right to have an action heard in another. For a forum sel-
ection clause to be exclusive, it must go beyond establishing that a
particular forum will have jurisdiction and must clearly demon-
strate the parties’ intent to make that jurisdiction exclusive.
New Orleans, 376 F.3d at 504.
New Orleans, then, explains why the McDermott contract was not deemed
a waiver. In fact, the McDermott court could have used this very language when
it explained that the forum selection clause it interpreted was a waiver only of
personal jurisdiction. The McDermott contract allowed McDermott to select ven-
ue, but not an exclusive venue; New Orleans explains that such a venue-selection
provision would not be sufficient as a waiver in any case, Convention or not.
It follows that the Underwriters’ proposed heightened standard for Con-
10
No. 08-10451
vention removal has no basis in law. McDermott permits waiver by means other
than express waiver, and the New Orleans three-part synthesis, which accurate-
ly incorporates the McDermott standard, applies in the context of the Conven-
tion.
B. Application.
The question whether the Policies meet the McDermott waiver standard
is properly answered under the “clear and unequivocal” test explicated in New
Orleans. We consider whether the Policies, by any of the means the New Or-
leans court mentioned, necessarily exclude continued exercise of removal rights.
The Underwriters have effectively conceded, in their briefs and at oral argu-
ment, that our rejection of their proposed interpretation of McDermott disposes
of their appeal.
The third New Orleans basis for waiver—contractual specification of juris-
diction in a way that “clearly demonstrates the parties’ intent to make that jur-
isdiction exclusive”—is the one that is relevant here. New Orleans, 376 F.3d at
504. The Policies’ forum selection clause fixes “exclusive” venue for litigation in
“the Courts of Dallas County, Texas.” This, prima facie, satisfies New Orleans.12
12
In Argylle Equities LLC v. Paolino, 211 F. App’x 317, 318 (5th Cir. 2006), this court
correctly stated that a contract providing that “[b]orrower hereby consents to the exclusive jur-
isdiction of the courts sitting in Kendall County, Texas, United States of America” is an unam-
biguous waiver. Contractual references to the courts of a particular county are to state courts,
not to federal courts that happen to sit there.
Federal district courts may be in Texas, but they are not of Texas. Black’s Law
Dictionary defines “of” as “denoting that from which anything proceeds; indicat-
ing origin, source, descent.” Federal courts indisputably proceed from, and find
their origin in, the federal government, though located in particular geographic
regions. By agreeing to litigate all relevant disputes solely in “the Courts of
Texas,” TSE waived its right to removal.
Dixon v. TSE Int’l, Inc., 330 F.3d 396, 398 (5th Cir. 2003) (per curiam) (footnote omitted). See
also Excell, Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318, 321 (10th Cir. 1997) (“Because
(continued...)
11
No. 08-10451
It is far more definite than was the provision construed in McDermott. Removal
may not be inconsistent with a party’s “submit[ting] to the jurisdiction” of state
court, or with all matters being decided in accordance with state court “law and
practice,” see McDermott, 944 F.2d at 1206, but it is inconsistent with a situation
in which the state courts in Dallas County would have “exclusive” jurisdiction.
No party has suggested, and we see no reason to think, that the Policies’ lan-
guage could be a waiver of personal jurisdiction only. In short, permitting re-
moval would read the word “exclusive” out of the contract. 13
Nor, unlike the contract provisions in McDermott, do other provisions of
the Policies compromise the plain directive of the forum selection clause. In Mc-
Dermott, we found that the litigation could be governed by either of two indepen-
dent and coequal forum selection clauses. Id. at 1204-06. The Policies, though,
contain an arbitration provision setting venue in London and the forum selection
clause setting venue in Dallas County.14 The Underwriters have not suggested
that these provisions conflict, as did the analogous provisions in McDermott.
Where there is no such ambiguity, the McDermott court’s analysis permits the
Policies’ “exclusive jurisdiction” language to mean what it says.
The Underwriters have waived their right to remove. The order of remand
is AFFIRMED.
12
(...continued)
the language of the clause refers only to a specific county and not to a specific judicial district,
we conclude venue is intended to lie only in state district court.”); Ondova Ltd. Co. v. Manila
Indus., Inc., 513 F. Supp. 2d 762, 773 (N.D. Tex. 2007).
13
In Suter, 223 F.3d at 158, which interchangeably referred to a “‘clear and unambigu-
ous language’ standard” and to an “express waiver requirement,” the Third Circuit explained
that it would “resolv[e] any ambiguity in contract language against waiver.” Regardless of
Suter’s references to “express waiver,” apparently no court has recommended disregarding un-
ambiguous contractual terms merely because they lack magic words.
14
That is the best way to make sense of—and give effect to—the forum selection
clause’s reference to “disputes arising under or in connection with” the Policies.
12
No. 08-10451
OWEN, Circuit Judge, concurring:
I concur in the judgment only.
With great respect, I do not join Judge Smith’s opinion because it relies
heavily on this court’s decision in City of New Orleans v. Municipal
Administrative Services., Inc.,1 which concerned removal under 28 U.S.C. § 1441.
Our decision in McDermott International, Inc. v. Lloyds Underwriters of London 2
examined removal under 9 U.S.C. § 205, and we should adhere to that binding
precedent.
This court said in McDermott that a waiver of the right to remove under
§ 205 must be “express”3 or “explicit.” 4 The Supreme Court has since had
occasion to consider the meaning of “explicit” in C & L Enterprises, Inc. v. Citizen
Band Potawatomi Indian Tribe of Okla.5 The issue in that case was whether an
Indian Tribe had waived its sovereign immunity by agreeing to a contract with
an arbitration agreement that provided for enforcement of any arbitration award
“‘in accordance with applicable law in any court having jurisdiction thereof.’”6
The contract also contained a choice-of-law provision that selected “the law of the
place where the Project is located,” which was Oklahoma.7 The Supreme Court
1
376 F.3d 501 (5th Cir. 2004).
2
944 F.2d 1199 (5th Cir. 1991).
3
Id. at 1209, 1211, 1213 (adopting an “express waiver rule”).
4
Id. at 1209 (“There are four reasons why we will give effect only to explicit waivers
of Convention Act removal rights.”); 1212 (finding “persuasive” the reasoning that a waiver
of removal rights under the Foreign Sovereign Immunity Act, 28 U.S.C. § 1441(d), must be
“‘explicit’”) (quoting In re Delta America Re Ins. Co., 900 F.2d 890, 894 (6th Cir. 1990)).
5
532 U.S. 411, 418 (2001) (“The question presented is whether the Tribe has waived
its immunity.”).
6
Id. at 419.
7
Id.
13
No. 08-10451
reasoned that by virtue of these provisions, “the parties ha[d] effectively
consented to confirmation of the award ‘in accordance with’ the Oklahoma
Uniform Arbitration Act,” 8 which in turn provided that “jurisdiction to enforce
the agreement vests in ‘any court of competent jurisdiction of this state.’” 9 The
Supreme Court concluded that “[o]n any sensible reading of the Act, the District
Court of Oklahoma County, a local court of general jurisdiction, fits that
statutory description.”10 The Court thus held that the tribe had waived
sovereign immunity. No question of removal was raised in that case, but the
decision’s rationale is instructive.
As Judge Jolly’s dissenting opinion points out, the pertinent question in
C & L Enterprises for determining whether the tribe had relinquished sovereign
immunity was whether the “tribe’s waiver [was] ‘clear.’” 11 However, in
answering that question, the Supreme Court quoted from the Seventh Circuit’s
decision in Sokaogon Gaming Enterprise Corp. v. Tushie-Montgomery Associates,
Inc.,12 stating that the following passage from that decision was a “cogent
observation [that] holds as well for the case we confront” 13 : “The [tribal
immunity] waiver . . . is implicit rather than explicit only if a waiver of sovereign
immunity, to be deemed explicit, must use the words ‘sovereign immunity.’ No
8
Id.
9
Id. at 419-20.
10
Id. at 420.
11
Id. at 418 (citing Oklahoma Tax Comm’n v. Citizen Band Potawatomi Tribe of Okla.,
498 U.S. 505, 509 (1991)).
12
86 F.3d 656 (7th Cir. 1996).
13
C & L Enters., Inc., 532 U.S. at 420.
14
No. 08-10451
case has ever held that.” 14 I would apply the same reasoning regarding the right
to remove under 9 U.S.C. § 205.
I would not demand that to be effective, a waiver of removal rights under
9 U.S.C. § 205 must contain the word “remove” or “removal” or a reference to the
statute. Our decision in McDermott imposes no such requirement, and I am
unaware of any decisions to so construe 9 U.S.C. § 205. In the present case, the
statement in the agreements between ENSCO and the Underwriters that
disputes “shall be subject to the exclusive jurisdiction of the Courts of Dallas
County, Texas” is explicit or express. The use of the word “exclusive” is well-
understood. It means solely in Dallas County courts or to the exclusion of other
courts that may have jurisdiction.
I accordingly agree that the Underwriters waived the right to remove, and
the district court’s decision to remand should not be disturbed.
14
Id. at 418 (quoting Sokaogon, 86 F.3d at 659-60).
15
No. 08-10451
E. GRADY JOLLY, Circuit Judge, dissenting:
Like Judge Owen, I believe that Judge Smith’s opinion mistakenly relies
upon City of New Orleans v. Municipal Administrative Services., Inc., 376 F.3d
501 (5th Cir. 2004), a case which considered removal pursuant to 28 U.S.C.
§ 1441. The Underwriters removed this action pursuant to 9 U.S.C. § 205, and
the removal right afforded therein cannot be waived by anything less than an
express statement of waiver. McDermott Int’l, Inc. v. Lloyds Underwriters of
London, 944 F.2d 1204, 1209 (5th Cir. 1991). I disagree, however, with Judge
Owen’s conclusion that the exclusive jurisdiction clause at issue here constitutes
an express waiver of removal rights. Purporting to apply this Court’s express
waiver standard, she suggests that language may be implicitly express. I
respectfully dissent from the failure of both Judges Smith and Owen to apply our
precedent in McDermott.
I.
The Convention on the Recognition and Enforcement of Foreign Arbitral
Awards provides a removal right (9 U.S.C. § 205) that is substantially broader
than the one found in the general removal statute (28 U.S.C. § 1441). See Acosta
v. Master Maintenance and Const. Inc., 452 F.3d 373, 376-77 (5th Cir. 2006);
Beiser v. Weyler, 284 F.3d 665, 674 (5th Cir. 2002). This low bar set by § 205 is
consistent with the policy goals of the Convention. See Scherck v. Alberto-Culver
Co., 417 U.S. 506, 520 n.15 (1974) (noting the importance of unified standards
and consistent enforcement of arbitration agreements); McDermott, 944 F.2d at
1209-11 (noting the importance of reciprocity).
In accord with these policy concerns and § 205’s extensive grant of removal
rights, a waiver of these removal rights will only be enforced if it is express and
explicit. See McDermott, 944 F.2d at 1209-13. Judge Smith attempts to
maneuver around McDermott, but its clearly and repeatedly stated holding is
inescapable: “There are four reasons why we will give effect only to explicit
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waivers of Convention Act removal rights”; “we adopt the express waiver rule
here to afford maximum protection to all those who rely on the Convention”;
“[o]ur express waiver rule minimizes this danger by providing a bright-line
standard for determining when parties surrender the full panoply of Convention
Act rights”; “[f]uture forum choice disputes in Convention cases will not languish
in this court under our bright-line express waiver rule.” McDermott, 944 F.2d at
1209, 1211, 1213 (emphases added). Looking to City of New Orleans, he ignores
the important differences between § 1441 and § 205.
A majority of our panel today correctly concludes that the analysis in City
of New Orleans is limited to general removal under § 1441. McDermott is
binding.
II.
With the appropriate standard established, the question remains whether
the Underwriters expressly waived their right to removal. The Underwriters
consented to the exclusive jurisdiction of the Courts of Dallas County. One can
infer from this that the Underwriters have waived their right to remove to
federal court. Under a normal contract analysis, we would give effect to this
waiver. But under the express waiver rule, an inferred waiver is not sufficient.
The tribal immunity cases Judge Owen relies on are not substantially
relevant in the Convention Act context.1 The policy concerns underlying tribal
immunity favor waiver of immunity. Sokaogon Gaming Enter. Corp. v. Tushie-
Montgomery Assocs., 86 F.3d 656, 659-60 (7th Cir. 1996). The policy concerns
underlying the Convention Act, however, disfavor waiver of removal rights.
Judge Reavley, in McDermott, noted that under the “bright-line express
waiver rule,” Convention Act cases would no longer be bogged down by time-
consuming forum-choice disputes. McDermott, 944 F.2d at 1213. Judge
1
In C & L Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe of Oklahoma, the
Supreme Court applied a “clear” waiver standard. 532 U.S. 411, 417 (2001).
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Reavley’s hopes and the bright-line ruled he espoused have been dimmed by the
holding of the majority.
III.
For the reasons stated above, I would not remand this case to state court.
Accordingly, I respectfully dissent.
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