Baldwin Haspel Burke & Mayer LLC

Insurance Update: Arbitration Clause Not Preempted Under Louisiana Law

Bill Schwartz - 

In the case of McDonnel Group, LLC v Great Lakes Insurance, SE, UK Branch, decided on May 13, 2019, the U. S. Court of Appeals upheld an arbitration provision under Louisiana law in an insurance policy.

McDonnel Group, LLC purchased an insurance policy from the defendants that included a written agreement to arbitrate disputes. After the Insurers denied McDonnel’s claim, McDonnel initiated this declaratory and breach of contract action in federal district court. The Insurers moved to dismiss based on the policy’s arbitration provision. McDonnel responded that the arbitration provision was “amended out” of the contract through the contract’s conformity to statute provision, because arbitration conflicted with a Louisiana statute.

The district court held, however, that the alleged conflicting Louisiana statute was preempted by the Convention and therefore dismissed the case in favor of arbitration. They determined the policy’s conformity provision did not negate the agreement to arbitrate. As a result, the Fifth Circuit Court of Appeals agreed and affirmed the district court decision upholding the arbitration provision.

Click here for the entire decision.

If you have any questions regarding this insurance matter, please contact Bill Schwartz at (504) 569-2900 or wschwartz@bhbmlaw.com.


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