Monday April 5, 2021
In 2019, SKV’s client, Polyflow, LLC, demanded that Specialty RTP, LLC, and John Wright arbitrate Polyflow’s claims for breach of contract and torts that stemmed from a 2017 settlement agreement. When Specialty RTP and Wright refused to arbitrate as the settlement agreement required, Polyflow petitioned to compel arbitration in the Southern District of Texas. The district court denied Polyflow’s petition in a one-sentence order.
In a published decision on March 30, 2021, the Fifth Circuit unanimously reversed. Polyflow argued on appeal that the parties had contractually agreed to a broad “arising out of the agreement” arbitration provision that covered all of Polyflow’s claims. The Fifth Circuit agreed with Polyflow, holding that the arbitration provision was broad and encompassed Polyflow’s claims and that Specialty RTP and Wright had no defenses to arbitration. In its opinion, the Fifth Circuit clarified that “arising out of” arbitration provisions should be construed broadly. Accordingly, the Fifth Circuit reversed the district court’s ruling and remanded the case with instructions to order the parties to arbitration. In doing so, the court said that it “ha[d] done nothing more than hold the parties to their contractual obligation.”
A link to the opinion can be found at https://www.ca5.uscourts.gov/opinions/pub/20/20-20416-CV0.pdf.