QPro Inc. (US) v. RTD Quality Services USA, Inc. (US), 761 F.Supp. 2d 492

QPro Inc. sued RTD Quality Services USA, Inc. in Texas state court, alleging tortuous interference in a contract between QPro and Dow Chemical Company. RTD (USA) removed under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. §§ 201–08, based on an arbitration agreement between QPro and Applus RTD, the foreign parent of RTD (USA). (Docket Entry No. 1). This court denied QPro’s motion to remand because under 9 U.S.C. § 203, a defendant has the right to remove an action or proceeding that “relates to an arbitration agreement or award falling under the Convention . . . any time before the trial thereof . . . to the district court of the United States for the district and division embracing the place where the action or proceeding is pending.” 9 U.S.C. § 205 (emphasis added).1 To remove a case under § 205, a defendant must show that (1) an arbitration agreement exists that “falls under” the Convention, and (2) the dispute “relates to” the arbitration agreement. Ling v. Deutsche Bank AG, No. 4:05CV345, 2005 WL 3158040, at *5 (E.D. Tex. Nov. 28, 2005). This court denied remand because the case law sets a very low standard for making this showing. See Beiser v. Weyler, 284 F.3d 665, 669 (5th Cir. 2002). Under Beiser, so long as there is “an arbitration agreement falling under the Convention [that] could conceivably affect the outcome of the plaintiff’s case,” the “relates to” test is satisfied. 284 F.3d at 669 (emphasis added). The defendant need not show that it has the right to enforce the arbitration agreement. Beiser recognizes that “even if [the plaintiff] is right on the merits that he cannot ultimately be forced into arbitration, his suit at least has a ‘connection with’ the contracts governing the transaction out of which his claims arise.” Id. at 670.
After this court denied the motion to remand, RTD complied with the scheduling order for filing a motion to compel arbitration, (Docket Entry No. 12). Q Pro responded, (Docket Entry No. 13); RTD replied, (Docket Entry No. 14); and QPro surreplied, asking this court to remand, (Docket Entry No. 15).
Based on the motion and responses, the record, and the applicable law, this court denies the motion to compel, finding that the requirements for allowing a nonsignatory to compel arbitration with a signatory are not satisfied, and grants QPro’s motion to remand. The reasons are explained below.