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Click here for the full text of this decision FACTS:Lonnie Brown, Nettie Brown, Jerry Brown, and Pat Brown (the Browns) appeal from an order staying proceedings and compelling arbitration of their claims against Citigroup Global Markets, Inc., formerly Smith Barney (Smith Barney), G.E. Life & Annuity Insurance Co, (GE), and Pacific Life Insurance Co. (Pacific) (collectively appellees). The Browns are investors in, and beneficiaries of, Smith Barney securities brokerage accounts. Smith Barney’s representative, Patrick Holt (Holt), managed these accounts, investing in variable annuities from GE and Pacific, as well as a variety of stocks. Upset with Holt’s investment decisions, the Browns sued Smith Barney, GE, Pacific, and Holt in Louisiana state court (the state action), alleging fraud, negligence, and breach of various common law and statutory duties. The defendants removed the state action to federal district court. Soon thereafter, Smith Barney, with intervenors GE and Pacific, filed two separate civil actions against the Browns in federal court (the federal actions): one against Lonnie and Nettie Brown, and one against Jerry and Pat Brown. Both lawsuits sought an order compelling arbitration of the Browns’ claims pursuant to the Federal Arbitration Act (FAA), 9 U.S.C. ��1-16, based on arbitration clauses that were included in Smith Barney’s client agreement with the Browns. Appellees also moved for a stay pending arbitration in the state action pursuant to �3 of the FAA. Soon thereafter, Smith Barney and Pacific moved to compel arbitration under the FAA in the federal actions. Around this time, the district court consolidated the state action with the federal actions. Smith Barney, with Pacific joining, then filed a reply in support of the motions to compel arbitration and to stay the consolidated action, arguing for a stay based upon �3. Contemporaneously with this flurry of activity, the Browns moved to remand the state action as untimely removed. They also moved to dismiss the federal actions and the complaints in intervention on jurisdictional grounds, asserting that Holt, a nonparty to the federal actions, is an indispensable party under Federal Rule of Civil Procedure 19 whose joinder would destroy diversity of citizenship. They also argued that the court should abstain from exercising jurisdiction. The district court remanded the state action but denied the motion to dismiss the federal actions. Rather than consider the issue of arbitrability, however, the court stayed the federal actions pending the outcome in the remanded state action because “[i]t would be a waste of judicial resources and of the parties’ time and treasure if both federal and the state court were to proceed simultaneously in these cases. . . .” The appellees moved in the federal actions to alter or amend the stay order, arguing that the policy favoring arbitration required lifting the stay and ordering arbitration despite the threat of piecemeal litigation in state and federal court. The district court agreed, vacating the stay as improvidently issued and ordering additional briefing addressing the issue of arbitrability. After receiving briefing, the district court addressed the “sole issue to be decided” in the federal actions arbitrability of the Browns’ claims against the appellees. The district court concluded that the Browns were bound by an arbitration clause in their client agreements and were compelled to arbitrate their claims against Smith Barney. It also concluded that the actions of Smith Barney, intervenors GE and Pacific, and Holt were “inextricably intertwined” because “[t]here is no way to bring actions against either [GE or Pacific] without considering the actions of Smith Barney and its employee, Patrick Holt.” Applying equitable estoppel, the court then ordered arbitration of the claims against Pacific and GE as well. Without offering a basis for its authority, the district court then “stay[ed] the Browns’ actions against all the defendants within its jurisdiction, to include Smith Barney, Pacific and GE pending binding arbitration.” The Browns appeal from the district court’s order compelling arbitration and staying proceedings. HOLDING:Affirmed. The stay could not have been issued pursuant to 9 U.S.C. �3. That section, by its terms, does not authorize a federal court to enjoin ongoing state proceedings, such as the remanded state action, only federal proceedings. And, furthermore, the record discloses that there was nothing left for the district court to stay in the federal actions after it remanded the state action and ordered the parties to the arbitration table. Unless the district court was staying some undefined or future proceedings in the federal actions, its stay order could have only applied to actions against the appellees in the remanded state action. Such a stay could not be properly issued pursuant to �3. The court holds that the district court did not issue a �3 stay and, furthermore, that the arbitration order is a final decision under Green Tree and 9 U.S.C. �16(a)(3). Therefore, the order is appealable. The district court did not abuse its discretion in finding that Holt is not an indispensable party under Federal Rule of Civil Procedure 19(b). The threat of piecemeal, inconsistent litigation of claims and issues, the Browns’ primary concern, is insufficiently prejudicial to render a party indispensable under Rule 19 given the oft-stated preference for arbitration under the FAA. Snap-On Tools Corp. v. Mason, 18 F.3d 1261 (5th Cir. 1994). Furthermore, the Browns’ “fear that the federal and state courts will reach conflicting interpretations of the arbitration clauses [themselves] does not present the degree of prejudice necessary to support a conclusion that [Holt] is an indispensable party.” PaineWebber Inc. v. Cohen, 276 F.3d 197 (6th Cir. 2001). Given the slight risk of prejudice, consideration of the extent to which any prejudice can be reduced or eliminated, Rule 19(b)’s second factor, is largely unnecessary. As to the third factor under Rule 19(b), requiring arbitration of these claims in accordance with the arbitration agreement, while allowing a state court to pronounce upon the issue of arbitrability, does not render the potential judgment inadequate. Finally, although the state court may be able to provide an adequate alternative remedy, such availability is insufficient reason for deciding that an FAA action should not proceed. The Browns assert that the district court misapplied the abstention doctrine set forth in Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). The Browns’ sole argument in favor of abstention is that the state court may decide that the case against Holt is not arbitrable after the district court decided that the claims against Smith Barney are arbitrable. Congress’ intent in enacting the FAA was to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible. Allowing a federal court to order arbitration, even where a state court may construe an arbitration clause differently, is fully consistent with this established congressional intent. This conclusion is not altered simply because a state court’s arbitrability decision may involve a party to the arbitration agreement. The arbitration clauses in the Browns’ client agreements are not unconscionable and the district court did not err in finding them valid. The Browns were not forced to agree to the terms of those clauses. They could have avoided arbitration by not engaging Smith Barney’s services. There is nothing exceptional or burdensome about these clauses, and there is no reason to believe that the Browns did not knowingly and willingly accept their terms. In Grigson v. Creative Artists Agency, LLC, 210 F.3d 524 (5th Cir. 2000), the court held that a non-signatory to an arbitration agreement can compel arbitration: 1. when the signatory to a written agreement containing an arbitration clause must rely on the terms of the written agreement in asserting its claims against a nonsignatory; or 2. when the signatory raises allegations of substantially interdependent and concerted misconduct by both the nonsignatory and one or more signatories to the contract. The district court did not abuse its discretion in determining that the Browns were estopped under Grigson’s second prong from asserting that a lack of a written arbitration agreement precluded arbitration. The district court’s finding that there was no way to bring actions against GE and Pacific without considering the actions of Smith Barney and Patrick Holt, is not patently incorrect, the court concludes. OPINION:Emilio M. Garza, J.; Jolly, Smith and Garza, JJ.

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