Case: 15-10117       Document: 00513298704          Page: 1     Date Filed: 12/08/2015




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                       No. 15-10117                        United States Court of Appeals
                                                                                    Fifth Circuit

                                                                                  FILED
USHEALTH GROUP, INCORPORATED,                                              December 8, 2015
                                                                             Lyle W. Cayce
               Plaintiff - Appellee                                               Clerk

v.

WILLIAM OLIVER SOUTH; JERRY D. BLACKBURN; GUSTAVO FRAGA,

               Defendants - Appellants




                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC Nos. 4:14-CV-757,
                             4:14-CV-758, 4:14-CV-759


Before REAVLEY, ELROD, and HAYNES, Circuit Judges.
PER CURIAM:*
       William South, Jerry Blackburn, 1 and Gustavo Fraga (collectively, the
“Agents”) appeal the district court’s denial of their petitions to compel
arbitration with USHealth Group, Inc. (“USHealth”). The Agents contend that


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
       1  In its letter brief, USHealth states that Jerry Blackburn’s counsel has informed
USHealth that Blackburn’s middle initial is “M”—not “D,” as designated in the pleadings
before the district court and in the briefing before this court. We will not change the initial
here, as Blackburn has not asked this court or the district court to amend his designation.
     Case: 15-10117        Document: 00513298704           Page: 2     Date Filed: 12/08/2015



                                        No. 15-10117
their dispute with USHealth concerning the Agents’ acquisition of USHealth
stock must be arbitrated.           However, USHealth is a non-signatory to the
agreement containing the arbitration clause on which the Agents attempt to
rely.       For the reasons that follow, we reject the Agents’ arguments that
USHealth should nevertheless be forced to arbitrate and AFFIRM the district
court’s denial of the Agents’ petitions to compel arbitration.
                                       I. Background
        USHealth is an insurance holding company operating under Texas law.
It owns various insurers and insurance marketing agencies as subsidiaries.
These subsidiaries include USHealth Career Agency, Inc. (“USHealth Career”)
and Small Business Insurance Advisors, Inc. (“SBIA”). South, Blackburn, and
Fraga are insurance agents who worked as independent contractors for
USHealth Career and SBIA, selling insurance. The Agents initially earned
commissions for their work through a contract with USHealth Career. They
signed contracts in 2011 with USCare Marketing, Inc., which later changed its
name to SBIA. 2         These agreements (hereinafter the “SBIA Agreements”)
contained provisions mandating mediation and arbitration in the event of
“claims, disputes, and controversies arising out of or in any manner relating to
this [SBIA] Agreement, or any other Agreement executed in connection with
this Agreement, or to the performance, interpretation, application or
enforcement hereto . . . .”
        The Agents claim that they helped grow USHealth’s business in the
areas of Florida they managed through contracts with USHealth subsidiaries
and that they were promised and given rewards for this work, but that they
were later deprived of those rewards. The Agents allege that one reward was



        2For simplicity’s sake, we will follow the parties’ and district court’s lead in referring
to both USCare Marketing and SBIA simply as “SBIA.”
                                                2
    Case: 15-10117      Document: 00513298704    Page: 3   Date Filed: 12/08/2015



                                  No. 15-10117
a promise by USHealth Career and SBIA that the Agents would be able to gain
equity in USHealth, which presumably was meant to increase in value over
time.    USHealth offered the Agents the opportunity to obtain such equity in
2006 through Conditional Offer Letters introducing each Defendant to the
Equity Incentive Program (“EIP”). Each of the Agents consented to participate
in the EIP, certifying that they satisfied certain conditions for participation.
The Conditional Offer Letters and EIP did not contain arbitration clauses.
The EIP provided USHealth the right to repurchase any shares issued to the
Agents if their “insurance agent relationship[s]” with USHealth Career or
SBIA “terminated for any reason.”
        The Agents claim SBIA cut them out of the profitable Florida insurance
market through a two-step process. First, SBIA promised the Agents access to
special health care plans and a deferred compensation bonus program
involving SBIA stock under the EIP. The second step involved SBIA forcing
the Agents to sign unfavorable agreements, under which the Agents would not
be able to meet the minimum requirements for participation in the EIP. SBIA
gave the Agents a choice between signing the SBIA Agreements and signing
“captive” agent agreements, which would prohibit them from marketing
products of other companies as they had in the past. The Agents chose the
SBIA Agreements, but those agreements “did not provide any leads to potential
new business or access to SBIA’s best products, meaning that the products [the
Agents] would be able to offer would be inferior and not competitive with the
services and products offered by other insurance providers.” Allegedly, SBIA
“maliciously planned” to use the Agreements to buy back its shares from the
Agents, replacing their stake in the valuable Florida market.
        Ultimately, the Agents claim this scenario unfolded exactly as described.
USHealth allegedly withdrew important medical products and overpriced
others, causing the Agents to become unable to meet their minimum
                                        3
     Case: 15-10117       Document: 00513298704         Page: 4    Date Filed: 12/08/2015



                                      No. 15-10117
requirements. 3     Then SBIA terminated the SBIA Agreements.                   USHealth
subsequently exercised its option to repurchase the Agents’ stock under the
EIP, allegedly “for an amount exponentially lower than what was promised to
the [Agents].” Consequently, the Agents exercised the alternative dispute
provisions in the SBIA Agreements.
       The SBIA Agreements provide for mediation, then arbitration if
mediation fails.      The Agents demanded mediation by letter addressed to
“USCare Marketing, Inc.” SBIA responded on letterhead bearing SBIA’s logo,
suggesting terms for mediation.           After failing to successfully mediate the
dispute, SBIA issued the Arbitration Demand Letters, stating:
              In view of the fact that there remain outstanding Disputes,
       as defined in the underlying agreement[s] between [the Agents]
       and . . . SBIA . . . and USHealth Group, Inc. . . . , it appears it is
       time to move to mandatory, binding arbitration proceedings
       required by the agreement.
              Accordingly, on behalf of SBIA, USHealth, and all related
       entities, please accept this demand as our formal initiation of
       arbitration proceedings in connection with any and all claims
       between our companies and [the Agents]. 4
       When the parties disagreed about various arbitration details, the Agents
filed for a protective order in Texas state court, naming only SBIA as a
defendant.      During a hearing to resolve disputes about the details of
arbitration, counsel for the Agents specifically stated that the Agents were not
demanding arbitration with USHealth, only with SBIA. The Agents filed their
first statement of claims before the arbitration panel, naming only SBIA as an
opposing party. In August 2014, USHealth filed this suit against the Agents
in state court. The Agents then filed an amended statement of claims in the


       3 The Agents have not specified which particular requirements they were unable to
meet; nor are the allegedly unfavorable terms obvious from the face of the SBIA Agreements.
       4 SBIA sent three identical letters, one to each individual defendant. For simplicity,
we will refer to them collectively as the Arbitration Demand Letters.
                                             4
    Case: 15-10117     Document: 00513298704       Page: 5   Date Filed: 12/08/2015



                                  No. 15-10117
arbitration, naming both SBIA and USHealth as opposing parties and alleging
throughout that SBIA acted as USHealth’s agent or alter ego. The Agents
removed the state court suit to federal court and filed petitions to compel
USHealth to arbitrate.
      In federal district court, the parties disputed whether USHealth’s claims
should be arbitrated along with the Agents’ claims against SBIA. USHealth’s
state court petition alleged that it relied on the Agents’ representations that
they met the conditions for participation in the EIP and that it would not have
issued stock to the Agents absent those representations. USHealth alleged
that the Agents “breached material provisions of the Conditional Offer Letter
so as to preclude both [their] participation in the [EIP], as well as the issuance
of any restricted common stock thereunder”; thus, USHealth sued for
compensatory damages for the alleged breaches of contract, warranties, and
covenants, and for a declaratory judgment that the Agents were not entitled to
any rights to the stock issued to them. USHealth’s allegations accuse the
Agents of “fail[ing] to perform [their] contractual obligations,” along with
making “false representations” that “constitute[d] a breach of express
warranties and convenants, . . . as well as implied warranties.”
      The district court denied the petitions, and the Agents timely appealed.
                                II. Jurisdiction
      The parties have asserted that the district court had diversity
jurisdiction under 28 U.S.C. § 1332, because they claimed that USHealth is a
Delaware corporation with its main offices in Fort Worth, Texas, and that the
Agents were all diverse from USHealth. However, the notices of removal for
Blackburn and Fraga only alleged each agent’s residency, without addressing




                                        5
     Case: 15-10117       Document: 00513298704         Page: 6    Date Filed: 12/08/2015



                                      No. 15-10117
citizenship or domicile. 5 After we requested supplemental briefing on this
issue, Blackburn and Fraga filed an uncontested motion for leave to amend
their notices of removal to allege their domiciles, which we granted pursuant
to 28 U.S.C. § 1653. The amended notices sufficiently allege citizenship, and
USHealth does not challenge the additional factual assertions. The other
jurisdictional requirements under 28 U.S.C. § 1332 are satisfied, and we
conclude the district court exercised diversity jurisdiction.                    We have
jurisdiction from its order denying the Agents’ motions to compel arbitration
under 9 U.S.C. §§ 4 & 16(a)(1)(B).
                                III. Standard of Review
       We review the district court’s denial of a motion to compel arbitration de
novo. See Paper, Allied-Indus. Chem. & Energy Workers Int’l Union, Local 4-
12 v. Exxon Mobil Corp., 

, 275 (5th Cir. 2011). It is within the
district court’s discretion to decide whether to compel arbitration pursuant to
equitable estoppel. Grigson v. Creative Artists Agency, L.L.C., 

,
528 (5th Cir. 2000). The district court abuses that discretion when it premises
its decision on either an erroneous application of the law or a clearly erroneous
assessment of the evidence. See Crawford Prof’l Drugs, Inc. v. CVS Caremark
Corp., 

, 256 (5th Cir. 2014); 

. Whether
an alter ego relationship existed is a question of fact that we review for clear
error. See Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 

, 359 (5th
Cir. 2003). We will only reverse a fact finding as clearly erroneous if we have
“a definite and firm conviction that a mistake has been committed.” Canal
Barge Co. v. Torco Oil Co., 

, 375 (5th Cir. 2000).



       5 South filed an amended notice of removal correcting similar pleading deficiencies at
the behest of the district court before the cases were all consolidated. South’s pleadings
properly plead that he is domiciled in Florida and thus that he is diverse from USHealth.
See 28 U.S.C. § 1332(a)(1); Stine v. Moore, 

, 448 (5th Cir. 1954).
                                             6
     Case: 15-10117      Document: 00513298704         Page: 7    Date Filed: 12/08/2015



                                      No. 15-10117
                                     IV. Discussion
       When faced with a motion to compel arbitration, courts must first
determine whether the parties agreed to arbitrate the dispute at issue. See
Ford v. NYLCare Health Plans of Gulf Coast, Inc., 

, 247 (5th Cir.
1998). When a party to an arbitration agreement seeks to enforce it against a
non-party or non-signatory, we must determine whether principles of state
contract law extend the scope of that agreement such that the non-signatory
should be bound by it. See generally 

. The parties
do not dispute that: (1) USHealth is not a signatory to the SBIA Agreements;
(2) there is no arbitration agreement contained in the EIP between USHealth
and the Agents; and (3) USHealth has not participated in the mediation or
arbitration proceedings between the Agents and SBIA. The Agents thus seek
to compel arbitration with USHealth as a non-signatory to the SBIA
Agreements under various theories of estoppel and imputation.
       We note that the parties do not fully agree about whether Texas or
federal law should apply to this dispute. 6 The SBIA Agreements specify that
they are governed by the laws of the State of Texas and by the Texas
Arbitration Act. Although the Agents argue federal law governs whether
USHealth should be compelled to arbitrate, they generally fail to specify how
Texas or federal law would result in different outcomes, and they have cited
both federal and Texas law in their arguments before the federal courts.
       When the parties fail to show that the outcome would differ depending
on the laws of more than one forum, the dispute over applicable law is a “false
conflict.” See Kevin M. Ehringer Enters., Inc. v. McData Servs. Corp., 

 The district court specified that it would deny the Agents’ petitions under either
law, in part because Texas courts are influenced by “persuasive and well-reasoned federal
precedent” that has “explored the extent to which non-signatories can be compelled to
arbitrate.” See In re Kellogg Brown & Root, Inc., 

, 739 (Tex. 2005).
                                             7
    Case: 15-10117    Document: 00513298704     Page: 8   Date Filed: 12/08/2015



                                 No. 15-10117
321, 326 & n.2 (5th Cir. 2011). We have applied both federal and state law in
past cases to determine “whether non-signatory plaintiffs should be compelled
to arbitrate their claims.” See In re Kellogg Brown & Root, Inc., 

, 738 (Tex. 2005). However, “in determining whether the parties agreed to
arbitrate a certain matter, courts apply the contract law of the particular state
that governs the agreement.” Wash. Mut. Fin. Grp., LLC v. Bailey, 

, 264 (5th Cir. 2004). Furthermore, we look to “traditional principles of
state law” to determine whether an arbitration agreement may be enforced
against non-signatories through “state-contract-law theories, including
equitable estoppel.” 

, 261–62, 262 n.9 (citing Arthur
Andersen LLP v. Carlisle, 

(2009)). We conclude that this case
does not present a true conflict. See 

262 n.9; Hininger v. Case
Corp., 

, 125–26 (5th Cir. 1994).
A. Estoppel
      The Agents assert that USHealth should be compelled to arbitrate due
to equitable estoppel, either because USHealth has directly benefitted from the
SBIA Agreements or because SBIA and USHealth engaged in interdependent
and concerted misconduct to deprive the Agents of valuable equity in
USHealth.
      1. Concerted misconduct estoppel
      The district court’s rejection of concerted misconduct estoppel was not an
abuse of discretion. No applicable authority supports the use of that theory in
this case. First, the Supreme Court of Texas has clearly rejected the use of
concerted misconduct estoppel to compel a non-signatory to arbitrate. See In
re Merrill Lynch Trust Co. FSB, 

, 191–95 (Tex. 2007); In re
Labatt Food Serv., L.P., 

, 644 (Tex. 2009). The Agents also rely
on our decision in Grigson, where we held that a signatory was estopped from
attempting to avoid arbitration by strategically suing only non-signatory
                                       8
     Case: 15-10117       Document: 00513298704         Page: 9    Date Filed: 12/08/2015



                                      No. 15-10117
defendants. The claims in Grigson involved allegations of interdependent and
concerted misconduct by both the signatories and non-signatories and relied
on the agreement containing the arbitration 

–28.
Assuming arguendo that we could even apply Grigson in these circumstances, 7
it does not mandate compelling USHealth to arbitrate. In Grigson, we kept a
signatory to an arbitration agreement from avoiding that agreement when
suing non-signatories would have required the involvement of the other
signatory to the arbitration agreement because of allegedly concerted
misconduct. 

530–31. Principles of estoppel were applied against
signatories to the arbitration agreement to prevent unfair gamesmanship.
       Since then, we have approvingly cited other courts’ determinations that
this version of estoppel only applies to keep a signatory from avoiding its
arbitration agreement. See 

. We specifically noted that
the reverse does not hold true: a signatory may not use the same logic to estop
a non-signatory from avoiding arbitration.             

not support
compelling the non-signatory, USHealth, to arbitrate in this case.
       2. Direct benefits estoppel
       The Agents also argue that USHealth should be estopped from suing the
Agents in federal court rather than arbitrating its claims because USHealth
embraced the SBIA Agreements. “[A] nonparty may be compelled to arbitrate
‘if it seeks, through the claim, to derive a direct benefit from the contract
containing the arbitration provisions.’” See In re Weekley Homes, L.P., 

, 131 (Tex. 2005) (quoting 

). “Claims
must be brought on the contract (and arbitrated) if liability arises solely from
the contract or must be determined by reference to it. On the other hand,


       7  The Agents attempt to create a conflict of laws with their arguments on this point,
but we conclude that neither Texas nor federal law would support using this theory to compel
arbitration here.
                                             9
   Case: 15-10117     Document: 00513298704      Page: 10   Date Filed: 12/08/2015



                                  No. 15-10117
claims can be brought in tort (and in court) if liability arises from general
obligations imposed by law.” 

(footnote omitted).
      Direct benefits estoppel is meant to prevent a non-signatory plaintiff who
is seeking or has reaped the benefits of a contract “from simultaneously
attempting to avoid the contract’s burdens, such as the obligation to arbitrate
disputes.” Carr v. Main Carr Dev., LLC, 

, 497–99 (Tex. App.—
Dallas 2011, pet. denied) (citing 

). A non-signatory
may be compelled to arbitrate if it either (1) “seeks through the claim, to derive
a direct benefit from the contract containing the arbitration provision,” or (2)
“deliberately seeks and obtains substantial benefits from the contract outside
the context of its claim.” 

court held in Carr that non-signatories
may not be compelled to arbitrate when their claims “merely ‘touch matters’
covered by a contract or ‘are dependent upon’ a contract; instead, the claims
must rely on the terms of the contract.” 

(emphasis added) (quoting
Hill v. G.E. Power Sys., Inc., 

, 348–49 (5th Cir. 2002)).
      The district court examined the evidence in the record and found that
nothing showed USHealth’s “claims against defendants arise from the [SBIA]
Agreements or must be determined by reference to them”; therefore, it refused
to compel arbitration based on the direct benefits estoppel theory. We find no
legal error or abuse of discretion in this determination. The Agents cite Carr
and In re Weekley Homes to support the application of their direct benefits
estoppel theory, but those cases do not support compelling arbitration here.
      In re Weekley Homes is distinguishable. In that case, the non-party who
was compelled to arbitrate directly relied on and derived significant benefits
from a 

–30. The non-signatory plaintiff directed
construction of the home in which she lived according to the construction
contract and by demanding repairs, reimbursement, and other benefits based
on the contract. 

–33. After she developed asthma that she attributed
                                       10
   Case: 15-10117    Document: 00513298704      Page: 11   Date Filed: 12/08/2015



                                 No. 15-10117
to the construction, she attempted to sue the construction company for
negligence. 

The Supreme Court of Texas estopped the plaintiff
from relying on her status as a non-signatory to avoid arbitrating a claim that
arose from home repairs completed pursuant to a contract from which she
directly and purposefully benefitted. 

      Similar to this case, Carr involved a corporate entity, MCD, suing Carr,
another entity, for breach of fiduciary duties. 

–98. Part
of the breach of fiduciary duty claim relied on Carr’s alleged usurpation of
“contracted-for business opportunities from MCD” in violation of a
“Development Agreement” that Carr had signed with an alleged corporate
affiliate of MCD. 

497–98. MCD argued its general fiduciary
duty claim may have related and referred to the Development Agreement but
was not dependent on that agreement, and the Dallas Court of Appeals agreed.

. This was despite Carr’s contentions that the substance of the claim
could not be determined without reference to whether Carr violated the
Development Agreement and that damages would have to be determined based
on the structural arrangement for calculating rent contained in the
Development Agreement. 

found that MCD could show breaches
of independent fiduciary duties even absent breaches of the Development
Agreement to which MCD was not a party. 

      USHealth avers that the Agents made false representations concerning
their qualifications to participate in the EIP and that USHealth detrimentally
relied on these representations in issuing to the Agents stock to which they
were not entitled. The SBIA Agreements were executed in 2011, while the EIP
was consummated based on representations made from 2006 to 2010. The EIP
also authorized stock repurchase if the Agents’ relationships with USHealth
Career terminated for any reason. USHealth argues its claims are not based
on the SBIA Agreements, but on the allegedly fraudulent conduct of the Agents
                                      11
   Case: 15-10117     Document: 00513298704     Page: 12   Date Filed: 12/08/2015



                                 No. 15-10117
in making sworn statements about their qualifications for the EIP in the
Conditional Offer Letters and affidavits.
      The sworn representations the Agents were required to make for
participation in the EIP concerned their contractual relationships with
USCare/SBIA. Each of the Agents had to certify that he was an “exclusive
Regional Marketing Director of USHEALTH’s subsidiary, USHEALTH Career
insurance agency, and . . . he was not in breach or violation of any of the terms
of his agent contract with USHEALTH Career insurance agency, or . . . derived
more than 50% of his annual income . . . from USHEALTH Career insurance
agency or the other subsidiaries of USHEALTH.” Accordingly, at least some
of USHealth’s claims relate to the Agents’ work for SBIA and USHealth Career
and their performance, income, and adherence to USHealth Career’s agent
contract. The Agents argue from these facts that USHealth sought a benefit
from the SBIA Agreements because it hoped to incentivize high performance
and compliance with those Agreements through the EIP.
      Even if USHealth derived this indirect benefit, the attenuation between
the EIP and the SBIA Agreements and the indirect nature of the benefit
precludes applying direct benefit estoppel under Carr, In re Weekley Homes, or
other relevant precedents. See, e.g., In re Weekley 

–
32. The Agents’ liability to USHealth need not be determined by reference to
the SBIA Agreements, nor does it solely arise from those contracts. Instead,
liability may derive from representations the Agents made about their
compliance with their USHealth Career contracts and their annual income.
The Agents have not established a sufficient link between these contracts to
show that USHealth derived benefits from the SBIA Agreements with one
hand and then sought to reject the Agreements’ arbitration provisions with the
other. See, e.g., In re Weekley 

–32; 

–99; see also In re Merrill 

(noting that under
                                       12
    Case: 15-10117       Document: 00513298704          Page: 13     Date Filed: 12/08/2015



                                       No. 15-10117
Texas law, the party seeking to compel arbitration has the evidentiary burden
to prove it may enforce the agreement). The district court did not abuse its
discretion in declining to apply direct benefits estoppel in this case.
B. Alter Ego
       The Agents also contend that SBIA is the alter ego of USHealth such
that USHealth is bound to the arbitration provisions of the SBIA Agreements.
We review a district court’s alter ego determination for clear error. 

. 8 We have held that “[u]nder the alter ego doctrine, a corporation
may be bound by an agreement entered into by its subsidiary regardless of the
agreement’s structure or the subsidiary’s attempts to bind itself alone to its
terms, when their conduct demonstrates a virtual abandonment of
separateness.” 

(citation omitted). However, courts do not lightly
or routinely pierce the corporate veil. See 

Under either Texas or
federal law, a corporate relationship is insufficient; rather, the corporation
must have exercised such control over the subsidiary that it is clear the two
entities have abandoned their separate corporate identities. See, e.g., id.; see
also Gardemal v. Westin Hotel Co., 

, 593 (5th Cir. 1999); SSP
Partners v. Gladstrong Invs. (USA) Corp., 

, 454–55 (Tex. 2008);
In re Merrill 

.



       8  The Agents have repeatedly insisted that we should review this issue and determine
the meaning of certain documents in the record de novo. They note that the evidence before
us is the same documentary evidence considered by the district court and argue that
credibility determinations and associated deference should not apply. The fact that the
record contains documentary evidence and a lack of credibility determinations concerning
live witnesses does not make the alter ego analysis non-factual. We have stated before that
“[a]lter ego determinations are highly fact-based, and require considering the totality of the
circumstances in which the instrumentality functions.” 

; see also
Zahra Spiritual Tr. v. United States, 

, 242 (5th Cir. 1990). Therefore, we review
this decision under the clear error standard, although of course we may always correct errors
of law underpinning a factual determination. See 

. We find no such
errors here.
                                             13
    Case: 15-10117       Document: 00513298704          Page: 14     Date Filed: 12/08/2015



                                       No. 15-10117
       Under either Texas or federal law, the district court did not clearly err
in finding that the Agents failed to show USHealth and SBIA have abandoned
separateness, or that USHealth is attempting to use its separate corporate
existence to fraudulently disrupt the arbitration proceedings or evade its
obligation to participate in them.              The Agents claim that USHealth’s
fraudulent conduct is simply bringing suit against the Agents outside the
arbitration. However, the Agents have failed to show the abandonment of
separateness that would make this conduct fraudulent under Texas and
federal law. 9
       The Agents repeatedly emphasize that the Arbitration Demand Letters
purported to initiate mandatory arbitration between “SBIA, USHealth and all
related entities . . . in connection with any and all claims between our
companies.” The Arbitration Demand Letters do not show that USHealth
controls SBIA and has abandoned separateness, as the Agents argue.
Although those letters purported to demand arbitration on behalf of both SBIA
and USHealth, they described the two entities as (plural) “companies” and do
not otherwise evince a lack of separateness. Standing alone, this is insufficient
to show an abandonment of separateness under the alter ego doctrine.
       We also reject the Agents’ implicit argument that the Arbitration



       9 The Agents made various factual arguments before the district court about why
USHealth and SBIA did not operate as separate entities. The Agents do not make these
same arguments before this court; therefore, we consider them abandoned. See Martco Ltd.
v. Wellons, Inc., 

, 877 n.10 (5th Cir. 2009); FED. R. APP. P. 28(a)(8). Even if not
abandoned, these arguments lack merit—for example, sharing a treasurer and business
address are insufficient to evince corporate control and a lack of separateness. See, e.g.,

–94 (noting that common ownership, directorship, and financing
arrangements between a parent and subsidiary do not necessarily show alter ego status).
Agents have also waived the argument that USHealth’s status as an insurance holding
company under Texas law shows that USHealth “controls” its insurers, which allegedly
include SBIA. We decline to consider this argument, raised for the first time on appeal. See
Mick Haig Prods. E.K. v. Does 1-670, 

, 652 (5th Cir. 2012).
                                             14
   Case: 15-10117     Document: 00513298704      Page: 15   Date Filed: 12/08/2015



                                  No. 15-10117
Demand Letters, standing alone, constitute an agreement to arbitrate.
Reviewing this issue de novo, see In re Liljeberg Enters., Inc., 

, 439
(5th Cir. 2002), we conclude that no agreement was formed. Even assuming
arguendo that the Letters constituted USHealth’s offer to arbitrate with the
Agents, the Agents did not accept the offer before it was disavowed and
withdrawn. See generally Bocchi Americas Assocs. Inc. v. Commerce Fresh
Mktg. Inc., 

, 392 (5th Cir. 2008) (“An offer results in a binding
contract upon acceptance by the other party according to its terms.” (quoting
Fail v. Lee, 

, 208 (Tex. App.—Fort Worth 1976, no writ))); Hill
v. Rich, 

, 600–02 (Tex. Civ. App.—Austin 1975, writ ref’d n.r.e.)
(affirming summary judgment against parties who had failed to accept a
counteroffer to purchase property before it was withdrawn by the landowner’s
offer to other parties); Sheehan v. Driskell, 

, 404 (Tex. Civ.
App.—Houston [14th Dist.] 1971, writ ref’d n.r.e.) (“The prospective
purchaser’s revocation of the offer was effective because his withdrawal was
made prior to acceptance . . . .”). About one year after the letters were sent,
the Agents disavowed any intent to view the letters as a viable offer to arbitrate
with USHealth, and subsequently USHealth revoked any offer that could have
existed when it filed suit against the Agents in state court. See generally City
of Houston v. Williams, 

, 140 n.12 (Tex. 2011); Antwine v. Reed,

, 485 (Tex. 1947).
C. Inseparability of Claims
      Finally, the Agents aver that their claims against SBIA and USHealth
are inextricably intertwined or inherently inseparable such that they should
be arbitrated together to prevent “factual and legal whipsaw.” The Agents
provide no authority to support their contentions that such inseparability
would warrant compelling a non-signatory to participate in arbitration, either
as a standalone legal theory or as an equitable ground for such relief, and we
                                       15
    Case: 15-10117       Document: 00513298704          Page: 16     Date Filed: 12/08/2015



                                       No. 15-10117
have found none. 10 Cf. In re Merrill 

–95 (declining to
apply estoppel based on substantially interdependent misconduct in part
because it is not a traditional ground for estoppel under Texas contract law);

, 261–62, 262 n.9. We conclude that the district court
did not err in rejecting this argument as a possible basis for compelling
arbitration. 11
                                      V. Conclusion
       We find no abuse of discretion or clear error in the district court’s refusal
to compel USHealth to arbitrate with the Agents. We therefore AFFIRM the
denial of the Agents’ petitions to arbitrate.




       10 Before the district court, the Agents made the more specific argument that Federal
Rule of Civil Procedure 19 and relevant precedent make USHealth an indispensable party to
the arbitration. We conclude this argument lacks merit even if Agents have not abandoned
that argument on appeal by failing to properly make and support it with citation to authority.
See FED. R. APP. P. 28(a)(8); 

n.10. Supreme Court precedent holds
that alleged joint tortfeasors are merely permissive parties under Rule 19, not necessary or
indispensable parties. See, e.g., Temple v. Synthes Corp., 

, 7–8 (1990) (holding it
was “error to label [alleged] joint tortfeasors as indispensable parties under Rule 19(b) and
to dismiss the lawsuit with prejudice for failure to join those parties”). Additionally,
assuming arguendo USHealth was an indispensable party to the arbitration, that could only
potentially affect whether the arbitration should be dismissed, not whether USHealth must
be forced to arbitrate without an agreement to do so.
       11  The Agents take language from the district court’s order out of context and claim
that factual and legal whipsaw has already occurred. We do not see any such conflict in the
district court’s actions, and even if we did, the Agents point us to no authority suggesting
that such a “whipsaw” is legally sufficient to compel a non-signatory to arbitrate.
                                             16