STEPHEN A. HIGGINSON, Circuit Judge:
Noatex Corp. ("Noatex") and Kohn Law Group, Inc. ("Kohn") appeal two district court decisions in an interpleader action brought by Auto Parts Manufacturing Mississippi, Inc. ("APMM") that named Noatex, King Construction of Houston, L.L.C. ("King"), and Kohn as claimants. Appellants claim that the district court erred in discharging APMM from the action, enjoining all parties from filing any proceedings relating to the interpleader fund without a court order, and in denying their motion to compel arbitration.
APMM contracted with Noatex to build an automotive parts factory in Guntown, Mississippi. Noatex hired King as subcontractor to provide services and materials to Noatex. A dispute arose between Noatex and King over the quality of King's work and payments allegedly due to King. On September 23, 2011, King filed a Stop Notice pursuant to Mississippi's Stop Notice statute, Miss.Code Ann. § 85-7-181 (repealed 2014).
On November 15, 2011, APMM filed a complaint for interpleader against King and Noatex in Mississippi state court. APMM alleged that it was a disinterested stakeholder of the $260,410.15, disclaimed any further right to the funds, alleged that it could be exposed to double liability from the claims of multiple claimants, and alleged that it was unable to determine which of King's and Noatex's claims were valid. APMM asked the court for permission to tender the funds to the court, and asked that the court determine the claimants' rights to the interpleaded funds and enjoin King, Noatex, and any other person from instituting an action against APMM for recovery of the funds. On December 5, 2011, Noatex removed the interpleader complaint to federal district court, noting
In April 2012, the district court granted King's motion to remand due to lack of complete diversity between the parties. Noatex Corp. v. King Constr. of Hous., LLC, 864 F.Supp.2d 478, 483 (N.D.Miss. 2012). In December 2012, the district court withdrew its remand, finding that APMM could have commenced the case in federal court under 28 U.S.C. § 1335. The court directed APMM to redeposit the interpleader funds with the court, and APMM complied.
While the interpleader action was on remand, Noatex's counsel, Kohn, filed suit against APMM in the U.S. District Court for the Central District of California. Kohn alleged that Noatex had defaulted on its obligations to pay for legal services. Kohn claimed that an October 5, 2011 engagement agreement between Kohn and Noatex ("Engagement Agreement") "confer[red] a lien in favor of Kohn Law upon APMM's obligations to pay Noatex the amount of $260,410.15," that took priority over any other liens against Noatex. The Engagement Agreement also contained an arbitration clause:
The California action was stayed "in favor of the ongoing Mississippi interpleader action."
APMM filed a motion for discharge as a disinterested stakeholder, which Noatex and Kohn — but not King — opposed. In their joint opposition and in a joint motion to dismiss, Noatex and Kohn argued that APMM and King were bound by the Engagement Agreement to arbitrate this dispute and that the district court proceedings should be stayed pending arbitration. Noatex and Kohn also argued that the interpleader complaint failed to allege a claim for relief between Noatex, Kohn, and King.
On March 3, 2014, the district court granted APMM's motion to dismiss or discharge. The court found that the requirements for statutory interpleader under 28 U.S.C. § 1335 had been satisfied. The district court rejected Noatex's and Kohn's arguments that the discharge should be stayed pending arbitration and that APMM could not be discharged because it owed interest on the fund. It decided that the appropriate action was to discharge APMM as a disinterested stakeholder and proceed to determine the respective rights of the claimants. The district court discharged APMM and enjoined King, Noatex, and Kohn from filing any proceedings against APMM relating to the interpleader fund without authorization from the court.
On March 17, 2014, the district court denied Noatex and Kohn's motion to compel arbitration and to stay the proceedings pending arbitration, without prejudice to possible future arbitration between Noatex and Kohn.
Noatex and Kohn appealed the discharge order, as well as "all matters inextricably bound up" with that decision — over ten additional district court decisions. They also appealed the district court's denial of their motion to compel arbitration and to stay the action pending arbitration.
On March 24, 2014, the district court dismissed Kohn from the action, finding that any possible claims that Kohn had to the interpleader funds were not ripe because any lien depends on Noatex having rights in the fund. The district court also found Kohn's dismissal proper because Kohn's claim was asserted after the interpleader action was commenced. No party has appealed Kohn's dismissal.
On October 20, 2014, after the appeals were fully briefed, King and Noatex informed the district court that they had reached a settlement, and the district court dismissed the action without prejudice, retaining "complete jurisdiction to vacate this order and to reopen the action upon cause shown that settlement has not been completed and further litigation is necessary." Auto Parts Mfg. Miss. v. King Constr. of Hous., LLC, No. 1:11-cv-00251 (N.D.Miss. Oct. 20, 2014), ECF No. 262. King and Noatex filed a joint settlement motion with this court asking this court to distribute the registry funds according to the terms of settlement ($109,750 to King and $150,660.15 to Noatex) and to dismiss the appeals solely as against King. This panel dismissed the appeal for lack of jurisdiction, noting that we do not have jurisdiction to distribute the funds. The district court granted King's and Noatex's subsequent motion to distribute the registry funds and dismissed the action without prejudice. Id., ECF No. 264. The district court's distribution order did not address the injunction, and APMM filed a "motion to reopen and for clarification" that asked the district court to explicitly state that the injunction remains in effect. Id., ECF No. 265. Noatex and Kohn opposed APMM's motion. Id., ECF No. 266.
This complicated procedural history leaves the following issues to be resolved on appeal: 1) appellants' motion to dismiss the appeals solely as to King; 2) APMM's invitation to dismiss the appeals in their entirety as moot, and, if granted, appellants' contingent motion to vacate the district court's injunction; 3) appellants' appeal of the district court's order discharging APMM and enjoining appellants from filing any proceedings related to the interpleader funds; and 4) appellants' appeal of the district court's denial of their motion to compel arbitration and to stay the interpleader action pending arbitration.
To begin, appellants move to dismiss the appeals as to King after King's settlement agreement with Noatex and the district court's distribution of the interpleader funds. Neither King nor APMM opposes the motion.
Next, we address appellants' appeal of the district court's order discharging APMM and enjoining appellants from filing any proceedings relating to the interpleader funds. We have jurisdiction pursuant to 28 U.S.C. § 1292(a), which grants this court jurisdiction to hear the appeal of an interlocutory order granting an injunction. Our review "extends only to those parts of an interlocutory order that relate to the grant of an injunction." Ass'n of Co-op. Members, Inc. v. Farmland Indus., Inc., 684 F.2d 1134, 1138 (5th Cir.1982). In reaching its injunction, the district court relied on its determinations that APMM was a disinterested stakeholder, that APMM had deposited the interpleader funds, and that there were adverse claims to the fund. Thus, we review the district court's discharge order in full, including the finding that the statutory requirements for interpleader were met.
The parties dispute the effect on our jurisdiction of the district court's distribution of funds and dismissal of the case. APMM contends that the distribution has mooted the appeal because the interpleader funds have been distributed and because, by settling, Noatex and King have abandoned any competing claims to the funds. Noatex and Kohn agree that the request for distribution of funds is moot, but maintain that their appeal of the injunction has not been mooted. They argue that the appeal of the injunction's validity is a live issue, evidenced by Kohn's intent to bring action against APMM and APMM's motion for clarification in the district court as to the continued applicability of the injunction.
Our jurisdiction depends on whether the injunction is still in effect; if the injunction is no longer in effect, the challenge to the injunction is moot and we need not consider it. The question boils down to whether the injunction was permanent or preliminary. Permanent injunctions survive dismissal of the case; preliminary injunctions do not. See Venezia v. Robinson, 16 F.3d 209, 211 (7th Cir.1994) ("A preliminary injunction cannot survive the dismissal of a complaint."); Rice v. Johnson, 35 Fed.Appx. 389 (5th Cir.2002) (unpublished) (same); 11A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2947 (3d ed.). The answer is not immediately obvious; the district court ordered that appellants "are enjoined from filing any proceedings against Plaintiff relating to the interpleader fund without an order of this Court allowing the same." The district court did not explicitly term its order a "permanent" or "preliminary" injunction. This confusion caused APMM to file a motion in district court to clarify the continued operation of the injunction.
We hold that the district court issued a permanent injunction that survives the subsequent order of dismissal. Several considerations lead us to reach this conclusion. First, APMM requested a permanent injunction in its arguments in the district court, and appellants explicitly recognized — and opposed — APMM's request for a permanent injunction. The district court considered these arguments before issuing the injunction. Second, the district court relied on 28 U.S.C. § 2361, which
Because appellants request vacatur of the permanent injunction, there is still a live issue before this court, and the challenge to the district court's injunctive relief is not moot.
We review the district court's grant of injunctive relief in an interpleader action for abuse of discretion. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Karp, 108 F.3d 17, 23 (2d Cir.1997); Metro. Life Ins. Co. v. Kubichek, 83 Fed.Appx. 425, 430 (3d Cir.2003). To the extent it is a legal question, the underlying issue of whether the statutory requirements for interpleader have been met is reviewed de novo. See Tex. Commerce Bank Nat'l Ass'n v. Florida, 138 F.3d 179, 181 (5th Cir.1998).
Before we address whether the district court abused its discretion in discharging APMM and enjoining the claimants from filing any claims relating to the interpleader funds, we determine whether the requirements for maintaining an interpleader action have been met. There are two types of interpleader: rule interpleader pursuant to Fed.R.Civ.P. 22 and statutory interpleader under 28 U.S.C. § 1335. They differ in jurisdictional requirements but not in substance. See 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1703 (3d ed.). 28 U.S.C. § 1335 grants a district court jurisdiction over an interpleader action if: 1) the plaintiff files an action concerning an amount of $500 or more; 2) the plaintiff deposits the funds at issue into the registry of the court; 3) two
Rhoades v. Casey, 196 F.3d 592, 600 (5th Cir.1999) (citation omitted). Whether the statutory requirements for interpleader have been met squarely concerns only the first stage of interpleader. A court considers the merits of the claimants' claims to the fund and the proper distribution of the fund only if the statutory elements for an interpleader action are met. See id.
Appellants do not dispute that the action meets most of the elements of statutory interpleader. APMM filed an action concerning $260,410.15 and deposited that sum with the registry of the court. APMM named as claimants King (a Mississippi citizen), Noatex (a California citizen), and later Kohn (a California citizen), satisfying § 1335's minimum diversity requirement.
Appellants' argument, based heavily in traditional theories of equity, is that APMM currently faces only separate obligations to King and to Noatex. Thus, the argument goes, APMM is not subject to the possibility of multiple claims for the same funds, making interpleader improper. Despite the distribution of funds, appellants continue to reserve their rights to pursue separate claims for the portion of the interpleaded funds that was distributed to King. Essentially, appellants argue that King's claim was implausible and
The district court did not — and in light of the settlement agreement, will not — opine on whether, in the absence of the Stop Notice statute, King could have succeeded on its claims in the second stage. The first stage of interpleader only is concerned with whether multiple claims have been asserted, or may be asserted, against a disinterested stakeholder, not whether those claims have merit. See Rhoades, 196 F.3d at 601 (finding a proper interpleader action where multiple parties informed a stakeholder that they claimed a pool of benefits). Appellants have conceded in the district court, even after the Stop Notice statute was declared unconstitutional, that King at least claimed a right to the interpleader funds. In support of its motion to stay the case pending arbitration, appellants argued that "[u]nder the circumstances of this action for interpleader, King Construction of Houston, LLC must also arbitrate its claim of asserted equitable rights to the interpleader fund."
There is also a "single, identifiable fund" that is the subject of the interpleader. Rhoades, 196 F.3d at 600 n. 8 (citing Wausau Ins. Cos. v. Gifford, 954 F.2d 1098, 1100 (5th Cir.1992)). Appellants argue that, whatever claim King had against Noatex, it was not a claim against the interpleaded funds. They characterize King as a general creditor whose claim is against APMM generally but not tied to the interpleader funds. Appellants rely on Airborne Freight Corp. v. United States, 195 F.3d 238 (5th Cir.1999) to argue that King and Noatex assert rights to different debts.
Faced with King's and Noatex's competing claims, APMM reasonably concluded that it was subject to multiple suits from adverse claimants seeking the same $260,410.15. APMM deposited the disputed sum with the registry of the court, thereby instituting and maintaining an interpleader action as permitted by 28 U.S.C. § 1335.
Having found the district court did not err in finding the statutory requirements of § 1335 interpleader met, we review its decision to discharge APMM and to enjoin the parties for abuse of discretion. The district court's discharge and injunction readily follow from its findings on statutory interpleader, and we affirm.
In an interpleader action, the district court "may discharge the plaintiff from further liability." 28 U.S.C. § 2361; see also 7 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1714 (3d ed.) ("When the court decides that interpleader is available, it may issue an order discharging the stakeholder, if the stakeholder is disinterested."). "A district court has broad powers in an interpleader action." Rhoades, 196 F.3d at 600. APMM met the requirements of Section 1335 and disclaimed any right to the funds; there was no reason to keep APMM in a dispute solely between the adverse claimants. See Tittle, 463 F.3d at 423 (quoting Wright, Miller & Kane for the proposition that a disinterested stakeholder who is willing to tender the disputed funds "is not to be obliged to be at the expense and risk of defending an action; but, on giving up the thing ..., he is to be relieved, and the Court directs that the persons between whom the dispute really exists shall fight it out at their own expense").
28 U.S.C. § 2361 also expressly authorizes a district court to enter an order restraining claimants "from instituting or prosecuting any proceeding in any State or United States court affecting the property... involved in the interpleader action until further order of the court." 28 U.S.C. § 2361; see also Rhoades, 196 F.3d at 600-01. The district court was well within its discretion to protect APMM — a disinterested stakeholder — from other suits seeking the interpleader funds. See In re Bohart, 743 F.2d at 325 ("[I]nterpleader statutes and rules are liberally construed to protect the stakeholder from the expense of defending twice, as well as to protect him from double liability." (internal quotation marks and citation omitted)).
Appellants present no argument why APMM should not be discharged besides
Noatex and Kohn also appeal the district court's denial of their motion to compel arbitration and to stay the interpleader action pending arbitration. We have jurisdiction over this appeal pursuant to 9 U.S.C. § 16(a). Noatex and Kohn sought to compel APMM and King to arbitrate the entire interpleader dispute on the basis of an arbitration clause in the Engagement Agreement between Noatex and its law firm, Kohn. The district court denied the motion on numerous grounds, including: 1) appellants waived their right to arbitrate by substantially invoking the judicial process; 2) appellants' motion was untimely; and 3) the arbitration agreement between Noatex and Kohn did not require APMM and King to arbitrate this dispute. Noatex and Kohn argue that their appeal is not moot because, if this court finds that arbitration should have been compelled, we have the authority to vacate the district court's discharge order and injunction. Further, appellants contend that Noatex's claim for fees and costs incurred while Kohn was a party should be arbitrated. Because there is a live controversy, we will decide the merits of the appeal. We agree with the district court that the arbitration agreement did not require APMM to arbitrate this dispute, so we need not reach the district court's other grounds for denying the motion.
We review a district court's denial of a motion to compel arbitration and denial of a stay pending arbitration de novo. JP Morgan Chase & Co. v. Conegie ex rel. Lee, 492 F.3d 596, 598 (5th Cir. 2007); Texaco Exploration & Prod. Co. v. AmClyde Engineered Prods. Co., 243 F.3d 906, 908 (5th Cir.2001). We review for abuse of discretion a district court's determination of whether equitable estoppel may be invoked to compel arbitration. Bridas S.A.P.I.C. v. Gov't of Turkmenistan, 345 F.3d 347, 360 (5th Cir.2003). "To constitute an abuse of discretion, the district court's decision must be either premised on an application of the law that is erroneous, or on an assessment of the evidence that is clearly erroneous." Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 528 (5th Cir.2000).
Whether APMM has agreed, or is otherwise bound, to arbitrate is a threshold question for the court. "[B]ecause arbitration is a matter of contract, where a party contends that it has not signed any agreement to arbitrate, the court must first determine if there is an agreement to arbitrate before any additional dispute can be sent to arbitration." Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 218 (5th Cir.2003). To determine whether the parties have agreed to arbitrate this claim, we ask "(1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement." Pers. Sec. & Safety Sys. Inc. v. Motorola Inc., 297 F.3d 388,
We first decide whether there was a valid agreement to arbitrate between the parties. Kohn and Noatex, as signatories to the Engagement Agreement, have agreed to arbitrate certain disputes between them. The Engagement Agreement is an agreement for Kohn to provide legal services to Noatex and is signed only by Noatex and Kohn. It is undisputed that APMM is not a signatory to the contract containing the arbitration clause. Where some written agreement to arbitrate exists, we have recognized several theories for binding a non-signatory to an arbitration agreement. See The Rice Co. (Suisse), S.A. v. Precious Flowers Ltd., 523 F.3d 528, 536-37 (5th Cir.2008). Appellants contend that one of these theories — equitable estoppel — requires APMM to arbitrate, notwithstanding APMM's status as a non-signatory to the Engagement Agreement.
The parties dispute which body of law — federal, California, or Mississippi — applies to the question of whether equitable estoppel binds APMM to the arbitration clause. We need not resolve this question because APMM is not bound under any estoppel standard. See Washington Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 267-68 (5th Cir.2004) (under federal law, a non-signatory is bound to arbitrate when it sues "based upon" the contract); JSM Tuscany, LLC v. Superior Court, 193 Cal.App.4th 1222, 123 Cal.Rptr.3d 429, 445 (2011) (under California law, a non-signatory is bound to arbitrate when pursuing a claim that is "dependent upon or inextricably intertwined" with the contract obligations); Scruggs v. Wyatt, 60 So.3d 758, 770 (Miss.2011) (under Mississippi law, a non-signatory is bound to arbitrate when its claims are "directly dependent" on the contract).
Appellants argue that APMM can establish the existence of "conflicting claims" — a prerequisite to its interpleader action — only by reference to the Engagement Agreement. However, APMM can establish — and has established — the existence of conflicting claims necessary for interpleader by referencing the dispute between King and Noatex alone, without reference to the Engagement Agreement. Statutory interpleader requires the assertion of two or more claims to the same fund. See 28 U.S.C. § 1335(a)(1); Rhoades, 196 F.3d at 600 (holding that the statutory requirements for interpleader are met if there are adverse claimants to a single fund). Here, claims were asserted by Noatex and King; interpleader did not depend on including Kohn's claims to the fund. Thus, while the language of the Engagement Agreement may have been sufficient to establish conflicting claims — of Noatex and Kohn — it was not necessary. Appellants concede this point by arguing that "APMM and King Construction are bound to arbitrate, even though the amended interpleader complaint is also pleaded and disputed on alternate grounds that do not reference the engagement agreement." Claims cannot be inextricably intertwined with, directly dependent on, or based on a contract if they can be shown without reference to the contract.
We also note that this case does not fit the rationale of the equitable estoppel exception. APMM is not trying to "hav[e] it
Because we find that APMM did not agree to arbitrate this dispute and that equitable estoppel does not compel it to arbitrate, we need not address whether the scope of the agreement includes the interpleader suit. See Tittle, 463 F.3d at 419 (determining scope of arbitration clause only because there was no dispute that parties were subject to a valid agreement to arbitrate). We also do not reach the district court's alternative grounds for denying appellants' motion to compel.
For the foregoing reasons, we AFFIRM the district court's discharge of APMM and its accompanying injunction. We also AFFIRM the district court's denial of appellants' motion to compel arbitration and to stay proceedings pending arbitration. King Construction is DISMISSED from these appeals. Appellants' alternative motion to vacate the district court's rulings is DENIED.