First Circuit Reconsiders Potential Procedural Conflicts between Litigation and Construction Arbitration Agreements
Authors Christopher K. LeMieux and Hannah M. Marler
A recent decision from the First Circuit in Stantec Consulting Services, Inc. v. Kiewit Louisiana Co. provides important context for judicial interpretations of construction arbitration agreements and their timing for enforcement. In Stantec Consulting Services, Inc. v. Kiewit Louisiana Co., the Louisiana First Circuit Court of Appeal affirmed the trial court’s decision sustaining a dilatory exception of prematurity based on an arbitration agreement. The court dismissed, without prejudice, a petition for declaratory judgment involving alleged perempted claims.
The dispute stemmed from the U.S. Army Corps of Engineers’ multi‑entity project to design and construct Permanent Canal Closures and Pump Stations in New Orleans, subcontracted through PCCP Constructors, a joint venture. The dispute involved claims asserted by the subcontractors and engineers against the general contractor and claims asserted between the general contractor and owner. Ultimately the owner asserted multiple claims for defective work against the general contractor, which also implicated the work of the subcontractors. While the general contractor and owner attempted to resolve their claims, the general contractor and subcontractors entered into an arbitration agreement. Ultimately, the subcontractors filed a petition for declaratory judgment seeking to have the district court enter a ruling stating that the arbitration agreement did not include preempted claims. In response, the general contractor sought to enforce the arbitration agreement according to its precise language which required arbitration for “any disputes” between the parties relating to the construction project.
The general contractor responded to the declaratory action with an exception of prematurity, arguing that the arbitration agreement rendered the court case improper at this stage. The trial and appellate courts agreed. The First Circuit held that the stand-alone, broadly worded Arbitration Agreement clearly covered all disputes, including defenses like peremption, and delegated those determinations to the arbitrators via its adoption of AAA rules. The court emphasized Louisiana and federal policy favoring arbitration, resolving interpretive doubts in favor of sending issues—including statutory defenses—to the arbitral forum.
Stantec marks a Louisiana appellate endorsement of comprehensive, separately negotiated arbitration agreements that unambiguously delegate statutory defenses like peremption to arbitration. This case marks a departure from the Court’s previous rulings in Lemoine Company LLC v Durr Heavy Construction LLC and Boh Bros Construction Co LLC v Cypress Bend Real Estate Development Company LLC, which both ruled that a court retains its authority to resolve peremption first when the arbitration clause is embedded in a construction contract, generic, or lacks clear delegation to the arbitrator. For parties to Louisiana construction contracts who wish to have time-bar defenses decided in arbitration, precise drafting, and / or having a separate arbitration agreement is needed..
