Seshadri Raju v. Erin Murphy , 709 F. App'x 318 ( 2018 )

Case: 17-60550 Document: 00514324642 Page: 1 Date Filed: 01/26/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 17-60550
Fifth Circuit
FILED
Summary Calendar January 26, 2018
Lyle W. Cayce
Clerk
SESHADRI RAJU, M.D., P.A.,
Plaintiff−Appellant,
versus
ERIN MURPHY, M.D.,
Defendant−Appellee.
Appeal from the United States District Court
for the Southern District of Mississippi
No. 3:17-CV-357
Before HIGGINBOTHAM, JONES, and SMITH, Circuit Judges.
PER CURIAM: *
Two doctors had a business relationship and an agreement that contem-
plated arbitration to resolve disputes. When they disagreed, Seshadri Raju
sued Erin Murphy instead of invoking arbitration. The state suit was removed
to federal court, whereupon Murphy counterclaimed. Only then did Raju
invoke the arbitration clause. The district court denied Raju’s motion to stay
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
Case: 17-60550 Document: 00514324642 Page: 2 Date Filed: 01/26/2018
No. 17-60550
the proceedings and compel arbitration. Raju brings this interlocutory appeal
under 9 U.S.C. § 16(a).
The district court issued a succinct but more than adequate explanation
of its reasons for denying arbitration. It noted that “[t]he right to arbitrate
. . . is subject to waiver” (quoting Nicholas KBR, Inc., 565 F.3d 904, 907 (5th
Cir. 2009) (citation omitted)). The court properly noted that “[w]aiver will be
found when the party seeking arbitration substantially invokes the judicial
process to the detriment or prejudice of the other party” (quoting Miller Brew-
ing Co. v. Fort Worth Distrib. Co., 781 F.2d 494, 497 (5th Cir. 1986)).
The district court accurately found that Raju had “substantially in-
voke[d] the judicial process.” As the court said, “[t]he record suggests that
Dr. Raju was initially uninterested in resolving this dispute through arbitra-
tion” and decided on that avenue only when the case landed in federal court
through removal. As the court opined, “Dr. Raju clearly prefers litigation over
arbitration, apparently just not in this Court.”
Murphy still must show prejudice to establish waiver, for, as the district
court observed, “[i]nvocation of the Judicial process, alone, is insufficient to
support waiver of arbitration.” The court correctly found prejudice from Mur-
phy’s being required to answer the complaint, to file a counterclaim, to consult
with two law firms, and to gear her legal strategy to court proceedings instead
of arbitration. The court pointed out that Murphy was also prejudiced by the
public nature of the lawsuit, whereas arbitration would have been private and
confidential, so Murphy was hurt “by the public filing of the highly charged
allegations accusing her of tortious and even criminal conduct.”
The district court handled this matter ably, fairly, and expeditiously.
There was prejudice and waiver. The order denying the motion to stay and to
compel arbitration is AFFIRMED.
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