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Conseco Finance Svc v. Shinall ( 2002 )


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  •                     UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT
    No. 01-60522
    CONSECO FINANCE SERVICING CORPORATION,
    Plaintiff-Appellee,
    VERSUS
    MARY SHINALL and JOHNNIE PAYNE,
    Defendants-Appellants.
    Appeal from the United States District Court
    for the Southern District of Mississippi
    (01-CV-107)
    October 1, 2002
    Before SMITH, BENAVIDES, and PARKER, Circuit Judges.
    PER CURIAM:*
    Appellants,   Mary    Shinall    and   Johnnie   Payne,   appeal   the
    district court’s denial of their motion to dismiss and the orders
    compelling arbitration and staying their state court action.             For
    the reasons that follow, we affirm.
    *
    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    opinion should not be published and is not precedent except under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-
    BACKGROUND
    In   the    summer     of     1999,       Appellants,     both     residents      of
    Mississippi,      visited     Lakeland       Drive    Mobile      Home   Sales,    d/b/a
    Lakeland Mobile Home Sales (hereinafter “Lakeland”) in Vicksburg,
    Mississippi.      David Walters, also a resident of Mississippi and a
    representative of Lakeland, assisted Appellants in viewing the two
    homes on Lakeland’s lot available for sale.                     The home Appellants
    decided to purchase was a used mobile home.                 Appellants made a down
    payment and       Lakeland    agreed       to     finance   the    remainder      of   the
    purchase.        In completing the purchase transaction, Appellants
    executed    a    Manufactured       Home    Retail     Installment       Contract      and
    Security     Agreement       (hereinafter           “Contract”)        containing       an
    arbitration clause.           Although Lakeland agreed to finance the
    purchase, the Contract was assigned to Conseco Finance Servicing
    Corp.1 (hereinafter “Conseco Servicing”) shortly after it was
    executed.
    The home was delivered to Appellants and set up on their lot,
    however, Appellants did not approve of the home’s condition and
    refused to occupy it.               Needless to say, the payments became
    delinquent and the mobile home was repossessed.                     On May 30, 2000,
    Appellants       brought     suit    against        Lakeland,      Walters,    Conseco
    1
    Conseco Finance Servicing Corp. is a Delaware corporation with
    its principal place of business in St. Paul, Minnesota. At the
    time of sale, Conseco Finance Servicing Corp. was known as Green
    Tree Financial Servicing Corporation.
    -2-
    Servicing,         and   Conseco   Finance      Corp.2   (hereinafter      “Conseco
    Finance”) in the Circuit Court of Claiborne County, Mississippi,
    seeking damages in connection with the purchase of the mobile home.
    Appellants’ complaint asserted that the state court defendants made
    misrepresentations with respect to the age, condition, and cost of
    the mobile home.           In addition, the complaint asserted that the
    defendants engaged in an egregious pattern and practice of fraud
    and deception in the sale and financing of mobile homes.
    On June 29, 2000, Conseco Servicing and Conseco Finance
    (collectively hereinafter “Conseco”) moved to dismiss the state
    court action and to compel arbitration pursuant to the arbitration
    clause in the Contract.            On July 19, 2000, Appellants moved the
    state court to continue or stay, pending discovery on the issue of
    arbitrability,           any   hearing    on    Conseco’s    motion   to    compel
    arbitration.         Subsequently, the state court granted Appellants’
    motion and entered an order on October 12, 2000, staying the
    arbitration issue and permitting the parties to conduct full
    discovery.          Shortly    thereafter,      Appellants   propounded    written
    discovery to all defendants.
    On February 12, 2001, Conseco Servicing filed the instant suit
    in       federal   court   seeking   an   order    to    compel   arbitration   of
    Appellants’ state court claims and to stay the state court action
    2
    Conseco Finance Corp. is a Delaware corporation with its
    principal place of business in St. Paul, Minnesota.       Conseco
    Finance Corp. is the parent company of Conseco Servicing.
    -3-
    pending arbitration.    Appellants responded on February 23, 2001,
    and moved the district court to dismiss, or in the alternative, to
    stay the action pending resolution of the state court proceedings.
    On May 3, 2001, Conseco Finance moved to intervene in the district
    court action, compel arbitration of Appellants’ state court claims,
    and stay the state court proceedings pending arbitration.
    The district court entered its Memorandum Opinion and Order on
    June 8, 2001, denying Appellants’ motion to dismiss, ordering
    Appellants to arbitrate their state court claims against Conseco
    Servicing, and staying the state court proceedings relative to
    Conseco Servicing. Similarly, on June 19, 2001, the district court
    granted Conseco Finance’s motion to intervene and issued an order
    compelling Appellants to arbitrate their state court claims against
    Conseco Finance and staying the state court proceedings relative to
    Conseco Finance.
    On appeal, Appellants contend that the district court erred
    in: 1) failing to join necessary and indispensable state court
    parties; 2) failing to abstain from exercising jurisdiction in
    light of the parallel state court proceedings; 3) staying the state
    court   proceedings   pursuant   to   the   “in   aid   of   jurisdiction”
    exception to the Anti-Injunction Act; 4) failing to dismiss the
    federal action due to collateral estoppel of the substantive issues
    in dispute; 5) failing to dismiss the federal action in light of
    Conseco’s waiver of any right to invoke federal jurisdiction; 6)
    denying their motion for discovery; and 7) denying their request
    -4-
    for a jury trial.
    STANDARDS OF REVIEW
    We review de novo, a district court’s assumption of subject
    matter jurisdiction.    See Local 1351 Int’l Longshoremens Assoc. v.
    Sea-Land Serv. Inc., 
    214 F.3d 566
    , 569 (5th Cir. 2000).   We review
    for an abuse of discretion, a district court’s determination
    whether to exercise its jurisdiction and de novo, its underlying
    legal conclusions.     See Safety Nat’l Cas. Corp. v. Bristol-Myers
    Squibb Co., 
    214 F.3d 562
    , 564 (5th Cir. 2000).       Insofar as the
    availability of the exceptions to the Anti-Injunction Act is an
    issue of law, we review de novo, a district court’s injunction of
    a state court action.     See Next Level Communications L.P. v. DSC
    Communications Corp., 
    179 F.3d 244
    , 249 (5th Cir. 1999). We review
    for an abuse of discretion, a district court’s decision whether to
    issue an injunction that properly falls within the exceptions to
    the Anti-Injunction Act.    See Rolex Watch USA, Inc. v. Meece, 
    158 F.3d 816
    , 823 (5th Cir. 1998).   We also review de novo, a district
    court’s application of collateral estoppel and the decision to deny
    a jury trial on factual issues in the context of an arbitration
    agreement.   See Stripling v. Jordan Prod. Co., L.L.C., 
    234 F.3d 863
    , 868 (5th Cir. 2000) (citation omitted) (“[T]he application of
    collateral estoppel is a question of law that we review de novo.”);
    Avedon Eng’g, Inc. v. Seatex, 
    126 F.3d 1279
    , 1283 (10th Cir. 1997)
    (citation omitted) (“We also review de novo a district court’s
    -5-
    decision to deny a jury trial on the factual question of whether
    the parties agreed to arbitrate.”).    We review a district court’s
    discovery decisions for an abuse of discretion.         See Moore v.
    Willis Indep. Sch. Dist., 
    233 F.3d 871
    , 876 (5th Cir. 2000).
    DISCUSSION
    Appellants raise a number of issues on appeal.      We address
    each in turn below.
    I.   JURISDICTION TO HEAR APPEAL
    Before addressing the merits of the issues presented in this
    appeal, we must first determine whether we have jurisdiction over
    the district court’s orders compelling arbitration.     In Green Tree
    Finance Corp.-Alabama v. Randolph, 
    531 U.S. 79
    (2000), the Supreme
    Court addressed the appealability of orders compelling arbitration
    under the Federal Arbitration Act, 9 U.S.C. § 16(a)(3) (1999)
    (hereinafter “the FAA”).3    The Supreme Court held in Green Tree
    that, a district court’s order compelling arbitration is appealable
    as a final decision under § 16(a)(3) if the underlying action is
    dismissed.   See Green 
    Tree, 531 U.S. at 86-87
    .      The FAA does not
    define a “final decision” with respect to an arbitration.       Green
    Tree instructs, however, that a final decision “is a decision that
    ends the litigation on the merits and leaves nothing more for the
    3
    Section 16(a)(3) of the FAA states in relevant part: “(a) An
    appeal may be taken from – . . . (3) a final decision with respect
    to an arbitration that is subject to this title.”      9 U.S.C. §
    16(a)(3).
    -6-
    court to do but execute the judgment.”           
    Id. at 86
    (internal
    quotations and citations omitted).       In a footnote to the opinion,
    the Supreme Court expanded its holding beyond the specific facts
    presented in Green Tree and stated that “[h]ad the District Court
    entered a stay instead of a dismissal in this case, that order
    would not be appealable.”      
    Id. at 87
    n.2 (citing 9 U.S.C. §
    16(b)(1)).
    In the instant case, Conseco contends that after granting
    their motions to compel, the district court stayed its action and
    thus, the orders are not appealable.        Although Conseco concedes
    that the district court’s orders did not expressly state that the
    action was stayed, Conseco maintains that insofar as the orders
    generally granted their arbitration motions and insofar as they
    requested a stay pursuant to 9 U.S.C. § 3, it logically follows
    that the district court stayed the action.      Even a cursory reading
    of   Conseco’s   Complaint   and    Petition   for   Order   Compelling
    Arbitration and for Other Relief, the district court’s Memorandum
    Opinion and Order of June 8, 2001, and the subsequent Order of June
    19, 2001, however, reveals the flaws in Conseco’s contention.
    Conseco is correct in that the district court’s orders did not
    expressly state that the district court action was stayed. Conseco
    is incorrect, however, in interpreting the district court’s orders
    as a stay of the district court action and in implying that they
    requested a stay of the district court action.       Conseco’s request
    -7-
    for   injunctive    relief    specifically    sought   to   enjoin   “all
    proceedings on the part of Defendants, and their attorneys in the
    State Court Action.”         Furthermore, the district court’s order
    clearly provides that the stay accompanying the order compelling
    arbitration applied only to the state court proceedings relative to
    the parties in the instant suit. Because the district court action
    was not stayed, Appellants’ district court motion to dismiss or to
    stay pending the outcome of the state court proceedings was denied,
    and the orders compelling Appellants to arbitrate their claims
    against Conseco ended the litigation on the merits and left nothing
    more for the district court to do but execute the judgment, we
    conclude that the district court’s decision was a final decision
    within the meaning of § 16(a)(3) and in accordance with Green Tree.
    Thus, we have jurisdiction to hear the instant appeal.
    II.   SUBJECT MATTER JURISDICTION
    Appellants argue that the district court erred in denying
    their motion to dismiss.       Specifically, Appellants maintain that
    Walters and Lakeland are indispensable parties to the instant
    action because of their participation in the formation of the
    Contract and should have been joined.        Appellants further maintain
    that the joinder of Walters and Lakeland would have destroyed
    diversity jurisdiction under 28 U.S.C. § 1332 due to their non-
    diverse status as residents of Mississippi.        We disagree.
    Rule 19(a)(1) requires joinder if “in the person’s absence
    -8-
    complete relief cannot be accorded among those already parties.”
    FED. R. CIV. P. 19(a)(1).   When joinder of a person described in
    Rule 19(a)(1) is not feasible because it will deprive the court of
    subject matter jurisdiction, Rule 19(b) requires the court to
    determine whether “the action should proceed among the parties
    before it, or should be dismissed, the absent person being thus
    regarded as indispensable.”      FED. R. CIV. P. 19(b).
    Contrary   to   Appellants’   contentions,   however,     Walters   and
    Lakeland were not necessary and indispensable parties. Appellants’
    state court complaint asserts that the Contract at issue was
    procured through fraud and deceit.       Appellants, however, did not
    specifically allege fraudulent inducement in the execution of the
    arbitration agreement.    Under § 4 of the FAA, an allegation that
    the entire contract was fraudulently induced does not call into
    question the making of an agreement to arbitrate.         See Prima Paint
    Corp. v. Flood & Conklin Mfg. Co., 
    388 U.S. 395
    , 403-04 (1967).
    Furthermore, “the federal district court ascertains only whether
    the arbitration clause covers the allegations at issue.          ‘If the
    dispute is within the scope of the arbitration clause, the court
    may not delve further into the merits of the dispute.’”          Snap-On
    Tools Corp. v. Mason, 
    18 F.3d 1261
    , 1267-68 (5th Cir. 1994)
    (quoting Mun. Energy Agency v. Big Rivers Elec. Corp., 
    804 F.2d 338
    , 342 (5th Cir. 1986) (citing Meridian v. Algernon Blair, Inc.,
    
    721 F.2d 525
    , 528 (5th Cir. 1983)).
    -9-
    In the instant case, the only issue before the district court
    was whether Appellants were to be compelled to arbitrate their
    claims against Conseco. Information regarding the participation of
    Walters and Lakeland in the formation of the Contract may have been
    beneficial in an examination of the merits of the underlying state
    court dispute, but were not necessary to determine whether the
    allegations at issue were within the scope of the arbitration
    clause.   Accordingly, the district court did not err in denying
    joinder of Walters and Lakeland.
    III.   ABSTENTION
    Appellants argue that the district court erred in failing to
    abstain from hearing this case pursuant to the abstention doctrine
    set forth in Colorado River Water Conservation District v. United
    States, 
    424 U.S. 800
    (1976) and further elucidated in Moses H. Cone
    Memorial Hospital v. Mercury Construction Corp., 
    460 U.S. 1
    (1983).
    Specifically, Appellants contend that the district court abused its
    discretion in failing to abstain from hearing this case in light of
    the procedural posture of the underlying proceedings and Conseco’s
    improper federal litigation tactics.
    “The doctrine of abstention generally applies only to cases
    involving considerations of proper constitutional adjudication or
    regard for federal-state relations . . . in situations involving
    the contemporaneous exercise of concurrent jurisdictions.”    Bank
    One, N.A. v. Boyd, 
    288 F.3d 181
    , 184 (5th Cir. 2002) (internal
    -10-
    quotation       and   citation    omitted).     Colorado     River   instructs,
    however, that considerations of wise judicial administration may
    also serve as an appropriate basis for a federal district court’s
    decision to refrain from exercising jurisdiction in favor of a
    parallel state court proceeding.          See 
    id. The district
    court’s orders do not explain its decision to
    exercise jurisdiction.           Nevertheless, we begin our analysis with
    the federal court’s virtually unflagging obligation to exercise the
    jurisdiction conferred upon them.             See 
    id. “Abstention from
    the
    exercise of federal jurisdiction is the exception, not the rule.”
    
    Id. at 813.
          “Abdication of the obligation to decide cases can be
    justified under [the abstention] doctrine only in the exceptional
    circumstances where the order to the parties to repair to the state
    court would clearly serve an important countervailing interest.”
    
    Id. There is
    no hard and fast rule for determining whether to
    dismiss     a    federal    action    because    of     parallel   state    court
    litigation. Factors relevant to the decision, however, include: 1)
    which court       first    assumed   jurisdiction     over   the   res;    2)   the
    inconvenience of the federal forum; 3) the desirability of avoiding
    piecemeal litigation; 4) the order in which jurisdiction was
    obtained by the concurrent fora; 5) whether and to what extent
    federal law provides the rules of decision on the merits; and 6)
    the adequacy of the state court proceeding in protecting the rights
    -11-
    of the party invoking federal jurisdiction.               See 
    id. at 818;
    Moses
    H. 
    Cone, 460 U.S. at 23
    , 26; Black Sea Inv., Ltd. v. United
    Heritage Corp.,      
    204 F.3d 647
    ,    650   (5th    Cir.    2000)   (citation
    omitted).     No single factor is dispositive.            Rather, the decision
    whether to abstain requires a careful balancing of these factors as
    they apply in a given case.
    The first factor is not applicable to the instant case as
    there   has   been   no    exercise   of   jurisdiction         over   any    res   or
    property.     With respect to the second factor, Appellants assert
    that the federal forum is inconvenient due to the geographic
    distance between Claiborne County (the location of the state court
    action) and Hinds County (the location of the federal court action)
    and thus, this factor weighs in favor of exercising jurisdiction.
    We disagree.     The question is not whether the federal forum is
    inconvenient, but rather “whether the inconvenience of the federal
    forum [to the parties] is so great that this factor points toward
    abstention.”    Evanston Ins. Co. v. Jimco, Inc., 
    844 F.2d 1185
    , 1193
    (5th Cir. 1988).      Because Claiborne County and Hinds County are
    neighboring counties, any inconvenience would be minor. Thus, this
    factor weighs in favor of exercising jurisdiction.                       The third
    factor also weighs in favor of exercising jurisdiction.                      Although
    it is generally desirable to avoid piecemeal litigation when
    possible, the FAA “requires piecemeal resolution when necessary to
    give effect to an arbitration agreement.”               Moses H. Cone, 460 U.S.
    -12-
    at 20.
    Mindful of the Supreme Court’s caution against giving “too
    mechanical a reading to the ‘priority’ element,” we find that the
    fourth factor, the order in which jurisdiction was obtained by the
    concurrent fora, weighs slightly in favor of abstention.    
    Id. at 21.
      The state court action was filed almost nine months prior to
    the federal action.   Furthermore, the state court had issued an
    order permitting discovery and Appellants had propounded written
    discovery.
    The only question before the district court was whether
    Appellants should be compelled to arbitrate their state court
    claims against Conseco. “The FAA establishes that, ‘as a matter of
    federal law, any doubts concerning the scope of arbitrable issues
    should be resolved in favor of arbitration . . . .’” Bank One,
    
    N.A., 288 F.3d at 186
    (quoting Moses H. 
    Cone, 460 U.S. at 15
    ).
    Thus, the fifth factor, whether and to what extent federal law
    provides the rules of decision on the merits, weighs in favor of
    the district court exercising jurisdiction.   The sixth factor, the
    adequacy of the state proceedings in protecting the rights of the
    party invoking federal jurisdiction is a neutral factor.       See
    Evanston Ins. 
    Co., 844 F.2d at 1193
    (explaining that the adequacy
    of the state proceedings “can only be a neutral factor or one that
    weighs against, not for, abstention”). Although the FAA represents
    federal policy, enforcement of it is left in large part to the
    -13-
    state courts.             See Moses H. 
    Cone, 460 U.S. at 26
    n.32.
    Because         no     single    factor     is   dispositive     and   the    weight
    accorded to any single factor depends upon the circumstances of the
    particular case, ending our analysis with these six factors would
    present    a    fairly        close   call     due    to   the   state   court’s    prior
    assumption of jurisdiction.                  Yet, the balance would still tip
    slightly in favor of the district court exercising jurisdiction.
    A determination of whether exceptional circumstances warranting
    abstention          are    present    in   any    given      case,   however,     is   not
    restricted to an examination of these six factors alone.                        Although
    not called into play in Moses Cone, there, the Supreme Court
    instructed that “the vexatious or reactive nature of either the
    federal or the state litigation may influence the decision whether
    to defer to a parallel state litigation under Colorado River.”
    Moses H. 
    Cone, 460 U.S. at 26
    n.20.
    Relying on the arbitration provision in the Contract, Conseco
    countered Appellants’ state court complaint with a motion to compel
    arbitration.          Appellants opposed Conseco’s arbitration motion and
    moved the court for a stay or continuance of any hearing on
    Conseco’s motion in order to allow the parties to take discovery
    relevant       to    the     enforceability      of    the   arbitration    provision.
    Finding Appellants’ motion well taken, the state court entered an
    order on or about October 11, 2000, permitting full discovery and
    staying any hearing on Conseco’s motion to compel arbitration
    -14-
    pending discovery.       On February 12, 2001, displeased with the
    course of progress in the state court action and four months after
    the state court stayed, pending discovery, any hearing on the
    motion to compel arbitration, Conseco Servicing filed the instant
    federal suit to compel arbitration.
    Conseco’s resort to the federal courts, nearly nine months
    after the initiation of the state court action and four months
    after the entry of an adverse order, appears at first glance to be
    an abuse of the federal courts.            Conseco was free to pursue
    compulsion of arbitration in a parallel federal action upon being
    served in the state court action.         Conseco elected, however, to
    pursue arbitration in state court.          Only after the state court
    issued   an   order,    not   limiting    discovery   to   the   issue   of
    arbitrability, but permitting full discovery and staying any action
    on the motion to compel arbitration, did Conseco decide to resort
    to the federal courts.
    “The Supreme Court has noted that ‘the vexatious or reactive
    nature of either the federal or the state litigation may influence
    the decision whether to defer to a parallel state litigation under
    Colorado River.’”      Allen v. La. State Bd. of Dentistry, 
    835 F.2d 100
    , 105 (5th Cir. 1988) (quoting Moses H. 
    Cone, 460 U.S. at 18
    n.20).   We are mindful, however, that “[a] party who could find
    adequate protection in state court is not thereby deprived of its
    right to the federal forum, and may still pursue the action there
    -15-
    since there is no ban on parallel proceedings.” Evanston Ins. 
    Co., 844 F.2d at 1193
    .
    The sequence of events in this case demonstrate that Conseco’s
    initial position in state court and its resort to the federal
    courts were consistent with the policy of the FAA to move the case
    out of court and into arbitration as quickly as possible.              There
    was   no   improper   forum   shopping    or    attempt   to   undermine   the
    authority of the state court to enforce its order.              Although the
    question is close, we find that this case does not present the
    exceptional circumstances necessary to abstain from exercising
    jurisdiction in favor of the ongoing proceedings in state court.
    Accordingly, the district court did not abuse its discretion in
    exercising jurisdiction.
    IV.    STAY OF STATE COURT PROCEEDINGS
    Appellants argue that the district court erred in staying the
    state court proceedings, insofar as they related to the parties to
    the federal court action, pursuant to the “in aid of jurisdiction”
    exception to the Anti-Injunction Act, 28 U.S.C. § 2283.                    More
    exactly, Appellants contend that the “in aid of jurisdiction”
    exception is inapplicable to the instant case because: 1) there is
    no property or res involved; and 2) the case was not removed from
    state court, but rather filed in federal court as a totally
    separate and independent proceeding.           Appellants, however, fail to
    cite any controlling authority for this argument and we find it
    -16-
    totally without merit.
    Section 2283 states that “[a] court of the United States may
    not grant an injunction to stay proceedings in a State court except
    as expressly authorized by Act of Congress, or where necessary in
    aid   of   its   jurisdiction,      or   to   protect    or   effectuate     its
    judgments.”      28   U.S.C.    §   2283.     Often     referred   to   as   the
    relitigation exception, the “necessary in aid of its jurisdiction,
    or to protect or effectuate its judgments” exception, is applicable
    when “the claims or issues which the federal injunction insulates
    from litigation in state proceedings actually have been decided by
    the federal court.”     Chick Kam Choo v. Exxon Corp., 
    486 U.S. 140
    ,
    148 (1988).      The stay at issue here properly falls within the
    exception for injunctions.           Accordingly, we find no abuse of
    discretion on the part of the district court in staying the state
    court proceedings.
    V.     Collateral Estoppel
    Appellants maintain that the district court erred in failing
    to dismiss this action because Conseco was collaterally estopped
    from litigating the substantive issues involving arbitration as a
    result of the state court’s discovery order.             We disagree.
    Under Mississippi law, “[c]ollateral estoppel provides that an
    issue of ultimate fact which was a valid and final judgment may not
    be re-litigated between the same parties in a subsequent suit.”
    Farris v. State, 
    764 So. 2d 411
    , 423 (Miss. 2000) (citing Ashe v.
    -17-
    Swenson, 
    397 U.S. 436
    , 443 (1970). “Where the elements of estoppel
    have been satisfied, the court’s inquiry is not whether the court’s
    order was erroneous, but only that it was the final judgment of the
    case.”    State ex rel. Moore v. Molpus, 
    578 So. 2d 624
    , 642 (Miss.
    1991) (internal quotation and citation omitted).               In the present
    case, the state court’s discovery order did not adjudicate all of
    the claims of the parties.       As such, it was interlocutory in nature
    and not a final judgment on the merits.           See MISS R. CIV. P. 54(a);
    Cunningham v. Mitchell, 
    535 So. 2d 589
    , 592 (Miss. 1988) (holding
    that   order   compelling   discovery      was   not    an   appealable   final
    judgment).     Accordingly, this assignment of error lacks merit.
    VI.   WAIVER OF ARBITRATION
    Appellants assert that Conseco’s resort to the federal courts
    after receiving an adverse ruling in the state court constituted
    reactive and vexatious conduct resulting in a waiver of any right
    to invoke federal jurisdiction.       “Fifth Circuit precedent places a
    ‘heavy burden’ on a party claiming waiver of arbitration rights.”
    Snap-On    Tools   
    Corp., 18 F.3d at 1267
      (citation   omitted).
    “Accordingly, we indulge a presumption against finding waiver.”
    
    Id. (citing Walker
    v. J.C. Bradford & Co., 
    938 F.2d 575
    , 577 (5th
    Cir. 1991). Insofar as we have already found that Conseco’s resort
    to the federal courts did not amount to reactive and vexatious
    conduct warranting abstention, we similarly find no waiver of any
    right to seek compulsion of arbitration in federal court.
    -18-
    VII.    DENIAL OF DISCOVERY
    Appellants contend that the district court erred in denying
    discovery    relative   to     the   enforceability   of   the   arbitration
    agreement.    Specifically, Appellants argue that their defenses of
    fraud and unconscionability turn upon factual questions and thus,
    they should be entitled to conduct discovery.          We disagree.
    “[I]n FAA suits, the federal courts conduct ‘an expeditious
    and summary hearing, with only restricted inquiry into factual
    issues’ bearing on the making of the arbitration agreement.” Snap-
    On Tools 
    Corp., 18 F.3d at 1265
    n.4 (citing Moses H. 
    Cone, 460 U.S. at 22
    ). Appellants allegations of fraud and unconscionability were
    not directed specifically at the arbitration agreement, but at the
    Contract in general.         A general allegation that a contract was
    fraudulently procured does not call into question the making of an
    agreement to arbitrate.        See Prima Paint 
    Corp., 388 U.S. at 403-04
    .
    The issue before the district court was not whether the arbitration
    agreement was unconscionable or procured by fraud, but whether
    Appellants should be compelled to arbitrate their claims against
    Conseco.    The discovery sought by Appellants was not necessary to
    answer the question before the district court.             Accordingly, we
    find that the district court did not abuse its discretion in
    denying discovery.
    VIII.      TRIAL BY JURY
    Appellants argue that they are entitled to a jury trial under
    -19-
    § 4 of the FAA relative to the issue of arbitrability and that the
    district   court   erred   in   compelling    arbitration.    Appellants
    essentially put forth two arguments.4          First, Appellants contend
    that they “did not knowingly, voluntarily and intellectually waive
    their right to a trial by jury.”          In support of this contention,
    Appellants maintain that they were fraudulently induced to sign the
    Contract containing the arbitration clause and therefore, cannot be
    compelled to arbitrate any of the claims that have been asserted in
    state court because the Contract was procured through fraud,
    trickery, and deceit.      As we have stated throughout this opinion,
    however, an allegation that the contract, as a whole, was procured
    by fraud does not call into question the making of an agreement to
    arbitrate.   “Under Supreme Court precedent, a party must challenge
    the making of the agreement to arbitrate itself in order to create
    a jury-triable issue.”     Dillard v. Merrill Lynch, Pierce, Fenner &
    Smith, Inc., 
    961 F.2d 1148
    , 1154 n.9 (5th Cir. 1992) (internal
    quotation omitted) (citing Prima Paint 
    Corp., 388 U.S. at 403-04
    ).
    Second, Appellants assert that because they requested a jury
    trial in both the state and federal court actions, the FAA requires
    that they receive one.     This argument is not persuasive.     “A party
    4
    We note that Appellants also contend that the “district court
    erred in not holding the arbitration agreement unconscionable, or
    alternatively, allowing discovery on this issue.” Appellants fail,
    however, to show why the arbitration agreement was unconscionable
    but rather, make only unsupported general allegations directed at
    the Contract as a whole.     Accordingly, we find this argument
    lacking in merit.
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    to an arbitration agreement cannot obtain a jury trial merely by
    demanding one.”      
    Id. (citation omitted).
                Even if Appellants’s
    allegations of fraud and unconscionability were taken as true,
    there would be no legal basis for submitting the issue to a jury.
    Thus,   we   find   no    error   in   the    district      court’s   denial    of
    Appellants’ request for a jury trial.
    CONCLUSION
    For the reasons stated above, we AFFIRM the district court’s
    Memorandum Opinion and Order of June 8, 2001, and the subsequent
    Order   of   June   19,   2001,   staying     the   state    court    action   and
    compelling Appellants to arbitrate their claims against Conseco.
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