In the Matter of: Jon Amberson

United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
___________ FILED
January 3, 2023
No. 21-50960
Lyle W. Cayce
___________
Clerk
In the Matter of Jon Christian Amberson
Jon Christian Amberson; Jon Christian Amberson PC;
Amberson Natural Resources, LLC,
Appellants,
versus
James Argyle McAllen; El Rucio Land and Cattle
Company, LLC; San Juanito Land Partnership, Ltd.;
McAllen Trust Partnership,
Appellees.
______________________________
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:20-CV-1193
______________________________
ON PETITION FOR REHEARING
Before Jones, Southwick, and Oldham, Circuit Judges.*
Per Curiam:
*
Judge Oldham concurs in the denial of rehearing.
No. 21-50960
Jon Christian Amberson, his law firm, and Amberson Natural
Resources (“ANR”), whom we will reference collectively as Amberson,
move for rehearing by this panel. Though successful in convincing a majority
of the panel that we have authority to consider the argument that a claim was
not arbitrable, Amberson then lost on the merits of that argument. Matter of
Amberson, 54 F.4th 240, 263, 267 (5th Cir. 2022).
Amberson alleges we erred in three ways: (1) we should not have
considered the arbitrator’s fact findings in deciding the validity of the state
court’s compelling of arbitration; (2) the state court record does not support
that all the claims were intertwined; and (3) the appellees’ state court
pleadings do not support our finding of alter ego. A component of all three is
that when deciding whether the Amberson parties were alter egos of each
other and whether the Cannon Grove claims were arbitrable, we should have
considered only the record as it existed at the time the state court ordered
arbitration in April 2018 or denied reconsideration in October 2018.
Therefore, not only were the findings by the arbitrator irrelevant, but so is
any evidence that did not appear in the record until the arbitration.
One way to understand the argument is that Amberson is insisting that
even though there was no need to pursue a writ of mandamus prior to the
arbitration, our review after the arbitration is limited to the record that
existed at the earlier time. Of no small importance to urging error on
rehearing, this argument is not one that appeared in the briefs and is therefore
forfeited. Regardless, it is wrong.
Amberson cites no Texas caselaw that the evidence to support the
validity of interlocutory orders reviewed on appeal after a final judgment
must come only from the part of the record that existed when the orders were
entered. Regardless of Texas procedure, though, in federal court an
interlocutory order merges into the final judgment. 15A Charles Alan
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No. 21-50960
Wright & Arthur R. Miller, et al., Federal Practice and
Procedure § 3905.1 (3d. ed.). We agree with the treatise that state court
rulings made before removal should be treated similarly: “In most
circumstances at least it is sensible to adhere to the ordinary rule that
interlocutory rulings [by the state court] merge in the final judgment,
permitting review by the federal court of appeals.” Id.
We see an analogy to why, after a trial, it is irrelevant that a party could
convince us that a pretrial, unappealable order denying summary judgment
should instead have been granted based on the earlier, limited record. “Once
the case proceeds to trial, the full record developed in court supersedes the
record existing at the time of the summary-judgment motion.” Ortiz v.
Jordan, 562 U.S. 180, 184 (2011). In this appeal, after all the proceedings
have run their course, the questions are the arbitrability of a particular claim
and the validity of an award against Amberson, individually. How those
questions should have been answered early in the case before the record was
as developed as it is now does not matter.
Finally on this point are the interests of judicial and litigants’
economy. “Though waiting until after the arbitration to seek appellate
review [of the order compelling arbitration] may waste the parties’ resources,
‘parties may also waste resources appealing every referral when a quick
arbitration might settle the matter.’” Amberson, 54 F.4th at 262 (quoting
Perry Homes v. Cull, 258 S.W.3d 580, 587 (Tex. 2008)). Even more wasteful
would be to disregard the final-judgment record that demonstrates
arbitration was properly compelled and reject an arbitration award because
the earlier record did not yet so demonstrate. If review is unavailable until
after final judgment, it is senseless not to use the final-judgment record.
We affirmed the federal district court because arbitration was properly
compelled. The state court’s initial order did not need separate review.
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No. 21-50960
We now examine related complaints. One argument is that it is for the
court to decide whether parties agreed to submit a particular dispute to
arbitration. We acknowledged that principle in our discussion of a holding
by the Supreme Court of Texas that “under the FAA, whether a non-
signatory is bound by an arbitration agreement is an issue for the court, absent
the agreement’s clearly giving the task to the arbitrator.” Id. at 265 (citing In
re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005)). Here, the Hidalgo
County District Court did decide the issue. Later, this court reviewed
whether all the Amberson parties were subject to arbitration on the Cannon
Grove claim. Both the state court and this court decided they were.
Amberson insists we did not give de novo review to whether arbitration
should have been compelled and instead deferred to the arbitrator. The
Texas precedent Amberson cites for the de novo standard is one we discussed
in our opinion. See id. at 261–62 (discussing Perry Homes, 258 S.W.3d 580).
The Perry Homes opinion held that courts are to give “ordinary review” to an
order compelling arbitration and deferential review to the award itself. Perry
Homes, 258 S.W.3d at 587. For the meaning of “ordinary review,” Perry
Homes cited a United States Supreme Court opinion. Id. at 587 n.15 (citing
First Options of Chicago, Inc. v. Kaplan., 514 U.S. 938, 947–48 (1995)). There,
an arbitration occurred without any court compelling it; the Supreme Court
stated no deference was to be given on appeal to the arbitrators’ conclusions
about arbitrability. First Options, 514 U.S. at 941, 947–49. The Court held
that under the Federal Arbitration Act, review “should proceed like review
of any other district court decision finding an agreement between parties, e.g.,
accepting findings of fact that are not ‘clearly erroneous’ but deciding
questions of law de novo.” Id. at 947–49.
Of course, de novo review is only for legal conclusions, and all of ours
were the result of de novo consideration. The real complaint is we were
deferential to the arbitrator as to facts. One of the opinion’s alleged
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No. 21-50960
misstatements of the review standard was that “the arbitrator’s fact-findings
relevant to whether the Cannon Grove claim was subject to the arbitration
agreement, a claim he did not resolve, are still entitled to substantial
deference.” Amberson, 54 F.4th at 264. Another is in the analysis of alter
ego: “Fact findings by an arbitrator are nearly unassailable.” Id. at 263. The
third also was part of our analysis of alter ego. A threshold question was
whether Amberson’s arguments about alter ego had been forfeited. Id. at
265. We did not answer that question because, regardless of the answer, the
arbitrator’s decision that Amberson individually had to arbitrate the Cannon
Grove matter “must stand.” Id.
We now examine how these statements affected our analysis. On the
agreement’s scope, Amberson argues we relied on the arbitrator’s findings
on the merits of the claim, such as the finding Amberson had misappropriated
funds, in holding that the Cannon Grove claim was intertwined with other
arbitrable matters. Amberson’s briefing, though, did not meaningfully
dispute the accuracy of the arbitrator’s fact-findings. The arbitrator’s
opinion contained the best summary of the facts. Absent any argument that
the findings were erroneous, acceptance of the summary was proper. Our
discussion identified the evidence, then gave de novo review by identifying the
applicable legal standard and applying it. Id. at 266–67.
As to alter ego, this court’s opinion explained Texas law on alter ego.
We held that whether a non-signatory is bound by an arbitration agreement
is to be decided by the court, absent agreement to the contrary. Id. at 264–65
(citing Weekley Homes, 180 S.W.3d at 130). We also stated that in Texas, the
“trial court’s findings on whether an arbitration agreement exists among
specific parties are entitled to deference.” Id. at 265 (citing Aerotek, Inc. v.
Boyd, 624 S.W.3d 199, 204 (Tex. 2021)). Our opinion quoted several findings
by the arbitrator, pointed out that the bankruptcy court had incorporated the
quoted findings into its own judgment (making those findings the court’s
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No. 21-50960
findings), and stated the district court had affirmed. Id. at 264–65. We found
no basis to disturb the findings or the resulting legal conclusions. Id. at 265.
As to this court’s statement that the arbitrator’s decision to arbitrate the
Cannon Grove matters “must stand,” we meant no reason was shown in the
appeal to reverse. Id. In sum, all three federal courts that reviewed the award
referenced the evidence on alter ego and found it compelling. Undue
deference was not given to the arbitrator as to fact-findings.
Amberson goes a step further as to alter ego and argues that the
McAllen parties’ final amended answer in Hidalgo County District Court did
not sufficiently make the claim. Amberson insists that in this answer, the
allegation was only that the law firm and ANR were the alter egos of
Amberson the individual but did not include that the first two were alter egos
of each other. The heading for the relevant part of the answer is phrased as
Amberson asserts. The text, though, says this: “There exists such unity
between JON CHRISTIAN AMBERSON, P.C., ANR and AMBERSON
that the separateness of individual corporations and AMBERSON has
ceased.” That same section of the answer closes by stating “AMBERSON,
JON CHRISTIAN AMBERSON, P.C. and ANR are all responsible for the
actions of each other.” We do not address whether the answer is even
relevant at this stage, but the rehearing petition’s description of the answer
approaches being disingenuous.
IT IS ORDERED that the petition for rehearing is DENIED.
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