Sangisetty Law Firm,LLC v. Jason Joy & Associates, PLLC et al

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SANGISETTY LAW FIRM, LLC 	CIVIL ACTION
VERSUS 	NO: 25-1561
JASON JOY & ASSOCIATES, PLLC
ET AL.
SECTION: “J”(5)
ORDER AND REASONS
Before the Court is an Exception of Prematurity that the Court will treat as a
Motion to Compel Arbitration (Rec. Doc. 1-3, at 30–35) filed by Defendants Jason
Joy & Associates, PLLC and Colin Wood.1 Plaintiff Sangisetty Law Firm, LLC
opposed the motion to compel arbitration (Rec. Doc. 17), and Defendants filed a reply
memorandum (Rec. Doc. 19). Having considered the motion and legal memoranda,
the record, and the applicable law, the Court finds that the motion to compel
arbitration should be GRANTED.
FACTS AND PROCEDURAL BACKGROUND
This litigation arises out of Plaintiff and Defendants’ agreement to assume
joint representation of clients who had formerly been represented by McClenny
Moseley and Associates (“MMA”). Initially, Plaintiff and Defendant Jason Joy &
Associates, PLLC (“JJA”)2 executed a “Joint Venture Agreement,” the professed
purpose of which was to “facilitate the transfer” of these clients’ files. (Rec. Doc. 4-2,
at 1). In this agreement, Plaintiff and Defendants agreed to an arbitration clause and
1 Kathleen O’Connor is also a named defendant in this matter, but as of February 23, 2026, she had
not made an appearance on the record, and she did not join the other defendants in the instant motion.
2 Defendant Colin Wood was a partner at JJA when the events leading to this litigation transpired.
JJA and Colin Wood will be referred to collectively as “Defendants.”
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specifically expressed their intent “to work collaboratively to effectuate an expedited
and efficient transfer of the clients from the Previous Firm.” Id. Plaintiff explains,
however, that the transfer of the clients’ files from MMA was not as expedited and
efficient as MMA had allegedly promised, and therefore, “the MMA project that Joy
and Sangisetty originally contemplated and envisioned . . . had morphed into
something completely different and vastly more complicated.” (Rec. Doc. 17, at 3
(quoting Jason J. Joy & Associates, PLLC’s Compl. in Intervention, No. 25-318, at
16–17 ¶ 50 (S.D. Tex. Apr. 11, 2025)). As a result, Plaintiff claims that the parties
implicitly decided that the Joint Venture Agreement would no longer govern their
arrangement to represent former MMA clients jointly; instead, Plaintiff contends that
the contingency fee agreements that Plaintiff and Defendant JJA jointly entered into
with clients, and which also specified the firms’ fee-splitting arrangement, became
the new agreement between the Plaintiff and Defendants. Defendants dispute these
claims and move the Court to compel arbitration.
On February 28, 2025, Plaintiff filed the instant lawsuit in the 32nd Judicial
District Court for the Parish of Terrebonne, State of Louisiana. Chief among
Plaintiff’s claims is that Defendants breached the agreement to share in the joint
representation of former MMA clients equally and, therefore, are not entitled to legal
fees. As their first responsive pleading, Defendants filed an Exception of Prematurity
based on the Joint Venture Agreement’s arbitration clause. On July 30, 2025,
Defendants removed the case to this Court pursuant to 28 U.S.C. §§ 1441 and 1446,
averring that the Court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. (Rec.
Doc. 1). Plaintiff filed a motion to transfer or dismiss on August 5, 2025, arguing that
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its agreement with Defendants was governed by a forum-selection clause and
requesting that the case be transferred back to the 32nd Judicial District Court or
dismissed. Conversely, Defendants alleged, and the Court agreed, that the forum-
selection clause, which was found in the “Hurricane Contingency Fee Agreements”
and not in the Joint Venture Agreement, did not apply as between Sangisetty and
Jason Joy & Associates. Accordingly, the Court denied Plaintiff’s motion to transfer
or dismiss the case. Further, because the Joint Venture Agreement executed by
Plaintiff and Defendants contained an arbitration clause, the Court ruled that it
would treat the Exception of Prematurity that Defendants filed in the state court
proceeding as a motion to compel arbitration. Therefore, the issue that the Court
must decide is whether the parties should be held to the arbitration clause that they
initially agreed to in the Joint Venture Agreement.
LEGAL STANDARD
Arbitration agreements are governed by the Federal Arbitration Act (“FAA”).
9 U.S.C. §§ 1–16. Section 2, “the primary substantive provision of the Act,” reflects “a
liberal federal policy favoring arbitration agreements” and effectively creates “a body
of federal substantive law of arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983). The United States Court of Appeals for the Fifth
Circuit has observed that “Congress’ clear intent, in the Arbitration Act, was to move
the parties to an arbitrable dispute out of court and into arbitration as quickly and
easily as possible.” Snap-on Tools Corp. v. Mason, 18 F.3d 1261, 1263 (5th Cir. 1994)
(internal quotations omitted, cleaned up).
Under the FAA, district courts are required “to ‘compel arbitration of otherwise
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arbitrable claims, when a motion to compel arbitration is made.’” Harris v. JCPenney
Co., Inc., No. 07-9675, 2008 WL 90038, at *1 (E.D. La. Jan. 8, 2008) (quoting Sedco,
Inc. v. Petroleos Mexicanos Mexican Nat’l Oil Co., 767 F.2d 1140, 1147 (5th Cir.
1985)). When evaluating motions to compel arbitration, courts conduct a two-step
inquiry. Kubala v. Supreme Prod. Servs., Inc., 830 F.3d 199, 201 (5th Cir. 2016). The
Court first inquires whether the parties agreed to arbitrate the dispute at issue. Id.
This inquiry consists of two subsidiary questions: “(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.” Webb v. Investacorp, Inc., 89
F.3d 252, 257–58 (5th Cir. 1996) (citation omitted).
To determine whether the parties formed a valid agreement to arbitrate, courts
apply ordinary principles of state contract law. Am. Heritage Life Ins. Co. v. Lang,
321 F.3d 533, 537–38 (5th Cir. 2003). On the other hand, in analyzing arbitrability,
courts apply federal substantive law. Graves v. BP Am., Inc., 568 F.3d 221, 222–23
(5th Cir. 2009) (quoting Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc.,
473 U.S. 614, 626 (1985)). Moreover, “as a matter of federal law, any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone, 460 U.S.
at 24–25 (citations omitted). When a court finds that the parties entered a valid
agreement to arbitrate and that the dispute in question falls within the scope of this
agreement, it moves to the second step of the arbitration inquiry, assessing “whether
any federal statute or policy renders the claims nonarbitrable.” Washington Mut. Fin.
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Grp., LLC v. Bailey, 364 F.3d 260, 263 (5th Cir. 2004) (citation omitted).
Finally, under Section 3 of the FAA, a district court must stay a lawsuit when
a 	party 	demonstrates 	that 	any 	issue 	involved in 	the lawsuit 	is 	“referable 	to
arbitration under an agreement in writing for such arbitration.” 9 U.S.C. § 3. This
provision is mandatory and demands a stay of legal proceedings “whenever the issues
in a case are within the reach of an arbitration agreement.” Complaint of Hornbeck
Offshore (1984) Corp., 981 F.2d 752, 754 (5th Cir. 1993) (citation omitted). When
these circumstances are present, a district court “has no discretion under section 3 to
deny the stay.” Id. (citation omitted).
DISCUSSION
Plaintiff does not assert that a federal statute or policy renders its claims
against 	Defendants 	nonarbitrable. 	Therefore, 	the 	Court 	must 	determine 	first
whether Plaintiff and Defendants validly agreed to arbitrate disputes and then
whether the dispute in this case falls within the scope of their arbitration agreement.
The Joint Venture Agreement that Plaintiff and Defendants executed contains an
arbitration agreement that reads as follows:
VIII. Binding Effect / Governing Law / Mediation.
Should any dispute arise out of this Agreement, the parties agree
to binding, non-appealable arbitration pursuant to the rules of the
American Arbitration Association, limited to a maximum of four days
divided equally between the parties; each to have, at most, two days to
present its case. The parties agree that both parties contributed to the
drafting of this agreement; therefore, the parties agree not to assert
against the other party a cannon [sic] of construction against the
draftsman.
(Rec. Doc. 16-2, at 2). Neither party disputes that this is a valid arbitration
agreement; instead, Plaintiff maintains that the Joint Venture Agreement governed
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only the initial transfer of the client files from MMA, and more importantly, because
the nature of the joint venture changed, the parties implicitly agreed, through their
discussions and their conduct, that the Joint Venture Agreement no longer governed
their joint representation of clients.
Plaintiff objects to the Court’s decision to treat Defendants’ Exception of
Prematurity as a Motion to Compel Arbitration (Rec. Doc. 15) and urges the Court to
reconsider. To support its position, Plaintiff argues that the Court should consider
late-filed evidence based on “the need to render just decisions on the basis of all the
facts.” (Rec. Doc. 16-1, at 3 (quoting Lavespere v. Niagara Mach. & Tool Works, Inc.,
910 F.2d 167, 174 (5th Cir. 1990))). Specifically, attached to its original Motion to
Transfer/Dismiss, Plaintiff had submitted a sample “Hurricane Contingency Fee
Agreement” (Rec. Doc. 4-4) that Plaintiff and Defendants used for their joint
representation of clients. Plaintiff argued that the contingency fee agreement’s
forum-selection clause—rather than the arbitration agreement in the Joint Venture
Agreement—should govern disputes between Plaintiff and Defendants. Because it
was a sample, however, the agreement that Plaintiff initially submitted (Rec. Doc. 4-
4) did not include a fee-splitting arrangement, which was a fact that the Court cited
in its ruling on the Motion to Transfer/Dismiss.
In re-urging its Motion, Plaintiff attached copies of “Hurricane Contingency
Fee Agreements” that were executed jointly by Plaintiff Sangisetty Law Firm and
Defendant Jason J. Joy & Associates with clients, and these later-filed agreements
do contain the fee-splitting arrangement between the law firms. The relevant
provision is reproduced below:
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Client agrees to a joint representation by Jason J. Joy & Associates
(“JJJ”) and Sangisetty Law Firm, LLC (“SLF”) who will represent
Client in accordance with the applicable rules of professional conduct
and assume “joint responsibility” for Client’s case. In the event of a
successful recovery the Firms shall split the contingency fee evenly, on
a 50/50 basis.
(Rec. Doc. 16-4, at 2 (citing Tex. Disciplinary Rules of Pro. Conduct Rule 1.04 and its
official 	Comments 	for 	the 	definition 	of 	“joint 	responsibility”)). 	Because 	the
agreements that Sangisetty and Jason J. Joy & Associates executed jointly with
clients specified the fee-splitting arrangement between the attorneys,3 Plaintiff
claims that the forum-selection clause from that same agreement should govern the
relationship between the law firms, in addition to governing any potential disputes
between the firms and the clients whom they agreed to represent jointly.
The Court disagrees with this argument for two primary reasons. First, the
forum-selection clause in the contingency fee agreement reads as follows: “In the
event of a dispute and/or claims between them, the Parties to this Agreement agree
that venue shall be in the 15th Judicial District Court in Acadia or Lafayette Parish,
Louisiana, or the 32nd Judicial District Court in Terrebonne Parish, Louisiana only.”
(Rec. Doc. 16-4, at 4 (emphasis added)). The agreement also includes both firms’ logos
at the top of the first page, and the signature lines for the parties to the agreement
are found below the forum-selection clause on the third page. Here, there are only
two signature lines: one for the Client and one for the Attorney. The formatting of the
signature lines indicates that there are only two parties to the contingency fee
3 When attorneys agree to joint representation of a client, they are obligated to obtain the client’s
consent in writing “to the terms of the arrangement,” which means that Sangisetty and Jason J. Joy
& Associates were required to include the fee-splitting arrangement in the agreement they executed
jointly with clients. See Tex. Disciplinary Rules of Pro. Conduct Rule 1.04 (State Bar of Tex. 2025).
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agreement: the Client on one side of the transaction and the law firms, Sangisetty
and Jason Joy & Associates, who are acting jointly, on the other.
Further, Plaintiff and Defendants had previously executed the Joint Venture
Agreement that included the arbitration clause at issue. The Court agrees with
Plaintiff 	that 	this 	Joint 	Venture 	Agreement 	did 	not 	specify 	the 	fee-splitting
arrangement, but instead stated that “such was to be determined at a later date and
based on the actual work done on each of the client files.” (Rec. Doc. 4-1, at 3).
However, both parties in this matter are legally sophisticated—they are lawyers after
all—and they recognized, at least initially, that they should execute an agreement
that would govern their relationship as to the joint representation of clients. The fact
that Plaintiff claims they did not follow this Joint Venture Agreement is irrelevant.4
If the parties had wanted the forum-selection clause, rather than the arbitration
clause, to apply to their relationship, they easily could have specified that either in
the Hurricane Contingency Fee Agreement or in a separate agreement between
themselves. 	Moreover, 	if 	the 	parties 	intended 	to 	rescind 	the 	Joint 	Venture
Agreement, they could have done so in writing and/or by executing a new written
agreement.
4 Plaintiff alleges that Jason J. Joy & Associates conceded in court filings in the Southern District of
Texas that the Joint Venture Agreement no longer governed their agreement. For example, Jason J.
Joy & Associates wrote, “As far as the parties were concerned the original [Joint Venture] Joy—
Sangisetty agreement was never again mentioned nor referenced.” (Rec. Doc. 16-1, at 4). Further,
Jason J. Joy & Associates allegedly stated in court filings that the “MMA project that Joy and
Sangisetty originally contemplated and envisioned in June 2023 had morphed into something
completely different and vastly more complicated. Ultimately, Joy and Sangisetty agreed to split
attorney fees on a 50/50 basis, and that arrangement is reflected in the contingency fee agreements
executed by JJA-SLF clients, and acknowledged by the parties.” Id. at 4–5. However, it does not
logically follow that because the contingency fee agreements governed the firms’ fee-splitting
arrangement (which is required), the agreement also governed every aspect of the firms’ relationship
concerning their joint representation of clients.
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Next, Plaintiff asserts that Defendants waived their right to seek arbitration
because 	they 	substantially 	invoked 	the 	judicial 	process. 	Specifically, 	Plaintiff
contends that Defendants invoked the judicial process when they emailed copies of
subpoena duces tecum requests to Plaintiff, among other parties, in the state court
proceeding on June 23, 2025, prior to removal. The Fifth Circuit has established that
despite the strong federal policy favoring arbitration, a party can waive its right to
arbitration when the party “knowingly relinquish[es] the right to arbitrate by acting
inconsistently with that right.” Garcia v. Fuentes Rest. Mgmt. Servs., Inc., 141 F.4th
671, 676 (5th Cir. 2025) (quoting Morgan v. Sundance, Inc., 596 U.S. 411, 419 (2022)).
Substantial 	invocation 	of 	the 	judicial 	process 	constitutes 	“one 	way 	of
demonstrating that a party waived its right” to compel arbitration, id., and it requires
that a “party must, at the very least, engage in some overt act in court that evinces a
desire to resolve the arbitrable dispute through litigation rather than arbitration,”
Subway Equip. Leasing Corp. v. Forte, 169 F.3d 324, 329 (5th Cir. 1999). Generally,
however, there exists a “presumption against finding waiver” in the Fifth Circuit, and
“[a] party asserting waiver thus bears a heavy burden of proof in its quest to show
that an opponent has waived a contractual right to arbitrate.” Walker v. J.C. Bradford
& Co., 938 F.2d 575, 577 (5th Cir. 1991) (citations omitted).
Here, Plaintiff argues that Defendants’ requests for document production
represented a substantial invocation of the judicial process. Defendants counter by
pointing out that their first responsive pleading to Plaintiff’s state-court petition was
an exception of prematurity seeking to dismiss the case without prejudice so that the
parties could arbitrate their dispute instead. The Court takes judicial notice of the
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fact that Defendants sought to compel arbitration at the earliest stage of this
litigation, but even if that were not the case, the Court also finds that emailing copies
of subpoenas duces tecum to Defendants does not constitute a substantial invocation
of the judicial process. See, e.g., Garcia, 141 F.4th at 678 (concluding that the
exchange of one set of interrogatories, requests for production, and responses between
the parties was “similar to ‘the minimal discovery’ that [the Fifth Circuit had]
previously considered insufficient to waive arbitration”).
Plaintiff argues that Defendants also substantially invoked the judicial process
when they filed a Complaint in Intervention against both MMA and Sangisetty in the
United States District Court for the Southern District of Texas. The Court fully
agrees with Plaintiff that Defendants have represented their position inconsistently
in their court filings in the Southern District of Texas and in this Court. However,
the Fifth Circuit regularly emphasizes that a party opposing arbitration bears a
heavy burden to prove waiver. While Defendants have sought to intervene in the case
filed by MMA against Sangisetty in the Southern District of Texas, Defendants did
not initiate that lawsuit. Furthermore, in their earliest responsive pleading to
Plaintiff’s state-court petition, Defendants raised an exception of prematurity based
on the arbitration clause found in the Joint Venture Agreement. Therefore, the Court
concludes that Defendants have not waived their right to compel arbitration in this
matter.
Finally, Plaintiff contends that its lawsuit involves claims that are not subject
to any agreement between itself and Defendants. Specifically, Plaintiff alleges that
some of its claims against Defendants are based on their “agreeing to perform work
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which [they] did not do, [their] malfeasance in over-delegating responsibilities to non-
attorney, third party vendors, [their] utilizing work product of SLF to solicit clients
for malpractice matters when [Defendants were] told [they] had a conflict of interest,
and other conduct related to the actual representation of the clients, i.e., not the client
file transfers.” (Rec. Doc. 17, at 16). Ultimately, the Court finds this argument
unavailing. All of these claims relate directly to and arise out of the joint venture
between Sangisetty and Jason Joy & Associates. At least initially, the parties agreed
that the joint venture would be governed by the Joint Venture Agreement, which
contained the arbitration clause. Each of the claims that Plaintiff lists falls logically
under the venture to represent clients jointly, and the Fifth Circuit has made it clear
that “any doubts concerning the scope of arbitrable issues should be resolved in favor
of arbitration.” Moses H. Cone, 460 U.S. at 24–25 (citations omitted). Therefore, the
Court finds that these disputes fall within the scope of the arbitration agreement.
CONCLUSION
Accordingly,
IT 	IS 	HEREBY 	ORDERED 	that 	the Motion 	to 	Compel 	Arbitration 	is
GRANTED.
IT 	IS 	FURTHER 	ORDERED 	that 	this 	matter 	be 	STAYED 	pending
arbitration.
New Orleans, Louisiana, this 23rd day of February, 2026.
____________________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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