The Fifth Circuit Court of Appeals has rejected an effort by eight insurance companies to force a Louisiana property owner into arbitration, affirming that state law prohibits such clauses in property insurance contracts covering Louisiana real estate.
In *One Lakeside Plaza, L.L.C. v. Indian Harbor Insurance Company*, filed Jan. 7, 2026, the appeals court addressed whether a group of insurers could compel One Lakeside Plaza to arbitrate a dispute over a surplus line insurance policy covering Louisiana property. The case involved Indian Harbor Insurance Company, QBE Specialty Insurance Company, Steadfast Insurance Company, General Security Indemnity Company of Arizona, United Specialty Insurance Company, Lexington Insurance Company, Safety Specialty Insurance Company, and Old Republic Union Insurance Company as defendants-appellants.
The Fifth Circuit's brief per curiam opinion referenced its recent decision in *Town of Vinton v. Indian Harbor Insurance Co.*, decided Dec. 8, 2025, where the court applied Louisiana law to a similar contract dispute. That precedent proved decisive in the current case, as the court noted that Louisiana Revised Statutes Section 22:868 "expressly prohibits arbitration agreements for insurance contracts covering property located in the state."
The case originated in the U.S. District Court for the Western District of Louisiana, where the insurers apparently lost their initial bid to compel arbitration. The district court's ruling was affirmed by the Fifth Circuit panel consisting of Circuit Judges Haynes, Ho, and Oldham.
The dispute centers on a surplus line insurance policy, which typically covers risks that standard insurance markets cannot or will not insure. Surplus line insurance is often used for unique or high-risk properties that fall outside conventional underwriting guidelines. These policies are regulated differently than standard insurance products and are often written by non-admitted insurers.
Louisiana's prohibition on arbitration clauses in property insurance contracts reflects the state's policy of ensuring that insurance disputes remain subject to judicial oversight rather than private arbitration proceedings. This approach differs from many other jurisdictions where arbitration clauses are routinely enforced in commercial insurance contexts.
The timing of this decision follows closely on the heels of the *Town of Vinton* ruling, suggesting the Fifth Circuit is taking a consistent approach to Louisiana insurance law interpretation. The December 2025 precedent appears to have settled questions about how federal courts should apply Louisiana's anti-arbitration statute in property insurance cases.
For the insurance industry, this ruling reinforces that Louisiana's regulatory framework takes precedence over contractual arbitration provisions when property insurance is involved. The decision affects how insurers structure policies covering Louisiana real estate and may influence litigation strategies in similar coverage disputes.
One Lakeside Plaza's victory in preventing arbitration means the coverage dispute will proceed in federal court, where the company may have advantages in discovery, jury trial rights, and appeal procedures that might not be available in arbitration proceedings. For policyholders, the ruling preserves access to traditional court proceedings rather than potentially limiting disputes to private arbitration forums.
The case also highlights the complex interplay between federal arbitration law and state insurance regulation. While the Federal Arbitration Act generally favors enforcement of arbitration agreements, Louisiana's specific statutory prohibition creates an exception that federal courts must respect under principles of federalism.
The insurers' unsuccessful appeal suggests they believed federal arbitration principles might override Louisiana's prohibition, but the Fifth Circuit's reliance on *Town of Vinton* indicates the state law exception is well-established. This consistency in judicial interpretation provides greater certainty for both insurers and policyholders operating in Louisiana.
The opinion was designated as unpublished under Fifth Circuit Rule 47.5, meaning it cannot be cited as precedent in future cases. However, the decision still provides guidance on how the court views Louisiana's arbitration prohibition in the property insurance context.
For legal practitioners, this case demonstrates the importance of understanding state-specific insurance regulations when drafting policies or litigating coverage disputes. Louisiana's anti-arbitration statute appears to create a reliable shield against attempts to move property insurance disputes out of state and federal courts.
The case number 24-30758 indicates this was a 2024 filing that reached resolution in early 2026, suggesting a relatively typical timeline for federal appeals. The involvement of eight separate insurance companies indicates the significance of the coverage amount or the legal principles at stake in the underlying dispute.
Looking ahead, this ruling may influence how insurers approach policy drafting for Louisiana properties and whether they continue including arbitration clauses despite their apparent unenforceability under state law. The decision reinforces Louisiana's approach to maintaining judicial oversight of insurance coverage disputes involving property within its borders.