     Case: 18-50167      Document: 00514942993         Page: 1    Date Filed: 05/03/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                           United States Court of Appeals
                                                                                    Fifth Circuit

                                                                                  FILED
                                      No. 18-50167                             May 3, 2019
                                               Lyle W. Cayce
INTERNATIONAL CORRUGATED AND PACKING SUPPLIES,      Clerk
INCORPORATED,

              Plaintiff - Appellee

v.

LEAR CORPORATION; LEAR MEXICAN SEATING CORPORATION,
formerly known as Lear Trim, L.P.,

              Defendants - Appellants



                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 3:15-CV-405


Before JOLLY, DENNIS, and HIGGINSON, Circuit Judges.
PER CURIAM:*
       Defendants appeal the district court’s order denying arbitration.
Because this appeal presents unresolved factual issues, we VACATE and
REMAND for the district court to determine in what manner the parties
entered into the underlying agreements.




       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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                                 No. 18-50167

                                        I.
      For several years, Lear Corporation and Lear Mexican Seating
Corporation (Lear) purchased packaging materials from International
Corrugated and Packing Supplies, Inc. (Intercorpac).       Intercorpac sued to
recover unpaid invoices related to some of those sales. After removing to
federal court, Lear moved to compel arbitration. Lear argued that purchase
orders they sent to Intercorpac to facilitate Lear’s purchase of packaging
materials formed part of the contractual relationship between Lear and
Intercorpac and required the parties to arbitrate the instant dispute. These
purchase orders contained a statement explaining that the “Purchase Order
incorporates and is governed by the Lear Corporation Purchase Order Terms
and Conditions,” along with a link to the website where the terms and
conditions could be found. The terms and conditions contained an arbitration
clause.
      The parties dispute what role the purchase orders played in their
transactions. Lear contends that when it needed materials from Intercorpac,
it e-mailed a purchase order to Intercorpac, and Intercorpac responded by
delivering the materials and sending an invoice to Lear. Intercorpac claims
that Lear ordered its materials not by emailing a purchase order, but by calling
or emailing Intercorpac with a delivery request, after which Intercorpac
delivered the products.    Lear then sent payment to Intercorpac by direct
deposit on the fourth of every month.
      The district court denied Lear’s motion to compel arbitration, finding
that Lear “fail[ed] to explain, in sufficient detail, how the process of ordering
materials from [Intercorpac] began and continued during the parties’
relationship or when each purchase order was sent in that process.” If the
purchase orders were sent after the contract was formed, the court explained,


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                                 No. 18-50167

“it appears that the terms and conditions and its provisions would be
inapplicable to the parties’ agreements.” Even if the purchase orders were sent
prior to shipment, the court noted, “the parties may have had prior discussions
agreeing to certain terms of their transactions and purchase orders were
merely sent to confirm those discussions before [Intercorpac] shipped goods to
[Lear].”
      Lear moved for reconsideration, proffering several email exchanges
between themselves and Intercorpac purporting to show that Intercorpac was
aware of the terms and conditions prior to the transactions at issue in this
lawsuit. As Intercorpac points out on appeal, however, Lear did not “address[]
the district court’s inquiry of whether any prior discussions took place before
sending purchase orders or the precise timing of when the purchase orders
were sent, or how the process of ordering materials from Intercorpac began and
continued during the parties’ relationship.”
      Avoiding these open factual disputes, the district court assumed
arguendo that Lear had “proven enforceable agreements through the course of
dealing” with Intercorpac. It again denied Lear’s motion to compel arbitration,
however, reasoning that the terms and conditions (and thus the arbitration
agreement) could not be incorporated by reference into the purchase orders
because the purchase orders were unsigned, and Texas law required a
signature to utilize incorporation by reference.
      Lear appeals, arguing that Texas law does not require a signature to
incorporate a document by reference.           It contends that the signature
requirement in Texas jurisprudence is a proxy for enforceability—so long as a
contract is enforceable, according to Lear, it may incorporate an unsigned
document by reference. The agreements at issue in this case, according to
Lear, did not require signatures to be enforceable.


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                                       II.
      We review de novo a district court’s interpretation of an agreement to
arbitrate and whether it binds the parties to arbitrate. Cal. Fina Group, Inc.
v. Herrin, 379 F.3d 311, 315 (5th Cir. 2004) (citing Bridas S.A.P.I.C. v. Gov’t of
Turkmenistan, 345 F.3d 347, 353 (5th Cir. 2003)). The district court’s factual
findings are subject to review only for clear error. Id.
      When our jurisdiction is based on diversity, we apply the substantive law
of the forum state. James v. Woods, 899 F.3d 404, 408 (5th Cir. 2018) (citing
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). We look to the decisions of
the state’s highest court for guidance, and if no decision of that court resolves
the matter, we make an “Erie guess” as to how the court would. In re Franchise
Servs. of N. Am., Inc., 891 F.3d 198, 209-10 (5th Cir. 2018) (citing Temple v.
McCall, 720 F.3d 301, 307 (5th Cir. 2013)).                Regarding “substantive
innovation” in state law, we have cautioned that “[e]ven in the rare case where
a course of Texas decisions permits us to extrapolate or predict with assurance
where that law would be had it been declared, we should perhaps—being out
of the mainstream of Texas jurisprudential development—be more chary of
doing so than should an inferior state tribunal.” Rhynes v. Branick Mfg. Corp.,
629 F.2d 409, 410 (5th Cir. Unit A 1980).
      The Texas Supreme Court has not had occasion to determine whether a
contract that is unsigned but otherwise enforceable may incorporate an
unsigned document by reference. We decline to resolve this novel question of
Texas law here because the district court has not yet ruled on the enforceability
of Lear’s purchase orders. Specifically, the district court has not determined
how the parties entered the agreements at issue in this case—either through
purchase orders, or phone calls or emails prior to the sending of purchase
orders, or some other conduct—nor has it determined what effect, if any, the


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                                  No. 18-50167

parties’ course of dealing has on such agreements. See TEX. BUS. & COM. CODE
§ 2.204(a) (“A contract for sale of goods may be made in any manner sufficient
to show agreement, including conduct by both parties which recognizes the
existence of such a contract.”); Tubelite, a Div. of Indal, Inc. v. Risica & Sons,
Inc., 819 S.W.2d 801, 802, 804-05 (Tex. 1991) (evaluating “whether an
agreement to pay interest arose . . . because of a course of dealing between two
merchants”); In re Freightquote.com, No. 05-18-01028-CV, 2019 WL 995791, at
*5 (Tex. App. Mar. 1, 2019) (evaluating whether a “forum-selection clause was
incorporated into the contract . . ., either by reference or course of dealing”).
Resolution of these key underlying factual disputes, which we cannot resolve
on appeal, may make it unnecessary for a federal court to venture an Erie guess
on Texas law.
      Accordingly, we VACATE and REMAND to the district court for the
limited purpose of making findings as to whether, when, and under what terms
the parties entered into the agreements at issue in this case.         We retain
jurisdiction of the appeal during the pendency of the limited remand. See
Wheeler v. City of Columbus, 686 F.2d 1144, 1154 (5th Cir. 1982).




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