Securities Fraud Claim is Arbitrable, 5th Circuit Rules

NEW ORLEANS — A claim that relates to representations that a software company made about how to achieve an earnout consideration falls within the scope of the parties’ narrow arbitration agreement and cannot be litigated, a federal appeals court has ruled.

On Aug. 11, the 5th Circuit U.S. Court of Appeals found a trial court erred lacked discretion to consider the issue of whether the claim is barred by res judicata. However, the appeals court affirmed dismissal of the claim, ruling that it is arbitrable.

Plaintiffs are stockholders of Vocada Inc., whose sole product was a software program called …