Justia Arbitration & Mediation Opinion Summaries

A Guatemalan company, HSR, engaged another Guatemalan company, AICSA, to design and construct a hydroelectric power plant. The project faced opposition from the local indigenous community, leading to work suspension and eventual contract termination by HSR. HSR initiated arbitration seeking payments and damages from AICSA, which counterclaimed for its own damages and sought to include its subcontractor, Novacom, in the arbitration.The United States District Court for the Southern District of Florida initially denied AICSA's motion to vacate the arbitration award, citing Eleventh Circuit precedent. The Eleventh Circuit Court of Appeals, in an en banc decision, later reversed this, holding that Chapter 1 of the Federal Arbitration Act (FAA) provides grounds for vacatur in cases governed by the New York Convention. The case was remanded to the District Court, which ultimately confirmed the arbitration award, leading to AICSA's appeal.The Eleventh Circuit Court of Appeals reviewed the case and affirmed the District Court's decision. The court held that the arbitration tribunal did not exceed its authority in three key areas: requiring AICSA to maintain or renew advance payment bonds, denying AICSA's claim that HSR breached anti-corruption provisions, and refusing to join Novacom to the arbitration. The court emphasized that the tribunal's decisions were based on interpretations of the contract, even if those interpretations were arguably erroneous. The court's review was limited to whether the tribunal interpreted the contract, not whether it did so correctly. View "Hidroelectrica Santa Rita S.A. v. Corporacion AIC, SA" on Justia Law

A salesperson from Elite Home Remodeling, Inc. visited the home of Harold and Lucy West, both in their 90s and suffering from dementia, to discuss solar panel installation and home renovation. The salesperson, Ilai Mitmiger, allegedly obtained Harold's electronic signature on a loan agreement with Solar Mosaic LLC (Mosaic) through Deon, the Wests' daughter, who provided her email for the documents. The loan agreement was signed electronically in Harold's name within seconds, despite Harold's apparent lack of understanding and technical ability.The Superior Court of Los Angeles County denied Mosaic's petition to compel arbitration, finding that Mosaic failed to prove the existence of an agreement to arbitrate. The court determined that Mosaic did not establish that Harold signed the loan documents or that Deon had the authority to bind Harold to the agreement.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court's order. The appellate court held that the evidence presented, including Harold's dementia and lack of technical skills, created a factual dispute about the authenticity of Harold's electronic signatures. The court also found that Mosaic did not prove Deon had the authority to act as Harold's agent or that Harold ratified the agreement during a recorded phone call with Mosaic. The court concluded that the recorded call did not demonstrate Harold's awareness or understanding of the loan agreement, thus failing to establish ratification. The order denying the petition to compel arbitration was affirmed. View "West v. Solar Mosaic, LLC" on Justia Law

Nicholas and Stacy Boerson, owners of New Heights Farm I and II in Michigan, faced a disappointing corn and soybean harvest in 2019. They submitted crop insurance claims to Great American Insurance Company, which were delayed due to an ongoing federal fraud investigation. The Boersons sued Great American, the Federal Crop Insurance Corporation, and the U.S. Department of Agriculture for breach of contract, bad faith adjustment, and violations of insurance laws.The United States District Court for the Western District of Michigan dismissed the Boersons' claims. It ruled that claims related to Great American's nonpayment were unripe due to the ongoing investigation, while claims alleging false measurements and statements by Great American were ripe but subject to arbitration. The court also dismissed claims against the federal defendants on sovereign immunity grounds.The United States Court of Appeals for the Sixth Circuit affirmed the district court's dismissal. It held that the claims related to nonpayment were unripe because the insurance policy barred payment until the investigation concluded. The court also found that the arbitration agreement in the insurance policy covered the ripe claims against Great American, requiring those disputes to be resolved through arbitration. Additionally, the court ruled that sovereign immunity barred the claims against the federal defendants, as there was no clear waiver of immunity for constructive denial claims under the Federal Crop Insurance Act. View "New Heights Farm I, LLC v. Great American Insurance Co." on Justia Law

Sergio Ramirez, a former police officer, was terminated by the City of Indio Police Department following an internal affairs investigation. Ramirez was initially placed on administrative leave after being charged with rape and sexual assault, though he was later acquitted of all criminal charges. Despite the acquittal, the internal investigation concluded that Ramirez had violated several departmental policies, leading to his termination. Ramirez appealed the decision through the administrative appeal process outlined in the Memorandum of Understanding (MOU) between the City and the Indio Police Officers’ Association.The arbitrator, after a full evidentiary hearing, recommended Ramirez's reinstatement with full back pay and benefits. However, the City Manager upheld the termination, citing Ramirez's poor judgment, dishonesty, and conduct unbecoming of an officer. Ramirez then petitioned the Superior Court of Riverside County for a writ of mandate, arguing that the City Manager should have deferred to the arbitrator's findings on the weight and credibility of the evidence. The Superior Court denied the petition, affirming the City Manager's decision.The Court of Appeal, Fourth Appellate District, reviewed the case and affirmed the lower court's judgment. The court held that the MOU clearly vested the City Manager with the final authority to make disciplinary decisions, including the power to reject the arbitrator's advisory findings. The court found that the City Manager had conducted a thorough review of the arbitrator's recommendations and the evidence before making the final decision. The court also concluded that the administrative appeal process provided Ramirez with due process, as it included notice, an opportunity to respond, and a meaningful hearing. The judgment of the Superior Court was affirmed, upholding Ramirez's termination. View "Ramirez v. City of Indio" on Justia Law

A former employee, Liu, sued her employer, Miniso, alleging various employment-related claims, including sexual harassment, sex discrimination, and wage and hour violations. Liu claimed that she faced severe and pervasive harassment and discrimination based on her sexual orientation and gender identity, and that she was misclassified as an exempt employee, leading to unpaid wages and denied breaks. Liu also alleged that she was retaliated against for refusing to participate in illegal practices and for whistleblowing, which led to her constructive termination.The Superior Court of Los Angeles County denied Miniso's motion to compel arbitration of Liu's claims. Miniso argued that Liu's allegations of sexual harassment were insufficient to state a claim and that the arbitration agreement should be enforced for the non-sexual harassment claims. The trial court found that Liu had adequately stated a claim for sexual harassment and, based on the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), ruled that the arbitration agreement was unenforceable for all of Liu's claims.The California Court of Appeal, Second Appellate District, affirmed the trial court's decision. The appellate court held that under the EFAA, if a plaintiff's case includes at least one claim of sexual harassment, the entire case is exempt from arbitration at the plaintiff's election. The court emphasized that the EFAA's language invalidates arbitration agreements with respect to the entire case, not just the sexual harassment claims. This interpretation avoids the inefficiency of having separate proceedings for different claims and aligns with the legislative intent to protect plaintiffs from being compelled into arbitration for sexual harassment disputes. View "Liu v. Miniso Depot CA, Inc." on Justia Law

Plaintiffs, who are users of Coinbase's cryptocurrency platform, filed a complaint against Coinbase, Inc. alleging violations of the Consumer Legal Remedies Act (CLRA), the California False Advertising Law (FAL), and the California Unfair Competition Law (UCL). They sought public injunctive relief, claiming Coinbase misrepresented its security features to the public. Coinbase's user agreement, which plaintiffs accepted, included an arbitration clause. Coinbase moved to compel arbitration, arguing the plaintiffs sought private injunctive relief, which is subject to arbitration.The San Francisco Superior Court denied Coinbase’s motion to compel arbitration, finding that the plaintiffs sought public injunctive relief, which is not subject to arbitration under California law. The court noted that the complaint exclusively sought public injunctive relief and did not request any relief that would solely benefit the plaintiffs or existing Coinbase customers. The court also referenced a related federal case, Aggarwal I, where plaintiffs sought individual relief, supporting the conclusion that the current complaint sought public injunctive relief.The California Court of Appeal, First Appellate District, reviewed the case de novo. The court affirmed the trial court’s decision, holding that the plaintiffs’ complaint indeed sought public injunctive relief. The court explained that public injunctive relief under the CLRA, FAL, and UCL is intended to prohibit unlawful acts that threaten future injury to the public, rather than redress individual wrongs. The court found that the plaintiffs’ allegations and requests for relief were aimed at preventing Coinbase from continuing its allegedly deceptive practices, which primarily benefit the public. Consequently, the arbitration provision in Coinbase’s user agreement could not compel arbitration of the plaintiffs’ claims for public injunctive relief. View "Kramer v. Coinbase, Inc." on Justia Law

Heide Montoya, a former Superintendent of On-Board Services at Amtrak, was discharged in 2020 and later rehired to a different position. Montoya filed a lawsuit alleging sex discrimination and other state-law claims. The litigation became complicated due to a dispute over arbitration. Amtrak argued that Montoya had agreed to arbitration by continuing to work after receiving an email notice. Montoya denied receiving the arbitration agreement, and the district judge could not resolve the issue due to a lack of definitive evidence.The United States District Court for the Northern District of Illinois, Eastern Division, held a status hearing where the judge indicated that the evidence was insufficient to determine if an arbitration agreement existed. The judge suggested that the parties confer and possibly provide a joint statement on how to proceed. Instead of following these steps, Amtrak filed a notice of appeal, relying on §16(a)(1) of the Federal Arbitration Act (FAA), which allows interlocutory appeals from orders bypassing arbitration.The United States Court of Appeals for the Seventh Circuit reviewed the case and found that §16 of the FAA only applies when the Act as a whole is applicable. Section 1 of the FAA excludes contracts of employment for railroad employees, among others, from its scope. Since Montoya was an Amtrak employee, the case falls outside the FAA. The court referenced similar cases and legal precedents, including Southwest Airlines Co. v. Saxon and Bissonnette v. LePage Bakeries Park St., LLC, to support its conclusion. Consequently, the Seventh Circuit dismissed Amtrak's appeal for lack of jurisdiction, noting that the district court still needs to resolve whether Montoya agreed to arbitrate disputes under state law. View "Montoya v. National Railroad Passenger Corp." on Justia Law

A motor vehicle collision occurred in Sussex County, Delaware, involving Joanne Dudsak, a New Jersey resident insured by New Jersey Manufacturers (NJM), and Christopher Koester, a Maryland resident insured by Allstate Insurance Company. NJM paid Personal Injury Protection (PIP) benefits to Dudsak and sought inter-company arbitration in Delaware to recover these costs. Allstate opposed, arguing that NJM's policy, being from New Jersey, did not qualify for arbitration under Delaware law, which requires the vehicle to be registered in Delaware for PIP subrogation rights.The arbitrator ruled in favor of NJM, awarding the full amount and rejecting Allstate's jurisdictional challenge. Allstate then filed a Petition to Vacate the Arbitration Award in the Delaware Chancery Court, arguing that the arbitrator exceeded his authority. NJM moved to dismiss the petition, claiming the issue was moot because Allstate had agreed to tender its policy limits, which would extinguish NJM's subrogation rights under Delaware law.The Delaware Chancery Court denied NJM's Motion to Dismiss, finding that a real dispute remained. The court then addressed the merits of Allstate's Motion for Summary Judgment. The court applied the standard of review under 10 Del. C. §5714(a)(5), which allows vacating an arbitration award if the arbitrated claim was barred by limitation and the objection was raised from the outset. The court found that §2118 of the Delaware PIP statute applies only to vehicles required to be registered in Delaware and does not cover out-of-state policies like NJM's. Consequently, the arbitrator exceeded his authority by accepting jurisdiction over the case. The court granted Allstate's Motion for Summary Judgment, vacating the arbitration award. View "Allstate Insurance Co. v. New Jersey Manufacturers Insurance Co." on Justia Law

Eileen Cure, a licensed investment advisor, entered into agreements with LPL Financial LLC (LPL) to act as a registered representative under LPL’s broker-dealer umbrella. These agreements included arbitration provisions. Cure, along with her companies, Cure & Associates, P.C. and Premier Wealth & Retirement Management, LLC, filed claims against LPL after LPL terminated its relationship with Cure, alleging she violated LPL’s policies. Cure’s companies, which were not signatories to the arbitration agreements, also alleged business disparagement and other claims against LPL.The United States District Court for the Eastern District of Texas granted LPL’s motion to compel arbitration for Cure but denied it for her companies, stating that the companies were not signatories to the arbitration agreements. The court also denied LPL’s request to stay the litigation pending arbitration. LPL appealed, arguing that under California and Texas law, equitable estoppel principles should compel Cure’s companies to arbitrate their claims.The United States Court of Appeals for the Fifth Circuit reviewed the case and concluded that Cure’s companies, although nonsignatories, were bound by the arbitration provisions due to equitable estoppel. The court found that the companies received direct benefits from Cure’s agreements with LPL, making them subject to the arbitration clauses. The Fifth Circuit reversed the district court’s denial of LPL’s motion to compel arbitration for the companies and vacated the order denying a stay of the litigation. The case was remanded for the district court to compel arbitration of the companies’ claims and to stay the action pending arbitration. View "Cure & Associates, P.C. v. LPL Financial" on Justia Law

In 2022, Congress amended the Federal Arbitration Act (FAA) by passing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which renders arbitration agreements unenforceable at the plaintiff’s election in sexual assault and sexual harassment cases arising on or after March 3, 2022. Jane Doe filed a lawsuit in 2023 against her employer, Second Street Corporation, and two supervisors, alleging sexual harassment, discrimination, and wage-and-hour violations. The defendants moved to compel arbitration based on an arbitration provision in the employee handbook. The trial court denied the motion, concluding that the EFAA rendered the arbitration provision unenforceable for all of Doe’s claims and allowed her to file a first amended complaint adding additional claims, including constructive wrongful termination.The Superior Court of Los Angeles County denied the defendants' motion to compel arbitration, finding that Doe’s sexual harassment claims, which included conduct both before and after the EFAA’s effective date, were exempt from mandatory arbitration. The court also ruled that all of Doe’s other claims were exempt from arbitration under the EFAA because they were part of the same case. Additionally, the court permitted Doe to file a first amended complaint.The California Court of Appeal, Second Appellate District, affirmed the trial court’s order. The appellate court held that under the EFAA’s plain language, Doe’s sexual harassment claims, which alleged continuing violations both before and after the EFAA’s effective date, were not subject to mandatory arbitration. The court also held that the EFAA invalidates an arbitration clause as to the entire case, not just the claims alleging sexual harassment. Therefore, the trial court properly denied the motion to compel arbitration and did not abuse its discretion by allowing Doe to file a first amended complaint. View "Doe v. Second Street Corp." on Justia Law