Justia Arbitration & Mediation Opinion Summaries

Connie Lange purchased a fifth-wheel camping trailer from GMT Auto Sales in August 2020, which included a $199 administrative fee. Lange later filed a class action petition alleging that GMT violated the Missouri Merchandising Practices Act by charging this fee, arguing that fifth-wheel camping trailers do not qualify as "motor vehicles," "vessels," or "vessel trailers" under the relevant statute. GMT initially moved to dismiss the case but later moved to compel arbitration based on an arbitration clause in the retail installment contract.The Circuit Court of St. Louis County overruled GMT's motion to dismiss and later granted GMT's motion to compel arbitration. The arbitrator awarded Lange $199 and $5,000 in attorney fees. Lange then filed a motion to vacate the arbitration award and reconsider the order compelling arbitration, which the circuit court denied. Lange appealed, arguing that GMT waived its right to arbitration by filing the motion to dismiss and that the arbitration provision was unenforceable.The Missouri Court of Appeals reversed the circuit court's judgment, agreeing with Lange that GMT waived its right to arbitration. The Supreme Court of Missouri granted transfer and reviewed the case de novo. The court found that GMT did not waive its right to arbitration by filing the motion to dismiss, as it timely moved to compel arbitration and raised it as an affirmative defense in its responsive pleading. The court also found that the arbitration provision remained enforceable despite the assignment of the retail installment contract to a bank. Lange's argument regarding the unconscionability of the arbitration provision was deemed unpreserved for review.The Supreme Court of Missouri affirmed the circuit court's judgment confirming the arbitration award. View "Lange v. GMT Auto Sales, Inc." on Justia Law

A catastrophic turbine failure occurred at the Hadjret En Nouss Power Plant in Tipaza, Algeria. The plant is owned by Shariket Kahraba Hadjret En Nouss (SKH), which is jointly owned by the Algerian government and Algerian Utilities International Ltd. SNC-Lavalin Contructeurs International Inc. (SNC) operated the plant on behalf of SKH. SNC entered into multiple contracts with various General Electric entities, including a Services Contract with General Electric International, which contained an arbitration clause.The insurers, reinsurers, and retrocessionaires (collectively the "Insurers") initiated litigation as subrogees of SKH against General Electric International, General Electric Company, GE Power, and GE Power Services Engineering (collectively the "GE Entities") in Georgia's state-wide business court. The GE Entities removed the case to federal court and moved to compel arbitration based on the arbitration provision in the Services Contract. The United States District Court for the Northern District of Georgia granted the motion, concluding that SKH was a third-party beneficiary of the Services Contract.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court affirmed the district court's decision, holding that SKH, as the plant's owner, was a third-party beneficiary of the Services Contract. Consequently, the Insurers, as subrogees of SKH, were bound by the arbitration clause. The court also affirmed that any questions regarding the arbitrability of specific claims should be resolved by the arbitrator, as the Services Contract incorporated the Conciliation and Arbitration Rules of the International Chamber of Commerce, which delegate such decisions to the arbitrator. View "Various Insurers, Reinsurers and Retrocessionaires v. General Electric International, Inc." on Justia Law

A collective bargaining agreement between the Teamsters Union and Quality Custom Distribution guaranteed that the top 80% of senior employees would receive at least 40 paid hours per week. During the early months of the COVID-19 pandemic, many Starbucks stores in or near Chicago closed or reduced their hours, resulting in senior employees averaging only 30 hours a week. The Union demanded that the employer make up the difference, but the employer refused, citing an exception for Acts of God.The dispute was taken to an arbitrator, who ruled in favor of the Union. The arbitrator determined that while epidemics might be considered Acts of God, the reduction in work was primarily due to the Governor of Illinois' orders, which were not Acts of God. The employer then filed a suit in the United States District Court for the Northern District of Illinois to nullify the arbitrator's decision. The district court judge declined to nullify the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The court held that as long as the arbitrator interprets the contract, the award must stand. The arbitrator had interpreted the contract's "Act of God" clause, concluding it did not cover the Governor's orders. The court emphasized that judicial review of arbitration awards is limited to ensuring the arbitrator interpreted the contract, not whether the interpretation was correct. The court also noted that the employer's conduct in the litigation process imposed unnecessary costs and ordered the employer to show cause why sanctions should not be imposed. View "Quality Custom Distribution Services LLC v International Brotherhood of Teamsters, Local 710" on Justia Law

Plaintiffs, representing a putative class, filed an antitrust lawsuit against Grubhub Inc., Postmates Inc., and Uber Technologies, Inc. (collectively, "Defendants"). The plaintiffs alleged that the defendants violated Section 1 of the Sherman Antitrust Act and its state analogues by entering into no-price competition clauses (NPCCs) with restaurants, which prevented the restaurants from offering lower prices through other channels. The plaintiffs claimed that these NPCCs led to artificially high prices for restaurant meals. The class included customers who purchased takeout or delivery directly from restaurants subject to NPCCs, customers who dined in at such restaurants, and customers who used non-defendant platforms to purchase from these restaurants.The United States District Court for the Southern District of New York denied the defendants' motion to compel arbitration. The court held that the scope of the arbitration clauses was an issue for the court to decide and that the clauses did not apply to the plaintiffs' claims as they lacked a nexus to the defendants' Terms of Use. The court also found that the plaintiffs had not agreed to Grubhub's Terms of Use.The United States Court of Appeals for the Second Circuit reviewed the case. The court affirmed the district court's decision in part, ruling that the question of arbitrability for the plaintiffs' claims against Grubhub is for the court to decide and that Grubhub's arbitration clause does not apply to the plaintiffs' antitrust claims. However, the court reversed the district court's decision in part, finding that Grubhub had established an agreement to arbitrate with the plaintiffs and that the threshold question for the plaintiffs' claims against Uber and Postmates is for the arbitrator to decide. The case was remanded for further proceedings consistent with this opinion. View "Davitashvili v. Grubhub" on Justia Law

Plaintiffs owned property adjacent to an unpaved road where the Town of Lodi determined that low-hanging branches and dead or dying trees posed a hazard. In 2010, the Town hired a tree service company to cut or remove fifty-five trees on plaintiffs' land, believing the trees were within the right of way. Plaintiffs disagreed and sought treble damages under RPAPL 861 (1). The parties agreed to binding arbitration, and the arbitrator awarded plaintiffs damages, including treble the "stumpage value" of the trees.The Supreme Court confirmed the arbitrator's award, and a divided Appellate Division affirmed. The Appellate Division majority held that treble damages under RPAPL 861 were not punitive but intended to capture elusive compensatory damages. The dissenting justices argued that the treble damages were punitive and could not be awarded against the Town. The Town appealed to the Court of Appeals.The New York Court of Appeals reviewed the case and held that treble damages under RPAPL 861 are punitive in nature. The Court reasoned that the statute's "good faith" provision, which reduces damages from treble to single if the defendant acted in good faith, indicates a punitive intent. The Court also noted that the legislative history and structure of the statute support the conclusion that treble damages are meant to punish and deter wrongful conduct. Consequently, the Court reversed the Appellate Division's order insofar as appealed from, with costs, and granted the petition to vacate the award in part. View "Matter of Rosbaugh v Town of Lodi" on Justia Law

Tiffany Johnson and Tracy Crider, Maryland residents, obtained credit card accounts from Continental Finance Company, LLC and Continental Purchasing, LLC. They filed separate class-action lawsuits in Maryland state court, alleging that Continental violated Maryland usury laws by charging excessive interest rates through a "rent-a-bank" scheme. They sought statutory damages and declaratory judgments to void their loans. Continental removed the cases to the District of Maryland and moved to compel arbitration based on a cardholder agreement containing an arbitration provision.The District of Maryland consolidated the cases and denied Continental's motions to compel arbitration. The court held that it was responsible for determining whether the arbitration agreement was illusory, not the arbitrator. It also found that the choice-of-law provisions in the agreements could not be applied before establishing the existence of a valid contract. Finally, the court concluded that the arbitration agreement was illusory under Maryland law due to a "change-in-terms" clause allowing Continental to unilaterally alter any term at its sole discretion.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court's decision. The Fourth Circuit agreed that the court, not the arbitrator, should determine the contract's formation. It also concurred that the choice-of-law provisions could not be enforced before establishing a valid contract. Finally, the court held that the arbitration agreement was illusory under Maryland law because the change-in-terms clause allowed Continental to escape its contractual obligations, rendering the agreement non-binding. The judgment of the district court was affirmed. View "Johnson v. Continental Finance Co., LLC" on Justia Law

Doctors Scott Sullivan and Frank DellaCroce, along with their associated business entities, entered into a turnkey agreement with Stewart Feldman and his associated entities to pool their risks through certain insurance arrangements. The agreement included an arbitration provision. The doctors later alleged that Feldman and his entities misled them about the insurance arrangements and failed to wind down the insurance entities upon request, leading to multiple arbitration proceedings.The United States District Court for the Southern District of Texas was involved in compelling and managing these arbitrations. The court initially allowed multiple arbitrations to proceed simultaneously and later confirmed four arbitration awards, despite their inconsistencies. The district court also issued a stay order to prevent further arbitrations until the existing ones were resolved.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the Glasser, Baker, and Kutcher arbitration awards, finding no grounds under the Federal Arbitration Act to vacate them. The court also affirmed in part the Jones arbitration award but reversed it in part concerning defendant Jeff Carlson, who was not bound by the arbitration agreement. The court vacated and remanded the district court’s order staying further arbitrations, allowing the parties to resolve the inconsistencies among the awards through additional arbitration if they choose. View "Sullivan v. Feldman" on Justia Law

In 2020 and 2021, Rohan Dhruva and Joshua Stern, residents of California, created accounts and subscribed to CuriosityStream, an online streaming service. They later discovered that CuriosityStream was sharing their event data and other identifiers with Meta, which they claimed violated the federal Video Privacy Protection Act and California state law. Consequently, they filed a putative class action lawsuit in Maryland, where CuriosityStream is headquartered.The United States District Court for the District of Maryland denied CuriosityStream's motion to compel arbitration. The court acknowledged that the website provided adequate notice of the Terms of Use through a conspicuous hyperlink but concluded that users were not given clear notice that clicking the "Sign up now" button constituted agreement to the Terms of Use. CuriosityStream's motion for reconsideration was also denied.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court concluded that Dhruva and Stern had reasonable notice that registering for the streaming service would constitute assent to the website’s Terms of Use, which included an arbitration clause. The court held that the design and content of the website provided sufficient notice of the terms and that Dhruva and Stern manifested their assent by registering with the website. Consequently, the Fourth Circuit reversed the district court's order denying the motion to compel arbitration and remanded the case for further proceedings. View "Dhruva v. CuriosityStream, Inc." on Justia Law

The plaintiff, New England Property Services Group, LLC, filed a claim under a homeowners’ insurance policy for wind damage to a property in Greenville, Rhode Island. The insurance company, Vermont Mutual Insurance Company, provided an estimate for the loss, which the plaintiff disputed. The plaintiff invoked the appraisal process outlined in the insurance agreement. Each party appointed an appraiser, but they could not agree on an umpire, so the Superior Court appointed one. The appraisal concluded with an award signed by the plaintiff’s appraiser and the umpire, but not the defendant’s appraiser.The plaintiff filed a petition in the Superior Court to confirm the appraisal award under Rhode Island’s Arbitration Act. The defendant filed a cross-petition to vacate the award, arguing that the plaintiff’s appraiser was ineligible due to a financial interest in the award. The Superior Court granted the defendant’s cross-petition to vacate the award and denied the plaintiff’s petition to confirm it. The plaintiff did not appeal this order but instead filed a motion to reconsider, arguing that the appraisal process was not arbitration because the insurance contract did not require appraisers to be disinterested. The Superior Court denied this motion.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court’s order. The Court held that the appraisal process was akin to arbitration, despite the absence of the word “disinterested” in the insurance contract. The Court noted that the plaintiff had initially sought to confirm the award under the Arbitration Act and only challenged the nature of the proceedings after the award was vacated. The Court concluded that the Superior Court had subject-matter jurisdiction and that the appraisal clause in the insurance policy constituted arbitration under the Arbitration Act. View "New England Property Services Group, LLC v. Vermont Mutual Insurance Company" on Justia Law

The Berkeley County School District filed a lawsuit against several defendants, including HUB International Ltd. and HUB International Midwest Ltd., alleging claims related to insurance policies and services provided. HUB sought to compel arbitration based on brokerage service agreements (BSAs) from 2002, 2003, 2005, 2006, 2009, and 2011. The district court denied the motion, and HUB appealed. The appellate court reversed and remanded for a trial to resolve factual disputes about the agreements. After a bench trial, the district court again denied the motion, finding no meeting of the minds for the 2006, 2009, and 2011 BSAs and precluding consideration of the 2002 and 2003 BSAs. HUB appealed again, and the appellate court vacated the judgment regarding the 2002 and 2003 BSAs.On remand, the district court found the 2002 and 2003 BSAs valid and enforceable but denied HUB's motion to compel arbitration, deciding that the dispute did not fall within the scope of those agreements. HUB appealed this decision.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the district court erred by deciding the arbitrability of the dispute itself. The appellate court held that the arbitration provisions in the 2002 and 2003 BSAs, which incorporate the American Arbitration Association (AAA) commercial rules, clearly delegate arbitrability questions to the arbitrator. Therefore, the district court should have compelled arbitration to resolve whether the claims fall within the scope of the arbitration agreements.The Fourth Circuit reversed the district court's judgment and remanded the case with instructions to compel arbitration of the threshold arbitrability question in accordance with the parties' agreement. View "Berkeley County School District v. HUB International Limited" on Justia Law