Justia Arbitration & Mediation Opinion Summaries
Jock v. Sterling Jewelers Inc.
Plaintiffs, a group of current and former retail sales employees of Sterling Jewelers, filed suit alleging that they were paid less than their male counterparts, on account of their gender, in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. After an arbitrator certified a class of Sterling Jewelers employees that included employees who did not affirmatively opt in to the arbitration proceeding, the district court held that the arbitrator exceeded her authority in purporting to bind those absent class members to class arbitration. The Second Circuit reversed, holding that the arbitrator was within her authority in purporting to bind the absent class members to class proceedings because, by signing the operative arbitration agreement, the absent class members, no less than the parties, bargained for the arbitrator's construction of their agreement with respect to class arbitrability. The court remanded to the district court to consider, in the first instance, the issue of whether the arbitrator exceeded her authority in certifying an opt-out class. View "Jock v. Sterling Jewelers Inc." on Justia Law
Posted in: Arbitration & Mediation, Civil Rights, Labor & Employment Law, US Court of Appeals for the Second Circuit
Prima Donna Development Corp. v. Wells Fargo Bank, N.A.
Prima Donna’s president, opened commercial bank accounts at Wells Fargo; he signed or agreed to be bound by several agreements, including wire transfer agreements. The commercial account agreement contained an arbitration agreement. A Prima employee was the victim of fraud and authorized wire transfers to foreign banks. Before Prima reported the fraud, $638,400 had been transferred and could not be recovered. Prima sued, alleging that Wells Fargo did not employ reasonable commercial standards of fair dealing and failed to follow the agreement's security procedures. The court ordered arbitration, stating “The fact that UCC provisions displace common law provisions and provide the law under which claims are analyzed" is unrelated to what type of fact-finder can apply that law. The arbitrator concluded that Wells Fargo was not liable for the loss. The court of appeal concluded the trial court properly ordered the matter to arbitration and confirmed the award. The court rejected arguments that the arbitration agreement was substantively unconscionable because the arbitrator would not necessarily decide the dispute under California law, because it denied Prima its right to a jury trial, or because of the limited nature of judicial review. The arbitration process allowed for discovery, an arbitrator who voluntarily recused himself after Prima expressed concern about his impartiality, a multi-day hearing, written discovery, evidentiary rulings, and a reasoned, written award that applied relevant California law, View "Prima Donna Development Corp. v. Wells Fargo Bank, N.A." on Justia Law
Bakersfield College v. Cal. Community College Athletic Assn.
Defendant California Community College Athletic Association (Athletic Association) administered intercollegiate athletics for the California community college system. The parties agreed that, as a condition of participating in the intercollegiate football league, plaintiff Bakersfield College (the College) agreed to be bound by the Athletic Association’s bylaws and constitution, including a provision requiring the College to resolve any sanctions and penalty disputes by binding arbitration. Instead of proceeding through binding arbitration to challenge the sanctions and penalty decisions issued by the Athletic Association and codefendant the Southern California Football Association (the Football Association) against the College, the College and coplaintiffs Jeffrey Chudy and the Kern Community College District elected to file civil litigation. Plaintiffs argued they were excused from pursuing binding arbitration because the arbitration provision was unconscionable. The trial court said the “issue [wa]s close,” but ultimately, after severing the one-sided attorney fees subsections, found the arbitration provision was not unconscionable. The trial court, therefore, found plaintiffs’ litigation was barred by the failure to exhaust their administrative remedies. The Court of Appeal agreed with the trial court that this was a close case but concluded the arbitration provision was unconscionable. Accordingly, it reversed. View "Bakersfield College v. Cal. Community College Athletic Assn." on Justia Law
Posted in: Arbitration & Mediation, California Courts of Appeal, Entertainment & Sports Law, Government & Administrative Law
Robinson Nursing & Rehabilitation Center, LLC v. Phillips
The Supreme Court affirmed in part and reversed and remanded in part the order of the circuit court denying motions to compel arbitration of a class-action complaint filed by Appellees, holding that Appellants failed to meet their burden of proving a valid and enforceable arbitration agreement with respect to certain agreements but that Appellants met their burden to prove the validity of the remainder of the arbitration agreements. Appellees filed a class-action complaint against Appellants, a nursing home and related entities, alleging that Appellants had breached their admission and provider agreements, violated the Arkansas Deceptive Trade Practices Act, committed negligence and civil conspiracy, and had been unjustly enriched. Appellants' filed four motions to compel arbitration with respect to ten class members/residents. The circuit court denied the motions. The Supreme Court affirmed in part and reversed in part, holding (1) certain arbitration agreements contained deficiencies that prevented Appellants from meeting their burden of proving a valid and enforceable arbitration agreement; and (2) Appellants met their burden to prove the validity of the remainder of the arbitration agreements not already discussed. View "Robinson Nursing & Rehabilitation Center, LLC v. Phillips" on Justia Law
Davis v. TWC Dealer Group, Inc.
TWC operated a Walnut Creek Toyota dealership. The Davises sought employment at TWC, to run its special finance department. The Davises are African-American, and Donald Davis is over the age of 40. The Davises were required to sign agreements providing that the Davises agreed to arbitration. The three agreements are all different. After the Davises became employed, TWC hired a new General Manager, Colon. The Davises claim that Colon “began to systematically undermine [the Davises’s] programs,” an effort “punctuated by shockingly inappropriate ageist and racist comments to and about them.” The Davises eventually resigned, filed complaints with the Department of Fair Employment and Housing, and obtained right to sue letters. The defendants filed an unsuccessful petition to compel arbitration. The court found there was an agreement to arbitrate, but found both procedural and substantive unconscionability. The court of appeal affirmed, noting TWC’s “lack of candor” concerning the agreements. The court noted the “take it or leave it” pressure under which the agreements were signed, the inconsistency between the agreements, how hard it would be for a layman to read the agreements, and the inclusion of broad provisions in violation of public policy. View "Davis v. TWC Dealer Group, Inc." on Justia Law
McGee v. Armstrong
Plaintiff, a management employee of the Summit County Board of Developmental Disabilities, worked under renewable one-year agreements that contained broad arbitration provisions. When Plaintiff joined the Ohio Army National Guard in 2008, his contract provided for “military leave in accordance with Board Policy.” Thereafter, there were several disputes about his entitlement military leave at full pay. Plaintiff refused to sign a proposed 2011–12 contract. Plaintiff filed his first complaint in 2011. In April 2012, shortly after returning from military leave, the Board delivered to Plaintiff a pre-disciplinary hearing notice. The Board subsequently notified Plaintiff of his termination. Plaintiff filed another complaint, alleging wrongful termination of employment, breaches of the employment contract, and discrimination and retaliation based on his military status. The district court granted Defendants’ motion to compel arbitration, excluding two breach of contract claims. An arbitrator determined that all of the claims identified as possibly subject to arbitration were arbitrable, and granted the Defendants summary judgment. The court granted Defendants summary judgment regarding Plaintiff’s breach of contract claims. The Sixth Circuit affirmed. The contract provided that the arbitrators could decide questions of arbitrability and, under Ohio law, the arbitrators did not exceed their powers by entering a decision on Defendants’ motion for summary judgment. Plaintiff failed to show a breach of his contract with respect to military leave. View "McGee v. Armstrong" on Justia Law
Posted in: Arbitration & Mediation, Contracts, Labor & Employment Law, US Court of Appeals for the Sixth Circuit
Plummer v. McSweeney
The Eighth Circuit reversed the district court's denial of the law firm's motion to compel arbitration between the firm and its client. The court held that the law firm's offer to pay plaintiff's share of the arbitration costs cured any substantive unconscionability that the agreement may have contained; the offer also cured any issue regarding substantive unconscionability where the arbitration provision in effect allowed only the firm to obtain redress of claims; plaintiff has not demonstrated that she lacked meaningful choice, and thus the circumstances giving rise to the lawsuit did not render the retainer agreement procedurally unconscionable; and the language in the agreement adequately disclosed the consequences of the arbitration provision, and the agreement was not unenforceable because the firm violated their ethical duties under DC Circuit precedent. View "Plummer v. McSweeney" on Justia Law
Monster Energy Co. v. City Beverages, LLC
The Ninth Circuit vacated a final arbitration award between Monster Energy and City Beverages, dba Olympic Eagle. The parties had signed an agreement providing exclusive distribution rights for Monster's products to Olympic Eagle for a fixed term in a specified territory. After Monster exercised its contractual right to terminate the agreement, the parties proceeded to arbitration. In the final arbitration award, the arbitrator determined that Olympic Eagle did not qualify for protection under Washington law. The panel held, given the arbitrator's failure to disclose his ownership interest in JAMS, coupled with the fact that JAMS has administered 97 arbitrations for Monster over the past five years, that vacatur of the award was necessary on the ground of evident partiality. Therefore, the court reversed the district court's judgment, and also vacated the district court's award of post-arbitration fees to Monster for its petition to confirm the award. View "Monster Energy Co. v. City Beverages, LLC" on Justia Law
Henry v. Educational Financial Service
Debtor filed an adversary proceeding in bankruptcy court raising the issue of whether her bankruptcy discharge applied to a student loan. The Fifth Circuit affirmed the bankruptcy court's denial of Wells Fargo's motion to compel arbitration. The court held that its holding In re Nat'l Gypsum Co., 118 F.3d 1059, 1069 (5th Cir. 1997), -- that bankruptcy courts have discretion to refuse to compel arbitration in proceedings seeking enforcement of a discharge injunction -- remains good law following the Supreme Court's decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). The court held that Epic Systems shows that National Gypsum's doctrinal foundation remains sound. View "Henry v. Educational Financial Service" on Justia Law
SAI Montgomery BCH, LLC v. Williams
SAI Montgomery BCH, LLC, d/b/a Classic Cadillac and Andrew Harper, general manager for Cadillac appealed a trial court order denying their motions to compel arbitration. The matter arose over a lease agreement. Customers made two lease payments before the car they lease was seized by law enforcement, and the lessees arrested for theft of property. A grand jury ultimately refused to return an indictment, and the lessees sued the Cadillac dealership and its general manager for malicious prosecution, slander, defamation and conversion, amongst other things. Because the Alabama Supreme Court concluded the trial court was without jurisdiction to enter the order appealed from, it dismissed the appeal. View "SAI Montgomery BCH, LLC v. Williams" on Justia Law