Justia Arbitration & Mediation Opinion Summaries

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Two former employees of Michael Morse and his firm, Michael J. Morse, PC, sued Morse for workplace sexual harassment, including sexual assault, intentional infliction of emotional distress; negligence, gross negligence, and wanton and willful misconduct; and civil conspiracy. In both cases, the firm moved to dismiss and compel arbitration on the basis that both women signed the firm’s Mandatory Dispute Resolution Procedure agreement (MDRPA) prior to accepting employment with the firm. The trial court granted defendants' motion in each case, concluding that the arbitration agreement was valid and enforceable and that the claims were related to the employees' employment and therefore subject to arbitration. A majority of the Court of Appeals concluded that plaintiffs’ claims of sexual assault were not subject to arbitration because sexual assault was not “related to” plaintiffs’ employment. Further, the Court of Appeals stated that the fact that the alleged assaults would not have occurred but for plaintiffs’ employment with the firm did not provide a sufficient nexus between the terms of the arbitration agreement and the alleged sexual assaults. "Defendants noted certain facts that supported connections between plaintiffs’ claims and their employment, including that the alleged assaults occurred at work or work-related functions. But those facts did not necessarily make plaintiffs’ claims relative to employment; rather, the facts had to be evaluated under a standard that distinguished claims relative to employment from claims not relative to employment. This analysis prevents the absurdity of an arbitration clause that bars the parties from litigating any matter, regardless of how unrelated to the substance of the agreement, and it ensures that the mere existence of a contract does not mean that every dispute between the parties is arbitrable. Neither the circuit courts nor the Court of Appeals considered this standard when evaluating defendants’ motions to compel arbitration." Rather than apply this newly adopted approach in the first instance, the Michigan Supreme Court vacated the judgments of the Court of Appeals and remanded the cases to the circuit courts so that those courts could analyze defendants’ motions to compel arbitration by determining which of plaintiffs’ claims could be maintained without reference to the contract or employment relationship. View "Lichon v. Morse" on Justia Law

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Postmates’ website enables customers to arrange for deliveries from local businesses. Beginning in March 2017, prospective couriers seeking to offer their delivery services were presented with Postmates’ Fleet Agreement when logging on for the first time. The Agreement directs a prospective courier to review a mutual arbitration provision that applies to “any and all claims between the [p]arties,” including claims related to a courier’s classification as an independent contractor, delivery fees received by a courier, and state and local wage and hour laws. It includes a “Representative Action Waiver.” There is an opt-out provision: “Arbitration is not a mandatory condition of [the courier’s] contractual relationship with Postmates. ” Plaintiffs acknowledged the Fleet Agreement. Postmates did not receive opt-out forms for any of them. In December 2017, Plaintiffs filed a putative class and representative action, alleging Labor Code violations. The trial court denied Postmates’s petition to compel arbitration of Private Attorney General Act claims for civil penalties, citing the California Supreme Court’s 2017 “Iskanian” holding that representative action waivers were unenforceable. The court of appeal affirmed, rejecting Postmates’ arguments that Iskanian was abrogated by subsequent U.S. Supreme Court decisions. Iskanian expressly established that the Federal Arbitration Act does not preempt state law on the enforceability of PAGA waivers. View "Winns v. Postmates Inc." on Justia Law

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The Court of Appeal exercised its discretion to construe Western Bagel's appeal as a petition for writ of mandate and granted the petition, directing the trial court to enter a new order compelling the parties to arbitrate their dispute via binding arbitration in accordance with the terms of their arbitration agreement.In this case, the trial court found that the Federal Arbitration Act (FAA) governs the parties' arbitration agreement, concluded that the inconsistency between the Spanish and English severability clauses creates an ambiguity regarding whether the parties consented to binding or nonbinding arbitration, resolved this ambiguity against Western Bagel pursuant to the constructive canon of contra proferentem, and ordered the parties to arbitrate their dispute on a nonbinding basis.Upon reaching the merits of Western Bagel's writ petition, the court concluded that the FAA preempted the trial court's use of contra proferentem. Assuming arguendo there is an ambiguity regarding whether the parties consented to binding or nonbinding arbitration, the court employed the FAA's default rule that any ambiguities about the scope of an arbitration agreement must be resolved in favor of arbitration as envisioned by the FAA, a fundamental attribute of which is a binding arbitral proceeding. View "Western Bagel Co., Inc. v. Superior Court" on Justia Law

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In 2011, the Borough of Carteret and the Firefighters Mutual Benevolent Association, Local 67 (FMBA) executed a collectively negotiated agreement (CNA) governing the terms and conditions of employment for the Borough’s firefighters. As of 2013, the Borough employed four captains and generally staffed each shift with one captain, who was charged with managing subordinate firefighters also on duty. Under the CNA, if no captains were scheduled to work a particular shift, the senior firefighter on duty would assume the captain’s responsibilities and be compensated at the captain’s rate of pay. Almost two years after the CNA went into effect, the Borough created a new position -- fire lieutenant -- falling between captain and firefighter in the chain of command. After the creation of the lieutenant position, if no captains were scheduled for a given shift, the lieutenant on duty would assume the captain’s responsibilities. In those instances, however, the Borough paid lieutenants their regular salary, not the higher rate an acting captain would have been paid. In 2017, the FMBA filed a grievance alleging that the Borough’s failure to pay lieutenants at the rate of an acting captain when a lieutenant assumed a captain’s responsibilities violated the terms of the CNA. An arbitrator sided with the FMBA. The Chancery Division upheld the award, but the Appellate Division reversed, finding that the difference between the Civil Service Commission’s job descriptions for firefighters and fire lieutenants created uncertainty as to Section 5 of the CNA's application to lieutenants. The New Jersey Supreme Court reversed, finding the arbitrator’s award was supported by a reasonably debatable interpretation of the disputed provision, and therefore, the award should have been upheld on appeal. View "Borough of Carteret v. Firefighters Mutual Benevolent Association, Local 67" on Justia Law

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The Second Circuit affirmed the district court's July 8, 2020 Order granting an application for discovery assistance pursuant to 28 U.S.C. 1782 and the August 25, 2020 Order denying reconsideration of the same. The Fund, a Russian corporation, sought assistance from the district court to order discovery from AlixPartners for use in an arbitration proceeding brought by the Fund against Lithuania before an arbitral panel established pursuant to a bilateral investment treaty between Lithuania and Russia.The court concluded that an arbitration between a foreign state and an investor, which takes place before an arbitral panel established pursuant to a bilateral investment treaty to which the foreign State is a party, constitutes a "proceeding in a foreign or international tribunal" under 28 U.S.C. 1782; the Fund, as a party to the arbitration for which it seeks discovery assistance, is an "interested person" who may seek discovery assistance for such an arbitration under section 1782; and the district court did not abuse its discretion in finding that the Intel factors weigh in favor of granting the Fund's discovery application under section 1782. View "The Application of the Fund v. AlixPartners" on Justia Law

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Plaintiff filed suit against Sixt on behalf of a putative class of Sixt customers, alleging that Sixt breached its own contract with him and violated two state consumer-protection statutes. In this case, plaintiff had used Orbitz.com to book a rental car from Sixt. When plaintiff picked up the rental car from Sixt, he signed an entirely separate agreement with Sixt which did not contain an arbitration provision.The Eleventh Circuit explained that a customer making an airline, hotel, or car-rental reservation on Orbitz.com agrees to a contract that includes an arbitration provision, and that provision requires the customer to arbitrate disputes related to, among other things, "any services or products provided." At issue is whether that phrase refers to services and products provided by Orbitz or by anyone.Reading the "any services or products provided" clause in the light of neighboring provisions and the larger contractual context—and applying a dose of common sense—the court concluded that it refers only to services and products provided by Orbitz. The court affirmed the district court's denial of Sixt's motion to compel arbitration because the underlying dispute does not relate to services or products provided by Orbitz. Rather, it relates only to those provided by Sixt, a company that does business through Orbitz. View "Calderon v. Sixt Rent a Car, LLC" on Justia Law

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When Selden signed up for Airbnb, an online home rental platform, he was presented with a sign-in webpage that informs the user he is agreeing to certain terms by signing up. Airbnb’s Terms of Service required that all disputes be resolved by arbitration. After Selden signed up for Airbnb, he attempted to rent a listed room and suspected that the host denied his request because of his race, which the host could see from Selden’s profile picture. Selden created two fake Airbnb accounts with profile pictures of white individuals and used his fake accounts to request renting the same property for the same dates. According to Selden, the host accepted both requests. Selden posted his claims on social media where they went viral.Selden sued, citing Title II of the Civil Rights Act of 1964, 42 U.S.C. 2000a), the Civil Rights Act of 1866, 42 U.S.C. 1981, and the Fair Housing Act, 42 U.S.C. 3604. The district court compelled arbitration of his claims. The arbitrator ruled in favor of Airbnb. The court refused to vacate the arbitration award. The D.C. Circuit affirmed, rejecting Selden’s arguments that he did not agree to arbitrate because Airbnb’s sign-up screen failed to put him on notice of the arbitration clause in its Terms of Service, that his discrimination claims were not arbitrable, and that the arbitrator committed misconduct by failing to provide for sufficient discovery and by refusing to consider his expert report. View "Selden v. Airbnb, Inc." on Justia Law

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The First Circuit affirmed the judgment of the district court granting a preliminary injunction to the American Institute for Foreign Study, Inc. to enjoin class arbitration in this dispute with an au pair, holding that the agreement between the parties did not authorize class arbitration, and the au pair's claim was moot.The Institute, which places au pairs with host families in the United States, entered into a contract with Plaintiff, an au pair from Spain, that required the parties to arbitrate their disputes. Plaintiff filed a class arbitration demand against the Institute and its CEO, William Gertz (together, Defendants). Defendants subsequently filed suit seeking to enjoin class arbitration. The district court denied relief to Gertz and granted a preliminary injunction to the Institute. The First Circuit affirmed, holding (1) the agreement did not provide an affirmative basis to conclude that the parties agreed to class arbitration; and (2) Gertz's claim was moot. View "American Institute for Foreign Study, Inc. v. Fernandez-Jimenez" on Justia Law

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The Supreme Court granted writ relief in this case concerning whether the district court has authority to intervene in binding arbitration to sanction a party's misconduct, holding that the district court improperly intervened in this matter.The parties agreed to Plaintiff filing a complaint, staying the action, selecting an arbitrator, and allowing the case to proceed through arbitration. After an improper sweep of Plaintiff's technology, Defendant filed a motion for discovery sanctions. The arbitrator fined Plaintiff but declined to strike Plaintiff's claims at that time, as requested by Defendant. Defendant then filed a motion in the district court for provisional relief, requesting that the court take action to remedy the misconduct. The district court found that it had the authority to address the issues raised in the motion. The Supreme Court granted Plaintiff's petition for writ relief, holding (1) where Nev. Rev. Stat. 38.222 provides limited authority to intervene in an arbitration only where the district court orders a provisional remedy and where the court did not order a provisional remedy in this case, the district court lacked authority under section 38.222 to intervene in the arbitration; and (2) the district court did not have inherent authority to intervene in the arbitration because the alleged litigation misconduct was squarely before the arbitrator. View "Direct Grading & Paving v. Eighth Judicial District Court" on Justia Law

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The Supreme Court reversed in part the judgment of the trial court granting Plaintiff's motion to vacate an arbitration award and denying Defendant's corresponding application to confirm the award, holding that the arbitrator did not exceed her authority or manifestly disregard the law, but the inclusion of issues related to child support in the award was improper.Before the parties were married they executed a premarital agreement. Years later, Plaintiff brought this action to dissolve the marriage, and the parties executed a binding agreement to arbitrate the dissolution action. At issue was the validity of the arbitrator's award dividing the equity in the parties' marital home and assigning responsibility for certain expenses related to child support. The trial court granted Plaintiff's motion to vacate the portion of the arbitration award. The Supreme Court reversed in part, holding (1) the trial court erred in ruling that the arbitrator's award exceed the scope of the parties' submission; (2) any error in distributing the equity in the marital home would not permit a court to vacate the arbitration award; and (3) because Connecticut law prohibits the inclusion of issues related to child support in arbitration awards, this portion of the award is reversed. View "Blondeau v. Baltierra" on Justia Law