Justia Arbitration & Mediation Opinion Summaries

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Plaintiffs obtained short-term, high-interest loans from lenders owned by the Tribes. The standard loan contracts contained an agreement to arbitrate any dispute arising under the contract and a delegation provision requiring an arbitrator—not a court—to decide “any issue concerning the validity, enforceability, or scope of [the loan] agreement or [arbitration agreement].” The contracts stated that they were governed by tribal law and that an arbitrator must apply tribal law. Plaintiffs filed class-action RICO complaints against the Tribal Lenders. The district court denied the defendants’ motion to compel arbitration, reasoning that the arbitration agreement as a whole in each contract was unenforceable because it prospectively waived plaintiffs’ right to pursue federal statutory claims by requiring arbitrators to apply tribal law.The Ninth Circuit reversed. Rather than asking first whether the arbitration agreement was enforceable as a whole, the court must consider first the enforceability of the delegation provision specifically. The delegation provision was enforceable because it did not preclude plaintiffs from arguing to an arbitrator that the arbitration agreement was unenforceable under the prospective-waiver doctrine. The general enforceability issue must, therefore, be decided by an arbitrator. The choice-of-law provisions were not to the contrary because they did not prevent plaintiffs from pursuing their prospective-waiver enforcement challenge in arbitration. View "Brice v. Plain Green, LLC" on Justia Law

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California Governor Gavin Newsom signed into law California Assembly Bill 51, which was enacted with the purpose of ensuring that individuals are not retaliated against for refusing to consent to the waiver of rights and procedures established in the California Fair Employment and Housing Act and the Labor Code and to ensure that any contract relating to those rights and procedures be entered into as a matter of voluntary consent, not coercion.The Ninth Circuit reversed in part the district court's conclusion that AB 51 is preempted by the Federal Arbitration Act (FAA). The panel held that California Labor Code 432.6 neither conflicts with the language of section 2 of the FAA nor creates a contract defense by which executed arbitration agreements may be invalidated or not enforced. Furthermore, section 432.6 does not make invalid or unenforceable any agreement to arbitrate, even if such agreement is consummated in violation of the statute; section 432.6 applied only in the absence of an agreement to arbitrate and expressly provided for the validity and enforceability of agreements to arbitrate; and because the district court erred in concluding that section 432.6(a)–(c) were preempted by the FAA, it necessarily abused its discretion in granting plaintiffs a preliminary injunction.However, the panel agreed that the civil and criminal penalties associated with AB 51 stood as an obstacle to the purposes of the FAA and were therefore preempted. The panel held that Government Code 12953 and Labor Code 433 are preempted to the extent that they apply to executed arbitration agreements covered by the FAA. Accordingly, the panel affirmed the district court's determination that the civil and criminal penalties associated with AB 51 were preempted; vacated the district court's preliminary injunction enjoining AB 51's enforcement; and remanded for further proceedings. View "Chamber of Commerce of the United States v. Bonta" on Justia Law

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The Fifth Circuit previously ruled that One Tech waived its right to arbitrate plaintiffs' state law claims in a class action alleging that One Tech duped consumers into signing for "free" credit reports that were not really free. Here, the court considered whether One Tech also waived its right to arbitrate federal claims added after remand. The court followed its precedent holding that waivers of arbitral rights are evaluated on a claim-by-claim basis and held that One Tech did not waive its right to arbitrate the new federal claims. The court concluded that the district court erred in holding otherwise. Accordingly, the court reversed and remanded. View "Forby v. One Technologies, LP" on Justia Law

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Williams International Company LLC designed, manufactured, and serviced small jet engines. Dodson International Parts, Inc., sold new and used aircraft and aircraft parts. After purchasing two used jet engines that had been manufactured by Williams, Dodson contracted with Williams to inspect the engines and prepare an estimate of repair costs, intending to resell the repaired engines. Williams determined that the engines were so badly damaged that they could not be rendered fit for flying, but it refused to return one of the engines because Dodson had not paid its bill in full. Dodson sued Williams in federal court alleging federal antitrust and state-law tort claims. Williams moved to compel arbitration under the Federal Arbitration Act (FAA), relying on an arbitration clause on the original invoices. The district court granted the motion, and the arbitrator resolved all of Dodson’s claims in favor of Williams. Dodson then moved to reconsider the order compelling arbitration and to vacate the arbitrator’s award. The court denied both motions and, construing Williams’s opposition to the motion for vacatur as a request to confirm the award, confirmed the award. Dodson appealed, challenging the district court’s order compelling arbitration and its order confirming the award and denying the motions for reconsideration and vacatur. After review, the Tenth Circuit affirmed, holding: (1) the claims in Dodson’s federal-court complaint were encompassed by the arbitration clause; (2) the district court did not abuse its discretion in denying Dodson’s untimely motion to reconsider; and (3) that Dodson failed to establish any grounds for vacatur of the arbitrator’s award or for denial of confirmation of the award. View "Dodson International Parts v. Williams International Company" on Justia Law

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Plaintiff filed a class action complaint under the Employee Retirement Income and Security Act (ERISA) against the fiduciaries of the retirement plan offered by his former employer, Triad, for alleged financial misconduct.The Seventh Circuit concluded that the ERISA provisions that plaintiff invokes have individual and plan-wide effect. However, the arbitration provision in Triad's defined contribution retirement plan precludes relief that "has the purpose or effect of providing additional benefits or monetary or other relief to any Eligible Employee, Participant or Beneficiary other than the Claimant." Therefore, this provision prohibits relief that ERISA expressly permits. Accordingly, the court affirmed the district court's denial of Triad's motion to compel arbitration or, in the alternative, to dismiss. View "Smith v. Board of Directors of Triad Manufacturing, Inc." on Justia Law

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The Ninth Circuit reversed the district court's order denying Comcast's motion to compel arbitration under the Federal Arbitration Act of the claims asserted against it by a former cable subscriber. Plaintiff filed a putative class action challenging certain of Comcast's privacy and data-collection practices and seeking a variety of monetary and equitable remedies. The district court ultimately concluded that provisions of plaintiff's subscriber agreements were unenforceable under the McGill rule.The panel concluded that the district court misconstrued what counts as "public injunctive relief" for purposes of the McGill rule and that it therefore erred in concluding that the complaint here sought such relief. The panel explained that public injunctive relief within the meaning of McGill is limited to forward-looking injunctions that seek to prevent future violations of law for the benefit of the general public as a whole, as opposed to a particular class of persons, and that do so without the need to consider the individual claims of any non-party. Furthermore, such an injunction attempts to stop future violations of law that are aimed at the general public, and imposing or administering such an injunction does not require effectively fashioning individualized relief for nonparties. Because plaintiff's complaint did not seek such relief, the McGill rule is not implicated, and the arbitration agreement should have been enforced. View "Hodges v. Comcast Cable Communications, LLC" on Justia Law

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The Eighth Circuit concluded that HomeServices waived its right to arbitrate after actively litigating this case in federal court for nearly a year. The court also concluded that, under circuit precedent, the issue of whether a party has decided to substantially invoke the litigation machinery is a question for the court, rather than the arbitrator, to answer. In this case, the company failed to do all it could reasonably have been expected to do to make the earliest feasible determination of whether to proceed judicially or by arbitration. View "Sitzer v. National Association of Realtors" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court dismissing Defendants' 2013 motion to enforce a purported settlement agreement and to compel arbitration and dismissing Defendants' claim for unjust enrichment after a trial, holding that the circuit court did not err.Plaintiff brought suit against Defendants, his brothers, to dissolve their family partnership and asserting claims for breach of contract and breach of fiduciary duty. Defendants asserted multiple counterclaims based on Plaintiff's alleged misappropriation of partnership assets. This appeal concerned only the circuit court's denial of Defendants' motion to enforce the settlement agreement and to compel arbitration and the dismissal of Defendants' claim for unjust enrichment. The Supreme Court affirmed, holding that the circuit court (1) did not err in denying Defendants' motion to enforce the purported settlement agreement and to compel arbitration; and (2) did not err in denying Defendants relief on their claim for unjust enrichment. View "Paweltzki v. Paweltzki" on Justia Law

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The Arbitration Board, in its Merits Award, held that Verizon violated a Collective Bargaining Agreement (CBA) with its Union by contracting with common carriers to deliver FiOS TV set-top boxes to “existing customers” for self-installation, work that used to be performed exclusively by Union Service Technicians. Months later, the Board, in creating a “remedy,” expanded the scope of the violation to include deliveries to both existing and new customers and also the accompanying self-installations.The Third Circuit affirmed the district court in vacating the Remedy Award to the extent that it awards damages for work that falls beyond the outer bounds of the Merits Award--the delivery of boxes to existing customers. The deference given to arbitration awards is almost unparalleled, but not absolute. An arbitrator’s powers are limited by the parties’ agreement, which is made against a background of default legal rules. Under these default rules, an arbitrator who has decided an issue is prohibited from revising that decision without the consent of the parties. He can decide other issues submitted by the parties, correct clerical errors, and clarify his initial decision— but nothing more. The Board improperly awarded punitive damages, which are not permitted under the CBA. View "Verizon Pennsylvania LLC v. Communications Workers of America" on Justia Law

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Harper runs deliveries under the “Amazon Flex” program, which supplements Amazon’s traditional delivery services. Interested drivers use an app to sign up to drive packages from Amazon warehouses, affiliated grocers, and participating restaurants to home shoppers. Harper signed up, clicking on a brightly colored button stating, “I AGREE AND ACCEPT” following the Terms of Service. The Terms included an arbitration provision with an “opt-out” process and specified that Washington law applies. Harper filed a putative class action on behalf of similarly situated New Jersey Amazon Flex drivers, alleging that Amazon misclassified them as independent contractors when they really are employees. Amazon moved to compel arbitration under the Federal Arbitration Act. Harper cited the exemption for a “class of workers engaged in foreign or interstate commerce,” 9 U.S.C. 1, noting that the drivers make some deliveries across state lines. Amazon argued that the claim is also arbitrable under state law. The district court ordered discovery to determine whether Harper falls within the FAA exception, declining to reach Amazon’s alternative state law argument.The Third Circuit vacated. Federal courts sitting in diversity must decide state law claims, including state arbitrability, even where the FAA may apply. That is a threshold inquiry, ensuring prompt review of state law claims, particularly before turning to discovery to sort through a comparatively complex federal question. View "Harper v. Amazon.com Services, Inc." on Justia Law