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Wakaya Perfection, LLC and its principals sued Youngevity International Corp. and its principals in Utah state court. The Youngevity parties responded by bringing their own suit against the Wakaya parties in a California federal district court, then removing the Utah case to federal court. These steps resulted in concurrent federal cases sharing at least some claims and issues. The California litigation progressed; and in November 2017, the federal district court in Utah ordered dismissal. The issues presented for the Tenth Circuit's review centered on whether: (1) the federal district court should have abstained from exercising jurisdiction under the Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976) test; and (2) and arbitrator would have needed to decide the arbitrability of Wakaya's claims. The Tenth Circuit reversed on both grounds: the federal trial court applied the wrong abstention test and erroneously ruled that an arbitrator should have decided whether Wakaya's claims were arbitrable. View "Wakaya Perfection, LLC v. Youngevity International" on Justia Law

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The Ninth Circuit withdrew its prior opinion and filed the following opinion. The panel affirmed the district court's order affirming an arbitration award for the union. The panel held that the arbitrator was acting within his authority when he crafted a remedy to cure the parties' mutual mistake. In this case, the arbitration award drew its essence from the collective bargaining agreement and the arbitrator's award did not violate public policy. View "ASARCO, LLC v. United Steel, Paper and Forestry" on Justia Law

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The First Circuit affirmed the district judge’s order sending Appellant’s case to arbitration, holding that the arbitration agreement between the parties was enforceable and did not fail for lack of consideration or unconscionability. Appellant and his employer entered into an agreement outlining the terms for Appellant’s continued at-will employment, which included an arbitration agreement. After Appellant was fired, Appellant filed this federal court lawsuit against Appellees alleging that his discharged violated several federal and state laws. Appellees moved to dismiss the complaint and compel arbitration. In response, Appellant argued that the arbitration agreement was unenforceable for lack of consideration and that the agreement was unconscionable and thus, unenforceable. The district court granted Appellees’ motion, concluding that a valid and enforceable arbitration agreement existed between the parties. The First Circuit affirmed, holding that both Appellant’s consideration and unconscionability arguments failed. View "Britto v. Prospect CharterCare SJHSRI, LLC" on Justia Law

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The First Circuit reversed the decision of the district court denying Defendants’ motion to dismiss Plaintiff’s complaint and compel arbitration based on the parties’ signed arbitration agreement, holding that, contrary to the conclusion of the district court, Defendants’ offer of continued at-will employment was valid consideration for the agreement. Plaintiff’s complaint alleged that Defendants fired him in violation of the Family Medical Leave Act and the Rhode Island Parental and Family Medical Leave Act. Defendants filed a motion to dismiss the case and compel arbitration. The district court denied the motion, concluding that the agreement failed for lack of consideration. The First Circuit reversed, holding (1) the agreement was supported by adequate consideration; and (2) Plaintiff’s motion to supplement the record is denied. The Court remanded the case with instructions to grant Defendants’ motion to dismiss and compel arbitration. View "Conduragis v. Prospect CharterCARE, LLC" on Justia Law

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The plaintiff, who arbitrated a claim that arose under a federal statute, the Electronic Communications Privacy Act of 1986 (known as the Stored Communications Act), 18 U.S.C. 2701, sought to vacate or modify the arbitration award. The plaintiff filed a motion in the district court; for jurisdiction, he invoked 28 U.S.C. 1331 (federal-question jurisdiction) and 1332 (diversity jurisdiction). The Federal Arbitration Act, 9 U.S.C. 10-11, which provides for the enforceability of arbitration agreements and specifies procedures for conducting arbitrations and enforcing arbitration awards, does not provide an independent jurisdictional basis for disputes under the Act. The Fourth Circuit vacated the dismissal of the action, stating that the better approach for determining subject-matter jurisdiction over section 10 and 11 motions is to look to the nature of the underlying claim in dispute, as is done with respect to section 4 petitions to compel arbitration. If the underlying claim is one that otherwise could be litigated in federal court, the motion can likewise be resolved in federal court. The district court had federal-question jurisdiction because the plaintiff’s underlying claim arose under federal law. View "McCormick v. America Online, Inc." on Justia Law

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Forby filed a state court class action against Tech for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) and unjust enrichment under Illinois law. In its notice of removal, Tech did not reference arbitration but argued that Forby’s claims were baseless and that no class should be certified. Tech later moved to dismiss for failure to state a claim and, in the alternative, moved to transfer the case, arguing that Forby’s claims were subject to arbitration in Texas and that an Illinois district court could not compel arbitration outside of its district. After the case was transferred, Tech filed a 12(b)(6) motion to dismiss that did not mention arbitration. In its reply to Forby’s response, Tech again did not mention compelling arbitration. The district court denied the motion with respect to Forby’s ICFA claim and dismissed the unjust enrichment claim. Four days after attending a Rule 26(f) conference and receiving Forby’s requests for production, Tech filed its motion to compel arbitration and an expedited motion to stay discovery. The court granted the motions, finding that Tech had substantially invoked the judicial process but that Forby had not suffered prejudice. The Fifth Circuit reversed. When a party will have to re-litigate in the arbitration forum an issue already decided by the district court in its favor, that party is prejudiced. View "Forby v. One Technologies, L.P." on Justia Law

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The Supreme Court vacated the decision of the court of appeals reversing the judgment of the district court that concluded that a fee agreement between the parties was not void and thus ordering arbitration, holding that the district court erred by directing entry of final judgment rather than staying the proceedings, and therefore, there was no proper final judgment from which to take an appeal. Plaintiffs sued Defendants after learning that Defendants had provided brokerage services to Plaintiffs without the requisite state license. Specifically, Plaintiffs alleged that the fee agreement obligating Defendants to pay for the services provided was void as against public policy. Defendants, in turn, moved to compel arbitration pursuant to the terms of the fee agreement and to dismiss or to stay the underlying proceedings. The district court ordered arbitration and dismissed the case, concluding that the fee agreement was not void. The court of appeals reversed, determining that the fee agreement was void. The Supreme Court vacated the court of appeals’ decision, holding that the district court erred by dismissing the case instead of staying proceedings and that the court of appeals erred when it concluded that it had jurisdiction over the merits of this case. View "Woischke v. Stursberg & Fine, Inc." on Justia Law

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General Re entered into a Reinsurance Agreement with Lincoln, which allowed General Re to increase premiums only if the increase was founded on a “change in anticipated mortality.”. If General Re exercised that right, Lincoln could “recapture” its life insurance policies, rather than pay increased premiums. General Re increased the premiums. Lincoln elected to arbitrate the rate increase, as provided for in the Agreement. The arbitration panel found that there was a change in the anticipated mortality so that General Re was entitled to increase premiums. The Final Award stated that if Lincoln chose to exercise its right to recapture: “All premium and claim transactions paid by one party to the other following the effective date of the recapture … shall be unwound.” The Award directed the parties to work together in calculating the amounts, and that any disagreement over the calculations should be submitted to the panel, which retained jurisdiction as "necessary to resolve any dispute over the calculation and payment of the amounts awarded.” Lincoln later wrote to the arbitral panel, set forth the parties’ dispute regarding the language of the Final Award regarding Unearned Premiums, and requested that the panel settle the issue. General Re argued the arbitrators lacked authority to reconsider and fundamentally change the methodology ordered in the Award. The panel issued a "Clarification," stating that the Award contained “ambiguities” and that both parties were reading the Award inconsistently with the Agreement. The district court confirmed the Clarification. The Second Circuit affirmed. The doctrine of functus officio, which limits the power of arbitrators to alter an award once the arbitrators have decided the issue, did not bar the panel from clarifying how the parties were to calculate an ambiguous award. View "General Re Life Corp. v. Lincoln National Life Insurance" on Justia Law

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In 2014, Jeremy Gowan filed this action against Cavalier Home Builders, LLC, d/b/a Buccaneer Homes ("Buccaneer"), Minton Industries, Inc. ("Minton"), Monster Movers, LLC ("Monster Movers"), Jerry Dudley, and Britt Richards. Buccaneer, Dudley, Richards, and Minton moved to compel arbitration based on an arbitration agreement Gowan had signed relating to the sale of a manufactured home. Although Monster Movers was not a party to the arbitration agreement, Gowan's claims against Monster Movers were submitted to arbitration by consent of the parties. While the arbitration proceeding was pending, Monster Movers entered into a joint dismissal with Gowan. The case proceeded to arbitration against the remaining defendants. In 2017, the arbitrator issued an award in favor of Gowan and against Buccaneer in the amount of $10,000. As to Gowan's claims against all other remaining defendants, the award was adverse to Gowan. Gowan appealed the award to the circuit court on the basis that the award was insufficient against Buccaneer. The Alabama Supreme Court determined the circuit court deviated from the procedure for the appeal of an arbitration award established by Rule 71B, Ala. R. Civ. P. The issue raised in the mandamus petition was made moot, and the Supreme Court declined further review. View "Ex parte Cavalier Home Builders, LLC, d/b/a Buccaneer Homes." on Justia Law

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Gregory Nethery appealed a Circuit Court’s decision to grant a motion to compel arbitration filed by Defendants CapitalSouth Partners, Harbert Mezzanine Partners, and On-Site Fuel Services (collectively, “Defendants”). Nethery retained a minority thirty-percent ownership interest in OSFS through his stock interest in OSFH. CapitalSouth and Harbert each held the remaining interest. In October 2016, Nethery filed suit in circuit court against CapitalSouth and Harbert, claiming breach of fiduciary duty, corporate freeze out, unjust enrichment, constructive trust, civil conspiracy, and negligence and mismanagement. As he claimed in the circuit court, Nethery argued on appeal that, based upon a choice-of-law provision contained in the Stockholders Agreement, Delaware law governed interpretation of the agreement. Nethery contended that under Delaware law, the arbitration clause did not apply because Nethery’s complaint did not allege breach of the Stockholders Agreement, nor did Nethery seek legal relief under the agreement. Rather, Nethery asserted only noncontractual state-law claims and his legal claims existed independently from the contract. Unpersuaded, the Mississippi Supreme Court found the circuit court correctly found Nethery’s claims were subject to the agreement’s arbitration provision. View "Nethery v. CapitalSouth Partners Fund II, L.P." on Justia Law