Justia Arbitration & Mediation Opinion Summaries

Three siblings contracted with a funeral home for the cremation of their mother’s remains. The transaction involved two documents: a Purchase Agreement, signed only by one sibling, and an Authorization for Cremation, signed by all three. The Purchase Agreement contained an arbitration clause. The siblings later claimed that the funeral home failed to provide notice and an opportunity to cancel the cremation, as they had allegedly been promised. After the cremation was performed without further notice, the siblings and the decedent’s estate sued the funeral home for breach of contract and various torts.The case was first heard by the Eighth Judicial District Court in Clark County. The funeral home moved to compel arbitration under the agreement. The district court denied the motion, reasoning that factual issues remained as to the enforceability of the agreement and the arbitration provision. Specifically, the court found uncertainty regarding the right to cancel and determined that only the signing sibling could potentially be bound by the arbitration clause, pending resolution of factual disputes. The court also concluded that the nonsignatory siblings and the estate were not bound by the arbitration clause, rejecting the funeral home’s equitable estoppel arguments.On appeal, the Supreme Court of the State of Nevada reviewed whether the enforceability of the contract containing an arbitration clause must be decided by the arbitrator under NRS 38.219(3), regardless of whether a delegation provision was invoked below, and whether nonsignatories could be bound to arbitrate under equitable estoppel. The Supreme Court held that under NRS 38.219(3), the arbitrator must resolve the contract’s enforceability, and the district court erred in denying arbitration on that basis. The court further held that the two nonsignatory siblings are equitably estopped from avoiding arbitration because they seek a direct benefit from the agreement, but the estate is not bound. The order was affirmed in part, reversed in part, and remanded for further proceedings. View "LEGACY FUNERAL HOLDINGS OF NEV., LLC VS. OUZENIAN" on Justia Law

Two individuals who use a rideshare company’s smartphone application alleged that the company engaged in a deceptive pricing scheme. They claimed the company publicly advertises that the price displayed to consumers before a ride is “the price [the consumer will] pay at the end of the ride.” However, plaintiffs asserted that this displayed price is only an estimate and that the company frequently charges more than the advertised price. Plaintiffs sought an injunction to prevent the company from advertising prices lower than what consumers actually pay and requested restitution or disgorgement of any excess amounts paid.The Superior Court of California, City and County of San Francisco, reviewed the company’s motion to compel arbitration under its user agreement. That agreement required arbitration of individual claims and included a class action waiver, but also stated that if the waiver was unenforceable, claims subject to the waiver would proceed in court. Plaintiffs argued that the waiver violated California law (as interpreted in McGill v. Citibank, N.A.), since it barred them from seeking public injunctive relief. The trial court agreed, finding that the relief sought was public in nature and that the agreement did not require severance of plaintiffs’ requests for individual relief into arbitration.The California Court of Appeal, First Appellate District, Division Five, affirmed the trial court’s order. The appellate court held that plaintiffs sought public injunctive relief because their requested injunction would benefit all potential users of the platform, not simply themselves or a discrete group. The court further held that the arbitration agreement was ambiguous regarding whether only the injunctive request should proceed in court or whether all relief should. Applying the contra proferentem rule, the court construed the ambiguity against the company and concluded the entire action must remain in court. The order denying arbitration was affirmed. View "Bogguess v. Uber Technologies" on Justia Law

A police lieutenant in a city police department sent a series of inappropriate and sexual text messages, including a video depicting bestiality, to two female subordinate officers. After an anonymous letter revealed these acts, the department’s Internal Affairs Bureau investigated and the lieutenant was charged with multiple violations of the department’s disciplinary code, including sexual harassment and failure to supervise. The Police Commissioner ordered his dismissal, but the lieutenant, through the union, challenged this action under the collective bargaining agreement, leading to grievance arbitration.At arbitration, the arbitrator found insufficient evidence to support the sexual harassment charge but determined that the lieutenant had violated other sections of the disciplinary code. The arbitrator imposed a fifty-day suspension and ordered the lieutenant’s reinstatement with back pay, concluding that the city lacked just cause for discharge. The city sought to vacate the award in the Court of Common Pleas of Philadelphia County, arguing that the arbitrator exceeded his authority and that the standard of judicial review should be broadened. The trial court denied the city’s petition, holding it was bound by the narrow certiorari scope of review, which permits courts to review only issues concerning the arbitrator’s jurisdiction, regularity of proceedings, excess of powers, or constitutional rights. The Commonwealth Court affirmed, reiterating that the narrow certiorari standard applied and declining to modify it.The Supreme Court of Pennsylvania, Eastern District, reviewed whether to overturn its prior decisions in Pennsylvania State Police v. Pennsylvania State Troopers’ Ass’n (Betancourt) and Pennsylvania State Police v. Pennsylvania State Troopers’ Ass’n (Smith), which established and declined to expand the narrow certiorari scope of review for grievance arbitration awards under the Policemen and Firemen Collective Bargaining Act (Act 111). The court held that stare decisis required adherence to these precedents, reaffirming that judicial review of Act 111 grievance arbitration awards remains limited to narrow certiorari, and declined to create a public policy exception or adopt broader review standards. The judgment of the Commonwealth Court was affirmed. View "City of Phila. v. FOP, Lodge No. 5" on Justia Law

This case involves a dispute between a county juvenile court and a labor union regarding the interpretation and application of two collective-bargaining agreements covering employees at a juvenile detention center and other court employees. Both agreements contained duration clauses, evergreen clauses, and arbitration provisions. When negotiations for successor agreements failed, the juvenile court declared the agreements expired and ceased recognizing the union. In response, the union filed a grievance and counterclaims, asserting that the evergreen clauses extended the agreements until certain conditions were met and that the court breached the agreements by unilaterally terminating them.Initially, the Cuyahoga County Court of Common Pleas found the agreements were not void ab initio for lack of consideration and recognized an extension of the agreements under the evergreen clauses, but not beyond December 31, 2020, due to public policy. The court ruled the union was entitled to damages for the breach but held that the union’s emailed grievance was not arbitrable, as considering it a grievance would violate public policy. The parties then cross-appealed.The Eighth District Court of Appeals reversed the trial court, holding that disputes concerning the interpretation of the evergreen and duration clauses, as well as the question of when the agreements expired, were subject to arbitration under the agreements. The appellate court ordered the parties to proceed to arbitration.The Supreme Court of Ohio affirmed the Eighth District’s decision. The court held that disputes about the expiration and interpretation of the collective-bargaining agreements are arbitrable, as they concern contract interpretation within the scope of the arbitration clauses. The court found sufficient consideration for the arbitration provisions and determined that challenges to the agreements’ formation did not affect the enforceability of the arbitration clauses. The matter was remanded to the trial court to order arbitration. View "O'Malley v. Laborers' Internatl. Union of N. Am., Local 860" on Justia Law

An employee who worked for a company from May 2021 until his termination in January 2024 signed an arbitration agreement at the start of his employment. This agreement required any employment-related disputes to be resolved through binding arbitration on an individual basis, with a waiver of class and collective actions. In November 2024, the employee notified the Labor and Workforce Development Agency (LWDA) of alleged Labor Code violations by his employer. After the LWDA did not respond within the statutory period, he became authorized to pursue a civil action for penalties under the Private Attorneys General Act (PAGA), acting as a proxy for the state. He subsequently filed a complaint in Stanislaus County Superior Court asserting only nonindividual PAGA claims—claims on behalf of other aggrieved employees and not for his own individual recovery—for various Labor Code violations.The employer responded by filing a motion to compel arbitration, arguing that PAGA required the inclusion of individual claims and that the arbitration agreement should apply. The Superior Court denied this motion, noting procedural irregularities and emphasizing that binding precedent allowed PAGA actions consisting solely of nonindividual claims. The court referenced a split in authority on whether PAGA actions could be limited to nonindividual claims, but ultimately relied on decisions holding such actions permissible, especially after recent statutory amendments.On appeal, the California Court of Appeal, Fifth Appellate District, affirmed the trial court’s decision. The appellate court held that, under the version of PAGA effective July 1, 2024, an aggrieved employee may bring a PAGA action consisting only of nonindividual claims and that these claims are not subject to arbitration, even if an arbitration agreement exists. The court further found that the statutory amendments did not require an employee to include individual claims, and that denying arbitration of nonindividual PAGA claims does not violate federal or state policy favoring arbitration. The denial of the motion to compel arbitration was affirmed. View "Castillo v. Belkorp AG, LLP" on Justia Law

A property management company in Los Angeles employed an individual from April 2023 to September 2024. As part of the hiring and onboarding process, the employee was required to sign an arbitration agreement that mandated all employment-related claims be resolved through binding arbitration and included a waiver of class and representative actions. The employee later filed a class action lawsuit against the employer, alleging wage-and-hour violations and unfair business practices.The employer responded by filing a motion in the Superior Court of Los Angeles County to compel arbitration of the employee's individual claims, dismiss the class claims, and stay the action. The employer made clear that the Federal Arbitration Act (FAA) did not apply and relied on California law. The employee opposed, arguing that under California Labor Code section 432.6, it is illegal for an employer to require an employee to sign an arbitration agreement as a condition of employment unless the agreement is enforceable under the FAA. The Superior Court denied the employer’s motion, finding that the arbitration agreement was required as a condition of employment, thus violating section 432.6, and that, since the FAA did not apply, the agreement was unenforceable under California law.On appeal, the Court of Appeal of the State of California, Second Appellate District, Division Four, affirmed the trial court’s order. The appellate court held that, under California law, an arbitration agreement required as a condition of employment in violation of section 432.6 is unenforceable unless it is otherwise enforceable under the FAA. Because the parties agreed the FAA did not apply and the agreement was required as a condition of employment, the employer could not enforce it. The court affirmed the denial of the motion to compel arbitration. View "Molina v. Triumph Residential Services, Inc." on Justia Law

Several business entities collectively known as the Merit Entities entered into loan agreements with International Bank of Commerce (IBC Bank) to finance the expansion of an auto dealership group. After discovering alleged fraudulent conduct by the dealership’s operator and his subsequent death, the Merit Entities entered negotiations with IBC Bank to restructure their debt, resulting in new loan agreements in October 2020 containing arbitration provisions with an anti-waiver clause. Despite ongoing disputes regarding outstanding debt and the validity of certain contract terms, the central issue on appeal was whether these disputes should be resolved in court or through arbitration.After the Merit Entities filed suit in the District Court, IBC Bank responded with both a motion to dismiss and an alternative motion to compel arbitration, citing the anti-waiver provision. The trial court denied the motion to dismiss in part and, following an evidentiary hearing, compelled arbitration, finding the arbitration agreement enforceable and applicable to the plaintiffs’ claims. On appeal, the Oklahoma Court of Civil Appeals reversed the trial court’s decision, holding that IBC Bank’s participation in litigation constituted a waiver of its right to arbitrate.The Supreme Court of the State of Oklahoma reviewed the case de novo and vacated the opinion of the Court of Civil Appeals, affirming the District Court’s order compelling arbitration. The Court held that IBC Bank did not waive its right to arbitrate because its conduct fell within the scope of activity expressly permitted by the anti-waiver provision in the arbitration agreement. Additionally, the Court found that the Merit Entities failed to establish fraudulent inducement specifically directed at the arbitration provisions. The parties’ disputes must therefore be resolved in arbitration as agreed. View "MERIT HOLDINGS v. INTERNATIONAL BANK OF COMMERCE" on Justia Law

BBC, LLC, contracted Germer Construction, Inc. to provide construction services for a subdivision development. A dispute arose regarding the amount owed, leading to arbitration as required by contract. The arbitrator awarded Germer nearly $1,000,000, including costs and fees. BBC sought a court order to vacate the arbitration award, while Germer requested confirmation of the award and entry of judgment. Germer also moved for a temporary restraining order and preliminary injunction, claiming BBC was dissipating assets. The district court granted an ex parte temporary restraining order restricting BBC’s asset transfers. At a hearing, the district court required BBC to post a $1,000,000 surety bond and Germer a $250,000 bond, characterizing them as “equivalent” to supersedeas bonds, then dissolved the restraining order and denied preliminary injunctive relief.BBC petitioned the Idaho Supreme Court for writs of prohibition or mandamus to vacate the district court’s order and prohibit further pre-judgment asset restrictions, arguing the district court lacked authority to require the bond or injunctive relief solely to secure a potential monetary judgment. The Idaho Supreme Court stayed the district court’s order and sought briefing from Germer and the Attorney General.The Supreme Court of Idaho held that the district court exceeded its authority by requiring BBC to post a surety bond to secure a potential money judgment for an unsecured debt. The court found no rule, statute, or inherent equitable power authorizing such relief in this context. The court issued a writ of review, vacating the district court’s order, including both bond requirements. BBC was found to have no adequate, speedy remedy at law, and the requested writs of prohibition and mandamus were denied. The case was remanded for further proceedings consistent with the opinion. View "BBC LLC v. LATAH COUNTY DISTRICT COURT" on Justia Law

A dispute arose between the principal members of a defense contracting company after Martin Kao, who had become the CEO and major owner, was charged with crimes related to fraudulent misuse of Paycheck Protection Program funds. The company, which relied on government contracts requiring strict security clearance, suffered significant harm when Kao’s actions led to the invalidation of its facility security clearance and placed it at risk of suspension from federal contracting. The original owner and another entity sought Kao’s disassociation and damages, citing breach of fiduciary duty, fraud, and gross negligence. The parties were bound by an operating agreement requiring arbitration for disputes.After a civil complaint was filed in the Circuit Court of the First Circuit, an amended operating agreement and voting trust limited Kao’s control, but the company continued to face loss of contracts and financial harm. Arbitration proceedings began, but Kao, citing pending federal criminal charges, unsuccessfully moved to stay the arbitration, arguing his rights against self-incrimination would be prejudiced. The arbitrator denied the stay and ultimately awarded significant damages, including punitive damages, to the plaintiffs.Kao moved to vacate the arbitration award in circuit court, arguing the arbitrator erred in refusing to postpone and in awarding punitive damages. The circuit court denied the motion, finding no “sufficient cause” for postponement and affirming the arbitrator’s authority. The Intermediate Court of Appeals (“ICA”) largely affirmed, holding the arbitrator did not abuse discretion and the punitive damages award was within authority.Upon review, the Supreme Court of the State of Hawai‘i held that the proper standard for “sufficient cause for postponement” under Hawai‘i law is “good cause,” and articulated three factors for courts to consider, grounded in the Hawai‘i Constitution. Applying these, the court found Kao had not met the standard, and affirmed the ICA’s judgment. View "Navatek Capital Inc. v. Kao" on Justia Law

The plaintiff in this case began working for a law firm in 2017 and, in February 2018, signed an arbitration agreement covering most employment-related disputes. Over several years, she rose through the ranks and contributed to the creation of a legal tech company, earning a substantial award of stock options. By August 2023, those options had fully vested, and she communicated her intention to exercise them. Shortly thereafter, in February 2024, she was terminated without warning, despite prior positive performance reviews. In addition to her claims regarding unlawful termination and deprivation of stock options, she alleged that she experienced ongoing sexual harassment from her supervisors, including inappropriate comments and conduct.Prior to this case, the defendants filed a declaratory judgment action in the United States District Court for the Northern District of Texas seeking confirmation of her termination for cause, and later attempted to compel arbitration. That Texas action was stayed after the plaintiff filed suit in the United States District Court for the Southern District of New York. Her complaint included claims for sexual harassment under state and city law, as well as non-harassment claims, such as breach of contract and conversion. The defendants moved to compel arbitration, dismiss, or transfer the case. The district court denied the motion to compel arbitration, holding that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA) allowed the entire lawsuit to proceed in court, not just the sexual harassment claims. Some claims and parties were dismissed for failure to state a claim, but the key harassment and conversion claims remained.The United States Court of Appeals for the Second Circuit reviewed the district court’s denial of arbitration de novo. It held that, when properly invoked, the EFAA permits a plaintiff to invalidate a predispute arbitration agreement for the entire lawsuit, not only for claims directly relating to sexual harassment or assault. The Second Circuit affirmed the district court’s order and remanded the case for further proceedings. View "Diaz-Roa v. Hermes Law" on Justia Law