Justia Arbitration & Mediation Opinion Summaries
Olson v. Lyft, Inc.
Olson is a driver for Lyft, whose terms of service include an agreement he could not bring a Private Attorney General Act (PAGA), Labor Code 2698, claim in court, and that disputes with Lyft must be resolved by individual arbitration. Olson sued Lyft alleging six PAGA claims. Lyft petitioned to compel to arbitration. The petition acknowledged that a 2014 precedent (Iskanian) precluded enforcement of PAGA waivers, but asserted that Iskanian was wrongly decided and was no longer good law in light of the U.S. Supreme Court’s 2018 decision, Epic Systems. The trial court rejected Lyft’s arguments.The court of appeal affirmed. Epic Systems addressed the question of whether the NLRA renders unenforceable arbitration agreements containing class action waivers that interfere with workers’ right to engage in “concerted activities.” It did not address private attorney general laws like PAGA or qui tam suit. View "Olson v. Lyft, Inc." on Justia Law
Borror Property Management, LLC v. Oro Karric North, LLC
Oro contracted for Borror to manage Oro’s residential apartments. Each management contract stated: “If either party shall notify the other that any matter is to be determined by arbitration,” the parties would proceed to arbitration unless they first resolved the dispute. A dispute arose and resulted in Borror’s ceasing to manage Oro’s properties. Oro responded by letter asserting that Borror was in breach of the contracts and that Oro planned “to proceed directly to litigation in either state or federal court,” as the contracts “do not limit litigation exclusively to arbitration.” Nonetheless, Oro asked Borror to notify it within six days if Borror preferred arbitration. A week after receiving Oro’s letter, Borror filed a federal court complaint asserting its own breach of contract claims. Rather than filing an answer or another responsive pleading, Oro moved to compel arbitration.The district court held that Oro had waived its contractual right to arbitration through its pre-litigation conduct. Invoking its appeal rights under the Federal Arbitration Act, 9 U.S.C. 1, Oro timely appealed. The Sixth Circuit reversed. Correspondence is not equivalent to formal litigation; parties often posture their claims with “loose rhetorical flair.” Oro’s pre-trial “posturing” correspondence was neither inconsistent with its arbitration right nor prejudicial to Borror. View "Borror Property Management, LLC v. Oro Karric North, LLC" on Justia Law
Midwest Motor Supply Co. v. Superior Court
Finch began his employment with Midwest in 2014. His employment agreement stated: “This Agreement shall be construed in accordance with Ohio Law" and that any litigation "must be venued in Franklin County, Ohio.” In 2016, Midwest promoted Finch. The exhibits to the 2014 employment agreement were revised. In 2017 and 2018, Midwest provided Finch with Compensation and Annual Plan letters, revising Finch’s compensation. In 2019, Finch filed this lawsuit in Contra Costa County, alleging violations of the Labor Code for failure to pay his final wages on time and failure to reimburse him for business expenses; violation of Business and Professions Code section 17200; and a cause of action under the Private Attorneys General Act.The court concluded that the 2017 and 2018 Compensation letters modified the 2014 employment agreement. Because these modifications occurred after January 1, 2017, the court concluded they triggered Finch’s Labor Code section 925 right. Section 925 renders a forum selection clause in an employment contract voidable by an employee if the contract containing the clause was “entered into, modified, or extended on or after January 1, 2017.” The court of appeal denied Midwest’s writ petition. Section 925 is triggered by any modification to a contract occurring on or after January 1, 2017. View "Midwest Motor Supply Co. v. Superior Court" on Justia Law
Fagan v. Warren Averett Companies, LLC
Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law
Epstein v. Vision Service Plan
Epstein, an optometrist, entered into a VSP “Network Doctor Agreement.” VSP audited of Epstein’s claims for reimbursement, concluded he was knowingly purchasing lenses from an unapproved supplier, and terminated the provider agreement. The agreement included a two-step dispute resolution procedure: the “Fair Hearing” step provided for an internal “VSP Peer Review.” If the dispute remained unresolved, the agreement required binding arbitration under the Federal Arbitration Act (FAA), under procedures set forth in the policy. A “Fair Hearing” panel upheld the termination.Instead of invoking the arbitration provision, Epstein filed an administrative mandamus proceeding, alleging the second step of the process was contrary to California law requiring certain network provider contracts to include a procedure for prompt resolution of disputes and expressly stating arbitration “shall not be deemed” such a mechanism. (28 Cal. Code Regs 1300.71.38.) He claimed that state law was not preempted by the FAA, citing the McCarran-Ferguson Act, which generally exempts from federal law, state laws enacted to regulate the business of insurance.The court of appeal affirmed the rejection of those challenges. State regulatory law requiring certain network provider agreements to include a dispute resolution process that is not arbitration pertains only to the first step of the dispute resolution process and does not foreclose the parties from agreeing to arbitration in lieu of subsequent judicial review. While the arbitration provision is procedurally unconscionable in minor respects, Epstein failed to establish that it is substantively unconscionable. View "Epstein v. Vision Service Plan" on Justia Law
Stover v. Experian Holdings, Inc.
Neal v. Navient Solutions, LLC
Ohio law allows nonsignatory agents to compel arbitration under general principles of contract and agency law. The Eighth Circuit reversed the district court's denial of Navient's motion to compel arbitration against plaintiff. The court disagreed with the district court's finding that the relevant arbitration clause does not include Navient as a party and so Navient cannot compel arbitration. Rather, the court held that Ohio law permits plaintiff to compel arbitration as a nonsignatory agent of the holder of the loan. The court also held that Ohio's rule of alternate estoppel prevents plaintiff from disavowing the arbitration clause because his claim arises out of the same contract. Therefore, plaintiff is estopped from avoiding the arbitration clause because his claims are integrally intertwined with the contract containing the agreement to arbitrate. Accordingly, the court remanded for further proceedings. View "Neal v. Navient Solutions, LLC" on Justia Law
Cinatl v. Prososki
The Supreme Court affirmed the judgment of the district court confirming an arbitrator's award, holding that the court properly affirmed the award.Plaintiff brought this action against Defendant seeking rescission of a contract of purchase and sale of dental practice and lease, alleging that fraudulent misrepresentations were made and that he relied upon them to his detriment. Because the contract contained an arbitration provision the district court sustained Defendant's motion to compel arbitration. The arbitrator concluded that Plaintiff ratified the contract through his conduct and waived any cause of action he might have had arising from his purchase of the dental practice. Plaintiff filed an application to vacate the arbitrator's award. The district court denied the motion. Thereafter, Defendant filed a motion to confirm the award, which the district court granted. The Supreme Court affirmed, holding (1) this Court had jurisdiction to consider Plaintiff's challenge to the denial of his application to vacate, but his challenge lacked merit; and (2) the district court did not err in confirming the arbitration award. View "Cinatl v. Prososki" on Justia Law
Provost v. YourMechanic, Inc.
Defendant YourMechanic, Inc. sought to compel plaintiff Jonathan Provost to arbitrate whether he was an “aggrieved employee” within the meaning of the California Labor Code before he could proceed under the Private Attorneys General Act of 2004 (PAGA) with his single-count representative action alleging various Labor Code violations against company. The Court of Appeal determined that requiring Provost to arbitrate whether he was an “aggrieved employee” with standing to bring a representative PAGA action would have required splitting that single action into two components: an arbitrable “individual” claim and a nonarbitrable representative claim. The Court concluded that a PAGA-only representative action was not an individual action at all, but instead was one that was indivisible and belonged solely to the state. Therefore, YourMechanic could not require Provost to submit by contract any part of his representative PAGA action to arbitration. The trial court therefore properly denied YourMechanic's motion. View "Provost v. YourMechanic, Inc." on Justia Law
Sutton v. David Stanley Chevrolet
In 2016, plaintiff-appellee Isaac Sutton went shopping for a vehicle at the defendant-appellant David Stanley Chevrolet, Inc.'s (hereafter DSC) car dealership. He agreed to purchase a 2016 Chevy Silverado on credit and he agreed to trade-in his 2013 Challenger. He was informed by DSC that his credit was approved. In addition, he was given $22,800.00 for the Challenger for which he still owed $25,400.00. The documents for the purchase of the vehicle amounted to approximately eighty-six pages, which included a purchase agreement and a retail installment sale contract (RISC). He left the dealership that evening with the Silverado and left his Challenger. Several days later he was informed by DSC that his financing was not approved and he would need a co-signor to purchase the Silverado. Sutton visited DSC but was then told he did not need a co-signor and there was no need to return the vehicle. At the end of June his lender for his 2013 Challenger contacted him about late payments. Sutton contacted DSC who said it was not their responsibility to make those payments since they did not own the Challenger he traded-in. A few days later, he was notified by DSC that his Challenger had been stolen and the matter was not the responsibility of DSC. Sutton had to make an insurance claim on his Challenger and DSC took back the Silverado. In the meantime, Sutton continued to make payments on the Challenger. Plaintiff and his wife Celeste Sutton sued DSC over the whole transaction involving the Challenger. DSC moved to compel arbitration. Plaintiffs alleged they were fraudulently induced into entering the arbitration agreement. The trial court found there was fraudulent inducement and overruled the motion to compel arbitration. The Oklahoma Court of Civil Appeals reversed the trial court and remanded for further proceedings concerning the unconscionability of the arbitration agreement. The Oklahoma Supreme Court granted certiorari, and found the trial court's order was fully supported by the evidence. The opinion of the Oklahoma Court of Civil Appeals was therefore vacated and the matter remanded to the trial court for further proceedings. View "Sutton v. David Stanley Chevrolet" on Justia Law