Justia Arbitration & Mediation Opinion Summaries
Gherardi v. Citigroup Global Markets, Inc.
After plaintiff won a substantial arbitration award against his former employer, the employer sought vacatur in federal court. The district court agreed with the employer, Citi, that plaintiff had been an at-will employee and thus the arbitrators exceeded their powers by finding that he had been wrongfully terminated.The Eleventh Circuit reversed the district court's vacatur of the arbitration award, holding that plaintiff and Citi agreed to arbitrate all disputes about plaintiff's employment. The court stated that, under the Federal Arbitration Act, the merits of plaintiff's dispute were committed to the arbitrators and Citi does not get to start over in federal court because it identifies a possible legal error in arbitration. Therefore, the district court erred by substituting its own legal judgment for that of the arbitrators. View "Gherardi v. Citigroup Global Markets, Inc." on Justia Law
Fedor v. United Healthcare
Plaintiff-appellant Dana Fedor appealed a district court’s order compelling her to arbitrate employment-related claims she brought against her former employer, UnitedHealthcare, Inc. (UHC), and United Healthcare Services, Inc. Fedor argued the district court impermissibly compelled arbitration before first finding that she and UHC had indeed formed the arbitration agreement underlying the district court’s decision. To this, the Tenth Circuit agreed, concluding that the issue of whether an arbitration agreement was formed in the first instance had to be determined by the court, even where there has been a failure to specifically challenge provisions within the agreement delegating certain decisions to an arbitrator. Judgment was vacated and the matter remanded for further proceedings. View "Fedor v. United Healthcare" on Justia Law
Mejia v. DACM Inc.
In May 2017, plaintiff Joseph Mejia bought a used motorcycle from Defendant DACM, Inc. (Del Amo) for $5,500. Mejia paid $500 cash and financed the remainder of the purchase price with a WebBank-issued Yamaha credit card he obtained through the dealership purchasing the motorcycle. In applying for the credit card, Mejia signed a credit application acknowledging he had received and read WebBank’s Yamaha Credit Card Account Customer Agreement (the credit card agreement), which contained an arbitration provision. Sometime after his purchase, Mejia filed a complaint against Del Amo on behalf of himself and other similarly situated consumers alleging Del Amo “has violated and continues to violate” the Rees-Levering Automobile Sales Finance Act by failing to provide its customers with a single document setting forth all the financing terms for motor vehicle purchases made with a conditional sale contract. The trial court denied Del Amo’s petition to compel arbitration, finding the arbitration provision was unenforceable under McGill v. Citibank, N.A., 2 Cal.5th 945 (2017) because it barred the customer from pursuing “in any forum” his claim for a public injunction to stop Del Amo’s allegedly illegal practices. Del Amo contended the trial court erred in ruling the arbitration provision was unenforceable under McGill, arguing: (1) McGill did not apply because, due to a choice-of-law provision in the contract, Utah law rather than California law governed the dispute; (2) if California law applied, the arbitration provision “does not run afoul of McGill” because Mejia did not seek a public injunction; (3) the arbitration clause was not unenforceable under McGill because the provision did not prevent a plaintiff from seeking public injunctive relief in all fora; and (4) if the arbitration provision was unenforceable under McGill, the Federal Arbitration Act (FAA) preempted McGill and required enforcement of the clause. The Court of Appeal found no merit to any of Del Amo's contentions and affirmed the district court's order. View "Mejia v. DACM Inc." on Justia Law
Badgerow v. Walters
After a panel of arbitrators issued an arbitration award dismissing all of plaintiff's claims against Ameriprise and three of its franchise advisors, plaintiff then filed a petition in Louisiana state court to vacate that arbitration award, as to certain defendant parties. Defendants removed to state court; plaintiff moved to remand; and the district court held that it did have subject-matter jurisdiction over the petition to vacate and thus denied remand. The district court ruled on the removed petition to vacate, denying plaintiff's claims with prejudice. At issue in this appeal is the jurisdiction of the federal court over the petition to vacate.The Fifth Circuit affirmed and held that, applying the look-through analysis, the district court correctly found that the federal claim against Ameriprise in the FINRA arbitration proceeding meant that there was federal subject-matter jurisdiction over the removed petition to vacate the FINRA arbitration dismissal award. Therefore, the district court correctly denied plaintiff's motion to remand the action to vacate to Louisiana state court. View "Badgerow v. Walters" on Justia Law
OOGC America, LLC v. Chesapeake Exploration, LLC
OOGC filed suit to vacate two arbitration awards favoring Chesapeake on the basis of an arbitrator's failure to disclose connections with certain non-parties. The Fifth Circuit vacated the district court's decision to vacate the awards and remanded with instructions to confirm the arbitration awards within thirty days of the issuance of the mandate. The court held that the district court erred by vacating the arbitration awards for "evident partiality" under 9 U.S.C. 10(a)(2). Furthermore, resolving all doubts or uncertainties in favor of upholding the awards, the court held that OOGC has not shown an adequate basis for vacatur under 9 U.S.C. 10(a)(4) and rejected OOGC's argument that the arbitrator exceeded his powers here.The court affirmed the district court's denial of the arbitrator's motion to intervene because the district court was without jurisdiction to rule upon the intervention motion once the plaintiff had filed his notice of appeal. Because the court vacated the district court's decision, the court denied the arbitrator's motion to intervene as moot. View "OOGC America, LLC v. Chesapeake Exploration, LLC" on Justia Law
MZM Construction Co. Inc. v. NJ Building Laborers Statewide BenefitsFunds
In a dispute concerning a construction company’s liability for contributions to the Benefits Fund, the Fund unilaterally scheduled arbitration. The company sought to enjoin arbitration, alleging fraud in the execution of the agreement it signed. The district court concluded that the court had the primary power to decide whether fraud in the execution vitiated the formation or existence of the contract containing the arbitration provision. The court enjoined arbitration pending resolution of factual issues that bear upon that claim.The Third Circuit affirmed. Under the Federal Arbitration Act (FAA), 9 U.S.C. 4, questions about the “making of the agreement to arbitrate” are for the courts to decide unless the parties have clearly and unmistakably referred those issues to arbitration in a written contract whose formation is not in issue. Here, the formation of the contract containing the relevant arbitration provision is at issue. View "MZM Construction Co. Inc. v. NJ Building Laborers Statewide BenefitsFunds" on Justia Law
Shivkov v. Artex Risk Solutions, Inc.
The Ninth Circuit affirmed the district court's order compelling individual arbitration and dismissing a putative class action alleging violations of the Racketeer Influenced and Corrupt Organizations Act and Arizona law. Pursuant to agreements entered into by the parties, Artex and Tribeca formed and managed captive insurance companies that plaintiffs owned, and to which plaintiffs paid insurance premiums. Plaintiffs claimed the payments as tax-deductible business expenses without recognizing them as taxable income. After the IRS audited plaintiffs, it issued delinquency notices and sought to impose penalties. Plaintiffs settled with the IRS and then brought this putative class action against defendants.First, the panel held that the agreements are not unenforceable on the grounds that plaintiffs raise. Addressing an issue of first impression concerning the survival of arbitration obligations following contract termination, the panel held that the agreements do not expressly negate the presumption in favor of post-termination arbitration or clearly imply that the parties did not intend for their arbitration obligations to survive termination. Second, the panel held that the Arbitration Clause encompasses all plaintiffs' claims. Third, the panel joined seven of its sister circuits in holding that the availability of class arbitration is a gateway issue that a court must presumptively decide. In this case, the agreements do not clearly and unmistakably delegate that issue to the arbitrator. Because the agreements are silent on class arbitration, the panel held that they do not permit class arbitration. Finally, the panel held that all non-signatory defendants may compel arbitration pursuant to the agreements. View "Shivkov v. Artex Risk Solutions, Inc." on Justia Law
Innovative Images, LLC v. Summerville et al.
Innovative Images, LLC sued its former attorney James Summerville, Summerville Moore, P.C., and The Summerville Firm, LLC (collectively, the “Summerville Defendants”) for legal malpractice. In response, the Summerville Defendants moved to dismiss the suit and to compel arbitration in accordance with the parties’ engagement agreement, which included a clause mandating arbitration for any dispute arising under the agreement. The trial court denied the motion, ruling that the arbitration clause was “unconscionable” and thus unenforceable because it had been entered into in violation of Rule 1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for attorneys found in Georgia Bar Rule 4-102 (d). The Court of Appeals reversed, holding that the arbitration clause was not void as against public policy or unconscionable. The Georgia Supreme Court concluded after review that regardless of whether the Summerville Defendants violated GRPC Rule 1.4 (b) by entering into the mandatory arbitration clause in the engagement agreement without first apprising Innovative of the advantages and disadvantages of arbitration, the clause was not void as against public policy because Innovative did not argue, and no court has held, that such an arbitration clause could never lawfully be included in an attorney-client contract. For similar reasons, the Supreme Court held the arbitration clause was not substantively unconscionable, and on the limited record before it, Innovative did not show the clause was procedurally unconscionable. Accordingly, the Court affirmed the appellate court's judgment. View "Innovative Images, LLC v. Summerville et al." on Justia Law
Grice v. United States District Court for the Central District of California
Uber’s smartphone application connects riders needing transportation with available local drivers. Rideshare fares are charged automatically via the Uber App, with Uber withholding a percentage as a “service fee.” Grice, an Alabama Uber driver, has used the Uber App since 2016 to provide rideshare services to and from Huntsville International Airport and Birmingham-Shuttlesworth International Airport. Uber had agreements with these airports to allow Uber drivers to pick up arriving passengers. Grice, in the course of his work, never crosses state lines. Grice filed a putative class action lawsuit, alleging that Uber failed to safeguard drivers’ and riders’ personal information and mishandled a data security breach in which that information was stolen by online hackers. Uber moved to compel arbitration, citing the Technology Services Agreement that Grice and other drivers signed, requiring arbitration of “any disputes . . . arising out of or related to [the driver’s] relationship” with Uber and prohibiting arbitration “on a class, collective action, or representative basis.” Grice responded that he drives passengers who are engaged in interstate travel to and from airports and qualified for the Federal Arbitration Act, 9 U.S.C. 1 exemption for workers engaged in foreign or interstate commerce.The district court compelled arbitration. The Ninth Circuit denied a petition for a writ of mandamus seeking to vacate the order The district court’s decision was not clearly erroneous as a matter of law, as required for granting a writ of mandamus. View "Grice v. United States District Court for the Central District of California" on Justia Law
Delta Electric Power Assn. v. Campbell
Members of Delta Electric Power Association filed a lawsuit against the cooperative seeking the return of excess revenue and receipts. Delta moved to compel arbitration. The trial court found that the arbitration clause contained in the bylaws was procedurally unconscionable and denied Delta’s motion to compel. After Delta appealed the trial court’s decision, the Mississippi Supreme Court decided Virgil v. Southwest Mississippi Electric Power Association, 296 So. 3d 53 (Miss. 2020), in which it found an arbitration agreement contained in a cooperative’s bylaws to be valid and enforceable. Because the Supreme Court determined the issues in this case were almost identical to the issues decided in Virgil, precedent required it Court to reverse the trial court’s decision denying Delta’s motion to compel arbitration. View "Delta Electric Power Assn. v. Campbell" on Justia Law