Justia Arbitration & Mediation Opinion Summaries

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The plaintiff, Dana Hohenshelt, filed a lawsuit against his former employer, Golden State Foods Corp., alleging retaliation under the California Fair Employment and Housing Act, failure to prevent retaliation, and violations of the California Labor Code. Golden State moved to compel arbitration in accordance with their arbitration agreement, and the trial court granted the motion, staying court proceedings. Arbitration began, but Golden State failed to pay the required arbitration fees within the 30-day deadline. Hohenshelt then sought to withdraw his claims from arbitration and proceed in court, citing Golden State's failure to pay as a material breach of the arbitration agreement under California's Code of Civil Procedure section 1281.98. The trial court denied this motion, deeming Golden State's payment, which was made after the deadline but within a new due date set by the arbitrator, as timely.The Court of Appeal of the State of California Second Appellate District disagreed with the trial court's decision. It held that the trial court had ignored the clear language of section 1281.98, which states any extension of time for the due date must be agreed upon by all parties. Golden State's late payment constituted a material breach of the arbitration agreement, regardless of the new due date set by the arbitrator. The court also rejected Golden State's argument that section 1281.98 is preempted by the Federal Arbitration Act, following precedent from other courts that held these state laws are not preempted because they further the objectives of the Federal Arbitration Act. Therefore, the court granted Hohenshelt's petition for writ of mandate, directing the trial court to lift the stay of litigation. View "Hohenshelt v. Superior Court" on Justia Law

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In this case, decided by the United States Court of Appeals for the First Circuit, the dispute involved Aeroballoon USA, Inc., and its owner Douglas Hase (collectively, Aeroballoon/Hase), and Jiajing (Beijing) Tourism Co., Ltd. (Jiajing). In 2016, Jiajing contracted Aeroballoon for two tethered helium balloons at a total price of $1.8 million. Despite Jiajing making regular payments totaling $1,018,940, Aeroballoon failed to deliver the balloons. An arbitration panel awarded Jiajing $1,410,739.01 plus interest for Aeroballoon's breach of contract. Following the award, Hase dissolved Aeroballoon and Jiajing subsequently filed a complaint seeking enforcement of the arbitration award.The case focused on two counts: fraudulent transfers in violation of the Massachusetts Uniform Fraudulent Transfer Act (UFTA) and unfair business practices under Chapter 93A of the Massachusetts General Laws. The jury awarded Jiajing $1.6 million for each count. The district court later reduced the damages to $1.113 million for each count, a decision unchallenged by either party.The Court of Appeals affirmed the lower court's decision. The court held that the evidence was sufficient to support a finding that Aeroballoon had engaged in fraudulent transfers of at least $1.113 million. The court further held that even a single fraudulent transfer is sufficient to create liability under Chapter 93A, thereby affirming the verdict on the claim of unfair business practices. The court also awarded costs to Jiajing. View "Jiajing (Beijing) Tourism Co. Ltd. v. AeroBalloon USA, Inc." on Justia Law

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In the case of Maryann Jones v. Solgen Construction, LLC and GoodLeap, LLC, the Court of Appeal of the State of California Fifth Appellate District affirmed the trial court's decision not to compel arbitration. The case concerned a business relationship involving the installation of home solar panels. The appellants, Solgen Construction and GoodLeap, had appealed the trial court's denial of their separate motions to compel arbitration, arguing that the court had erred in several ways, including by concluding that no valid agreement to arbitrate existed.Jones, the respondent, had filed a lawsuit alleging fraudulent misrepresentation, fraudulent concealment, negligence, and violations of various consumer protection laws. She contended that she had been misled into believing she was signing up for a free government program to lower her energy costs, not entering into a 25-year loan agreement for solar panels. The appellants argued that Jones had signed contracts containing arbitration clauses, but the court found that the appellants had failed to meet their burden of demonstrating the existence of a valid arbitration agreement. The court also held that the contract was unenforceable due to being unconscionable.The appellate court affirmed the trial court's decision, rejecting the appellants' arguments that an evidentiary hearing should have been held and that the court had erred in its interpretation of the evidence and the law. It found that the trial court had not abused its discretion and that its finding that the appellants failed to meet their burden of proof was not erroneous as a matter of law. View "Jones v. Solgen Construction" on Justia Law

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In this case, the defendant, Bobby Quinton Gentile, pleaded guilty to conspiracy to possess with intent to distribute at least 500 grams of methamphetamine. He later appealed his sentence, arguing that the district court judge improperly coerced him into withdrawing his objections to the drug amount calculation in the Presentence Investigation Report by threatening to deny him his acceptance of responsibility points. The United States Court of Appeals for the Fifth Circuit found no plain error and affirmed the district court's decision. The court held that Gentile's argument that he was judicially coerced to withdraw his objections to the drug amount calculation fails under plain error review because, even assuming arguendo that the district court erred clearly by coercing him, Gentile did not show the error affected his substantial rights. His sentence was affirmed. View "USA v. Gentile" on Justia Law

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In a wrongful death action against an assisted-living facility, the Supreme Court of Tennessee held that the claims were subject to arbitration as per an agreement signed by the deceased's attorney-in-fact. The court clarified two key points. First, signing an optional arbitration agreement is not a "health care decision" under the Durable Power of Attorney for Health Care Act. Second, the attorney-in-fact had the authority to sign the arbitration agreement on the deceased's behalf, considering the durable power of attorney gave her the power to act for him in "all claims and litigation matters". The court further ruled that the deceased's son, who brought the wrongful death action, was bound by the arbitration agreement because his claims were derivative of his father's. Consequently, the court reversed the decision of the Court of Appeals and remanded the case to the trial court.In the case, Granville Williams, Jr. died while residing at an assisted-living facility run by Smyrna Residential, LLC. His son James Williams filed a wrongful death action against the facility. The decedent's daughter, acting as his attorney-in-fact under a power of attorney, had signed an arbitration agreement with the facility at the time of his admission. The arbitration agreement was not a condition of admission to the facility. The key issues were whether the attorney-in-fact had the authority to sign the arbitration agreement and whether the son, who was not a party to the agreement, was nevertheless bound by it. View "Williams v. Smyrna Residential, LLC" on Justia Law

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This case involves a group of plaintiffs who were minors at the time their guardians purchased and activated DNA test kits from Ancestry.com. The plaintiffs, through their guardians, provided their DNA samples to Ancestry.com for genetic testing and analysis. The plaintiffs later sued Ancestry.com, alleging that the company violated their privacy rights by disclosing their confidential genetic information to another business. Ancestry.com moved to compel arbitration based on a clause in its Terms & Conditions agreement, which the plaintiffs' guardians had agreed to when they purchased and activated the test kits.The United States Court of Appeals for the Seventh Circuit, applying Illinois law, held that the plaintiffs were not bound to arbitrate their claims under the agreement between their guardians and Ancestry.com. The court reasoned that the plaintiffs neither signed the agreement nor created Ancestry.com accounts, and did not independently engage with Ancestry.com's services. Furthermore, the court refused to bind the plaintiffs to the agreement based on equitable principles, including the doctrine of direct benefits estoppel. The court noted that while the plaintiffs theoretically could benefit from Ancestry.com's services, there were no allegations that the plaintiffs had actually accessed their DNA test results.The court therefore affirmed the district court's decision denying Ancestry.com's motion to compel arbitration. The court's holding clarified that under Illinois law, a minor cannot be bound to an arbitration agreement that their guardian agreed to on their behalf, unless the minor independently engaged with the services provided under the agreement or directly benefited from the agreement. View "Coatney v. Ancestry.com DNA, LLC" on Justia Law

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Shawn Fowler, a former Montana state trooper, sued the Department of Justice, Montana Highway Patrol (MHP) alleging constructive discharge in violation of the Wrongful Discharge from Employment Act (WDEA). He also alleged breach of contract by the Montana Public Employees Association (MPEA) for declining his request to arbitrate. Fowler claimed that he was forced to retire due to a hostile work environment, which was mainly due to disciplinary action taken against him for mishandling two suspected DUI traffic stops in 2017. The MHP argued that Fowler, who was covered by a collective bargaining agreement (CBA), failed to exhaust the grievance procedures of the CBA before filing a lawsuit.The Supreme Court of the State of Montana reversed the judgment of the Sixth Judicial District Court, Park County. The Supreme Court held that an employee covered by a CBA can't bring a claim under the WDEA. The Court determined that Fowler’s alleged constructive discharge was covered by the CBA and he was required to exhaust the grievance procedures for a constructive discharge through the CBA. The Court found that Fowler did not grieve any of the events preceding his suspension, which he claimed contributed to his constructive discharge, and he resigned from employment prior to exhausting the grievance procedure of the CBA. The Court concluded that the District Court erred in denying the State’s two motions for summary judgment and reversed the judgment. View "Fowler v. Department of Justice" on Justia Law

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In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

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The United States Court of Appeals for the Ninth Circuit affirmed the lower court's order to compel arbitration and dismiss without prejudice a series of lawsuits against several sports goods e-commerce companies (the defendants). The lawsuits were brought by several plaintiffs, who were consumers that purchased goods online from the defendants and had their personal information stolen during a data breach on the defendants' websites. The defendants moved to compel arbitration based on the arbitration provision in their terms of use. The appellate court held that the plaintiffs had sufficient notice of the arbitration provision and that the arbitration clause was not invalid under California law, was not unconscionable, and did not prohibit public injunctive relief. Furthermore, the parties agreed to delegate the question of arbitrability to an arbitrator according to the commercial rules and procedures of JAMS, a private alternative dispute resolution provider. View "PATRICK V. RUNNING WAREHOUSE, LLC" on Justia Law

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In this putative class action lawsuit, Maria Johnson, a former employee of Lowe's Home Centers, LLC, brought claims on behalf of herself and other Lowe's employees under California's Private Attorneys General Act of 2004 (PAGA) for alleged violations of the California Labor Code. Johnson had signed a pre-dispute employment contract that included an arbitration clause.The United States Court of Appeals for the Ninth Circuit affirmed the district court's decision to compel arbitration of Johnson's individual PAGA claim, as a valid arbitration agreement existed and the dispute fell within its scope. However, the district court's dismissal of Johnson's non-individual PAGA claims was vacated. The lower court had based its decision on the U.S. Supreme Court's interpretation of PAGA in Viking River Cruises, Inc. v. Moriana, which was subsequently corrected by the California Supreme Court in Adolph v. Uber Techs., Inc. The state court held that a PAGA plaintiff could arbitrate their individual PAGA claim while also maintaining their non-individual PAGA claims in court. The case was remanded to the district court to apply this interpretation of California law. The Ninth Circuit rejected Lowe's argument that Adolph was inconsistent with Viking River. View "JOHNSON V. LOWE'S HOME CENTERS, LLC" on Justia Law