Justia Arbitration & Mediation Opinion Summaries

The People filed suit alleging Uber and Lyft violated the Unfair Competition Law (Bus. & Prof. Code 17200 (UCL)) by misclassifying California rideshare and delivery drivers as independent contractors, depriving them of wages and benefits associated with employee status, thereby harming workers, competitors, and the public. The suit sought injunctive relief, civil penalties, and restitution under the UCL and injunctive relief under Assembly Bill 5, Labor Code 2786. The court of appeal affirmed a preliminary injunction under Assembly Bill 5. Proposition 22 subsequently altered the standards for determining whether app-based drivers are independent contractors. The parties stipulated to dissolve the preliminary injunction. The Labor Commissioner filed separate actions against Uber and Lyft, pursuant to her Labor Code enforcement authority, alleging misclassification of drivers.The two direct enforcement actions were coordinated. Uber and Lyft moved to compel arbitration of those actions to the extent they seek “driver-specific” or “ ‘individualized’ ” relief, such as restitution under the UCL and unpaid wages under the Labor Code. The motions did not seek arbitration of the requests for civil penalties and injunctive relief; they relied on arbitration agreements the defendants entered into with drivers. The court of appeal affirmed the denial of the motions. The People and the Labor Commissioner are not parties to those arbitration agreements. View "In re Uber Technologies Wage and Hour Cases" on Justia Law

The district court appointed a receiver to claw back profits received by investors in a Ponzi scheme that was the subject of a Securities and Exchange Commission enforcement action. The receiver filed suit against certain investors, alleging fraudulent transfers from the receivership entities to the investors. The district court concluded that the receiver was bound by arbitration agreements signed by the receivership company, which was the instrument of the Ponzi scheme. The district court relied on Kirkland v. Rune.   The Ninth Circuit reversed the district court’s order denying a motion to compel arbitration. The panel held that EPD did not control because it addressed whether a bankruptcy trustee, not a receiver, was bound by an arbitration agreement. Unlike under bankruptcy law, there was no explicit statute here establishing that the receiver was acting on behalf of the receivership entity’s creditors. The panel held that a receiver acts on behalf of the receivership entity, not defrauded creditors, and thus can be bound by an agreement signed by that entity. But here, even applying that rule, it was unclear whether the receiver was bound by the agreements at issue. The panel remanded for the district court to consider whether the defendant investors met their burden of establishing that the fraudulent transfer claims arose out of agreements with the receivership entity, whether the investors were parties to the agreements and any other remaining arbitrability issues. View "GEOFF WINKLER V. THOMAS MCCLOSKEY, JR., ET AL" on Justia Law

Petitioner was employed at Office Depot as a senior financial analyst. He was responsible for, among other things, ensuring data integrity. One of Ronnie’s principal duties was to calculate and report a metric called “Sales Lift.” Sales Lift is a metric designed to quantify the cost-reduction benefit of closing redundant retail stores. Petitioner identified two potential accounting errors that he believed signaled securities fraud related to the Sales Lift. Petitioner alleged that after he reported the issue, his relationship with his boss became strained. Eventually, Petitioner was terminated at that meeting for failing to perform the task of identifying the cause of the data discrepancy. Petitioner filed complaint with the Department of Labor’s Occupational Safety and Health Administration (OSHA), and OSHA dismissed his complaint. Petitioner petitioned for review of the ARB’s decision.
The Eleventh Circuit denied the petition. The court explained that Petitioner failed to allege sufficient facts to establish that a reasonable person with his training and experience would believe this conduct constituted a SOX violation, the ARB’s decision was not arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with the law. The court wrote that Petitioner’s assertions that Office Depot intentionally manipulated sales data and that his assigned task of investigating the discrepancy was a stalling tactic are mere speculation, which alone is not enough to create a genuine issue of fact as to the objective reasonableness of Petitioner’s belief. View "Chris Ronnie v. U.S. Department of Labor" on Justia Law

The Supreme Court affirmed the judgment of the district court compelling an estate's claims to arbitration pursuant to an arbitration agreement signed during the decedent's admission to El Jen Convalescent Hospital and Retirement Center (El Jen), holding that a nonsignatory heir's wrongful death claim is not bound to an agreement like the arbitration agreement in his case that does not implicate the viability of the underlying personal injury claim.Following the death of her husband, Gary Tyler, Stacy Tyler brought this action against El Jen, asserting negligence, wrongful death, and survivorship claims individually and on behalf of Gary's estate and their minor child, and was joined by two adult statutory heirs. The district court (1) compelled the estate's claims to arbitration pursuant to the arbitration signed during Gary's admission to El Jen; and (2) concluded that the statutory heirs were not bound by the agreement because they did not sign it. The Supreme Court affirmed, holding that the district court (1) properly rejected Plaintiffs' challenge to the arbitration agreement's validity; and (2) did not err in holding that the heirs were not bound by the agreement because they were nonsignatories who were pursuing their own individual claims. View "El Jen Medical Hospital, Inc. v. Tyler" on Justia Law

Jansen was a resident at a skilled nursing facility. Kotalik, with Jansen’s power of attorney for healthcare, signed a “Contract Between Resident and Facility” that provides all civil claims shall be resolved exclusively through mandatory mediation, and, if such mediation does not resolve the dispute, through binding arbitration. The contract waived claims for punitive damages and included a “termination upon death” provision. Jansen suffered several falls, resulting in injuries that contributed to or caused Jansen’s death. Her estate sued, arguing that the defendants had waived their right to mediate and/or arbitrate by participating in litigation for nearly a year, that the arbitration clause was procedurally and substantively unconscionable, and that Kotalik, as Jansen’s POA for healthcare, lacked the authority to execute an arbitration clause on Jansen’s behalf.The Illinois Supreme Court affirmed the denial of the motion. By the express terms of the contract, once the resident died, the contract ceased to exist, including the forum provision. The court did not address the other arguments. View "Clanton v. Oakbrook Healthcare Centre, Ltd." on Justia Law

Doe sued her former employer Na Hoku,and former manager Montoya, asserting multiple claims arising from Montoya’s alleged sexual harassment and assault of Doe. The defendants successfully compelled the case to arbitration. September 1, 2022 was the “due date” for the defendants to pay certain arbitration fees and costs to the arbitrator. Under Code of Civil Procedure section 1281.98(a)(1), these fees and costs had to be “paid within 30 days after the due date” (October 3) to avoid breaching the arbitration agreement. The arbitrator received the payment on October 5, because the defendants mailed a check on Friday, September 30 although payment could be submitted by credit card, electronic check, or wire transfer.Doe moved to vacate the order compelling arbitration. The trial court denied the motion. The court of appeal granted Doe’s mandamus petition, strictly enforcing the section 1281.98(a)(1) 30-day grace period. The court declined to “find that the proverbial check in the mail constitutes payment.“ The defendants’ payment, received more than 30 days after the due date established by the arbitrator, was untimely. View "Doe v. Superior Court of the City and County of San Francisco" on Justia Law

The issue this case presented for the Idaho Supreme Court's review centered on a wage claim dispute between Pat Stiffler and his previous employer, Hydroblend, Inc. After a dispute arose concerning incentive pay on an allegedly miscoded account, Stiffler filed a complaint for unpaid wages, breach of contract, retaliation, and wrongful termination. The proceedings culminated with two orders from the district court that: (1) awarded summary judgment to Hydroblend concerning treble damages; (2) concluded multiple issues were governed by an arbitration provision in Stiffler’s employment agreement; and (3) denied summary judgment where disputed facts remained at issue. Stiffler appealed the district court’s decisions, arguing that he is entitled to treble damages on all wages under Idaho’s Wage Claim Act, as well as severance pay under his 2019 employment contract. Stiffler also argues that the district court erred by compelling arbitration of some of his claims. The Idaho Supreme Court reversed the district court’s dismissal of Stiffler’s arbitrable claims because they should have been stayed, not dismissed. However, the Court affirmed the district court’s determination that a 2019 Contract controlled the issue of incentive pay while the remaining claims arose under a 2021 Contract and its arbitration agreement. As the prevailing party, Hydroblend was entitled to costs on appeal pursuant to Idaho Appellate Rule 40(a). View "Stiffler v. Hydroblend, Inc." on Justia Law

Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

In 2017, the plaintiffs leased a Mercedes-Benz B250E from a dealer. In 2020, at the end of the lease, they signed a Retail Installment Sales Contract (RISC) with the dealer to finance the purchase of the vehicle. Both the lease and the RISC contained arbitration agreements.The plaintiffs allege that Mercedes-Benz USA (MBUSA), as the manufacturer or distributor of the vehicle, provided them with two express warranties and a separate implied warranty of merchantability and that the vehicle had undisclosed defects covered by the warranties, They took the vehicle to the dealer, which was authorized by MBUSA for repairs, but despite multiple attempts, the vehicle could not be fixed. The plaintiffs filed suit, alleging violations of the Song-Beverly Consumer Warranty Act. MBUSA moved to compel arbitration, arguing that it had standing to compel arbitration as a third-party beneficiary of both the lease and the RISC, and equitable estoppel. While the trial court rejected MBUSA’s argument that it was a third-party beneficiary of the agreements, it agreed with MBUSA’s equitable estoppel argument. The court of appeal reversed. MBUSA is not a party to the agreements with the vehicle dealer and the claims against MBUSA are not intertwined with those agreements. View "Yeh v. Superior Court of Contra Costa County" on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this second lawsuit brought by AJZ's Hauling, LLC against TruNorth Warranty Programs of North American (TruNorth) affirming the decision of the trial court denying TruNorth's motion to stay and compel arbitration, holding that the claims filed by AJZ's Hauling against TruNorth were subject to arbitration.AJZ's Hauling purchased a truck that came with a TruNorth warranty. AJZ's Hauling later sued TruNorth, and the trial court granted TruNorth's motion to stay the proceedings and to compel arbitration. AJZ's then filed a second lawsuit raising the same claims it had alleged against TruNorth in the first lawsuit. TruNorth again filed a motion to stay and to compel arbitration, which the trial court denied. The court of appeals affirmed, concluding that application of the doctrine of res judicata would be unreasonable or unjust. The Supreme Court reversed, holding (1) AJZ's Hauling's claims filed against TruNorth in the second lawsuit were subject to arbitration; and (2) an exception to application of the doctrine of res judicata to avoid unjust results does not apply when the parties had a full opportunity to litigate the issue and chose not to do so. View "AJZ Hauling, LLC v. TruNorth Warranty Program of N. America" on Justia Law