Justia Arbitration & Mediation Opinion Summaries
Dept. of Fair Employment and Housing v. Cisco Systems, Inc.
Cisco Systems, Inc. hired “John Doe” in September 2015 to work as an engineer. Doe was required to sign an arbitration agreement as a condition of his employment. Under the agreement, Cisco and Doe had to arbitrate “all disputes or claims arising from or relating to” Doe’s employment, including claims of discrimination, retaliation, and harassment. Several years after signing the agreement, Doe filed a complaint with the California Department of Fair Employment and Housing, alleging Cisco discriminated against him because of ancestry or race. He reported that two supervisors denied him opportunities and disparaged him because, under the traditional caste system of India, he was from the lowest caste and they are from the highest. Doe also accused Cisco of retaliating when he complained about being treated unfavorably because of his caste. The Department notified Cisco of Doe’s complaint, investigated it, and decided it had merit. Attempts at informal resolution were unsuccessful. The Department then filed a lawsuit against Cisco and the two supervisors. The Department alleged five causes of action alleging multiple violations of FEHA, and sought a permanent injunction preventing Cisco from committing further violations, and mandatory injunctive relief requiring Cisco to institute policies to prevent employment discrimination. The complaint also requested an order that Cisco compensate Doe for past and future economic losses. Cisco moved to compel arbitration pursuant to the agreement Doe signed. The trial court denied the motion. On appeal, Cisco argued the Department was bound by the terms of Doe’s arbitration agreement. The Court of Appeal affirmed, finding the Department acts independently when it exercises the power to sue for FEHA violations. “As an independent party, the Department cannot be compelled to arbitrate under an agreement it has not entered.” View "Dept. of Fair Employment and Housing v. Cisco Systems, Inc." on Justia Law
Rodriguez-Rivera v. Allscripts HC Sol., Inc.
The First Circuit affirmed the judgment of the district court dismissing this case against Allscripts Healthcare Solutions, Inc. (AHS) on personal jurisdiction grounds but vacated the dismissal as to Allscripts Healthcare, LLC (Allscripts), holding that the district court improperly granted the motion to dismiss as to Allscripts.Dr. Juan M. Rodriguez-Rivera (Rodriguez) brought this action against AHS and Allscripts in Puerto Rico federal court after his electronic patient records from his medical practice were destroyed. AHS and Allscripts filed a motion to dismiss. The district court granted the motion, finding that the disputes should be arbitrated, that it lacked jurisdiction over both AHS and Allscripts, and that Rodriguez's complaint failed to state a claim as a matter of law. The First Circuit affirmed in part and vacated in part, holding (1) the district court improperly granted the motion to dismiss for lack of personal jurisdiction with respect to Allscripts; (2) whether a valid arbitration existed was a factual matter to be resolved by the district court; and (3) the district court erred in concluding that Rodriguez's complaint failed to state a claim against Allscripts. View "Rodriguez-Rivera v. Allscripts HC Sol., Inc." on Justia Law
Iraq Telecom Ltd. v. IBL Bank S.A.L.
In an appeal from a district court ruling reducing an order of attachment in aid of arbitration. The district court had initially granted an ex parte order in favor of Petitioner, an Iraqi cell phone company (“Telecom”), attaching up to $100 million of the assets of Respondent, a Lebanese bank. Thereafter, the district court exercised its discretion and reduced the amount of the attachment to $3 million in part because of concerns the attachment would have an adverse impact on the Lebanese economy.Telecom appealed arguing that (1) it established a probability of success in the pending arbitration and was therefore entitled to an attachment of $100 million and (2) the district court lacked authority to consider extraordinary circumstances in reducing the attachment.The Second Circuit affirmed to the extent that the district court held that it had the discretion to consider extraordinary circumstances and that Telecom demonstrated a continuing need for the attachment, and to the extent that the district court attached $3 million; vacated to the extent the district court attached only $3 million based on the existence of extraordinary circumstances without considering how those circumstances might change given an attachment greater than $3 million but less than $42 million; and remanded as to (a) Telecom's probability of success, (b) the assessment of extraordinary circumstances, and (c) the amount of the attachment above $3 million. View "Iraq Telecom Ltd. v. IBL Bank S.A.L." on Justia Law
Robert D. Mabe, Inc v. OptumRX
The Third Circuit vacated in part the order of the district court denying OptumRX's (Optum) motion to compel arbitration in the underlying action alleging breaches of contract and breaches of duties of good faith and fair dealing and violations of certain state statutes, holding that the district court erroneously applied the incorrect standard in ruling on Optum's motion.More than 400 pharmacies brought suit against Optum, a pharmacy benefits manager responsible for administering prescription drug programs on behalf of health-insurance plans. Optum moved to compel arbitration based on arbitration agreements found in various contracts covering the majority of the pharmacies. The district court denied the motion in full, concluding that compelling the pharmacies to proceed with arbitration would be procedurally unconscionable. The Sixth Circuit vacated the judgment in part, holding that the district court erred by not adhering to Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764 (3d Cir. 2013). View "Robert D. Mabe, Inc v. OptumRX" on Justia Law
Brawerman v. Loeb & Loeb LLP
Plaintiffs sued Defendants asserting causes of action for professional negligence and breach of fiduciary duty. Defendants moved to compel arbitration pursuant to the Retainer Agreement and the trial court granted the motion. The arbitration hearing proceeded and the arbitrator found that Defendants were liable to Plaintiffs for their failure to protect Plaintiffs’ control over the business or to disclose to Plaintiffs such lack of control. However, the arbitrator found that this conduct did not harm Plaintiffs because they could not show that the contingency fee paid to the firm was caused by Defendants’ failings.Plaintiffs moved the trial court to vacate the Award. They again argued that the Retainer Agreement, including its arbitration clause, was illegal and unenforceable because Defendant was unlicensed to practice law when he performed services for Plaintiffs pursuant to that agreement. The trial court denied the motion and confirmed the arbitration award.The Second Appellate District affirmed the ruling finding that there was no error. The court wrote that Birbrower, Montalbano, Condon & Frank v. Superior Court (1998) 17 Cal.4th 119 (Birbrower) dictates that the unlicensed attorney’s illegal practice of law pursuant to the retainer agreement does not render the entire retainer agreement illegal. Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 30 (Moncharsh) holds that an arbitration provision is severable from an agreement that is not entirely illegal (unless the arbitration provision itself is illegal). There is no claim here of any illegality in the retainer agreement’s arbitration provision. View "Brawerman v. Loeb & Loeb LLP" on Justia Law
JONES DAY V. ORRICK, HERRINGTON & SUTCLIFFE
The dispute at issue is between Jones Day and one of its former partners, a German national who was based in its Paris office until he left to join Orrick, Herrington & Sutcliffe (“Orrick”). Jones Day’s partnership agreement provides for mandatory arbitration of all disputes among partners, and that all such arbitration proceedings are governed by the FAA. The partnership dispute proceeded to arbitration in Washington D.C., the location designated in the arbitration agreement. The Ninth Circuit reversed the district court’s order denying Jones Day’s petitions to compel Orrick to comply with an arbitrator’s subpoena. First, the court held that the district court had subject matter jurisdiction over the action to enforce arbitral summonses issued by the arbitrator in an ongoing international arbitration being conducted in Washington, D.C., under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention. The court further held that venue was proper in the Northern District of California. The court reversed and remanded with instructions to enforce Jones Day’s petitions to compel Orrick and its partners to comply with the arbitral summonses. View "JONES DAY V. ORRICK, HERRINGTON & SUTCLIFFE" on Justia Law
California v. Maplebear Inc.
The San Diego City Attorney brought an enforcement action under the Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the State of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hires ("Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart challenged the trial court’s order, arguing that even though the State was not a party to its Shopper agreements, they were bound by its arbitration provision to the extent they seek injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law
Dina Abdurahman v. Prospect CCMC LLC
Plaintiff, an emergency medical resident, began working for Crozer Chester Medical Center (“CCMC”). Plaintiff signed an at-will employment agreement with CMCC and an agreement to arbitrate with Prospect Health Access Network (“Prospect”), a company that employs professionals working at hospitals. After Plaintiff was involved in a dispute with a supervisor at CMCC, who also was an employee of Prospect, Plaintiff was terminated. Plaintiff filed a discrimination complaint with the Pennsylvania Human Relations Commission and the Equal Employment Opportunity Commission against CMCC. CMCC moved to compel arbitration.The district court denied CMCC's motion to compel arbitration and CMCC appealed.On appeal the Third Circuit affirmed, finding that Plaintiff's agreement to arbitrate any disputes between herself and Prospect did not extend to disputes involving CMCC. View "Dina Abdurahman v. Prospect CCMC LLC" on Justia Law
Archer v. Grubhub, Inc.
The Supreme Judicial Court held that delivery drivers that delivered takeout food and various prepackaged goods from local restaurants, convenience stores, and delicatessens to Grubhub, Inc. do not fall within a residual category of workers who are exempt from arbitration pursuant to section 1 of the Federal Arbitration Act (FAA).Plaintiffs, former delivery drivers for Grubhub, brought this putative class action against Grubhub, alleging violations of the Wage Act, the Tips Act, and the Minimum Wage Act and that Grubhub unlawfully retaliated against drivers who complained about their wages. Grubhub filed a motion to compel arbitration pursuant to an arbitration agreement each Plaintiff had entered into. Because Plaintiffs transported and delivered some prepackaged food items manufactured outside Massachusetts, the judge found that Plaintiffs fell within the definition of "any other class of workers engaged in foreign or interstate commerce" who were exempt from arbitration under section 1 of the FAA. The Supreme Judicial Court reversed, holding that Plaintiffs were not transportation workers actually engaged in the movement of goods in interstate commerce, as required by the residual clause of section 1. View "Archer v. Grubhub, Inc." on Justia Law
M.K. Weeden Construction, Inc. v. Simbeck & Assocs., Inc.
The Supreme Court reversed the order of the district court vacating an interim award and final award issued by the arbitrator and requiring the parties to resubmit their dispute to arbitration before a new arbitrator, holding that the district court erred.M.K. Weeden Construction, Inc. and Simbeck and Associates, Inc. entered into a subcontract for Simbell to install a geosynthetic lining system on the slopes of a new embankment on a tailings storage facility at a mine near Nye, Montana. After Weeden terminated the subcontract by invoking the subcontract's default provision Simbeck filed a demand for arbitration. The arbitrator first issued an interim award awarding Simbeck damages and then a final award awarding Simbeck attorney fees. The district court granted Weeden's motion to vacate the award and ordered the parties again to submit the dispute to arbitration before a new arbitrator, ruling that the arbitrator exceeded his authority by issuing the interim award. The Supreme Court reversed, holding (1) the interim award was a proper "reasoned award" and the district court abused its discretion by vacating it; and (2) Simbeck was entitled to attorney fees incurred in defense of the arbitration award. View "M.K. Weeden Construction, Inc. v. Simbeck & Assocs., Inc." on Justia Law