Justia Arbitration & Mediation Opinion Summaries

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The Second Circuit affirmed the district court's judgment confirming an arbitration award in favor of the State of New York. The court held that the arbitral panel – which did in fact consider the Indian Gaming Regulatory Act (IGRA) – reasonably concluded that its task in this case was a straightforward matter of contract interpretation not subject to the Secretary of the Interior's approval. The court explained that the panel did not disregard the IGRA, and deferral to the Department of the Interior was not warranted. Therefore, the arbitral panel did not manifestly disregard governing law, and the district court properly confirmed the award. View "Seneca Nation of Indians v. State of New York" on Justia Law

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The Ninth Circuit affirmed the district court's order compelling arbitration pursuant to the Federal Arbitration Act and dismissing a putative class action brought by plaintiff against MoneyLion, operator of a smartphone app offering financial services to its customers. Plaintiff alleged that MoneyLion violated California's Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act when it refused to allow her to cancel her membership after she fell behind on her fees, deposits, and loan payments.The panel concluded that the district court correctly determined that the arbitration provision at issue was valid and enforceable because it allowed public injunctive relief and did not violate the McGill rule under California law. The panel explained that in California, litigants proceeding in individual lawsuits may request public injunctive relief without becoming private attorneys general. In this case, the arbitration agreement authorized the arbitrator to award all injunctive remedies available in an individual lawsuit under California law. View "DiCarlo v. MoneyLion, Inc." on Justia Law

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Homeowners Colin Masseau and Emily MacKenzie appealed a trial court’s order confirming an arbitrator’s dismissal of their claims against defendants Guy Henning and Brickkicker/GDM Home Services, LLC. Specifically, homeowners challenged the trial court’s referral of the case to arbitration on the ground that the purported arbitration agreement lacked the notice and acknowledgment provisions required under the Vermont Arbitration Act (VAA), and they urged the Vermont Supreme Court to vacate the arbitrator’s award because the arbitrator exceeded his authority by manifestly disregarding the law. The Supreme Court concluded the parties’ contract affected interstate commerce, and that the arbitration agreement was therefore governed by the Federal Arbitration Act (FAA) and is not subject to the more exacting notice and acknowledgment requirement of the VAA. The Court declined to find the arbitrator's analysis rose to the level of "manifest disregard." View "Masseau v. Luck" on Justia Law

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The Supreme Court held that the Federal Trade Commission's "single document rule," promulgated under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301-2312, does not require the disclosure of a binding arbitration agreement.Petitioner bought a truck from Respondent. The parties' retail purchase order included a binding arbitration agreement for any dispute related to the truck's purchase. Petitioner eventually filed suit under the Act, and Respondent successfully moved to compel arbitration. Petitioner appealed, arguing that the arbitration agreement was unenforceable because it was not disclosed in a single document with other warranty terms, in violation of the Federal Trade Commission's (FTC) single document rule. The Fifth District affirmed, holding that a binding arbitration agreement is not an item covered by the single document rule's disclosure requirements. The Supreme Court approved the Fifth District's decision, holding that the existence of a binding arbitration agreement is not among the disclosures required by the FTC's single document rule. View "Krol v. FCA US, LLC" on Justia Law

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In this action brought under the Railway Labor Act (RLA), 45 U.S.C. 151 et seq., the First Circuit affirmed the judgment of the district court dismissing Plaintiff's claim against American Airlines, Inc. and later granting Allied Pilots Association's (APA) motion for summary judgment, holding that that APA did not breach its duty of fair representation and that Plaintiff could not maintain a claim against American Airlines.In 1999, Bryan's then-union submitted a grievance on his behalf alleging that his then-employer violated the terms of the applicable collective bargaining agreement and that APA, the successor to the previous union, breached its duty of fair representation under the RLA by withdrawing from pursuing his grievance to arbitration based on an allegedly inadequate investigation into the grievance's merits. Bryan also suit American Airlines, the successor to his previous employer, for his previous employer's alleged breach of the collective bargaining agreement. The district court disposed of the claims through dismissal and summary judgment. The First Circuit affirmed, holding (1) APA did not breach its duty of fair representation under the RLA; and (2) based on Bryan's own concession, he could not maintain a claim against American Airlines. View "Bryan v. American Airlines, Inc." on Justia Law

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The Court of Appeal reversed a judgment confirming an arbitration award removing the managing director of two corporations, owned by Ted and his brother Harry Roussos as cotrustees of two trusts, and appointing the director proposed by Harry. The court concluded that the parties cannot contract away California's statutory protections for parties to an arbitration, including mandatory disqualification of a proposed arbitrator upon a timely demand. The court explained that the arbitrator was still a "proposed neutral arbitrator" for the present arbitration under Code of Civil Procedure sections 1281.9 and 1281.91, and under section 1281.91, subdivision (b)(1), the arbitrator was required to disqualify himself upon Ted's timely service of a notice of disqualification. In this case, as the proposed neutral arbitrator, Judge Shook was legally required to make the disclosures set forth in his disclosure report, and Ted had an absolute right to disqualify him without cause. Because the arbitrator refused to disqualify himself, the trial court was required to vacate the award under section 1286.2, subdivision (a)(6)(B). The court remanded with instructions for the trial court to vacate its order granting the petition to confirm the arbitration award, and to enter a new order vacating the award. View "Roussos v. Roussos" on Justia Law

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In 2020 Union Pacific Railroad announced a change to its employee attendance policy. Several regional branches of the union opposed the change and sought an order under the Railway Labor Act, 45 U.S.C. 151a (RLA), requiring Union Pacific to submit the change to collective bargaining. The district court dismissed for lack of jurisdiction; the claim belonged in arbitration before the National Railroad Adjustment Board.The Seventh Circuit affirmed and granted Union Pacific’s motion for sanctions under Federal Rule of Appellate Procedure 38 for the frivolous appeal. For the second time in three years, the Brotherhood has pressed a position squarely foreclosed by settled law. The union’s challenge to the revised policy amounted to a “minor dispute” subject to mandatory arbitration under the RLA. Given the parties’ course of dealing over workplace attendance requirements, there was a clear pattern and practice of Union Pacific modifying its policies many times over many years without subjecting changes to collective bargaining, which provided the railroad with a nonfrivolous justification to unilaterally modify its attendance policy. That reality made this dispute a minor one subject to resolution through mandatory arbitration. View "Brotherhood of Locomotive Engineers & Trainmen GCA UP v. Union Pacific Railroad Co." on Justia Law

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Putnam purchased a service-only (satellite) Subaru facility in San Francisco. Putnam entered into a temporary “Dealer Candidate Satellite Service Facility Agreement.” Subaru and Putnam subsequently executed a Subaru Dealer Agreement for the sale and service of vehicles at a Burlingame dealership and a five-year (renewable) Satellite Service Facility Agreement, which contained an arbitration provision. In 2017, Subaru stated that it would not approve Putnam’s proposed relocation of the satellite facility and would not renew the Satellite Agreement in 2019. Putnam filed protests with the New Motor Vehicle Board. Subaru moved to compel arbitration.The trial court found that the Satellite Agreement did not come within the Motor Vehicle Franchise Contract Arbitration Fairness Act, an exception to the Federal Arbitration Act. Putnam was compelled to arbitrate claims arising from that agreement. The court denied Subaru’s request to compel Putnam to dismiss its Board protests, which were stayed pending arbitration. An arbitrator found that the Satellite Agreement was a franchise, that Subaru was required to show good cause, and that Subaru had established good cause for terminating the Satellite Agreement.The court of appeal affirmed the confirmation of the arbitration award, rejecting arguments that the arbitrator lacked jurisdiction to make a good cause determination; enforcement of the arbitration provision was illegal under the Vehicle Code; public policy underlying California’s New Motor Vehicle Board Act precluded the arbitrator from making a good cause determination; and that Putnam’s due process rights were violated when Subaru failed to provide the required notice of the reasons for termination. View "Subaru of America, Inc. v. Putnam Automotive, Inc." on Justia Law

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In a putative class action, plaintiffs Joe Maldonado, Alfredo Mendez, J. Peter Tuma, Jonabette Michelle Tuma, and Roberto Mateos Salmeron (collectively referred to as “the Customers”), claimed Fast Auto Loans, Inc., (Lender) charged unconscionable interest rates on loans in violation of California Financial Code sections 22302 and 22303. Lender filed a motion to compel arbitration and stay the action pursuant to an arbitration clause contained within the Customers’ loan agreements. The court denied the motion on the grounds the provision was invalid and unenforceable because it required consumers to waive their right to pursue public injunctive relief, a rule described in McGill v. Citibank, N.A., 2 Cal.5th 945 (2017). On appeal, Lender argued the “McGill Rule” did not apply, but even if it did, other claims were subject to arbitration. Alternatively, Lender contended the McGill Rule was preempted by the Federal Arbitration Act . Finding Lender’s contentions on appeal lacked merit, the Court of Appeal affirmed the trial court’s order. View "Maldonado v. Fast Auto Loans" on Justia Law

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The Court of Appeal reversed the trial court's denial of Altamed's motion to compel arbitration of plaintiff's employment-related claims. The court concluded that the trial court erred in denying the motion to compel arbitration. The court explained that the arbitration agreement is valid where plaintiff knowingly waived her right to a jury trial and the signature of Altamed's CEO was not required on the arbitration agreement. The court also concluded that any unconscionability in the arbitration agreement does not provide grounds for revocation or non-enforcement. However, the court concluded that the second review provision appears entirely severable from the remainder of the agreement and removing it would remove the only instance of substantive unconscionability. Therefore, the court ordered Paragraph 5 authorizing review by a second arbitrator severed, and remanded for the trial court to enter an order granting the motion to arbitrate. View "Cisneros Alvarez v. Altamed Health Services Corp." on Justia Law