Justia Arbitration & Mediation Opinion Summaries
B&S MS Holdings, LLC v. Landrum
David and Jill Landrum began developing land in Livingston, Madison County, Mississippi, in approximately 2006. David sought financial assistance from Michael Sharpe. Michael invested substantial sums in the business, and his wife, Marna Sharpe, gained a membership interest in the business. In 2010, Livingston Holdings, LLC (Livingston), a Mississippi limited-liability company, was formed. The original members of the company were Jill, Marna, and Sara Williams. Livingston acquired Williams’s ownership interests, and Marna later assigned her membership interest to B&S Holdings, LLC (B&S). The development became the Town of Livingston. The members of Livingston consisted of B&S and Jill. In this dispute between the members of the limited-liability company, the question presented for the Mississippi Supreme Court's review was whether statutory provisions prevented the enforcement of an arbitration provision and waiver contained in the operating agreement of the company. Because the Court determined the statutory provisions did not control over the terms of the operating agreement, it affirmed the trial court’s decision to compel arbitration. View "B&S MS Holdings, LLC v. Landrum" on Justia Law
International Union v. Trane U.S. Inc.
The Eighth Circuit reversed the district court's dismissal of the union's claims against Trane concerning an arbitration award. In this case, the June Award indicated that the arbitrator did not intend for it to be final because he explicitly retained jurisdiction "until the terms of the award are met." When a dispute did arise regarding damages, the arbitrator resolved that dispute in the September Award and then expressly stated that he was "no longer retaining jurisdiction in this matter." Therefore, the express relinquishment of jurisdiction in the September Award indicated that the arbitrator intended the September Award to be final and did not contemplate further disputes regarding the award. The court held that the union is not time-barred from seeking to vacate the arbitration award because the text of the June Award indicates that it was not the final award. The court stated that the September Award is the final award and the union filed its claim to vacate within 90 days of it. Therefore, the union's claim was timely and the district court erred in concluding otherwise. The court remanded for further proceedings. View "International Union v. Trane U.S. Inc." on Justia Law
ABM Industry Groups, LLC v. International Union of Operating Engineers
ABM appealed the district court's denial of its motion to confirm an arbitration award and granting in part the union's motion to vacate the award, under Section 301 of the Labor Management Relations Act (LMRA). In this case, the arbitrator issued an opinion and award, concluding that two employees were not entitled to termination pay and directing them to repay certain amounts to ABM. The district court denied the motion to confirm the arbitrator's award, concluding that the award was ultra vires and unenforceable. The Second Circuit held that the arbitrator did not exceed her authority because, under both agency law principles and federal labor law, the union possessed the authority to bind the employees to the arbitration award. The court stated that the district court plainly erred by reasoning that no precedent or authority supported the proposition that a union can bind its members to make payments ordered by an arbitrator under an arbitration agreement to which they were not signatories, following a process in which they did not participate. Rather, the court held that the record is clear that the employees did participate in the arbitration proceeding and the union possessed both agency and statutory authority to appear in the arbitration on their behalf. View "ABM Industry Groups, LLC v. International Union of Operating Engineers" on Justia Law
Lavigne v. Herbalife, Ltd.
Plaintiffs, aggrieved distributors, filed a putative class action alleging that Herbalife and the top distributors who manage the "Circle of Success" events violated the federal Racketeer Influenced and Corrupt Organizations Act by conducting the affairs of a racketeering enterprise and by conspiring to do so. The district court denied Herbalife's motion to compel arbitration of the aggrieved distributors' claims against the top distributors and denied the motion to transfer those claims to the Central District of California. The Eleventh Circuit held that the district court correctly denied the top distributors' motion to compel arbitration, because none of the top distributors is a party to any of the aggrieved distributors' agreements and thus they cannot invoke the agreements' arbitration clauses; the district court was correct to resolve the motion to compel arbitration instead of immediately sending it to an arbitrator; and the district court correctly declined to apply equitable estoppel to compel arbitration of the aggrieved distributors' claims against the top distributors. Finally, the court held that it is without jurisdiction to review whether the district court erred in denying the motion to transfer venue. Accordingly, the court affirmed in part and dismissed in part. View "Lavigne v. Herbalife, Ltd." on Justia Law
Landry v. Transworld Systems Inc.
The Supreme Judicial Court affirmed the judgment of the superior court denying Defendant's motion to compel arbitration of Plaintiff's claims that Defendant had engaged in improper debt collection practices and debt collection regulations, holding that there was no error in the denial of Defendant's motion to compel arbitration. Plaintiff allegedly owed debt to Enterprise Rent-A-Car Company of Boston, LLC for damage to a rental vehicle. Enterprise assigned the debt to Defendant for collection. Plaintiff filed a class action complaint against Defendant, alleging that Defendant made too frequent phone contact with him and other debtors. Defendant sought to compel arbitration of Plaintiff's claims pursuant to the rental contract between Plaintiff and Enterprise. The superior court denied the motion to compel. The Supreme Court affirmed, holding that reasonable minds could differ as to whether the arbitration provision in the contract was applicable to claims brought against Defendant, and therefore, Defendant did not put forth the clear and definite evidence of intent that it must to be entitled to enforce the arbitration provision as a third-party beneficiary. View "Landry v. Transworld Systems Inc." on Justia Law
Standard Security Life Insurance Co. of New York v. FCE Benefit Administrators, Inc.
FCE administered health insurance policies underwritten by the Insurers. After a few years, the Insurers became dissatisfied with FCE’s performance and invoked the Agreement’s arbitration clause. In Phase I of the arbitration, the arbitrators awarded the Insurers damages of more than five million dollars. The Insurers attempted to confirm this award under the Federal Arbitration Act, 9 U.S.C. 9, but the district court concluded that the case was not yet ripe for adjudication. The arbitrators had not yet resolved all matters that had been submitted to them. In Phase II, the arbitrators denied the Insurers’ remaining claim for reimbursement of excessive administrative fees and FCE’s counterclaim for lost profits. The district court confirmed the arbitration results in their entirety. The Seventh Circuit affirmed. The court rejected FCE’s arguments that the Phase II Award superseded the Phase I Award such that the district court could confirm only the Phase II Award; that part of the Phase I Award must be vacated because the arbitrators exceeded their authority by hearing and deciding the Insurers’ indemnification claims; and that it was reversible error for the court to confirm the portion of the Phase I Award labeled as damages for “embezzlement.” View "Standard Security Life Insurance Co. of New York v. FCE Benefit Administrators, Inc." on Justia Law
Bautista v. Fantasy Activewear, Inc.
The Court of Appeal affirmed the trial court's order denying Fantasy's petitions to compel arbitration in two actions involving substantially similar wage and hour allegations. Plaintiffs both signed settlement agreements with Fantasy in 2014 in connection with a case called Guerra v. Fantasy Activewear, Inc. (LASC No. BC517633) containing the arbitration clauses at issue. The court held that plaintiffs were not acting as agents of the Labor and Workforce Development Agency (LWDA) when they entered into their settlement agreements with AW and DF. Because plaintiffs were not acting as agents of the state when they entered into the arbitration agreements at issue here, the court held that Fantasy has identified no arbitration agreement that would bind the real party in interest—the state—to arbitration, even of the question of arbitrability. View "Bautista v. Fantasy Activewear, Inc." on Justia Law
Jin O. Jin v. Parsons Corp.
After plaintiff filed suit against Parsons for employment discrimination, Parsons moved to compel arbitration. The district court denied the motion, concluding that genuine disputes of material fact existed as to whether plaintiff agreed to arbitrate. The DC Circuit held that Section 4 of the Federal Arbitration Act makes plain that the district court, once it concluded that a genuine dispute of material fact existed as to whether plaintiff assented to the arbitration agreement, should have proceeded to try the issue of arbitrability. Section 4 allows the defendant to move the district court to compel the parties to arbitrate their dispute, but if arbitrability of the dispute itself is in issue, the FAA instructs the district court to proceed summarily to trial on that limited issue. Accordingly, the court vacated and remanded with instructions that the district court should hold the motion in abeyance pending its prompt resolution of whether the parties agreed to arbitrate. View "Jin O. Jin v. Parsons Corp." on Justia Law
Garner v. Inter-State Oil Co.
Chris Garner sued Inter-State Oil Company alleging employment claims and seeking certification of a class action. Based on an arbitration agreement between Garner and Inter-State Oil, the trial court granted Inter-State Oil’s petition to compel arbitration of individual claims only, effectively denying Garner the ability to pursue class action claims. The trial court relied on language in the arbitration agreement stating that Garner waived his right to participate in class action lawsuits. On appeal of the order granting the motion to compel arbitration, Garner contended: (1) the plain language of the arbitration agreement gave him the right to pursue his class claims in arbitration; and (2) Inter-State Oil waived reliance on the arbitration agreement. The Court of Appeal concluded: (1) the arbitration agreement required arbitration of Garner’s class claims; and (2) Inter-State Oil did not waive reliance on the arbitration agreement. The Court modified the trial court’s order to require arbitration of both individual and class claims, and affirmed the order as modified. View "Garner v. Inter-State Oil Co." on Justia Law
Gibbs v. Haynes Investments, LLC
After a group of borrowers filed suit against two online lenders, the Haynes Defendants filed a motion to compel arbitration. The Fourth Circuit affirmed the district court's denial of the motion to arbitrate, holding that the borrowers sufficiently challenged the validity of the delegation clauses and the district court was correct to consider the enforceability of the arbitration agreements. The court also held that the choice-of-law clauses amount to a prospective waiver such that the arbitration agreements, including the delegation clauses, are unenforceable. Therefore, the court explained that the district court had the authority to decide whether the arbitration agreements were valid, correctly decided they were not, and did not err in denying the motion to compel arbitration. View "Gibbs v. Haynes Investments, LLC" on Justia Law