Justia Arbitration & Mediation Opinion Summaries

The dispute involved two sets of co-owners of a Kentucky limited liability company operating a pharmacy. In 2019, the Dotsons acquired a 50 percent ownership interest from the Ingrams, with a promissory note and security agreement (the “Ingram debt”), making the Dotsons and the Andersons equal owners. In 2023, the Andersons and the LLC filed suit against the Dotsons, who counterclaimed. In early 2024, the parties participated in a mediation and reached a settlement agreement, which was recorded on video during a Zoom call. The mediator recited the terms, including payment arrangements and asset/debt allocations, and the parties affirmed the terms verbally. Subsequently, disputes arose regarding the nature of the Ingram debt (whether corporate or personal), leading both sides to refuse to fulfill their respective payment obligations.The Rowan Circuit Court, after a hearing, found the settlement agreement valid, enforceable, and unambiguous. The court determined the Ingram debt was personal to the Dotsons and not assumed by the Andersons, and held that the agreement did not violate Kentucky’s Statute of Frauds. The court did not address the applicability of Kentucky Rule of Civil Procedure 99.10. The Kentucky Court of Appeals affirmed and concluded that the requirements of CR 99.10 were satisfied.On discretionary review, the Supreme Court of Kentucky affirmed the Court of Appeals. It held that a video recording of an oral settlement agreement, where parties knowingly affirm the terms, constitutes a valid “electronic record” and “electronic signature” under the Uniform Electronic Transactions Act and satisfies the Statute of Frauds and CR 99.10. The court also found the settlement terms unambiguous and complete, and that the parties mutually assented to them. Issues of alleged breach of contract were deemed premature and not addressed. View "DOTSON V. CIA DRUG, LLC" on Justia Law

A man, Mark, died in a car crash while riding as a passenger in an Uber vehicle. His estate, represented by his wife Sheridan, brought claims against Uber and the driver, including wrongful death and survival actions. Both Mark and Sheridan had accepted Uber’s terms-of-use agreements, which contained arbitration clauses. Uber moved to compel arbitration, arguing that Mark’s agreement covered survival claims and Sheridan’s agreement covered wrongful death claims brought by the estate on behalf of statutory beneficiaries.The Circuit Court of Cook County compelled arbitration of the survival claims based on Mark’s agreement but denied Uber’s motion to compel arbitration of the wrongful death claims, reasoning that Sheridan’s agreement only covered disputes arising from her own use of Uber’s services, not Mark’s. Uber appealed. The Appellate Court of Illinois, First District, reversed, holding that the arbitration agreement between Sheridan and Uber included a delegation clause requiring an arbitrator to decide whether the wrongful death claims were subject to arbitration. The appellate court found the agreement was not unconscionable and remanded for further proceedings.The Supreme Court of the State of Illinois reviewed the case to determine whether Sheridan’s individual arbitration agreement obligated the estate to arbitrate the arbitrability of wrongful death claims, which arose from Mark’s use of Uber’s services. The court held that it did not. The court found no clear and unmistakable evidence that Sheridan, acting as statutory beneficiary or personal representative, agreed to delegate to an arbitrator the issue of arbitrability for wrongful death claims arising from her husband’s use. The court reversed the appellate court’s judgment and affirmed the circuit court’s denial of Uber’s motion to compel arbitration of the estate’s wrongful death claims, allowing those claims to proceed in court. View "Geller v. Uber Technologies, Inc." on Justia Law

An attorney who began working for a luxury goods company in 2015 alleged that, soon after she was hired, a male colleague subjected her to repeated sexual harassment and, on one occasion, sexual assault. She reported the conduct internally but claimed that company officials failed to respond appropriately and, instead, retaliated against her. Over the years, she experienced alleged ongoing retaliation, including negative performance reviews, exclusion from work opportunities, and other adverse actions. In 2019, she filed a lawsuit in New York State Supreme Court alleging sexual harassment and retaliation under state and city law. The state trial court denied the employer’s request to compel arbitration, but the Appellate Division, First Department reversed and ordered the case to arbitration based on an arbitration agreement the plaintiff had signed before starting her employment.Following her termination in December 2022, the plaintiff filed a new federal lawsuit in the United States District Court for the Southern District of New York against her former employer and a supervisor, asserting claims of retaliation in violation of federal, state, and local law. She also sought leave to amend her complaint to consolidate her federal claims with the earlier claims that were pending in arbitration, arguing that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) rendered the arbitration agreement unenforceable. The district court dismissed her federal retaliation claims under Rule 12(b)(6), finding she had not plausibly alleged protected activity linked to her termination, and denied her motion to amend, concluding the additional claims remained subject to the arbitration agreement.The United States Court of Appeals for the Second Circuit reviewed the case. The court held that the plaintiff’s initial complaint plausibly alleged retaliation: refusing to meet with her supervisor to discuss settling her discrimination claims pending in arbitration constituted protected activity, and the circumstances of her termination supported an inference of retaliation. However, the court affirmed the denial of leave to amend, explaining that the additional claims accrued before the EFAA’s effective date and thus remained subject to arbitration. The appellate court affirmed in part, vacated in part, and remanded for further proceedings. View "Newton v. LVMH Moet Hennessy Louis Vuitton Inc." on Justia Law

Two American entrepreneurs established three international corporations to invest in the casino and gaming industry in Laos. Two of these corporations became involved in disputes with the Government of the Lao People’s Democratic Republic (Lao PDR), resulting in multiple arbitration proceedings in Singapore. The tribunals issued monetary awards in favor of Lao PDR against the two companies. Lao PDR tried to collect the awards through various means, including contacting corporate officers, filing suits abroad, and pursuing enforcement actions in U.S. courts. After an unsuccessful attempt in Idaho, Lao PDR filed a petition in the United States District Court for the Northern Mariana Islands to enforce the arbitral awards, asserting that the entrepreneurs and their third corporation, Bridge Capital, were alter egos of the award-debtor corporations and should also be liable.The District Court for the Northern Mariana Islands granted a joint motion by Baldwin and Bridge Capital to dismiss the petition, concluding that it lacked jurisdiction under the Federal Arbitration Act (FAA) to enforce the awards against parties not named as debtors in the arbitral awards. The court reasoned that Lao PDR would need to bring a separate action to pursue enforcement against alleged alter egos. The court stayed a similar motion by Scott pending the present appeal.Upon review, the United States Court of Appeals for the Ninth Circuit held that the district court had subject matter jurisdiction under 9 U.S.C. § 203 because the awards arose from a commercial, international relationship and were foreign arbitral awards under the New York Convention. The appellate court determined that the district court was required to consider the merits of Lao PDR’s alter ego theory in a single enforcement proceeding, rather than requiring a separate action. The Ninth Circuit reversed the district court’s dismissal and remanded for further proceedings. View "THE GOVERNMENT OF THE LAO PEOPLE'S DEMOCRATIC REPUBLIC V. BALDWIN" on Justia Law

Three individuals deposited approximately $85,000 into a joint account with a bank. When one of the depositors became subject to a civil judgment in an unrelated matter, the judgment creditor garnished the account. The bank paid about $38,000 from the joint account to the creditor without seeking the depositors’ permission. The depositors sued the bank for breach of contract and fiduciary duty in the Allegheny County Court of Common Pleas, which compelled arbitration under the account agreement. The arbitrator ruled in favor of the bank and awarded attorney fees. After the award, the bank sought confirmation of the arbitration award. The depositors’ attorney missed the 30-day deadline to seek judicial review due to a family emergency, specifically the unexpected death of his stepson.The depositors’ counsel filed a motion for nunc pro tunc relief in the Court of Common Pleas, requesting an extension to file for review. The court granted an additional 20 days. Counsel filed the belated appeal, and the court vacated the attorney fee award but otherwise affirmed the arbitration award. The bank appealed. The Pennsylvania Superior Court, after remanding for an unrelated issue, considered cross-appeals. The depositors argued due process violations during arbitration, while the bank contended the court lacked jurisdiction to modify the award after the statutory deadline and erred in granting nunc pro tunc relief.The Supreme Court of Pennsylvania reviewed whether the “non-negligent happenstance” exception to statutory filing deadlines—established in Bass v. Commonwealth—remained viable and whether it applied to the attorney’s family emergency. The Court held that the statutory 30-day period in 42 Pa.C.S. § 7342(b) is mandatory and not subject to an equitable, non-negligent-happenstance exception absent express statutory language. The Court affirmed the Superior Court’s order, disapproving Bass as a basis for extending arbitration review deadlines without legislative authorization. View "Carr v. First Commonwealth Bank" on Justia Law

Four law firms jointly represented a client in a federal court case against Iraq, resulting in a substantial judgment in favor of their client. Prior to seeking attorneys’ fees, the firms executed an Agreement Concerning Attorneys’ Fees (ACAF), which provided for a forty-six percent contingency fee and included an arbitration clause. Disputes arose regarding the allocation of the fee, particularly after some firms allegedly negotiated a side agreement to increase their shares. One firm, believing its share was subject to future negotiation, did not seek fees in arbitration and was awarded none by the arbitrator.After the arbitration, Quinn, Racusin & Gazzola Chartered (QRG) moved in the Superior Court of the District of Columbia to vacate the arbitrator’s final award, arguing the ACAF was invalid due to fraudulent inducement and duress, and that the arbitrator had exceeded the scope of authority under the agreement. Appellees disputed these claims and sought confirmation of the award. The Superior Court determined that QRG had not established fraud or duress and found the arbitration clause broad enough to encompass both the fee allocation dispute and related tort claims. The court denied QRG’s motion to vacate and confirmed the arbitration award.On appeal, the District of Columbia Court of Appeals reviewed de novo the legal conclusions regarding fraud, duress, and the scope of the arbitration clause. The court held that QRG failed to demonstrate fraudulent inducement or duress in execution of the arbitration clause. It further held that the arbitrator acted within the scope of the ACAF’s arbitration clause, which covered the fee allocation dispute and related tort claims. The Court affirmed the Superior Court’s judgment confirming the arbitrator’s final award. View "Quinn, Racusin & Gazzola Chartered v. Pavich Law Group, P.C." on Justia Law

Transportation Consultants, Inc. owned property in Louisiana insured under a surplus lines commercial property policy issued by a group of domestic and foreign insurers. The policy contained an arbitration clause and a provision stating it should be construed as separate contracts between the insured and each underwriter. Following Hurricane Ida, a dispute arose regarding coverage, prompting Transportation Consultants to file suit against all insurers in Louisiana state court.The insurers removed the case to the United States District Court for the Eastern District of Louisiana, relying on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards to assert federal jurisdiction. The district court initially granted the insurers' motion to compel arbitration and stayed the litigation. After the Louisiana Supreme Court decided Police Jury of Calcasieu Parish v. Indian Harbor Insurance Co., the plaintiff moved for reconsideration. The district court then reversed its earlier decision as to the domestic insurers, finding that Louisiana law prohibits arbitration clauses in insurance contracts between Louisiana parties, and lifted the stay as to the domestic insurers. The order compelling arbitration and staying litigation against the foreign insurers remained.On appeal, the United States Court of Appeals for the Fifth Circuit held that, following its precedent in Town of Vinton v. Indian Harbor Insurance Co. and Crescent City Surgical Operating Co. v. Interstate Fire & Casualty Co., the arbitration clauses in contracts with the domestic insurers are unenforceable under Louisiana law and equitable estoppel cannot be used to compel arbitration. The court affirmed the district court’s denial of arbitration as to the domestic insurers but vacated the lifting of the stay. The case was remanded for the district court to reconsider, in light of updated precedent and additional briefing, whether litigation against the domestic insurers should be stayed pending completion of arbitration with the foreign insurers. View "Transportation Conslt v. Certain Undwr" on Justia Law

Three individuals employed as customer service agents for a ground services provider and an airline at Denver International Airport brought a class action lawsuit asserting violations of Colorado’s wage laws. Their complaint alleged that the employers improperly deducted time for lunch breaks not taken, forced work during rest breaks, failed to pay overtime, and withheld commissions. Each employee’s contract contained a mandatory arbitration clause, which the employers sought to enforce under the Federal Arbitration Act (FAA) and Colorado law. The employees responded that, as transportation workers, their contracts were exempt from the FAA, and further argued that Colorado law voided such arbitration agreements for wage claims.The United States District Court for the District of Colorado denied the motions to compel arbitration. After an evidentiary hearing, the district court focused narrowly on the specific duties of the three employees, rather than considering the work typically performed by the broader class of customer service agents. It found that the employees “actually and routinely” handled passenger luggage and played a “gatekeeping” role with respect to cargo. On this basis, the court concluded they were transportation workers exempt from the FAA. The district court did not address the request to compel arbitration under Colorado law.On appeal, the United States Court of Appeals for the Tenth Circuit held that the district court erred by defining the relevant class of workers too narrowly—focusing only on the specific employees, rather than the typical duties of the class as a whole, as required by Supreme Court precedent (including Southwest Airlines Co. v. Saxon). The Tenth Circuit reversed the district court’s order denying the motions to compel arbitration and remanded for further proceedings to properly determine the attributes of the class of workers under the correct legal standard. View "Joyner v. Frontier Airlines" on Justia Law

Cheryl Walker used her Uber account to order a guest ride for her husband, Carroll Walker. Carroll had never downloaded the Uber app or created an account, and he consistently stated that he does not read or reply to text messages. On the relevant occasion, Cheryl ordered a ride for Carroll, and Uber sent Carroll a text message with ride details and a hyperlink to its Terms of Use, which included an arbitration provision. Carroll did not see the message. During the ride, an accident occurred, allegedly due to the driver’s distraction by Uber’s app, resulting in severe injuries to Carroll.In the United States District Court for the District of Columbia, Cheryl Walker sued Uber on Carroll’s behalf, asserting negligence and products liability claims. Uber moved to compel arbitration, arguing Carroll was bound to arbitrate either because he had notice of the Terms via Uber’s text message or as a third-party beneficiary of Cheryl’s contract with Uber. The district court denied Uber’s motion, finding Uber failed to establish that Carroll was on inquiry notice of the Terms and concluding that Carroll was not bound as a third-party beneficiary or estopped from refusing arbitration.The United States Court of Appeals for the District of Columbia Circuit reviewed the district court’s denial of Uber’s motion to compel arbitration de novo, applying D.C. contract law. The Court held that Uber had not shown Carroll agreed to be bound by its Terms of Use, as Carroll lacked actual or inquiry notice of the Terms. The Court further determined that Carroll was not bound by Cheryl’s contract as a third-party beneficiary or by equitable estoppel, since Carroll was not seeking to enforce Cheryl’s contract and his claims were independent of it. The judgment of the district court was affirmed. View "Walker v. Uber Technologies, Inc." on Justia Law

Metroplex Communications, Inc., which operates several local news outlets in Illinois, earns revenue by selling advertising space. Meta Platforms, Inc., the owner of Facebook, also sells ads and competes for the same local advertisers. Metroplex, representing a putative class of small businesses that compete with Meta for advertisers, alleged that Meta engaged in unlawful, anticompetitive practices by misrepresenting the reach and effectiveness of its Facebook advertisements, thereby drawing advertisers away from other platforms. The suit is based on claims under the Lanham Act and the Illinois Uniform Deceptive Trade Practices Act, seeking disgorgement of profits Meta allegedly earned through misleading conduct. Although Metroplex had purchased Facebook ads in the past, its lawsuit was brought in its capacity as a competitor, not as an ad purchaser.Meta moved to compel arbitration in the United States District Court for the Southern District of Illinois, arguing that Metroplex’s prior ad purchases subjected it to an arbitration clause in Meta’s Commercial Terms. The district court denied the motion, reasoning that Metroplex’s claims arose from its status as a competitor and not from its own ad purchases or contractual relationship as an ad buyer. The court found the claims to be outside the scope of the arbitration clause.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the scope of the arbitration clause de novo, applying Illinois law. The court held that Metroplex’s unfair competition claims were not sufficiently connected to Metroplex’s ad purchases or Meta’s Commercial Terms to fall within the arbitration agreement. The claims centered on alleged anticompetitive conduct and public misrepresentations, unrelated to Metroplex’s own limited use of Meta’s ad services. The court affirmed the district court’s denial of Meta’s motion to compel arbitration, holding that the arbitration clause did not apply to Metroplex’s claims as a competitor. View "Metroplex Communications, Inc. v Meta Platforms, Inc." on Justia Law