Justia Arbitration & Mediation Opinion Summaries

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The Ninth Circuit affirmed the district court's order compelling arbitration in a putative class action brought by Massachusetts residents who have worked as Uber drivers, seeking a preliminary injunction prohibiting Uber from classifying drivers in Massachusetts as independent contractors, as well as an order directing Uber to classify its drivers as employees and comply with Massachusetts wage laws.The panel concluded that Uber drivers, as a nationwide class of workers, do not fall within the so-called "interstate commerce" exemption to mandatory arbitration under the Federal Arbitration Act (FAA). The panel explained that Uber drivers, even when crossing state lines or transporting passengers to airports, are merely conveying interstate passengers between their homes and their destination in the normal course of their independent local service. Therefore, interstate movement cannot be said to be a central part of the class members' job description. The panel found the analysis of the minority of district courts that have found to the contrary unpersuasive.The panel also concluded that plaintiffs' claims and requested injunctive relief are arbitrable by the terms of the arbitration agreement and plaintiffs' requested injunctive relief would have upended the status quo rather than maintained it. Therefore, the district court properly addressed the motion to compel arbitration first.Finally, the panel concluded that the injunctive relief requested, reclassification of drivers' status from "independent contractors" to "employees" is not a public injunctive relief that may be allowed to them to avoid arbitration. In this case, the relief sought by plaintiffs is overwhelmingly directed at plaintiffs and other rideshare drivers, and they would be the primary beneficiaries of access to overtime and minimum wage laws. View "Capriole v. Uber Technologies, Inc." on Justia Law

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Code of Civil Procedure section 1288 requires that a petition to vacate an arbitration award must be filed and served no later than 100 days after service of the award. Section 1288.2 imposes the same deadline on a response to a petition to confirm an arbitration award when the response requests that the award be vacated. These deadlines are jurisdictional.The Court of Appeal did not reach the substantive issue because it agreed with LFG that defendant did not timely request that the arbitration award be vacated. The court concluded that neither defendant's petition to vacate the arbitration award nor her request to vacate the award in her response to LFG's petition to confirm were filed within the 100-day limit. Therefore, the trial court lacked jurisdiction to consider defendant's request and the arbitration award must be confirmed. View "Law Finance Group, LLC v. Key" on Justia Law

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Meinders offers chiropractic services. United provides or administers insurance plans nationwide. In 2006, Meinders became a “participating provider” with United to expand his customer base; he signed a provider agreement with ACN. which provided administrative and network management services for chiropractors, and had a preexisting master services agreement with United. The agreement allowed ACN, “in its sole discretion,” to “assign its rights, duties or obligations” under the agreement.“ The agreement stated that if a dispute arose, either party “may” submit the issue “to arbitration” and any arbitration decision would be “final and binding.”Meinders submitted claims for United-insured patients directly to United; United paid those claims. Those claims were submitted on United forms and if an explanation of benefits was requested, United provided it. Meinders confirmed a patient’s eligibility either through United’s website or through a United phone number. ACN became a wholly-owned subsidiary of United.In 2013, United sent a fax to Meinders, who believed that United had violated the Telephone Consumer Protection Act and filed suit. After remands, the district court held that “United … assumed the material obligations of ACN …, a wholly-owned subsidiary of United, under the Provider Agreement, which authorizes United to enforce the arbitration clause.” The Third Circuit affirmed. View "Dr. Robert L. Meinders, D.C., Ltd. v. United HealthCare Services, Inc." on Justia Law

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Anonymous plaintiffs filed a putative class action against The Trump Corporation, Donald J. Trump, and various members of his family, asserting claims for racketeering in violation of 18 U.S.C. 1962(c), conspiracy to conduct the affairs of a racketeering enterprise in violation of 18 U.S.C. 1962(d), dissemination of untrue and misleading public statements in violation of California law, unfair competition in violation of California law, unfair and deceptive trade practices in violation of Maryland and Pennsylvania law, common-law fraud, and common-law negligent misrepresentation. Plaintiffs contend that defendants fraudulently induced them to enter into business relationships with non-party appellant, ACN, by making a series of deceptive and misleading statements. The district court denied both defendants and ACN's motions to compel arbitration.The Second Circuit affirmed, concluding that (1) defendants may not compel plaintiffs to arbitrate their dispute on equitable estoppel grounds; and (2) the district court may not compel arbitration as to ACN's discovery dispute because the court lacked an independent basis for subject-matter jurisdiction over the parties' dispute. The court considered defendants and ACN's remaining arguments on appeal and concluded that they are without merit. View "Doe v. The Trump Corporation" on Justia Law

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After completing MoneyGram's Transfer Send Form, Fisher, a 63-year-old veteran with poor eyesight, initiated Moneygram money transfers at California Walmart stores, one for $2,000 to a Georgia recipient, and another for $1,530 to a Baton Rouge recipient. The funds were delivered to the intended recipients. Fisher never turned over the Send Form to read the Terms and Conditions, which included an arbitration requirement. He would have been unable to read the six-point print without a magnifying glass. Fisher sued MoneyGram, claiming that the transfers were induced by a “scammer,” and that MoneyGram knew its system was used by scammers but failed to warn or protect customers; MoneyGram’s service was used frequently in fraudulent transactions because the money was immediately available at a Walmart store or other MoneyGram outlet. Other services (bank transfers) place a temporary hold on funds to discourage fraudulent transactions. Fisher alleged MoneyGram had been the subject of an FTC injunction, requiring it to maintain a program to protect its consumers.Fisher’s class action complaint cited the unfair competition law. The court of appeal affirmed the denial of MoneyGram’s petition to compel arbitration. The provision was unenforceable as procedurally and substantively unconscionable, and not severable. The small font, placement, and “take it or leave it nature” were “indications” of procedural unconscionability. The one-year limitations period, a requirement that any plaintiff pay arbitration costs and fees, and waiver of attorneys’ fees were substantively unconscionable “in the aggregate.” View "Fisher v. MoneyGram International, Inc." on Justia Law

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The primary issue in consolidated appeals was the scope of an automobile insurance policy’s arbitration provision. Two insureds with identical Allstate Insurance Company medical payments and uninsured/underinsured motorist (UIM) insurance coverage settled with their respective at-fault drivers for applicable liability insurance policy limits and then made medical payments and UIM benefits claims to Allstate. Allstate and the insureds were unable to resolve the UIM claims and went to arbitration as the policy required. The arbitration panels initially answered specific questions submitted about the insureds’ accident-related damages. At the insureds’ requests but over Allstate’s objections, the panels later calculated what the panels believed Allstate ultimately owed the insureds under their medical payments and UIM coverages and issued final awards. Allstate filed superior court suits to confirm the initial damages calculations, reject the final awards as outside the arbitration panels’ authority, and have the court determine the total amounts payable to the insureds under their policies. The judge assigned to both suits affirmed the final arbitration awards; Allstate appealed both decisions. The Alaska Supreme Court determined the arbitration panels had no authority to determine anything beyond the insureds’ damages arising from their accidents and because Allstate withheld its consent for the panels to determine anything else, the Court reversed the superior court’s decisions and judgments. The Supreme Court also reversed some aspects of the superior court’s separate analysis and rulings on legal issues that the panels improperly decided. Given (1) the arbitration panels’ damages calculations and (2) the Supreme Court's clarification of legal issues presented, the cases were remanded for the superior court to determine the amount, if any, Allstate had to pay each insured under their medical payments and UIM coverages. View "Allstate Insurance Company v. Harbour" on Justia Law

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Plaintiffs DDK Hotels, DDK Hospitality, and DDK Management filed suit against Defendants Williams-Sonoma and West Elm, asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and unjust enrichment. West Elm then brought an action in the Delaware Court of Chancery, seeking to dissolve the joint venture, which the Delaware court dismissed. Plaintiffs then filed a supplemental complaint in the district court to assert an additional claim for breach of the prevailing party provisions of Section 21(h) of the joint venture agreement. Defendants then moved to compel arbitration for that claim, which the district court denied.The Second Circuit affirmed the district court's order denying defendants' motion to compel arbitration, concluding that the joint venture agreement does not "clearly and unmistakably" delegate arbitrability to the arbitrator and that the district court therefore correctly ruled on the scope of the arbitration agreement. Finally, the court rejected DDK Hospitality's request for prevailing party fees and noted that DDK Hospitality may pursue its request for fees on remand. View "DDK Hotels, LLC v. Williams-Sonoma, Inc." on Justia Law

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Two former employees of Michael Morse and his firm, Michael J. Morse, PC, sued Morse for workplace sexual harassment, including sexual assault, intentional infliction of emotional distress; negligence, gross negligence, and wanton and willful misconduct; and civil conspiracy. In both cases, the firm moved to dismiss and compel arbitration on the basis that both women signed the firm’s Mandatory Dispute Resolution Procedure agreement (MDRPA) prior to accepting employment with the firm. The trial court granted defendants' motion in each case, concluding that the arbitration agreement was valid and enforceable and that the claims were related to the employees' employment and therefore subject to arbitration. A majority of the Court of Appeals concluded that plaintiffs’ claims of sexual assault were not subject to arbitration because sexual assault was not “related to” plaintiffs’ employment. Further, the Court of Appeals stated that the fact that the alleged assaults would not have occurred but for plaintiffs’ employment with the firm did not provide a sufficient nexus between the terms of the arbitration agreement and the alleged sexual assaults. "Defendants noted certain facts that supported connections between plaintiffs’ claims and their employment, including that the alleged assaults occurred at work or work-related functions. But those facts did not necessarily make plaintiffs’ claims relative to employment; rather, the facts had to be evaluated under a standard that distinguished claims relative to employment from claims not relative to employment. This analysis prevents the absurdity of an arbitration clause that bars the parties from litigating any matter, regardless of how unrelated to the substance of the agreement, and it ensures that the mere existence of a contract does not mean that every dispute between the parties is arbitrable. Neither the circuit courts nor the Court of Appeals considered this standard when evaluating defendants’ motions to compel arbitration." Rather than apply this newly adopted approach in the first instance, the Michigan Supreme Court vacated the judgments of the Court of Appeals and remanded the cases to the circuit courts so that those courts could analyze defendants’ motions to compel arbitration by determining which of plaintiffs’ claims could be maintained without reference to the contract or employment relationship. View "Lichon v. Morse" on Justia Law

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Postmates’ website enables customers to arrange for deliveries from local businesses. Beginning in March 2017, prospective couriers seeking to offer their delivery services were presented with Postmates’ Fleet Agreement when logging on for the first time. The Agreement directs a prospective courier to review a mutual arbitration provision that applies to “any and all claims between the [p]arties,” including claims related to a courier’s classification as an independent contractor, delivery fees received by a courier, and state and local wage and hour laws. It includes a “Representative Action Waiver.” There is an opt-out provision: “Arbitration is not a mandatory condition of [the courier’s] contractual relationship with Postmates. ” Plaintiffs acknowledged the Fleet Agreement. Postmates did not receive opt-out forms for any of them. In December 2017, Plaintiffs filed a putative class and representative action, alleging Labor Code violations. The trial court denied Postmates’s petition to compel arbitration of Private Attorney General Act claims for civil penalties, citing the California Supreme Court’s 2017 “Iskanian” holding that representative action waivers were unenforceable. The court of appeal affirmed, rejecting Postmates’ arguments that Iskanian was abrogated by subsequent U.S. Supreme Court decisions. Iskanian expressly established that the Federal Arbitration Act does not preempt state law on the enforceability of PAGA waivers. View "Winns v. Postmates Inc." on Justia Law

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The Court of Appeal exercised its discretion to construe Western Bagel's appeal as a petition for writ of mandate and granted the petition, directing the trial court to enter a new order compelling the parties to arbitrate their dispute via binding arbitration in accordance with the terms of their arbitration agreement.In this case, the trial court found that the Federal Arbitration Act (FAA) governs the parties' arbitration agreement, concluded that the inconsistency between the Spanish and English severability clauses creates an ambiguity regarding whether the parties consented to binding or nonbinding arbitration, resolved this ambiguity against Western Bagel pursuant to the constructive canon of contra proferentem, and ordered the parties to arbitrate their dispute on a nonbinding basis.Upon reaching the merits of Western Bagel's writ petition, the court concluded that the FAA preempted the trial court's use of contra proferentem. Assuming arguendo there is an ambiguity regarding whether the parties consented to binding or nonbinding arbitration, the court employed the FAA's default rule that any ambiguities about the scope of an arbitration agreement must be resolved in favor of arbitration as envisioned by the FAA, a fundamental attribute of which is a binding arbitral proceeding. View "Western Bagel Co., Inc. v. Superior Court" on Justia Law