Justia Arbitration & Mediation Opinion Summaries
Coughenour v. Del Taco
Plaintiff-respondent Sarah Coughenour worked for defendant-appellant Del Taco, LLC, starting when she was 16 years old. When she was first employed by Del Taco, she signed a “Mutual Agreement to Arbitrate” (Agreement). After Coughenour reached the age of 18, she continued working for Del Taco for four months. Coughenour quit and filed a lawsuit against Del Taco for sexual harassment committed by one of their employees, wage and hour claims brought pursuant to the Labor Code, and other claims under the Fair Housing and Employment Housing Act. Del Taco moved to compel arbitration. The trial court denied the Motion, finding that Coughenour’s filing of the lawsuit was a disaffirmance of the Agreement within the meaning of Family Code section 6710, which allowed a person upon reaching majority age to disaffirm a contract entered into while a minor. Del Taco appealed the denial of its motion, arguing that by working for Del Taco for four months after she reached the age of majority, Coughenour ratified the Agreement, which estopped her power to disaffirm the Agreement. In the alternative, Del Taco argued that Coughenour did not disaffirm the Agreement within a “reasonable time” after reaching the age of 18 as required by Family Code section 6710. The Court of Appeal affirmed denial of Del Taco's motion: [t]he filing of the lawsuit was notice that [Coughenour] disaffirmed the Agreement." The trial court did not abuse its discretion by concluding that Coughenour disaffirmed the Agreement within a reasonable time. View "Coughenour v. Del Taco" on Justia Law
State ex rel. Troy Group v. Honorable David J. Sims
The Supreme Court granted a writ of prohibition prohibiting the circuit court from enforcing its order denying Petitioners' motion to dismiss or, in the alternative, to compel arbitration, holding that the circuit court erred in finding that the arbitration agreement put forth by Petitioners was not authentic.After her employment ended, Respondent filed a lawsuit alleging wrongful and discriminatory discharge. Petitioners filed a motion to dismiss/compel arbitration, asserting that this matter was subject to a valid and binding arbitration agreement. The circuit court denied the motion, concluding that significant questions existed with regard to the authenticity of the arbitration agreement. Petitioners then filed the instant petition for a writ of prohibition seeking to prevent enforcement of the circuit court's order. The Supreme Court granted the requested writ, holding that the circuit court committed clear legal error in denying Petitioners' motion to dismiss or, in the alternative, to compel arbitration by finding the arbitration agreement was not authentic. View "State ex rel. Troy Group v. Honorable David J. Sims" on Justia Law
Home Inspections of VA & WV, LLC v. Hardin
The Supreme Court reversed the order of the circuit court denying Petitioner's motion to dismiss Respondent's civil lawsuit or, in the alternative, to compel arbitration, holding that the arbitration provision was clear and unambiguous and was therefore an enforceable agreement to arbitrate.Respondent purchased real estate improved with several structures. After Petitioner inspected the structures Respondent signed the contract. After Respondent allegedly discovered issues with his property he filed a complaint against Petitioner alleging breach of contract, negligence and fraud. Petitioner filed a motion to dismiss, or alternatively, a motion to stay further proceedings and compel arbitration on the grounds that the parties' contract contained an enforceable arbitration provision. The circuit court concluded that the arbitration provision was ambiguous. The Supreme Court reversed and remanded for further proceedings, holding that the arbitration provision was clear and unambiguous. View "Home Inspections of VA & WV, LLC v. Hardin" on Justia Law
Gulf LNG Energy v. ENI USA Gas Marketing
Gulf LNG Energy, LLC owned and operated a liquefied natural gas (“LNG”) terminal in Mississippi (the “Pascagoula Facility”). Gulf LNG Pipeline, LLC (collectively with Gulf LNG Energy, LLC, “Gulf”), owned and operated a five-mile long pipeline that distributed LNG from the Pascagoula Facility to downstream inland pipelines. Eni USA Gas Marketing LLC (“Eni”), marketed natural gas products and offered related services to customers in the U.S. In 2007, Gulf and Eni entered into a Terminal Use Agreement (the “TUA”), whereby Gulf would construct the Pascagoula Facility, and Eni would use the Facility to receive, store, regasify, and deliver imported LNG to downstream businesses. Under the TUA, Eni agreed to pay Gulf fees for using the Facility, including monthly Reservation Fees and Operating Fees. In 2016, Eni filed for arbitration, alleging the U.S. natural gas market had undergone a “radical change” due to “unforeseen, vast new production and supply of shale gas in the United States [that] made import of LNG into the United States economically irrational and unsustainable.” Eni alleged the essential purpose of the TUA had been frustrated and thus terminated because of “fundamental and unforeseeable change in the United States natural gas/LNG market,” and sought a declaration that Eni could terminate the TUA at any time because Gulf breached warranties and covenants. After the first arbitration, the panel order Eni to pay Gulf "just compensation ...for the value their partial performance of the TUA conferred upon Eni." Gulf subsequently sued Eni to collect the arbitration award; judgment was entered in Gulf's favor. Eni initiated a second arbitration, again asserting breaches of the TUA. Gulf moved to dismiss the second arbitration. The Court of Chancery ruled the issues raised in the second arbitration were already decided in the first (and subsequent court case). The Delaware Supreme Court, after its review of these proceedings, determined: (1) the Court of Chancery had jurisidction to enjoin a collateral attack on the first arbitration award; and (2) the Court of Chancery should have enjoined all claims in the second arbitration between the parties, because the admitted goal of the second arbitration was to "raise irregularities and revisit the financial award in the first arbitration." The Court, therefore, affirmed part of the Court of Chancery's judgment affirming dismissal of the second arbitration, and reversed any part of the lower court's judgment allowing certain issues in the second arbitration to be considered. View "Gulf LNG Energy v. ENI USA Gas Marketing" on Justia Law
Tracy v. Florida Atlantic University Board of Trustees
Plaintiff filed suit against the University and others alleging that the parties' collective bargaining agreements' (CBA) "Conflict of Interest/Outside Activities" policy was unconstitutionally vague, that his termination breached the CBA, and that the University had used his insubordination as a pretext for First Amendment retaliation. Plaintiff's action stemmed from the University's termination of plaintiff after he attracted national news media attention for publicly questioning whether the Sandy Hook Elementary School shooting had in fact occurred.The Eleventh Circuit affirmed the district court's summary judgment rulings and its denial of plaintiff's post-trial motions for judgment as a matter of law and for a new trial. The court held that the district court correctly concluded that plaintiff's failure to exhaust the CBA's mandatory grievance-and-arbitration procedures barred his claim that the University breached the CBA by firing him. Although the court affirmed the district court on the constitutional claims, the court applied a different analysis. Without deciding the issue, the court assumed for the purposes of this appeal that plaintiff could constitutionally challenge the Policy on vagueness grounds. The court held that plaintiff's vagueness challenge failed on the merits, and his facial and as-applied First Amendment challenges to the Policy's reporting requirement failed. Furthermore, plaintiff's challenge to the Policy's conflict-of-interest provision failed on the merits. Because plaintiff's constitutional challenges failed, his declaratory judgment claim based on the same grounds also failed. Finally, the court concluded that the district court did not abuse its discretion in excluding the Faculty Senate meeting transcript. View "Tracy v. Florida Atlantic University Board of Trustees" on Justia Law
Young v. Grand Canyon University, Inc.
The Eleventh Circuit held that section 685.300(i)(1) defines the term "borrower defense claim" to include—rather than exclude—breach-of-contract and misrepresentation claims—and, accordingly, that section 685.300(f) prohibits Grand Canyon from enforcing its pre-dispute arbitration agreement with respect to plaintiff's claims here. In this case, Grand Canyon urges a reading of section 685.300 that would not only (1) exclude bread-and-butter breach-of-contract and misrepresentation claims—the claims that complaining borrowers are most likely to bring—but also (2) include non-contract and non-misrepresentation claims only if reduced to judgment, thereby rendering that aspect of the borrower-defense-claim protection meaningless. Therefore, the court reversed the district court's decision to the contrary. View "Young v. Grand Canyon University, Inc." on Justia Law
Brown v. TGS Management Co., LLC
Plaintiff Richard Brown appealed a judgment confirming an arbitration award in favor of defendant TGS Management Company (TGS) in an employment contract dispute. The specific statutory right at issue in the underlying dispute was Brown’s right to work in his chosen field free of contractual restraints on competition. The Legislature expressed that right in the simple but sweeping language of Business and Professions Code section 16600: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” Brown worked for TGS for over 10 years. During that time, a substantial portion of Brown’s compensation was a yearly bonus which rewarded Brown’s performance over the previous year with a sizable cash award to be paid over the next two years. In February 2016, TGS terminated Brown’s employment without cause effective March 2016. Over the next month, Brown and TGS attempted to negotiate a confidential separation agreement. TGS prepared a settlement offer in the form of a draft separation and general release agreement (the Draft Separation Agreement), but Brown rejected the offer. TGS terminated Brown as planned, making the termination “without cause” so Brown could keep two bonuses he had earned but not yet received (the deferred bonuses), given the two-year bonus structure in place. In October 2016, Brown filed a complaint against TGS stating claims for declaratory relief, injunctive relief, and reformation of the arbitrator-selection process in the Employment Agreement. The declaratory relief claim sought a declaration Brown could compete with TGS without risking a damages claim for breaching the Employment Agreement or jeopardizing his two deferred bonuses. Brown also sought an injunction against enforcement of the covenant not to compete. Ten days after filing the complaint, Brown filed a petition to compel arbitration. TGS consented, and answered, stating it would not seek to enforce the no-compete clause in Brown's contract, but that he forfeited the two bonuses at issue when he filed a copy of the Draft Separation Agreement, which disclosed the identity of TGS' clients and its bonus formula for computing employee bonuses. The arbitrator granted TGS' motion for summary judgment. On appeal, Brown contended the Court of Appeal had to vacate the judgment because the arbitration award exceeded the arbitrator's powers, “and the award cannot be corrected without affecting the merits of the decision[.]” The Court concluded the arbitrator exceeded his power in issuing an award enforcing provisions of an employment agreement which illegally restricted Brown’s right to work. Consequently, judgment was reversed and the matter remanded for further proceedings. View "Brown v. TGS Management Co., LLC" on Justia Law
Wisconsin Department of Workforce Development v. Taylor
The Randolph-Sheppard Act, 20 U.S.C. 107(a), provides economic opportunities by granting blind persons priority to operate vending facilities at certain government properties. When a blind vendor, Belsha, was awarded certain vending operations in Racine County, Wisconsin, a different blind vendor, Taylor, became unhappy and challenged the award. The Act is administered by state licensing agencies; Taylor’s challenge traveled first through Wisconsin’s regulatory process. Although Taylor achieved some success through the Wisconsin Division of Vocational Rehabilitation, she commenced federal administrative proceedings with the Secretary of Education. An arbitration panel awarded Taylor money damages and a permanent vending machine services contract for a site in Racine.The district court vacated the arbitration decision, ruling that there were no material deficiencies in the choice of Belsha for the Racine site, that the arbitration panel’s key factual findings were not supported by substantial evidence, and the arbitration panel’s ultimate conclusion was arbitrary and capricious. The Seventh Circuit affirmed. The arbitration panel mistakenly substituted the APA standard of review for the burden of proof of a disappointed vendor under the Act. View "Wisconsin Department of Workforce Development v. Taylor" on Justia Law
Matlin v. Spin Master Corp.
In 1997, Plaintiffs co-founded Gray Matter Holdings. A 1999 Withdrawal Agreement with Gray Matter entitled Plaintiffs to royalties on the sales of “Key Products.” In 2003, Gray Matter sold some assets to Swimways. After that sale, Plaintiffs took Gray Matter to arbitration four times over their royalty rights. The third arbitration determined that Gray Matter did not transfer its royalty obligations under the Withdrawal Agreement to Swimways but only transferred its intellectual property rights; Gray Matter, not Swimways, remained responsible for any royalty compensation owed to Plaintiffs. The fourth arbitration found no evidence to support Plaintiffs’ claim that Swimways tendered fraudulent filings to the Patent and Trademark Office regarding the intellectual property rights in the Key Products and that all intellectual property rights in the Key Products at issue had been transferred to Swimways.Plaintiffs filed suit, alleging that they were entitled to royalties for the Key Products and that Swimways tendered the alleged fraudulent filings. The Seventh Circuit affirmed the dismissal of the complaint and the imposition of $271,926.92 in sanctions. The claims were barred by principles of res judicata and the arbitrations were “binding and final” under the Withdrawal Agreement. An accounting showed that attorneys and staff spent 273.1 hours, charging an average rate of about $1,000 per hour, preparing the motions to dismiss and for sanctions. View "Matlin v. Spin Master Corp." on Justia Law
Swain v. LaserAway Medical Group, Inc.
The Court of Appeal affirmed the trial court's denial of LaserAway's petition to compel arbitration of an action brought by plaintiff, alleging that she suffered skin injuries as a result of laser hair removal treatment she received from LaserAway.The court held that plaintiff met her burden of showing that the arbitration agreement between her and LaserAway was unconscionable. In this case, the arbitration was procedurally unconscionable because the agreement was adhesive, warranting further review of the agreement's substantive terms. The court also held that the agreement had a high degree of substantive unconscionability, rendering it unenforceable. Furthermore, LaserAway failed to show the arbitration agreement was not unconscionable under Code of Civil Procedure section 1295. View "Swain v. LaserAway Medical Group, Inc." on Justia Law