by
At issue in this appeal was whether it was a judge or an arbitrator who must decide if the arbitration agreement between Spirit Airlines and members of its $9 Fare Club allows for arbitration of claims brought by a class of claimants. The Eleventh Circuit held that the agreement's choice of American Arbitration Association rules, standing alone, was clear and unmistakable evidence that Spirit intended that the arbitrator decide this question. Therefore, the district court was not permitted to rely on testimony from Spirit's vice president to explain the agreement's meaning, and was correct to reject the offer of that testimony. The court affirmed the judgment of the district court. View "Spirit Airlines, Inc. v. Maizes" on Justia Law

by
Gaffers is a former employee of Kelly, which provides outsourcing and consulting services to firms around the world, including “virtual” call center support, where employees like Gaffers work from home. Gaffers alleged that Kelly underpaid virtual employees, based on time spent logging in to Kelly’s network, logging out, and fixing technical problems. Gaffers sued on behalf of himself and his co-workers (over 1,600 have joined) seeking back pay and liquidated damages under the Fair Labor Standards Act (FLSA), 29 U.S.C. 216(b). About half of the employees that Gaffers sought to represent signed an arbitration agreement with Kelly (Gaffers did not sign one) stating that individual arbitration is the “only forum” for employment claims, including unpaid-wage claims. Kelly moved to compel individual arbitration under the Federal Arbitration Act, 9 U.S.C. 4. Gaffers contended that the National Labor Relations Act and the Fair Labor Standards Act rendered the arbitration agreements unenforceable. The district court agreed with Gaffers. The Sixth Circuit reversed. In 2018, the Supreme Court held, in Epic Systems, that the National Labor Relations Act does not invalidate individual arbitration agreements. The court rejected arguments that FLSA displaced the Arbitration Act by providing a right to “concerted activities” or “collective action” or rendered the employees’ arbitration agreements illegal and unenforceable. View "Gaffers v. Kelly Services, Inc." on Justia Law

by
The Eighth Circuit affirmed the district court's judgment confirming an arbitrator's award of attorney's fees and expenses to Beumer. The court held that the arbitrator acted within the scope of his authority and did not violate the arbitration agreement's provision when he determined that attorneys' fees were "costs" and not "loss" under Missouri law. Therefore, these costs were not subject to the limitation of liability. The court held that ProEnergy failed to demonstrate grounds to vacate the arbitration award under 9 U.S.C. 10, and denied Beumer's motion for sanctions. View "Beumer Corp. v. ProEnergy Services, LLC" on Justia Law

by
Acosta challenged the district court's entry of a default judgment against them after they failed to pay their required arbitration fees in a dispute with a former employee who sought unpaid wages under the Fair Labor Standards Act (FLSA). The Eleventh Circuit vacated and remanded, holding that it found no basis in the Federal Arbitration Act, caselaw, or anywhere else to support a court's decision to enter a default judgment solely because a party defaulted in the underlying arbitration. Because the court concluded that the district court erred in entering a default judgment against Acosta based solely on Acosta's default in the underlying arbitration, the court did not reach the remaining arguments. View "Hernandez Hernandez v. Acosta Tractors Inc." on Justia Law

by
Reading, a Pennsylvania not-for-profit health system, issued auction rate securities (ARSs) to finance capital projects. J.P. Morgan was the underwriter and broker-dealer. Reading claims that J.P. Morgan and others artificially propped up the ARS market through undisclosed support bidding; when they stopped in 2008, the market collapsed. Reading filed state law claims and demanded arbitration with the Financial Industry Regulatory Authority (FINRA). The 2005 and 2007 broker-dealer agreements state “all actions and proceedings arising out of” the agreements or ARS transactions must be filed in the Southern District of New York. Reading filed a claim under FINRA Rule 12200, which requires a FINRA member (J.P. Morgan) to arbitrate any dispute at the customer’s request. J.P. Morgan refused, arguing that the forum-selection clauses in the 2005 and 2007 broker-dealer agreements constituted a waiver of Reading’s right to arbitrate under Rule 12200. The Third Circuit affirmed the Eastern District of Pennsylvania, which resolved the transfer dispute before the arbitrability dispute, declined to transfer the action, and required J.P. Morgan to submit to arbitration. Reading’s right to arbitrate is not contractual but arises out of a binding, regulatory rule, adopted by FINRA and approved by the SEC. Condoning an implicit waiver of Reading’s regulatory right to arbitrate would erode investors’ ability to use a cost-effective means of resolving allegations of misconduct and undermine FINRA’s ability to oversee and remedy such misconduct. View "Reading Health System v. Bear Stearns & Co., Inc." on Justia Law

by
Plaintiffs brought a class action against Bluestem, alleging that the company engaged in unscrupulous business practices in violation of federal and state laws. The Eighth Circuit agreed with Bluestem that all of plaintiffs' claims fell within the scope of the arbitration clause. The court held that the agreements contained broad arbitration clauses and plaintiffs' state-law usury, state and federal financial disclosure and state-law unjust enrichment claims all fell within the scope of the arbitration agreements. Accordingly, the court remanded with directions to order arbitration on those claims. View "Parm v. Bluestem Brands, Inc." on Justia Law

by
This appeal stemmed from the parties' dispute over Lone Star's proposed adjustments to a Revenue Calculation that provided payment to Sunbelt. The arbitrator agreed with Lone Star's upward judgment to the revenue attributable to its former customers, but reformed the contract after concluding that the parties had made a mutual mistake when their agreement listed the revenue target for the former Lone Star clients. The court affirmed and remanded for reconsideration of the mutual mistake claim. The court held that, because the parties did not agree in either the asset purchase agreement or the engagement letter to have the arbitrator decide reformation, the court must decide the issue. View "Hebbronville Lone Star Rentals, LLC v. Sunbelt Rentals Industrial Services, LLC" on Justia Law

by
The Court of Appeal reversed the trial court's order denying a petition to vacate an arbitration award and granting a petition to confirm it. In this case, the arbitrator did not comply with several applicable disclosure requirements, which gave rise to multiple grounds for disqualification. The court held that the arbitrator was actually aware of at least one of the grounds for disqualification, and thus the resulting arbitration award was subject to vacatur. The court held that, by not disclosing the four pending arbitration with counsel for Chase, the arbitrator violated the continuing disclosure duties under Ethics standard 7(d). View "Honeycutt v. JPMorgan Chase Bank, N.A." on Justia Law

by
Andromeda and Internaves entered into a shipping contract that unambiguously required the parties to submit their dispute to arbitration. At issue on appeal was where the parties agreed to arbitrate. The district court was unable to determine the site of arbitration and resorted to the statutory default forum, compelling arbitration in its own district. The court reversed and remanded with instructions to compel arbitration in London under English law. The court held that the parties' intention to arbitrate in London was discernible from the very terms they wrote into the contract and thus the parties provided for the forum, which the district court was obliged to recognize and uphold. View "Internaves de Mexico S.A. de C.V. v. Andromeda Steamship Corp." on Justia Law

by
At issue was whether a court may vacate an arbitrator’s decision for manifest disregard of applicable law even though such a ground is not listed in Md. Code Cts. & Jud. Proc. 3-224(b). Petitioners sought to vacate the arbitration award in this case, arguing that the arbitrator manifestly disregarded well-established Maryland law. The circuit court dismissed the petition but denied Respondents’ request for attorney’s fees. The court of special appeals affirmed. The Court of Appeals affirmed, holding that the arbitrator’s award did not demonstrate manifest disregard of applicable law and that the circuit court did not abuse its discretion in refusing to award attorney’s fees. Specifically, the Court held (1) the General Assembly did not preempt the common-law ground of manifest disregard of the law when it enacted the Maryland Uniform Arbitration Act; (2) because the arbitrator did not make a palpable mistake of law or fact appearing on the face of the award, the lower courts correctly concluded that the arbitrator’s award did not demonstrate a manifest disregard; and (3) the circuit court did not err in declining to award attorney’s fees to Respondent. View "WSC/2005 LLC v. Trio Ventures Associates" on Justia Law