Appellants, investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme, alleged that Appellee, a clearing broker for Stanford Group Company, failed to disclose adverse financial information. A FINRA panel rejected appellants' claims but awarded them $10,000 in compensation for certain arbitration-related expenses. In this interlocutory appeal, appellants challenge the district court's denial of their motion to dismiss, for lack of subject matter jurisdiction, appellee's motion to confirm an arbitration award. At issue was whether the amount in controversy for establishing diversity jurisdiction over a petition to confirm an arbitration award is the amount awarded by the arbitration panel or the amount previously sought in the arbitration proceeding. The court affirmed the judgment and adopted the better reasoned approach to the amount in controversy under these circumstances. The court held that monetary amount sought in the underlying arbitration is the amount in controversy for purposes of diversity jurisdiction. View "Pershing, LLC v. Kiebach" on Justia Law

Appellants, investors who suffered financial losses as a result of R. Allen Stanford’s Ponzi scheme, alleged that Appellee, a clearing broker for Stanford Group Company, failed to disclose adverse financial information. A FINRA panel rejected appellants' claims but awarded them $10,000 in compensation for certain arbitration-related expenses. In this interlocutory appeal, appellants challenge the district court's denial of their motion to dismiss, for lack of subject matter jurisdiction, appellee's motion to confirm an arbitration award. At issue was whether the amount in controversy for establishing diversity jurisdiction over a petition to confirm an arbitration award is the amount awarded by the arbitration panel or the amount previously sought in the arbitration proceeding. The court affirmed the judgment and adopted the better reasoned approach to the amount in controversy under these circumstances. The court held that monetary amount sought in the underlying arbitration is the amount in controversy for purposes of diversity jurisdiction. View "Pershing, LLC v. Kiebach" on Justia Law

Hamilton Park, a long-term care facility, belonged to a multi-employer bargaining group, Tuchman. Tuchman and the employees' union agreed to a CBA beginning in 2008 and extending through February 28, 2013, giving the union the option to reopen negotiations in November 2011 to bargain for new terms for the CBA’s last year and to submit any unresolved items to binding interest arbitration, and allowing the arbitrator to “determine his jurisdiction” and grant “all appropriate remedies.” In 2011, the union invoked its right to reopen negotiations. The parties agreed to arbitrate unresolved issues, including the cost to maintain the existing health benefits. The arbitrator, Scheinman, suggested a multi-year award to spread increased contributions over a longer period. Scheinman claims that “[b]oth sides [orally] agreed my jurisdiction permitted a multi-year Award, at my discretion.” In 2012, Scheinman issued an award that extended through June 2016, dealing with wages and health benefits contributions, and allowing the union to reopen negotiations for the contract’s last year. Scheinman did not address why he included a second generation interest arbitration provision, nor did he claim that the parties consented. Hamilton Park petitioned to vacate the award, arguing that Scheinman exceeded his authority. The Third Circuit reversed in part. Hamilton Park agreed to expand Scheinman’s jurisdiction to a multi-year award, but did not agree to inclusion of a second generation interest arbitration provision. View "Hamilton Park Health Care Ctr., Ltd.v. 1199 SEIU United Healthcare Workers E." on Justia Law

Hamilton Park, a long-term care facility, belonged to a multi-employer bargaining group, Tuchman. Tuchman and the employees' union agreed to a CBA beginning in 2008 and extending through February 28, 2013, giving the union the option to reopen negotiations in November 2011 to bargain for new terms for the CBA’s last year and to submit any unresolved items to binding interest arbitration, and allowing the arbitrator to “determine his jurisdiction” and grant “all appropriate remedies.” In 2011, the union invoked its right to reopen negotiations. The parties agreed to arbitrate unresolved issues, including the cost to maintain the existing health benefits. The arbitrator, Scheinman, suggested a multi-year award to spread increased contributions over a longer period. Scheinman claims that “[b]oth sides [orally] agreed my jurisdiction permitted a multi-year Award, at my discretion.” In 2012, Scheinman issued an award that extended through June 2016, dealing with wages and health benefits contributions, and allowing the union to reopen negotiations for the contract’s last year. Scheinman did not address why he included a second generation interest arbitration provision, nor did he claim that the parties consented. Hamilton Park petitioned to vacate the award, arguing that Scheinman exceeded his authority. The Third Circuit reversed in part. Hamilton Park agreed to expand Scheinman’s jurisdiction to a multi-year award, but did not agree to inclusion of a second generation interest arbitration provision. View "Hamilton Park Health Care Ctr., Ltd.v. 1199 SEIU United Healthcare Workers E." on Justia Law

The Burlington Administrators’ Association and Nicolas Molander (collectively the Association) appealed a trial court’s confirmation of an arbitration decision that Molander, in his capacity as an interim assistant principal, was not entitled to the contractual and statutory protections applicable to regular assistant principals who were not hired on an interim or acting basis. In particular, they challenged the trial court’s conclusion that it had no authority to review the merits of the arbitrator’s ruling for “manifest disregard of the law,” and argued that in this case, the arbitrator’s ruling evinced such a disregard. Because the Supreme Court concluded that the arbitrator’s award did not in any event reflect a manifest disregard of the law, it did not address the question whether the trial court had authority to review an arbitration award under such a standard. Accordingly, the Supreme Court affirmed. View "Burlington Administrators' Ass'n v. Burlington Bd. of School Comm'rs" on Justia Law

As a condition of her employment with Defendants, Plaintiff signed an agreement to resolve any employment-related disputes through arbitration. After Plaintiff resigned, she filed a complaint against Defendants, alleging that she suffered harassment, discrimination, and retaliation during the course of her employment. Defendants filed a motion to compel arbitration. Plaintiff opposed the motion, asserting that it was unconscionable. The trial court agreed with Plaintiff and denied the motion to compel arbitration. The court of appeal reversed. The primary issue before the Supreme Court was whether the arbitration agreement was unconscionable because of a clause in the agreement providing that, in the event a claim proceeds to arbitration, the parties are authorized to seek preliminary injunctive relief in the superior court. The Supreme Court affirmed, holding that the arbitration agreement was not unconscionable because the clause did no more that restate existing law. View "Baltazar v. Forever 21, Inc." on Justia Law

This appeal stems from Roger and Mary Jo Carlson's attempt to arbitrate class action claims against Pulte under a sales agreement that contained an arbitration clause, and Pulte's efforts to limit arbitration to the claims between the three parties. Because the primary goal in enforcing an arbitration agreement is to discern and honor party intent, and because of the fundamental differences between bilateral and class arbitration - which change the nature of arbitration altogether - the court held that whether parties agree to class arbitration is a gateway question for the court. In this case, the parties did not unmistakably provide that the arbitrator would decide whether their agreement authorizes class arbitration. In fact, the sales agreement says nothing at all about the subject. Therefore, the district court erred in concluding that the question was a procedural one for the arbitrator. Accordingly, the court reversed the order denying Pulte's motion for partial summary judgment, vacated the judgment dismissing the petition, and remanded for further proceedings. View "Del Webb Communities, Inc. v. Carlson" on Justia Law

Sgouros purchased a “credit score” package from TransUnion. Armed with the number TransUnion gave him, he went to a car dealership and tried to use it to negotiate a favorable loan. The score he had bought, however, was useless: it was 100 points higher than the score pulled by the dealership. Sgouros filed suit, asserting that TransUnion violated the Fair Credit Reporting Act, 15 U.S.C. 1681g(f)(7)(A); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1; and the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010, by misleading consumers by failing to inform them that the formula used to calculate their purchased credit scores was materially different from the formula used by lenders. TransUnion moved to compel arbitration, asserting that the website through which Sgouros purchased his product included an agreement to arbitrate. The district court concluded that no such contract had been formed and denied TransUnion’s motion. The Seventh Circuit affirmed after evaluating the website and concluding that TransUnion had not put consumers on notice of the terms of agreement, as required by Illinois law, but actually distracted them from noticing those terms. View "Sgouros v. TransUnion Corp." on Justia Law

Ling's employment as a Monterey restaurant manager was terminated. Her position was classified as exempt under Industrial Wage Order 5-2001(1)(B)(1), from overtime compensation and mandated meal periods. Ling sued, seeking unpaid overtime wages, waiting time penalties, and premium pay for failure to provide meal and rest periods; she alleged unfair competition and sought attorney‘s fees and costs. An arbitrator rejected Ling’s claim that she was wrongly classified and her contention that chronic staffing shortages required her to spend time performing nonexempt hourly work. Based on nine weeks when she attended training, Ling was compensated $1,038 for missed meal periods and $7,668 in waiting time penalties. The arbitrator deemed employer the prevailing party on all but that minor issue, awarded employer $29,046 in costs and $212,685 in attorney‘s fees based on the dominant contention of erroneous classification.The court corrected and remanded. The court of appeal agreed that the arbitrator exceeded his power by awarding statutory attorney‘s fees to an employer for work performed in defeating inextricably intertwined claims, contrary to public policy embedded in the Labor Code‘s one-way fee shifting provision. The court upheld the trial court‘s remedy and subsequent order confirming an award to plaintiff of costs but not attorney‘s fees based on intervening California Supreme Court authority. View "Ling v. P.F. Chang's China Bistro, Inc." on Justia Law

Brian Beck, Audrey Mahoney, David and Felice Oppenheim, Patty Brown, and others brought an action in the Oakland Circuit Court against Park West Galleries, Inc., and others, alleging, inter alia, breach of contract and fraud. Defendant Park West Galleries, Inc. (Park West) sold art on various cruise ships traversing international waters. Plaintiffs purchased art from Park West on multiple occasions over the course of several years while on different cruise ships in different locations. The issue this case presented for the Michigan Supreme Court's review centered on whether an arbitration clause included in invoices for plaintiffs’ artwork purchases applied to disputes arising from plaintiffs’ previous artwork purchases when the invoices for the previous purchases did not refer to arbitration. The Court agreed with plaintiffs that the arbitration clause contained in the later invoices could not be applied to disputes arising from prior sales with invoices that did not contain the clause. Each transaction involved a separate and distinct contract, and the facts did not reasonably support a conclusion that the parties intended for the arbitration clause to retroactively apply to the previous contracts. Accordingly, the Supreme Court reversed that part of the Court of Appeals judgment that extended the arbitration clause to the parties’ prior transactions that did not refer to arbitration. The case was remanded back to the Court of Appeals for consideration of the issues raised in plaintiffs’ appeal that the Court did not address to the extent those issues relate to claims that are not subject to arbitration. In all other respects, leave to appeal was denied because the Court was not persuaded that it needed to review the remaining questions presented. View "Beck v. Park West Galleries, Inc." on Justia Law