Crockett’s former law firm subscribed to a LexisNexis legal research plan that allowed unlimited access to certain databases for a flat fee. Subscribers could access other databases for an additional fee. According to Crockett, LexisNexis indicated that a warning sign would display before a subscriber used a database outside the plan. Years after subscribing, Crockett complained that his firm was being charged additional fees without any warning that it was using a database outside the Plan. LexisNexis insisted on payment of the additional fees. The firm dissolved. Crockett’s new firm entered into a LexisNexis subscription agreement, materially identical to the earlier plan; it contains an arbitration clause. Crockett filed an arbitration demand against LexisNexis on behalf of two putative classes. One class comprised law firms that were charged additional fees. The other comprised clients onto whom such fees were passed. The demand sought damages of more than $500 million. LexisNexis sought a federal court declaration that the agreement did not authorize class arbitration. The district court granted LexisNexis summary judgment. The Sixth Circuit affirmed. “The idea that the arbitration agreement … reflects the intent of anyone but LexisNexis is the purest legal fiction,” but the one-sided adhesive nature of the clause and the absence of a class-action right do not render it unenforceable. The court observed that Westlaw’s contract lacks any arbitration clause.View "Reed Elsevier, Inc. v. Crockett" on Justia Law

Tillman filed suit pro se, alleging that Macy’s discriminated against her on the basis of race in violation of Title VII when it terminated her employment in 2009. Macy’s filed a motion to compel arbitration, based on a claimed agreement between the parties to participate in a dispute-resolution program called Solutions. The Solutions process had four steps, the last of which is binding arbitration. After the May’s store at which she had worked since 2001 was acquired by Macy’s, Tillman received a document describing the Solutions process and noting that employees were automatically “covered” by arbitration by virtue of continuing employment, but could opt out of binding arbitration. Tillman’s packet was mailed and was not returned as undeliverable. Tillman stated that she did not receive it. In 2006, Tillman attended a mandatory video describing the Solutions Program. Tillman does not deny receiving a brochure distributed at the meeting. In 2007, Macy’s sent another brochure that stated that she had the entire Solutions program, specifically including Step 4 Arbitration. Tillman stated that she did not receive this mailing. Macy’s sent another Election Form and brochure. Tillman did not return the form; again claiming that she did not receive it. The district court denied Macy’s motion. The Sixth Circuit reversed. Macy’s provided sufficient notice of its offer to enter into an arbitration agreement, and Tillman accepted by continuing her employment and not returning either opt-out form. Arbitration should be required, notwithstanding the absence of an employee-signed agreement. View "Tillman v. Macy's Inc." on Justia Law

Plaintiff filed suit against Ralphs alleging violations of the California Labor Code and California Business and Professions Code 17200 et seq. On appeal, Ralphs challenged the district court's denial of its motion to compel arbitration. The court concluded that Ralphs' arbitration policy was unconscionable under California law. The court concluded that Ralphs' arbitration was procedurally unconscionable where, among other things, agreeing to Ralphs' policy was a condition of applying for employment and the terms were not disclosed to plaintiff until three weeks after she had agreed to be bound by it. In regards to substantive unconscionability, the court concluded, among other things, that Ralphs' terms required that the arbitrator impose significant costs on the employee up front, regardless of the merits of the employee's claims, and severely limited the authority of the arbitrator to allocate arbitration costs in the award. Further, the state law supporting such a conclusion was not preempted by the Federal Arbitration Act, 9 U.S.C. 2. Accordingly, the court affirmed and remanded for further proceedings. View "Chavarria v. Ralphs" on Justia Law

Plaintiffs filed a putative class action suit on behalf of current and former students, alleging that Corinthian engaged in a deceptive scheme to entice the enrollment of prospective students in violation of California law. Corinthian moved to compel arbitration pursuant to arbitration clauses in plaintiffs' enrollment agreements. The court concluded that the Broughton-Cruz rule, which exempted claims for "public injunctive relief" from arbitration, was preempted by the Federal Arbitration Act (FAA), 9 U.S.C. 2. In the alternative, the court concluded that plaintiffs' claims were within the scope of their arbitration agreements and plaintiffs were required to arbitrate their public injunction claims. Accordingly, the court reversed the district court's order denying Corinthian's motion to compel arbitration and remanded. View "Ferguson, et al. v. Corinthian Colleges, Inc., et al." on Justia Law

In 2009, to “preserve Delaware’s pre-eminence in offering cost-effective options for resolving disputes, particularly those involving commercial, corporate, and technology,” Delaware granted the Court of Chancery power to arbitrate business disputes. That Court then created an arbitration process as an alternative to trial for certain disputes, 10 DEL. CODE tit. 10, 349; Del. Ch. R. 96-98. To qualify for arbitration, at least one party must be a business entity formed or organized under Delaware law, and neither can be a consumer. Arbitration is limited to monetary disputes that involve an amount of at least one million dollars. The fee for filing is $12,000, and the arbitration costs $6,000 per day after the first day. Arbitration begins approximately 90 days after the petition is filed. The statute and rules bar public access. Arbitration petitions are confidential and are not included in the public docketing system. Attendance at proceedings is limited to parties and their representatives, and all materials and communications produced during the arbitration are protected from disclosure in judicial or administrative proceedings. The Coalition challenged the confidentiality provisions. The district court found that Delaware’s proceedings were essentially civil trials that must be open to the public, under the First Amendment. The Third Circuit affirmed. View "Delaware Coal. for Open Gov't v. Strine" on Justia Law

Plaintiff was a teacher in the Manchester-Essex Regional School District until he was informed by the District Superintendent's intention to terminate his employment for inappropriate sexual conduct toward a student. Plaintiff sought review of the Superintendent's action. An arbitrator affirmed Plaintiff's dismissal. Plaintiff then filed suit in Massachusetts superior court challenging his dismissal and seeking to vacate the arbitrator's decision. Three weeks later, Plaintiff filed this complaint in federal court alleging state and federal law violations. The next day, Plaintiff amended his state-court complaint so it contained the exact same claims as his federal-court complaint. The state court rejected Plaintiff's claims and affirmed the arbitrator's decision. Later, the federal district court granted summary judgment against Plaintiff, finding that Plaintiff's claims were barred by res judicata. The First Circuit Court of Appeals affirmed, holding that none of the reasons presented by Plaintiff why res judicata did not bar his federal claims from adjudication in federal court were persuasive. View "Atwater v. Driscoll" on Justia Law

Adam appealed the district court's denial of its motion to appoint an arbitrator under the Federal Arbitration Act, 9 U.S.C. 1 et seq., after determining that the challenges to the appointment presented procedural questions to be decided by the International Centre for Dispute Resolution. As a preliminary matter, the court concluded that the district court had ancillary jurisdiction over Adam's post-judgment motion to appoint an arbitrator under Kokkonen v. Guardian Life Ins. Co. of Am. On the merits, the court rejected Adam's argument on appeal that the district court was required to intervene on grounds that a lapse had occurred in the appointment process; rejected Adam's argument that the district court was required to reach the merits of Adam's request to reinstate the mediator; and rejected Adam's remaining arguments. Accordingly, the court affirmed the judgment. View "Adam Technologies Int'l v. Sutherland Global Servs." on Justia Law

Plaintiffs filed a putative class action suit against CMH Homes, Vanderbilt and others in state court. The companies subsequently filed a petition in the district court alleging that plaintiffs' claims were subject to mandatory arbitration. The district court dismissed the petition. The companies argued that the district court erred by concluding that it lacked diversity jurisdiction. The court concluded that the district court correctly reasoned that Vaden undermined Advance America and required the court's departure from that precedent. Following the Vaden approach, the district court properly looked through the arbitration petition to the state court complaint to determine the amount in controversy. Nonetheless, the court remanded for the district court to calculate an amount in controversy and to determine on that basis whether it had jurisdiction over the putative class action under 28 U.S.C. 1332(d)(2). View "CMH Homes, Inc., et al. v. Goodner, et al." on Justia Law

The Unions filed a grievance against Alcan, claiming that Alcan violated a collective bargaining agreement. On appeal, the Unions challenged the district court's order vacating the arbitrator's award of severance pay. The court reversed the judgment because a federal court must defer to the arbitrator's interpretation where the arbitrator was at least arguably construing or applying the collective bargaining agreement. The court denied the Unions' request for attorneys' fees. Alcan acted promptly to seek an order vacating the arbitration award and the company did not act dishonestly or in bad faith. View "Alcan Packaging Co. v. Graphic Communications, et al." on Justia Law

Defendant in this case was a franchisor and Plaintiffs were its franchisees. After Plaintiffs sued Defendant, the district court certified a class, excluding those franchisees whose agreements with Defendant contained clauses expressly requiring arbitration. While those franchisees pursued arbitration, the arbitrator imposed a stay of the arbitrations of ten of those franchisees. The district court later concluded that Defendant had violated an order requiring it to obtain judicial permission before making any motion to delay or prevent arbitration proceedings and sanctioned Defendant by admitting to the class the ten franchisees, relieving them of their obligations to arbitrate. Defendant then unsuccessfully filed a motion to reconsider the sanction and to stay the ten franchisees' judicial proceedings pending arbitration. The First Circuit Court of Appeals reversed, holding (1) the district court's determination that Defendant violated the order was an abuse of discretion; and (2) therefore, there was no basis for the sanction, and Defendant's motion to stay should have been granted. View "Awuah v. Coverall N. Am., Inc." on Justia Law