Justia Arbitration & Mediation Opinion Summaries

The plaintiff brought claims against her former employer alleging violations of federal and state wage and hour laws. After removal to the United States District Court for the District of Rhode Island, some claims were resolved at summary judgment, leaving the federal wage claims for trial. Before trial, the parties participated in a court-ordered mediation before a magistrate judge, during which they reached an oral settlement agreement whose terms were recited on the record. The agreement included payment to the plaintiff, confidentiality, non-defamation, and no-rehire clauses, as well as dismissal of the action with prejudice. Both parties, including the plaintiff and her counsel, confirmed their assent to the agreement.Following the mediation, the defendant prepared written settlement documents and a stipulation of dismissal. However, the plaintiff refused to sign, asserting she felt pressured and that certain terms were ambiguous or not sufficiently definite. The district court reviewed these objections after the defendant moved to enforce the settlement. The court found the agreement enforceable, denied the plaintiff’s request for an evidentiary hearing on alleged undue influence due to lack of factual support, and ordered her to execute the documents. After the plaintiff failed to comply, the court ultimately dismissed the case with prejudice under Federal Rule of Civil Procedure 41(b).On appeal, the United States Court of Appeals for the First Circuit held that the district court did not err in enforcing the oral settlement agreement or in denying the plaintiff’s motion for reconsideration and request for an evidentiary hearing. The appellate court found no genuine dispute of material fact as to the existence or terms of the settlement and affirmed the district court’s judgment, awarding costs and attorney fees to the defendant. View "Maccarone v. Siemens Industry, Inc." on Justia Law

A group of former and current employees of a staffing agency alleged that the company misclassified recruiters as exempt from state overtime laws and failed to provide required meal and rest breaks. After the employees filed a putative class action in state court, which the company removed to federal court, the parties engaged in over a year of discovery and completed class certification briefing. Shortly after class certification briefing closed, the company implemented a new, mandatory arbitration agreement for internal employees, including the putative class members. This agreement required class members to either quit their jobs or affirmatively opt out of arbitration if they wished to remain in the class, effectively reversing the typical opt-out structure of class actions under Federal Rule of Civil Procedure 23.The United States District Court for the Northern District of California granted class certification and, after reviewing the company’s communications about the new arbitration agreement, found them misleading and potentially coercive. The court determined that the communications disparaged class actions, omitted key information, and confused recipients about their rights and deadlines, especially as the emails were sent during a holiday period. Consequently, when the company moved to compel arbitration against class members who had not opted out, the district court denied the motion, relying on its authority under FRCP 23(d) to ensure the fairness of class proceedings.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The Ninth Circuit held that district courts have broad authority under FRCP 23(d) to refuse to enforce arbitration agreements when a defendant’s conduct undermines the fairness of the class action process, especially where communications are misleading and subvert the opt-out mechanism. The court also held that the arbitration agreement’s delegation provision did not prevent the district court from ruling on enforceability in this context. View "AVERY V. TEKSYSTEMS, INC." on Justia Law

An individual seeking to refinance his mortgage visited a website that offers mortgage information and referrals to affiliated lenders. During three separate visits, he entered personal information and clicked buttons labeled “Calculate” or “Calculate your FREE results.” Immediately below these buttons, the website displayed language in small font stating that clicking would constitute consent to the site’s Terms of Use, which included a mandatory arbitration provision and permission to be contacted by the site or affiliates. The Terms of Use were accessible via a hyperlinked phrase. After using the site, the individual was matched with a particular lender but did not pursue refinancing. Later, he received multiple unwanted calls from the lender and filed a class-action lawsuit under the Telephone Consumer Protection Act, alleging violations such as calling numbers on the Do Not Call registry.The United States District Court for the Eastern District of Michigan initially dismissed the complaint on the merits and denied the lender’s motion to compel arbitration as moot. Upon realizing the arbitration issue should have been decided first, the court reopened the case but found no enforceable agreement to arbitrate existed, denying the motion to compel arbitration. The court also denied reconsideration and allowed the plaintiff to amend his complaint. The lender appealed the denial of arbitration.The United States Court of Appeals for the Sixth Circuit reviewed the denial de novo. It held that, under California law, the website provided reasonably conspicuous notice that clicking the buttons would signify assent to the Terms of Use, including arbitration. The court found that the plaintiff’s conduct objectively manifested acceptance of the offer, forming a binding arbitration agreement. The court also concluded that the agreement was not invalid due to unspecified procedural details and that questions of arbitrability were delegated to the arbitrator. The Sixth Circuit reversed the district court’s decision and remanded for further proceedings. View "Dahdah v. Rocket Mortgage, LLC" on Justia Law

Berkeley Research Group, LLC and Southern Advanced Materials, LLC entered into a contract in 2019 for consulting services, which included an arbitration clause specifying that any disputes would be resolved via arbitration in Philadelphia, Pennsylvania. After Southern allegedly failed to pay for Berkeley's services, the parties participated in arbitration administered by JAMS, with the arbitrator located in Philadelphia. The arbitration was conducted via Zoom, and the arbitrator ultimately awarded Berkeley $433,815.34. Berkeley then filed a petition in the Shelby County Chancery Court in Tennessee to confirm the arbitration award.The Shelby County Chancery Court denied Southern’s motion to dismiss, finding it had jurisdiction and confirming the award. Southern appealed, and the Tennessee Court of Appeals affirmed the trial court’s subject matter jurisdiction under Tennessee Code Annotated section 29-5-323 but reversed on personal jurisdiction grounds, holding that Southern lacked sufficient contacts with Tennessee. The appellate court remanded with orders to dismiss.The Supreme Court of Tennessee granted permission to appeal and reviewed whether Tennessee courts have subject matter jurisdiction to confirm an arbitration award where the agreement specified arbitration in another state. The Court held that, under the Uniform Arbitration Act (UAA), Tennessee courts only have subject matter jurisdiction to confirm arbitration awards when the agreement provides for arbitration in Tennessee. Because the parties’ contract required arbitration to occur in Pennsylvania and did not allow for arbitration in Tennessee, the Shelby County Chancery Court lacked subject matter jurisdiction. The Supreme Court of Tennessee vacated the judgments of both lower courts and dismissed Berkeley’s petition to confirm the award. The disposition by the Supreme Court of Tennessee was to vacate and dismiss for lack of subject matter jurisdiction. View "Berkeley Research Group, LLC v. Southern Advanced Materials, LLC" on Justia Law

A dispute arose from a contingency fee agreement between the heirs of an Alaska Native allotment and an attorney who helped them recover substantial compensation from the federal government for mismanagement of oil and gas leases on their land. After a settlement was reached, years later, one of the heirs was sued by the attorney in federal court for allegedly failing to make required payments under the fee agreement. The heir then invoked mandatory fee arbitration under Alaska Bar Association rules, which prompted the federal court to stay the proceedings pending the outcome of arbitration.The arbitration was conducted before an Alaska Bar Association panel, which, following guidance from Bar Counsel, limited its review to whether the amount of the attorney’s fee was reasonable, and declined to address broader challenges to the enforceability of the fee agreement, including claims of duress and illegality under federal Indian law. The panel ultimately found the fee amount reasonable. Dissatisfied, the heir petitioned the Alaska Superior Court to vacate the panel’s decision, arguing that the panel exceeded its authority by not deciding enforceability issues and raising other statutory grounds under the Revised Uniform Arbitration Act (RUAA). The Superior Court denied the petition, confirmed the arbitration award, and granted enhanced attorney’s fees to the attorney for post-arbitration litigation.On appeal, the Supreme Court of the State of Alaska affirmed the Superior Court’s confirmation of the arbitration award. The Supreme Court held that a fee arbitration panel’s decision to narrow the scope of review is subject to a “reasonably possible” standard and that the panel did not exceed its authority in this case. The court also held that awards of attorney’s fees under Alaska Civil Rule 82 are permissible in post-arbitration proceedings governed by the RUAA and found no abuse of discretion in the Superior Court’s award. View "Oenga v. Givens" on Justia Law

The plaintiff was employed by the defendant as a collector and customer service representative in California, and upon being hired, electronically signed an arbitration agreement. The agreement broadly required arbitration for disputes relating to employment or termination, and covered claims based on federal, state, or local laws, including the California Labor Code. It also expressly prohibited class or collective adjudication and stated that it “shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.” In 2023, the plaintiff sued the defendant, asserting both individual and class claims for alleged violations of labor and business statutes.After the complaint was filed in the Superior Court of Los Angeles County, the defendant moved to compel arbitration of the plaintiff’s individual claims and to dismiss the class claims. The defendant submitted evidence that it is a Delaware corporation, previously had offices in Washington, and sourced materials from outside California. The plaintiff opposed, arguing that the Federal Arbitration Act (FAA) did not apply because her employment was exclusively within California and no evidence showed the agreement involved interstate commerce. The trial court found the arbitration agreement valid, held that the FAA applied based on the agreement’s express terms and supporting evidence, and dismissed the class claims per the agreement’s prohibition.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, considered whether the trial court correctly found the FAA governed the arbitration agreement. The appellate court held that the FAA applies because the parties expressly agreed in the contract to be governed by the Act, regardless of whether the underlying transaction actually involved interstate commerce. The court affirmed the order compelling arbitration of the plaintiff’s individual claims and dismissing the class claims. The defendant was awarded costs on appeal. View "Tuufuli v. West Coast Dental Admin. Services" on Justia Law

The parties in this case entered into a settlement agreement in 2005 to resolve a longstanding water rights dispute between their respective parcels, providing that future disputes would be resolved by mediation and, if necessary, binding arbitration before a retired judge with water law expertise in San Diego County. The agreement included provisions for attorney fees for the prevailing party in certain circumstances. In 2016, a new dispute arose over groundwater resources and the parties proceeded to arbitration. During the arbitration, the arbitrator withdrew after Lodge filed demands for disqualification, leaving the dispute unresolved. While the Barbanell entities sought a replacement arbitrator, Lodge initiated a separate lawsuit asserting the same claims as those in arbitration. The Barbanell entities then filed a distinct action, petitioning the Superior Court of San Diego County to appoint a new arbitrator.The Superior Court of San Diego County granted the Barbanell entities’ petition to appoint a new arbitrator and entered judgment in their favor, designating them as prevailing parties entitled to seek attorney fees. Upon subsequent motion, the court found that the settlement agreement entitled the Barbanell entities to recover reasonable attorney fees incurred in obtaining the appointment of a new arbitrator, and awarded them $68,800 in fees. An amended judgment was issued to reflect this award.The Court of Appeal, Fourth Appellate District, Division One, reviewed only the postjudgment award of attorney fees. It affirmed the Superior Court’s decision, holding that the Barbanell entities were prevailing parties in the discrete action to appoint an arbitrator and were entitled to attorney fees under the settlement agreement and Civil Code section 1717. The appellate court clarified that the presence of related claims pending elsewhere did not preclude a fee award for this separate, concluded action. View "Barbanell v. Lodge" on Justia Law

JB Viva Vegas, L.P. challenged the assessment of withdrawal liability imposed by the Nevada Resort Association-International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the US and Canada Local 720 Pension Trust under the Multiemployer Pension Plan Amendments Act (MPPAA). JB had contributed to the Trust’s pension plan for stagehands working on a theatrical production, which later closed. The Trust asserted withdrawal liability, arguing that its plan no longer qualified for the entertainment industry exception due to a shift in employee work from entertainment to convention-related activities.After JB’s request for review went unanswered, it initiated arbitration. The arbitrator initially ruled in JB’s favor, finding the plan qualified for the entertainment exception and ordering rescission of the withdrawal liability. The Trust then sought to vacate the arbitration award in the United States District Court for the District of Nevada. The district court vacated the award, reasoning that the relevant year for determining the plan’s status was the year JB withdrew, not when it joined, and remanded to the arbitrator. On remand, the arbitrator granted summary judgment to the Trust, concluding that the MPPAA was ambiguous as to how much entertainment work was required and that the plan did not “primarily” cover entertainment employees because less than half earned most of their wages from entertainment work. The district court affirmed the arbitrator’s decision, granting summary judgment to the Trust.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the district court’s summary judgment de novo. The court held that the MPPAA’s entertainment industry exception does not require a minimum amount of entertainment work for an individual to qualify as an “employee in the entertainment industry.” Therefore, the Trust’s plan primarily covers such employees if a majority perform any entertainment work. The Ninth Circuit reversed the district court’s decision and remanded the case. View "NEVADA RESORT ASSOCIATION-INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES AND MOVING PICTURE MACHINE OPERATORS OF THE US AND CANADA LOCAL 720 PENSION TRUST V. JB VIVA VEGAS, LP" on Justia Law

A former hourly, nonexempt employee of a large lumber manufacturer filed a class action in October 2018 alleging wage and hour violations on behalf of eight classes of present and former employees. Many employees had signed arbitration agreements that precluded class actions and required arbitration of employment-related disputes, but neither the named plaintiff nor other named plaintiffs were signatories. Throughout several years of litigation, the employer did not identify signatory employees or produce the signed arbitration agreements, despite being ordered to do so. The employer participated in extensive discovery and litigation regarding all putative class members, including those who had signed the agreements.The Superior Court of Shasta County reviewed the case and, after extensive discovery disputes, granted class certification for eight classes in November 2022. Following class certification, the employer produced over 3,000 signed arbitration agreements and promptly moved to compel arbitration for class members who had signed the agreements. The plaintiffs opposed this, arguing the employer had waived its right to compel arbitration due to its prior litigation conduct, including failure to produce agreements and treating signatory employees as class members throughout discovery. The trial court denied the employer’s motion to compel arbitration, finding waiver under the St. Agnes test, and granted sanctions precluding the employer from presenting evidence of the arbitration agreements or arguing that class members had signed them.Upon appeal, the Court of Appeal of the State of California, Third Appellate District, affirmed the order denying the motion to compel arbitration and dismissed the appeal from the sanctions order. The main holding was that the employer had waived its contractual right to compel arbitration by conduct that was inconsistent with an intent to arbitrate, including withholding the agreements and treating signatory employees as class members, as established by clear and convincing evidence. The court dismissed the appeal regarding sanctions for lack of appellate jurisdiction. View "Sierra Pacific Industries Wage and Hour Cases" on Justia Law

A construction company in southern Nevada ceased contributing to a multiemployer pension plan after it stopped operating in the state. The pension plan’s trustees assessed the company for withdrawal liability, asserting the company owed over $2.8 million under the Multiemployer Pension Plan Amendments Act (MPPAA). The company challenged the assessment, arguing it was exempt from liability because its asbestos abatement work qualified for the “building and construction industry” exception in the MPPAA. The company pointed out that asbestos abatement involves removing or remediating hazardous materials from buildings, including demolition and substantial alterations to structures.An arbitrator initially ruled in favor of the pension plan’s trustees, interpreting the “building and construction industry” narrowly to include only work that literally builds new structures, and finding that asbestos abatement did not meet this definition. The company then brought suit in the United States District Court for the District of Nevada to vacate or modify the arbitration award. The district court rejected the arbitrator’s and trustees’ narrow construction, instead adopting a broader understanding of the industry that includes maintenance, repair, alteration, and demolition. The district court granted summary judgment to the company, holding that its asbestos abatement work qualified for the statutory exception, and ordered the return of payments made toward the assessed liability.On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s judgment. The Ninth Circuit held that the phrase “building and construction industry” in the MPPAA incorporates the definition established by the National Labor Relations Board under the Taft-Hartley Act, which includes erection, maintenance, repair, and alteration of buildings and structures. Applying this definition, the court ruled that asbestos abatement is covered by the exception, exempting the company from withdrawal liability. View "WALKER SPECIALTY CONSTR., INC. V. BD. OF TR. OF THE CONSTR. INDUS. AND LABORERS JOINT PENSION TRUST" on Justia Law