Justia Arbitration & Mediation Opinion Summaries

The First Circuit reversed the judgment of the district court vacating a portion of an arbitration award that voided the guaranty agreement at issue in this case, holding that, contrary to the conclusion of the district court, the arbitrator acted within the scope of his powers.Massachusetts Technology Collaborative (MTC) contracted with KCST USA, Inc. to operate and market a fiber optic network in western Massachusetts. MTC also secured a guaranty of KCST's obligations under the contract from KCST's parent company, Axia NetMedia Corporation. Axia later sued MTC over the guaranty agreement. MTC sought an order compelling arbitration, which the district court granted. The arbitrator found that MTC had materially breached the agreement with KCST, and, therefore, that the guaranty agreement was void for failure of consideration. The district court concluded that the arbitrator had exceeded the scope of his powers and vacated the award. The First Circuit reversed, holding that the arbitrator did not exceed the scope of his powers under section 10(a)(4) of the Federal Arbitration Act. View "Axia NetMedia Corp. v. Massachusetts Technology Park Corp." on Justia Law

In 2008, appellants Robert and Linda Shivers rented a residential property in La Habra from respondent Wilfred Rivera. Almost seven years later, Rivera filed an unlawful detainer action against the Shivers, alleging they had not paid rent. He later amended his pleading to add causes of action based on the allegation they had damaged the property and taken appliances when they vacated it. The Shivers filed a cross-complaint, alleging Rivera had failed to make repairs to the property and had left it untenantable. The case was originally assigned to limited civil jurisdiction but was later reclassified to unlimited civil. Upon reassignment, the new trial judge ordered counsel to meet and confer regarding the appointment of a referee under Code of Civil Procedure section 638, and a status conference on the subject was scheduled for March 19, 2018. At the status conference, the parties advised the court they could not agree on a referee. The court took the matter under submission, but warned that a referee would be appointed if the parties could not agree on one. Thereafter, in a minute order dated one month later, the trial court, instead of appointing a referee, sua sponte ordered the matter to judicial arbitration. The issue this case presented for the Court of Appeal's review centered on whether the arbitration, originally statutory in nature, morphed into a contractual arbitration as the result of a vague stipulation by counsel for the parties. Neither side ever seemed to have entertained the notion that the completed arbitration was anything but binding, and treated it as such. The trial judge, however, decided on his own that the arbitration was not what the parties intended, a conclusion derived from their actions rather than their explicit words. As a result, the trial court denied the appellants’ petition to confirm, vacated the award, and set a trial date in the case. After review, the Court of Appeal concluded the trial court erred in not confirming the arbitration award and reversed it. View "Rivera v. Shivers" on Justia Law

The Court of Appeal reversed the trial court's order denying the employer's motion to compel arbitration. The court held that the employee demonstrated his assent to the arbitration clause by signing the acknowledgment, and the employer had no duty to call the arbitration agreement to the employee's attention. The court found that provisions in the arbitration clause concerning arbitrator's fees and costs and attorney fees are unenforceable, but they may be severed, and the rest of the agreement is enforceable. Accordingly, on remand, the trial court is directed to sever the offending provisions concerning arbitration fees and costs and attorney fees from the agreement and otherwise grant the motion to compel arbitration. View "Conyer v. Hula Media Services, LLC" on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law

Plaintiffs filed suit against defendants, the property owners, claiming that the property they rented had bed bugs and other problems. The property owners then moved to compel arbitration based on agreements in plaintiffs' leases.The Court of Appeal affirmed the trial court's denial of the property owners' motion for arbitration, holding that state public policy prohibits arbitration provisions in residential lease agreements. The court held that the arbitration agreements in the leases were void under Civil Code 1953, subdivision (a)(4), and that Jaramillo v. JH Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394, and Harris v. University Village Thousand Oaks, CCRC, LLC. (2020) 49 Cal.App.5th 847, 850, specifically identified the right to have a jury trial as a procedural right that may not be waived or modified under section 1953, subdivision (a)(4). View "Williams v. 3620 W. 102nd Street, Inc." on Justia Law

The Ninth Circuit affirmed the district court's order denying in part Uber's motion to compel arbitration of claims brought by plaintiffs under the Americans with Disabilities Act (ADA). Plaintiff alleged that Uber failed to provide a wheelchair-accessible ride-sharing option (uberWAV) in their hometown of New Orleans.The panel held that plaintiffs plausibly alleged sufficient facts to establish Article III standing where they sufficiently alleged an injury in fact under the "deterrent effect doctrine." The doctrine recognizes that when a plaintiff who is disabled within the meaning of the ADA has actual knowledge of illegal barriers at a public accommodation to which he or she desires access, that plaintiff need not engage in the futile gesture of attempting to gain access in order to show actual injury. In this case, plaintiffs have alleged that they are aware that Uber does not offer uberWAV in New Orleans; that they cannot use the Uber App because of its failure to offer uberWAV; that they plan to use the Uber App if it becomes wheelchair-accessible; and that they presently fear that they will encounter the mobility-related barriers which exist within Uber's Application and services. The panel also held that plaintiffs have plausibly alleged causation and redressability where plaintiffs' alleged injuries would not exist absent Uber's actions, and these injuries cannot be redressed without enjoining Uber to comply with the ADA. Finally, the panel held that equitable estoppel does not apply where plaintiffs' ADA claims are fully viable without any reference to Uber's Terms and Conditions. View "Namisnak v. Uber Technologies, Inc." on Justia Law

Pagliacci Pizza hired Steven Burnett as a delivery driver. Steven Burnett attended a mandatory new employee orientation at a local Pagliacci Pizza. During the orientation, Pagliacci gave Burnett multiple forms and told him to sign them so that he could start working. One of the forms that Burnett signed was a one-page “Employee Relationship Agreement” (ERA). The ERA mentioned nothing about arbitration of disputes. Pagliacci’s “Mandatory Arbitration Policy” (MAP) was printed in Pagliacci’s employee handbook, “Little Book of Answers,” a 23-page booklet in which Pagliacci’s MAP appeared on page 18. The MAP was not listed in the handbook’s table of contents, and page 18 fell within the “Mutual Fairness Benefits” section. Burnett was given a copy of Little Book of Answers during his orientation and told to read it at home. Consistent with that instruction, the ERA contained a section entitled “Rules and Policies.” Delivery drivers like Burnett filed a class action alleging wage and hour claims against Pagliacci Pizza. At issue on interlocutory review was whether the trial court sustainably denied the employer’s motion to compel arbitration. The Court of Appeals affirmed, determining that the mandatory arbitration policy contained in the employee handbook, which was provided to the named plaintiff after he signed the employment relationship agreement, was procedurally and substantively unconscionable and, thus, unenforceable. The Washington Supreme Court held that the MAP at issue in this case was indeed unenforceable because no arbitration agreement was formed when the employee signed the employment agreement when he had no notice of the arbitration provision contained in the employee handbook. The Court also held that in light of the noted circumstances, even if an arbitration contract existed, it was procedurally unconscionable and unenforceable. Furthermore, the Court held the same arbitration provision was substantively unconscionable because its one-sided terms and limitation provisions would bar any claim by the terminated employee here, an overly harsh result. Accordingly, the trial court’s order denying the employer’s motion to compel arbitration was affirmed and the matter remanded for further proceedings. View "Burnett v. Pagliacci Pizza, Inc." on Justia Law

In this action brought against a long-term care facility by Kenneth, as administrator of Estate of Tommy Patton, the Supreme Court reversed in part the court of appeals' decision concluding that an arbitration agreement was enforceable as to Kenneth's individual wrongful death claim but that the agreement was not enforceable as to the Estate's claims, holding that the agreement was valid as to both claims.Kenneth signed an arbitration agreement at the time his father, Tommy, was admitted to Signature HealthCARE of East Louisville's long-term care facility. Tommy later suffered a fall and died a few weeks later. Kenneth brought sued Signature, alleging negligence and wrongful death. Signature filed a motion to compel arbitration. The trial court denied the motion in its entirety. The court of appeals reversed in part, concluding that the arbitration agreement was not enforceable against the Estate but that Kenneth's wrongful death claim was arbitrable because he executed the arbitration agreement in his individual capacity. The Supreme Court reversed in part, holding that both the Estate's and Kenneth's individual claims were subject to arbitration because the arbitration agreement was valid and enforceable as to the Estate claim and as to Kenneth's individual wrongful death claim. View "LP Louisville East, LLC v. Patton" on Justia Law

Davis filed sued individual Red Bull executives for age and sexual harassment and hostile work environment in violation of the Fair Employment and Housing Act, and for intentional and negligent infliction of emotional distress. Davis was 56 years old, had been employed by Red Bull for 15 years, and was in a mid-level managerial sales position until he was terminated.Red Bull filed a demand for arbitration with the American Arbitration Association. The individual defendants moved to compel Davis to submit his claims to arbitration. Davis filed a separate lawsuit against Red Bull seeking a declaratory judgment that his claims were not subject to the arbitration agreement. That agreement specifies it is “intended to cover all civil claims which involve or relate in any way to [Davis’s] employment (or termination of employment) with Red Bull, including, but not limited to, claims of employment discrimination or harassment on the basis of . . . sex, age, . . . claims for wrongful discharge, [and] claims for emotional distress.”The trial court concluded and the court of appeal affirmed that the agreement was unconscionable and unenforceable. The court noted the "adhesion" nature of the agreement, which is not mutual and the arbitral discovery process does not guarantee adequate discovery. View "Davis v. Kozak" on Justia Law

The Ninth Circuit affirmed the district court's denial of Amazon's motion to compel arbitration of one of the named plaintiff's federal and state wage and hour claims. This plaintiff, unlike the other three named plaintiffs, agreed to all of Amazon's Terms of Service (TOS) when he signed up to work as a delivery provider for Amazon's app-based delivery program, Amazon Flex (AmFlex), including the arbitration provision at issue here.The panel held that AmFlex delivery providers in this case are transportation workers engaged in interstate commerce and are thus exempt from the Federal Arbitration Act's enforcement provisions pursuant to 9 U.S.C. 1 where they made "last mile" deliveries of goods in the stream of interstate commerce. The panel explained that the interstate transactions between Amazon and the customer do not conclude until the packages reach their intended destinations, and thus AmFlex drivers are engaged in the movement of interstate commerce, even if they did not themselves need to cross state lines. The panel noted that cases involving delivery services like Postmates or Doordash are distinguishable, because those cases recognize that local food delivery drivers are not "engaged in the interstate transport of goods" where the prepared meals from local restaurants are not a type of good that are "indisputably part of the stream of commerce." In this case, AmFlex workers complete the delivery of goods that Amazon ships across state lines and for which Amazon hires AmFlex workers to complete the delivery. Therefore, AmFlex workers form a part of the channels of interstate commerce and are engaged in interstate commerce.The panel also held that the TOS bars application of Washington state law to the arbitration provision. Therefore, there is no valid and enforceable arbitration agreement. View "Rittmann v. Amazon.com, Inc." on Justia Law