Justia Arbitration & Mediation Opinion Summaries

The case involves the Government Employees Insurance Company (GEICO) and its affiliates, who sued several medical practices in separate actions in the District of New Jersey. GEICO alleged that the practices defrauded them of more than $10 million by abusing the personal injury protection (PIP) benefits offered by its auto policies. The practices allegedly filed exaggerated claims for medical services, billed medically unnecessary care, and engaged in illegal kickback schemes. GEICO's suits against the practices each included a claim under the New Jersey’s Insurance Fraud Prevention Act (IFPA).The practices sought arbitration of GEICO’s IFPA claim, arguing that a valid arbitration agreement covered the claim and that a different New Jersey insurance law allowed them to compel arbitration. However, each District Court disagreed, ruling instead that IFPA claims cannot be arbitrated. The practices appealed to the United States Court of Appeals for the Third Circuit.The Third Circuit Court of Appeals reversed the lower courts' decisions, holding that claims under the IFPA are arbitrable. The court found that GEICO's argument that the IFPA implicitly prohibits arbitration was not persuasive. The court also concluded that GEICO’s IFPA claims must be compelled to arbitration under the Federal Arbitration Act (FAA), as the claims fell under the scope of the arbitration agreement in GEICO's Precertification and Decision Point Review Plan. The court remanded the case with instructions to compel arbitration of GEICO’s IFPA claims against the practices. View "GEICO v. Caring Pain Management PC" on Justia Law

The case involves a dispute between Andrew Reynosa and his former employer, Advanced Transportation Services, Inc. (ATS). Reynosa had signed an arbitration agreement with ATS during his employment. After leaving the company, he filed a complaint for damages against ATS, which was then moved to arbitration as per the agreement. However, Reynosa later filed a motion to withdraw from arbitration, arguing that ATS had twice failed to pay the required arbitration fees within the stipulated 30-day period, thereby waiving its right to compel him to proceed with arbitration.The Tulare County Superior Court denied Reynosa's motion to withdraw from arbitration. The court found that the parties had mutually agreed to extend the deadline for payment of the arbitration fees, and ATS had paid the fees within the extended deadline. Therefore, the court concluded that ATS had not materially breached the arbitration agreement.Reynosa then petitioned the Court of Appeal of the State of California, Fifth Appellate District, seeking a writ of mandate directing the superior court to vacate its order and grant his motion to withdraw from arbitration. The appellate court granted Reynosa's request for a stay of the arbitration proceedings and issued an order to show cause why writ relief should not be granted.The appellate court concluded that the superior court had erroneously denied Reynosa's motion to withdraw from arbitration. The court found that ATS had materially breached the arbitration agreement by failing to pay the arbitration fees within the stipulated 30-day period. The court held that Reynosa was entitled to withdraw from arbitration and proceed in a court of appropriate jurisdiction. The court issued a writ of mandate directing the superior court to vacate its order and grant Reynosa's motion to withdraw from arbitration. The court also ordered the superior court to address Reynosa's requests for sanctions under the relevant code of civil procedure. View "Reynosa v. Superior Court" on Justia Law

The case involves Ramon Dejesus Cedeno, an employee of Strategic Financial Solutions, LLC, and a participant in its Strategic Employee Stock Ownership Plan. Cedeno sued the company, its trustee Argent Trust Company, and other defendants under the Employee Retirement Income Security Act (ERISA), alleging that a transaction caused the Plan to incur substantial losses and that Argent breached fiduciary duties owed to Plan participants. The defendants moved to compel arbitration under the Federal Arbitration Act (FAA), pointing to a provision in the Plan’s governing document that required Plan participants to resolve any claims related to the Plan in arbitration.The United States District Court for the Southern District of New York denied the motion, reasoning that the agreement was unenforceable because it would prevent Cedeno from effectuating rights guaranteed by Congress through ERISA, namely, the plan-wide relief available under Section 502(a)(2) to enforce the rights established in ERISA Section 409(a).On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court's decision. The court held that the arbitration provision is unenforceable because it would prevent Cedeno from pursuing the Plan-wide remedies Sections 409(a) and 502(a)(2) unequivocally provide. The court concluded that the entire arbitration provision is null and void due to a non-severability clause in the Plan. View "Cedeno v. Sasson" on Justia Law

The case revolves around a dispute over a real estate commission. Andrew Waldo, a broker in charge of a realty company, represented buyers in the purchase of thirteen golf courses from National Golf Management, LLC (NGM). Michael Cousins, another broker, who had previously represented NGM in an earlier transaction, claimed a commission for the golf course deal despite not having a written representation agreement. Cousins, Waldo, and Waldo's agent agreed to arbitrate their dispute. The arbitration panel ruled in favor of Cousins, awarding him half of the commission earned on the golf course sale.The circuit court initially dismissed the lawsuit, ruling that oral agreements for a commission were unenforceable under South Carolina law. However, the arbitration panel later ruled in favor of Cousins. Waldo petitioned the circuit court to vacate the award, which was referred to the Master-in-Equity. The Master-in-Equity vacated the award, stating that the arbitration panel ignored statutory law regarding real-estate agency. The court of appeals reversed this decision, ruling that there was a "barely colorable" ground for the arbitration award based on a line of cases upholding oral and implied contracts for real estate commissions.The Supreme Court of South Carolina reversed the court of appeals' decision and vacated the award. The court held that the arbitration panel had manifestly disregarded several statutes governing real-estate agency law in awarding Cousins half of the commission. The court noted that the Act, which governs real-estate licensing, requires written agreements for real estate agency and forbids oral or implied ones. The court also rejected Cousins' argument that he was entitled to a commission based on a series of cases that recognized a realtor's right to a commission through an oral or implied contract, as these cases were decided before the Act became law. View "Waldo v. Cousins" on Justia Law

A group of individuals, including a minor, filed a class action lawsuit against Warner Bros. Entertainment, Inc. for alleged misrepresentations related to the mobile application Game of Thrones: Conquest (GOTC). The plaintiffs claimed that Warner Bros. engaged in false and misleading advertising within the game. In response, Warner Bros. moved to compel arbitration of all claims based on the GOTC Terms of Service, which users agree to by tapping a “Play” button located on the app’s sign-in screen. The district court denied Warner Bros.' motion, finding that the notice of the Terms of Service was insufficiently conspicuous to bind users to them.The case was appealed to the United States Court of Appeals for the Ninth Circuit. The lower court had found that Warner Bros. failed to provide reasonably conspicuous notice of its Terms of Service, thus denying the motion to compel arbitration. The district court focused on whether the context of the transaction put the plaintiffs on notice that they were agreeing to the Terms of Service, concluding that the app did not involve a continuing relationship that would require some terms and conditions.The Ninth Circuit Court of Appeals reversed the district court's decision. The appellate court held that the district court erred in finding that Warner Bros. failed to provide reasonably conspicuous notice. The court found that the context of the transaction and the placement of the notice were both sufficient to provide reasonably conspicuous notice. The court also rejected the plaintiffs' argument that the arbitration agreement was unconscionable due to its ban on public injunctive relief. The court concluded that the unenforceability of the waiver of one’s right to seek public injunctive relief did not make either this provision or the arbitration agreement unconscionable or otherwise unenforceable. The case was remanded for further proceedings. View "KEEBAUGH V. WARNER BROS. ENTERTAINMENT INC." on Justia Law

The Supreme Court of Iowa reviewed a case involving a dispute between the University of Iowa and Modern Piping, Inc., a mechanical contractor. The dispute arose during the construction of the University of Iowa Stead Family Children’s Hospital. Modern Piping sought to arbitrate some delay disputes, but the University obtained a temporary injunction preventing arbitration. Modern Piping successfully had the injunction dissolved and sought to recover not only the fees and costs it incurred in doing so, but also restitution for the University's wrongful injunction.The district court initially granted the University an ex parte temporary injunction against Modern Piping, preventing arbitration of specific disputes. Modern Piping intervened and successfully had the injunction dissolved. The University appealed this decision but was unsuccessful. Meanwhile, the parties arbitrated the original disputes, resulting in the University paying Modern Piping over $16 million pursuant to the arbitration award.The Supreme Court of Iowa held that the restitution awarded to Modern Piping was not a proper remedy for a claim for wrongful injunction and could not stand. The court affirmed the $21,784.50 award to Modern Piping for fees and costs but reversed the $12,784,177.00 award for restitution. The court found that Modern Piping's claim for restitution was not directly correlated to the injunction, and therefore, it was not entitled to recover restitution in the form of a broad-reaching unjust enrichment claim. The case was remanded for entry of an order consistent with this directive. View "The University of Iowa v. Modern Piping, Inc." on Justia Law

The case involves Christine Matlock Dougherty, who sued U.S. Behavioral Health Plan, California (USB) for claims related to her son's healthcare. Dougherty's son, Ryan, was enrolled in a UnitedHealthcare HMO health plan, which Dougherty had access to through her employer. Ryan admitted himself into a residential treatment facility for severe drug addiction, but USB denied coverage for his stay after three days, arguing that he could be treated at home. Ryan fatally overdosed shortly after his discharge from the facility. Dougherty then sued USB, claiming that its wrongful denial of coverage for Ryan's treatment caused his death. USB petitioned to compel arbitration of her claims, but the trial court denied the petition, stating that USB's arbitration agreement was not enforceable because it did not comply with the disclosure requirements imposed by Health & Safety Code section 1363.1.The trial court denied USB's petition to compel arbitration on the grounds that the arbitration agreement did not comply with the disclosure requirements of Health & Safety Code section 1363.1. The court found that there were two separate contracts, one between Dougherty and UnitedHealthcare, and another between Dougherty and USB. The court ruled that the arbitration agreement in the supplement, which governed Dougherty's claims against USB, did not comply with section 1363.1's disclosure requirements.The Court of Appeal of the State of California Fourth Appellate District Division Two reversed the trial court's decision. The appellate court concluded that USB forfeited its argument that the issue of whether the arbitration agreement was valid under the disclosure requirements of section 1363.1 was delegated to the arbitrator. However, the court agreed with USB that the trial court erroneously denied USB’s petition because USB complied with section 1363.1. The court found that the only "health care service plan" at issue that "includes terms that require binding arbitration" is Dougherty’s plan with UnitedHealthcare, which includes both the EOC and the supplement as components of the plan. Therefore, the court concluded that there was no section 1363.1 violation and reversed the trial court's order denying the petition to compel arbitration. View "Dougherty v. U.S. Behavioral Health Plan" on Justia Law

The case involves Angel Mondragon, an employee of Sunrun Inc., who was required to sign an arbitration agreement as a condition of his employment. The agreement covered most disputes related to Mondragon’s employment but excluded claims brought under the Private Attorney General Act of 2004 (PAGA). After his employment ended, Mondragon filed a complaint asserting several causes of action under PAGA. Sunrun filed a motion to compel arbitration of Mondragon’s claims, which the trial court denied. Sunrun appealed the decision, arguing that the trial court erred in ruling on whether Mondragon’s claims were arbitrable.The Superior Court of Los Angeles County had previously denied Sunrun's motion to compel arbitration. The court ruled that it, not the arbitrator, should decide questions of arbitrability. The court also ruled that the arbitration agreement unambiguously excluded PAGA claims and did not differentiate between individual PAGA claims and PAGA claims brought on behalf of other employees.The Court of Appeal of the State of California Second Appellate District Division Seven affirmed the decision of the lower court. The court concluded that Mondragon, an unsophisticated party, did not delegate arbitrability decisions to the arbitrator. The court also concluded that the language of the arbitration agreement did not require Mondragon to arbitrate his individual PAGA claims. Therefore, the court affirmed the decision of the lower court. View "Mondragon v. Sunrun Inc." on Justia Law

In 2002, the Department of Housing and Urban Development (HUD) advertised job openings with a promotion potential to grade thirteen, while existing employees in comparable positions could only be promoted to grade twelve. The American Federation of Government Employees, National Council of HUD Locals Council 222, AFL-CIO, representing the existing employees, filed a grievance arguing that this violated their collective bargaining agreement with HUD. The grievance proceeded to arbitration.The Federal Labor Relations Authority (FLRA) initially declined to resolve the jurisdictional issue of whether the grievance involved classification, which is generally non-arbitrable, or reassignment, which could be resolved in arbitration. The arbitrator determined that the grievance was arbitrable and found that HUD had violated the collective bargaining agreement. The FLRA agreed with HUD's exceptions that the arbitrator's remedy required reclassification and therefore violated the Federal Service Labor-Management Relations Statute (FSLMRS). The FLRA vacated the arbitrator’s remedial award and remanded for an alternative remedy.In 2018, the FLRA held that the grievance concerned classification and that the arbitrator had always lacked jurisdiction over the grievance. The FLRA vacated all of the arbitrator’s pronouncements and its own prior decisions. The union then filed a complaint in district court claiming that the FLRA’s decision was “ultra vires.” The district court rejected the union’s Administrative Procedure Act claim but denied the FLRA’s motion to dismiss the entire complaint for lack of subject matter jurisdiction. The court later granted the union’s motion for summary judgment.On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the district court lacked jurisdiction to review the FLRA's decision. The court found that the Federal Service Labor-Management Relations Statute (FSLMRS) clearly precluded judicial review of FLRA arbitration decisions in both the courts of appeals and the district courts. The court also held that the FLRA did not violate a clear statutory prohibition by vacating the arbitrator's award and its own prior decisions. The court vacated the district court's orders and instructed it to dismiss the complaint. View "American Federation of Government Employees v. FLRA" on Justia Law

In 2015, Joseph Semprini filed a lawsuit against his employer, Wedbush Securities, Inc., alleging 11 personal causes of action and seven class claims for alleged wage and hour violations. Semprini and Wedbush agreed that Semprini’s personal claims would be arbitrated, while the remaining claims would proceed in court. The class was certified in 2017, and the parties litigated Semprini’s class and Private Attorneys General Act (PAGA) claims in court over the next several years. In 2022, the U.S. Supreme Court ruled in Viking River Cruises, Inc. v. Moriana that an employer may enforce an employee’s agreement to arbitrate individual PAGA claims. Following this decision, Wedbush asked its workforce to sign arbitration agreements, and 24 class members, including the second named plaintiff, Bradley Swain, agreed to do so.The Superior Court of Orange County denied Wedbush’s motion to compel arbitration of the named plaintiffs’ individual PAGA claims and the claims of the 24 class members who signed arbitration agreements. The court found that Wedbush had waived its right to compel arbitration by entering into the 2015 stipulation.The Court of Appeal of the State of California Fourth Appellate District Division Three affirmed the lower court's decision. The court held that even if the Viking River decision or the 2022 arbitration agreements gave Wedbush a new right to move to compel certain claims to arbitration, Wedbush waited too long to make its motion, particularly in light of the looming trial date. The court found that Wedbush had waived its right to compel arbitration by waiting nine months after the Viking River decision and five to six months after select class members signed the new arbitration agreements to file its motion to compel arbitration. View "Semprini v. Wedbush Securities Inc." on Justia Law