Justia Arbitration & Mediation Opinion Summaries

Hamilton had been employed by the EEOC for 20 years, with no disciplinary problems, until one day in 2016, when, while engaged in mediation, he suddenly began using racial epithets, engaging in physical violence, and refusing to follow orders. The EEOC removed him from federal service. The union filed a grievance, which led to arbitration. During a hearing, the EEOC called 11 witnesses; the union called Hamilton. Although the arbitrator found that certain aspects of the EEOC’s case had not been proved, he credited the testimony of EEOC witnesses to conclude that Hamilton “had a major physical and/or mental breakdown.” Because Hamilton denied taking any of the actions he was charged with, the arbitrator concluded that Hamilton “did not remember.” The arbitrator found that the EEOC had not shown that Hamilton’s behavior had any negative effect on its reputation and had failed to consider that Hamilton’s behavior “was caused by his obvious medical condition,” and set aside Hamilton’s removal, awarding back pay. The arbitrator denied the union’s request for arbitration costs and attorney fees. The Federal Circuit vacated the denial of attorneys’ fees; 5 U.S.C. 7701(g) provides that an adjudicator may require an agency to pay the employee’s reasonable attorney fees if the employee is the prevailing party and the adjudicator determines that payment by the agency “is warranted in the interest of justice.” On remand, the arbitrator must reconsider the issue and include a statement of reasons. View "AFGE Local 3599 v. Equal Employment Opportunity Commission" on Justia Law

After its workers’ compensation insurance premiums rapidly increased, Jackpot believed that Applied Underwriters had mishandled its claims and had wrongfully failed to disclose how it calculated premiums. Jackpot filed suit. Applied sought to compel arbitration based on the arbitration agreement contained in a Request to Bind. Jackpot argued that the arbitration agreement was invalid. Applied contended that, under the Federal Arbitration Act, only the arbitrator could decide the threshold question of whether the arbitration agreement was enforceable. The trial court held that the arbitration agreement was invalid. The court of appeal affirmed. In light of Jackson’s specific arguments that the arbitration provision was unenforceable due to fraud, ambiguity, and unconscionability, the trial court was obligated to consider its validity. Allied violated California law in issuing the Request to Bind without first submitting it for regulatory approval. The policy does not provide for arbitration but allows for administrative review by the Insurance Commissioner for certain disputes and otherwise leaves Jackpot’s rights to judicial review intact. The Request to Bind’s arbitration agreement, which compels arbitration in Nebraska for a wide array of disputes, materially changes the policy's dispute-resolution terms and constituted “a collateral agreement that should have been filed and endorsed to the Policy” under Insurance Code section 11658. View "Jackpot Harvesting, Inc. v. Applied Underwriters, Inc." on Justia Law

If an employee brings a solitary Labor Code Private Attorneys General Act of 2004 (PAGA) claim, a trial court may not split that claim, sending the employee to arbitration (when he has agreed to it) to recover his underpaid wages but retaining jurisdiction to award the additional, statutorily prescribed amounts.The Court of Appeal held that splitting a PAGA claim in this manner was both legally impermissible and inconsistent with labor and arbitration law. The court explained that where, as here, the employee-plaintiff elected to file a solitary PAGA claim, splitting that claim into two effectively rewrites his complaint into one asserting an individual claim for underpaid wages (which is shunted to arbitration) and a PAGA claim (which is not). Accordingly, the court held that the trial court properly denied the motion to compel arbitration in this case and affirmed the judgment. View "Zakaryan v. The Men's Warehouse, Inc." on Justia Law

After Brown Sims, a Houston law firm, successfully obtained a favorable result for its client, AJR, the client colluded with the opposing party, CNA and its attorneys, to consummate a settlement just between themselves. After settlement, the district court dismissed the case as moot.The Fifth Circuit held that the district court had subject matter jurisdiction over Brown Sims's claims against CNA. The court also held that Brown Sims met all of Federal Rule of Civil Procedure 24's criterion for intervention as of right and the district court erred in concluding otherwise. Furthermore, the district court erred in denying the Rule 60(b)(5) and (b)(6) motions. Accordingly, the court reversed in part, vacated in part, and remanded for further consideration. View "Adam Joseph Resources v. CNA Metals Limited" on Justia Law

The Court of Appeal reversed the trial court's order denying Carrows' motion to compel arbitration. The court held that the language of the arbitration agreement was sufficient to apply to the current action. However, the court remanded to determine a factual issue where time was not relative, but relevant. The factual issue was whether Carrows knew that at the time plaintiff signed an arbitration agreement, plaintiff was represented by counsel. In this case, whether the arbitration agreement was unenforceable should be decided by the trial court. View "Salgado v. Carrows Restaurants, Inc." on Justia Law

In this case brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962, 1964, the First Circuit affirmed the district court's ruling dismissing Plaintiff's claims against all defendants, holding that Plaintiff's claims against his securities broker may only be resolved through arbitration, the claims against the broker's wife and the couple's conjugal partnership were also subject to the arbitration agreement, and Plaintiff's claims against a bank were out of time.Plaintiff, a building contractor in Puerto Rico, argued that his securities broken, in collusion with the investment firm and affiliated bank, fraudulently stole more than $400,000 from his investment account. Plaintiff also named as defendants his broker's wife and their conjugal partnership . The district court dismissed all claims against all defendants. The First Circuit affirmed, holding (1) subject to the binding agreement between the parties, Plaintiff's claims against the broker may only be resolved through arbitration; (2) the claims against the broker's wife and the conjugal partnership were derivative of the claims against the broker and therefore also subject to the arbitration agreement; and (3) Plaintiff's claims against the bank were time-barred under 18 U.S.C. 1964. View "Alvarez-Mauras v. Banco Popular of Puerto Rico" on Justia Law

After plaintiff was terminated from VWB, he filed a class action against the company alleging various wage and hour violations under California labor law. The Court of Appeal affirmed the trial court's denial of VWB's petition to compel arbitration and held that the trial court correctly found that plaintiff's employment came within the Federal Arbitration Act's exemption granted to transportation workers engaged in interstate commerce. The trial court correctly found that plaintiff, employed as a delivery driver for VWB, engaged in interstate commerce through his participation in the continuation of the movement of interstate goods to their destinations. Therefore, plaintiff was exempt from the FAA. The court need not address plaintiff's alternative argument that the arbitration agreement was unenforceable. View "Nieto v. Fresno Beverage Co." on Justia Law

William Carroll, M.D., Loring Rue, M.D., and Gustavo Heudebert, M.D. (collectively, defendants), appealed a circuit court's denial of their motion to compel arbitration of claims asserted against them by Paul F. Castellanos, M.D. Dr. Castellanos alleged that he was an "internationally recognized" physician with a specialty practice as a "laryngologist and bronchoesophagologist (airway surgeon)" who was "recruited to come to the University of Alabama at Birmingham in 2005 to establish a center of excellence for the treatment of voice and aero digestive disorders at University of Alabama, Birmingham Academic and Medical Center" ("UAB Medical Center"). University of Alabama Health Services Foundation, P.C. ("UAHSF") and Dr. Castellanos executed a "Physician Employment Contract" describing the details of his employment, which contained an arbitration provision. The questions whether the individual defendants, as nonsignatories to the employment contract, could enforce the arbitration provision in that contract and whether the arbitration provision encompassed Dr. Castellanos's claims against the individual defendants were questions for the arbitrator, not the court, pursuant to the arbitration provision in the employment contract. The Alabama Supreme Court determined the circuit court erred in denying the individual defendants' motion to compel arbitration. The Court therefore reversed the order and remanded the case for further proceedings. View "Carroll v. Castellanos" on Justia Law

The Court of Chancery granted Defendant’s motion to dismiss Plaintiff’s complaint to vacate or modify an arbitration award for failure to state a claim, holding that there was no reasonably conceivable evident material miscalculation or evident material mistake in the arbitrator’s report.In 2017, Plaintiff and Company entered into a Securities Purchase Agreement. In 2018, under the dispute resolution provision of the agreement, Plaintiff and the Company engaged in mandatory, binding arbitration regarding the Company’s total accounts receivable reserve (the Total AR Reserve). The arbitrator issued a report determining the Total AR Reserve was $661,165. Plaintiff then filed a complaint to vacate or modify the arbitration award, arguing that the arbitrator made an evident material miscalculation or evident material mistake in his determination of the Total AR Reserve. The Court of Chancery disagreed and granted Defendant’s motion to dismiss. View "CLP Toxicology, Inc. v. Casla Bio Holdings LLC" on Justia Law

In this construction dispute, the Court of Chancery granted Defendant’s motion to dismiss Plaintiffs’ complaint seeking to vacate or modify an arbitration award for failure to state a claim and denying Plaintiffs’ motion for summary judgment, holding that the arbitrator did not exceed the scope of his authority or act in manifest disregard of the law when he awarded Defendant damages.In their first claim, Plaintiffs argued that the arbitrator’s interpretation of the provisions in the contract between the parties regarding the total cost of the construction project evidences a manifest disregard for the law. In their second claim, Plaintiffs argued that the arbitrator exceeded his authority and acted in manifest disregard of the law when he issued an award for fees and expenses to Defendant. The Court of Chancery disagreed, holding that the arbitrator did not act in manifest disregard of the law in either respect. View "Stempien v. Marnie Properties, LLC" on Justia Law