Justia Arbitration & Mediation Opinion Summaries

Plaintiff Simply Wireless, Inc. appealed a district court order dismissing its complaint against Defendants T-Mobile US, Inc. and T-Mobile USA, Inc. (collectively, “T-Mobile”). Upon determining that the parties’ business relationship was governed by a written agreement containing a mandatory arbitration clause, the district court went on to determine that the scope of that arbitration clause included all of Simply Wireless’s claims against T-Mobile. After review, the Fourth Circuit concluded the district court erred in determining the scope of the parties’ arbitration clause, as the parties "clearly and unmistakably" intended for an arbitrator to resolve all arbitrability disputes. Nonetheless, because the parties intended for an arbitrator to resolve all arbitrability disputes, the district court’s ultimate dismissal of Simply Wireless’s complaint in favor of arbitration was proper. Accordingly, the Fourth Circuit affirmed the district court’s dismissal, but on alternate grounds. View "Simply Wireless, Inc. v. T-Mobile US, Inc." on Justia Law

The Supreme Court affirmed the order of the district court compelling arbitration and its judgment confirming the arbitration award.A few months after beginning work for Home Savings of America (HSOA), Plaintiff signed an employment agreement containing a provision that required the parties to submit any disputes to binding arbitration. After HSOA terminated Plaintiff’s employment, Plaintiff sued HSOA, its CEO and Board chair Dirk Adams, and Home Savings Bancorp (HSBC), which owned all of HSOA’s stock, alleging breach of contract, wrongful discharge, and fraud. The district court ordered the parties to proceed to binding arbitration. The arbitrator issued an award in favor of HSBC and Adams. The district court confirmed the award. The Supreme Court affirmed both orders, holding (1) the parties had a valid agreement to arbitrate, and therefore, the district court properly referred Plaintiff’s claims to arbitration; and (2) the district court did not abuse its discretion in confirming the arbitration award because the court had jurisdiction to hear Plaintiff’s motion to vacate the arbitration award, and the arbitrator did not manifestly disregard the law. View "Tedesco v. Home Savings Bancorp, Inc." on Justia Law

Plaintiffs-respondents Virgil and Glenda Jensen contended they suffered damages caused by a negligently maintained rental truck, rented by his supervisor, Charles Scannell, which blew a tire while Virgil was driving it. Defendant-appellant U-Haul Co. of California (UHCA) appealed the trial court’s denial of its motion to compel arbitration. UHCA contended plaintiffs were bound by the arbitration agreement in the rental contract, even though neither plaintiff was a party to that contract. The Court of Appeal’s review of plaintiffs’ complaint showed that plaintiffs did not rely or depend on the terms of the rental in asserting their claims, and none of their allegations were in any way founded in or bound up with the terms or obligations of that agreement. UHCA, citing to general principles and cases that it contended were analogous, argued that plaintiffs were bound to arbitrate their claims, even though they are not signatories to the agreement between Scannell and UHCA, on any of three theories: third-party beneficiary, agency, or estoppel. The Court of Appeal was not persuaded and affirmed the trial court. View "Jensen v. U-Haul Co. of California" on Justia Law

The Sixth Circuit affirmed the decision of the district court affirming the bankruptcy court concluding that Mountain Glacier properly reserved its arbitration claim in its dispute with Nestle Waters after Mountain Glacier filed for Chapter 11 bankruptcy. The bankruptcy automatically stayed the companies’ arbitration. After the bankruptcy proceedings ended, Mountain Glacier attempted to resume arbitration, but Nestle Waters objected, arguing that Mountain Glacier failed properly to reserve the arbitration in its reorganization plan. The lower courts disagreed, as did the Sixth Circuit, holding (1) Mountain Glacier’s reservation enabled creditors to identify its claim and evaluate whether additional assets might be available for distribution; and (2) neither Browning v. Levy, 283 F.3d 761, 772 (6th Cir. 2002) nor 11 U.S.C. 1123(b)(3) required Mountain Glacier to provide more information than it did. View "Nestlé Waters North America. Inc. v. Mountain Glacier LLC" on Justia Law

The Ninth Circuit affirmed the district court's order compelling arbitration of putative class action claims against AT&T by customers who alleged that AT&T falsely advertised their mobile service plans as "unlimited" when in fact it intentionally slowed data at certain usage levels. The panel held that there was no state action in this case, rejecting plaintiffs' claim that there was state action whenever a party asserts a direct constitutional challenge to a permissive law under Denver Area Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996). The panel held that Denver Area did not broadly rule that the government was the relevant state actor whenever there was a direct constitutional challenge to a "permissive" statute, and did not support finding state action here. The panel also held that the Federal Arbitration Act merely gives AT&T the private choice to arbitrate, and did not encourage arbitration such that AT&T's conduct was attributable to the state. View "Roberts v. AT&T Mobility, LLC" on Justia Law

In 2015, State Farm filed suit against Watts, alleging subrogated product liability claims against Watts arising from a loss that occurred in November 2012. The Court of Appeal affirmed the trial court's denial of Watt's motion to compel arbitration, finding no basis for any vested right to arbitration under the circumstances of this case, where the parties have agreed to be bound by contractual terms and rules determined by a third party. In this case, the parties signed the AF arbitration agreement some years before 2012. In 2015, the AF arbitration agreement excluded product liability claims from the kinds of claims subject to compulsory arbitration under the agreement. View "State Farm General Insurance Co. v. Watts Regulator Co." on Justia Law

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not allow nonsignatories or non-parties to compel arbitration. The Federal Arbitration Act (FAA) expressly exempted from its scope any contracts of employment of seamen. In this maritime action, the Ninth Circuit affirmed the denial of a motion to compel arbitration arising from the death of a seaman in the sinking of a fishing vessel. Dongwon moved to compel arbitration based on an employment agreement between the seaman and the vessel's owner, Majestic. The panel held that Dongwon was neither a signatory nor a party to the employment agreement. The panel also held that Dongwan could not compel arbitration on grounds other than the Convention Treaty, such as the FAA. View "Yang v. Dongwon Industries, Ltd." on Justia Law

Hyatt and Shen Zhen entered into an agreement providing that Shen Zhen would renovate a Los Angeles hotel and operate it using Hyatt’s business methods and trademarks. Two years later Hyatt declared that Shen Zhen was in breach. An arbitrator concluded that Shen Zhen owes Hyatt $7.7 million in damages plus$1.3 million in attorneys’ fees and costs. The Seventh Circuit affirmed the district court’s order of enforcement, upholding the arbitrator’s refusal to issue a subpoena to Cadwalader, who represented Shen Zhen during the contract negotiations. The dispute arose two years after Cadwalader stopped working for Shen Zhen. The contract has an integration clause that forecloses resort to the negotiating history as an interpretive tool. The arbitrator also declined to disqualify Hyatt’s law firm, which Cadwalader joined about three years after the contract was signed, finding that the firm’s ethics screen ensured that no confidential information would reach Hyatt's lawyers. The court also rejected an argument that the award disregarded federal and state franchise law and should be set aside under 9 U.S.C. 10(a)(4), which covers situations in which “the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” View "Hyatt Franchising, L.L.C. v. Shen Zhen New World I, LLC" on Justia Law

This case turned on whether an attorney-in-fact made a “health care decision” by admitting her principal to a residential care facility for the elderly and, in the process, agreeing to an arbitration clause. The trial court found she acted outside the scope of her authority under the power of attorney, and the arbitration clause this appeal seeks to enforce was void. The issue this case presented for the Court of Appeal’s review centered on the scope of two statutes, the Power of Attorney Law (Prob. Code, sec. 4000 et seq. (PAL)), and the Health Care Decisions Law (Prob. Code, sec. 4600 et seq. (HCDL)), in light of the care a residential care facility for the elderly agreed to provide, and actually provided, in this instance (Health & Saf. Code, sec. 1569 et seq.). For resolution, the Court had to parse the authority of two of the principal’s relatives, one holding a power of attorney under the PAL and one holding a power of attorney under the HCDL. The Court concluded admission of decedent to the residential care facility for the elderly in this instance was a health care decision, and the attorney-in-fact who admitted her, acting under the PAL, was not authorized to make health care decisions on behalf of the principal. As a result of this conclusion, the Court affirmed the trial court’s denial of a motion by the residential care facility to compel arbitration. Because the attorney-in-fact acting under the PAL did not have authority to make health care decisions for her principal, her execution of the admission agreement and its arbitration clause are void. View "Hutcheson v. Eskaton Fountainwood Lodge" on Justia Law

An agreement to arbitrate a Labor Code Private Attorneys General Act of 2004 (PAGA) claim, entered into before an employee is statutorily authorized to bring such a claim on behalf of the state, is an unenforceable predispute waiver. The Court of Appeal held that the trial court properly denied a petition to compel arbitration of respondents' claim under PAGA. In this case, any agreement by respondents was entered into before they were authorized to bring a PAGA claim. View "Julian v. Glenair, Inc." on Justia Law