Justia Arbitration & Mediation Opinion Summaries

In this companion case to Van Dusen v. Swift, No. 15-15257 (“Van Dusen III”), Swift seeks a writ of mandamus ordering the district court to vacate its case management order and decide the petition to compel arbitration without discovery or trial. The court concluded that the Bauman factors weigh against the grant of mandamus relief; Swift has a remedy in urging its position before the district court in dispositive motions and, if the district court is adverse to Swift, in the form of direct appeal following the issuance of a final order; normal litigation expense does not constitute sufficient prejudice to warrant relief, and the discovery cost has already been incurred; and most crucially, in the absence of controlling precedent, the district court order was not clearly erroneous. Accordingly, the court concluded that Swift is not entitled to the extraordinary relief of the issuance of a writ of mandamus. View "In re Swift Transportation" on Justia Law

Plaintiff filed suit alleging that Swift misclassified her and others as independent contractors, as well as alleging violations of federal and state labor laws. On appeal, plaintiff objected that section 1 of the Federal Arbitration Act (FAA), 9 U.S.C. 1, prevented the district court from compelling arbitration. The district court granted Swift's motion to compel arbitration. The court clarified that the district court - not the arbitrator - must decide the section 1 issue. The district court then set out to determine the section 1 exemption issue. Swift moved for an order to stay proceedings, including discovery, and for an order setting a briefing schedule to determine the section 1 issue without resort to discovery and trial. The district court denied Swift’s motion. It also concluded that the order was not immediately appealable. The court concluded that that, absent statutory authorization, district court certification, or application of the collateral doctrine, the court lacked appellate jurisdiction over the appeal and dismissed. In this case, this is not an appeal from a motion explicitly brought under the FAA or unmistakably invoking its remedies. Because the district court did not deny a petition to order arbitration to proceed, there is no jurisdiction under section 16(a)(1)(B). View "Van Dusen v. Swift Transportation" on Justia Law

Plaintiffs, individuals who enrolled in a cosmetology program at Milan Institute, filed a class action against the college and its President, alleging that defendants violated state labor laws and the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. On appeal, defendants challenged the district court's denial of their motion to compel arbitration. The court concluded that the district court did not err in deciding the litigation conduct waiver issue itself. If the parties intend that an arbitrator decide that issue under a particular contract, they must place clear and unmistakable language to that effect in the agreement. Defendants failed to do so in this case and thus the district court did not err by deciding the conduct waiver issue. The court also concluded that defendants waived their right to arbitration because they engaged in acts inconsistent with their right to arbitration, and plaintiffs were prejudiced. Accordingly, the court affirmed the judgment. View "Martin v. Yasuda" on Justia Law

Plaintiff filed suit against his employer, Supreme, under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. After the action was filed but, according to Supreme, before it had learned of the suit, the company announced a new policy requiring employees to arbitrate employment disputes, including FLSA claims. The district court denied Supreme’s motion to dismiss or compel arbitration. The court reversed, concluding that the arbitration agreement is binding and contains a delegation clause transferring the power to decide threshold questions of arbitrability to the arbitrator. The court remanded and directed the district court to enter an order compelling arbitration. View "Kubala, Jr. v. Supreme Production Serv." on Justia Law

CEEG (Shanghai) Solar Science & Technology Co., Ltd. (“CEEG”), a Chinese company, agreed to sell solar energy products to LUMOS, LLC, a U.S. company. After receiving certain shipments, LUMOS filed a warranty claim alleging workmanship defects, and refused to remit the balance due. After two years of "fitful" negotiations, CEEG filed an arbitration proceeding pursuant to the parties’ agreements. Although the parties had communicated exclusively in English to that point, CEEG served LUMOS with a Chinese-language notice of the proceedings, and LUMOS did not immediately realize what the notice was. After the arbitration panel ruled in its favor, CEEG moved for the district court to confirm the award. LUMOS filed a motion to dismiss, arguing that the Chinese-language notice caused it to miss the deadline to participate in appointing the arbitration panel. The district court granted the motion, finding that the notice was not reasonably calculated to apprise LUMOS of the arbitration proceedings. The Tenth Circuit agreed and affirmed. View "CEEG (Shanghai) Solar Science v. Lumos" on Justia Law

In 2012, GNP Parent, LLC entered into a sales agreement to purchase compressed natural gas from Xpress Natural Gas, LLC as fuel for the Great Northern Paper Mill. Cate Street Capital, Inc., the corporate owner of GNP, guaranteed the amounts payable by GNP up to $1,500,000. GNP failed to make the required payments for natural gas, and an arbitrator found Cate Street liable to Xpress for $1,500,000 on the guarantee. Xpress applied to the superior court to confirm the arbitration award. Cate Street and GNP moved to vacate the award in part, arguing that the arbitrator exceeded his authority in awarding Xpress $1,500,000 in damages on the guarantee of payments. The superior court entered a judgment confirming the award and denying the motion to vacate the award. The Supreme Judicial Court affirmed, holding that the arbitrator did not exceed his authority in this case because his interpretation was rationally derived from the sales agreement. View "Xpress Natural Gas, LLC v. Cate St. Capital, Inc." on Justia Law

A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law

The College Network, Inc. (TCN) appealed an order denying its motion to compel arbitration of a consumer fraud and breach of contract action brought by Plaintiffs Bernadette Magno, Rosanna Garcia, and Sheree Rudio. TCN argued the arbitration provision in Plaintiffs' purchase agreements was valid and enforceable and contended the trial court erred when it ruled the provision unconscionable. Alternatively, TCN argued that if the forum selection clause was unconscionable, the court abused its discretion in voiding the arbitration provision altogether rather than severing the objectionable provisions and enforcing the remainder. After review of the provision at issue, the Court of Appeal concluded the trial court correctly determined the arbitration provision to be procedurally and substantively unconscionable and did not abuse its discretion in voiding it in its entirety. View "Magno v. The College Network, Inc." on Justia Law

In this appeal stemming from a failed real estate investment, plaintiffs challenged the district court’s judgment confirming the arbitration award in favor of the Rainier parties involved in marketing the investment. The real estate transactions underlying this appeal have already been described in greater depth in Rainier DSC 1, L.L.C. v. Rainier Capital Management, L.P., 546 F. App’x 491, 492–93 (5th Cir. 2013). The court affirmed the district court's judgment confirming the arbitration award, concluding that plaintiffs have not identified any basis for vacating the arbitration award. View "Rainier DSC 1, LLC v. Rainier Capital Mgmt." on Justia Law

In this appeal stemming from a failed real estate investment, plaintiffs challenged the district court's judgments in favor of the non-arbitrating defendants. The real estate transactions underlying this appeal have already been described in greater depth in Rainier DSC 1, L.L.C. v. Rainier Capital Management, L.P., 546 F. App’x 491, 492–93 (5th Cir. 2013). The court affirmed the district court's grant of summary judgment, concluding that plaintiffs have not shown that the district court erred in not staying the litigation of the non-arbitrating parties during the arbitration or in granting summary judgment in favor of FSA and the physicians. View "Rainier DSC 1, LLC v. Rainier Capital Mgmt." on Justia Law