Justia Arbitration & Mediation Opinion Summaries

The case involves Illinois Casualty Company (ICC) and thirty-three models who contested whether arbitration was appropriate based on the assignment of several business insurance policies that ICC issued to B&S of Fort Wayne, Inc., Showgirl III, Inc., and Reba Enterprises, LLC (collectively, "Insured Clubs"). The models alleged that the Insured Clubs used their images for social media advertisements without their consent. The Insured Clubs had insurance policies with ICC, which they tendered for defense and indemnification. ICC denied coverage, leading to a settlement agreement between the Insured Clubs and the models, assigning the Insured Clubs’ rights against ICC to the models.The trial court compelled arbitration between ICC and the models. On appeal, the Indiana Court of Appeals reversed, finding that none of the models’ claims fell within the provision of the arbitration agreement. The models sought transfer to the Indiana Supreme Court.The Indiana Supreme Court held that an agreement to arbitrate in accordance with American Arbitration Association (AAA) rules constitutes “clear and unmistakable” intent to delegate arbitrability to an arbitrator. However, the court found that because no agreement to arbitrate existed between ICC and the Insured Clubs before 2016, the models could not compel arbitration for claims deriving from this period. The court affirmed in part and reversed in part, ruling that models with claims from 2016 and later could compel arbitration, but those with pre-2016 claims could not. View "Illinois Casualty Co. v. Burciaga" on Justia Law

Carlos Ramirez, an employee, filed a class action lawsuit against his former employer, Golden Queen Mining Company, alleging various violations of the Labor Code and unfair competition. The employer moved to compel arbitration, but the trial court denied the motion, stating that the employer failed to demonstrate the existence of an executed arbitration agreement. The employer appealed, arguing that it had made a prima facie showing that a written arbitration agreement existed and that Ramirez’s statements that he did not recall being presented with or signing an arbitration agreement were insufficient to rebut its initial showing.The Superior Court of Kern County had initially denied the employer's motion to compel arbitration on the grounds that the employer failed to demonstrate the existence of an executed arbitration agreement. The court found that the employer's evidence, which included an unsigned arbitration agreement and a handbook acknowledgement purportedly signed by Ramirez, was insufficient to establish the existence of an arbitration agreement.The Court of Appeal of the State of California Fifth Appellate District reversed the lower court's decision. The appellate court concluded that Ramirez did not provide sufficient evidence to rebut the employer’s initial showing that an arbitration agreement existed. The court found that Ramirez's failure to recall signing the document did not create a factual dispute about the signature’s authenticity. The court also noted that Ramirez’s declaration did not state whether he had reviewed the arbitration agreement or other documents purportedly signed by him, nor did it address whether he recalled signing the handbook acknowledgement, which included a statement that he agreed to the terms of the arbitration agreement. The court therefore reversed the order denying the motion to compel arbitration and remanded the case for further proceedings to address Ramirez’s unconscionability defense. View "Ramirez v. Golden Queen Mining Co." on Justia Law

The Choctaw Nation and several pharmacies it owns and operates entered into agreements with Caremark, LLC, and its affiliates to facilitate insurance reimbursements for the Nation’s costs for pharmacy services for its members. The Nation filed a lawsuit in the Eastern District of Oklahoma, alleging that Caremark unlawfully denied pharmacy reimbursement claims in violation of the Recovery Act. After the matter was stayed in the Eastern District of Oklahoma, Caremark petitioned to compel arbitration of the Nation’s claims in the District of Arizona. The district court granted the petition, concluding that the parties’ agreements included arbitration provisions with delegation clauses and therefore an arbitrator must decide the Nation’s arguments that its claims are not arbitrable.The Ninth Circuit Court of Appeals affirmed the district court’s decision. The court held that most of the Nation’s arguments challenging the district court’s arbitration order were foreclosed by a previous case, Caremark, LLC v. Chickasaw Nation, which addressed the enforceability of identical arbitration provisions. The court also held that the Nation’s remaining argument that the District of Arizona lacked subject-matter jurisdiction over the petition to compel arbitration failed because the Nation contractually agreed to arbitrate its claims against Caremark in Arizona, and in those contracts specifically “agree[d] to such jurisdiction.” Thus, the Nation expressly waived its tribal sovereign immunity as a bar to arbitration in the District of Arizona. View "CAREMARK, LLC V. CHOCTAW NATION" on Justia Law

The case involves a dispute between William Good and Uber Technologies, Inc., and Rasier, LLC (collectively, Uber). Good, a user of Uber's ride-hailing service, suffered severe injuries in a car accident while riding in a vehicle driven by an Uber driver. He filed a negligence lawsuit against Uber and the driver. Uber moved to compel arbitration based on its terms of use, which Good had agreed to when he used the Uber app.The Superior Court denied Uber's motion to compel arbitration. The court found that Uber had not provided Good with reasonable notice of its terms of use, and that Good had not reasonably manifested his assent to those terms.The Supreme Judicial Court of Massachusetts reversed the lower court's decision. The court found that Uber's "clickwrap" contract formation process, which required Good to click a checkbox indicating that he had reviewed and agreed to the terms and then to activate a button labeled "Confirm," put Good on reasonable notice of Uber's terms of use. The court also found that Good's selection of the checkbox and his activation of the "Confirm" button reasonably manifested his assent to the terms. Therefore, the court concluded that a contract had been formed between Good and Uber, and that the dispute should be submitted to arbitration as per the terms of that contract. The case was remanded for entry of an order to submit the claims to arbitration. View "Good v. Uber Technologies, Inc." on Justia Law

The case involves the Federal Education Association Stateside Region (FEA-SR), a teachers' union, and the Federal Labor Relations Authority (FLRA). The parties were negotiating a new collective bargaining agreement (CBA) when they reached an impasse. The Federal Service Impasses Panel (FSIP) was called in to resolve the remaining issues. The FSIP issued an order resolving the impasse, but FEA-SR refused to sign the agreement, arguing that the FSIP lacked jurisdiction to resolve certain issues. FEA-SR filed an arbitral grievance claiming that the Department of Defense's submission of the agreement for agency head review without FEA-SR's signature violated the contractual ground rules and constituted bad faith bargaining.The arbitrator found in favor of FEA-SR, concluding that the Department of Defense had committed unfair labor practices by cutting negotiations short and submitting an unexecuted agreement for agency head review. The FLRA, however, set aside the arbitrator's award, finding that the arbitrator could not review whether the FSIP had jurisdiction over the disputed issues and that the agreement was "executed" when the FSIP issued its order.FEA-SR petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the FLRA's decisions. The court held that it had jurisdiction to review the petition because the FLRA's decisions involved an unfair labor practice. However, on the merits, the court rejected FEA-SR's claims and denied the petition for review. The court agreed with the FLRA that the arbitrator lacked authority to review the FSIP order and that the agreement was executed when the FSIP issued its order. View "Federal Education Association Stateside Region v. FLRA" on Justia Law

The case involves a divorced couple, Bradley Carter (father) and Rachel Carter (mother), who have two children. Following their divorce, the mother, who had an alcohol use disorder, was granted supervised visits with her children twice a month. After two years of sobriety and the impending closure of their visitation center, the mother requested unsupervised visits and weekends with her children, which the father opposed.The Circuit Court initially sent the parties to mediation, which proved unsuccessful. At the final hearing, the mother requested two modifications of her parental rights and responsibilities: unsupervised parenting time and an expansion of her parenting time. The Circuit Court denied her request, maintaining the schedule of two, two-hour supervised visits with the mother per month with a mutually agreeable supervisor. The mother appealed this decision.The Supreme Court of New Hampshire reviewed the case. The mother argued that the trial court improperly narrowed its “present environment” inquiry to the children’s routine with the father and failed to consider other factors, including the infrequency of their contact with their mother. The Supreme Court agreed with the mother, stating that the children’s “present environment” is determined by assessing the surroundings or conditions in which the children now exist, which includes their daily activities, mental and emotional states, and their needs.The Supreme Court vacated the trial court’s order denying the mother’s request for a modification of parenting time and remanded for the trial court to reconsider her request. The Supreme Court also vacated the court’s denial of her request for unsupervised visitation, allowing the parties to clarify the statutory basis for the relief they are requesting on remand. View "In the Matter of Carter & Carter" on Justia Law

The case involves SKAV, L.L.C., the owner of a Best Western hotel in Abbeville, Louisiana, and Independent Specialty Insurance Company. The hotel was damaged by Hurricane Laura in August 2020, and SKAV filed a claim on a surplus lines insurance policy it had purchased from Independent Specialty. The policy contained an arbitration clause requiring all disputes to be settled by arbitration. However, SKAV sued Independent Specialty in the Western District of Louisiana, alleging that the insurance company had failed to adequately cover the hotel's hurricane damage under the policy's terms. Independent Specialty moved to compel arbitration, but the district court denied the motion, citing a prior decision that concluded that § 22:868 of the Louisiana Revised Statutes voids an arbitration provision in a contract for surplus lines insurance.The case was appealed to the United States Court of Appeals for the Fifth Circuit. The main dispute was the effect of § 22:868 of the Louisiana Revised Statutes on the insurance policy's arbitration clause. The statute bars insurance policies from depriving Louisiana courts of jurisdiction and permits, in limited circumstances, forum- and venue-selection provisions. The court noted that there were conflicting decisions on this issue from district courts in Louisiana and New York.The Fifth Circuit Court of Appeals affirmed the district court's decision. The court concluded that the arbitration clause in the surplus lines insurance policy was void under § 22:868. The court reasoned that the Louisiana Legislature's 2020 amendments to the statute did not reverse the state's longstanding anti-arbitration policy. The court also rejected Independent Specialty's argument that the issue of the arbitration clause's validity must itself go to arbitration, stating that when a statute prevents the valid formation of an arbitration agreement, the court cannot compel arbitration, even on threshold questions of arbitrability. View "S. K. A. V. v. Independent Specialty Insurance Co." on Justia Law

The case involves the State of Connecticut and the Connecticut State University Organization of Administrative Faculty, AFSCME, Council 4, Local 2836, AFL-CIO. The plaintiff, the state, sought to vacate an arbitration award reinstating a union member to his employment as the director of student conduct at a state university. The defendant union sought to confirm the award. The grievant’s employment had been terminated in connection with a domestic dispute involving his wife. The university conducted its own investigation and subsequently informed the grievant that his employment was being terminated as a result of his off-duty conduct. The union contested the grievant’s discharge, and an arbitration hearing was held. The arbitrator concluded that the university did not have just cause to terminate the grievant’s employment and ordered his reinstatement.The state contended that the award violated public policy. The trial court rendered judgment granting the state’s application to vacate the award and denying the union’s motion to confirm the award, from which the union appealed. The Supreme Court of Connecticut held that the state failed to demonstrate that enforcement of the arbitration award reinstating the grievant to his position of director of student conduct violated public policy. The court reversed the trial court’s judgment and remanded the case with direction to grant the union’s motion to confirm the award and to deny the state’s application to vacate the award. View "State v. Connecticut State University Organization of Administrative Faculty" on Justia Law

Sun Holdings purchased a workers’ compensation policy from American Zurich Insurance, which required Sun to reimburse American Zurich for the first $250,000 of each claim. American Zurich fulfilled its obligations under the policy, but Sun did not. When Sun received bills, it ignored them without explanation or justification. American Zurich invoked the policy’s dispute-resolution clause, which called for arbitration in Illinois under New York law and the rules of the American Arbitration Association. During the arbitration, Sun offered a series of weak excuses, which the arbitrators dismissed. The arbitrators ordered Sun to pay what American Zurich claimed (approximately $1.1 million plus 9% interest from the time each bill was due) and added almost $175,000 in attorneys’ fees as a sanction for frivolous defense.American Zurich applied to the United States District Court for the Northern District of Illinois for enforcement of the arbitration award. Sun argued that the arbitrators had exceeded their authority by directing it to pay the insurer’s legal fees, citing two sentences in the contract. The district court disagreed with Sun and ordered it to pay the award in full.The case was then brought before the United States Court of Appeals for the Seventh Circuit. The court held that the arbitrators had interpreted the contract when they concluded that its reference to legal fees did no more than adopt the American Rule, which allows each side to pay its own lawyers but does not forbid sanctions for frivolous litigation. The court stated that whether the arbitrators were right or wrong in their interpretation was not its concern. The court also noted that Sun's arguments were requests to contradict the arbitrators’ findings, which the Federal Arbitration Act forbids. The court affirmed the district court's decision and issued an order for Sun to show cause why sanctions should not be imposed for its frivolous appeal. View "American Zurich Insurance Company v. Sun Holdings, Inc." on Justia Law

The case involves Ling Mueller and Paul Mueller, a married couple who separated in 2017. During their marriage, they cultivated cannabis and buried the proceeds on their property. They initially attempted to use a collaborative law process to dissolve their marriage. They signed an agreement that outlined the collaborative process, including a confidentiality clause. However, the agreement also explicitly stated that it did not create any legally enforceable rights or obligations. During the second collaborative session, Ling became angry and left the meeting abruptly when asked about investments she had made using the proceeds from the couple's marijuana operation. She subsequently initiated divorce proceedings in family court.In the family court, Paul subpoenaed both parties' collaborative attorneys to testify about statements Ling made during the second collaborative session. Ling argued that the confidentiality clause in the agreement shielded her statements from disclosure. However, the court found the agreement, including the confidentiality clause, to be unenforceable. It also found that Ling had waived the confidentiality provision. As a result, it allowed the parties' collaborative attorneys to testify about the second collaborative session. The court found Ling to be not credible and ordered her to make a $161,077 equalizing payment.In the Court of Appeal of the State of California First Appellate District Division Five, the sole issue on appeal was the admissibility of testimony about the second collaborative session. This depended on whether the confidentiality clause was enforceable despite the agreement's multiple statements that it created no enforceable rights or obligations. The court found that the agreement unequivocally stated that it did not give either party enforceable legal rights. Therefore, the court affirmed the family court's decision that the confidentiality clause was unenforceable. View "Mueller v. Mueller" on Justia Law