Justia Arbitration & Mediation Opinion Summaries

Plaintiffs, a group of retail sales employees of defendant, appealed from an order of the district court vacating an arbitration award on the ground that the arbitrator had exceeded her authority in light of the Supreme Court's decision in Stolt-Nielson S.A. v. AnimalFeeds International Corp. At issue was whether a district court had the authority to vacate an arbitration award where it believed that the arbitrator improperly interpreted the terms of an arbitration agreement. The court held that, because the district court did not undertake the appropriate inquiry - whether, based on the parties' submission for the arbitration agreement, the arbitrator had the authority to reach an issue, not whether the arbitrator decided the issue correctly - and instead substituted its own legal analysis for that of the arbitrator's, the court reversed the judgment of the district court. The court also held that, because the court found that the arbitrator acted within her authority to reach an issue properly submitted to her by the parties and reached her decision by analyzing the terms of the agreement in light of applicable law, the award should not have been vacated. Accordingly, the court remanded with instructions to confirm the award.

In three cases consolidated for review, the facts were similar. A person was admitted to a nursing home, and a family member signed an admission agreement containing an arbitration clause. After the person died, a family member filed suit against the nursing home, alleging the nursing home negligently caused injuries leading to the person's death. The nursing home sought to dismiss the lawsuit and compel the family member to participate in binding arbitration. The family members asserted the arbitration clauses were unenforceable, alleging (1) the clauses violated the West Virginia Nursing Home Act, and (2) were unconscionable under the common law. After reviewing the relevant laws, the Supreme Court held that (1) the Nursing Home Act, which states any that waiver by a nursing home resident of his right to sue for injuries sustained in a nursing home shall be void as contrary to public policy, is preempted by the Federal Arbitration Act; and (2) in the context of pre-injury nursing home admission agreements, where a personal injury or wrongful death occurred after the signing of the contract, arbitration clauses are unenforceable to compel arbitration of a dispute concerning negligence that results in a personal injury or wrongful death.

Appellant Cheryl Waiters was employed by the city of Cleveland. When the city discharged Waiters from employment, the union of which Waiters was a member filed a grievance and later demanded arbitration. The arbitrator found the city had discharged Waiters without just cause and ordered that she be reinstated to employment. Waiters then filed a complaint in the court of appeals for a writ of mandamus to compel her reinstatement to her former position with back pay and an award of attorney fees. The city subsequently reinstated Waiters to her former job. The court of appeals denied Waiters's writ, concluding that her claim for reinstatement was moot and that she failed to establish her entitlement to back pay or attorney fees. Waiters appealed. The Supreme Court affirmed the judgment of the court of appeals, holding that (1) Waiters's reinstatement claim was rendered moot when she was reinstated; (2) as a bargaining-unit employee who was represented by the union in the grievance and arbitration process, Waiters was relegated to the arbitration proceeding in which the dispute concerning the amount of back pay she would be entitled to was being decided; and (3) Waiters was not entitled to attorney fees.

In the fall of 2008 William Hartford, a high school science teacher, was fired after his Montana teaching certificate expired by his inadvertence in failing to renew it. Hartford sought to file a grievance, alleging that he had been terminated without just cause in violation of a collective bargaining agreement (CBA) entered into between Kalispell School District (District) and the Kalispell Education Association (KEA). The district superintendent, and later the board of trustees, denied Hartford's request, claiming the matter did not constitute a valid grievance under the CBA on grounds that Hartford was not a member of the bargaining unit at any point during his employment in the fall of 2008 and that he was not a "teacher" as defined under Montana law during his employment in the fall of 2008. Hartford and the KEA filed a petition in the district court to compel arbitration as provided in the CBA. The district court granted summary judgment in favor of Hartford and the KEA and ordered the matter submitted to arbitration. The Supreme Court affirmed, concluding that the questions raised by the matter were properly submitted to arbitration.

This case involved an appeal from two district court orders, (1) an order regarding motions related to arbitration and (2) a decision and order over-ruling and denying any requested relief regarding defendants' objections to order regarding motions related to arbitration. In the first order, the district court granted appellee's motion to compel arbitration and stayed district court proceedings. In the second order, the district court overruled objections to the first order. At issue was whether the order compelling arbitration was a final, appealable order. After an examination of state court rules, state statutes, and the Federal Arbitration Act, the Supreme Court held that neither the first nor the second order was an appealable order and dismissed the appeal.

This case stemmed from an asset purchase transaction where defendants and plaintiff entered into an allocation agreement that included an arbitration clause. Defendants appealed from the district court's order enjoining arbitration and denying their motion to stay judicial proceedings under section 3 of the Federal Arbitration Act ("FAA"), 9 U.S.C. 3. Defendants contended that the arbitration clause reserved the question of arbitrability for the arbitrators, and that the district court erred in determining that the dispute was not subject to arbitration. The court held that the arbitration clause in the agreement clearly and unmistakably expressed the parties' intent that the arbitrators determine questions of arbitrability, and that the district court therefore erred in permanently enjoining the arbitration and failing to stay judicial proceedings under section 3 of the FAA. Accordingly, the court reversed and remanded with instructions to grant the motion to stay proceedings under section 3 and dissolve the permanent injunction.

This lawsuit arose from the dispute between the parties about how much appellant was obligated to pay appellee for auto-glass goods and services rendered on behalf of appellant's insureds. Appellants appealed from the district court's orders dismissing its counterclaim that appellee violated Minnesota's anti-incentive statute, Minn. Stat. 325F.783, granting summary judgment in favor of appellee on appellant's counterclaim for breach of contract, and denying appellant's motion to vacate the arbitration award. The court held that, given the plain language of the statute and the ordinary meaning of the terms of rebate and credit, appellee's practice did not violate the anti-incentive statute. The court also held that even if the blast faxes at issue constituted offers to enter into unilateral contracts, appellee rejected the offers when its actions failed to conform to the terms of the offer. The court further held that the arbitration award did not require reversal or new proceedings because the award was based on the finding that appellant failed to pay the competitive price standard set forth in the applicable endorsement and Minnesota law.

This case arose from the parties' insurance agreement where appellant insured appellees against borrower defaults on appellees' loans. Appellant appealed the district court's decision to remand the case back to state court pursuant to its discretion under the Declaratory Judgment Act ("DJA"), 28 U.S.C. 2201-2202. At issue was whether the district court was required to consider appellant's motion under the Federal Arbitration Act ("FAA"), 9 U.S.C. 3, before exercising its discretion under the DJA. The court held that, because the federal court's jurisdiction was proper, it was required under the mandatory terms of the FAA to consider appellant's motion before it remanded the case pursuant to its discretion under the DJA. Accordingly, the court reversed the district court's order of remand and remanded for its consideration of appellant's FAA motion.

The union contracts state that a cost-of-living allowance will be applied to offset health insurance costs for hourly-rated employees and not be applied to hourly wage rates. The contracts state that the COLA will be equal to 1¢ per hour for each full 0.3 of a point change in the Consumer Price Index calculation. An employer was calculating the COLA on a weekly basis and maintained that the adjustment was only $0.08 per week; the union argued that the adjustment should be calculated at $3.20 per week ($0.08 x 40 hours per week). In November 2008, an arbitrator rejected management's argument that the contracts included a scrivener's error and that the COLA should be calculated on a weekly, rather than hourly basis.The district court entered summary judgment in favor of the unions. The Eleventh Circuit affirmed. The Labor Management Relations Act, 29 U.S.C. 185, preempts employers' state law fraud counterclaims. An attempt to assert a federal common law "fraudulent procurement" defense was barred by the three-month limitations period for challenging the arbitrator's award.

Defendant appealed from the district court's grant of summary judgment in favor of plaintiff, compelling arbitration of a dispute related to healthcare benefits under an expired collective bargaining agreement. At issue was whether the district court erred in granting plaintiff's motion for summary judgment and issuing an order compelling the arbitration. The court reversed and held that the district court erred in granting summary judgment and compelling arbitration where both parties vigorously disputed issues of both law and fact, including whether the 1994 agreement was ambiguous and whether the summary plan descriptions constituted an intrinsic or extrinsic evidence of the parties' intent. The parties also point to various other extrinsic evidence and vehemently disagree as to whether the bargained for fully-paid health insurance premiums for life or just for the term of the agreement. Under these circumstances, the court held that the question of whether the right to fully-paid premiums vested under the 1994 agreement was best decided in the first instance by the district court and therefore, remanded for further proceedings.