Justia Arbitration & Mediation Opinion Summaries

In 2020 and 2021, Rohan Dhruva and Joshua Stern, residents of California, created accounts and subscribed to CuriosityStream, an online streaming service. They later discovered that CuriosityStream was sharing their event data and other identifiers with Meta, which they claimed violated the federal Video Privacy Protection Act and California state law. Consequently, they filed a putative class action lawsuit in Maryland, where CuriosityStream is headquartered.The United States District Court for the District of Maryland denied CuriosityStream's motion to compel arbitration. The court acknowledged that the website provided adequate notice of the Terms of Use through a conspicuous hyperlink but concluded that users were not given clear notice that clicking the "Sign up now" button constituted agreement to the Terms of Use. CuriosityStream's motion for reconsideration was also denied.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court concluded that Dhruva and Stern had reasonable notice that registering for the streaming service would constitute assent to the website’s Terms of Use, which included an arbitration clause. The court held that the design and content of the website provided sufficient notice of the terms and that Dhruva and Stern manifested their assent by registering with the website. Consequently, the Fourth Circuit reversed the district court's order denying the motion to compel arbitration and remanded the case for further proceedings. View "Dhruva v. CuriosityStream, Inc." on Justia Law

The plaintiff, New England Property Services Group, LLC, filed a claim under a homeowners’ insurance policy for wind damage to a property in Greenville, Rhode Island. The insurance company, Vermont Mutual Insurance Company, provided an estimate for the loss, which the plaintiff disputed. The plaintiff invoked the appraisal process outlined in the insurance agreement. Each party appointed an appraiser, but they could not agree on an umpire, so the Superior Court appointed one. The appraisal concluded with an award signed by the plaintiff’s appraiser and the umpire, but not the defendant’s appraiser.The plaintiff filed a petition in the Superior Court to confirm the appraisal award under Rhode Island’s Arbitration Act. The defendant filed a cross-petition to vacate the award, arguing that the plaintiff’s appraiser was ineligible due to a financial interest in the award. The Superior Court granted the defendant’s cross-petition to vacate the award and denied the plaintiff’s petition to confirm it. The plaintiff did not appeal this order but instead filed a motion to reconsider, arguing that the appraisal process was not arbitration because the insurance contract did not require appraisers to be disinterested. The Superior Court denied this motion.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court’s order. The Court held that the appraisal process was akin to arbitration, despite the absence of the word “disinterested” in the insurance contract. The Court noted that the plaintiff had initially sought to confirm the award under the Arbitration Act and only challenged the nature of the proceedings after the award was vacated. The Court concluded that the Superior Court had subject-matter jurisdiction and that the appraisal clause in the insurance policy constituted arbitration under the Arbitration Act. View "New England Property Services Group, LLC v. Vermont Mutual Insurance Company" on Justia Law

The Berkeley County School District filed a lawsuit against several defendants, including HUB International Ltd. and HUB International Midwest Ltd., alleging claims related to insurance policies and services provided. HUB sought to compel arbitration based on brokerage service agreements (BSAs) from 2002, 2003, 2005, 2006, 2009, and 2011. The district court denied the motion, and HUB appealed. The appellate court reversed and remanded for a trial to resolve factual disputes about the agreements. After a bench trial, the district court again denied the motion, finding no meeting of the minds for the 2006, 2009, and 2011 BSAs and precluding consideration of the 2002 and 2003 BSAs. HUB appealed again, and the appellate court vacated the judgment regarding the 2002 and 2003 BSAs.On remand, the district court found the 2002 and 2003 BSAs valid and enforceable but denied HUB's motion to compel arbitration, deciding that the dispute did not fall within the scope of those agreements. HUB appealed this decision.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the district court erred by deciding the arbitrability of the dispute itself. The appellate court held that the arbitration provisions in the 2002 and 2003 BSAs, which incorporate the American Arbitration Association (AAA) commercial rules, clearly delegate arbitrability questions to the arbitrator. Therefore, the district court should have compelled arbitration to resolve whether the claims fall within the scope of the arbitration agreements.The Fourth Circuit reversed the district court's judgment and remanded the case with instructions to compel arbitration of the threshold arbitrability question in accordance with the parties' agreement. View "Berkeley County School District v. HUB International Limited" on Justia Law

Plaintiffs Tiffaney Whitt, on behalf of her minor children, and Jeremiah Parker, Whitt’s adult son, filed a lawsuit against Kearney School District and Durham School Services, L.P., due to racial harassment experienced by Parker and his siblings on a school bus operated by Durham. Plaintiffs alleged a 42 U.S.C. § 1981 claim against Durham, asserting they were third-party beneficiaries of the contract between Kearney and Durham, which required safe, harassment-free transportation.The United States District Court for the Western District of Missouri denied Durham’s motion to dismiss and motion for summary judgment, which challenged the validity of Plaintiffs’ § 1981 claim. Durham then filed a motion to compel arbitration based on an arbitration clause in its contract with Kearney. The district court denied this motion, concluding that Durham waived its right to enforce the arbitration clause by not raising it earlier in the litigation. Durham appealed this decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court’s judgment. The appellate court held that Durham knew of its right to arbitrate, as it possessed the contract containing the arbitration clause, and acted inconsistently with that right by engaging in extensive litigation and discovery before filing the motion to compel arbitration. The court also noted that the district court’s consideration of prejudice to Plaintiffs, although erroneous, did not affect the substantial rights of the parties. The appellate court rejected Durham’s argument that it could not have known to seek arbitration until the district court’s summary judgment ruling and found that Durham’s actions were inconsistent with preserving its right to arbitrate. The court also denied Plaintiffs’ request to adopt a process for certifying interlocutory appeals as frivolous and their request for costs under Fed. R. App. P. 38. View "Parker v. Durham School Services, L.P." on Justia Law

Piedmont Comprehensive Pain Management Group, LLC ("Piedmont") provides pain-management care and had a business arrangement with DocRx Dispensing, Inc. ("DRD") for billing and collection services. DRD collected payments from insurance companies for medications dispensed by Piedmont and kept a portion as compensation. In 2022, Piedmont sued DRD and other related entities and individuals, alleging breach of contract, unjust enrichment, and various tort-based claims, accusing them of improperly depriving Piedmont of funds owed for dispensing medications.The Mobile Circuit Court initially granted the defendants' motion to compel arbitration based on an April 2017 agreement between Piedmont and DRD, which included an arbitration clause. The court stayed the action pending arbitration. During arbitration, the defendants produced a later August 2017 agreement, which also contained an arbitration clause and was signed by both parties. Piedmont then requested the trial court to lift the stay, arguing that the defendants could not insist on arbitration while denying the existence of the April 2017 agreement. The trial court lifted the stay, and the defendants appealed.The Supreme Court of Alabama reviewed the case de novo. The court held that claims based on the August 2017 agreement, which was signed by both parties, must be arbitrated. The court also noted that the trial court's initial order compelling arbitration of claims based on the April 2017 agreement was a final judgment, and Piedmont's failure to appeal within the required time frame meant the trial court had no jurisdiction to set aside that order. Consequently, the Supreme Court of Alabama reversed the trial court's order lifting the stay and remanded the case for further proceedings consistent with its opinion. View "DocRx, Inc. v. Piedmont Comprehensive Pain Management Group, LLC" on Justia Law

Mark Lovil, the manager of R.K. Metals, LLC, signed a commercial lease with E&E, Co. Inc. in 2015 in his representative capacity. The lease did not include a personal guaranty or arbitration clause. R.K. Metals became delinquent in rent payments, leading E&E to require a new lease in 2018, which included both a personal guaranty and an arbitration clause. Lovil signed the new lease as president of R.K. Metals, but R.K. Metals claimed they were unaware of the new clauses until the final version was delivered.R.K. Metals filed a complaint in the Lee County Circuit Court in May 2020, seeking declaratory relief and asserting breach-of-contract claims. The circuit court found the lease enforceable and ordered arbitration. E&E sought to include Lovil personally in the arbitration, leading to a determination of his status as guarantor. The circuit court granted E&E’s Motion for Summary Judgment, finding Lovil personally liable as guarantor and a necessary party to arbitration.The Supreme Court of Mississippi reviewed the case de novo. The court held that Lovil’s signature on the lease, despite his corporate designation, bound him personally as guarantor due to the clear language of the guaranty clause. The court also found that Lovil, as personal guarantor, was bound by the arbitration clause. The court applied the doctrine of equitable estoppel, noting Lovil’s close legal relationship with R.K. Metals, and concluded that he must participate in arbitration.The Supreme Court of Mississippi affirmed the circuit court’s judgment, holding that Lovil is personally bound as guarantor and compelled to participate in arbitration. View "R.K. Metals, LLC v. E & E Co., Inc." on Justia Law

Vicor Corporation supplied power converter modules to Foxconn for years. Vicor alleged that Foxconn switched to manufacturing and importing knock-off modules that infringed Vicor's patents. In July 2023, Vicor filed a complaint with the International Trade Commission (ITC) alleging patent infringement by Foxconn. Simultaneously, Vicor sued Foxconn for patent infringement in the United States District Court for the Eastern District of Texas, which stayed the case pending the ITC's resolution. Foxconn then initiated arbitration in China, claiming Vicor had agreed to arbitrate disputes based on terms in purchase orders. Vicor filed a new lawsuit in the United States District Court for the District of Massachusetts, seeking to enjoin the arbitration and declare it was not bound by the arbitration or license terms.The district court granted a temporary restraining order (TRO) and later a preliminary injunction against the arbitration, despite Foxconn's request for a stay under 28 U.S.C. § 1659. The court acknowledged that Section 1659 applied but concluded it could still grant preliminary relief based on the All Writs Act and its inherent authority to preserve its jurisdiction.The United States Court of Appeals for the First Circuit reviewed the case. The court concluded that Section 1659 required the district court to stay proceedings because Vicor's claims involved issues also present in the ITC proceeding. The appellate court held that the district court erred in granting the preliminary injunction despite Foxconn's request for a stay. Consequently, the First Circuit vacated the preliminary injunction and remanded the case for further proceedings consistent with its opinion. View "Vicor Corp. v. FII USA Inc." on Justia Law

Nicole Lampo was hired by Amedisys Holding, LLC as a physical therapist. A month after her hiring, Amedisys sent an email to all employees introducing an arbitration program. The email required employees to acknowledge the arbitration materials and provided an opt-out option within 30 days. Lampo acknowledged the email but did not opt out. She continued working for Amedisys until her termination in March 2018, after which she filed a lawsuit against Amedisys and her former supervisor for wrongful discharge, tortious interference, and defamation. Amedisys moved to compel arbitration based on the arbitration agreement.The Circuit Court of Georgetown County denied Amedisys's motion to compel arbitration, concluding that Lampo's failure to opt out did not constitute acceptance of the arbitration agreement. The Court of Appeals reversed this decision, finding that Lampo had accepted the arbitration agreement as a matter of law by not opting out and continuing to work.The Supreme Court of South Carolina reviewed the case and reversed the Court of Appeals' decision. The Supreme Court held that Lampo did not accept Amedisys's offer to form an arbitration agreement by merely failing to opt out and continuing to work. The court emphasized that silence and inaction do not constitute acceptance of an offer unless specific circumstances indicate a manifestation of assent, which were not present in this case. The court concluded that there was no evidence of Lampo's intent to be bound by the arbitration agreement, and thus, no valid arbitration agreement was formed. The case was remanded for further proceedings consistent with this opinion. View "Lampo v. Amedisys Holding, LLC" on Justia Law

Presley Karlin, a 17-year-old, was injured at Urban Air Springfield, a trampoline and adventure park, due to allegedly inadequate protective cushions. After turning 18, Karlin sued Urban Air for negligence. Urban Air responded by filing a motion to compel arbitration based on an arbitration agreement signed by Karlin’s mother on his behalf. Karlin argued that his mother lacked the authority to sign the agreement and that the agreement only applied to claims arising on the day it was signed, not to his injury four months later.The Circuit Court of Greene County overruled Urban Air’s motion to compel arbitration. Urban Air appealed, limiting its arguments to the arbitration agreement signed by Karlin’s mother. The court reviewed the case de novo, focusing on whether the arbitration agreement contained a delegation clause that required threshold issues of arbitrability to be decided by an arbitrator.The Supreme Court of Missouri found that the arbitration agreement did contain a delegation clause, which required any disputes about the scope, arbitrability, or validity of the agreement to be settled by arbitration. Since Karlin did not specifically challenge the delegation clause itself, the court held that the clause was valid and enforceable. Consequently, Karlin’s claims regarding the validity and scope of the arbitration agreement must be presented to the arbitrator.The Supreme Court of Missouri vacated the circuit court’s order and remanded the case with instructions to sustain Urban Air’s motion to compel arbitration. View "Karlin vs. UATP Springfield, LLC" on Justia Law

Jason and Kacie Highsmith hired Shelter, LLC to manage a home renovation project and later contracted with Design Gaps, Inc. to design and install cabinets and closets. The contracts required arbitration for disputes but did not specify completion dates. Design Gaps failed to meet multiple promised deadlines, leading the Highsmiths to terminate the contracts and hire another company. The Highsmiths shared Design Gaps' copyrighted drawings with the new contractor. They then filed for arbitration, alleging breach of contract and other claims, while Design Gaps counterclaimed for various issues, including copyright infringement.The arbitrator held a three-day hearing, during which the Highsmiths presented multiple witnesses, while Design Gaps only presented David Glover. The arbitrator found in favor of the Highsmiths, awarding them damages and attorney’s fees, and denied Design Gaps' counterclaims, including the copyright claim, citing fair use and lack of evidence for copyright registration.Design Gaps petitioned the United States District Court for the District of South Carolina to vacate the arbitration award, arguing the arbitrator disregarded the law and failed to issue a reasoned award. The district court denied the petition and confirmed the arbitration award, also granting the Highsmiths' motion for attorney’s fees.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court dismissed the appeal, citing lack of federal jurisdiction based on the precedent set in Friedler v. Stifel, Nicolaus, & Co., which held that federal courts do not have jurisdiction over motions to vacate arbitration awards unless there is an independent basis for federal jurisdiction beyond the Federal Arbitration Act. The court concluded that the petition did not meet this requirement. View "Design Gaps, Inc. v. Shelter, LLC" on Justia Law