Justia Arbitration & Mediation Opinion Summaries

After disputes arose between a general contractor and two of its subcontractors, an arbitrator awarded the subcontractors money for the labor and material they had provided the general contractor along with associated costs, attorneys' fees, interest, and other sums. The general contractor declared bankruptcy before paying up, and the surety company that issued a bond guaranteeing the subcontractors would be paid tendered amounts representing only the part of the awards that compensated for labor and material (and some interest). But the subcontractors (or in one case, the subcontractor's assignee) wanted the whole of the awards and sued in federal court to get it.   The district court sided with the surety and granted it summary judgment. The Eighth Circuit reversed and remanded the district court’s decision granting summary judgment to the surety. The court held that the bond at issue obligates the surety to pay not only for labor and material but also for other related items to which Plaintiffs’ subcontracts entitle them (or their assignees). The court explained that the bond provided that if the subcontractors were not paid in full, which is the case here, they were entitled to sums "justly due," which included costs, attorneys' fees and interest. View "Owners Insurance Company v. Fidelity & Deposit Company" on Justia Law

Técnicas Reunidas de Talara S.A.C., a Peruvian corporation, subcontracted with SSK Ingeniería y Construcción S.A.C., another Peruvian corporation, to provide electromechanical work on the refinery project. In response to a contract dispute, the arbitral panel issued a $40 million award to SSK. During the arbitration, two of Técnicas's attorneys withdrew and joined the opposing party’s law firm. More than a month later Técnicas objected in the International Court of Arbitration to alleged conflicts of interest held by the arbitrators, but its objection made no mention of the attorney side switching.   The district court agreed with Técnicas that a public policy against attorney side-switching exists in the United States but concluded that the public policy was not contravened in this case because there was no actual prejudice and Técnicas waived its objection. At issue on appeal concerns whether a party to an international arbitration can obtain a vacatur of an adverse arbitral award because two of its attorneys withdrew and joined the opposing party’s law firm during the arbitral proceedings.     The Eleventh Circuit affirmed the judgment. The court explained that Técnicas waived its right to complain. The court explained thatTécnicas, the losing party in the arbitration, had knowledge of the attorney side-switching but did not object until Técnicas received an adverse award more than a year later, The court wrote that its conclusion is consistent with the well-settled principle “that a party may not sit idle through an arbitration procedure and then collaterally attack that procedure on grounds not raised . . . when the result turns out to be adverse.” View "Tecnicas Reunidas De Talara S.A.C. v. SSK Ingenieria Y Construccion S.A.C." on Justia Law

Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law

Plaintiff worked as a driver for California Transit. After California Transit terminated his employment, Evenskaas filed this wage and hour class action against California Transit; its owner, and the company that administered California Transit’s payroll, Personnel Staffing Group, LLC (collectively, the California Transit defendants).   Because Plaintiff signed an arbitration agreement, in which he agreed to arbitrate all claims arising from his employment and waived his right to seek class-wide relief, the California Transit defendants filed a motion to compel arbitration. The trial court denied the motion. The California Transit defendants appealed, contending the FAA applies to the arbitration agreement.   The Second Appellate District reversed the order denying Defendants’ motion to compel arbitration is reversed. The court directed the trial court to enter a new order granting the motion and dismissing Plaintiff’s class claims. The court explained that because the paratransit services California Transit hired Plaintiff to provide involve interstate commerce for purposes of the FAA, the FAA applies to the arbitration agreement and preempts the Gentry rule that certain class action waivers in employment arbitration agreements are unenforceable. View "Evenskaas v. California Transit, Inc." on Justia Law

Plaintiff-Appellee Preble-Rish Haiti, S.A. filed this case pursuant to Rule B of the Supplemental Rules for Admiralty or Maritime Claims in the Federal Rules of Civil Procedure. It sought to attach assets to secure a partial final arbitration award against the Republic of Haiti and the Bureau de Monétisation de Programmes d’Aide au Developpement (BMPAD). Garnishee BB Energy USA, L.L.C.(BB Energy) admitted to holding credits belonging to BMPAD located in the Southern District of Texas.   Although BB Energy raised BMPAD’s sovereign immunity from prejudgment attachment again, the district court stated it had already decided that issue and cited its August 10, 2021 order. BB Energy appealed the January 4, 2022 order pursuant to the collateral order doctrine   The Fifth Circuit reversed the district court’s ruling and vacated the writ of attachment. The court explained that to satisfy Section 1610(d), an explicit waiver of immunity from prejudgment attachment must be express, clear, and unambiguous. Anything short of that is insufficient. Here, because there is no such explicit waiver in the contract or elsewhere, the district court erred in concluding BMPAD waived its sovereign immunity from prejudgment attachment. View "Preble-Rish Haiti, S.A. v. BB Energy USA" on Justia Law

The Supreme Court reversed the judgment of the circuit court denying a refund of Business and Professional Occupational License (BPOL) taxes Coxcom, LLC paid to Fairfax County on the grounds that the Internet Tax Freedom Act's (ITFA) grandfather clause permitted the County to impose the tax, holding that the grandfather clause did not apply.Since 2000, Cox had provided internet access service to customers in the County. In 2016, Cox filed a request for a BPOL tax refund for the tax years 2013 through 2015, asserting that the federal ITFA preempted the County from imposing the BPOL tax on internet access service revenues. The circuit court concluded that the BPOL tax qualified for the grandfather clause exemption. The Supreme Court reversed, holding (1) the circuit court correctly found that the ITFA applied to the County's BPOL tax; and (2) the grandfather clause did not rescue the County's imposition of a tax on internet access services. View "Coxcom, LLC v. Fairfax County" on Justia Law

The Supreme Court reversed the rulings of the circuit court denying Bridgecrest Acceptance Corporation's motions to dismiss or stay the counterclaims against it and to compel the matters to arbitration pursuant to an arbitration agreement, holding that the arbitration agreement was legally valid, conscionable, and not precluded by collateral estoppel.In two separate cases, Bridgecrest sought a deficiency judgment against consumers who had defaulted on car payments. The consumers brought counterclaims, raising putative class claims for unlawful and deceptive business practices. Bridgecrest moved to stay or dismiss the consumers' counterclaims and compel arbitration pursuant to the arbitration agreements signed by the consumers when buying their vehicles. The circuit court overruled the motions in both cases. The Supreme Court reversed, holding that the circuit court erred in refusing to compel arbitration. View "Bridgecrest Acceptance Corp. v. Donaldson" on Justia Law

After plaintiff filed this class-action complaint against defendants, defendants filed a motion to compel arbitration. The trial court granted the motion. Plaintiff appealed, and the Court of Appeals affirmed. The Oregon Supreme Court granted review of the matter, finding that plaintiff and defendants executed a contract—the “Driver Services Agreement” (DSA)—for plaintiff to provide delivery services for defendants. The DSA stated that drivers are independent contractors. The DSA includes a section on dispute resolution. That section provides that any party “may propose mediation as appropriate” as a means for resolving a dispute arising out of or relating to the DSA. It then provided that, if the parties did not pursue mediation or mediation failed, “any dispute, claim or controversy” arising out of or relating to the DSA—including disputes about “the existence, scope, or validity” of the DSA itself—would be resolved through binding arbitration conducted by a panel of three arbitrators. The DSA also included a savings clause, which allowed for the severance of any invalid or unenforceable term or provision of the DSA. On review, plaintiff argued, inter alia, that the arbitration agreement within the DSA was unconscionable because it required him to arbitrate his wage and hour claims but prohibited the arbitrators from granting him relief on those claims. Plaintiff based his argument on a provision of the arbitration agreement that stated that the arbitrators could not “alter, amend or modify” the terms and conditions of the DSA. The Court of Appeals agreed with defendant’s reading of the DSA, as did the Supreme Court: read in the context of the DSA as a whole, the provision that the arbitrators may not “alter, amend or modify” the terms and conditions of the DSA “is not plausibly read as a restriction on their authority to determine what terms are enforceable or what law is controlling.” View "Gist v. Zoan Management, Inc." on Justia Law

Esso Exploration and Production Nigeria Limited, (“Esso”) the Nigerian subsidiary of an international oil corporation, asked federal courts in the United States to enforce an arbitral award of $1.8 billion, plus interest, against the Nigerian National Petroleum Corporation (“NNPC”) that Nigerian courts have partially set aside. Courts in Nigeria previously set aside the Award in part. Nonetheless, Esso seeks enforcement of the entire Award under the New York Convention. NNPC urges dismissal of Esso’s suit for lack of personal jurisdiction and on the basis of forum non-conveniens, and it opposes the petition for enforcement on the merits.   The Second Circuit determined affirmed the district court’s rulings because its factual determinations were meticulous and its legal conclusions sound. The court held that NNPC has standing on cross-appeal to challenge the denial of its motion to dismiss, even though the district court ruled in its favor on the merits. NNPC has such standing because our partial vacatur on the merits revives the action against it, and it may face an adverse ruling on remand. On considering NNPC’s challenges to the district court’s denial of its motion to dismiss for want of personal jurisdiction and forum non-conveniens.   The court wrote that although the district court should have broadened its analysis under the Pemex standard, it ultimately agreed with its conclusion that U.S. courts owe the Nigerian judgments setting aside the Award comity.  The court concluded, however, that the district court went too far by refusing to enforce not only those parts of the Award that the Nigerian courts set aside but also those parts of the Award that remain viable under the Nigerian judgments. View "Esso Expl. and Prod. Nigeria Ltd. v. Nigerian Nat'l Petroleum Corp." on Justia Law

The Court of Chancery granted summary judgment in favor of Respondents and confirmed a May 10, 2021 arbitration award, holding that this court was obliged to grant Respondents' cross-motion for summary judgment to confirm the award.Respondent commenced an arbitration proceeding against Petitioner asserting several claims relating to amendments to the parties' LLC agreement. After the arbitrator issued decisions, Petitioner filed a petition to vacate the award in part. Respondent and affiliated entities filed a counterclaim to confirm the arbitration award. All parties moved for summary judgment. The Court of Chancery granted summary judgment in favor of Respondents and confirmed the arbitration award, holding that Petitioner's challenges to the award failed. View "Polychain Capital LP v. Pantera Venture Fund II LP" on Justia Law