Justia Arbitration & Mediation Opinion Summaries

The federally-recognized Native American Tribe (in California) started an online lending business, allegedly operated by non-tribal companies owned by non-tribal Defendants on non-tribal land. The Plaintiffs are Virginia consumers who received online loans from tribal lenders while living in Virginia. Although Virginia usury law generally prohibits interest rates over 12%, the interest rates on Plaintiffs’ loans ranged from 544% to 920%. The Plaintiffs each electronically signed a “loan agreement,” “governed by applicable tribal law,” and containing an “Arbitration Provision.” The borrowers defaulted and brought a putative class action against tribal officials and two non-members affiliated with the tribal lenders.The district court denied the defendants’ motion to compel arbitration and motions to dismiss on the ground of tribal sovereign immunity except for a Racketeer Influenced and Corrupt Organizations Act (RICO) claim. The Fourth Circuit affirmed. The choice-of-law clauses of this arbitration provision, which mandate exclusive application of tribal law during any arbitration, operate as prospective waivers that would require the arbitrator to determine whether the arbitration provision impermissibly waives federal substantive rights without recourse to federal substantive law. The arbitration provisions are unenforceable as violating public policy. Substantive state law applies to off-reservation conduct, and although the Tribe itself cannot be sued for its commercial activities, its members and officers can be. Citing Virginia’s interest in prohibiting usurious lending, the court refused to enforce the choice-of-law provision. RICO does not give private plaintiffs a right to injunctive relief. View "Hengle v. Treppa" on Justia Law

In 2007, ROHM Japan and MaxPower entered into a technology license agreement (TLA). ROHM Japan was permitted “to use certain power [metal oxide semiconductor field-effect transistors (MOSFET)]-related technologies of” MaxPower (Licensor) developed under a Development and Stock Purchase Agreement in exchange for royalties paid to MaxPower. The TLA, as amended in 2011, includes an agreement to arbitrate “[a]ny dispute, controversy, or claim arising out of or in relation to this Agreement or at law, or the breach, termination, or validity thereof.” Arbitration is to be conducted “in accordance with the provisions of the California Code of Civil Procedure.”In 2019, a dispute arose between ROHM Japan and MaxPower concerning whether the TLA covers ROHM’s silicon carbide MOSFET products. MaxPower notified ROHM Japan of its intent to initiate arbitration. Shortly thereafter, ROHM's subsidiary, ROHM USA, sought a declaratory judgment of noninfringement of four MaxPower patents in the Northern District of California and four inter partes review petitions. The district court granted MaxPower’s motion to compel arbitration and dismissed the case without prejudice, reasoning that the TLA “unmistakably delegate[s] the question of arbitrability to the arbitrator.” The Federal Circuit affirmed. In contracts between sophisticated parties, incorporation of rules with a provision on the subject is normally sufficient “clear and unmistakable” evidence of the parties’ intent to delegate arbitrability to an arbitrator. View "ROHM Semiconductor USA, LLC v. MaxPower Semiconductor, Inc." on Justia Law

In her complaint, plaintiff Pamela Chambers alleged that she received a written communication from a debt collector contracted by Crown that failed to comply with the CFDBPA’s notice formatting requirement. She filed a putative class action lawsuit against Crown Asset Management, LLC. Crown moved to compel arbitration, relying on an affidavit from an employee of Chambers’s original creditor, Synchrony Bank (Synchrony), who stated in part that “Synchrony’s records” showed a credit card account agreement containing an arbitration clause was mailed to Chambers. Chambers objected to the affidavit on various evidentiary grounds. The trial court sustained the objections and denied Crown’s motion to compel arbitration. Crown appealed, contending the trial court erred by sustaining Chambers’s evidentiary objections and denying the motion to compel. Finding no reversible error, the Court of Appeal affirmed. View "Chambers v. Crown Asset Management, LLC" on Justia Law

Aviles worked for ADT, installing security systems in customers’ homes; he spied on customers using cameras he had installed. ADT discovered Aviles’s misconduct, fired him, and reported him to the authorities. The Richmonds, citizens of Texas, among Aviles’s victims, sued Aviles and ADT in Texas state court. The Richmonds’ contract with ADT contained an arbitration clause. ADT filed a federal suit under the Federal Arbitration Act, alleging complete diversity between the Richmonds and ADT, which is a citizen of Florida and Delaware.The Fifth Circuit vacated the dismissal of the suit. A federal court can hear a suit to compel arbitration only if it could hear “a suit arising out of the controversy between the parties,” 9 U.S.C. 4. To define that “controversy,” a federal court must “look through” the FAA petition “to the parties’ underlying substantive controversy.” If a federal court could hear a suit arising from that “whole controversy,” then that court can hear the FAA suit. The district court looked through ADT’s federal suit to the Richmonds’ state-court complaint, which named Aviles and ADT as defendants, and concluded that the “whole controversy” included Aviles, ADT, and the Richmonds. Those parties lacked diversity of citizenship because Aviles is from Texas. The district court erred in extending the “whole controversy” analysis to define the “parties” to that controversy. View "ADT, L.L.C. v. Richmond" on Justia Law

Plaintiffs-appellees Darrell Reeves and James King worked as welding inspectors for Enterprise Products Partners through third party staffing companies, Cypress Environmental Management and Kestrel Field Services. Reeves brought a collective action claim to recover unpaid overtime wages under the Fair Labor Standards Act. King later consented to join the putative collective action and was added as a named plaintiff. Enterprise argued that both Reeves and King signed employment contracts with their respective staffing companies that contained arbitration clauses for disputes. The Tenth Circuit found that indeed both plaintiffs’ respective contracts contained arbitration clauses, and that under the doctrine of equitable estoppel, these agreements require the claims to be resolved in arbitration. “Because Reeves and James’s claims allege substantially interdependent and concerted misconduct by Enterprise and non-defendant signatories, Cypress and Kestrel, arbitration should be compelled for these claims.” The Court reversed the district court’s denial of Enterprise’s motions to compel. View "Reeves, et al. v. Enterprise Products Partners" on Justia Law

The First Circuit reversed the order of the district court denying Lyft Inc.'s request to compel arbitration in this purported class action but affirmed the denials of preliminary injunctive relief, holding that the Federal Arbitration Act (FAA) applied.Plaintiffs were Massachusetts-based rideshare drivers who used the Lyft application and platform to find passengers. In their complaint, Plaintiffs claimed that Lyft misclassified them as independent contractors rather than employees. At issue on this appeal were rulings concerning Plaintiffs' requests for preliminary injunctive relief and the denial of Lyft's request to compel arbitration. The First Circuit reversed in part, holding (1) the FAA applies in this case; and (2) the district court did not err in denying Plaintiffs' requested injunction. View "Cunningham v. Lyft, Inc." on Justia Law

Elkhorn is a farm labor contractor for a California-based vegetable grower. As part of Elkhorn’s orientation for incoming employees, Martinez-Gonzalez signed employment paperwork that included arbitration agreements. The district court held that the arbitration agreements resulted from undue influence and economic duress and were invalid and unenforceable.The Ninth Circuit reversed and remanded for determination of whether Martinez-Gonzalez’s allegation of federal and state labor and wage law violations fell within the scope of the arbitration agreements. Under California law, the doctrine of economic duress did not render the arbitration agreements unenforceable because Elkhorn did not commit a wrongful act and reasonable alternatives were available to Martinez-Gonzalez. Martinez-Gonzalez made the journey from Mexico to California, where he was dependent on Elkhorn housing and had already started work but, while “not ideal,” those circumstances did not constitute a “wrongful act” under California law. No one at Elkhorn told Martinez-Gonzalez that refusing to sign the agreements was a cause for termination. It was clearly erroneous for the district court to conclude that MartinezGonzalez lacked a reasonable alternative. The timing and place of the orientation did not show that Martinez-Gonzalez’s will was overborne; the lack of time to consult with attorneys or read the agreements did not improperly induce his signatures. Elkhorn’s representatives’ instructions to sign the agreements quickly were not insistent demands. View "Martinez-Gonzalez v. Elkhorn Packing Co. LLC" on Justia Law

Gezu worked for Charter, 2017-2019. In October 2017, Charter sent an email to all active, non-union employees announcing a new employment-based legal dispute resolution program. The email instructed employees about their right to opt out. The arbitration agreement, which was available in full on Charter’s intranet, required arbitration of all disputes, claims, and controversies that could be asserted in court or before an administrative agency.During his employment, Gezu allegedly suffered discrimination based on his race and national origin and Charter did not take any action to address the discrimination despite being made aware of it. Charter terminated Gezu in May 2019, based on what Gezu alleges were pretextual reasons. Gezu, acting pro se, asserted claims under Title VII of the Civil Rights Act and 42 U.S.C. 1981. The Fifth Circuit affirmed an order granting Charter’s motion to compel arbitration and to dismiss. There was a valid modification to Gezu’s employment contract, consisting of notice and acceptance. View "Gezu v. Charter Communications" on Justia Law

Union Square owns the San Francisco building where Saks has operated a store since 1991. The lease's initial 25-year term was followed by successive options to renew; it mandates arbitration to determine Fair Market Rent for renewals. Section 3.1(c)(iv) states that “[e]ach party shall share equally the fees and expenses of the arbitrator. The attorneys’ fees and expenses of counsel for the respective parties and of witnesses shall be paid by the respective party engaging such counsel or calling such witnesses.” Section 23.10 permits a prevailing party to recover costs, expenses, and reasonable attorneys’ fees, “Should either party institute any action or proceeding to enforce this Lease ... or for damages by reason of any alleged breach ... or for a declaration of rights hereunder,The parties arbitrated a rent dispute in 2017. The trial court vacated the First Award, in favor of Union Square. To avoid re-arbitration, Union Square sought mandamus relief, which was summarily denied. While discussions concerning another arbitration were pending, Union Square filed a superior court motion to appoint the second arbitrator. The court-appointed arbitrator ruled in favor of Saks.The court of appeal affirmed the orders vacating the First Award and confirming the Second Award. Saks sought $1 million in attorneys’ fees for “litigation proceedings arising out of the arbitration,” not for the arbitrations themselves, citing Section 23.10. The court of appeal affirmed the denial of the motion. Each party agreed to bear its own attorneys’ fees for all proceedings related to settling any disagreement around Fair Market Rent under Section 3.1(c). View "California Union Square L.P. v. Saks & Company LLC" on Justia Law

Janet signed a Durable Power of Attorney and Nomination of Conservator (DPOA), appointing Randall as her attorney-in-fact. The DPOA advised that it “does not authorize anyone to make medical and other health care decisions,” authorized Randall to “demand, arbitrate, and pursue litigation on [Janet’s] behalf, authorized Randall to “do all things and enter into all transactions necessary to provide for the Principal’s personal care,” including the provision of institutional residential care. Janet later moved into a residential care facility, Atria; Randall signed a one-page “Agreement to Arbitrate.”While living at Atria, Janet allegedly fell and broke her hip. Janet, through Randall as her guardian ad litem, sued Atria under the Elder Abuse and Dependent Adult Civil Protection Act (Welf. & Inst. Code 15600), asserting elder neglect and abuse, negligence, fraud, financial elder abuse, and unfair business practices, alleging that Atria failed to assist with her activities of daily living, failed to supervise her, and failed to check on her after knowing she felt dizzy and unwell. Atria sought to compel arbitration. Janet argued the arbitration clause was not enforceable because it was not signed by Janet or an agent pursuant to a valid power of attorney for healthcare. The court of appeal reversed the denial of Atria’s petition, holding that Randall was authorized to enter into the arbitration agreement. View "Gordon v. Atria Management Co." on Justia Law