Justia Arbitration & Mediation Opinion Summaries

After Holdings defaulted on a loan to purchase a commercial aircraft, Banc filed suit alleging that Holdings breached the terms of the loan documents in various respects. Banc also alleged it had a right to sell the aircraft in the possession of Jet Edge as collateral for the loan and to recover money owed by Jet Edge to Holdings based on a subordination agreement. Furthermore, Banc asserted claims for breach of the aircraft usage agreement and conversion. The trial court granted Holdings and Jet Edge's petition to compel arbitration, finding that the American Arbitration Association (AAA) rules provided for delegation of the determination of whether the parties' dispute arose out of the arbitration clause and thus the arbitrator should decide whether Banc's claims were arbitrable.The Court of Appeal granted Banc's petition for writ of mandate compelling the trial court to vacate its order granting Holdings's petition to compel arbitration. The court agreed with Banc that the trial court erred in relying on the Supreme Court's decision in Henry Schein, Inc. v. Archer and White Sales, Inc. (2019) ___ U.S. ___ [139 S.Ct. 524, 529]. The court explained that the court, in Schein, considered who should decide whether the parties' dispute arising from a specific contract with an arbitration clause was arbitrable. In this case, however, the question on Holdings's petition to compel arbitration was whether the parties agreed to arbitrate their dispute over the loan documents, which did not have arbitration clauses, a question the court must decide in the first instance. View "Banc of California, NA v. Superior Court" on Justia Law

The Supreme Court denied Wyoming Cardiopulmonary Services's (WCS) motion to dismiss this appeal of the district court's confirmation of the decision of an arbitration panel concluding that the parties' non-compete agreement was enforceable if modified and reversed the confirmation of the panel's decision, holding that the panel made a manifest error of law.Dr. Michel Skaf, a cardiologist, signed a non-compete agreement when he became a shareholder in WCS. After WCS terminated Dr. Skaf for cause, he set up his own practice. WCS subsequently brought this complaint and a motion to compel arbitration. The panel found that the covenant not to compete was enforceable if modified and rewrote the agreement. The district court confirmed the panel's decision to enforce the covenant not to compete and entered judgment of $193,000. The Supreme Court reversed and vacated the award, holding that the panel made a manifest error of law in violation of public policy in its review and revision of the covenant not to compete. View "Skaf v. Wyoming Cardiopulmonary Services, P.C." on Justia Law

In this dispute over internet names, DotConnect appealed to ICANN's internal dispute resolution program and told the arbitrators they should grant it seven procedural advantages during the arbitration—advantages like interim relief and an independent standard of review. The arbitrators accepted DotConnect's arguments and gave DotConnect the advantages it sought, but the arbitrators did not award the .africa name to DotConnect. ICANN ultimately rejected DotConnect and awarded ZA the rights to .africa. DotConnect then filed suit against ICANN in Los Angeles Superior Court, where the trial court ruled against DotConnect on grounds of judicial estoppel.The Court of Appeal affirmed the trial court's application of judicial estoppel and concluded that DotConnect has estopped itself from suing in court by convincing ICANN's arbitrators DotConnect could not sue in court. In this case, DotConnect took two contrary positions; DotConnect took these positions in quasi-judicial and judicial settings; DotConnect used its initial position—"we cannot sue in court"—to persuade the panel to award DotConnect seven legal victories; DotConnect's positions are totally inconsistent; DotConnect did not take its initial position as the result of fraud, ignorance, or mistake; and the trial court had an ample basis to decide, in its discretion, to apply the doctrine of judicial estoppel to this case. The court rejected DotConnect's arguments to the contrary. Accordingly, the court affirmed the judgment in all respects and awarded costs to respondents. View "DotConnectAfrica Trust v. Internet Corporation for Assigned Names & Numbers" on Justia Law

After an arbitrator awarded money damages in favor of plaintiffs and against Terminix, plaintiffs filed a motion to confirm with the district court. The district court ordered Terminix to respond, but Terminix opted to forego any substantive opposition to the motion and instead asserted what it believed was its procedural right to file a separate motion to vacate any time within three months. Terminix filed its motion to vacate after the district court's deadline to oppose confirmation and the district court granted the motion to confirm as substantively unopposed and struck the motion to vacate as untimely.The Eleventh Circuit affirmed the district court's order granting the motion to confirm and concluded that the district court did not abuse its discretion when it struck Terminix's later-filed motion and thereby declined to rule on its merits. The court recommended that, when faced with a motion to confirm filed within three months of an arbitration award, district courts enter a briefing schedule that sets simultaneous deadlines for the losing party to file an opposition to the motion to confirm, if any, and to file a motion to vacate, modify, or correct, if any. The court explained that this practice will prevent similar disputes from arising in the future. Finally, the court denied plaintiffs' motion for sanctions. View "McLaurin v. The Terminix International Co., LP" on Justia Law

The Eighth Circuit affirmed the district court's denial of Walmart's motion to compel arbitration in an action brought by a customer, seeking to represent a nationwide class of disgruntled gift-card purchasers in Missouri state court. Over the next fifteen months after the complaint was filed, Walmart gave no hint that it was interested in arbitration. Instead, it immediately removed the case to federal district court and filed a motion to dismiss all counts. After plaintiff filed an amended complaint, Walmart once again moved to dismiss on multiple grounds. Walmart subsequently moved to compel arbitration, which the district court refused. The court agreed with the district court, concluding that Walmart had taken several actions that substantially invoked the litigation machinery and that were inconsistent with its right to arbitrate and Walmart's delay prejudiced plaintiff and would likely result in a duplication of efforts. View "McCoy v. Walmart, Inc." on Justia Law

The Supreme Court affirmed the judgment of the district court confirming an arbitration award in a commercial contract matter, holding that there was no error.The parties in this case were two newspapers with a lengthy contractual relationship. The parties' contract contained a provision submitting disputes arising out of the contract to binding private arbitration. A dispute arose over amounts owed under the parties' contract, and the matter was submitted to arbitration. After the arbitrator rendered an award, both parties sought to vacate portions of the award by arguing that the arbitrator's award was so egregiously wrong that the arbitrator had clearly failed to apply the contract at all. The district court confirmed the award. The Supreme Court affirmed, holding that the district court properly found that there was no clear and convincing evidence that the arbitrator had exceeded his powers, acted arbitrarily and capriciously, or manifestly disregarded the law. View "News+Media Capital Group LLC v. Las Vegas Sun, Inc." on Justia Law

Plaintiffs obtained short-term, high-interest loans from lenders owned by the Tribes. The standard loan contracts contained an agreement to arbitrate any dispute arising under the contract and a delegation provision requiring an arbitrator—not a court—to decide “any issue concerning the validity, enforceability, or scope of [the loan] agreement or [arbitration agreement].” The contracts stated that they were governed by tribal law and that an arbitrator must apply tribal law. Plaintiffs filed class-action RICO complaints against the Tribal Lenders. The district court denied the defendants’ motion to compel arbitration, reasoning that the arbitration agreement as a whole in each contract was unenforceable because it prospectively waived plaintiffs’ right to pursue federal statutory claims by requiring arbitrators to apply tribal law.The Ninth Circuit reversed. Rather than asking first whether the arbitration agreement was enforceable as a whole, the court must consider first the enforceability of the delegation provision specifically. The delegation provision was enforceable because it did not preclude plaintiffs from arguing to an arbitrator that the arbitration agreement was unenforceable under the prospective-waiver doctrine. The general enforceability issue must, therefore, be decided by an arbitrator. The choice-of-law provisions were not to the contrary because they did not prevent plaintiffs from pursuing their prospective-waiver enforcement challenge in arbitration. View "Brice v. Plain Green, LLC" on Justia Law

California Governor Gavin Newsom signed into law California Assembly Bill 51, which was enacted with the purpose of ensuring that individuals are not retaliated against for refusing to consent to the waiver of rights and procedures established in the California Fair Employment and Housing Act and the Labor Code and to ensure that any contract relating to those rights and procedures be entered into as a matter of voluntary consent, not coercion.The Ninth Circuit reversed in part the district court's conclusion that AB 51 is preempted by the Federal Arbitration Act (FAA). The panel held that California Labor Code 432.6 neither conflicts with the language of section 2 of the FAA nor creates a contract defense by which executed arbitration agreements may be invalidated or not enforced. Furthermore, section 432.6 does not make invalid or unenforceable any agreement to arbitrate, even if such agreement is consummated in violation of the statute; section 432.6 applied only in the absence of an agreement to arbitrate and expressly provided for the validity and enforceability of agreements to arbitrate; and because the district court erred in concluding that section 432.6(a)–(c) were preempted by the FAA, it necessarily abused its discretion in granting plaintiffs a preliminary injunction.However, the panel agreed that the civil and criminal penalties associated with AB 51 stood as an obstacle to the purposes of the FAA and were therefore preempted. The panel held that Government Code 12953 and Labor Code 433 are preempted to the extent that they apply to executed arbitration agreements covered by the FAA. Accordingly, the panel affirmed the district court's determination that the civil and criminal penalties associated with AB 51 were preempted; vacated the district court's preliminary injunction enjoining AB 51's enforcement; and remanded for further proceedings. View "Chamber of Commerce of the United States v. Bonta" on Justia Law

The Fifth Circuit previously ruled that One Tech waived its right to arbitrate plaintiffs' state law claims in a class action alleging that One Tech duped consumers into signing for "free" credit reports that were not really free. Here, the court considered whether One Tech also waived its right to arbitrate federal claims added after remand. The court followed its precedent holding that waivers of arbitral rights are evaluated on a claim-by-claim basis and held that One Tech did not waive its right to arbitrate the new federal claims. The court concluded that the district court erred in holding otherwise. Accordingly, the court reversed and remanded. View "Forby v. One Technologies, LP" on Justia Law

Williams International Company LLC designed, manufactured, and serviced small jet engines. Dodson International Parts, Inc., sold new and used aircraft and aircraft parts. After purchasing two used jet engines that had been manufactured by Williams, Dodson contracted with Williams to inspect the engines and prepare an estimate of repair costs, intending to resell the repaired engines. Williams determined that the engines were so badly damaged that they could not be rendered fit for flying, but it refused to return one of the engines because Dodson had not paid its bill in full. Dodson sued Williams in federal court alleging federal antitrust and state-law tort claims. Williams moved to compel arbitration under the Federal Arbitration Act (FAA), relying on an arbitration clause on the original invoices. The district court granted the motion, and the arbitrator resolved all of Dodson’s claims in favor of Williams. Dodson then moved to reconsider the order compelling arbitration and to vacate the arbitrator’s award. The court denied both motions and, construing Williams’s opposition to the motion for vacatur as a request to confirm the award, confirmed the award. Dodson appealed, challenging the district court’s order compelling arbitration and its order confirming the award and denying the motions for reconsideration and vacatur. After review, the Tenth Circuit affirmed, holding: (1) the claims in Dodson’s federal-court complaint were encompassed by the arbitration clause; (2) the district court did not abuse its discretion in denying Dodson’s untimely motion to reconsider; and (3) that Dodson failed to establish any grounds for vacatur of the arbitrator’s award or for denial of confirmation of the award. View "Dodson International Parts v. Williams International Company" on Justia Law