Justia Arbitration & Mediation Opinion Summaries

Plaintiff filed a class action complaint under the Employee Retirement Income and Security Act (ERISA) against the fiduciaries of the retirement plan offered by his former employer, Triad, for alleged financial misconduct.The Seventh Circuit concluded that the ERISA provisions that plaintiff invokes have individual and plan-wide effect. However, the arbitration provision in Triad's defined contribution retirement plan precludes relief that "has the purpose or effect of providing additional benefits or monetary or other relief to any Eligible Employee, Participant or Beneficiary other than the Claimant." Therefore, this provision prohibits relief that ERISA expressly permits. Accordingly, the court affirmed the district court's denial of Triad's motion to compel arbitration or, in the alternative, to dismiss. View "Smith v. Board of Directors of Triad Manufacturing, Inc." on Justia Law

The Ninth Circuit reversed the district court's order denying Comcast's motion to compel arbitration under the Federal Arbitration Act of the claims asserted against it by a former cable subscriber. Plaintiff filed a putative class action challenging certain of Comcast's privacy and data-collection practices and seeking a variety of monetary and equitable remedies. The district court ultimately concluded that provisions of plaintiff's subscriber agreements were unenforceable under the McGill rule.The panel concluded that the district court misconstrued what counts as "public injunctive relief" for purposes of the McGill rule and that it therefore erred in concluding that the complaint here sought such relief. The panel explained that public injunctive relief within the meaning of McGill is limited to forward-looking injunctions that seek to prevent future violations of law for the benefit of the general public as a whole, as opposed to a particular class of persons, and that do so without the need to consider the individual claims of any non-party. Furthermore, such an injunction attempts to stop future violations of law that are aimed at the general public, and imposing or administering such an injunction does not require effectively fashioning individualized relief for nonparties. Because plaintiff's complaint did not seek such relief, the McGill rule is not implicated, and the arbitration agreement should have been enforced. View "Hodges v. Comcast Cable Communications, LLC" on Justia Law

The Eighth Circuit concluded that HomeServices waived its right to arbitrate after actively litigating this case in federal court for nearly a year. The court also concluded that, under circuit precedent, the issue of whether a party has decided to substantially invoke the litigation machinery is a question for the court, rather than the arbitrator, to answer. In this case, the company failed to do all it could reasonably have been expected to do to make the earliest feasible determination of whether to proceed judicially or by arbitration. View "Sitzer v. National Association of Realtors" on Justia Law

The Supreme Court affirmed the judgment of the circuit court dismissing Defendants' 2013 motion to enforce a purported settlement agreement and to compel arbitration and dismissing Defendants' claim for unjust enrichment after a trial, holding that the circuit court did not err.Plaintiff brought suit against Defendants, his brothers, to dissolve their family partnership and asserting claims for breach of contract and breach of fiduciary duty. Defendants asserted multiple counterclaims based on Plaintiff's alleged misappropriation of partnership assets. This appeal concerned only the circuit court's denial of Defendants' motion to enforce the settlement agreement and to compel arbitration and the dismissal of Defendants' claim for unjust enrichment. The Supreme Court affirmed, holding that the circuit court (1) did not err in denying Defendants' motion to enforce the purported settlement agreement and to compel arbitration; and (2) did not err in denying Defendants relief on their claim for unjust enrichment. View "Paweltzki v. Paweltzki" on Justia Law

The Arbitration Board, in its Merits Award, held that Verizon violated a Collective Bargaining Agreement (CBA) with its Union by contracting with common carriers to deliver FiOS TV set-top boxes to “existing customers” for self-installation, work that used to be performed exclusively by Union Service Technicians. Months later, the Board, in creating a “remedy,” expanded the scope of the violation to include deliveries to both existing and new customers and also the accompanying self-installations.The Third Circuit affirmed the district court in vacating the Remedy Award to the extent that it awards damages for work that falls beyond the outer bounds of the Merits Award--the delivery of boxes to existing customers. The deference given to arbitration awards is almost unparalleled, but not absolute. An arbitrator’s powers are limited by the parties’ agreement, which is made against a background of default legal rules. Under these default rules, an arbitrator who has decided an issue is prohibited from revising that decision without the consent of the parties. He can decide other issues submitted by the parties, correct clerical errors, and clarify his initial decision— but nothing more. The Board improperly awarded punitive damages, which are not permitted under the CBA. View "Verizon Pennsylvania LLC v. Communications Workers of America" on Justia Law

Harper runs deliveries under the “Amazon Flex” program, which supplements Amazon’s traditional delivery services. Interested drivers use an app to sign up to drive packages from Amazon warehouses, affiliated grocers, and participating restaurants to home shoppers. Harper signed up, clicking on a brightly colored button stating, “I AGREE AND ACCEPT” following the Terms of Service. The Terms included an arbitration provision with an “opt-out” process and specified that Washington law applies. Harper filed a putative class action on behalf of similarly situated New Jersey Amazon Flex drivers, alleging that Amazon misclassified them as independent contractors when they really are employees. Amazon moved to compel arbitration under the Federal Arbitration Act. Harper cited the exemption for a “class of workers engaged in foreign or interstate commerce,” 9 U.S.C. 1, noting that the drivers make some deliveries across state lines. Amazon argued that the claim is also arbitrable under state law. The district court ordered discovery to determine whether Harper falls within the FAA exception, declining to reach Amazon’s alternative state law argument.The Third Circuit vacated. Federal courts sitting in diversity must decide state law claims, including state arbitrability, even where the FAA may apply. That is a threshold inquiry, ensuring prompt review of state law claims, particularly before turning to discovery to sort through a comparatively complex federal question. View "Harper v. Amazon.com Services, Inc." on Justia Law

Respondent Simran Singh (Mother) and Petitioner Gunjit Singh (Father) separated in January of 2012. They entered into a settlement agreement which resolved all issues arising from their marriage, including custody and visitation matters involving their two children, then aged eleven and two. Pursuant to that agreement, Mother received primary custody, and the parties consented to submit any future disputes regarding child support or visitation to a mutually agreed-upon arbitrator, specifically providing that his or her decision would "be binding and non-appealable." The family court approved the agreement and granted the parties a divorce in February of 2013. Approximately nine months later, Father filed an action in family court seeking modification of custody, visitation, and child support, alleging Mother had violated a provision of the agreement when she failed to return to South Carolina with the children after embarking on a cross-country tour as a motivational speaker. From January through August of 2014, four family court judges issued decisions— one dismissing Father’s complaint due to the parties' decision to arbitrate; a second issuing a consent order to arbitrate; and two approving amended agreements to arbitrate. The arbitrator issued a "partial" arbitration award finding a substantial and material change of circumstance affecting the welfare and custody of the minor children, and awarding Father temporary custody. A thirty-two-page final arbitration award was issued the next month, awarding custody to Father. A fifth family court judge issued an order in January 2015 confirming both the partial and final arbitration awards. Thereafter, Mother filed five separate Rule 60(b)(4), SCRCP, motions to vacate all the orders approving the parties' agreements to arbitrate. The court of appeals issued its unanimous decision in December of 2019, holding that the parties could not divest the family court of jurisdiction to determine issues relating to custody, visitation, and child support. One month prior, another panel of the court of appeals issued a decision in Kosciusko v. Parham, 836 S.E.2d 362 (Ct. App. 2019), holding the family court did not have subject-matter jurisdiction to approve the binding arbitration of children's issues. The South Carolina Supreme Court granted certiorari, and affirmed as modified, the appellate court's order. View "Singh v. Singh" on Justia Law

AtriCure, an Ohio company, that develops medical devices to treat atrial fibrillation, contracted with Dr. Meng’s company, ZenoMed, to serve as AtriCure’s exclusive Chinese distributor. AtriCure later believed that another of Meng's Chinese companies (Med-Zenith) was attempting to market a dangerous knockoff medical device. AtriCure and ZenoMed had a “Distribution Agreement” that included confidentiality and noncompete clauses and an arbitration clause designating a Chinese entity as the forum. AtriCure let the Distribution Agreement expire and demanded that ZenoMed pay for or return its inventory. Receiving no response, AtriCure filed a federal complaint in Ohio against Meng and Med-Zenith for improperly manufacturing and selling counterfeit products. ZenoMed, Meng, and Med-Zenith sought to stay the lawsuit against them under the Federal Arbitration Act, 9 U.S.C. 16(a) While Meng and Med-Zenith were not parties to the Distribution Agreement, they argued equitable estoppel and agency theories. The court denied their motion.The Sixth Circuit remanded. Although Supreme Court has promoted a “healthy regard” for the Federal Arbitration Act’s “federal policy favoring arbitration," the Act’s text compels states only to treat arbitration contracts the same way that they treat “any contract.” Ohio law permits the defendants to enforce an arbitration clause even though they did not sign the contract. The defendants' “equitable estoppel” theories failed but the district court failed to ask the right question under Ohio law when rejecting their agency theory. View "AtriCure, Inc. v. Meng" on Justia Law

Plaintiff filed suit in the New York Supreme Court pursuant to New York Civil Practice Law and Rule 7515 (C.P.L.R. 7515), challenging arbitration of her sexual harassment, hostile work environment, and retaliation claims against Fox News and certain senior executives. C.P.L.R. 7515 prohibits mandatory arbitration clauses covering employment discrimination claims, "[e]xcept where inconsistent with federal law." After removal to federal court, the district court denied plaintiff's motion to remand to state court on the basis that the action necessarily raises an issue of federal law: whether her claim is preempted by the Federal Arbitration Act (FAA).The Second Circuit affirmed the district court's denial of plaintiff's motion, concluding that plaintiff's suit arises under federal law. The court applied the Grable-Gunn analysis and concluded that because section 7515 requires a threshold showing that the plaintiff's claim complies with the FAA, it necessarily raises a substantial federal issue that may be resolved in federal court without threatening the federal-state balance. View "Tantaros v. Fox News Network, LLC" on Justia Law

The Union represents about 165 employees at the Clinton research facility, staffed by EMRE. In 2015, a bargaining unit member retired. After advertising internally failed to fill the open position, EMRE used independent contractors to staff the position. The Union filed a grievance regarding the propriety of EMRE contracting out bargaining unit positions and attempting to permanently fill bargaining unit positions with contractors. The Collective Bargaining Agreement (CBA) allows the Company to “let independent contracts” as long as: during any period of time when an independent contractor is performing work of a type customarily performed by employees and employees qualified to perform such work together with all of the equipment necessary in the performance of such work are available in the Company facilities, the Company may not because of lack of work demote or lay off any employee(s) qualified to perform the contracted work."Arbitrator Klein found that the CBA “expressly limits contracting to a ‘period of time” and that EMRE pursued a plan to replace employees with contractors as they left EMRE. She concluded that EMRE’s actions undermined the composition and breadth of the bargaining unit. The Third Circuit affirmed the arbitration award preventing EMRE from permanently contracting out bargaining unit positions at the Clinton facility. Rejecting an argument that the arbitrator improperly considered extrinsic evidence contrary to the CBA, the court noted that the standard of review for upholding arbitration awards is highly deferential. The award “withstands the minimal level of scrutiny.” View "Independent Laboratory Employees' Union, Inc. v. ExxonMobil Research and Engineering Co." on Justia Law