Justia Arbitration & Mediation Opinion Summaries

The Court of Appeal affirmed an order denying defendant's motion to compel arbitration, holding that there was sufficient evidence to support the trial court's finding that defendant waived its right to arbitrate. The court rejected defendant's contention that it was reasonable to wait until it located the executed arbitration agreements before filing its motion, particularly in light of its concession that at the outset of the litigation, it was not only aware of its policy requiring arbitration, but had located checklists that demonstrated both plaintiffs had received a copy of the arbitration agreement. Furthermore, substantial evidence supported a finding that the length of defendant's delay prior to filing its motion to compel arbitration and for a stay was unreasonable.The court also held that defendant acted in a manner inconsistent with its right to arbitrate. The court explained that, although defendant initially asserted arbitration as an affirmative defense, it subsequently represented in two status conference statements that it did not intend to arbitrate. The court explained that defendant's conduct related to classwide issues was inconsistent with its claimed right to arbitrate individual claims and strongly supported the trial court's finding that defendant acted in a manner inconsistent with its right to arbitrate. The court also concluded that substantial evidence supported the trial court's conclusion that defendant continued to act in a manner inconsistent with arbitration even after it located the arbitration agreements in June 2018. Finally, substantial evidence supported the trial court's finding of prejudice where defendant's delay impaired plaintiffs' ability to realize the benefits and efficiencies of arbitration. View "Garcia v. Haralambos Beverage Co." on Justia Law

Daylight, an expedited less-than-truckload carrier, contracts with independent truck drivers. Daylight’s California drivers only provided services within California. The plaintiffs each entered into an “Independent Contractor Service Agreement” before beginning to drive for Daylight and regularly signed materially identical contract extensions while driving for Daylight. All of those Agreements contained an identical arbitration provision. The plaintiffs filed a putative class action, requesting relief from Daylight’s “unlawful misclassification of former and current Daylight delivery drivers as ‘Independent Contractors,’ ” and alleging violations of Labor Code and wage order provisions, and the law against unfair competition.The court of appeal affirmed the denial of Daylight’s motion to compel arbitration, applying California law and finding the agreement procedurally and substantively unconscionable, and that severance of the unconscionable terms is not possible. Daylight was in a superior bargaining position and presented the contracts on a take it or leave it basis. The Agreement’s 120-day limitations period is substantially shorter than the statutory limits. The Agreement permits Daylight to seek a provisional judicial remedy but precludes plaintiffs from equivalent access and requires that the parties split the cost of arbitration, a cost greater than litigation filing fees. Because Daylight had waived its argument, the court did not address preemption under the Federal Arbitration Act, which“provides a limited exemption from FAA coverage to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce (9 U.S.C. 1). View "Ali v. Daylight Transport, LLC" on Justia Law

The issue this case presented for the Oregon Supreme Court's review centered on whether ORS 652.200(2) and ORCP 54 E(3) could be construed in a way that “will give effect” to both, in the words of the Oregon Legislature’s longstanding requirement for construing statutes. Plaintiff was employed by defendant for several years. Defendant terminated plaintiff’s employment, and, several months later, plaintiff filed the underlying action alleging defendant failed to pay wages that were due at termination. The case was assigned to mandatory court-annexed arbitration, and defendant made an offer of judgment under ORCP 54 E, which plaintiff rejected. The arbitrator ultimately found that defendant had failed to timely pay some of the wages that plaintiff claimed and that the failure was willful, entitling plaintiff to a statutory penalty. In addition, the arbitrator awarded plaintiff an attorney fee under ORS 652.200(2) and costs, but he applied ORCP 54 E(3) to limit those awards to fees and costs that plaintiff had incurred before defendant’s offer of judgment, because that offer of judgment exceeded the amount that plaintiff had ultimately recovered on his claims. Plaintiff filed exceptions to the arbitrator’s application of ORCP 54 E(3) to limit the award of fees and costs, but the award was affirmed by operation of law when the court failed to enter a decision within 20 days. In a divided en banc opinion, the Court of Appeals held that ORCP 54 E(3) could be applied to wage claims without negating the effect of ORS 652.200(2) and thus, both could be given effect. The Supreme Court concurred with the appellate dissent, finding that and need to limit the attorney fees of an employee who unreasonably rejects a good faith offer or tender could be addressed on a case-by-case basis under ORS 20.075(2), but the “reasonable” attorney fee required by ORS 652.200(2) could not be categorically limited through ORCP 54 E(3). Judgment was reversed and the matter returned to the circuit court for further proceedings. View "Mathis v. St. Helens Auto Center, Inc." on Justia Law

Wayne Farms LLC appealed a circuit court order compelling it to arbitrate its claims asserted against Primus Builders, Inc., and staying the action. Wayne Farms was a poultry producer located in Dothan, Alabama. Wayne Farms sought to expand its poultry-processing facility, and, to that end, entered into a "Design/Build Agreement" with Primus in 2017, that specifically addressed work to be completed by Primus in connection with the expansion of Wayne Farms' freezer warehouse. Primus subcontracted with Republic Refrigeration, Inc.; Republic hired Steam-Co, LLC for "passivation services." Upon draining a condenser for the freezer warehouse, it was discovered that the interior of the condenser was coated with corrosive "white rust." Primus then replaced the damaged condenser at a cost of approximately $500,000 under a change order, pursuant the Design/Build Agreement with Wayne Farms. Wayne Farms paid Primus for both the original damaged condenser and the replacement condenser. Both Primus and Steam-Co have claimed that the other is responsible for the damage to the condenser. Wayne Farms sued Primus and Steam-Co asserting claims of breach of contract and negligence and seeking damages for the damaged condenser and the cost of replacing it. Primus moved the trial court to compel arbitration as to the claims asserted against it by Wayne Farms. Primus also moved the trial court to dismiss, or in the alternative, stay Steam-Co's cross-claims against it. Wayne Farms opposed Primus's motion to compel arbitration, arguing that no contract existed between the parties requiring it to arbitrate claims arising from the passivation process. The Alabama Supreme Court found that the contract between Wayne Farms and Primus specified arbitration would apply to only those disputes arising from obligations or performance under the Design/Build Agreement, Wayne Farms could not be compelled to arbitrate with Primus a dispute arising from the performance of passivation work that was not an obligation agreed to in the Design/Build Agreement. Judgment was reversed and the matter remanded for further proceedings. View "Wayne Farms LLC v. Primus Builders, Inc." on Justia Law

Dorsa, a Miraca executive, learned of a purported scheme to defraud the government. Dorsa filed a qui tam action, alleging violations of the False Claims Act (FCA). Dorsa was fired and added a claim for FCA retaliation, 31 U.S.C. 3730(h). The government intervened. Dorsa and the government dismissed the qui tam claims. Miraca unsuccessfully moved to dismiss the retaliation claim because Dorsa had agreed to binding arbitration in his employment agreement. The court found that the arbitration clause did not cover Dorsa’s claim, which did not "have any connection with, an employment agreement."The Sixth Circuit dismissed an appeal for lack of jurisdiction. There was no final order and the narrow provision of the Federal Arbitration Act (FAA, 9 U.S.C. 16) that authorizes immediate appeals of certain interlocutory orders does not apply. Miraca filed its motion to dismiss without asking the court for a stay or an order compelling arbitration. The FAA provides that “[a]n appeal may be taken from an order” either “refusing a stay of any action,” or “denying a petition ... to order arbitration.” Even if the denial of the motion to dismiss had the same impact as refusing to stay the action or denying a petition to order arbitration, there is no test for appealability that hinges on the practical effect of a court’s order. View "Dorsa v. Miraca Life Sciences, Inc." on Justia Law

The Ninth Circuit held that plaintiff does not create appellate jurisdiction by voluntarily dismissing his claims with prejudice after being forced to arbitrate them. The panel dismissed plaintiff's appeal of the district court's denial of his motions to compel arbitration and reconsideration, and from his own voluntary dismissal. The panel concluded that it lacked jurisdiction over plaintiff's putative class action. In doing so, the panel held that Omstead v. Dell, Inc., 594 F.3d 1081 (9th Cir. 2010), which held that a plaintiff can avoid arbitration and manufacture appellate jurisdiction simply by voluntarily dismissing his claims with prejudice, has been effectively overruled by the Supreme Court's decision in Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017). View "Langere v. Verizon Wireless Services, LLC" on Justia Law

Aetna brought a qui tam action to recover damages and fees occasioned by the surgical center's fraudulent billing practices. The trial court denied the surgical center's petition to compel arbitration of the quit tam action. At issue is Aetna's claims of fraudulent insurance billing practices by the surgical center and its healthcare billing services in violation of the Insurance Fraud Protection Act (IFPA).The Court of Appeal affirmed and concluded that the qui tam action is not subject to arbitration because it is brought on behalf of the state which is not a party to the contract between the insurance company and the surgical center. In this case, California is the real party in interest and it cannot be compelled to arbitrate this qui tam IFPA action because it is not a signatory to the contracts. View "California ex rel. Aetna Health of California Inc. v. Pain Management Specialist Medical Group" on Justia Law

The Supreme Court reversed the judgment of the district court granting Defendant's motion to compel arbitration under the "voluntary agreement for arbitration" Rick Miller signed on behalf of his mother, Julia Miller, after she was admitted to Life Care Center of Casper (LCCC), holding that Rick lacked authority to execute the agreement.After Julia died allegedly from injuries sustained during a series of mishaps at LCCC Rick filed this complaint stating claims of negligence and premises liability against Defendant. Defendant filed a motion to compel arbitration. The court granted the motion. The Supreme Court reversed, holding (1) Julia's durable power of attorney for health care did not grant Rick express actual authority to sign the arbitration agreement; (2) Julia did not hold Rick out as having apparent authority to sign the agreement; and (3) Rick was not authorized to execute the arbitration agreement as Julia's "surrogate" under the Wyoming Health Care Decisions Act, Wyo. Stat. Ann. 35-22-401 through 416. View "Miller v. Life Care Centers of America, Inc." on Justia Law

The State entered into a Memorandum of Understanding (MOU) with the Union regarding terms and conditions of employment for certain state employees classified as bargaining unit 12. The State subsequently appealed the trial court’s order denying its petition to vacate or correct an arbitration award determining that DWR had violated article 16.7(G) of the MOU by using purged documents to support the adverse disciplinary action taken against the employee.The Court of Appeal concluded that the arbitration award interpreted and enforced article 16.7(G) of the MOU in a manner that constitutes a violation of the constitutional merit principle, because it impedes the ability of state departments to make reasonable and sound employment decisions based on merit. Therefore, the award violated public policy and the trial court erred in denying the petition. The court reversed the trial court's order on the petition and the ensuing judgment, remanding the matter to the trial court with instructions to enter a new order vacating the award. View "Department of Human Resources v. International Union of Operating Engineers" on Justia Law

The Court of Appeal affirmed a judgment confirming an arbitration award in favor of AXQG. The court denied MMG's requests for judicial notice, found MMG's arguments to be meritless, and concluded that the appeal was frivolous.The court concluded that MMG cannot credibly argue that the arbitrator was required to disclose his affiliation with GLAAD because MMG's principal chose to testify about his Catholic faith when that information was irrelevant to the present dispute over his managerial misconduct. The court also concluded that the arbitrator did not fail to hear evidence material to the final award. In this case, there is no basis in the record for MMG's contention that the arbitrator refused to hear testimony from one of its witnesses; MMG's claim that the arbitrator cut off its counsel's cross-examination of a prospective employee fails for lack of support and, in any event, the testimony was immaterial; and the arbitrator did not fail to hear evidence on the authenticity of an exhibit consisting of a chain of emails. Finally, the court concluded that MMG's appeal is objectively and subjectively frivolous, imposing sanctions on MMG and its counsel. View "Malek Media Group LLC v. AXQG Corp." on Justia Law