Justia Arbitration & Mediation Opinion Summaries

This appeal involved litigation between Coverall North America, Inc. and its franchisees. Proceeding under federal diversity jurisdiction, the franchisees asserted a variety of state-law claims against Coverall. Which of the various plaintiffs were subject to the arbitration provisions of the Franchise Agreement was at issue in this appeal. Appellees were a subgroup of Plaintiffs who became Coverall franchisees by signing consent to transfer agreements, which by reference incorporated under franchise agreements that contained arbitration clauses. The district court determined that Appellees did not have to arbitrate their claims against Coverall because they did not have adequate notice of the arbitration clauses contained in the franchise agreements. The First Circuit Court of Appeals reversed, holding that the district court erred because (1) Massachusetts law, which governed this dispute, did not impose any such special notice requirement upon these commercial contractual provisions; and (2) in any event, any special notice requirement would be preempted by the Federal Arbitration Act. View "Awuah v. Coverall N.A., Inc. " on Justia Law

This interlocutory appeal stemmed from litigation concerning a contract dispute among Williams Transport, LLC (Williams Transport), Driver Pipeline Company, Inc. (Driver Pipeline), Buckley Equipment Services, Inc. (Buckley Equipment), and other unnamed defendants. Based on an arbitration clause in the contract, Driver Pipeline filed a motion to compel arbitration. The trial court denied the motion to compel arbitration as well as a subsequent motion for reconsideration. Driver Pipeline filed a petition for interlocutory appeal, which the Supreme Court accepted as a notice of appeal. Finding no error by the trial court in denying Driver Pipeline's motion to compel arbitration, the Supreme Court affirmed. View "Driver Pipeline Company, Inc., Buckley Equipment Services, Inc. v. Williams Transport, LLC" on Justia Law

Plaintiffs filed suit seeking a judicial resolution of an LLC in which both Plaintiffs and Defendants held ownership interests. The district court ordered judicial dissolution and appointment of a receiver after finding that the managing member of the LLC, one of the defendants, had never operated the LLC in conformity with the operating agreement and had acted in a manner that was unduly prejudicial to Plaintiffs. The Supreme Court affirmed, holding (1) there were substantial undisputed facts to support the district court's order for dissolution under Mont. Code Ann. 35-8-902(1), and the district court properly applied the statute; and (2) the district court properly denied Defendants' motion to amend their answer to add counterclaims because Defendants were required to arbitrate such claims under the operating agreement. View "Gordon v. Kuzara" on Justia Law

Avaya Inc. ("Avaya") appealed a district court's ruling compelling arbitration of its labor dispute with the Communication Workers of America ("CWA") over the legal status of a class of Avaya employees called "backbone engineers." The union viewed the backbone engineers as non-represented "occupational" employees and legitimate objects for its organizing campaigns, while Avaya saw them as managers outside the scope of the company's labor agreements. CWA contended the parties' collective bargaining agreement ("CBA") required any dispute over the status of backbone engineers to be resolved in arbitration. Avaya maintained the parties did not consent to arbitrate the status of its backbone engineers and accused CWA of trying to unilaterally enlarge the CBA to encompass disputes over company management. Having reviewed the CBA and the evidence submitted to the district court, the Tenth Circuit agreed with Avaya's position and reversed the district court's order compelling arbitration. View "CWA v. Avaya, Inc." on Justia Law

The issue before the Fourth Circuit concerned commercial arbitration of insurance disputes in foreign tribunals. Appellant-Cross-Appellee ESAB Group, Inc. contended that South Carolina law "reverse preempts" federal law (namely, a treaty and its implementing legislation) pursuant to the McCarran-Ferguson Act. ESAB Group faced numerous products liability suits arising from alleged personal injuries caused by exposure to welding consumables manufactured by ESAB Group or its predecessors. These suits presently were proceeding in numerous state and federal courts in the United States. ESAB Group requested that its insurers defend and indemnify it in these suits. Several, including Zurich Insurance, PLC (ZIP), refused coverage. As a result, ESAB Group brought suit against its insurers in South Carolina state court. The district court then found that ZIP had the requisite minimum contacts with the forum to permit the exercise of personal jurisdiction and that the exercise of jurisdiction over ZIP was otherwise reasonable. Because it had referred to arbitration all claims providing a basis for subject-matter jurisdiction, the district court declined to exercise supplemental jurisdiction over the remaining claims. ESAB Group timely appealed the district court's exercise of subject-matter jurisdiction. ZIP filed a cross-appeal, challenging the district court’s exercise of personal jurisdiction and its authority to remand the nonarbitrable claims to state court. Upon review, the Fourth Circuit affirmed as to the district court’s exercise of subject-matter jurisdiction, and found no error in the district court's order compelling arbitration. Likewise, the Court rejected ZIP's arguments that the district court erred in exercising personal jurisdiction over it and in remanding nonarbitrable claims to state court. View "ESAB Group, Incorporated v. Zurich Insurance PLC" on Justia Law

Auto Owners Insurance, Inc. ("Auto Owners"), appealed a circuit court's denial of its motion to dismiss or, in the alternative, to compel arbitration in an action against it filed by Blackmon Insurance Agency, Inc. Blackmon served as an agent for Auto Owners since 1995. The agency agreement the parties signed provided for commission to Blackmon for the sale of Auto Owners policies; the agreement also included an arbitration agreement should there be a dispute among them. In 2010, Blackmon filed a complaint in the circuit court seeking a declaratory judgment as to the arbitrability of a dispute between Blackmon and Auto Owners as to which Auto Owners had already initiated arbitration proceedings. In its complaint, Blackmon alleged that Auto Owners had initiated the arbitration proceedings against Blackmon in Eaton County, Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners bases its claims on a 2005 document and 2009 supplemental agreement. Auto Owners moved to dismiss, or in the alternative, to compel arbitration. The circuit court denied Auto Owners' motion, and Auto Owners appealed. Upon review of the documents at the heart of this dispute, the Supreme Court concluded the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed the circuit court and remanded the case with instructions that the lower court grant the motion and either issue a stay of these proceedings pending arbitration, or dismiss the case. View "Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc." on Justia Law

Plaintiffs-Appellees Wheeling Hospital and Belmont Hospital along with other medical providers, filed this putative class action in West Virginia state court against the Ohio Valley Health Services and Education Corporation, Ohio Valley Medical Center and East Ohio Regional Hospital, (collectively, the "OV Health System Parties"), and Appellant The Health Plan of the Upper Ohio Valley, Inc. The plaintiffs sued in order to collect amounts allegedly owed to them by employee benefit plans established by the OV Health System Parties, for which The Health Plan acted as administrator. After pretrial activity, The Health Plan moved to dismiss the claims brought against it by the hospital plaintiffs pursuant to an arbitration agreement between the parties. The district court denied this motion, holding that The Health Plan had defaulted on its right to arbitrate. The Health Plan appealed. Upon review, the Fourth Circuit concluded that the district court erred in its determination that The Health Plan defaulted on its right to arbitrate. The Court therefore reversed the district court’s denial of The Health Plan’s motion to dismiss. View "Wheeling Hospital, Inc. v. Health Plan of the Upper Ohio Valley, Inc. " on Justia Law

Nicole Tausend, the beneficiary of a trust together with her father, Ronald, commenced a N.Y.C.P.L.R. 78 proceeding against Ronald and the partnership (NJR) formed by Ronald for the purpose of acquiring and selling property. Nicole commenced the proceeding in order to obtain access to the partnership documents and an accounting of its finances. In response, NJR issued a demand for arbitration. Supreme Court ordered the parties to arbitration, and the appellate division affirmed. Nicole appeared in the arbitration and asserted several counterclaims, which lead to NJR's commencement of this court proceeding seeking to stay arbitration of the counterclaims on the basis of the expiration of the statute of limitations. Supreme Court granted the petition and stayed arbitration of the counterclaims. The appellate division modified by dismissing NJR's petition to stay arbitration of the counterclaims, reasoning that the partnership was precluded from obtaining a stay because it had initiated and participated in the arbitration. The Court of Appeals affirmed, holding that because NJR initiated and participated in the arbitration of issues stemming from the dispute, its timeliness challenge to the counterclaims must be decided by an arbitrator. View "N.J.R. Assocs. v. Tausend" on Justia Law

In 2011, FSRO filed a Demand for Arbitration against Fantastic Sam's Franchise Corporation, on behalf of its members, who are franchisees, holding individual license agreements with Fantastic Sams. FSRO alleged that the Corporation had breached those license agreements. The Corporation filed a petition pursuant to the Federal Arbitration Act, 9 U.S.C. 4, to stay FSRO's arbitration and to compel FSRO members to arbitrate their claims individually. The district court allowed the petition as to license agreements that specifically prohibit class-arbitration. The decision in favor of the Corporation was not appealed. The court denied relief as to other agreements, which state: “Any controversy or claim arising out of or relating in any way to this Agreement or with regard to its formation, interpretation or breach shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association." The First Circuit affirmed. Whether the language permits group arbitration, as requested by FSRO, is a question for the arbitrators. View "Fantastic Sams Franchise Corp. v. FSRO Ass'n, Ltd." on Justia Law

This case arose from a foreign shipping contract billing dispute between Consorcio Ecuatoriano de Telecomunicaciones S.A. (CONECEL) and Jet Air Service Equador S.A. (JASE). CONECEL filed an application in the Southern District of Florida under 28 U.S.C. 1782 to obtain discovery for use in foreign proceedings in Ecuador. According to CONECEL, the foreign proceedings included both a pending arbitration brought by JASE against CONECEL for nonpayment under the contract, and contemplated civil and private criminal suits CONECEL might bring against two of its former employees who, CONECEL claims, may have violated Ecuador's collusion laws in connection with processing and approving JASE's allegedly inflated invoices. CONECEL's application sought discovery from JASE's United States counterpart, JAS Forwarding (USA), Inc. (JAS USA), which does business in Miami and was involved in the invoicing operations at issue in the dispute. The district court granted the application and authorized CONECEL to issue a subpoena. Thereafter, JASE intervened and moved to quash the subpoena and vacate the order granting the application. The district court denied the motion, as well as a subsequent motion for reconsideration. JASE appealed the denial of both. After thorough review and having had the benefit of oral argument, the Eleventh Circuit affirmed the orders of the district court. the Court concluded that the panel before which which JASE and CONECEL's dispute was pending acts as a first-instance decisionmaker; it permits the gathering and submission of evidence; it resolves the dispute; it issues a binding order; and its order is subject to judicial review. The discovery statute requires nothing more. The Court also held that the district court did not abuse its considerable discretion in granting the section 1782 discovery application over JASE's objections that it would be forced to produce proprietary and confidential information. The application was narrowly tailored and primarily requested information concerning JASE's billing of CONECEL, which was undeniably at issue in the current dispute between the parties." Finally, the district court did not abuse its discretion in denying JASE's motion for reconsideration. View "In re: Application of Consorcio Ecuatoriano" on Justia Law