Justia Arbitration & Mediation Opinion Summaries

Plaintiffs are personal investment holding corporations owned by two related Panamanian shareholders. Defendants, of who there are two distinct groups, are (1) a related group of banking corporations operating under the umbrella of Banco Santander, which provide banking, investment, and other financial management services; and (2) certain individual officers/employees of Santander. This dispute arose from plaintiff's investment of an undisclosed sum of money with defendants. At issue was whether a district court, having found a valid contract containing an arbitration clause existed, was also required to consider a further challenge to that contract's place within a broader, unexecuted agreement. Having considered those circumstances in light of Granite Rock Co. v. International Brotherhood of Teamsters and other relevant precedent, the court found that the district court properly construed the law regarding arbitrability in dismissing plaintiff's suit. Accordingly, the court affirmed the judgment. View "Solymar Investments, Ltd., et al. v. Banco Santander S.A., et al." on Justia Law

The Town of Little Compton filed a complaint against the town firefighters union, contending that the union, or its representative, had engaged in the unauthorized practice of law when the union allowed its nonlawyer business agent to represent it at a labor arbitration hearing. The Unauthorized Practice of Law Committee concluded that the union representative's action constituted a technical violation of the statute governing the unauthorized practice of law. Mindful that this type of lay representation of unions in labor arbitrations is a common practice, the Committee petitioned the Supreme Court on how to proceed. The Supreme Court held that, although the conduct involved in this case may have been the practice of law pursuant to the statute, because of the long-standing involvement of nonlawyer union employees at public grievance arbitrations, the Court would not limit this involvement at this time. View "In re Town of Little Compton" on Justia Law

In 2005, Plaintiff Marlene Harris purchased a car from Defendant David Stanley Chevrolet. Her purchase agreement contained an arbitration provision that applied to any "controversy, claim or dispute between the Purchaser and the Dealer arising out of, or related to this sale or transaction, including but not limited to, any and all issues or disputes arising as a result of this sale or transaction whether said issues arise prior to, during or subsequent to the sale or attempted sale of a vehicle." A few days after executing the purchase agreement, Plaintiff entered into a GAP insurance contract sold to her by an employee of the dealership (acting as an agent of the insurance company). In 2009, the car was a total loss. The GAP insurance company refused to pay the total difference between the insurance proceeds and the amount owed on the car, and Plaintiff sued to compel the GAP coverage. Plaintiff maintained that the purchase of the vehicle and the purchase of the policy were separate transactions, and that the arbitration clause of the purchase contract was inapplicable to the underpayment of coverage (GAP coverage). She argued no claim was brought against the GAP insurance company which was related to the sale or financing of the vehicle, conceding the arbitration clause would have applied to claims related to the sale or financing issues. After reviewing the motions of the parties, the trial court denied Defendant's Motion to Compel arbitration without an evidentiary hearing. Upon review, the Supreme Court concluded that the two contracts involved two separate subjects, executed on different dates, and the arbitration clause in the purchase agreement did not mention or reference GAP insurance or any relationship between the two contracts. The trial court did not abuse its discretion in denying the evidentiary hearing and ruling that the arbitration clause did not apply as a matter of law.View "Harris v. David Stanley Chevrolet, Inc." on Justia Law

In an arbitration proceeding between Respondent SunOpta Grains and Foods Inc. (SunOpta) and Colorado Mills, LLC, an arbitrator, at SunOpta's request, issued subpoenas to petitioners SK Food International and Adams Vegetable Oil, Inc. SK Food and Adams were not parties to the underlying arbitration. Neither company was incorporated in Colorado, was registered as a foreign corporation in Colorado, or maintained a principal office in Colorado. The subpoenas, which requested business records, were served on SK Food and Adams at their places of business in California and North Dakota. When SK Food and Adams refused to comply with the arbitration subpoenas, SunOpta asked the district court to enforce them. The district court issued an order enforcing the subpoenas.In response, SK Food and Adams filed a petition for a rule to show cause, which the Supreme Court issued. The nonparties appealed the district court's order enforcing the subpoenas. The Supreme Court held that Colorado courts, as a matter of state sovereignty, have no authority to enforce civil subpoenas against out-of-state nonparties. Accordingly, the Court vacated the district court's enforcement order, and remanded case back to the district court for further proceedings. View "Colorado Mills, LLC v. SunOpta Grains and Foods Inc." on Justia Law

This case returned to the South Carolina Supreme Court from the United States Supreme Court for reconsideration in light of "AT&T Mobility, LLC v. Concepcion." The underlying action originally came to the Court on appeal of the trial court's denial of Appellant Century BMW's motion to compel arbitration. The Court affirmed the trial court's denial of the motion to compel. Following that decision, Appellant filed a petition for rehearing, contending the Supreme Court's opinion was inconsistent with the federal Supreme Court's decision in "Stolt-Nielsen S.A. v. Animalfeeds International Corp." which found that the federal Arbitration Act preempted South Carolina law. The South Carolina Court emphasized that its opinion was based on state law grounds, and admonished Appellant for "attempting to reframe the issues and miscast [the Court's] holding as disingenuous to the opinion and a holding [it] never made." Thereafter, Appellant petitioned the United States Supreme Court for a writ of certiorari. The South Carolina Court's opinion was vacated by the federal Supreme Court and remanded for consideration in light of its decision in "AT&T Mobility, LLC v. Concepcion." Respondents Heather Herron and several others "individually and for the benefit of all car buyers who paid 'administrative fees'" argued that the matter of preemption was not preserved in the South Carolina proceedings. The South Carolina Court agreed and therefore adhered to its initial opinion. View "Herron v. Century BMW" on Justia Law

Plaintiff Salvatore Rabbia appealed a superior court order that ordered $37,000 held in escrow be dispersed to Intervenor Automotive Finance Corporation instead of to him. Plaintiff was a principal in the corporate Defendant Harvard Auto Sales (d/b/a "Hitcars.com"). The company was in the business of salvaging motor parts; Automotive Finance Corporation and Plaintiff were two of Harvard Motors' creditors. AFC financed Harvard's purchase of inventory. Plaintiff was involved in a long-standing dispute with Harvard. The issue before the Supreme Court invovled Plaintff's and AFC's competing claims to funds Harvard gave to their counsel to hold in escrow in the summer of 2008 while settlement discussions with Plaintiff were ongoing. Upon careful review of the superior court record, the Supreme Court concluded that a "transfer" occurred when the Court affirmed an earlier trial court decision requiring disbursement of the escrowed funds to Plaintiff. As a result, Plaintiff acquired both legal and equitable title to the escrowed funds, entitling him to take them free of any perfected security interest AFC may have had in them. The Court reversed the superior court decision with respect to release of the funds to AFC. The Court affirmed the superior court with respect to all other matters in this case. View "Rabbia v. Rocha" on Justia Law

This action arose from a transaction involving the sale of equity in a Texas-based dental practice management company to a Chicago-based private equity firm. At issue was whether the purchasers' ability to raise the forum selection clause issue in Texas provided them with an adequate remedy at law, undermining the basis for equity jurisdiction, and if not, whether the terms of the forum selection clause were broad enough to reach the Texas claims. The court held that the forum selection clause did not provide purchasers an adequate remedy at law, and therefore, the court had subject matter jurisdiction over their claims. The court also held that the forum selection clause here, which applied to any claims arising under or relating to the transaction, was sufficiently broad in scope that the purchasers were likely to succeed in showing that it provided exclusive jurisdiction in Delaware over the claims brought by the sellers in Texas. Accordingly, the court granted purchasers' motion for preliminary injunction. View "ASDC Holdings, et al. v. The Richard J. Malouf 2008 All Smiles Trust, et al." on Justia Law

UBS appealed the denial of their motion for a preliminary injunction enjoining defendants from proceeding with an arbitration before the Financial Industry Regulatory Authority (FINRA), and alternatively requiring that the arbitration proceed in New York County. In the arbitration, defendants sought damages for UBS's alleged fraud in connection with defendants' issuances of auction rate securities. The court held that defendants were entitled to arbitration because they became UBS's "customer" under FINRA's rules when they undertook to purchase auction services from UBS. The court also held that the enforceability of the forum selection clause was a procedural issue for FINRA arbitrators to address and that the district court lacked jurisdiction to resolve it. View "UBS Financial Servs, Inc. v. West Virginia University Hosp." on Justia Law

After Roger Hudspeth's employment with the Bank of the Commonwealth was terminated, Hudspeth filed a complaint against the Bank, alleging the Bank failed to pay him compensation owed for his employment. The Bank filed a motion to stay and compel arbitration before the Financial Industry Regulatory Authority (FINRA), arguing (1) the Bank was a "customer" as defined by the FINRA Code of Arbitration Procedure for Customer Disputes (Customer Code), (2) Hudspeth was an associated person of a "member," and (3) because the dispute was between a customer and an associated person of a member, arbitration was mandatory under the Customer Code. The circuit court denied the Bank's motion, concluding that the Bank was not a customer under the Customer Code. The Supreme Court reversed, holding (1) the Customer Code was susceptible to an interpretation under which the Bank could be considered a customer, and (2) because under the Federal Arbitration Act any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, the circuit court erred when it denied the Bank's motion in this case. Remanded. View "Bank of the Commonwealth v. Hudspeth" on Justia Law

This case was remanded from the U.S. Supreme Court. Appellants Keith Litman and Robert Watchel asked the Third Circuit to reverse a district court order that compelled them to arbitrate their contract dispute with Cellco Partnership (d/b/a Verizon Wireless) on an individual rather than class-wide basis. In an unpublished opinion, the Third Circuit vacated the district court order because a recent Third Circuit precedent bound the Court to conclude that class arbitration should have been available to Appellants. Verizon responded by seeking a stay of the mandate and seeking review by the Supreme Court. Having reviewed the supplemental briefing and applicable legal authority, the Third Circuit concluded that the applicable law at issue that required the availability of classwide arbitration created a scheme inconsistent with the Federal Arbitration Act. Accordingly, the Court affirmed the district court’s order compelling individual arbitration in accordance with the terms of the individual Appellants’ contracts with Verizon. View "Litman v. Cellco Partnership" on Justia Law