Justia Arbitration & Mediation Opinion Summaries

Breadeaux’s Pisa, LLC (“Breadeaux”) initiated this action against its franchisee, Beckman Bros. Ltd. (“Main Street Pizza”), in federal court seeking a preliminary injunction, a permanent injunction, and a declaratory judgment. After litigating its preliminary injunction, mediating, and participating in discovery proceedings, Breadeaux filed a demand for arbitration in which it sought to relitigate its preliminary injunction and avoid the court’s adverse discovery rulings. Breadeaux then moved to stay all proceedings pending completion of arbitration. The district court denied Breadeaux’s motion.   The Eighth Circuit affirmed. The court explained that Section 3’s stay provision is mandatory when “the issue involved in such suit or proceeding is referable to arbitration” under a valid arbitration agreement. 9 U.S.C. Section 3. The court wrote that it is unpersuaded by Breadeaux’s assertion that the only reasonable reading of the arbitration provision in the Agreement is that all claims or disputes, besides Breadeaux’s equitable claims, must be arbitrated. Additionally, Breadeaux elected to enforce the Agreement by judicial process, not through mediation and arbitration. Under these circumstances, Breadeaux’s claims are not referable. View "Breadeaux's Pisa, LLC v. Beckman Bros. Ltd." on Justia Law

The district court appointed a receiver to claw back profits received by investors in a Ponzi scheme that was the subject of a Securities and Exchange Commission enforcement action. The receiver filed suit against certain investors, alleging fraudulent transfers from the receivership entities to the investors. The district court concluded that the receiver was bound by arbitration agreements signed by the receivership company, which was the instrument of the Ponzi scheme. The district court relied on Kirkland v. Rune.   The Ninth Circuit reversed the district court’s order denying a motion to compel arbitration. The panel held that EPD did not control because it addressed whether a bankruptcy trustee, not a receiver, was bound by an arbitration agreement. Unlike under bankruptcy law, there was no explicit statute here establishing that the receiver was acting on behalf of the receivership entity’s creditors. The panel held that a receiver acts on behalf of the receivership entity, not defrauded creditors, and thus can be bound by an agreement signed by that entity. But here, even applying that rule, it was unclear whether the receiver was bound by the agreements at issue. The panel remanded for the district court to consider whether the defendant investors met their burden of establishing that the fraudulent transfer claims arose out of agreements with the receivership entity, whether the investors were parties to the agreements and any other remaining arbitrability issues. View "GEOFF WINKLER V. THOMAS MCCLOSKEY, JR., ET AL" on Justia Law

Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

PayPal users can transfer money to businesses and people; they can donate to charities through the Giving Fund, its 501(c)(3) charitable organization. Kass created a PayPal account and accepted PayPal’s 2004 User Agreement, including a non-mandatory arbitration clause and allowing PayPal to amend the Agreement at any time by posting the amended terms on its website. In 2012 PayPal amended the Agreement, adding a mandatory arbitration provision. Users could opt out until December 2012. In 2016, PayPal sent emails to Kass encouraging her to make year-end donations. Kass donated $3,250 to 13 charities through the Giving Fund website. Kass alleges she later learned that only three of those charities actually received her gifts; none knew that Kass had made the donations. Kass claims that, although Giving Fund created profile pages for these charities, it would transfer donated funds only to charities that created a PayPal “business” account; otherwise PayPal would “redistribute” the funds to similar charities.Kass and a charity to which she had donated filed a purported class action. The district court granted a motion to compel arbitration, then affirmed the arbitrator’s decision in favor of the defendants. The Seventh Circuit vacated. In concluding that Kass had consented to the amended Agreement, the district court erred by deciding a disputed issue of fact that must be decided by a trier of fact: whether Kass received notice of the amended Agreement and implicitly agreed to the new arbitration clause. View "Kass v. PayPal Inc." on Justia Law

Plaintiff-appellee Baker Hughes Services International, LLC, after winning an Ecuadorian arbitration against the Ecuador-based Pesago Consortium, secured an arbitral award enforceable jointly and severally against the Consortium’s two members: Defendant and third-party Campo Puma Oriente S.A. Plaintiff then brought its award to Oklahoma and sued Defendant to confirm the award in the United States. Plaintiff again prevailed, and the district court entered judgment against Defendant for the award’s amount, prejudgment interest, and attorney’s fees. Defendant challenged the enforcement of the arbitration award, arguing: (1) the U.S. district court lacked subject matter jurisdiction to confirm the award; (2) the district court should not have confirmed the award because the parties never agreed to arbitrate their dispute; and (3) the district court improperly awarded attorney’s fees and incorrectly calculated prejudgment interest. After its review, the Tenth Circuit Court of Appeals affirmed affirm everything except the district court’s award of prejudgment interest, which was vacated and remanded for the district court to reconsider. View "Baker Hughes Services International v. Joshi Technologies International" on Justia Law

Ford Motor Company (Ford) appealed from an order denying its motion to compel arbitration of Plaintiffs’ causes of action for breach of warranty, violations of the Song-Beverly Consumer Warranty Act (Civ. Code, Section 1790 et seq.; the Song-Beverly Act) and for fraudulent omission arising from alleged defects in a sports utility vehicle Plaintiffs’ purchased from the dealership, AutoNation Ford Valencia (AutoNation). The central question on appeal is whether Ford as the manufacturer of the vehicle, can enforce an arbitration provision in the sales contract between Plaintiffs and AutoNation to which Ford was not a party under the doctrine of equitable estoppel or as a third-party beneficiary of the contract.   The Eighth Circuit affirmed. The court concluded Ford cannot enforce the arbitration provision in the sales contract because Plaintiffs’ claims against Ford are founded on Ford’s express warranty for the vehicle, not any obligation imposed on Ford by the sales contract, and thus, Plaintiffs’ claims are not inextricably intertwined with any obligations under the sales contract. Nor was the sales contract between Plaintiffs and AutoNation intended to benefit Ford. View "Montemayor v. Ford Motor Co." on Justia Law

Consolidated appeals arose from of a commercial dispute between Southern Lift Trucks, LLC ("Southern"), and Hyundai Construction Equipment Americas, Inc. ("Hyundai Construction") -- an alleged subsidiary of Hyundai Heavy Industries Co., Ltd. ("Hyundai Heavy Industries"). Southern was a heavy-equipment dealer for Hyundai Construction. Southern filed suit against Hyundai Construction and Hyundai Heavy Industries (collectively, as "Hyundai") asserting various claims, including claims under the Alabama Heavy Equipment Dealer Act ("the AHEDA"). Southern also sought a preliminary injunction to prevent Hyundai: (1) from unlawfully terminating one of the dealer agreements at issue in these appeals; and (2) from unlawfully adding a second dealer in the territory that was covered under another dealer agreement at issue. In response, Hyundai moved to compel arbitration. The circuit court granted Southern's request for a preliminary injunction and denied Hyundai's motion to compel arbitration. In appeal no. SC-2022-0675, the Alabama Supreme Court affirmed the trial court's order insofar as it granted Southern's motion for a preliminary injunction as to the forklift agreement. However, the Court reversed the trial court's order insofar as it issued a preliminary injunction related to the construction-equipment agreement, and remanded the case for the trial court to enter an order consistent with the Supreme Court's opinion. In case no. SC-2022-0676, the Supreme Court affirmed the trial court's order insofar as it denied Hyundai's motion to compel arbitration as to any provisions of Southern's declaratory-judgment claim relating to the "enforceability of any provision" of the dealer agreement. However, the Court reversed the trial court's order insofar as it denied Hyundai's motion to compel arbitration as to Southern's other claims, and that case was remanded for further proceedings. View "Hyundai Construction Equipment Americas, Inc., et al. v. Southern Lift Trucks, LLC" on Justia Law

Defendant Niagara Mohawk Power Corporation (the "Company"), which does business as National Grid, is an electric and natural gas utility that operates throughout New York State. According to Plaintiff Local Union 97, International Brotherhood of Electrical Workers, AFL-CIO (the "Union"), Defendant agreed to provide to certain retired employees, former members of the Union. The Union filed a motion to compel arbitration pursuant to section 301(a) of the Labor Management Relations Act, 29 U.S.C. Section 185(a). The same day, the Company filed a motion for summary judgment dismissing the Complaint. The district court granted the Union's motion to compel arbitration, denied the Company's motion for summary judgment, and ordered that the case be closed.   The Second Circuit affirmed, holding that the agreement covers the dispute. The court explained that when it negotiated the Agreement, the Union bargained both for health insurance benefits for retired employees and for a grievance procedure that included, where necessary, access to arbitration. The court explained that it expressed no view on the merits of the Union's grievance; that is a question for the arbitrator. But interpreting the collective bargaining agreement in light of the principles the Supreme Court reaffirmed in Granite Rock, it is clear that the parties intended to arbitrate this dispute. View "Local Union 97, Int'l Bhd. of Elec. Workers, AFL-CIO v. Niagara Mohawk" on Justia Law

Doe alleges that she was sexually assaulted by a massage therapist during a massage at a San Rafael Massage Envy retail location. She filed suit against the Arizona-based franchisor that licenses the “Massage Envy” brand name (MEF), and the independently owned San Rafael franchise where the assault allegedly occurred. MEF moved to compel arbitration on the basis of a “Terms of Use Agreement” presented to Doe when she checked in for a massage she had booked at the franchise location. The trial court concluded that there was no agreement to arbitrate between Doe and MEF.The court of appeal affirmed, rejecting MEF’s argument that the “Terms of Use Agreement,” which was available to Doe via a hyperlink on the electronic tablet she was given at the franchise, was a valid and enforceable “clickwrap” agreement of the sort that courts routinely enforce. Doe did not have reasonable notice that she was entering into any agreement with MEF, much less notice of the terms of the agreement. The transaction was nothing like the typical transactions in which clickwrap agreements are used; Doe went to a physical location, where she was already a member, and was handed a tablet to check in for a massage. View "Doe v. Massage Envy Franchising, LLC" on Justia Law