Justia Arbitration & Mediation Opinion Summaries

LAD-T, LLC, dba Toyota of Downtown Los Angeles (LAD-T), and its parent company Lithia Motors Inc. (Lithia; collectively, Defendants) appeal from an order denying their motion to compel arbitration of Plaintiff’s claims brought under the California Fair Employment and Housing Act (FEHA). Defendants contend the trial court erred in finding Business and Professions Code section 17918 barred them from enforcing an arbitration agreement made in the name of an unregistered fictitious business, DT Los Angeles Toyota.   The Second Appellate District vacated the order denying Defendants’ motion to compel arbitration remanded for the trial court to address whether Defendants have waived their right to compel arbitration. The court ruled that if the trial court finds waiver, it should again deny the motion to compel arbitration; if it finds no waiver, it should grant the motion. The court explained that it agrees with Plaintiff that Defendants failed to act diligently in filing their fictitious business name statement. Accordingly, in the interests of justice the court vacated the court’s order denying the motion to compel arbitration and direct the court to again consider the motion to compel arbitration limited to the narrow issue of whether Defendants have waived their right to compel arbitration by their delay in filing the fictitious business name statement. View "Villareal v. LAD-T, LLC" on Justia Law

Michael O’Connor signed up for a loyalty program when he bought a pair of shoes and socks from Road Runner Sports, Inc. and Road Runner Sports Retail, Inc. (collectively, “Road Runner”). He alleged Road Runner did not tell him the loyalty program was an automatic renewal subscription and that his credit card would be charged an annual subscription fee. After discovering he had been charged for four years of subscription fees, he joined as the named plaintiff in a class action lawsuit alleging Road Runner had violated California’s Automatic Renewal Law and consumer protection statutes. Road Runner asserted O’Connor was bound by an arbitration provision it added to the online terms and conditions of the loyalty program, some three years after he enrolled. Although Road Runner conceded O’Connor did not have actual or constructive notice of the arbitration provision, it contended O’Connor created an implied-in-fact agreement to arbitrate when he obtained imputed knowledge of the arbitration provision through his counsel in the course of litigation and failed to cancel his membership. The Court of Appeal disagreed this was sufficient under California law to prove consent to or acceptance of an agreement to arbitrate. Accordingly, the Court affirmed the trial court’s order denying Road Runner’s motion to compel arbitration. View "Costa v. Road Runner Sports" on Justia Law

Defendant Jeffrey Mayhew and Plaintiffs David Starr and Thomas Hunt formed a limited liability company to operate a shopping center. They agreed Mayhew would manage the company and Starr and Hunt would provide startup capital. In exchange, Mayhew was entitled to 50 percent of the company’s profits and Starr and Hunt were entitled to the remaining 50 percent. After the shopping center’s business declined in 2008, Mayhew asked Starr and Hunt for additional capital. They agreed to do so only if Mayhew also contributed capital. Mayhew reported a $100,000 contribution, which caused Starr and Hunt to contribute roughly the same amount. The shopping center was later sold for a substantial profit. Mayhew claimed he was entitled to about 56.3 percent ownership interest in the company based on his additional capital contribution. Starr and Hunt disagreed and submitted the dispute to arbitration along with several other claims for damages. The arbitrator ruled in favor of Starr and Hunt, finding Mayhew only held a 50 percent interest in the company. A superior court later confirmed the award over Mayhew’s petition to vacate and entered judgment against him. On appeal, Mayhew claimed the trial court erred by failing to vacate the award, contending the arbitrator lacked authority to clarify the award, that the award was procured by undue means, and that the arbitrator’s award exceeded her powers. After its review, the Court of Appeal disagreed. Since Mayhew failed to identify any basis for vacating the award, the Court affirmed the judgment. View "Starr v. Mayhew" on Justia Law

In an appeal from a district court ruling reducing an order of attachment in aid of arbitration. The district court had initially granted an ex parte order in favor of Petitioner, an Iraqi cell phone company (“Telecom”), attaching up to $100 million of the assets of Respondent, a Lebanese bank. Thereafter, the district court exercised its discretion and reduced the amount of the attachment to $3 million in part because of concerns the attachment would have an adverse impact on the Lebanese economy.Telecom appealed arguing that (1) it established a probability of success in the pending arbitration and was therefore entitled to an attachment of $100 million and (2) the district court lacked authority to consider extraordinary circumstances in reducing the attachment.The Second Circuit affirmed to the extent that the district court held that it had the discretion to consider extraordinary circumstances and that Telecom demonstrated a continuing need for the attachment, and to the extent that the district court attached $3 million; vacated to the extent the district court attached only $3 million based on the existence of extraordinary circumstances without considering how those circumstances might change given an attachment greater than $3 million but less than $42 million; and remanded as to (a) Telecom's probability of success, (b) the assessment of extraordinary circumstances, and (c) the amount of the attachment above $3 million. View "Iraq Telecom Ltd. v. IBL Bank S.A.L." on Justia Law

The dispute at issue is between Jones Day and one of its former partners, a German national who was based in its Paris office until he left to join Orrick, Herrington & Sutcliffe (“Orrick”). Jones Day’s partnership agreement provides for mandatory arbitration of all disputes among partners, and that all such arbitration proceedings are governed by the FAA. The partnership dispute proceeded to arbitration in Washington D.C., the location designated in the arbitration agreement.   The Ninth Circuit reversed the district court’s order denying Jones Day’s petitions to compel Orrick to comply with an arbitrator’s subpoena. First, the court held that the district court had subject matter jurisdiction over the action to enforce arbitral summonses issued by the arbitrator in an ongoing international arbitration being conducted in Washington, D.C., under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention. The court further held that venue was proper in the Northern District of California. The court reversed and remanded with instructions to enforce Jones Day’s petitions to compel Orrick and its partners to comply with the arbitral summonses. View "JONES DAY V. ORRICK, HERRINGTON & SUTCLIFFE" on Justia Law

The Supreme Judicial Court held that delivery drivers that delivered takeout food and various prepackaged goods from local restaurants, convenience stores, and delicatessens to Grubhub, Inc. do not fall within a residual category of workers who are exempt from arbitration pursuant to section 1 of the Federal Arbitration Act (FAA).Plaintiffs, former delivery drivers for Grubhub, brought this putative class action against Grubhub, alleging violations of the Wage Act, the Tips Act, and the Minimum Wage Act and that Grubhub unlawfully retaliated against drivers who complained about their wages. Grubhub filed a motion to compel arbitration pursuant to an arbitration agreement each Plaintiff had entered into. Because Plaintiffs transported and delivered some prepackaged food items manufactured outside Massachusetts, the judge found that Plaintiffs fell within the definition of "any other class of workers engaged in foreign or interstate commerce" who were exempt from arbitration under section 1 of the FAA. The Supreme Judicial Court reversed, holding that Plaintiffs were not transportation workers actually engaged in the movement of goods in interstate commerce, as required by the residual clause of section 1. View "Archer v. Grubhub, Inc." on Justia Law

The Court of Chancery granted summary judgment in favor of Respondents and confirmed a May 10, 2021 arbitration award, holding that this court was obliged to grant Respondents' cross-motion for summary judgment to confirm the award.Respondent commenced an arbitration proceeding against Petitioner asserting several claims relating to amendments to the parties' LLC agreement. After the arbitrator issued decisions, Petitioner filed a petition to vacate the award in part. Respondent and affiliated entities filed a counterclaim to confirm the arbitration award. All parties moved for summary judgment. The Court of Chancery granted summary judgment in favor of Respondents and confirmed the arbitration award, holding that Petitioner's challenges to the award failed. View "Polychain Capital LP v. Pantera Venture Fund II LP" on Justia Law

The Court of Chancery granted Plaintiff's motion for summary judgment seeking an order confirming the arbitration panel's award in this case and denied Defendants' motion for summary judgment seeking to vacate the award, holding that there was no basis to vacate the arbitration panel's award.Defendants initiated arbitration proceedings against Plaintiff to challenge the validity of unsuitability determination that Plaintiff issued to Defendants under the parties' agreement. The arbitration panel determined that the unsuitability determination was valid. This litigation followed. The Court of Chancery confirmed the arbitration award, holding that Defendants were not entitled to relief on their allegations of error. View "MHP Management, LLC v. DTR MHP Management, LLC" on Justia Law

CCC and Tractable use algorithms and data generated by repair centers to provide estimates of the cost to repair damaged vehicles. Tractable dispatched its employee to obtain a license for CCC’s software. Using a false name, the employee purported to represent “JA,” a small, independent appraiser. CCC issued a license. The contract forbids assignment of the license without consent and represents that JA is acting on its own behalf, not as an agent for any third party, and forbids disassembly of the software or its incorporation into any other product. Tractable disassembled the software and incorporated some features into its own product. In CCC’s subsequent suit, Tractable moved for arbitration under the agreement between CCC and JA., arguing that “JA” is a name that Tractable uses for itself. The Seventh Circuit affirmed the denial of the motion. Tractable is not a party to the agreement. CCC could not have discovered that Tractable uses the name “JA.” Contractual meaning reflects words and signs exchanged between the negotiators, not unilateral, confidential beliefs. If a misrepresentation as to the character or essential terms of a proposed contract induces conduct that appears to be a manifestation of assent by one who neither knows nor has reasonable opportunity to know of the character or essential terms of the proposed contract, his conduct is not effective as a manifestation of assent.. The identity of CCC’s trading partner was a vital element of the deal. View "CCC Intelligent Solutions Inc. v. Tractable Inc." on Justia Law

The parties entered into a contract related to the construction of a bridge. Plaintiff filed a claim against Defendant including those of breach of contract, promissory estoppel, unjust enrichment, quantum meruit, and negligent misrepresentation. Based on an arbitration agreement, the parties presented their cases to an arbitrator, which found in Defendant's favor. The arbitrator awarded attorney's fees to Defendant.The district court reversed the arbitrator's award of attorney's fees, finding that the arbitrator exceeded his authority in awarding the fees.The Eighth Circuit reversed the district court's order reducing Defendant's arbitration award to exclude attorney's fees. The arbitration agreement at issue was not entirely clear on the attorney's fees issues, but Plaintiff cannot show that “the arbitrator based his decision on some body of thought, or feeling, or policy, or law that is outside the contract." View "Ind. Steel Construction, Inc. v. Lunda Construction Company" on Justia Law