Justia Arbitration & Mediation Opinion Summaries

Gregory Nethery appealed a Circuit Court’s decision to grant a motion to compel arbitration filed by Defendants CapitalSouth Partners, Harbert Mezzanine Partners, and On-Site Fuel Services (collectively, “Defendants”). Nethery retained a minority thirty-percent ownership interest in OSFS through his stock interest in OSFH. CapitalSouth and Harbert each held the remaining interest. In October 2016, Nethery filed suit in circuit court against CapitalSouth and Harbert, claiming breach of fiduciary duty, corporate freeze out, unjust enrichment, constructive trust, civil conspiracy, and negligence and mismanagement. As he claimed in the circuit court, Nethery argued on appeal that, based upon a choice-of-law provision contained in the Stockholders Agreement, Delaware law governed interpretation of the agreement. Nethery contended that under Delaware law, the arbitration clause did not apply because Nethery’s complaint did not allege breach of the Stockholders Agreement, nor did Nethery seek legal relief under the agreement. Rather, Nethery asserted only noncontractual state-law claims and his legal claims existed independently from the contract. Unpersuaded, the Mississippi Supreme Court found the circuit court correctly found Nethery’s claims were subject to the agreement’s arbitration provision. View "Nethery v. CapitalSouth Partners Fund II, L.P." on Justia Law

Levandowski and Ron started working at Google in 2007. Both resigned from Google in 2016. After leaving, they formed Otto, a self-driving technology company which Google considered a competitor of its own self-driving car project. In August 2016, Otto was acquired by Uber. In October 2016, Google initiated arbitration proceedings against Levandowski and Ron for allegedly breaching non-solicitation and non-competition agreements. The arbitration was scheduled to commence in April 2018. Google sought discovery from Uber, a nonparty to the arbitration, related to pre-acquisition due diligence done by Stroz at the request of Uber and Otto’s outside counsel. Over Uber’s objections, the arbitration panel determined the due diligence documents were not protected by either the attorney client privilege or the attorney work product doctrine and ordered them produced. Uber initiated a special proceeding in superior court seeking to vacate the discovery order and prevailed. The court of appeal reversed the superior court’s order. The due diligence-related documents prepared by Stroz were not protected attorney-client communications nor were they entitled to absolute protection from disclosure under the attorney work product doctrine. Although the materials had qualified protection as work product, denial of the materials would unfairly prejudice Google’s preparation of its claims. View "Uber Technologies, Inc. v. Google LLC" on Justia Law

When Goplin began working at WeConnect, he signed the “AEI Alternative Entertainment Inc. Open Door Policy and Arbitration Program,” which referred to AEI throughout; it never mentioned WeConnect. Goplin brought a collective action under the Fair Labor Standards Act. WeConnect moved to compel arbitration, Fed.R.Civ.P. 12(b)(3), attaching an affidavit from its Director of Human Resources stating, “I am employed by WeConnect, Inc.—formerly known as Alternative Entertainment, Inc. or AEI.” Goplin claimed that WeConnect was not a party to the agreement and could not enforce it. He cited language on WeConnect’s website: WeConnect formed when two privately held companies, Alternative Entertainment, Inc. (AEI) and WeConnect Enterprise Solutions, combined in September 2016… we officially became one company. WeConnect asserted that WeConnect and AEI were two names for the same legal entity, stating: This was a name change, not a merger. The court held that WeConnect did not establish that it was a party to the agreement or otherwise entitled to enforce it. The court rejected subsequently-submitted corporate-form documents and affidavits, stating that new evidence cannot be introduced in a motion for reconsideration unless the movant shows “not only that [the] evidence was newly discovered or unknown to it until after the hearing, but also that it could not with reasonable diligence have discovered and produced such evidence.” The Seventh Circuit affirmed. View "Goplin v. WeConnect, Inc." on Justia Law

In this long-running contractual dispute between Petitioners, the West Virginia Investment Management Board (IMB) and the West Virginia Consolidated Public Retirement Board (CPRB) and Respondent, The Variable Annuity Life Insurance Company (VALIC), the Supreme Court affirmed the order dismissing this matter from the Business Court Division’s docket in reliance on conclusions reached in an arbitration panel’s final decision.The first time the parties were before the Supreme Court, the Court reversed a summary judgment and remanded for further proceedings. The Court further directed that the matter be referred to the Business Court Division. Due to the complexity of the case, the parties agreed to submit the dispute to binding arbitration before a panel of three business court judges. The panel unanimously found in favor of Respondent. The Supreme Court affirmed, holding (1) there was no cause to void the parties’ agreement to submit the matter to binding arbitration; and (2) Petitioners’ arguments that the panel failed to apply the law of the case and neglected to decide all issues before it were unavailing. View "W. Va. Investment Management Board v. Variable Annuity Life Insurance Co." on Justia Law

In this long-running contractual dispute between Petitioners, the West Virginia Investment Management Board (IMB) and the West Virginia Consolidated Public Retirement Board (CPRB) and Respondent, The Variable Annuity Life Insurance Company (VALIC), the Supreme Court affirmed the order dismissing this matter from the Business Court Division’s docket in reliance on conclusions reached in an arbitration panel’s final decision.The first time the parties were before the Supreme Court, the Court reversed a summary judgment and remanded for further proceedings. The Court further directed that the matter be referred to the Business Court Division. Due to the complexity of the case, the parties agreed to submit the dispute to binding arbitration before a panel of three business court judges. The panel unanimously found in favor of Respondent. The Supreme Court affirmed, holding (1) there was no cause to void the parties’ agreement to submit the matter to binding arbitration; and (2) Petitioners’ arguments that the panel failed to apply the law of the case and neglected to decide all issues before it were unavailing. View "W. Va. Investment Management Board v. Variable Annuity Life Insurance Co." on Justia Law

Alfa Insurance Corporation, ALFA Mutual General Insurance Corporation, ALFA Life Insurance Corporation, and ALFA Specialty Insurance Corporation (collectively, "Alfa") petitioned the Alabama Supreme Court for a writ of mandamus seeking review of an order entered by the Montgomery Circuit Court on December 18, 2015. Although Alfa set forth three issues for review, the Supreme Court reviewed only one: whether the circuit court had jurisdiction to enter the December 18, 2015, order and whether it exceeded its discretion by not setting that order aside. R.G. "Bubba" Howell, Jr., and M. Stuart "Chip" Jones were insurance agents for an Alfa insurance agency in Mississippi. Their agency agreements with Alfa included an arbitration provision, as well as a provision requiring Howell and Jones to purchase "errors and omissions" insurance coverage. In 2012, Alfa accused Howell and Jones of selling competing products in contravention of their agency agreements; Howell and Jones, however, alleged that their actions had been approved by Alfa. Regardless, Alfa forced Howell to resign his position as an Alfa agent on December 31, 2012, and discharged Jones on January 1, 2013. After review, the Supreme Court concluded the circuit court exceeded its discretion in entering the December 18, 2015, order compelling discovery pretermitted discussion of the other, two discovery issues. View "Ex parte Alfa Insurance Corporation et al." on Justia Law

The Supreme Court affirmed the order of the district court staying proceedings and compelling Investors to submit all asserted claims against FSC Securities Corp. (FSC) and Rocky Mountain Financial Advisors, LLC and Eric Roshoven (collectively, RMF) to arbitration.On the recommendation of RMF brokers and advisors, Investors purchased securities in Invizeon Corporation through FSC. After Invizeon failed, Investors sued FSC and RMF, alleging that FSC failed adequately to supervise its registered RMF representatives and that RMF wrongfully induced Investors to invest in Invizeon on various grounds. FSC and RMF moved to stay proceedings and compel arbitration before the Financial Industry Regulatory Authority (FINRA). After a hearing, the district court issued an order compelling Investors to submit their claims to arbitration as provided in FSC customer agreement forms. The Supreme Court affirmed, holding that the district court (1) did not err in concluding that Investors knowingly, voluntarily, and intelligently assented to the terms of the standard-form arbitration agreements and validly waived their Montana constitutional rights to full legal redress and jury trial; (2) correctly concluded that the standard-form FSC arbitration agreements were not unconscionable; and (3) correctly compelled Investors to submit their claims against FSC and RMF to arbitration. View "Lenz v. FSC Securities Corp." on Justia Law

FutureSelect Portfolio Management Inc. sought to challenge a 2011 Superior Court order granting KPMG LLP's motion to compel arbitration. Lead plaintiff FutureSelect was headquartered in Washington state, and managed a number of investment funds. The second named defendant, Tremont Partners Inc., was headquartered in New York and served as the general partner to the Rye Funds, whose status as feeder funds to Bernard L. Madoff Investment Securities LLC (BMIS) was at the heart of this dispute. Tremont allegedly offered FutureSelect a valuable opportunity to invest with BMIS, and made assurances regarding its oversight and understanding of BMIS's operation. Relying on these assurances and the audit opinions of the accounting firm hired by Tremont, FutureSelect decided to invest in the Rye Funds in 1998. Between 1998 and late 2008, when BMIS's Ponzi scheme finally came to light, FutureSelect continued investing additional funds in the Rye Funds allegedly based on the representations it regularly received from Tremont and its auditors. In all, FutureSelect invested $195 million with Tremont. FutureSelect argued that the Court of Appeals erred by dismissing its appeal as untimely because either the relevant law changed after 2011 in the Washington Supreme Court’s decision in Hill V. Garda CL Northwest, Inc., 308 P.3d 635 (2013), the 2016 appeal followed entry of a final judgment against another defendant, or discretionary review was appropriate. Because none of these rationales provided a basis for FutureSelect's untimely appeal, the Washington Court upheld the Court of Appeals' order of dismissal. View "Futureselect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc." on Justia Law

Merritt Charles Horning III; Riggers Store Holdings, LLC; Riggers Store 1, LLC; Chase Merritt Management, Inc.; Chase Merritt, LP; and Racers Store Management, LLC (collectively the "Horning defendants") appealed a district court order denying their motion to compel arbitration of Raymond Melendez's lawsuit against them. The issues in this appeal centered on whether Melendez's claims against the Horning defendants concerning the operation of a convenience store in Williston were arbitrable under an arbitration clause in an operating agreement for Riggers Store Holdings. After review, the North Dakota Supreme Court concluded the district court erred in deciding Melendez's claims were not arbitrable, and reversed the order denying arbitration and remanded for entry of an order compelling arbitration. View "Melendez v. Horning III" on Justia Law

After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law