Justia Arbitration & Mediation Opinion Summaries

A collective bargaining agreement between the Teamsters Union and Quality Custom Distribution guaranteed that the top 80% of senior employees would receive at least 40 paid hours per week. During the early months of the COVID-19 pandemic, many Starbucks stores in or near Chicago closed or reduced their hours, resulting in senior employees averaging only 30 hours a week. The Union demanded that the employer make up the difference, but the employer refused, citing an exception for Acts of God.The dispute was taken to an arbitrator, who ruled in favor of the Union. The arbitrator determined that while epidemics might be considered Acts of God, the reduction in work was primarily due to the Governor of Illinois' orders, which were not Acts of God. The employer then filed a suit in the United States District Court for the Northern District of Illinois to nullify the arbitrator's decision. The district court judge declined to nullify the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The court held that as long as the arbitrator interprets the contract, the award must stand. The arbitrator had interpreted the contract's "Act of God" clause, concluding it did not cover the Governor's orders. The court emphasized that judicial review of arbitration awards is limited to ensuring the arbitrator interpreted the contract, not whether the interpretation was correct. The court also noted that the employer's conduct in the litigation process imposed unnecessary costs and ordered the employer to show cause why sanctions should not be imposed. View "Quality Custom Distribution Services LLC v International Brotherhood of Teamsters, Local 710" on Justia Law

Plaintiffs owned property adjacent to an unpaved road where the Town of Lodi determined that low-hanging branches and dead or dying trees posed a hazard. In 2010, the Town hired a tree service company to cut or remove fifty-five trees on plaintiffs' land, believing the trees were within the right of way. Plaintiffs disagreed and sought treble damages under RPAPL 861 (1). The parties agreed to binding arbitration, and the arbitrator awarded plaintiffs damages, including treble the "stumpage value" of the trees.The Supreme Court confirmed the arbitrator's award, and a divided Appellate Division affirmed. The Appellate Division majority held that treble damages under RPAPL 861 were not punitive but intended to capture elusive compensatory damages. The dissenting justices argued that the treble damages were punitive and could not be awarded against the Town. The Town appealed to the Court of Appeals.The New York Court of Appeals reviewed the case and held that treble damages under RPAPL 861 are punitive in nature. The Court reasoned that the statute's "good faith" provision, which reduces damages from treble to single if the defendant acted in good faith, indicates a punitive intent. The Court also noted that the legislative history and structure of the statute support the conclusion that treble damages are meant to punish and deter wrongful conduct. Consequently, the Court reversed the Appellate Division's order insofar as appealed from, with costs, and granted the petition to vacate the award in part. View "Matter of Rosbaugh v Town of Lodi" on Justia Law

The plaintiff, New England Property Services Group, LLC, filed a claim under a homeowners’ insurance policy for wind damage to a property in Greenville, Rhode Island. The insurance company, Vermont Mutual Insurance Company, provided an estimate for the loss, which the plaintiff disputed. The plaintiff invoked the appraisal process outlined in the insurance agreement. Each party appointed an appraiser, but they could not agree on an umpire, so the Superior Court appointed one. The appraisal concluded with an award signed by the plaintiff’s appraiser and the umpire, but not the defendant’s appraiser.The plaintiff filed a petition in the Superior Court to confirm the appraisal award under Rhode Island’s Arbitration Act. The defendant filed a cross-petition to vacate the award, arguing that the plaintiff’s appraiser was ineligible due to a financial interest in the award. The Superior Court granted the defendant’s cross-petition to vacate the award and denied the plaintiff’s petition to confirm it. The plaintiff did not appeal this order but instead filed a motion to reconsider, arguing that the appraisal process was not arbitration because the insurance contract did not require appraisers to be disinterested. The Superior Court denied this motion.The Rhode Island Supreme Court reviewed the case and affirmed the Superior Court’s order. The Court held that the appraisal process was akin to arbitration, despite the absence of the word “disinterested” in the insurance contract. The Court noted that the plaintiff had initially sought to confirm the award under the Arbitration Act and only challenged the nature of the proceedings after the award was vacated. The Court concluded that the Superior Court had subject-matter jurisdiction and that the appraisal clause in the insurance policy constituted arbitration under the Arbitration Act. View "New England Property Services Group, LLC v. Vermont Mutual Insurance Company" on Justia Law

Plaintiffs Tiffaney Whitt, on behalf of her minor children, and Jeremiah Parker, Whitt’s adult son, filed a lawsuit against Kearney School District and Durham School Services, L.P., due to racial harassment experienced by Parker and his siblings on a school bus operated by Durham. Plaintiffs alleged a 42 U.S.C. § 1981 claim against Durham, asserting they were third-party beneficiaries of the contract between Kearney and Durham, which required safe, harassment-free transportation.The United States District Court for the Western District of Missouri denied Durham’s motion to dismiss and motion for summary judgment, which challenged the validity of Plaintiffs’ § 1981 claim. Durham then filed a motion to compel arbitration based on an arbitration clause in its contract with Kearney. The district court denied this motion, concluding that Durham waived its right to enforce the arbitration clause by not raising it earlier in the litigation. Durham appealed this decision.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court’s judgment. The appellate court held that Durham knew of its right to arbitrate, as it possessed the contract containing the arbitration clause, and acted inconsistently with that right by engaging in extensive litigation and discovery before filing the motion to compel arbitration. The court also noted that the district court’s consideration of prejudice to Plaintiffs, although erroneous, did not affect the substantial rights of the parties. The appellate court rejected Durham’s argument that it could not have known to seek arbitration until the district court’s summary judgment ruling and found that Durham’s actions were inconsistent with preserving its right to arbitrate. The court also denied Plaintiffs’ request to adopt a process for certifying interlocutory appeals as frivolous and their request for costs under Fed. R. App. P. 38. View "Parker v. Durham School Services, L.P." on Justia Law

Vicor Corporation supplied power converter modules to Foxconn for years. Vicor alleged that Foxconn switched to manufacturing and importing knock-off modules that infringed Vicor's patents. In July 2023, Vicor filed a complaint with the International Trade Commission (ITC) alleging patent infringement by Foxconn. Simultaneously, Vicor sued Foxconn for patent infringement in the United States District Court for the Eastern District of Texas, which stayed the case pending the ITC's resolution. Foxconn then initiated arbitration in China, claiming Vicor had agreed to arbitrate disputes based on terms in purchase orders. Vicor filed a new lawsuit in the United States District Court for the District of Massachusetts, seeking to enjoin the arbitration and declare it was not bound by the arbitration or license terms.The district court granted a temporary restraining order (TRO) and later a preliminary injunction against the arbitration, despite Foxconn's request for a stay under 28 U.S.C. § 1659. The court acknowledged that Section 1659 applied but concluded it could still grant preliminary relief based on the All Writs Act and its inherent authority to preserve its jurisdiction.The United States Court of Appeals for the First Circuit reviewed the case. The court concluded that Section 1659 required the district court to stay proceedings because Vicor's claims involved issues also present in the ITC proceeding. The appellate court held that the district court erred in granting the preliminary injunction despite Foxconn's request for a stay. Consequently, the First Circuit vacated the preliminary injunction and remanded the case for further proceedings consistent with its opinion. View "Vicor Corp. v. FII USA Inc." on Justia Law

Gary Waetzig, a former employee of Halliburton Energy Services, Inc., filed a federal age-discrimination lawsuit against the company. He later submitted his claims for arbitration and voluntarily dismissed his federal lawsuit without prejudice under Federal Rule of Civil Procedure 41(a). After losing in arbitration, Waetzig sought to reopen his dismissed lawsuit and vacate the arbitration award, citing Federal Rule of Civil Procedure 60(b) as the basis for reopening the case.The U.S. District Court for the District of Colorado reopened the case, ruling that a voluntary dismissal without prejudice counts as a "final proceeding" under Rule 60(b) and that Waetzig made a mistake by dismissing his case rather than seeking a stay. The District Court also granted Waetzig's motion to vacate the arbitration award. Halliburton appealed, and the Tenth Circuit reversed the District Court's decision, holding that a voluntary dismissal without prejudice does not count as a "final judgment, order, or proceeding" under Rule 60(b).The Supreme Court of the United States reviewed the case and held that a case voluntarily dismissed without prejudice under Rule 41(a) counts as a "final proceeding" under Rule 60(b). The Court reasoned that a voluntary dismissal is "final" because it terminates the case and aligns with the definitions and historical context of the term "final." The Court also concluded that a voluntary dismissal qualifies as a "proceeding" under Rule 60(b), encompassing all steps in an action's progression. The judgment of the Tenth Circuit was reversed, and the case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Waetzig v. Halliburton Energy Services, Inc." on Justia Law

Eido Hussam Al-Nahhas, an Illinois resident, took out four loans from Rosebud Lending LZO, operating as ZocaLoans, with interest rates up to nearly 700%, far exceeding Illinois law limits. Al-Nahhas alleged that ZocaLoans was a front for two private equity firms, 777 Partners, LLC, and Tactical Marketing Partners, LLC, to evade state usury laws by claiming tribal sovereign immunity through the Rosebud Sioux Tribe. He sued ZocaLoans and the firms for violating Illinois usury statutes and the federal Racketeer Influence and Corrupt Organizations Act.The defendants participated in litigation for fourteen months, including filing an answer, engaging in discovery, and attending status conferences. They later sought to compel arbitration based on an arbitration provision in the loan agreements. The United States District Court for the Northern District of Illinois denied the motion, finding that the defendants had waived their right to compel arbitration by participating in litigation.The United States Court of Appeals for the Seventh Circuit reviewed the case. The court affirmed the district court's decision, holding that the defendants waived their right to arbitrate through their litigation conduct. The court also found that the case was not moot despite the settlement between Al-Nahhas and ZocaLoans, as punitive damages were still at issue. The court granted the parties' motions to file documents under seal. View "Hussam Al-Nahhas v 777 Partners LLC" on Justia Law

Kristin Casey, a former employee of D.R. Horton, Inc., filed a lawsuit against the company and one of its employees, Kris Hansen, alleging sexual harassment and other claims. D.R. Horton moved to compel arbitration based on an employment agreement that included an arbitration clause governed by California law. Casey opposed the motion, citing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), which allows plaintiffs to invalidate arbitration agreements in cases involving sexual harassment. The trial court granted the motion to compel arbitration, reasoning that the EFAA was inapplicable due to the choice-of-law provision in the employment agreement.The Contra Costa County Superior Court initially reviewed the case and granted the motion to compel arbitration, accepting Hansen's joinder. The court concluded that the choice-of-law provision in the employment agreement meant that California law, not the EFAA, applied. Casey then filed a petition for a writ of mandate to challenge this decision.The California Court of Appeal, First Appellate District, Division One, reviewed the case. The court held that the EFAA preempts state law attempts to compel arbitration in cases related to sexual harassment disputes. The court determined that the EFAA applies to the parties' transaction because it sufficiently involved interstate commerce. The court also concluded that the EFAA's rule of unenforceability of arbitration agreements in sexual harassment cases preempts the state law and that parties cannot contract around the EFAA through a choice-of-law provision. Consequently, the court granted Casey's petition and directed the trial court to vacate its order compelling arbitration and to enter a new order denying the motion. View "Casey v. Superior Court" on Justia Law

Thomas Steiger and Hope VanDelden have two minor children, G.L.M.S. and T.L.S. Thomas filed a Petition for Establishment of a Permanent Parenting Plan in October 2016, which was granted in May 2017 after Hope did not respond or attend the hearing. The plan allowed the children to reside primarily with Thomas and have contact with Hope on alternating weekends, holidays, and up to 14 days of vacation each year. Hope filed a motion to amend the parenting plan in October 2017, claiming Thomas had reduced her parenting time. Thomas’s mother and stepfather also petitioned to intervene, asserting their grandparenting time had been decreased.In October 2023, Hope filed a motion to proceed with mediation to address the parenting plan. After unsuccessful mediation, she filed another motion to amend the plan in January 2024, claiming Thomas did not allow the children to spend additional time with her. Thomas opposed the motion, asserting there was no change in circumstances to warrant an amendment. The District Court set an in-chambers interview with the oldest child, G.L.M.S., but did not hold an evidentiary hearing before granting Hope’s motion to amend the parenting plan in July 2024.The Supreme Court of the State of Montana reviewed the case. The court held that the District Court erred by not holding a hearing on the motion to amend the parenting plan, as required by Montana law unless the motion is denied for lack of adequate cause. The Supreme Court reversed the District Court’s order and remanded the case for a hearing to determine if the statutory criteria for amending the parenting plan were met and to amend the plan in the best interests of the children. View "In Re G.L.M.S. and T.L.S." on Justia Law

Julian Rodriguez, an hourly machine operator for Lawrence Equipment, Inc., filed a class action lawsuit in December 2015 alleging various wage-and-hour violations under the California Labor Code. Rodriguez claimed that Lawrence failed to pay for all hours worked, provide adequate meal and rest breaks, issue accurate wage statements, and pay final wages timely. In July 2014, Rodriguez had signed an arbitration agreement with Lawrence, which led to the arbitration of his non-PAGA claims. The arbitrator ruled in favor of Lawrence, finding that Rodriguez failed to prove any of the alleged Labor Code violations.The Superior Court of Los Angeles County confirmed the arbitration award and entered judgment in favor of Lawrence. Rodriguez appealed the judgment, but it was affirmed by the Court of Appeal. Subsequently, Lawrence moved for judgment on the pleadings, arguing that Rodriguez's remaining PAGA claim was barred by issue preclusion because the arbitrator had already determined that no Labor Code violations occurred. The trial court initially denied the motion but later granted it after the U.S. Supreme Court's decision in Viking River Cruises, Inc. v. Moriana, which influenced the court's interpretation of PAGA standing.The Court of Appeal of the State of California, Second Appellate District, Division Three, reviewed the case and affirmed the trial court's judgment. The appellate court held that the arbitrator's findings precluded Rodriguez from establishing standing as an aggrieved employee under PAGA. The court concluded that issue preclusion applied because the arbitrator's decision was final, the issues were identical, actually litigated, and necessarily decided, and the parties were the same. Consequently, Rodriguez lacked standing to pursue the PAGA claim, and the judgment of dismissal was affirmed. View "Rodriguez v. Lawrence Equipment, Inc." on Justia Law