Justia Arbitration & Mediation Opinion Summaries

Articles Posted in Civil Procedure
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The plaintiff, Dana Hohenshelt, filed a lawsuit against his former employer, Golden State Foods Corp., alleging retaliation under the California Fair Employment and Housing Act, failure to prevent retaliation, and violations of the California Labor Code. Golden State moved to compel arbitration in accordance with their arbitration agreement, and the trial court granted the motion, staying court proceedings. Arbitration began, but Golden State failed to pay the required arbitration fees within the 30-day deadline. Hohenshelt then sought to withdraw his claims from arbitration and proceed in court, citing Golden State's failure to pay as a material breach of the arbitration agreement under California's Code of Civil Procedure section 1281.98. The trial court denied this motion, deeming Golden State's payment, which was made after the deadline but within a new due date set by the arbitrator, as timely.The Court of Appeal of the State of California Second Appellate District disagreed with the trial court's decision. It held that the trial court had ignored the clear language of section 1281.98, which states any extension of time for the due date must be agreed upon by all parties. Golden State's late payment constituted a material breach of the arbitration agreement, regardless of the new due date set by the arbitrator. The court also rejected Golden State's argument that section 1281.98 is preempted by the Federal Arbitration Act, following precedent from other courts that held these state laws are not preempted because they further the objectives of the Federal Arbitration Act. Therefore, the court granted Hohenshelt's petition for writ of mandate, directing the trial court to lift the stay of litigation. View "Hohenshelt v. Superior Court" on Justia Law

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In this putative class action lawsuit, Maria Johnson, a former employee of Lowe's Home Centers, LLC, brought claims on behalf of herself and other Lowe's employees under California's Private Attorneys General Act of 2004 (PAGA) for alleged violations of the California Labor Code. Johnson had signed a pre-dispute employment contract that included an arbitration clause.The United States Court of Appeals for the Ninth Circuit affirmed the district court's decision to compel arbitration of Johnson's individual PAGA claim, as a valid arbitration agreement existed and the dispute fell within its scope. However, the district court's dismissal of Johnson's non-individual PAGA claims was vacated. The lower court had based its decision on the U.S. Supreme Court's interpretation of PAGA in Viking River Cruises, Inc. v. Moriana, which was subsequently corrected by the California Supreme Court in Adolph v. Uber Techs., Inc. The state court held that a PAGA plaintiff could arbitrate their individual PAGA claim while also maintaining their non-individual PAGA claims in court. The case was remanded to the district court to apply this interpretation of California law. The Ninth Circuit rejected Lowe's argument that Adolph was inconsistent with Viking River. View "JOHNSON V. LOWE'S HOME CENTERS, LLC" on Justia Law

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The case involves a group of former firefighters who retired from the city of Meriden and claimed damages from the city and the Meriden Municipal Pension Board for alleged breach of a collective bargaining agreement. The plaintiffs, who retired in 2015, claimed that they should have received an increase in their pension benefits based on a 2% wage increase that was awarded retroactively in an arbitration process after the plaintiffs had retired. The trial court ruled in favor of the plaintiffs, holding that the defendants had breached the collective bargaining agreement by failing to recalculate the plaintiffs' pension benefits based on the retroactive wage increase.On appeal, the Connecticut Supreme Court reversed the trial court's decision. The Supreme Court held that the defendants did not breach the collective bargaining agreement. This conclusion was based on the fact that the pension plan did not allow for the recalculation of pension benefits for retirees who voluntarily retired before the issuance of the arbitration award. The court noted that the pension plan only allowed for a retroactive adjustment of pension benefits for those who were forced to retire due to reaching the mandatory retirement age of 65. The court also held that the trial court did not lack subject matter jurisdiction to hear the case, rejecting the defendants' claim that the plaintiffs failed to exhaust their administrative remedies before filing the lawsuit. View "Stiegler v. Meriden" on Justia Law

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In a dispute between Voltage Pictures, LLC (Voltage) and Gussi S.A. de C.V. (Gussi SA) regarding their Distribution and License Agreement (DLA), the United States Court of Appeals for the Ninth Circuit affirmed the District Court for the Central District of California's decision to confirm an arbitral award in favor of Voltage. The court held that the district court had jurisdiction under Section 203 of Chapter 2 of the Federal Arbitration Act (FAA) and 28 U.S.C. § 1331, despite an incorrect initial assertion of diversity jurisdiction. The court also ruled that Federal procedural law, not California law, governed the service of Voltage's notice of motion to confirm the arbitral award. It held that Voltage had sufficiently served the notice by mailing the motion papers to Gussi SA's counsel. Lastly, the court held that the district court had not erred in refusing to extend comity to an alleged Mexican court order enjoining Voltage from seeking to confirm the award in the United States, as Gussi SA had not certified the genuineness of the purported Mexican court order or its translation. View "VOLTAGE PICTURES, LLC V. GUSSI, S.A. DE C.V." on Justia Law

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In a dispute between Conti 11 Container Schiffarts-GMBH & Co. KG M.S. and MSC Mediterranean Shipping Company S.A., the United States Court of Appeals for the Fifth Circuit found that the District Court for the Eastern District of Louisiana lacked personal jurisdiction over the case and reversed the district court's decision. The dispute arose from an incident where three chemical tanks exploded onboard a cargo vessel chartered by Conti to MSC, causing extensive damage and three deaths. After Conti won a $200 million award from a London arbitration panel, Conti sought to confirm the award in the Eastern District of Louisiana. MSC argued that the court lacked personal jurisdiction. The Fifth Circuit agreed with the district court’s assessment that when confirming an award under the New York Convention, a court should consider contacts related to the underlying dispute, not just those related to the arbitration itself. However, the Fifth Circuit disagreed with the district court's ruling that MSC waived its personal jurisdiction defense through its insurer’s issuance of a letter of understanding. The court also disagreed with the district court's finding that the loading of the tanks in New Orleans conferred specific personal jurisdiction over MSC, as this contact resulted from the actions of other parties not attributable to MSC. Therefore, the Fifth Circuit reversed the lower court's decision and remanded the case with instructions to dismiss it for lack of personal jurisdiction. View "Conti 11. Container Schiffarts-GMBH & Co. KG M.S. v. MSC Mediterranean Shipping Co. S.A." on Justia Law

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The case involves a dispute between Onecimo Sierra Suarez, an employee, and his employer, Rudolph & Sletten, Inc. (R&S), concerning the payment of arbitration fees. Suarez had initially sued his employer for alleged wage and hour violations. R&S successfully moved to have the case resolved through arbitration, as provided in their employment agreement. However, R&S delayed in paying its share of the initial arbitration fee, leading Suarez to argue that R&S has waived its right to arbitration. The Court of Appeal, Fourth Appellate District Division One, State of California held that the employer's delay in paying the arbitration fees constituted a material breach of the arbitration agreement, thereby waiving its right to arbitration. The court concluded that R&S's payment was late, even if certain provisions of the Code of Civil Procedure could potentially extend the deadline. The court also held that R&S's argument -- that the Federal Arbitration Act (FAA) preempted California's arbitration-specific procedural rules for fee payment -- was incorrect. The court found that such rules neither prohibited nor discouraged the formation of arbitration agreements, and therefore, were not preempted by the FAA. The court granted Suarez's petition and ruled that the case should proceed in court. View "Suarez v. Super. Ct." on Justia Law

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In 2020, Loring De Martini agreed to sell a commercial property to Puja Gupta. A dispute arose and the parties entered arbitration. Subsequently, Gupta filed a petition to confirm the arbitration award and recorded a lis pendens on the property. Gupta obtained a judgment confirming the award, but abandoned the case after De Martini successfully moved to expunge the lis pendens. Gupta then filed a new action seeking to compel De Martini to complete the sale and recorded another lis pendens. De Martini moved to expunge the new lis pendens, arguing that Gupta needed the court's permission to record it under the Code of Civil Procedure section 405.36, as it was recorded by the same claimant and affected the same property. The trial court denied the motion, concluding that section 405.36 only applies to successive lis pendens filed in the same action and Gupta had established a prima facie case regarding the probable validity of a real property claim.De Martini petitioned the Court of Appeal of the State of California, First Appellate District, Division Three for a writ of mandate. The court granted the petition, concluding that the trial court erred both in its interpretation of section 405.36 and its application of the prima facie standard in determining the probable validity of the real property claim. The court held that section 405.36 requires a claimant to seek court permission before recording a lis pendens on the same property in a subsequent proceeding if a lis pendens in a prior, related proceeding has been expunged. Additionally, the court determined that the trial court should have applied a preponderance of the evidence standard, not a prima facie standard, in determining the probable validity of the real property claim. The court ordered the trial court to vacate its order denying expungement of the lis pendens and to enter a new order granting the requested expungement and ruling on De Martini's motion for attorney fees. View "Di Martini v. Superior Court" on Justia Law

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The United States Court of Appeals for the Second Circuit has decided an appeal from The Resource Group International Limited, TRG Pakistan Limited, Mohammed Khaishgi, and Hasnain Aslam against Muhammad Ziaullah Khan Chishti. The appellants sought to avoid arbitration proceedings initiated by the appellee, arguing that a later-executed release agreement superseded the arbitration agreement in the original Stock Purchase Agreement. The appellants also sought a preliminary injunction to halt the ongoing arbitration, but the District Court denied their request, asserting that they failed to show a likelihood of success on their claims and that they would suffer irreparable harm without the injunction.On appeal, the Circuit Court held that it had jurisdiction over the case, finding that the parties had chosen New York law to govern the arbitration proceedings, thereby bypassing the restrictions on appellate review under the Federal Arbitration Act. The court also held that the District Court had relied on an erroneous view of the law in concluding that the appellants failed to show a likelihood of success on the merits of their claims and that they would suffer irreparable harm. The court found that the release agreement, which contained a forum selection clause, superseded the Stock Purchase Agreement's arbitration clause. The court also clarified that being forced to arbitrate a non-arbitrable claim could constitute irreparable harm, particularly where attorneys' fees and arbitration costs could not adequately compensate the harm.As a result, the court vacated the District Court's decision and remanded the case for further proceedings. View "The Resource Group International Limited v. Chishti" on Justia Law

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This case involves a dispute over an arbitration agreement between an employee and her employer. The employee, Aljarice Hasty, was employed by the American Automobile Association of Northern California, Nevada & Utah (Association). After her employment ended, Hasty sued the Association for race discrimination, disability discrimination, retaliation, harassment, wrongful discharge, and retaliation. The Association sought to compel arbitration per an agreement in Hasty's employment contract, but the trial court found the arbitration agreement was unconscionable and declined to sever the unconscionable terms. The Association appealed this decision.The Court of Appeal of the State of California Third Appellate District affirmed the trial court’s decision. The court found the arbitration agreement to be both procedurally and substantively unconscionable. Procedural unconscionability was found due to the adhesive nature of the agreement, the lack of negotiation, and the hidden nature of the unconscionable provision within the complex document. Substantive unconscionability was found due to the agreement's one-sided nature, the overly broad confidentiality provision, and the waiver of the employee's right to bring representative actions under the Private Attorneys General Act of 2004. The court also found that the trial court did not abuse its discretion by refusing to sever the unconscionable terms, as the arbitration agreement was permeated with unconscionability. View "Hasty v. American Automobile Assn. of Northern Cal., Nev. & Utah" on Justia Law

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This case involves a dispute between a group of individuals and companies associated with John Logan and a mix of investors and former investors in medical clinics that Logan has run. The parties attended a mediation to resolve five separate but related lawsuits. Following the mediation, RedMed believed there was an enforceable settlement agreement, while Logan believed the mediation only created a framework for further negotiations. The trial court granted RedMed’s Motion to Enforce Settlement, finding that a binding settlement agreement had been reached. Logan appealed, arguing that the trial court erred in finding a binding settlement agreement. The Supreme Court of Mississippi reverses the trial court's ruling. The court found that the proposed settlement agreement lacked material terms required by Mississippi contract law, such as the interest rate and term of a promissory note, and therefore no meeting of the minds occurred. The court further found that the conduct of the attorneys and mediator at the conclusion of the mediation indicated that mutual assent to the terms of a contract was lacking. As a result, the court concluded that no enforceable contract was formed at the mediation. Therefore, the case is remanded back to the trial court. View "Logan v. RedMed, LLC" on Justia Law