Justia Arbitration & Mediation Opinion Summaries

Valley Hospital admitted Ann as a resident to recover from hip surgery. Weeks later, Valley discharged Ann to an assisted living facility, where she died five days later. This suit alleges that Ann, unable due to dementia to communicate her needs, lost 40 pounds and became severely dehydrated at Valley, resulting in acute renal failure and that Valley, billing Medicare until her eligibility expired, "dumped" her at a non-medical facility, "misrepresenting to the family and facility that [Ann] was stable and healthy enough” for the transfer.Valley submitted an arbitration agreement that John had signed on Ann’s behalf. The agreement stated that residents were not required to sign as a condition of admission. The court sent the suit to arbitration. The plaintiffs paid their portion of the arbitration filing fee. Valley did not timely pay the balance. More than 30 days after the deadline, citing Code of Civil Procedure section 1281.98, the plaintiffs moved to vacate the stay of litigation and to withdraw from arbitration. Valley paid its fees that day. The court of appeal affirmed an order permitting the resumption of litigation. The statute provides that a business pursuing arbitration under a pre-dispute arbitration agreement is in material breach of that agreement—thereby waiving its right to arbitrate—if it fails to timely pay its share of arbitration fees; it does not require an arbitrator’s determination of default and it is not limited to only to mandatory pre-dispute agreements. View "Williams v. West Coast Hospitals, Inc." on Justia Law

HyreCar is an intermediary between people who own vehicles and people who would like to drive for services such as Uber and GrubHub. Before leasing a car, HyreCar sends an applicant’s information, including a photograph, to Mitek, which provides identity-verification services. Johnson, a HyreCar driver, brought a putative class action, alleging Mitek used that information without the consent required by the Illinois Biometric Privacy Act. Mitek asked the district court to send the case to arbitration, citing an Arbitration Agreement in Johnson’s contract with HyreCar, applicable to drivers, HyreCar, and “any subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of services or goods provided under the Agreement.The district court concluded that suppliers such as Mitek were not covered. The Seventh Circuit affirmed, rejecting Mitek’s claim that it is a “beneficiary of services or goods provided under the Agreement.” The “services or goods provided under the Agreement” are vehicles. Mitek cannot be classified as a “user” of HyreCar’s services or goods. Mitek has its own contract with HyreCar, but does not have a contract with any HyreCar driver. The Federal Arbitration Act, 9 U.S.C. 2 does not change the result. The court noted that claims under the Illinois Act cannot be litigated in federal court unless the plaintiff can show concrete harm. Johnson seeks only statutory damages. Johnson’s claim must be remanded to state court. View "Johnson v. Mitek Systems, Inc." on Justia Law

Communications Unlimited Contracting Services, Inc. ("CUI") appealed a circuit court judgment that granted Steve Clanton's motion for a remand for clarification of arbitration award issued by Judicial Arbitration and Mediation Services, Inc. ("JAMS"). Because the awards of money damages for each party were clearly stated and unambiguous in amount and scope, the Alabama Supreme Court concluded the circuit court erred in remanding the arbitration award to JAMS for clarification. The Supreme Court reversed the circuit court's judgment and remanded the case for further proceedings. View "Communications Unlimited Contracting Services, Inc. v. Clanton." on Justia Law

Coinbase, Inc., an online cryptocurrency exchange, appeals the district court’s order denying its motion to compel arbitration in a diversity suit brought by Plaintiff and three other Coinbase users (collectively “Plaintiffs”) who opted into Coinbase’s Dogecoin Sweepstakes in June 2021.   The Ninth Circuit affirmed the district court’s order denying Coinbase, Inc.’s motion to compel arbitration in a diversity suit. The panel held that the “scope” of an arbitration clause concerns how widely it applies, not whether it has been superseded by a subsequent agreement. The district court therefore correctly ruled that the issue of whether the forum selection clause in the Sweepstakes’ Official Rules superseded the arbitration clause in the User Agreement was not delegated to the arbitrator, but rather was for the court to decide.   Further, the court wrote that the district court correctly ruled that because the User Agreement and the Official Rules conflict on the question whether the parties’ dispute must be resolved by an arbitrator or by a California court, the Official Rules’ forum selection clause supersedes the User Agreement’s arbitration clause. View "DAVID SUSKI, ET AL V. COINBASE, INC., ET AL" on Justia Law

Plaintiff-appellant Bernell Beco filed suit against his former employer, defendant Fast Auto Loans, Inc. (Fast Auto) alleging 14 causes of action relating to the termination of his employment. Plaintiff alleged causes of action under with), including claims under the California Fair Employment and Housing Act (FEHA), numerous wage and hour violations under the Labor Code, wrongful termination, unfair competition, and additional tort claims. Fast Auto moved to compel arbitration, arguing that Beco had signed a valid arbitration agreement at the time he was hired. The trial court found the agreement unconscionable to the extent that severance would not cure the defects and declined to enforce it. After its review, the Court of Appeal agreed with the trial court that the agreement was unconscionable, and further rejected Fast Auto’s argument that the arbitrator, not the court, should have decided the issue of unconscionability. Additionally, because the agreement included numerous substantively unconscionable provisions, the appellate court found no abuse of discretion in the trial court’s decision not to sever them. View "Beco v. Fast Auto Loans, Inc." on Justia Law

An arbitrator determined that a borrower and lender were liable to each other for similar amounts, each roughly two and a half million dollars. He then offset the awards against each other, resolving the disputed issue of whether a setoff was proper. A bank, however, had also lent money to the borrower. The bank was not a party to the arbitration, but believed the setoff effectively circumvented the agreement among it, the borrower, and the other lender that the bank’s loan had priority and would be paid back first. Instead of being offset against the other lender’s award, the bank believed, the borrower’s award should have gone toward satisfying the bank’s loan. It thus convinced the trial court to correct the arbitrator’s award by eliminating the setoff. The Court of Appeal held that on the facts presented, the correction affected the merits of the arbitrator’s decision. Accordingly, the correction was improper, and the Court reversed. View "E-Commerce Lighting, Inc. v. E-Commerce Trade LLC" on Justia Law

Petitioner was an equity partner in Dentons U.S. LLP, a law firm with offices throughout the United States. A dispute arose between them over a multimillion-dollar contingency fee from a client whom Petitioner brought to the firm. The partnership agreement contains a clause providing for arbitration of all disputes in Chicago or New York. The partnership agreement also contains a clause delegating all questions of arbitrability to the arbitrator. Dentons terminated Petitioner for cause, asserting a breach of fiduciary duty, and initiated an arbitration in New York.Petitioner sued Dentons for wrongful termination and other causes of action in Los Angeles Superior Court. Petitioner obtained a temporary restraining order and then a preliminary injunction, enjoining the New York arbitration until the court could decide whether there was a clear and unmistakable delegation clause.Dentons filed a motion under Code of Civil Procedure section 1281.4, seeking a mandatory stay of the case based on its motion to compel arbitration that was then pending in a New York court, which the New York court later granted.Petitioner sought a writ of mandate, which the court previously denied. The Supreme Court granted review and transferred the case back to the Second Appellate District, directing the court to issue an order to show cause. The court did so, and again denies the petition. The court agreed with the trial court that the parties delegated questions of arbitrability to the arbitrator. The arbitrability issues in this case include whether petitioner is an employee who may invoke Labor Code section 925 and require the merits of the dispute to be resolved in California instead of New York. View "Zhang v. Super. Ct." on Justia Law

In 2018, Shiekh hired Davis; both signed an agreement to resolve all disputes by binding arbitration. Davis resigned after three months, claiming she was subjected to sexual harassment by her co-worker and customers. In March 2019, Davis filed a complaint under the California Fair Employment and Housing Act. On May 12, a summons was served. In July, Shiekh, represented by counsel, answered Davis’s complaint, asserting the arbitration agreement as an affirmative defense, and filed a case management statement. In August, the court scheduled a trial for July 2020. Discovery ensued, without Shiekh asserting a right to arbitrate. The trial date was continued. In October 2020 (17 months after service of process; seven months before the trial date) Shiekh moved to compel arbitration, citing the Federal Arbitration Act (9 U.S.C.1) and California Arbitration Act, asserting that its participation in the lawsuit had been de minimis and not inconsistent with an intent to arbitrate, and that the delay was excusable, citing its lack of counsel for several months, pandemic-related disruptions, and “the fact that [an employee] seemed to be the primary target of [the] complaint," until July 2020.The court of appeal affirmed the denial of Shiekh’s motion. Although the Supreme Court recently held that a waiver of the right to arbitrate cannot be conditioned on a showing of prejudice, substantial evidence supports the denial based on relevant factors other than prejudice. Shiekh’s actions were inconsistent with the right to arbitrate. View "Davis v. Shiekh Shoes, LLC" on Justia Law

R.A.C. Rolling Hills LP, dba ActivCare at Rolling Hills Ranch, and ActivCare Living, Inc. (together, ActivCare), appealed an order denying their petition to compel arbitration in the elder abuse lawsuit filed by Mary Leger. ActivCare contended the trial court erred in concluding that it had waived its right to arbitration because it sought to compel arbitration less than 30 days after filing its answer. Under the unique facts of this case, the Court of Appeal concluded substantial evidence supported the trial court’s waiver finding and affirmed the order. View "Leger v. R.A.C. Rolling Hills" on Justia Law

Appellant CVG Ferrominera Orinoco, C.A. (“Ferrominera”), appealed from the district court’s judgment confirming a foreign arbitral award and granting attorney’s fees and costs in favor of Petitioner Commodities & Minerals Enterprise Ltd. (“CME”). Ferrominera challenges the judgment on three grounds. First, it argues that the district court lacked personal jurisdiction because CME never served a summons on Ferrominera in connection with its motion to confirm the arbitral award. Second, Ferrominera contends that the district court erred in confirming the arbitral award based on purported lack of jurisdiction by the arbitral panel, issues with the scope of the award, and conflicts with United States public policy. Third, it argues that the district court abused its discretion in awarding attorney’s fees and costs in favor of CME.   The Second Circuit held that a party is not required to serve a summons in order to confirm a foreign arbitral award under the New York Convention. The court concluded that the district court properly enforced the arbitral award, but that it erred in awarding attorney’s fees and costs. Accordingly, the court affirmed in part and vacated in part. The court wrote that CME complied with the service of notice requirements of the New York Convention and the FAA, and the district court properly exercised personal jurisdiction over Ferrominera. Further, the court explained that Ferrominera has not borne its burden to show that the arbitration agreement is invalid where, as here, it has put forth no arguments whatsoever under the applicable law. View "Commodities & Minerals Enterprise Ltd. v. CVG Ferrominera Orinoco, C.A." on Justia Law