Justia Arbitration & Mediation Opinion Summaries

Badgerow initiated an arbitration proceeding, alleging that her employment was unlawfully terminated. After arbitrators dismissed Badgerow’s claims, she filed suit in Louisiana state court to vacate the arbitral award. Walters removed the case and applied to confirm the award. Badgerow then moved to remand the case to state court, arguing that the federal court lacked jurisdiction to resolve the parties’ requests to vacate or confirm the award under Federal Arbitration Act (FAA) Sections 10 and 9. Normally, a court has federal-question jurisdiction whenever federal law authorizes an action but the FAA does not itself support federal jurisdiction. A federal court must find an independent basis for jurisdiction to resolve an arbitral dispute. In this case, neither application revealed a jurisdictional basis on its face. The district court applied the “look-through” approach, finding jurisdiction in the federal-law claims contained in Badgerow’s underlying employment action. The Fifth Circuit affirmed.The Supreme Court reversed and remanded. The “look-through” approach to determining federal jurisdiction does not apply to requests to confirm or vacate arbitral awards under Sections 9 and 10 of the FAA. The Court distinguished precedent that interpreted other FAA sections. Sections 9 and 10 lack specific statutory language that instructs a federal court to “look through” the petition to the “underlying substantive controversy.” When Congress includes particular language in one section of a statute but omits it in another section of the same Act, the choice is considered deliberate. View "Badgerow v. Walters" on Justia Law

Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

Aronow sued Emergent for legal malpractice. Based on an arbitration provision in the retainer agreement, the trial court granted Emegent's motion to compel arbitration after finding the agreement was valid. Aronow and Emergent agreed on an arbitrator. Aronow was required to make a $1,500 advance payment for the arbitrator’s fee. At the initial conference with the arbitrator, Aronow, currently receiving public assistance relief in Alaska, advised that he was unable to pay the arbitration fees. In the trial court, Aronow sought a waiver of arbitration fees and costs or alternatively to lift the court stay.The court of appeal addressed a certified question and held that a trial court that granted a defendant’s petition to compel arbitration has jurisdiction to lift the stay of court proceedings where a plaintiff demonstrates financial inability to pay anticipated arbitration costs. Aronow must be allowed to attempt to demonstrate his inability to pay the arbitrator’s fees. If the trial court finds Aronow is unable to pay that fee, it should give Emergent the choice either to pay Aronow’s share of the fee or to waive the right to arbitrate. View "Aronow v. Superior Court" on Justia Law

The Supreme Court quashed the decision of the Third District Court of Appeal concluding that the circuit court had personal jurisdiction over Tribeca Asset Management, Inc., holding that the parties' agreement did not provide for arbitration in Florida.Tribeca and Ancla International, S.A. entered into a confidentiality agreement. Ancla later filed a petition to compel arbitration. The circuit court dismissed the petition for lack of personal jurisdiction, concluding that a provision in the parties' agreement did not contain a forum selection clause and merely contained a choice of law provision. The Third District reversed, concluding that the provision contained a forum selection clause. The Supreme Court reversed, holding that the agreement did not provide for arbitration in Florida. View "Tribeca Asset Management, Inc. v. Ancla International, S.A." on Justia Law

Robinson submitted an “uninsured driver” claim to State Farm for injuries sustained in an accident involving her car and an unidentified vehicle. Coverage was available only if the two cars came into contact. (Ins. Code 11580.2(b)(1).) In arbitration, State Farm propounded requests for admissions that there was either no contact between the two cars or that no damage resulted from any contact. Robinson failed to respond by the due date. After finding that Robinson had not “substantially complied” with Code of Civil Procedure sections 2033.220 or 2015.5, the court deemed the requests admitted and awarded sanctions. Robinson unsuccessfully moved to withdraw or amend the deemed admissions, citing inadvertence. The arbitrator entered an award in favor of State Farm, relying on the established admissions.The trial court confirmed the award. The court of appeal affirmed. In typical arbitration proceedings, discovery disputes are resolved by the arbitrator but in uninsured-motorist arbitration proceedings, discovery disputes are resolved by a trial court. Trial court discovery orders in these proceedings are not reviewable on appeal from a judgment confirming the arbitration award. A party’s recourse to challenge an allegedly improper discovery ruling in an uninsured-motorist arbitration proceeding is through a timely petition for a writ of mandamus. View "State Farm Mutual Automobile Insurance Co. v. Robinson" on Justia Law

Claude Rogers, a former resident of a residential care facility for the elderly known as Meadow Oaks of Roseville, died after experiencing heatstroke. His wife and successor-in-interest Kathryn and sons Jeffrey, Phillip and Richard sued Meadow Oaks of Roseville, Roseville SH, LLC, CPR/AR Roseville SH Owner, LLC, DCP Investors Roseville SH, LLC, DCP Management Roseville SH, LLC, Westmont Living, Inc., Tanysha Borromeo, Ana Rojas, and Andrew Badoud for elder abuse, fraud, and wrongful death. Defendants appealed an order denying their petition to compel plaintiffs to arbitrate their claims pursuant to an arbitration agreement that was part of the Residency Agreement Richard signed as Claude’s representative. Although defendants filed a notice of appeal, the appellate briefs were filed on behalf of Roseville SH, LLC only. Roseville SH, LLC contended that in denying the petition to compel arbitration: (1) the trial court erroneously believed defendants had to show that Claude lacked mental capacity to consent before they could prove that Richard had the authority to sign the arbitration agreement for Claude; (2) the trial court erred in concluding that Richard did not act as Claude’s actual or ostensible agent when he signed the arbitration agreement on Claude’s behalf; and (3) the trial court’s order violated the Federal Arbitration Act. The Court of Appeal concluded: (1) Roseville SH, LLC misconstrued the trial court’s analysis; (2) the trial court did not err in denying the petition to compel arbitration; and (3) the trial court’s order did not violate the Federal Arbitration Act. Accordingly, judgment was affirmed. View "Rogers v. Roseville SH, LLC" on Justia Law

Sacks is a law firm with a 20-year history of working with the International Monetary Fund (IMF). In 2011, IMF hired Sacks to negotiate disputed claims of various contractors that worked on the renovation of its headquarters. The parties’ contract asserts IMF’s immunity from suit and provides that any disputes not settled by mutual agreement shall be resolved by arbitration. In a subsequent fee dispute between Sacks and IMF, Sacks filed a demand for arbitration with the AAA. The arbitration panel awarded Sacks $39,918.82 plus interest but denied Sacks’ claim of underpayment in connection with earlier work.Sacks sued the Fund, claiming that the award should be vacated pursuant to the D.C. Code as “the result of misconduct by the arbitrators.” IMF removed the case to federal court and moved to dismiss it on immunity grounds pursuant to its Articles of Agreement, given effect in the U.S. by the Bretton Woods Act, 22 U.S.C. 286h. Sacks asserted the contract waived immunity by expressly providing for arbitration pursuant to the AAA Rules, which contemplate courts’ entry of judgment on arbitral awards. The D.C. Circuit affirmed the dismissal of the suit. The AAA Rules and D.C. law contemplate judicial involvement in the enforcement of arbitral awards, so arguably the contract also does so but an international organization's waiver of the immunity must be explicit. The parties' contract expressly retains the IMF’s immunity, reiterating it even within the arbitration clause. View "Leonard A. Sacks & Associates P.C. v. International Monetary Fund" on Justia Law

Kirk, an actress, using a pseudonym, entered into a confidential settlement agreement in August 2017 with four entertainment industry executives, who used fictitious names in the agreement and documents filed in the superior court. The agreement contained an arbitration clause. The executives filed a demand for arbitration in June 2020, asserting breach of contract, interference with contract, and civil extortion. The executives obtained from an emergency arbitrator a preliminary injunction prohibiting the actress, her fiance, and two others from disclosing confidential information as that term is defined in the settlement agreement, including any disclosures in court documents, and from initiating any lawsuit against the executives in violation of the arbitration provisions in the settlement agreement.Kirk and her fiance filed a petition in superior court to vacate the preliminary injunction. Because the emergency arbitrator’s ruling was not an “award” under Code of Civil Procedure section 1283.4,1 the court dismissed the petition for lack of jurisdiction. The court of appeal dismissed their appeal as taken from a non-appealable order. An arbitrator's interim rulings are not reviewable until the final award is entered; no appeal is available from a court's dismissal of a petition to vacate such an interim ruling. View "Kirk v. Ratner" on Justia Law

JustAnswer LLC (JustAnswer) appealed an order denying its petition to compel arbitration. Tina Sellers and Erin O’Grady (together, Plaintiffs) used the JustAnswer website to submit a single question to an “expert” for what they believed would be a one-time fee of $5, but JustAnswer automatically enrolled them in a costlier monthly membership. After discovering additional charges to their credit cards, Plaintiffs filed a class action lawsuit against JustAnswer, alleging it routinely enrolled online consumers like them in automatic renewal membership programs without providing “clear and conspicuous” disclosures and obtaining their “affirmative consent” as mandated by the California Automatic Renewal Law. Seeking to avoid the class action litigation, JustAnswer filed a petition to compel individual arbitration, claiming Plaintiffs agreed to their “Terms of Service,” which included a class action waiver and a binding arbitration clause, when they entered their payment information on the website and clicked a button that read, “Start my trial.” In a case of first impression under California law, the Court of Appeal considered whether, and under what circumstances, a “sign-in wrap” agreement was valid and enforceable. The Court concluded the notices on the “Start my trial” screens of the JustAnswer website were not sufficiently conspicuous to bind Plaintiffs, because they were less conspicuous than the statutory notice requirements, and they were not sufficiently conspicuous under other criteria courts have considered in determining whether a hyperlinked notice to terms of services was sufficient to put a user on inquiry notice of an arbitration agreement. The Court therefore affirmed the trial court’s order denying JustAnswer’s petition to compel arbitration. View "Sellers v. JustAnswer LLC" on Justia Law

The Alabama Space Science Exhibit Commission d/b/a U.S. Space & Rocket Center ("ASSEC") filed suit against Space Race, LLC ("Space Race"), seeking to avoid an arbitration award entered in favor of Space Race and against ASSEC by an arbitration panel in New York. In July 2016, Space Race agreed to produce an animated series for ASSEC aimed at promoting the interest of children in space exploration and science. The series was to be created and released to the public over a three-year period. In exchange, ASSEC agreed to compensate Space Race with funds ASSEC would receive from a grant from the National Aeronautics and Space Administration ("NASA"), which had contracted with ASSEC to provide funding for the series. The compensation was to be paid to Space Race annually as the series episodes were created during the three-year contract term. The parties' agreement provided that it "shall be governed" by Alabama law. Space Race produced the series before the contract term expired, but ASSEC failed to pay the amount owed for the last year of the series. Space Race claimed that ASSEC still owed Space Race approximately $1.3 million when the contract term expired. The parties' agreement contained an arbitration provision. In December 2017, after being notified by ASSEC that it would no longer make payments to Space Race because the grant from NASA had been terminated, Space Race commenced arbitration proceedings against ASSEC in New York. Space Race moved to dismiss ASSEC's Alabama action, asserting that a New York court had already entered a final judgment confirming the arbitration award. The Alabama trial court denied Space Race's motion to dismiss, and Space Race petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to dismiss ASSEC's action. Because the New York judgment confirming the arbitration award against ASSEC was entitled to full faith and credit and res judicata effect, the Supreme Court granted Space Race's mandamus petition. The trial court was directed to vacate its order denying Space Race's motion to dismiss and to enter an order granting that motion. View "Ex parte Space Race, LLC." on Justia Law