Justia Arbitration & Mediation Opinion Summaries

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

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

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

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

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

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

In Washington, a couple, the Lewises, moved into a rental property owned by another couple, the Ridgways. After the Lewises moved out, a dispute arose over the return of their security deposit. The Ridgways claimed the Lewises caused damage to the property and deducted repair costs from the deposit. The Lewises disputed these charges, and the case was sent to arbitration. During arbitration, the Lewises were awarded the full amount of their security deposit, but the Ridgways were given attorney fees under the small claims statute. The Lewises attempted to appeal the arbitration award and a pre-arbitration order granting partial summary judgment to the Ridgways. However, the Lewises did not personally sign their request for a trial de novo, a requirement under court rules and the arbitration statute.The Washington Supreme Court held that the Lewises' request for a trial de novo was ineffective because they did not personally sign the request, as required by the court rule and the arbitration statute. The court also held that, absent a valid request for a trial de novo, the Lewises could not appeal the pre-arbitration order granting partial summary judgment to the Ridgways. The court further stated that the question of who should be considered the prevailing party for the purpose of any attorney fee award needed further consideration, and remanded the case back to the lower court for determination of attorney fees. View "Crossroads Mgmt., LLC v. Ridgway" on Justia Law

In this case, the plaintiff, Maria Del Rosario Hernandez, filed a lawsuit against MicroBilt Corporation alleging the company violated the Fair Credit Reporting Act after the lender denied her loan application based on inaccurate information provided by a MicroBilt product. MicroBilt moved to compel arbitration based on the terms and conditions that Hernandez agreed to while applying for the loan, which included an arbitration provision. However, Hernandez had already submitted her claims to the American Arbitration Association (AAA) for arbitration.The AAA notified MicroBilt that its agreement with Hernandez was a consumer agreement, which meant the AAA's Consumer Arbitration Rules applied. Applying these rules, the AAA notified MicroBilt that its arbitration provision included a material or substantial deviation from the Consumer Rules and/or Protocol. Specifically, the provision’s limitation on damages conflicted with the Consumer Due Process Protocol, which requires that an arbitrator should be empowered to grant whatever relief would be available in court under law or in equity. After MicroBilt did not waive the damages limitation, the AAA declined to administer the arbitration under Rule 1(d).MicroBilt asked Hernandez to submit her claims to a different arbitrator, but she refused, requesting a hearing before the District Court. She argued that she must now pursue her claims in court because the AAA dismissed the case under Rule 1(d). The District Court reinstated Hernandez’s complaint and granted MicroBilt leave to move to compel arbitration under 9 U.S.C. § 4. However, the District Court denied MicroBilt’s motion to compel, leading to this appeal.The United States Court of Appeals for the Third Circuit affirmed the lower court's decision, stating that Hernandez had fully complied with MicroBilt’s arbitration provision, which allowed her to pursue her claims in court. The court held that it lacked the authority to compel arbitration. The court rejected MicroBilt's arguments that the AAA administrator improperly resolved an arbitrability issue that should have been resolved by an arbitrator, that the provision’s Exclusive Resolution clause conflicted with Hernandez’s return to court, and that the AAA’s application of the Consumer Due Process Protocol was unreasonable. The court concluded that it lacked the authority to review the AAA’s decision or to sever the damages limitation from the arbitration provision. View "Hernandez v. MicroBilt Corp" on Justia Law

The Ninth Circuit Court of Appeals reversed a district court's approval of a class action settlement between Tinder and Lisa Kim, a user of the dating app, ruling that Kim was not an adequate class representative. This class action lawsuit against Tinder was over its former age-based pricing model. Kim had agreed to arbitration, unlike over 7,000 potential members of the class, creating a fundamental conflict of interest that violated Rule 23(a)(4). The court found that Kim had a strong interest in settling her claim as she had no chance of going to trial, unlike the other members. The court also noted that Kim failed to vigorously litigate the case on behalf of the class, with her approach to opposing Tinder’s motion to compel arbitration not suggesting vigor. The court remanded the case for consideration of Kim's individual action against Tinder. View "KIM V. TINDER, INC." on Justia Law

Jeffrey Weikum appealed a district court order and judgment denying his motion to compel arbitration, and granting Rodney Pagel and Scott Hager's motion for summary judgment. The parties agreed to dissolve their law firm, Pagel Weikum, PLLP, and entered into a Release and Settlement Agreement. The Agreement included an arbitration clause. Pagel and Hager filed suit against Weikum for breach of contract and conversion. Weikum moved to dismiss and compel arbitration. The North Dakota Supreme Court reversed, finding the arbitration clause at issue in the Agreement was broad, and not limited by any exceptions. The Court concluded the district court misinterpreted the Agreement by finding the claims raised were not arbitrable, and by denying the motion to compel arbitration of those claims. View "Pagel, et al. v. Weikum" on Justia Law