Justia Arbitration & Mediation Opinion Summaries

Petitioner appealed from a district court judgment dismissing his to confirm an arbitral award. The court held that a forum selection 2 clause in the parties’ arbitration agreement required that any confirmation action be brought in the state courts of New Jersey or New York, and that this deprived the district court of subject matter jurisdiction.   The Second Circuit vacated. The court concluded that the district court erred in dismissing Petitioner’s petition. First, the court held that the petition adequately pleaded subject matter jurisdiction based on diversity of citizenship. Because parties cannot contractually strip a district court of its subject matter jurisdiction, it was error to conclude that the forum selection clause did so. Second, the court interpreted the relevant forum selection clauses as permissive arrangements that merely allow litigation in certain fora, rather than mandatory provisions that require litigation to occur only there. Accordingly, applying the modified forum non conveniens framework, the court held that the forum selection clauses did not bar proceedings from going forward in the United States District Court for the Southern District of New York. View "Rabinowitz v. Kelman" on Justia Law

Defendant-Appellant TA Operating LLC (TA) appeals the district court’s denial of its motion to compel arbitration of employment-related claims brought by Plaintiff.   The Ninth Circuit vacated the district court’s order denying Defendant’s motion to compel arbitration. The panel held that the district court erred in finding that the arbitration agreement’s delegation clause was unenforceable because it was substantively unconscionable. The district court properly considered whether an “unrelated” jury waiver provision made the delegation clause unconscionable. Here, though, the jury waiver provision applied only if the Agreement were determined to be unenforceable. As such, it could not support the conclusion that an agreement to arbitrate enforceability (i.e., the delegation clause) was unenforceable. View "KENNETH HOLLEY-GALLEGLY V. TA OPERATING, LLC" on Justia Law

This is a putative class action by three truck drivers against their employer, Domino’s Pizza. The court previously affirmed the district court’s denial of Domino’s motion to compel arbitration, holding that because the drivers were a “class of workers engaged in foreign or interstate commerce,” their claims were exempted from the Federal Arbitration Act (“FAA”) by 9 U.S.C. Section 1.   The Ninth Circuit affirmed the district court’s order denying Domino Pizza’s motion to compel arbitration in a putative class action brought by three Domino truck drivers, alleging violations of California labor law. The panel stated that its prior decision squarely rested upon its reading of Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon delivery drivers. The panel found no clear conflict between Rittmann and Saxon and nothing in Saxon that undermined the panel’s prior reasoning that because the plaintiff drivers in this case, like the Amazon package delivery drivers in Rittmann, transport interstate goods for the last leg to their final destinations, they are engaged in interstate commerce under Section 1. View "EDMOND CARMONA, ET AL V. DOMINO'S PIZZA, LLC" on Justia Law

An Asset Purchase Agreement provided that the sellers could receive variable payments (Earn-Out Consideration) if the post-merger company (IAS) achieved specific benchmarks. Section 2.6(c) specifies that IAS had to provide the sellers with the computation for each period, to become final unless they submitted a “notice of disagreement.” Any disagreement would be settled according to Section 2.3(e),” which refers to resolution by an accounting firm. Section 11.17, however, directs the parties generally to use non-binding mediation, followed by litigation if mediation fails.IAS determined that the company did not meet its targets. The sellers claim that IAS intentionally prevented the company from hitting its targets. Negotiations failed. The sellers sued for breach of contract and tortious interference; later, they filed a notice of disagreement and sought a declaration that the lawsuit was outside the scope of sections 2.3(e) and 2.6(d). IAS sought to compel arbitration under 2.3(e). The district court held that the Agreement contained a valid agreement to arbitrate. An accounting firm subsequently determined that the sellers had no right to Earn-Out Consideration. The district court entered judgment for IAS.The Third Circuit vacated. The Purchase Agreement contains an agreement to submit narrow disputes to an accounting firm for expert determination, not arbitration. Although the statement of IAS’s financial benchmarks becomes final after the expert completes its accounting analysis, the authority to resolve legal questions—like whether IAS violated the duty of good faith— remains with the courts. View "Sapp v. Industrial Action Services LLC" on Justia Law

Plaintiff-appellee Baker Hughes Services International, LLC, after winning an Ecuadorian arbitration against the Ecuador-based Pesago Consortium, secured an arbitral award enforceable jointly and severally against the Consortium’s two members: Defendant and third-party Campo Puma Oriente S.A. Plaintiff then brought its award to Oklahoma and sued Defendant to confirm the award in the United States. Plaintiff again prevailed, and the district court entered judgment against Defendant for the award’s amount, prejudgment interest, and attorney’s fees. Defendant challenged the enforcement of the arbitration award, arguing: (1) the U.S. district court lacked subject matter jurisdiction to confirm the award; (2) the district court should not have confirmed the award because the parties never agreed to arbitrate their dispute; and (3) the district court improperly awarded attorney’s fees and incorrectly calculated prejudgment interest. After its review, the Tenth Circuit Court of Appeals affirmed affirm everything except the district court’s award of prejudgment interest, which was vacated and remanded for the district court to reconsider. View "Baker Hughes Services International v. Joshi Technologies International" on Justia Law

Respondent the State of Libya (“Libya”) appealed from a district court judgment granting Petitioner Olin Holdings Limited’s (“Olin”) petition to confirm an arbitration award issued under a bilateral investment treaty between Libya and the Republic of Cyprus and denying Libya’s cross-motion to dismiss the petition on forum non-conveniens grounds. On appeal, Libya’s primary argument is that the district court erred by declining to independently review the arbitrability of Olin’s claims before confirming the final award.   The Second Circuit affirmed. The court held that Libya was not entitled to de novo review of the arbitral tribunal’s decisions because it “clearly and unmistakably” agreed to submit questions of arbitrability to the arbitrators in the first instance. The court further concluded that the district court properly confirmed the final award and rejected Libya’s cross-motion to dismiss the petition. The court explained that regarding the public and private interest factors, the district court held that Libya fell well short of satisfying its heavy burden because it “failed to identify even one” factor that weighed in favor of dismissal. On appeal, Libya makes “no persuasive argument identifying an error in the factual or legal components of the district court’s discretionary decision.” View "Olin Holdings Ltd. v. State of Libya" on Justia Law

Respondent is a former employee who won a judgment in Argentina's National Court of Labor Appeals against Citibank, N.A. Petitioner, the Argentinian branch of Citibank, N.A., filed a demand for arbitration with the American Arbitration Association and brought the proceedings below. The district court compelled arbitration, preliminarily enjoined the employee from enforcing the Argentinian judgment against Petitioner, and held Respondent in contempt of court. It also denied his motion to dismiss.   The Second Circuit reversed and remanded. The court held that the district court lacked subject matter jurisdiction over the Petition. Therefore, the district court was without authority to issue its orders in this case. The court reversed the district court's orders -- including its order to compel arbitration, the preliminary injunction it entered against Respondent, its order finding Respondent in contempt, and its order requiring Respondent to pay the Branch's attorneys' fees and costs. The court concluded that because the Branch has not shown it enjoys independent legal existence and Citibank has not sought to substitute itself or join this action as the real party in interest, there has been no party adverse to Respondent. Without adverse parties, there can be no subject matter jurisdiction under Article III. View "The branch of Citibank, N.A., established in the Republic of Argentina v." on Justia Law

Plaintiff worked for Defendant Skyview Capital, LLC. He sued this entity and others in state court after his termination. Skyview moved to compel arbitration. The trial court granted the motion and stayed the proceedings. Skyview had to pay arbitration fees ahead of the hearing. The fees were due June 4, 2021. On July 7, 2021, Plaintiff’s counsel asked the case manager whether Skyview had paid the deposits. On July 8, 2021, the case manager confirmed by email that Skyview had not paid. Plaintiff filed in the trial court a section 1281.98 Election to Withdraw from Arbitration. The court’s February 2022 order granted Plaintiff’s request to withdraw from arbitration, vacated the order staying proceedings, and awarded Plaintiff reasonable expenses under section 1281.99.
The Second Appellate District affirmed, holding that the order allowing Plaintiff to withdraw from arbitration was proper. The court explained that in enacting sections 1281.97 through 1281.99, the Legislature perceived employers’ and companies’ failure to pay arbitration fees was foiling the efficient resolution of cases. This contravened public policy. The Legislature responded by making nonpayment and untimely payment grounds for proceeding in court and getting sanctions. The point was to take this issue away from arbitrators, who may be financially interested in continuing the arbitration and in pleasing regular clients. Therefore, the trial court was right to decide this matter of statutory law. View "Cvejic v. Skyview Capital" on Justia Law

Bielski filed a putative class action, alleging that Coinbase, an online currency platform, failed to replace funds fraudulently taken from its users’ accounts. Coinbase’s User Agreement provides for binding arbitration. The district court denied Coinbase’s motion to compel arbitration. Coinbase then filed an interlocutory appeal under the Federal Arbitration Act, 9 U.S.C. 16(a), and moved the district court to stay its proceedings. The district court and Ninth Circuit denied stay motions.The Supreme Court reversed. A district court must stay its proceedings while an interlocutory appeal on the question of arbitrability is ongoing. Section 16(a) does not say whether district court proceedings must be stayed pending resolution of an interlocutory appeal but an appeal, including an interlocutory appeal, “divests the district court of its control over those aspects of the case involved in the appeal.” Because the question on appeal is whether the case belongs in arbitration or in court, the entire case is essentially “involved in the appeal,” and precedent requires that the court stay its proceedings while the interlocutory appeal on arbitrability is ongoing. If the court could move forward with proceedings while the appeal was ongoing, many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery) would be irretrievably lost. Absent a stay, parties could be forced to settle to avoid discovery and trial that they contracted to avoid through arbitration. When Congress wants to authorize an interlocutory appeal, but not to automatically stay district court proceedings pending that appeal, Congress typically says so. View "Coinbase, Inc. v. Bielski" on Justia Law

An arbitrator issued subpoenas to compel two individuals, who were not parties to the arbitration, to appear and produce documents at a hearing specially set “for the limited purpose of receiving documents” from them, or to download the documents to a website controlled by counsel for the party requesting the subpoenas. The subpoenas provided that after the production of documents, the “hearing” would be adjourned to a later date, at which time the subpoenaed nonparties would be summoned to appear and testify. The date for their compliance with the document production was nearly 12 months before the scheduled arbitration hearing on the merits. After the nonparties refused to comply with the subpoenas, the arbitrator compelled compliance. The nonparties petitioned the trial court to vacate the order compelling their compliance with the subpoenas. The trial court denied the petition to vacate the order, concluding the subpoenas were statutorily authorized “hearing” subpoenas under California Arbitration Act section 1282.6, not subpoenas issued for the purposes of discovery. The nonparties argued the judgment should be reversed because the subpoenas were improper discovery subpoenas, despite being labeled “hearing” subpoenas. Under the specific facts of this case, the Court of Appeal agreed with the nonparties. View "McConnell v. Advantest America" on Justia Law