Justia Arbitration & Mediation Opinion Summaries

E&Y appealed from the district court's order denying its motion to dismiss or stay proceedings, and to compel arbitration, in a putative class action brought by its former employees. At issue on appeal was whether an employee could invalidate a class-action waive provision in an arbitration agreement when that waiver removed the financial incentive for her to pursue a claim under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. 201, et seq. The court held that the FLSA did not include a "contrary congressional command" that prevented a class-action waiver provision in an arbitration agreement from being enforced by its terms. The court also held that, in light of the supervening decision of the Supreme Court in American Express Co v. Italian Colors Restaurant, the employee's argument that proceeding individually in arbitration would be "prohibitively expensive" was not a sufficient basis to invalidate the action waiver provision at issue here under the "effective vindication doctrine." Accordingly, the court reversed and remanded for further proceedings. View "Sutherland v. Ernst & Young LLP" on Justia Law

Plaintiffs filed a putative consumer class action suit against DirecTV and Best Buy, alleging violations of California's consumer protection laws. The arbitration agreement at issue in this instance was a customer service agreement between DirecTV and individuals who believed they purchased DirecTV equipment from Best Buy stores. AT&T Mobility v. Concepcion held that Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, preempted the State of California's rule rendering unenforceable arbitration provisions in consumer contracts that waive collective or class action proceedings. The court concluded that the arbitration agreement in this case was enforceable under Concepcion and, therefore, the district court did not err in compelling plaintiffs to arbitrate their claims against DirecTV. The court concluded, however, that plaintiffs were not required to arbitrate their claims with Best Buy. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Murphy v. DirecTV, Inc." on Justia Law

Plaintiffs brought a putative class action against Bresnan alleging violations of the Electronic Communications Privacy Act, 18 U.S.C. 2520-21, the Computer Fraud and Abuse Act, 18 U.S.C. 1030, and Montana state law for invasion of privacy and trespass to chattels in connection with targeted advertising they received while using Bresnan's Internet service. The district court declined to enforce a choice-of-law clause in the service subscriber agreement, provided to all Bresnan customers, specifying that New York law should apply, and an arbitration clause. The court held that AT&T Mobility LLC v. Concepcion further limited the savings clause in the Federal Arbitration Act (FAA), 9 U.S.C. 1-2 et seq., and therefore, the court held that the FAA preempted Montana's reasonable expectations/fundamental rights rule and that the district court erred in not applying New York law because a state's preempted public policy was an impermissible basis on which to reject the parties' choice-of-law selection. Accordingly, the court vacated the district court's denial of Bresnan's motion to compel arbitration and remanded to the district court with instructions to apply New York law to the arbitration agreement. View "Mortensen, et al. v. Bresnan Communications, LLC" on Justia Law

This case involved arbitration proceedings stemming from plaintiff's class action suit alleging, among other things, that SouthernLINC's termination fees were unlawful penalties under Georgia law. SouthernLINC, a wireless provider, appealed the district court's denial of its motion to vacate two arbitration awards. Under the standard set forth by the Supreme Court in Oxford Health Plans LLC v. Sutter, the court concluded that the arbitrator did not exceed his powers under section 10(a)(4) of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., either in construing the arbitration clause as he did or in certifying a class. Accordingly, the court affirmed the judgment of the district court. View "Southern Communications Serv. v. Thomas" on Justia Law

An agreement between American Express and merchants who accept American Express cards, requires that all of their disputes be resolved by arbitration and provides that there “shall be no right or authority for any Claims to be arbitrated on a class action basis.” The merchants filed a class action, claiming that American Express violated section 1 of the Sherman Act and seeking treble damages under section 4 of the Clayton Act. The district court dismissed. The Second Circuit reversed, holding that the class action waiver was unenforceable and that arbitration could not proceed because of prohibitive costs. The Circuit upheld its reversal on remand in light of a Supreme Court holding that a party may not be compelled to submit to class arbitration absent an agreement to do so. The Supreme Court reversed. The FAA reflects an overarching principle that arbitration is a matter of contract and does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery. Courts must rigorously enforce arbitration agreements even for claims alleging violation of a federal statute, unless the FAA mandate has been overridden by a contrary congressional command. No contrary congressional command requires rejection of this waiver. Federal antitrust laws do not guarantee an affordable procedural path to the vindication of every claim or indicate an intention to preclude waiver of class-action procedures. The fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy. View "Am. Express Co. v. Italian Colors Rest." on Justia Law

Plaintiffs were individuals who entered into contracts with Defendants for the provision of janitorial services to third-party customers. Plaintiffs filed this putative class action, alleging that Defendants violated the Massachusetts Wage Act. Defendants moved to stay the court proceedings pending arbitration according to the terms of the arbitration clause contained in the parties' franchise agreements. The superior court denied the motion, concluding that the arbitration clause was unenforceable as set forth in Feeny v. Dell Inc. (Feeney I). After the United States Supreme Court decided AT&T Mobility LLC v. Concepcion, Defendants sought appellate review, which the Supreme Court granted. The Supreme Court reversed the order invalidating the arbitration in light of its interpretation of Conception and its impact on Feeney I, as set forth in Feeney II, holding (1) Massachusetts public policy in favor of class proceedings in certain contexts may no longer serve, in and of itself, as grounds to invalidate a class waiver in an arbitration agreement; and (2) in this case, Plaintiffs failed to demonstrate they lacked a practical means to pursue their claims on an individual basis. View "Machado v. System4 LLC" on Justia Law

Plaintiffs commenced a putative class action against Defendant, alleging violations of Mass. Gen. Laws ch. 93A. Dell successfully moved to compel arbitration according to an arbitration agreement signed by the parties. An arbitrator concluded that the parties waived class action relief by signing the agreement. In Feeney I, the Supreme Court invalidated the class waiver provision in the arbitration agreement. In this subsequent appeal, the Supreme Court held that the arbitration agreement was properly invalidated where (1) Mobility LLC v. Concepcion, decided by the U.S. Supreme Court after Feeney I, precluded the invalidation of class waiver provisions in arbitration clauses in consumer contracts, such as the one at issue here, and therefore, Concepcion undid the principal rationale for the Court's decision in Feeney I; (2) a court is not foreclosed from invalidating an arbitration agreement that includes a class action waiver where a plaintiff can demonstrate he effectively cannot pursue a claim against the defendant in individual arbitration according to the terms of his agreement, thus rendering his or her claim nonremediable; and (3) Plaintiffs demonstrated that they could not pursue their statutory claim under the individual claim arbitration process required by the arbitration agreement. View "Feeney v. Dell Inc." on Justia Law

Plaintiffs filed a class action complaint against a check advance company, asserting claims based on numerous Florida statutes. Plaintiffs later amended the complaint to add Tiffany Kelly as an additional plaintiff and named class member. Because Kelly had signed the version of Defendant's arbitration agreement that contained a class action waiver, this case focused on her contracts with Defendant. The trial court eventually denied Defendant's motion to compel arbitration, ruling that the class action waiver was unenforceable because it was void as against public policy. The court of appeal affirmed, finding that no other reasonable avenue for relief would be available if it enforced the class action waiver. After the court of appeal decided this case, the U.S. Supreme Court issued its decision in AT&T Mobility, LLC v. Concepcion. Applying the rationale of Concepcion to the facts set forth in this case, the Supreme Court quashed the court of appeal's decision, holding that the Federal Arbitration Act preempted invalidating the class action waiver in this case on the basis of the waiver being void as against public policy. View "McKenzie Check Advance of Fla., LLC v. Betts" on Justia Law

Goldman Sachs appealed from an order of the district court denying their motion to compel arbitration of plaintiff's claims of gender discrimination. Plaintiff and others alleged that Goldman Sachs engaged in a continuing pattern and practice of discrimination based on sex against female employees in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000 et seq., and the New York City Human Rights Law, Administrative Code of the City of New York 8-107 et seq. On appeal, plaintiff contended that the arbitration clause in her agreement must be invalidated because arbitration would preclude her from vindicating a statutory right. The court disagreed and held that the district court erred in denying the motion to compel arbitration where plaintiff had no substantive statutory right to pursue a pattern-or-practice claim. Accordingly, the court reversed the judgment of the district court. View "Parisi v. Goldman, Sachs & Co." on Justia Law

Plaintiffs, five retail grocers, each attempting to bring class-action antitrust claims against one of two wholesale grocers, appealed the district court's grant of defendants' motion to dismiss plaintiffs claims from the putative class action. The court held that the non-signatory defendants could not use equitable estoppel to compel arbitration of plaintiffs' claims. Since the district court found the equitable estoppel issue dispositive, it did not address the successor-in-interest argument and therefore, the court remanded for the district court to consider this argument in the first instance. The court concluded that the remaining public policy arguments were moot or the court declined to issue an advisory opinion. View "King Cole Foods, Inc., et al v. SuperValu, Inc., et al" on Justia Law