Justia Arbitration & Mediation Opinion Summaries

Plaintiffs brought this putative class action against KeyBank, alleging violations of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200, in connection with private student loans that KeyBank extended to plaintiffs. The court concluded that (1) the Federal Arbitration Act (FAA) 9 U.S.C. 1 et seq., preempted the Broughton-Cruz rule and (2) the arbitration clause in the parties' contracts must be enforced because it was not unconscionable. Therefore, the court did not reach the question, presented in Appeal No. 10-15934, whether the NBA and the regulations of the OCC preempted plaintiffs' UCL claims. Accordingly, in Interlocutory Appeal No. 09-16703, the court reversed the district court's denial of KeyBank's motion to compel arbitration, vacated the judgment, and remanded to the district court with instructions to enter an order staying the case and compelling arbitration. Because the disposition of that appeal rendered the district court's subsequent dismissal order a nullity, the court dismissed Appeal No. 10-15934 as moot. View "Kilgore, et al. v. Keybank, et al." on Justia Law

Borrower brought suit against a payday loan company (Company), arguing that its arbitration agreement containing a class waiver was unenforceable. The trial court found that Company's arbitration agreement was unconscionable and unenforceable because its class waiver deprived borrowers of a meaningful remedy. The Supreme Court reversed in light of AT&T Mobility LLC v. Concepcion, holding that that the trial court erred in finding that Company's arbitration agreement was unconscionable based on its class waiver and should have instead adjudicated whether the arbitration agreement was enforceable in light of Borrower's evidence relevant to her claims regarding ordinary state-law principles that govern contracts but that do no single out or disfavor arbitration. Remanded. View "Robinson v. Title Lenders, Inc." on Justia Law

Missouri Title Loans appealed from a judgment finding that a class arbitration waiver contained in its loan agreement, promissory note, and security agreement (agreement) was unenforceable. The Supreme Court affirmed the judgment insofar as it held that the arbitration waiver was unconscionable and reversed that part of the judgment ordering that the claim be submitted to an arbitrator to determine suitability for class arbitration, holding that the appropriate remedy was to strike the entire arbitration agreement. The U.S. Supreme Court vacated the Court's judgment and remanded for further consideration in light of AT&T Mobility, LLC. v. Concepcion. Applying Concepcion, the Supreme Court affirmed in part and reversed in part, holding (1) the presence and enforcement of the class arbitration waiver did not make the arbitration clause unconscionable; (2) the formation of the agreement was unconscionable; and (3) therefore, the appropriate remedy was revocation of the arbitration clause contained within the agreement. Remanded. View "Brewer v. Mo. Title Loans, Inc." on Justia Law

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously. View "Carey v. 24 Hour Fitness USA, Inc." on Justia Law

Plaintiff entered into a two-year wireless service agreement with First Cellular in 2005. The company was acquired by defendant, which began dismantling and reorganizing. Plaintiff initially agreed to defendant's terms, but later filed a class action, claiming breach of contract for rendering his phone and equipment useless and refusing to honor the features and prices of the First Cellular Agreement. He also claimed deceptive rade practices under Illinois law and civil conspiracy. The district court denied defendant's motion to compel arbitration. The Seventh Circuit reversed, finding that defendant's arbitration clause applies because part of the claims are based on services and products received under defendant's contract. Defendant's contract unambiguously covers any dispute "arising out of" or "relating to the services and equipment." If a contract provides for arbitration of some issues, any doubt concerning the scope of the arbitration clause is resolved in favor of arbitration as a matter of federal law, 9 U.S.C. 2. View "Gore v. Alltel Comm'cns, LLC" on Justia Law

Appellants brought various claims before Financial Industry Regulatory Authority (FINRA) arbitrators against Ameriprise, a financial-services company, for, inter alia, breach of fiduciary duty, breach of contract, fraud, and negligent misrepresentation related to the decline in value of various financial assets owned by appellants and managed by Ameriprise. Ameriprise answered appellants' FINRA complaint by asserting, principally, that appellants released their claims by operation of a settlement agreement in a class-action agreement suit that had proceeded between 2004 and 2007 in the United States District Court for the Southern District of New York. After FINRA arbitrators denied Ameriprise's motion to stay appellants' arbitration, Ameriprise moved in the district court, in which the class action had been litigated and settled, for an order to enforce the settlement agreement that would enjoin appellants from pressing any of their claims before FINRA arbitrators. The district court concluded that the class settlement barred all of appellants' arbitration claims and therefore granted Ameriprise's motion and ordered appellants to dismiss their FINRA complaint with prejudice. The court held that the district court had the power to enter such an order and that several of appellants' arbitration claims were barred by the 2007 class-action settlement. Therefore, the court affirmed in part. But because the court concluded that appellants' arbitration complaint plead claims that were not, and could not have been, released by the class settlement, the court vacated in part the district court's judgment, and remanded the case for the entry of an order permitting the non-Released claims to proceed in FINRA arbitration. The court dismissed as moot appellants' appeal from the district court's denial of their motion for reconsideration. View "In Re: American Express Finance Advisors Securities Litigation" on Justia Law

Appellants, current and former shuttle bus drivers at the Minneapolis-St.Paul International Airport, brought suit against appellees in Minnesota state court alleging misclassifications of its drivers as franchisees rather than employees. At issue was whether the district court erred in granting the motion to compel arbitration, erred in enforcing the class action waiver clauses in the drivers' contracts, and erred in dismissing the federal action instead of staying it pending arbitration. The court held that the district court did not err in granting the motion to compel arbitration where appellants agreed to have an arbitrator determine threshold questions of arbitrability and therefore, appellants agreed to have the arbitrator decide whether the Federal Arbitration Act's (FAA), 9 U.S.C. 1, transportation worker exemption applied. The court also held that AT&T Mobility LLC v. Concepcion foreclosed appellants' claim that the district court erred in concluding the class action waivers were enforceable where the Supreme Court recently held that the FAA preempted a state-law-based challenge to the enforceability of class action waivers. The court held that, under the circumstances, the district court abused its discretion in dismissing the action rather than staying it pending completion of the arbitration. View "Green, et al. v. SuperShuttle Int'l, et al." on Justia Law

This case was remanded from the U.S. Supreme Court. Appellants Keith Litman and Robert Watchel asked the Third Circuit to reverse a district court order that compelled them to arbitrate their contract dispute with Cellco Partnership (d/b/a Verizon Wireless) on an individual rather than class-wide basis. In an unpublished opinion, the Third Circuit vacated the district court order because a recent Third Circuit precedent bound the Court to conclude that class arbitration should have been available to Appellants. Verizon responded by seeking a stay of the mandate and seeking review by the Supreme Court. Having reviewed the supplemental briefing and applicable legal authority, the Third Circuit concluded that the applicable law at issue that required the availability of classwide arbitration created a scheme inconsistent with the Federal Arbitration Act. Accordingly, the Court affirmed the district court’s order compelling individual arbitration in accordance with the terms of the individual Appellants’ contracts with Verizon. View "Litman v. Cellco Partnership" on Justia Law

This case arose when plaintiffs filed a nationwide consumer class action against Life of the South Insurance Company (Life of the South). At issue was whether Life of the South had a right to enforce against plaintiffs the arbitration clause in the loan agreement, between plaintiffs and the car dealership where they purchased their vehicle, where the loan agreement lead plaintiffs to enter into a separate credit life insurance contract with Life of the South. The court held that the loan agreement did not show, on its face or elsewhere, an intent to allow anyone other than plaintiffs, the car dealership, and Chase Manhattan, and the assignees of the dealership of Chase Manhattan, to compel arbitration of a dispute and Life of the South was none of those. The court also held that because the only claims plaintiffs asserted were based on the terms of their credit life insurance policy with Life of the South, which did not contain an arbitration clause, equitable estoppel did not allow Life of the South to compel plaintiffs to arbitrate. Accordingly, the court affirmed the district court's denial of Life of the South's motion to compel arbitration. View "Lawson, et al. v. Life of the South Ins. Co." on Justia Law

Respondents filed a complaint against AT&T Mobility LLC ("AT&T"), which was later consolidated with a putative class action, alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it advertised as free. AT&T moved to compel arbitration under the terms of its contract with respondents and respondents opposed the motion contending that the arbitration agreement was unconscionable and unlawfully exculpatory under California law because it disallowed classwide procedures. The district court denied AT&T's motion in light of Discover Bank v. Superior Court and the Ninth Circuit affirmed. At issue was whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 2, prohibited states from conditioning the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures. The Court held that, because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," quoting Hines v. Davidowitz, California's Discover Bank rule was preempted by the FAA. Therefore, the Court reversed the Ninth Circuit's ruling and remanded for further proceedings consistent with the opinion.