Justia Arbitration & Mediation Opinion Summaries

Defendants-appellants Catalina Restaurant Group, Inc., Carrows Restaurants, Inc., Carrows Family Restaurants, Inc., Coco’s Bakery Restaurants, Inc. and Coco’s Restaurants, Inc. (collectively, Catalina Defendants) appealed the partial denial of their motion to compel arbitration. Plaintiff-respondent Yalila Lacayo (Lacayo) was an employee of Catalina Defendants, and filed a plaintiff’s class action complaint on behalf of herself and others similarly situated (Class Members) against Catalina Defendants in superior court alleging numerous wage and hour violations under the Labor Code, and an injunctive relief claim under California’s unfair competition law (UCL). Catalina Defendants responded by filing a motion to compel arbitration of Lacayo’s individual claims, including the UCL claim, and dismissal of the class claims (Motion). The trial court granted the Motion as to Lacayo’s individual claims; refused to dismiss the class claims, instead letting the arbitrator decide if the class claims were subject to arbitration or a class action waiver; and denied the Motion as to the UCL claim; and stayed the matter until after arbitration was completed. Catalina Defendants on appeal argued the trial court erred by: (1) refusing to enforce the individual arbitration agreement according to its terms; and (2) refusing to compel arbitration of Lacayo’s UCL claim. In supplemental briefing, both parties addressed whether Catalina Defendants could appeal the trial court’s order granting arbitration of individual claims but refusing to dismiss the classwide claims, leaving the decision for the arbitrator. The Court of Appeal found Catalina Defendants could not appeal the portion of the Motion that granted arbitration for Lacayo’s individual claims and the refusal to dismiss the class claims. The Court of Appeal only addressed the order finding that the UCL claim was not subject to arbitration, and affirmed the trial court's order denying defendants' Motion as to the UCL claim. View "Lacayo v. Catalina Restaurant Group Inc." on Justia Law

Au pairs and former au pairs filed a class action lawsuit against AuPairCare, Inc. (“APC”) and other au pair sponsoring companies alleging violations of antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Fair Labor Standards Act (“FLSA”), federal and state minimum wage laws, and other state laws. Eventually, the au pairs amended their complaint and added two former au pairs, Juliane Harning and Laura Mejia Jimenez, who were sponsored by APC. In response, APC filed a motion to compel arbitration, which the district court denied. The district court found the arbitration provision between the parties both procedurally and substantively unconscionable and declined to enforce it. Because the arbitration provision contained only one substantively unconscionable clause, the Tenth Circuit concluded the district court abused its discretion by refusing to sever the offending clause and otherwise enforce the agreement to arbitrate. The Court therefore reversed the district court’s ruling and remanded for further proceedings. View "Beltran v. Interexchange, Inc." on Justia Law

Plaintiff Jeff Gist worked as a driver for defendant Driver Resources, LLC. The other two defendants were related companies. In November 2013, plaintiff filed a class-action complaint against defendants, on behalf of himself and other similarly situated drivers. At issue was defendants’ compliance with Oregon’s wage and hour laws. In January 2014, defendants filed a petition to compel arbitration, on the basis of an agreement that plaintiff had signed with one defendant. Plaintiff responded to the petition by arguing that the agreement was unconscionable, and therefore that arbitration should not be compelled. The trial court granted defendants’ petition, requiring plaintiff to proceed to arbitration. Plaintiff made several attempts to obtain appellate review of the trial court’s order compelling arbitration. This case required the Oregon Supreme Court to determine whether the Court of Appeals correctly dismissed plaintiff’s appeal of a judgment dismissing his complaint with prejudice on the grounds that the appeal was barred by the Supreme Court’s decision in Steenson v. Robinson, 385 P2d 738 (1963). That decision set out the common-law rule that a party may not appeal from a voluntarily-requested judgment. The Court concluded the judgment was appealable and remanded the case to the Court of Appeals. View "Gist v. Zoan Management, Inc." on Justia Law

Plaintiffs, current and former Uber drivers, filed putative class actions alleging that Uber violated various federal and state statutes by, among other things, misclassifying drivers as independent contractors rather than employees. The Ninth Circuit previously considered and reversed the district court's orders denying Uber's motions to compel arbitration in Mohamed v. Uber Technologies, Inc., 848 F.3d 1201, 1206 (9th Cir. 2016).In this case, the panel rejected plaintiffs' additional arguments as to why the arbitration agreements were unenforceable. Because the class certification by the district court was premised on the district court's determination that the arbitration agreements were unenforceable, the panel reversed class certification. The panel also held that the Rule 23(d) orders were based on the district court’s denial of the motions to compel arbitration and its granting of class certification. Because these decisions must be reversed, there was no longer a basis for the district court's restrictions on Uber's communication with class and putative class members. Therefore, these orders were moot and the panel reversed. View "O'Connor v. Uber" on Justia Law

The Eleventh Circuit held that the district court correctly determined that the availability of class arbitration was a question of arbitrability, presumptively for the court to decide, because it was the kind of gateway question that determined the type of dispute that would be arbitrated. In this case, defendants sought to compel arbitration on a class basis with JPay, a Miami-based company that provides fee-for-service amenities in prisons in more than thirty states.The court held, however, that the language the parties used in their contract expressed their clear intent to overcome the default presumption and to arbitrate gateway questions of arbitrability, including the availability of class arbitration. Therefore, the court vacated the district court's grant of summary judgment to JPay, reversed the denial of defendants' motion to compel arbitration, and remanded for further proceedings. View "JPay, Inc. v. Kobel" on Justia Law

Matthew Ray, a former DISH Network L.L.C. employee who signed an arbitration agreement when he was employed, filed an action in the federal district court alleging violations of the Fair Labor Standards Act (“FLSA”), Colorado’s Wage Claim Act, Colorado’s Minimum Wage Act, and a common law claim for breach of contract. Dish moved to dismiss, demanding that Ray arbitrate his claims pursuant to the Agreement. Ray dismissed the lawsuit and filed with the American Arbitration Association (“AAA”), asserting the same four claims. In addition, and the focus of this case, Ray attempted to pursue his claims as a class action under Fed. R. Civ. P. 23 and a collective action under 29 U.S.C. 216(b). The arbitrator determined that the Arbitration Agreement between the two parties permitted classwide arbitration, and then stayed the arbitration to permit DISH to contest the issue in court. DISH filed a Petition to Vacate Clause Construction Arbitration Award, which the district court denied. After review, the Tenth Circuit determined the arbitrator in this case did not manifestly disregard Colorado law when he concluded that he was authorized to conduct class arbitration by the broad language of the Agreement in combination with the requirement that arbitration be conducted pursuant to the AAA’s Employment Dispute Rules. Accordingly, the district court correctly denied DISH’s petition to vacate the arbitration award. View "Dish Network v. Ray" on Justia Law

In July 2007, NMG, a luxury fashion retailer, notified its employees that acceptance of the NMG Arbitration Agreement was a mandatory condition of employment which would be implied for all employees who continued to work at NMG beyond July 15, 2007. Tanguilig unsuccessfully tried to negotiate its terms. Tanguilig chose not to return to work after July 15, and sued alleging, among other things: wrongful termination in violation of public policy; wrongful retaliation; wrongfully requiring employees to agree to allegedly illegal terms, failure to provide 10-minute rest periods and 30-minute meal periods and to pay overtime wages and minimum wage in violation of the Labor Code; and failure to pay wages owed at the time of discharge. Early in the proceedings, the court dismissed Tanguilig’s wrongful termination and related claims. Several years later, it dismissed the remaining claims under California’s five-year dismissal statute, Code of Civil Procedure 583.310. The court of appeal affirmed, rejecting Tanguilig’s argument that the trial court erred in failing to toll the five-year clock under section 583.340(c), for the period during which an order compelling a co-plaintiff to arbitration was in effect. Tanguilig made no factual showing that she could not have brought her claims to trial while that order was in effect View "Tanguilig v. Neiman Marcus Group, Inc." on Justia Law

Employees of Wells Fargo filed putative class arbitrations before the American Arbitration Association, seeking unpaid overtime from Wells Fargo. The Second Circuit affirmed the district court's denial of Wells Fargo's petitions seeking to compel bilateral, rather than class, arbitration. The court assumed without deciding that the question whether an arbitration clause authorized class arbitration was a so-called "question of arbitrability" presumptively for a court, rather than an arbitrator, to decide. Therefore, applying Missouri's arbitration and contract law, the court held that the parties overcame this presumption by clearly and unmistakably expressing their intent to let an arbitrator decide whether they agreed to authorize class arbitration. View "Wells Fargo Advisors, LLC v. Sappington" on Justia Law

Plaintiff Tony Muro entered into an employment contract with defendant Cornerstone Staffing Solutions, Inc. (Cornerstone). The contract included a provision requiring that all disputes arising out of Muro's employment with Cornerstone to be resolved by arbitration. It also incorporated a class action waiver provision. In response to this case, which was styled as a proposed class action and alleged various Labor Code violations, Cornerstone moved to compel arbitration and dismiss the class claims. Relying heavily on Garrido v. Air Liquide Industrial, U.S. LP, 241 Cal.App.4th 833 (2015), the trial court concluded the contract was exempted from the operation of the Federal Arbitration Act (FAA; 9 U.S.C. 1 et seq.) and was instead governed by California law. It further determined that the California Supreme Court's decision in Gentry v. Superior Court, 42 Cal.4th 443 (2007) (overruled by 59 Cal.4th 348(2014)) continued to provide the relevant framework for evaluating whether the class waiver provision in the contract was enforceable under California law. After applying Gentry to the record here, the court found the class waiver provision of the contract unenforceable and denied the motion to compel arbitration. Cornerstone appeals, but finding no error, the Court of Appeal affirmed. View "Muro v. Cornerstone Staffing Solutions" on Justia Law

The Ninth Circuit affirmed the district court's order compelling arbitration of putative class action claims against AT&T by customers who alleged that AT&T falsely advertised their mobile service plans as "unlimited" when in fact it intentionally slowed data at certain usage levels. The panel held that there was no state action in this case, rejecting plaintiffs' claim that there was state action whenever a party asserts a direct constitutional challenge to a permissive law under Denver Area Educational Telecommunications Consortium, Inc. v. FCC, 518 U.S. 727 (1996). The panel held that Denver Area did not broadly rule that the government was the relevant state actor whenever there was a direct constitutional challenge to a "permissive" statute, and did not support finding state action here. The panel also held that the Federal Arbitration Act merely gives AT&T the private choice to arbitrate, and did not encourage arbitration such that AT&T's conduct was attributable to the state. View "Roberts v. AT&T Mobility, LLC" on Justia Law