Justia Arbitration & Mediation Opinion Summaries

Plaintiff alleged that, after her employment terminated, defendants failed to pay all of her final wages. She filed a putative class action under Labor Code sections 201-203, also asserting a representative Private Attorneys General Act (PAGA) claim seeking civil penalties on behalf of plaintiff and other aggrieved employees. Defendants submitted an arbitration agreement signed by plaintiff, stating any disputes would be submitted to arbitration and that “[a]ny such claims must be submitted on an individual basis only and I hereby waive the right to bring or join any type of collective or class claim in arbitration, in any court, or in any other forum.” Defendants conceded that the agreement cannot waive the representative PAGA claim. The trial court compelled arbitration of plaintiff’s individual claim, dismissed the class claims, bifurcated the representative PAGA claim, and stayed the PAGA claim pending the completion of arbitration. The court of appeal concluded the order is nonappealable; the order does not appear to constitute a de facto final judgment for absent plaintiffs. The putative class members/aggrieved employees under PAGA because their PAGA claims remain pending. View "Young v. REMX" on Justia Law

When Plaintiff was hired by Defendants, he signed multiple arbitration agreements as a condition of employment. Plaintiff later sued Defendant, alleging racial discrimination, harassment, and retaliation. The complaint sought to bring claims on behalf of a “class of current and former employees of color.” Defendants filed a motion to compel individual arbitration based on the arbitration agreements. The trial court granted the motion but struck the class allegations, concluding that the agreements did not permit class arbitration. The court of appeal reversed in part, ruling (1) the trial court erred in concluding that existing precedent compelled the court to determine whether class arbitration was available; and (2) the availability of class proceedings under an arbitration agreement is for an arbitrator to decide in the first instance. The Supreme Court affirmed, holding (1) there is no universal rule allocating the decision of whether an arbitration agreement permits or prohibits classwide arbitration to a court or an arbitrator, but rather, who decides is in the first instance a matter of agreement with the parties’ agreement subject to interpretation under state contract law; and (2) under state law, the arbitration agreement in this case allocates the decision to the arbitrator. View "Sandquist v. Lebo Automotive, Inc." on Justia Law

A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law

Appellant, a payday loan company, provided loans to the named plaintiffs. The named plaintiffs and other borrowers did not repay their loans, prompting Appellant to file several thousand individual collection actions. Appellant secured thousands of default judgments against the named plaintiffs. It was later discovered that the process server hired by Appellant falsified affidavits of service. The named plaintiffs sued Appellant, alleging that Appellant improperly obtained its default judgments against them and other similarly situated borrowers without their knowledge. Appellant moved to compel arbitration based on the arbitration provisions in its loan agreements. The district court denied Appellant’s motions, holding that Appellant waived its right to arbitrate by bringing collection actions in justice court and obtaining default judgments based on falsified affidavits of service. The Supreme Court affirmed, holding that the district court correctly concluded that Appellant waived its right to an arbitral forum where the named plaintiffs’ claims all concerned the validity of the default judgments Appellant obtained against them in justice court. View "Principal Investments v. Harrison" on Justia Law

In 2008, Chesapeake, as “Lessee,” entered into oil and gas leases with northeastern Pennsylvania landowners. The Leases indicate that they were “prepared by” Chesapeake and include a provision, stating that, in the event of a disagreement between “Lessor” and “Lessee” concerning “this Lease,” performance “thereunder,” or damages caused by “Lessee’s” operations, “all such disputes” shall be resolved by arbitration “in accordance with the rules of the American Arbitration Association.” In 2013, Scout purchased several leases and began receiving royalties from Chesapeake. In 2014, Scout filed an arbitration demand on behalf of itself and similarly situated lessors, alleging that Chesapeake paid insufficient royalties. Chesapeake objected to class arbitration and sought a declaratory judgment, arguing that “[it] did not agree to resolve disputes arising out of the leases at issue in ‘class arbitration,’ nor did Chesapeake agree to submit the question of class arbitrability ... to an arbitrator.” The district court and Third Circuit ruled in favor of Chesapeake, finding that the issue of arbitrability is a question for the court. Based on the language of the Leases, the nature and contents of the AAA rules, and existing case law, the Leases did not “clearly and unmistakably” delegate the question of class arbitrability to the arbitrators. View "Chesapeake Appalachia LLC v. Scout Petroleum, LLC" on Justia Law

DIRECTV and its customers entered into service agreements that included a binding arbitration provision with a class-arbitration waiver. It specified that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable. The agreement also declared that the arbitration clause was governed by the Federal Arbitration Act, 9 U.S.C. 2. After California customers entered into the agreement, the Supreme Court held that California’s rule invalidating class-arbitration waivers was preempted by the Federal Act. When California customers sued, the trial court denied DIRECTV’s request to order the matter to arbitration. The California Court of Appeal affirmed, finding the entire arbitration provision unenforceable under the agreement because the parties were free to refer in the contract to California law as it would have been absent federal preemption. The U.S. Supreme Court reversed. The California court’s interpretation does not place arbitration contracts “on equal footing with all other contracts,” as required by the Act. California courts would not interpret contracts other than arbitration contracts the same way. The language the court used to frame the issue focused only on arbitration. View "DIRECTV, Inc. v. Imburgia" on Justia Law

UEBT is a healthcare employee benefits trust governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, and pays healthcare providers directly from its own funds for the services provided to enrollees in its health plans. UEBT contracted with a “network vendor,” Blue Shield, to obtain access to Blue Shield’s provider network at the rates Blue Shield had separately negotiated, and certain administrative services. One of Blue Shield’s preexisting provider contracts was with Sutter, a group of health care providers in Northern California. UEBT sued Sutter, on behalf of a putative class of all California self-funded payors, alleging that Sutter’s contracts with network vendors, such as Blue Shield, contain anticompetitive terms that insulate Sutter from competition and drive up the cost of healthcare. UEBT sought damages, restitution, and injunctive relief under the Cartwright Act (Bus. & Prof. Code 16720) and California’s unfair competition law (section 17200). Sutter moved to compel arbitration, relying on an arbitration clause in the provider contract signed by Sutter and Blue Shield. The trial court denied Sutter’s motion, concluding that UEBT was not bound to arbitrate its claims pursuant to an agreement it had not signed or even seen. The court of appeal affirmed. View "UFCW & Employers Benefit Trust v. Sutter Health" on Justia Law

Miranda is a former employee of Anderson Enterprises; Hansen is the company’s general manager. During his employment, Miranda signed an “Alternative Dispute Resolution Policy” by which agreed to arbitrate all employment claims and waived the right to arbitrate claims as a class or collective action. In 2013, Miranda filed a purported class action lawsuit, asserting wage and hour claims, including a Private Attorneys General Act (PAGA; Lab. Code, 2698) claim. The trial court found the arbitration agreement valid and enforceable, dismissed the class and representative claims without prejudice based on the arbitration agreement’s waiver, directed Miranda to arbitrate his individual claims, and stayed the superior court proceedings pending completion of arbitration of the individual claims. The court of appeal reversed as to the representative PAGA claim, based on a subsequently-issued California Supreme Court opinion, Iskanian v. CLS Transp. Los Angeles, LLC (2014), under which the waiver is unenforceable. The court noted that Miranda had represented that he would not pursue his individual claims through arbitration and concluded that the PAGA ruling was, therefore, appealable. View "Miranda v. Anderson Enters., Inc." on Justia Law

Three petitioners sued their former employer and certain of its agents and associates (collectively, “Employer”) asserting minimum wage and overtime claims individually and on behalf of others similarly situated. The district court entered orders compelling individual arbitration of Petitioners’ claims and denying their motions for class certification. Each petitioner signed the same long-form arbitration agreement, which included a clause waiving the right to initiate or participate in class actions. Petitioners sought extraordinary writ relief, contending that Employer’s failure to countersign the long-form agreement made it unenforceable, that the class action waiver violated state and federal law, and, in the case of one petitioner, Employer waived its right to compel arbitration by litigating with him in state and federal court. The Supreme Court denied writ relief, holding that Petitioners’ arguments were unavailing and that the district court did not err in compelling individual arbitration of their claims. View "Tallman v. Eighth Judicial Dist. Court" on Justia Law

Plaintiffs Michael Parnow, Shawn Lisenby, Bob Andrade, Gabriel Bautista, and Saiyaz Abdul filed a class action against Universal Protection Service, LP and Universal Services of America, Inc. (collectively, UPS). Plaintiffs worked as armed security guards at the Yolo County Superior Court, under the employ of UPS. As part of their job, they have to provide equipment, such as guns, handcuffs, and radios, and have to pay the costs to maintain their certification to work as armed guards, but they are not reimbursed for equipment or training costs. When they filed an administrative complaint, they were all fired except plaintiff Lisenby, and none were paid their wages. The trial court granted a stipulated stay, pending the outcome of a then-pending case in the California Supreme Court. After the Supreme Court issued its decision, plaintiffs filed an amended complaint as a “representative action” under the Private Attorneys General Act of 2004 (PAGA) and also petitioned to compel class-wide arbitration. The agreement listed a number of disputes that were covered, including “any state or local statutes and ordinances relating to wage and hour or wage payment matters.” It excluded employees covered by collective bargaining agreements, and disputes involving workers compensation and unemployment insurance. UPS answered with a general denial, coupled with various affirmative defenses, including that the class action claims were barred by the arbitration agreement. UPS also filed a cross-complaint seeking a declaration that: (1) the trial court, not the arbitrator, should decide whether class action relief was barred by the arbitration agreement; and (2) that the arbitration agreement barred class actions. After plaintiffs answered the cross-complaint, UPS moved to compel individual arbitration and stay the proceedings. Plaintiffs opposed the motion, in part arguing that under American Arbitration Association (AAA) Rules, whether class arbitrations were permitted was a matter for the arbitrator to decide. Plaintiffs obtained judicial notice of the AAA Rules. The trial court denied the motion to compel individual arbitration, and stayed the suit pending the arbitration. UPS petitioned for a writ of mandate, seeking to set aside the order compelling it to submit to arbitration. Upon review, the Court of Appeal concluded that the agreements’ incorporation by reference of the AAA Rules vested the arbitrator with the power to decide the disputed issue. The alternative writ was discharged, the stay (issued previously) was vacated, and the petition for mandate was denied. View "Universal Protection Service v. Super. Ct." on Justia Law