Justia Arbitration & Mediation Opinion Summaries

In the case involving the Restaurant Law Center and the New York State Restaurant Association against the City of New York and the Commissioner of the City’s Department of Consumer and Worker Protection, the plaintiffs challenged a New York City law prohibiting the wrongful discharge of fast-food restaurant employees. The plaintiffs argued that the law was preempted by federal law and violated the dormant Commerce Clause of the United States Constitution.The United States Court of Appeals for the Second Circuit affirmed the decision of the United States District Court for the Southern District of New York, which had granted the defendants’ motions for summary judgment. The appellate court concluded that the city's Wrongful Discharge Law did not violate federal law nor the United States Constitution.The court held that New York’s Wrongful Discharge Law was not preempted by the National Labor Relations Act (NLRA) because it established minimum labor standards that regulated the substance, rather than the process, of labor negotiations. The court also held that the law did not violate the dormant Commerce Clause of the U.S. Constitution, which acts as a safeguard against economic protectionism. The court found that the law did not discriminate against interstate commerce either on its face, in its purpose, or in its practical effect. View "Restaurant Law Center v. City of New York" on Justia Law

The Supreme Court reversed the decision of the district court concluding that Plaintiffs - a climate advocacy group and three NorthWestern Energy ratepayers - had standing to challenge Mont. Code Ann. 69-8-421 as unconstitutional and then invalidating the statute, holding that Plaintiffs' challenge to the preapproval statute was not justiciable.At issue was section 69-8-421, which effectively permitted NorthWestern, but no other public utility, to apply to the Montana Public Service Commission for preapproval of an electricity supply resource. Plaintiffs filed a complaint requesting declaratory judgment that the preapproval statute violated both Mont. Const. art. II, 31 and Mont. Const. art. V, 12. NorthWestern filed a motion to dismiss for both lack of standing and ripeness. The district court denied the motion. The Supreme Court reversed, holding (1) Plaintiffs lacked standing to raise the rights of non-party utilities; and (2) Plaintiffs' alleged consumer injuries were not yet ripe for consideration. View "350 Montana v. State" on Justia Law

Current or former Uber drivers from different states agreed to Uber’s “Technology Services Agreement” as a condition of using Uber’s platform. The agreement requires drivers to resolve disputes with Uber on an individual basis through final and binding arbitration. Drivers may opt-out by sending Uber an email or letter. Singh’s class action alleged Uber had violated New Jersey wage and hour laws by misclassifying drivers as independent contractors, failing to pay them the minimum wage, and failing to reimburse them for business expenses. Calabrese’s class action, which was joined to Singh’s, sought to proceed collectively under the Fair Labor Standards Act.The district court ruled in Uber’s favor, compelling arbitration, having defined the relevant class as Uber drivers nationwide. The court found that interstate "rides constitute just 2% of all rides, resemble in character the other 98% of rides, and likely occur due to the happenstance of geography” for purposes of the exception in the Federal Arbitration Act (FAA) for arbitration agreements contained in the “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” 9 U.S.C. 1. The Third Circuit affirmed. The drivers' work is centered on local transportation. Most Uber drivers have never made an interstate trip. When Uber drivers do cross state lines, they do so only incidentally. They are not “engaged in foreign or interstate commerce.” View "Singh v. Uber Technologies, Inc" on Justia Law

The Court of Appeals affirmed the judgment of the appellate division reversing Supreme Court's order granting the petition filed by the City of Yorkers pursuant to N.Y. C.P.L.R. 75 to permanently stay arbitration of the underlying labor dispute, holding that grievances like the present one are arbitrable so long as no public policy, statutory, or constitutional provisions prohibit them and they are reasonably related to the provisions of the collective bargaining agreement (CBA).The underlying dispute between City of Yonkers and its firefighters concerned whether Yonkers must make certain types of payments to firefighters who were permanently disabled for work-related injuries and who qualified for benefits under N.Y. Gen. Mun. Law 207-a(2). Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO (the Union) filed a grievance alleging that Yonkers violated the CBA and then served a demand for arbitration. Yonkers responded by filing a petition to permanently stay arbitration. Supreme Court granted the petition. The appellate division reversed. The Court of Appeals affirmed, holding that this grievance was arbitrable. View "City of Yonkers v. Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO" on Justia Law

Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law

The Alabama Space Science Exhibit Commission d/b/a U.S. Space & Rocket Center ("ASSEC") filed suit against Space Race, LLC ("Space Race"), seeking to avoid an arbitration award entered in favor of Space Race and against ASSEC by an arbitration panel in New York. In July 2016, Space Race agreed to produce an animated series for ASSEC aimed at promoting the interest of children in space exploration and science. The series was to be created and released to the public over a three-year period. In exchange, ASSEC agreed to compensate Space Race with funds ASSEC would receive from a grant from the National Aeronautics and Space Administration ("NASA"), which had contracted with ASSEC to provide funding for the series. The compensation was to be paid to Space Race annually as the series episodes were created during the three-year contract term. The parties' agreement provided that it "shall be governed" by Alabama law. Space Race produced the series before the contract term expired, but ASSEC failed to pay the amount owed for the last year of the series. Space Race claimed that ASSEC still owed Space Race approximately $1.3 million when the contract term expired. The parties' agreement contained an arbitration provision. In December 2017, after being notified by ASSEC that it would no longer make payments to Space Race because the grant from NASA had been terminated, Space Race commenced arbitration proceedings against ASSEC in New York. Space Race moved to dismiss ASSEC's Alabama action, asserting that a New York court had already entered a final judgment confirming the arbitration award. The Alabama trial court denied Space Race's motion to dismiss, and Space Race petitioned the Alabama Supreme Court for a writ of mandamus directing the trial court to dismiss ASSEC's action. Because the New York judgment confirming the arbitration award against ASSEC was entitled to full faith and credit and res judicata effect, the Supreme Court granted Space Race's mandamus petition. The trial court was directed to vacate its order denying Space Race's motion to dismiss and to enter an order granting that motion. View "Ex parte Space Race, LLC." on Justia Law

Appellants, two individuals who have traveled on Amtrak in connection with their work and expect to continue doing so, sought declaratory and injunctive relief to prevent Amtrak from imposing an arbitration requirement on rail passengers and purchasers of rail tickets.The DC Circuit affirmed the district court's dismissal of the complaint because appellants have not plausibly alleged an actual injury-in-fact and therefore lack Article III standing. In this case, appellants have alleged neither ongoing nor imminent future injury. Rather, appellants assert only one cognizable interest, the interest in purchasing tickets to travel by rail, but Amtrak's new term of service has not meaningfully abridged that interest. View "Weissman v. National Railroad Passenger Corp." on Justia Law

Plaintiff, a Missouri resident, filed suit in state court against her former employer, Ferrellgas, a propane supplier, as well as James Ferrell and Pamela Brueckmann, Kansas residents and employees and officers of Ferrellgas. Plaintiff alleged gender discrimination claims under the Missouri Human Rights Act against Ferrellgas (Counts I and II), and tort claims against all defendants (Counts IIIVI). After removal to the district court, the district court granted defendants' motion to compel arbitration in part.The Eighth Circuit reversed, concluding that the district court erred in concluding that no language in plaintiff's employment agreement suggested that she consented to arbitrate tort claims arising from actions which predated her employment. The court explained that, though plaintiff's claims are based on alleged misrepresentations and omissions made before and at the time she accepted employment, they are subject to arbitration because they arise out of and relate to the resulting employee agreement and employee relationship. The court also concluded that Ferrell and Brueckmann, officers and agents of Ferrellgas who were not parties to the Employee Agreement, may enforce the arbitration clause. The court concluded that a signatory plaintiff cannot avoid arbitration when she treated signatory and non-signatory defendants as a single unit. In this case, each of plaintiff's tort claims against defendants is a single one that should be referred in its entirety to arbitration. View "Morgan v. Ferrell" on Justia Law

Defendant appealed from an order denying its petition to compel arbitration of Labor Code claims pursued by former employees, who contend that their lawsuit is limited to recovering civil penalties under the Private Attorneys General Act of 2004 (PAGA).The Court of Appeal again interpreted the California Supreme Court's decision in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, to mean "that PAGA representative claims for civil penalties are not subject to arbitration" under a predispute arbitration agreement. In this case, the PAGA claims alleged in the former employees' complaint are owned by the state and are being pursued by the former employees as the state's agent or proxy. The court explained that the arbitration agreements at issue are not enforceable as to the PAGA claims because the state was not a party to, and did not ratify, any of those agreements. Furthermore, after the former employees became representatives of the state, they did not agree to arbitrate the PAGA claims. Consequently, under the rule of California law recognized in Esparza v KS Industries, L.P. (2017) 13 Cal.App.5th 1228, 1234, and many other decisions of the Court of Appeal, the court concluded that the PAGA claims cannot be forced into arbitration based on agreements made by the former employees before they became authorized representatives of the state. Accordingly, the trial court correctly applied this rule of law.The court also concluded that defendant's argument that arbitration is compelled by the Federal Arbitration Act (FAA) and federal preemption fails for similar reasons. The court concluded that the FAA does not reach the PAGA claims alleged in this case and, therefore, federal law does not preempt the rule of California law stating PAGA claims are subject to arbitration only if the state, or the state’s authorized representative, consents to arbitration. View "Herrera v. Doctors Medical Center of Modesto, Inc." on Justia Law

In this case concerning arbitration agreements, nursing homes, and wrongful death claims under Massachusetts law, the First Circuit affirmed the judgment of the district court compelling arbitration after first certifying two questions to the Massachusetts Supreme Judicial Court (SJC), holding that the SJC's decision compelled the First Circuit to affirmed the judgment compelling arbitration.The personal representative of a deceased former nursing home resident brought a state wrongful death action against a set of organizations that oversaw the nursing home (collectively, nursing home). The nursing home sued to compel arbitration. The federal court compelled arbitration. On appeal, the personal representative argued that she was not bound by the decedent’s agreement to arbitrate with the nursing home because her wrongful death right of recovery was independent of the decedent’s wrongful death claim. The First Circuit certified questions of law to the SJC. After the SJC answered that claims of statutory beneficiaries under the state's wrongful death statute are derivative of the decedent's own cause of action, the First Circuit affirmed the district court's judgment, holding that the SJC's decision required this Court to affirm the judgment compelling arbitration. View "GGNSC Chestnut Hill LLC v. Schrader" on Justia Law