Justia Arbitration & Mediation Opinion Summaries

A software company operated an online payment portal used by residents, including the plaintiff, to pay rent for Maryland apartments. Each time the plaintiff paid rent through the portal, she was charged a convenience fee. To complete a transaction, users were required to check a box agreeing to the portal’s hyperlinked terms and conditions, which included an arbitration provision, a clause allowing unilateral changes to the agreement, and a notice provision stating that notices would be posted on the portal. The plaintiff, on behalf of herself and similarly situated individuals, filed a class action, alleging that the company unlawfully acted as an unlicensed collection agency by collecting these fees.After the action was removed to the U.S. District Court for the District of Maryland, the company moved to compel arbitration based on the terms and conditions. The plaintiff opposed, arguing that the arbitration agreement was unenforceable under Maryland law because the company’s ability to unilaterally change the terms without advance notice rendered its promise to arbitrate illusory. The district court agreed, finding that the contract was a browsewrap agreement and that the modification and notice clauses allowed the company to change terms at will without meaningful notice or an opportunity for users to opt out before changes became binding.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s denial of the motion to compel arbitration de novo. The Fourth Circuit held that, under Maryland law, the arbitration agreement was unenforceable for lack of consideration because the company’s promise to arbitrate was illusory. The court reasoned that the change-in-terms clause gave the company unfettered discretion to modify the agreement at any time, without advance notice, thus failing to bind the company meaningfully. The court affirmed the district court’s judgment. View "Trimble v. Entrata, Inc." on Justia Law

A national flooring retailer contracted with a Louisiana-based construction management company for the construction of a retail store in Metairie, Louisiana. The relationship soured after the retailer terminated the agreement, allegedly due to delays. Shortly after termination, the construction company disputed that it had breached the contract and demanded payment for work performed. The retailer did not respond to the payment demand.The construction company filed suit in the United States District Court for the Middle District of Louisiana under the Louisiana Private Works Act, seeking recovery for the work performed. The retailer moved to compel arbitration based on the agreement’s dispute resolution provision and also sought to transfer the case. The district court granted the transfer to the United States District Court for the Eastern District of Louisiana and denied the motion to compel arbitration without prejudice. When the motion to compel arbitration was renewed in the new court, the district court denied it again, concluding the retailer had not followed the prerequisite steps outlined in the contract’s dispute resolution process.On appeal, the United States Court of Appeals for the Fifth Circuit conducted de novo review. The appellate court determined that the arbitration clause in the contract, which gave the retailer sole discretion to elect arbitration, was a contract of adhesion under Louisiana law. Applying state contract principles and relevant Louisiana Supreme Court precedent, the court found that the lack of mutuality and the imbalance in bargaining power rendered the clause unenforceable. The court held that the arbitration provision was adhesionary and thus invalid, and affirmed the district court’s denial of the motion to compel arbitration. View "MAPP v. Floor and Decor" on Justia Law

The dispute involved four law firms that jointly represented Wye Oak Technology, Inc. in litigation against the Republic of Iraq. After a federal district court awarded Wye Oak over $120 million, Wye Oak’s board approved paying a forty-six percent contingency fee to the law firms, with the specific allocation among them to be determined later. The firms executed an Agreement Concerning Attorneys’ Fees (ACAF), which included an arbitration clause. Quinn, Racusin & Gazzola Chartered (QRG) later claimed that it was excluded from a prior side agreement between two other firms and alleged it was pressured into accepting the arbitration provision under duress.Following disputes over fee allocation and related tort claims, Pavich Law Group and Whiteford, Taylor & Preston initiated arbitration. The arbitrator awarded QRG zero percent of the contingency fee, while the other firms received varying portions. QRG challenged the award in the Superior Court of the District of Columbia, arguing that the ACAF was invalid due to fraudulent inducement and duress, and that the arbitrator had exceeded his authority by ruling on issues outside the scope of the arbitration clause. The Superior Court rejected QRG’s arguments, determined that the arbitration clause was broad enough to cover the disputes, and confirmed the arbitrator’s award.On appeal, the District of Columbia Court of Appeals affirmed the Superior Court’s judgment. The Court held that QRG failed to demonstrate fraudulent inducement or duress regarding the agreement to arbitrate. It also found that the arbitrator acted within the scope of the ACAF’s arbitration clause, which covered both fee allocation and related tort claims. The Court further concluded that the vacatur of the underlying federal judgment did not void the ACAF, as some monetization of the judgment had occurred. The judgment confirming the arbitration award was affirmed. View "Quinn, Racusin & Gazzola Chartered v. Pavich Law Group, P.C." on Justia Law

This case involves a dispute among business partners regarding the calculation and distribution of administrative fees earned from the sale of shares in a jointly managed investment fund. Prospect Capital Management L.P. (“Prospect”) acted as the fund administrator, while Stratera Holdings, LLC (“Stratera”) and Destra Capital Managers LLC (“Destra”) were entitled to share in fees depending on how fund shares were issued, including through a dividend reinvestment program (“DRIP”). After a change in sub-wholesaler, ambiguity arose in the contract language about whether certain DRIP shares—specifically, those issued by Stratera’s predecessor, Provasi—should be included in fee calculations. Prospect excluded these shares, reducing the amount paid to Stratera and Destra.Stratera and Destra initiated arbitration under the contract’s dispute resolution clause. The arbitration panel’s initial “Interim Award” found that Prospect had breached the contract by excluding DRIP shares for which Destra served as sub-wholesaler, but the award’s language left unclear whether this ruling applied to DRIP shares issued earlier by Provasi. When the parties could not agree on the scope of the award, the panel issued a revised interim award clarifying that fees were owed for DRIP shares issued by both Provasi and Destra. Prospect then petitioned the United States District Court for the District of Delaware to vacate the revised award, arguing that the arbitrators had unlawfully revisited a final decision in violation of the functus officio doctrine. The District Court rejected this claim, finding that the ambiguity exception to functus officio permitted the arbitrators’ clarification.On appeal, the United States Court of Appeals for the Third Circuit affirmed the District Court’s order. The court held that the ambiguity exception to the functus officio doctrine applied because the interim award was susceptible to more than one reasonable interpretation. Therefore, the panel acted within its authority in clarifying its award. View "Prospect Capital Management LP v. Stratera Holdings LLC" on Justia Law

A Nebraska auction company and its former independent sales representative (ISR) entered into a written agreement containing restrictive covenants, including a noncompete clause, and an arbitration provision governed by the Federal Arbitration Act. The ISR terminated the relationship and began working for a competitor, allegedly violating the noncompete clause. The auction company sued for breach of contract, injunctive relief, and tortious interference, seeking a temporary injunction to prevent the ISR’s competitive activities.The District Court for Hall County compelled arbitration for the breach of contract and tortious interference claims but retained jurisdiction to decide the request for injunctive relief, ultimately granting a temporary injunction against the ISR. While the arbitration was pending, the ISR sought to dissolve the injunction and later moved for damages, costs, and attorney fees under Nebraska’s injunction undertaking statute after the arbitrator ruled the restrictive covenants unenforceable and awarded certain damages to the ISR. The arbitrator also found that additional damages based on the invalidation of the restrictive covenants were speculative and not recoverable. The District Court confirmed the arbitral award and denied the ISR’s subsequent motion for additional damages, reasoning that the arbitral award was preclusive as to all damages except attorney fees and expenses.The Nebraska Supreme Court reviewed the case and held that, due to the scope of the arbitration and the confirmation of the arbitrator’s award, the ISR could not recover further damages for the wrongful injunction that overlapped with claims already addressed in arbitration. However, the Court held that attorney fees and expenses related to resisting the issuance and seeking dissolution of the wrongful injunction were not foreclosed by the arbitration and should be awarded. The Supreme Court modified the lower court’s judgment to include $11,000 in such fees and otherwise affirmed the judgment. View "Big Iron Auction Co. v. Harder Capital" on Justia Law

Neils Point, LLC owns a farm property in Harpswell, Maine, which it leased to Joseph and Laura Grady for agricultural use. The Gradys resided on the property and operated the farm under successive lease agreements, culminating in a 2017 extension titled “Commercial Agricultural Lease Agreement.” This lease specified that it was not a residential rental, set rent as a percentage of the farm’s net proceeds, and required arbitration for disputes. Neils Point alleged that the Gradys breached the lease by miscalculating rent, failing to pay on time, and not using the land as productive cropland.After Neils Point initiated arbitration in 2024, the Gradys responded by admitting the dispute was subject to arbitration and made their own arbitration demand under the lease. The arbitration hearing was held in July 2025, with both parties participating fully and without objection to either the process or the arbitrability of the dispute. The arbitrator found in favor of Neils Point, concluding that the Gradys breached the lease by improperly deducting expenses, failing to pay rent, and not maintaining the farm’s productivity. Damages were awarded, and the Gradys were ordered to vacate the property.The Cumberland County Superior Court confirmed the arbitration award and denied the Gradys’ subsequent motion to vacate, in which they argued for the first time that the arbitration provision was void because the lease was residential and the arbitrator exceeded his authority. The Maine Supreme Judicial Court affirmed the judgment, holding that the Gradys’ participation in arbitration without objection waived their right to challenge the validity of the arbitration clause or the arbitrator’s authority. The Court further held that the arbitrator’s construction of the lease was rational, and thus confirmation of the award was proper. View "Neils Point, LLC v. Grady" on Justia Law

Matthew Goforth, through MG Management Co., LLC, entered a dealer agreement with Sears Authorized Home Stores that included a broad non-compete provision, extending restrictions to his spouse, Malinda Goforth. After Matt decided not to renew the agreement, Sears suspected the Goforths would open a competing business and initiated arbitration, seeking to enforce the non-compete. The Goforths opposed enforcement, asserting the provision was unreasonable. The arbitrator initially denied emergency injunctive relief but later, upon learning that Matt and Malinda were opening Goforth Home & Lawn, granted interim relief enforcing the non-compete and added Malinda and her company as parties. A final arbitration award enforced the non-compete, but an appellate arbitrator later held the provision unenforceable while affirming attorneys’ fees to Sears. Subsequently, the Goforths initiated a second arbitration alleging antitrust violations, but the arbitrator determined their antitrust claims were compulsory counterclaims that should have been brought in the first arbitration.Following Sears’s bankruptcy, the Goforths brought an action in the United States District Court for the Western District of Missouri against Sears’s owners, Transform Holdco, LLC and affiliates, asserting the same antitrust claims. Transform moved for summary judgment, arguing the claims were compulsory counterclaims barred by their failure to raise them in the initial arbitration. The district court agreed, holding the claims accrued upon Sears’s initiation of the first arbitration and were thus subject to compulsory counterclaim rules. The court granted summary judgment for Transform and did not address alternative grounds or the Goforths’ partial summary judgment motion.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s decision. The Eighth Circuit held that the Goforths’ antitrust claims accrued when Sears initiated the first arbitration, making them compulsory counterclaims under Federal Rule of Civil Procedure 13. The court also held that Malinda and her company were bound by the agreement’s arbitration provision. View "Goforth v. Transform Holdco, LLC" on Justia Law

The underlying dispute arose from a business relationship between Standard Fiber, LLC and entities associated with Ridgeview, involving management fee arrangements over several years. In 2006, Standard Fiber and Ridgeview Capital, LLC entered a Management Services Agreement (2006 MSA) with a set fee structure. While payments continued after the 2006 MSA expired, the parties disagreed on what terms governed post-2008 payments. Standard Fiber asserted that subsequent agreements, including a 2014 agreement to pay $25,000 per month, controlled. Ridgeview denied the existence or effect of any later agreements, instead claiming entitlement to fees under the original MSA or an alleged oral 50/50 fee-splitting agreement.Ridgeview sued in the Third District Court, Salt Lake County, seeking unpaid management fees under the 50/50 oral agreement. The court compelled arbitration pursuant to the parties’ operating agreement, and the arbitration proceeded before a JAMS arbitrator. Ridgeview’s arbitration demand asserted claims for fees under the 2006 MSA and the 50/50 Agreement, but did not seek relief for breach of the 2014 fee agreement. During the arbitration, Standard Fiber referenced the 2014 Agreement as a defense, but Ridgeview did not advance it as a basis for affirmative recovery. The arbitrator ultimately found against Ridgeview on its submitted claims but awarded damages to Ridgeview based on breach of the 2014 Agreement.Standard Fiber moved the district court to modify or vacate the arbitration award, arguing the arbitrator exceeded her authority by granting relief on an unsubmitted claim. The district court confirmed the award, concluding it was rationally related to the parties’ submissions. On appeal, the Supreme Court of the State of Utah held that an arbitrator may only award relief on claims actually submitted for decision. Because Ridgeview did not submit a claim for breach of the 2014 Agreement, the arbitrator exceeded her authority. The Supreme Court reversed the district court’s confirmation of the award and remanded for modification to exclude any amount based on the 2014 Agreement. View "RV Holdings 4 v. Standard Fiber" on Justia Law

Two neighboring landowners, who are related by marriage, became involved in multiple property disputes, including disagreements over joint ownership and access to ditches and land. To resolve these disputes, one party filed two complaints in the District Court of Fremont County: one seeking an easement for ditch access and another seeking partition of jointly owned land. The parties also had related petitions pending before the Board of Control. During litigation, they participated in mediation and signed an email outlining terms of a purported global settlement agreement, which included provisions for access to ditches, maintenance rights, restrictions on visible storage, and the drafting of a formal settlement by one party’s attorney.After mediation, as the parties attempted to formalize the agreement, new disagreements arose regarding how to implement the access and storage restriction provisions. Each party filed a motion to enforce their interpretation of the settlement; one sought a recordable easement and restrictive covenant, while the other argued those terms exceeded the agreement. The District Court of Fremont County held a hearing to consider the motions, reviewed the parties’ filings and affidavits, and ultimately found that the agreement lacked essential terms, particularly regarding implementation of ditch access and the visual storage restriction. The court determined there was no meeting of the minds and denied both motions to enforce, as well as a request for sanctions.The Supreme Court of Wyoming reviewed the appeal. It held that the district court did not violate due process, as the issue of contract formation was properly considered and the parties had notice and opportunity to argue their positions. The Supreme Court agreed with the district court’s finding that no enforceable settlement agreement existed due to lack of mutual assent on material terms. It further held that Cross was not entitled to attorney’s fees, as there was no enforceable contract providing for such fees. The Supreme Court affirmed the district court’s order. View "Cross v. Albright" on Justia Law

Compeer, a group of federally chartered farm credit associations, entered into a master participation agreement with Corporate America Lending, Inc. (CAL), under which Compeer paid CAL $58 million in exchange for the right to receive all payments due on a set of agricultural loans CAL had originated to Famoso Hills Ranch in California. Under the agreement, CAL was to promptly remit any payments or proceeds received on these loans to Compeer. When Famoso refinanced its loans and paid off the balance to CAL, CAL failed to notify Compeer or transfer the payoff proceeds as required and instead concealed receipt of the funds and withheld them as a negotiation tactic, eventually claiming a right to offset based on alleged damages suffered.Arbitration proceedings commenced, resulting in an award in favor of Compeer, finding it was unconditionally entitled to the payoff proceeds and that CAL had no legal basis to withhold them. The arbitration panel found for Compeer on its claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Compeer moved in the United States District Court for the District of Minnesota to confirm the award and appoint a receiver to secure the funds. The district court confirmed the arbitration award, finding it final and enforceable, and appointed a receiver due to CAL’s repeated noncompliance and attempts to dissipate the funds. CAL appealed, arguing the award was nonfinal, violated public policy, and the receivership was improper due to a forum-selection clause and lack of necessity.The United States Court of Appeals for the Eighth Circuit affirmed the district court’s rulings. The court held that the arbitration award was final and confirmable, the public policy exception to vacatur under the Federal Arbitration Act did not require setting aside the award given the alternative equitable bases for Compeer’s recovery, and the district court acted within its discretion in appointing a receiver due to CAL’s conduct and the inadequacy of alternative remedies. View "Compeer Financial, ACA v. Corp. Amer. Lending, Inc." on Justia Law