Justia Arbitration & Mediation Opinion Summaries

Plaintiffs filed claims against the Ford Motor Company (FMC) for alleged defects in vehicles the company manufactured. FMC filed a motion to compel arbitration of plaintiffs’ claims based on the arbitration provision in the sale contracts. Plaintiffs opposed FMC’s motion, including on the grounds that FMC had waived its right to compel arbitration through its litigation conduct. The trial court denied FMC’s motion on its merits.   The Second Appellate District affirmed. The court explained that it agreed with the trial court that FMC could not compel arbitration based on Plaintiffs’ agreements with the dealers that sold them the vehicles. Equitable estoppel does not apply because, contrary to FMC’s arguments, Plaintiffs’ claims against it in no way rely on the agreements. FMC was not a third-party beneficiary of those agreements, as there is no basis to conclude Plaintiffs and their dealers entered into them with the intention of benefitting FMC. And FMC is not entitled to enforce the agreements as an undisclosed principal because there is no nexus between Plaintiffs’ claims, any alleged agency between FMC and the dealers, and the agreements. View "Ford Motor Warranty Cases" on Justia Law

Direct Biologics, LLC (“DB”) brought claims for breach of covenant to not compete and misappropriation of trade secrets against Adam McQueen, DB’s former employee, and Vivex Biologics, Inc. (“Vivex”), McQueen’s new employer. After granting DB a temporary restraining order based on its trade secret claims, the district court denied DB’s application for a preliminary injunction. Finding that DB’s claims were subject to arbitration, the district court also dismissed DB’s claims against McQueen and Vivex and entered final judgment.   The Fifth Circuit vacated the district court’s orders denying DB’s motion for a preliminary injunction and dismissing DB’s claims and remanded. The court held that the district court did not abuse its discretion by declining to presume irreparable injury based on McQueen’s breach of his non-compete covenants. The court held that remand is thus proper to allow the district court to make particularized findings regarding irreparable harm; specifically, the likelihood of misuse of DB’s information and the difficulty of quantifying damages should such misuse occur. View "Direct Biologics v. McQueen" on Justia Law

The Supreme Court affirmed the orders of the superior court granting motions to stay the superior court proceedings in four cases and refer them to arbitration in this construction dispute, holding that that superior court correctly found that these disagreement must be resolved through arbitration.Plaintiff substituted itself as the plaintiff and assignee of three subcontractors in in three mechanics' liens actions and then filed an additional complaint against the assignee of nine further subcontractors. Plaintiff further filed a complaint claiming it was owed $854,352 from Defendants. Defendants moved to stay the proceedings in all five cases and refer them to arbitration. The trial justice found that the language of the subcontracts required mandatory arbitration for the disputes and compelled the parties to participate in mandatory arbitration. The Supreme Court affirmed, holding that the disputes must be referred for arbitration. View "Petrolex II LLC v. Bailey Group LLC" on Justia Law

Vivera Pharmaceuticals, Inc. (Vivera) was developing a medical test kit, but had received “negative publicity” from its litigation with a rival company. Vivera hired Sitrick Group, LLC (Sitrick) to manage a public relations campaign. Vivera did not make any payments and Sitrick filed demands for arbitration with Judicial Arbitration and Mediation Services (JAMS). Judge Swart was selected to serve as an arbitrator in a separate matter between Sitrick and Legacy Development (the Legacy matter). In that matter, Sitrick was employing the same law firm (but a different lawyer) as was representing it in the arbitration with Vivera. Sitrick filed petitions to confirm the arbitration award. Vivera asked the trial court to vacate the arbitrator’s award due to Judge Swart’s inadequate disclosure of the Legacy matter. The trial court issued an order confirming the arbitrator’s award.   The Second Appellate District affirmed. The court explained that the California Arbitration Act (the Act) requires arbitrators to disclose, among other things, matters that the Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Ethics Standards) dictate must be disclosed. At issue here is whether the Ethics Standards require a retained arbitrator in a noncommercial case to disclose in one matter that he has been subsequently hired in a second matter by the same party and the same law firm. The court held “no,” at least where the arbitrator has previously informed the parties—without any objection thereto—that no disclosure will be forthcoming in this scenario. Because the arbitrator’s disclosures were proper here, the trial court properly overruled an objection based on inadequate disclosure. View "Sitrick Group v. Vivera Pharmaceuticals" on Justia Law

The Supreme Judicial Court affirmed the order of the trial judge granting the motion for judgment on the pleadings filed by the New England Police Benevolent Association, Inc., Local 192 (NEPBA), denying the city of Chelsea's motion for judgment on the pleadings, and confirming the underlying arbitration award in this labor dispute, holding that the trial court did not err in confirming the arbitration award.After NEPBA replaced another union as the exclusive bargaining representative for the emergency dispatchers in the city, NEPBA sought to arbitrate a grievance regarding an emergency dispatcher's termination following the change in union representation. While the NEPBA and city bargained to a new contract, employees had been working under the city's prior collective bargaining agreement (CBA) with the former union. Because the CBA contained an arbitration provision, the arbitrator ruled that the dispute was arbitrable. The superior court confirmed the decision. The Supreme Judicial Court affirmed, holding that the dispute was arbitrable. View "City of Chelsea v. New England Police Benevolent Ass'n, Local 192" on Justia Law

Plaintiffs, owners of Samsung SmartTVs, filed a putative class action in 2017, alleging that the SmartTVs used automatic tracking software to collect personally identifying information about them, such as the videos or streaming services they watch, and transmit that data to third-parties, who allegedly used the information to display targeted advertisements. When setting up their SmartTVs, plaintiffs had to agree to Terms and Conditions to access the Internet-enabled services. On some SmartTVs, the Terms and Conditions contained an arbitration provision. In 2018, the plaintiffs disclosed the Model Numbers for the named plaintiffs' SmartTVs, which enabled Samsung to determine whether they agreed to Terms containing an arbitration clause.The district court dismissed all except for the Wiretap Act claims. In 2020, Samsung notified the court that it would move to compel individual arbitration, arguing that it did not waive its right to arbitrate because “the prerequisites of waiver— extensive discovery and prejudice—are lacking.” The Third Circuit affirmed the denial of the motion. Samsung waived its right to arbitrate and compelling arbitration would cause the plaintiffs to suffer significant prejudice. Samsung’s actions evinced a preference for litigation over arbitration. Samsung continuously sought and agreed to stays in discovery and pursued successful motions to dismiss on the merits. It assented to all pre-trial orders and participated in numerous court conferences. View "White v. Samsung Electronics America Inc." on Justia Law

Martinique Properties, LLC filed a complaint against Certain Underwriters at Lloyd’s, London (Underwriters), seeking to vacate an arbitration award. The district court dismissed the complaint for failure to state a claim for vacatur. Martinique Properties appealed. Martinique Properties argues that the appraisal award must be vacated because the appraisers “used figures and measurements which are contrary to the actual conditions of the Property” and failed to “consider certain buildings” and certain portions of a damaged roof when determining the appraisal award. These alleged errors, Martinique Properties argues, show that the appraisers were either “guilty of misconduct” or “so imperfectly executed” their powers that “a mutual, final, and definite award . . . was not made,” two of the four grounds for vacating an award under the FAA.   The Eighth Circuit affirmed. The court found that Martinique Properties has alleged only factual errors that challenge the merits of the appraisal award, and the court has no authority to reconsider the merits of an arbitration award, even when the parties allege that the award rests on factual errors. Accordingly, the appraisers’ use of certain figures and measurements in calculating the amount of loss here, and their alleged failure to consider particular buildings and portions of roof damage, even if incorrect, are not sufficient for vacatur under the FAA. View "Martinique Properties, LLC v. Certain Underwriters at Lloyd's of London" on Justia Law

Plaintiff suffered a stroke on August 18, 2009. He was hospitalized at St. John’s Regional Medical Center for two weeks, followed by a month in St. John’s inpatient rehabilitation facility. He entered Oxnard Manor, a skilled nursing facility, on October 3. Four days later, on October 7, Plaintiff signed an arbitration agreement. It stated that he gave up his right to a jury or court trial, and required arbitration of claims arising from services provided by Oxnard Manor, including claims of medical malpractice, elder abuse, and other torts. Plaintiff remained a resident at Oxnard Manor until his death nine years later, individually and as Plaintiff’s successors in interest, sued Oxnard Manor for elder abuse/neglect, wrongful death, statutory violations/breach of resident rights, and negligent infliction of emotional distress. Oxnard Manor filed a petition to compel arbitration. Both sides relied on medical records to demonstrate whether Plaintiff had the mental capacity to consent to the arbitration agreement.   The Second Appellate District affirmed. The court explained that evidence here that Plaintiff scored below the level necessary to “solve complex problems such as managing a checking account” supports the conclusion that he was unable to manage his financial affairs. But regardless of whether the presumption of Civil Code section 39, subdivision (b) applied, substantial evidence established that Plaintiff lacked the capacity to enter an arbitration agreement. View "Algo-Heyres v. Oxnard Manor" on Justia Law

Skillz provides a mobile platform that hosts games in which players compete for cash prizes. To participate in paid-entry competitions, a user must save the player account; after entering a date of birth, the user must tap a box with the word “Next.” Below the “Next” box is the advisory statement: “By tapping ‘Next,’ I agree to the Terms of Service and the Privacy Policy.” A hyperlink, if tapped, takes the user to Skillz’s terms of service. Gostev saved a Skillz player account in 2019. The Terms of Service then had 15 pages.Gostev sued Skillz, alleging that its games constituted illegal gambling, predatory and unlawful practices, and violated the Unfair Competition Law and the Consumers Legal Remedies Act, Gostev alleged the arbitration agreement was unenforceable. Skillz argued that Gostev’s challenges to the enforceability of the arbitration provision had to be submitted to an arbitrator.The court of appeal affirmed a finding that the arbitration agreement was procedurally and substantively unconscionable. The court noted provisions that a plaintiff’s damages are limited, the arbitration must occur in San Francisco, a plaintiff only has one year to bring his claim, the parties must split the arbitration fees and costs, and the defendant can obtain equitable relief without posting a bond or security. Unconscionability ”permeates the agreement such that severance is unavailable,” View "Gostev v. Skillz Platform, Inc." on Justia Law

Plaintiff signed an arbitration contract with an employer called Intelex Enterprises, LLC. While working for Intelex, Plaintiff also worked for other firms (Other Firms). These Other Firms were legally separate from Intelex but functionally related to it. The Other Firms did not contract for arbitration with Plaintiff. After termination, Plaintiff sued the Other Firms but not Intelex: Intelex has never been a party to the case. The Other Firms moved to compel arbitration based on Plaintiff’s agreement with Intelex. The trial court denied the Other Firms’ motion to enforce a contract they had not signed.   The Second Appellate District affirmed. The court held that the Other Firms cannot equitably estop Defendant because they do not show she is trying to profit from some unfair action. They have no proof of agency. And they are not third-party beneficiaries of Intelex’s contract. The court explained that the Other Firms point to six places in the record they say show agency, but these materials do not measure up. The citation to Plaintiff’s complaint spotlights text that omits Intelex and cannot show agency. A different citation is to their attorney’s declaration recounting irrelevant procedural history. Other citations refer to Plaintiff’s admission that she worked for both Intelex and the Other Firms. This admission does not establish agency. View "Hernandez v. Meridian Management Services, LLC" on Justia Law