Justia Arbitration & Mediation Opinion Summaries

In this appeal centering on the existence of a valid arbitration agreement the Court of Appeals affirmed the decision of the court of appeals reversing the judgment of the circuit court, holding that the circuit court erred in compelling arbitration of the question of whether the arbitration clause in the agreements at issue was valid.The arbitration clause in this case stemmed from transactions between lead paint tort plaintiffs who received structured settlements and affiliated factoring companies that specialize in purchasing structured settlement rights. Defendants filed motions to compel arbitration and stay the case, but Plaintiffs challenged the existence of a valid agreement to arbitrate. The trial court granted the motion to compel arbitration, finding that the arbitrator was to determine the issue of arbitrability. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding that the circuit court erroneously compelled arbitration and that the issue of whether a valid arbitration agreement exists is an issue for the court to determine. View "Access Funding, LLC v. Linton" on Justia Law

The Supreme Court affirmed the judgment of the district court confirming an arbitration award involving a breach of a lease agreement after ruling that the arbitrator's determinations were not manifest error and were within his authority, holding that the district court did not err in confirming the arbitration award.Mountain Business Center, LLC (MBC) won an arbitration award against Fork Road, LLC. On appeal, MBC made three arguments in support of his request that the Court reverse and vacate the arbitration award. The Supreme Court affirmed, holding (1) the arbitrator did not exceed his authority by determining all issues presented by the parties in their stipulated list; (2) the arbitrator's determination that MBC was not the prevailing party and therefore not entitled to attorney fees was not a manifest error of law; and (3) the arbitrator's determination the MBC was not entitled to the first-to-breach rule was not a manifest error of law. View "Mountain Business Center, LLC v. Ford Road, LLC" on Justia Law

The Supreme Court held that in order to compel arbitration against a union employee, the claim must have been clearly and unmistakably waived in arbitration provisions in the collective-bargaining agreement (CBA) governing the parties, and to be clear and unmistakeable the claim must be included either by statute or specific cause of action in the arbitration provisions of the CBA.Plaintiff brought this intentional employer tort action under Ohio Rev. Code 2745.01. The trial court denied Defendant's ensuing motion to stay the proceedings and to compel arbitration. The court of appeals affirmed, holding that because the parties' CBA made no mention of Ohio Rev. Code 2745.01 or intentional torts, Plaintiff had not waived his right to pursue such a claim in a judicial forum. The Supreme Court affirmed, holding that because Plaintiff's claim for an intentional tort was not mentioned in the CBA, Defendants did not clearly and unmistakably agree to prohibit resolution of the claim in court. View "Sinley v. Safety Controls Technology, Inc." on Justia Law

International Brotherhood of Electrical Workers, AFL-CIO 20 (“Local Union 97”), a union primarily of electrical workers, executed a memorandum of agreement (“2003 MOA”) detailing a two-pronged approach to providing retiree life insurance benefits. Local Union 97 brought a complaint seeking to compel arbitration of a grievance they submitted alleging that NRG violated the terms of the CBAs by changing the life insurance benefit for the Pre-2019 Retirees to a lump sum of $10,000. The district court held that: 1) the grievance is not arbitrable under the 2019-2023 CBA, 2) the 2003 MOA is not arbitrable, and 3) the grievance is not arbitrable under any of the CBAs covering 2003-2019.   The Second Circuit reversed and remanded and held the grievance is arbitrable under the 2019-2023 CBA because the broad arbitration provision creates a presumption in favor of arbitrability that NRG failed to overcome. The court also held that the parties’ dispute was arbitrable under the Prior CBAs because the 2003 MOA was a supplemental agreement that arguably vested the life insurance benefit for life. View "Local Union 97 v. NRG Energy, Inc." on Justia Law

Michael O’Connor signed up for a loyalty program when he bought a pair of shoes and socks from Road Runner Sports, Inc. and Road Runner Sports Retail, Inc. (collectively, “Road Runner”). He alleged Road Runner did not tell him the loyalty program was an automatic renewal subscription and that his credit card would be charged an annual subscription fee. After discovering he had been charged for four years of subscription fees, he joined as the named plaintiff in a class action lawsuit alleging Road Runner had violated California’s Automatic Renewal Law and consumer protection statutes. Road Runner asserted O’Connor was bound by an arbitration provision it added to the online terms and conditions of the loyalty program, some three years after he enrolled. Although Road Runner conceded O’Connor did not have actual or constructive notice of the arbitration provision, it contended O’Connor created an implied-in-fact agreement to arbitrate when he obtained imputed knowledge of the arbitration provision through his counsel in the course of litigation and failed to cancel his membership. The Court of Appeal disagreed this was sufficient under California law to prove consent to or acceptance of an agreement to arbitrate. Accordingly, the Court affirmed the trial court’s order denying Road Runner’s motion to compel arbitration. View "Costa v. Road Runner Sports" on Justia Law

Rock Hemp contracted with CBDINC to purchase 6,000 hemp seeds. CBDINC is a fictitious business name used by Dunn, Davies, and Kolodny (Appellees). The contract contains an arbitration clause requiring “[a]ny dispute arising out of this Agreement” be resolved through “binding arbitration” in Denver, Colorado. Disappointed with CBDINC’s hemp seeds, Rock sued the Appellees individually, not CBDINC, in Wisconsin state court. The Appellees removed the case to federal court and moved to dismiss the case for failure to comply with the arbitration clause. Rock sought remand under 28 U.S.C. 1447.The Seventh Circuit affirmed the judgment in favor of the Appellees. Based on the date when Rock “specifically disclose[d] the amount of monetary damages sought,” the district court correctly found that removal was timely. The Appellees did not fully litigate the merits of the case in state court. The allegations in the complaint make clear that CBDINC was not a distinct legal entity from the Appellees, and Rock does not allege it was confused or deceived by the use of the d/b/a; the district court correctly concluded that the contract is valid and Appellees have standing to enforce it. View "Rock Hemp Corp. v. Dunn" on Justia Law

The Supreme Court held that the district court erred in denying Appellant's motion to compel arbitration and refusing to submit the arbitrability determination under the circumstances of this case to an arbitrator.Plaintiffs sued Airbnb, Inc. for wrongful death and personal injury alleging that Airbnb's services had been used by a party's host to rent the house where a shooting occurred, resulting in a fatality. Airbnb moved to compel arbitration, arguing that Plaintiffs had agreed to Airbnb's Terms of Service during the registration process for their accounts. The district court denied the motion to compel. The Supreme Court reversed, holding that because the Federal Arbitrability Administration governed the enforcement of arbitration agreement at issue, and because the agreement delegated the arbitrability question to an arbitrator, the district court erred in deciding the arbitrability question. View "Airbnb, Inc. v. Rice" on Justia Law

The Supreme Court reversed the order of the district court denying Appellant's motion to compel arbitration, holding that where an arbitration agreement delegates the threshold question of arbitrability to the arbitrator, the district court must refer to the case to arbitration, even if the court concludes that the dispute is not subject to the arbitration agreement.Respondents filed a personal injury lawsuit against Uber after their Uber driver rear-ended another Uber driver. Uber moved to compel arbitration on the grounds that Respondents had agreed to arbitrate their claims. The district court denied the motion, concluding that the arbitration agreement did not plainly provide that the parties agreed to submit this particular dispute to arbitration. The Supreme Court reversed, holding that where the arbitration agreement's delegation clause expressly requires the arbitrator to determine threshold issues of arbitrability, the district court erred by denying Uber's motion to compel on the ground that the claims were not subject to the arbitration agreement. View "Uber Technologies, Inc. v. Royz" on Justia Law

Defendant Jeffrey Mayhew and Plaintiffs David Starr and Thomas Hunt formed a limited liability company to operate a shopping center. They agreed Mayhew would manage the company and Starr and Hunt would provide startup capital. In exchange, Mayhew was entitled to 50 percent of the company’s profits and Starr and Hunt were entitled to the remaining 50 percent. After the shopping center’s business declined in 2008, Mayhew asked Starr and Hunt for additional capital. They agreed to do so only if Mayhew also contributed capital. Mayhew reported a $100,000 contribution, which caused Starr and Hunt to contribute roughly the same amount. The shopping center was later sold for a substantial profit. Mayhew claimed he was entitled to about 56.3 percent ownership interest in the company based on his additional capital contribution. Starr and Hunt disagreed and submitted the dispute to arbitration along with several other claims for damages. The arbitrator ruled in favor of Starr and Hunt, finding Mayhew only held a 50 percent interest in the company. A superior court later confirmed the award over Mayhew’s petition to vacate and entered judgment against him. On appeal, Mayhew claimed the trial court erred by failing to vacate the award, contending the arbitrator lacked authority to clarify the award, that the award was procured by undue means, and that the arbitrator’s award exceeded her powers. After its review, the Court of Appeal disagreed. Since Mayhew failed to identify any basis for vacating the award, the Court affirmed the judgment. View "Starr v. Mayhew" on Justia Law

The Supreme Court reversed the decision of the district court finding that Plaintiff did not waive its right to arbitration by its litigation-related conduct, holding that reversal was required in light of Morgan v. Sundance, Inc., __ U.S. __ (2022).Plaintiff sued Defendant for breach of contract. Defendant moved to dismiss the complaint with prejudice, arguing that Plaintiff waived its breach of contract claim under the parties' agreement by filing suit on the claim rather than commencing it in arbitration. Plaintiff subsequently filed a demand for arbitration and a motion to stay the case for arbitration. The district court granted Plaintiff's motion to stay the case, concluding that Defendant suffered no prejudice because of Plaintiff's litigation-related conduct. The Supreme Court reversed, holding that prejudice is not required to prove a party waived its right to stay a court case pending arbitration under section 3 of the Federal Arbitration Act following the United States Supreme Court's decision in Morgan. View "Kingery Construction Co. v. 6135 O Street Car Wash, LLC" on Justia Law