Justia Arbitration & Mediation Opinion Summaries

In this lawsuit between AllyAlign Health, Inc. and Signature Advantage, LLC the Supreme Court granted AllyAlign's motion for an order to compel arbitration of all claims, holding that a carve-out provision in the parties' contract for certain claims to be decided by a court did not negate the mandate of the Commercial Arbitration Rules and Arbitration Procedures of the American Arbitration Association (AAA's Rules) that the initial arbitrability of claims is to be determined by the arbitrator, not the courts.AllyAlign contracted with Signature Advantage for AllyAlign's services. The contract contained an arbitration provision incorporating the AAA's Rules. Signature Advantage later sued AllyAlign for breach of contract and other claims. AllyAlign moved to compel arbitration on all the claims based on the AAA's Rules that delegate to the arbitrator the initial decision about the arbitrability of claims arising between the parties. In response, Signature Advantage argued that the language of the carve-out provision exempted equitable claims from arbitration. The trial court granted in part the motion to compel arbitration but denied the motion for the claims it found to demand equitable relief. The Supreme Court compelled arbitration of all claims, holding that the trial court's order declining to refer all the claims of the complaint was erroneous. View "AllyAlign Health, Inc. v. Signature Advantage, LLC" on Justia Law

At issue were claims of fraudulent sales practices by two car dealerships that allegedly induced consumers to enter into agreements for the purchase of cars. The question presented for the New Jersey Supreme Court’s review was whether plaintiffs could avoid being compelled to arbitrate those claims. Plaintiffs challenged the formation and validity of their sales agreements on the bases that the dealerships’ fraudulent practices and misrepresentations induced them to sign the transactional documents and that the agreements were invalid due to violations of statutory consumer fraud requirements. As part of the overall set of documents, plaintiffs signed arbitration agreements. Those agreements contained straightforward and conspicuous language that broadly delegated arbitrability issues. Each trial court determined the arbitration agreements to be enforceable and entered orders compelling plaintiffs to litigate their various claims challenging the overall validity of the sales contracts in the arbitral forum. The Appellate Division reversed those orders. The Supreme Court reversed: “the trial courts’ resolution of these matters was correct and consistent with clear rulings from the United States Supreme Court that bind state and federal courts on how challenges such as plaintiffs’ should proceed. Those rulings do not permit threshold issues about overall contract validity to be resolved by the courts when the arbitration agreement itself is not specifically challenged. Here, plaintiffs attack the sales contracts in their entirety, not the language or clarity of the agreements to arbitrate or the broad delegation clauses contained in those signed arbitration agreements.” View "Goffe v. Foulke Management Corp." on Justia Law

The Supreme Court quashed preliminary writs issued preventing the circuit court from enforcing its orders sustaining motions to compel arbitration and stay proceedings filed by Dollar General, holding that the circuit court properly sustained Dollar General's motions to compel arbitration, stayed the cases, and ordered the parties to arbitrate the question of whether consideration existed.After Jesse Newberry and Becky Lowrance were discharged from Dollar General, they filed charges of discrimination. Dollar General filed motions to compel Newberry and Lowrance to submit their claims to arbitration and stay further proceedings on the grounds that the employees signed agreements to arbitrate. The circuit court sustained Dollar General's motions to compel. Newberry and Lowrance each sought a permanent writ of prohibition preventing the circuit court from enforcing its orders, arguing that Dollar General failed to meet its burden to show consideration supported either the employee arbitration agreements or the provisions delegating threshold issues of arbitrability to the arbitrator. The Supreme Court held that the circuit court properly sustained Dollar General's motions to compel arbitration and stay the cases. View "State ex rel. Newberry v. Honorable Steve Jackson" on Justia Law

Greenway Health, LLC, and Greenway EHS, Inc. (formerly EHS, Inc.) (collectively, "the Greenway defendants"), and Sunrise Technology Consultants, LLC, and Lee Investment Consultants, LLC (collectively, "the Sunrise defendants"), appealed separately a circuit court order denying their motion to compel the arbitration of certain claims asserted against them by Southeast Alabama Rural Health Associates ("SARHA"). Because the Alabama Supreme Court determined the Greenway defendants failed to establish the existence of a contract containing an arbitration provision, the Sunrise defendants' argument based on an intertwining-claims theory also failed. The Court therefore affirmed the trial court's denial of the Greenway defendants' and the Sunrise defendants' motions to stay proceedings and to compel arbitration. View "Greenway Health, LLC, and Greenway EHS, Inc. v. Southeast Alabama Rural Health Associates" on Justia Law

The Louisiana Supreme Court accepted a certified question of Louisiana law presented by the U.S. District Court of Appeals for the Fifth Circuit. This case involves a dispute between two creditors, each of which attached the same pig iron owned by the common debtor, America Metals Trading L.L.P. (“AMT”). Daewoo International Corp. (“Daewoo”), a South Korean trading company, entered into a series of contracts with AMT in May 2012 for the purchase of pig iron, to be delivered in New Orleans. The sale contracts contained arbitration clauses. Although Daewoo made payments under the contracts, AMT never shipped the pig iron. Daewoo sued AMT in the United States District Court for the Eastern District of Louisiana seeking an order compelling AMT to arbitrate the dispute pursuant to the terms of the contract and also seeking a writ of attachment of AMT’s pig iron on board the M/V Clipper Kasashio under the Louisiana non-resident attachment statute, Louisiana Code of Civil Procedure article 3542. The writ was granted and served by the U.S. Marshals Service on December 22, 2012. Noting that La. C.C.P. art. 3542, Louisiana’s non-resident attachment statute, allows a party to obtain a writ of attachment in "any action for a money judgment, whether against a resident or a nonresident, regardless of the nature, character, or origin of the claim, whether it is for a certain or uncertain amount, and whether it is liquidated or unliquidated," the federal court stated the issue as "whether Daewoo’s suit to compel arbitration and obtain provisional relief is an 'action for a money judgment' to which Louisiana’s non-resident attachment statute applies." The Louisiana Supreme Court responded: "Louisiana Code of Civil Procedure article 3542 allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment." View "Stemcor USA Inc. v. CIA Siderurgica Do Para Cosipar" on Justia Law

In 2016, a hacker tricked an employee into disclosing tax information of about 1,300 Lamps employees. After a fraudulent federal income tax return was filed in the name of Varela, he filed a putative class action on behalf of employees whose information had been compromised. Relying on the arbitration agreement in Varela’s employment contract, Lamps sought to compel arbitration on an individual rather than a classwide basis. The Ninth Circuit affirmed the rejection of the individual arbitration request, authorizing class arbitration. Although Supreme Court precedent held (Stolt-Nielsen, 2010) that a court may not compel classwide arbitration when an agreement is silent on the availability of such arbitration, the Ninth Circuit concluded that Stolt-Nielsen did not apply because the Lamps agreement was ambiguous, not silent, concerning class arbitration.The Supreme Court reversed, Under the Federal Arbitration Act, 9 U.S.C. 2, an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration. Arbitration is strictly a matter of consent. Class arbitration, unlike the individualized arbitration envisioned by the Act, “sacrifices the principal advantage of arbitration—its informality—and makes the process slower, more costly, and more likely to generate procedural morass than final judgment.” Courts may not infer consent to participate in class arbitration absent an affirmative “contractual basis for concluding that the party agreed to do so.” Silence is not enough and ambiguity does not provide a sufficient basis to infer consent. View "Lamps Plus, Inc. v. Varela" on Justia Law

This appeal arose from fourteen lawsuits brought by various plaintiffs against (1) Laura Willis, an insurance agent; (2) Jesse Dantice, the insurance broker who hired Willis and made her the agent in charge of the insurance office; (3) their insurance agency, Southern Risk Insurance Services, LLC (Southern Risk), and (4) six insurance companies for which their office sold policies (the Insurers). The plaintiffs in the lawsuits were Willis's customers (the Insureds) and other insurance agents (the Agents) in competition with Willis and Southern Risk. The Insureds filed twelve of the lawsuits, asserting claims against Willis, Dantice, and Southern Risk for, inter alia, violations of the Unfair Trade Practices Act (UTPA), common law unfair trade practices, fraud, and conversion. They also named the Insurers as defendants on a respondeat superior theory of liability for failing to adequately supervise or audit Willis and Southern Risk. The question before the South Carolina Supreme Court was whether arbitration should have been enforced against nonsignatories to a contract containing an arbitration clause. The circuit court denied the motion to compel arbitration. The court of appeals reversed and remanded, holding equitable estoppel was applicable to enforce arbitration against the nonsignatories. The Supreme Court reversed and remanded, finding the circuit court properly denied the motion to compel arbitration. View "Wilson v. Willis" on Justia Law

The Supreme Court affirmed the decision of the district court granting Prospect Funding Holdings, LLC's (Prospect) motions to confirm arbitration awards and for summary judgment in this interpleader action, holding that when Prospect moved to confirm the arbitration awards under section 9 of the Federal Arbitration Act (FAA), 9 U.S.C. 1 through 16, the district court was required by the FAA to do so.After selling an interest in her personal injury claim to Prospect, Edrie Wheat settled her claim. When a dispute arose over the amount due Prospect, Prospect initiated arbitration proceedings against Wheat and Ronald J. Palagi, P.C., LLC (Palagi), the law firm representing Wheat. Awards were eventually entered against Wheat and Palagi in favor of Prospect. Wheat and Palagi then brought this interpleader action but did not seek to vacate, modify, or correct the arbitration awards. The district court granted Prospect's motion to confirm the arbitration awards and also granted Prospect's motion for summary judgment. The Supreme Court affirmed, holding (1) summary judgment was not premature; and (2) the district court did not err in failing to find the agreement was invalid and unenforceable. View "Ronald J. Palagi, P.C. v. Prospect Funding Holdings" on Justia Law

In this construction dispute, the Court of Chancery granted Defendant’s motion to dismiss Plaintiffs’ complaint seeking to vacate or modify an arbitration award for failure to state a claim and denying Plaintiffs’ motion for summary judgment, holding that the arbitrator did not exceed the scope of his authority or act in manifest disregard of the law when he awarded Defendant damages.In their first claim, Plaintiffs argued that the arbitrator’s interpretation of the provisions in the contract between the parties regarding the total cost of the construction project evidences a manifest disregard for the law. In their second claim, Plaintiffs argued that the arbitrator exceeded his authority and acted in manifest disregard of the law when he issued an award for fees and expenses to Defendant. The Court of Chancery disagreed, holding that the arbitrator did not act in manifest disregard of the law in either respect. View "Stempien v. Marnie Properties, LLC" on Justia Law

The issue this case presented for the Alabama Supreme Court’s review was who had the power to determine the location of an arbitration proceeding: an arbitrator or Circuit Court. The Court concluded that, under the facts of this case, the arbitrator had that power; thus, reversed and remanded. View "Alliance Investment Company, LLC v. Omni Construction Company, Inc., a/k/a OCC, Inc" on Justia Law