Justia Arbitration & Mediation Opinion Summaries

Jansen was a resident at a skilled nursing facility. Kotalik, with Jansen’s power of attorney for healthcare, signed a “Contract Between Resident and Facility” that provides all civil claims shall be resolved exclusively through mandatory mediation, and, if such mediation does not resolve the dispute, through binding arbitration. The contract waived claims for punitive damages and included a “termination upon death” provision. Jansen suffered several falls, resulting in injuries that contributed to or caused Jansen’s death. Her estate sued, arguing that the defendants had waived their right to mediate and/or arbitrate by participating in litigation for nearly a year, that the arbitration clause was procedurally and substantively unconscionable, and that Kotalik, as Jansen’s POA for healthcare, lacked the authority to execute an arbitration clause on Jansen’s behalf.The Illinois Supreme Court affirmed the denial of the motion. By the express terms of the contract, once the resident died, the contract ceased to exist, including the forum provision. The court did not address the other arguments. View "Clanton v. Oakbrook Healthcare Centre, Ltd." on Justia Law

Shake Out, LLC entered into a contract with Clearwater Construction, LLC (“Clearwater”), to repair the building Shake Out’s restaurant occupied. The relationship between the parties quickly deteriorated, resulting in Shake Out filing a lawsuit against Clearwater. The parties attempted to mediate their dispute but were unsuccessful. After the case had proceeded for some time, Clearwater sought to compel arbitration pursuant to the contract. Shake Out objected, asserting that Clearwater had waived its right to enforce the arbitration clause because it had participated in the litigation for almost ten months before seeking to compel arbitration. The district court concluded Clearwater had not waived its right to seek arbitration and entered an order compelling arbitration and staying the proceedings. Finding no reversible error in that judgment, the Idaho Supreme Court affirmed. View "Shake Out, LLC v. Clearwater Construction, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals in this second lawsuit brought by AJZ's Hauling, LLC against TruNorth Warranty Programs of North American (TruNorth) affirming the decision of the trial court denying TruNorth's motion to stay and compel arbitration, holding that the claims filed by AJZ's Hauling against TruNorth were subject to arbitration.AJZ's Hauling purchased a truck that came with a TruNorth warranty. AJZ's Hauling later sued TruNorth, and the trial court granted TruNorth's motion to stay the proceedings and to compel arbitration. AJZ's then filed a second lawsuit raising the same claims it had alleged against TruNorth in the first lawsuit. TruNorth again filed a motion to stay and to compel arbitration, which the trial court denied. The court of appeals affirmed, concluding that application of the doctrine of res judicata would be unreasonable or unjust. The Supreme Court reversed, holding (1) AJZ's Hauling's claims filed against TruNorth in the second lawsuit were subject to arbitration; and (2) an exception to application of the doctrine of res judicata to avoid unjust results does not apply when the parties had a full opportunity to litigate the issue and chose not to do so. View "AJZ Hauling, LLC v. TruNorth Warranty Program of N. America" on Justia Law

The Supreme Court reversed the trial court's denial of Defendant's motion to compel arbitration, holding that remand was required for reconsideration in light of this Court's holdings in TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC, 667 S.W.3d 694 (Tex. 2023).Lone Star Cleburne Autoplex filed this suit asserting that Alliance Auto Auctions of Dallas conspired with two of Lone Star's employees in order to embezzle money from Lone Star. Alliance moved to compel arbitration based on arbitration clauses contained in authorization agreements between Lone Star and a company Alliance used to verify and authorize car dealerships to buy and sell in the company's auctions. In opposing the motion Lone Star asserted that its claims fell outside the scope of the arbitration agreement. The trial court denied Alliance's motion to compel. The court of appeals affirmed. The Supreme Court reversed, holding that because the court of appeals decided this case without addressing arguments rejected in TotalEnergies, remand was required. View "Alliance Auto Auction of Dallas, Inc. v. Lone Star Cleburne Autoplex, Inc." on Justia Law

Plaintiff sued The Savannah College of Art and Design, Inc. (“SCAD”) for race discrimination and retaliation after he was fired from his job as Head Fishing Coach. As part of his employment onboarding, however, Plaintiff signed a document agreeing to arbitrate—not litigate—all legal disputes that arose between him and SCAD. Accordingly, SCAD moved to dismiss and compel arbitration. The district court, approving and adopting the magistrate judge’s Report and Recommendation (“R & R”), granted SCAD’s motion. On appeal, Plaintiff argued that the district court erred by ignoring that his agreement with SCAD was unconscionable and that SCAD waived its right to arbitrate. He also argued that the district court abused its discretion in rejecting his early discovery request.   The Eleventh Circuit affirmed the district court’s order granting SCAD’s motion to dismiss and compel arbitration. The court concluded that the Plaintiff’s arbitration agreement is neither substantively nor procedurally unconscionable. Further, the court found that SCAD did not waive its right to enforce arbitration and that the district court did not abuse its discretion in overruling Plaintiff’s request for early discovery. In short, the court concluded that Plaintiff is bound by his agreement to arbitrate his legal claims against SCAD. View "Isaac Payne v. Savannah College of Art and Design, Inc." on Justia Law

Alliance Pipeline L.P. (“Alliance”) entered into contracts with four states (“State Agreements”) as well as contracts with individual landowners in order to build a natural gas pipeline. The contracts with landowners provide easements for the pipeline right-of-way. In 2018, some landowners on the pipeline right-of-way filed a class-action lawsuit against Alliance. After the class was certified, Alliance moved to compel arbitration for the approximately 73 percent of plaintiffs whose easements contain arbitration provisions. Alliance appealed, arguing the district court erred by not sending all issues to arbitration for the plaintiffs whose easements contain arbitration provisions.   The Eighth Circuit affirmed in part and reversed in part. The court explained that the district court that the damages issues are subject to arbitration for the plaintiffs whose easements contain an arbitration provision. Plaintiffs make two arguments against sending any issues to arbitration: (1) Plaintiffs’ claims cannot be within the scope of the arbitration provisions because the claims allege lack of compensation for “ongoing yield losses,” not “damages to crops” and (2) Plaintiffs’ claims arise under the State Agreements, which do not have arbitration provisions. The court found the arbitration agreements to be enforceable and to cover all issues. The court held that as to the arbitration class members, the claims should be dismissed without prejudice. As to the members of the class without arbitration provisions, the court saw no reason why these class members cannot proceed with the lawsuit in the normal course at the district court. View "H&T Fair Hills, Ltd. v. Alliance Pipeline L.P." on Justia Law

Plaintiff worked for Tug Hill Operating, LLC, for approximately a year and a half at rig sites in West Virginia. He commenced an action against Tug Hill under the Fair Labor Standards Act (“FLSA”), alleging that while Tug Hill formally classified him as an independent contractor, he actually qualified as an employee for purposes of the FLSA based on the degree of control that Tug Hill exercised over his work. He, therefore, claimed that Tug Hill was required to pay him overtime for those weeks in which he worked more than 40 hours. Tug Hill filed a motion to dismiss Plaintiff’s action on the ground that Plaintiff was contractually required to arbitrate his claim against it. In addition, RigUp itself filed a motion to intervene in order to seek the action’s dismissal in favor of arbitration. The district court granted both motions.   The Fourth Circuit reversed both rulings and remanded. The court explained that the numerous provisions in the Agreement preclude any conclusion that the Agreement was entered into solely or directly for the benefit of Tug Hill, such that Tug Hill could enforce it as a third-party beneficiary. Accordingly, the district court erred in granting Tug Hill’s motion to dismiss and compelling Plaintiff, under the arbitration agreement between him and RigUp, to proceed to arbitration with respect to his FLSA claim against Tug Hill. Moreover, the court explained that because RigUp’s agreement with Plaintiff expressly disclaimed any interest in any litigation, Plaintiff might have with a company in Tug Hill’s position RigUp cannot now opportunistically claim that intervention is necessary. View "Lastephen Rogers v. Tug Hill Operating, LLC" on Justia Law

Plaintiffs are twenty-six former employees of International Business Machines Corporation (“IBM”) who signed separation agreements requiring them to arbitrate any claims arising from their termination by IBM. The agreements set a deadline for initiating arbitration and included a confidentiality requirement. Plaintiffs missed the deadline but nonetheless tried to arbitrate claims under the Age Discrimination in Employment Act of 1967 (“ADEA”). Their arbitrations were dismissed as untimely. They then sued IBM in district court, seeking a declaration that the deadline is unenforceable because it does not incorporate the “piggybacking rule,” a judge-made exception to the ADEA’s administrative exhaustion requirements. Shortly after filing suit, Plaintiffs moved for summary judgment and attached various documents obtained by Plaintiffs’ counsel in other confidential arbitration proceedings. IBM moved to seal the confidential documents. The district court granted IBM’s motions to dismiss and seal the documents. On appeal, Plaintiffs argued that (1) the filing deadline in their separation agreements is unenforceable and (2) the district court abused its discretion by granting IBM’s motion to seal.   The Second Circuit affirmed. The court first wrote that the piggybacking rule does not apply to arbitration and, in any event, it is not a substantive right under the ADEA. Second, the court held that the presumption of public access to judicial documents is outweighed here by the Federal Arbitration Act’s (“FAA”) strong policy in favor of enforcing arbitral confidentiality provisions and the impropriety of counsel’s attempt to evade the agreement by attaching confidential documents to a premature motion for summary judgment. View "In re IBM Arb. Agreement Litig." on Justia Law

PayPal users can transfer money to businesses and people; they can donate to charities through the Giving Fund, its 501(c)(3) charitable organization. Kass created a PayPal account and accepted PayPal’s 2004 User Agreement, including a non-mandatory arbitration clause and allowing PayPal to amend the Agreement at any time by posting the amended terms on its website. In 2012 PayPal amended the Agreement, adding a mandatory arbitration provision. Users could opt out until December 2012. In 2016, PayPal sent emails to Kass encouraging her to make year-end donations. Kass donated $3,250 to 13 charities through the Giving Fund website. Kass alleges she later learned that only three of those charities actually received her gifts; none knew that Kass had made the donations. Kass claims that, although Giving Fund created profile pages for these charities, it would transfer donated funds only to charities that created a PayPal “business” account; otherwise PayPal would “redistribute” the funds to similar charities.Kass and a charity to which she had donated filed a purported class action. The district court granted a motion to compel arbitration, then affirmed the arbitrator’s decision in favor of the defendants. The Seventh Circuit vacated. In concluding that Kass had consented to the amended Agreement, the district court erred by deciding a disputed issue of fact that must be decided by a trier of fact: whether Kass received notice of the amended Agreement and implicitly agreed to the new arbitration clause. View "Kass v. PayPal Inc." on Justia Law

Petitioners Rick Hendrick Dodge Chrysler Jeep Ram (Rick Hendrick Dodge) and Isiah White argued an arbitrator had to decide whether they could enforce an arbitration provision in a contract even after that contract had been assigned to a third party. The court of appeals rejected this argument and affirmed the circuit court's determinations that: (1) the circuit court was the proper forum for deciding the gateway question of whether the dispute is arbitrable; and (2) Petitioners could not compel arbitration because Rick Hendrick Dodge assigned the contract to a third party. The South Carolina Supreme Court held that the doctrine announced in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) required the arbitrator to decide whether the assignment extinguished Petitioners' right to compel arbitration. Therefore, the Court reversed the court of appeals' decision and vacated the circuit court's discovery order. View "Sanders v. Savannah Highway Automotive Company" on Justia Law