Justia Arbitration & Mediation Opinion Summaries

When Plaintiff retained a Maine law firm to represent him in a legal action, he signed an attorney-client engagement letter that contained an arbitration provision. Plaintiff later sued the law firm and individual defendants (collectively, Defendants) for malpractice and violations of Maine's Unfair Trade Practices Act. Defendants moved to compel arbitration and dismiss the action. The district court granted the motion under the Federal Arbitration Act (FAA). Plaintiff appealed, arguing that the district court erred in enforcing the arbitration clause. The First Circuit Court of Appeals affirmed, holding that the district court did not err in granting the motion to compel arbitration and dismissed the action, as (1) Maine professional responsibility law for attorneys permits arbitration of legal malpractice claims so long as there is no prospective limitation on the law firm's liability; and (2) Maine law, like the FAA, is not hostile to the use of the arbitration forum, and Maine would enforce the arbitration of malpractice claims provision in this case. View "Bezio v. Draeger" on Justia Law

After plaintiff purchased a background check and report from Intelius on the Internet, plaintiff discovered that Adaptive, a separate company from Intelius, had been charging his credit card each month for a Family Safety Report. Plaintiff and others filed suit against Intelius in state court. Intelius then filed a third-party complaint against Adaptive. Adaptive filed a motion to compel arbitration of both Intelius's and plaintiff's claims. The court held that plaintiff did not enter into a contract with Adaptive to purchase the Family Safety Report, and did not enter into a contract with Adaptive to arbitrate. Therefore, the court affirmed the district court's denial of the motion to compel. The court remanded for further proceedings. View "Lee v. Intelius Inc." on Justia Law

Plaintiffs filed suit against RAC after entering into a rental agreement with RAC for a wooden trundle bed and mattress infested with bedbugs. On appeal, plaintiffs challenged the district court's order compelling arbitration of their breach of warranty claim under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq. Relying on regulation promulgated by the FTC under its authority to interpret the Act, plaintiffs argued that RAC could not require binding arbitration as part of a consumer warranty. The court concluded that the district court erred in holding that the FTC regulations contained no ban on binding arbitration. However, the FTC arbitration ban simply did not apply to plaintiffs' rental agreement with RAC. Because plaintiffs have not linked RAC's warranty to any sale, they failed to establish the existence of a written warranty under FTC regulations. Accordingly, the binding arbitration clause was enforceable and the court affirmed the judgment of the district court. View "Seney v. Rent-a-Center, Inc." on Justia Law

This case concerned a dispute involving certain equipment Dakota purchased from the Kloster division of Tromley. On appeal, Tromley appealed the district court's denial of its motion to compel arbitration. Because the arbitration provision was not readily available and because Dakota did not have a reasonable opportunity to reject it, Tromley could not establish the necessary consent to bind Dakota to that provision. Further, the emails exchanged between Dakota and Tromley in June and July 2010 did not constitute an addendum to their agreement which successfully incorporated the arbitration agreement where the court could not say that the parties mutually assented to modify their agreement to include the provision. Accordingly, the court affirmed the judgment of the district court. View "Dakota Foundry, Inc. v. Tromley Industrial Holding" on Justia Law

The multinational telecommunications firm Nortel declared bankruptcy in 2009 and various debtors comprising the Nortel brand auctioned their business lines and intellectual property, raising $7.5 billion. The debtors subsequently disputed whether they had agreed to allocate the auction funds through arbitration. The Bankruptcy Court held that they had not agreed to arbitrate their disputes about allocation. The Third Circuit affirmed: the contract at issue does not reflect the debtors’ intent to arbitrate disputes about the auction funds. The court declined to consider the Joint Administrators’ related challenge to the Bankruptcy Court’s decision to allocate the contested funds, noting that the Bankruptcy Court has not yet held the hearing to allocate the funds, so that review would be premature. View "In Re: Nortel Networks, Inc." on Justia Law

The NECA-IBEW Health and Welfare Fund provides health benefits to members of a local union of electrical workers. The Fund negotiated a Local Agreement with Sav-Rx, a provider of prescription-drug benefits, under which Sav-Rx reimburses pharmacies for dispensing medication and then invoices the Fund for some of its costs. The Local Agreement does not call for arbitration. A few months later, Sav-Rx negotiated a different agreement with the national organization of the IBEW, with which the local is affiliated. The National Agreement offers locals reduced charges and more services than the Local Agreement and contains a mandatory arbitration clause. Local unions and funds could opt into the National Agreement, but the Fund's trustees never voted on the matter. Over the next eight years the Fund accepted from Sav-Rx services provided by the National Agreement. The Fund sued Sav-Rx for invoicing the Fund at rates not authorized by either the Local or National Agreement. The district court dismissed, finding that Fund had accepted the benefits of the National Agreement and was bound to it; Sav-Rx established that the Fund knew it was accepting benefits under the National Agreement. The Seventh Circuit affirmed. View "NECA-IBEW Rockford Local Union 364 Health & Welfare Fund v. A&A Drug Co." on Justia Law

Verizon New England, Inc. ("Verizon") had a collective bargaining agreement (CBA) with Local 2327, International Brotherhood of Electrical Workers, AFL-CIO (the "Union") that was originally signed in 2003. When, in 2008, FairPoint Communications ("FairPoint") purchased Verizon's telecommunication operations in Vermont, New Hampshire, and Maine, FairPoint agreed to hire all former Verizon employees, represented by the Union, in those states. In 2010, the Union filed a grievance against FairPoint based on allegedly wrongful transfer of work. An arbitration panel entered an award against FairPoint, concluding that the facts constituted a wrongful conveyance. FairPoint filed suit in district court, arguing that the arbitral panel had exceeded its authority by wrongfully adding and subtracting terms from the CBA. The district court granted summary judgment in favor of the Union. Nonetheless, the district court denied costs and fees pursuant to Fed. R. Civ. P. 11. The First Circuit Court of Appeals affirmed, holding (1) no grounds existed on which to vacate the arbitral award; and (2) the district court did not abuse its discretion by denying costs and fees. View "N. New England Telephone Operations LLC v. Local 2327, Int'l Brotherhood of Elec. Workers, ALF-CIO" on Justia Law

Crockett’s former law firm subscribed to a LexisNexis legal research plan that allowed unlimited access to certain databases for a flat fee. Subscribers could access other databases for an additional fee. According to Crockett, LexisNexis indicated that a warning sign would display before a subscriber used a database outside the plan. Years after subscribing, Crockett complained that his firm was being charged additional fees without any warning that it was using a database outside the Plan. LexisNexis insisted on payment of the additional fees. The firm dissolved. Crockett’s new firm entered into a LexisNexis subscription agreement, materially identical to the earlier plan; it contains an arbitration clause. Crockett filed an arbitration demand against LexisNexis on behalf of two putative classes. One class comprised law firms that were charged additional fees. The other comprised clients onto whom such fees were passed. The demand sought damages of more than $500 million. LexisNexis sought a federal court declaration that the agreement did not authorize class arbitration. The district court granted LexisNexis summary judgment. The Sixth Circuit affirmed. “The idea that the arbitration agreement … reflects the intent of anyone but LexisNexis is the purest legal fiction,” but the one-sided adhesive nature of the clause and the absence of a class-action right do not render it unenforceable. The court observed that Westlaw’s contract lacks any arbitration clause.View "Reed Elsevier, Inc. v. Crockett" on Justia Law

Plaintiff terminated Defendant from employment. Thereafter, Defendant began arbitration proceedings seeking severance compensation he felt was contractually due. After arbitration hearings had commenced, the hearings were postponed for two months due to a medical situation afflicting Plaintiff's counsel. During the recess, Plaintiff formally requested pre-hearing and hearing third-party subpoenas directed at Defendant's current employer. The tribunal denied the issuance of the subpoenas. After the arbitration hearings resumed, the tribunal found Defendant was entitled to compensation pursuant to the terms of his employment agreement dealing with his termination without cause. The tribunal also found Defendant was entitled to pre-award interest. Plaintiff subsequently sought vacatur of the award, which the trial court denied. The First Circuit Court of Appeals affirmed, holding (1) the arbitration tribunal did not engage in misconduct by denying the issuance of the pre-hearing and hearing subpoenas; and (2) the tribunal did not exceed its authority in awarding pre-award interest to Defendant. View "Doral Fin. Corp. v. Garcia-Velez" on Justia Law

These appeals arose out of LJL's exercise of its contractual option to purchase Pitcairn's ownership stake in a jointly owned high-rise luxury residential building in New York City, after which the parties pursued an arbitration to determine the value of the property. Both parties subsequently appealed from the district court's judgment. In LJL's appeal, the court agreed with its contention that the arbitrator's exclusion of Pitcairn's hearsay exhibits was within the arbitrator's authorized discretion and, therefore, vacated the district court's order overturning the arbitrator's determination of the Stated Value. The court agreed with the district court's conclusion that the arbitrator acted in accordance with the terms of the arbitration agreement in refusing to determine the Purchase Price and, therefore, remanded with instructions to confirm the arbitration award in its entirety. In Pitcairn's appeal, the court found no error in the district court's dismissal of Pitcairn's claims for breach of fiduciary duties and breach of the covenant of good faith and fair dealing. Accordingly, the court affirmed the judgment. View "LJL 33rd Street Associates, LLC v. Pitcairn Properties Inc." on Justia Law