Justia Arbitration & Mediation Opinion Summaries

Current or former Uber drivers from different states agreed to Uber’s “Technology Services Agreement” as a condition of using Uber’s platform. The agreement requires drivers to resolve disputes with Uber on an individual basis through final and binding arbitration. Drivers may opt-out by sending Uber an email or letter. Singh’s class action alleged Uber had violated New Jersey wage and hour laws by misclassifying drivers as independent contractors, failing to pay them the minimum wage, and failing to reimburse them for business expenses. Calabrese’s class action, which was joined to Singh’s, sought to proceed collectively under the Fair Labor Standards Act.The district court ruled in Uber’s favor, compelling arbitration, having defined the relevant class as Uber drivers nationwide. The court found that interstate "rides constitute just 2% of all rides, resemble in character the other 98% of rides, and likely occur due to the happenstance of geography” for purposes of the exception in the Federal Arbitration Act (FAA) for arbitration agreements contained in the “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce,” 9 U.S.C. 1. The Third Circuit affirmed. The drivers' work is centered on local transportation. Most Uber drivers have never made an interstate trip. When Uber drivers do cross state lines, they do so only incidentally. They are not “engaged in foreign or interstate commerce.” View "Singh v. Uber Technologies, Inc" on Justia Law

The Supreme Court affirmed the opinion of the court of appeals reversing the judgment of the district court refusing to send the underlying rent dispute to arbitration and resolving the claim itself, holding that the dispute should be sent to arbitration.Landlord entered into a lease with Tenant providing that if Tenant defaulted Landlord shall submit such dispute to binding arbitration. When a dispute arose over water damage and withheld rent, litigation and arbitration resulted, with an arbitrator awarding judgment for Tenant. Thereafter, the trustee for several entities that held mortgages on the building brought a foreclosure action against Owner and appointed Receiver. When Tenant continued to refuse to pay rent, Receiver brought suit, and Tenant sought to send the dispute to arbitration. At issue was whether Receiver was bound by the lease's arbitration clause. The district court refused to send the dispute to arbitration and ruled that Tenant must make rent payments to Receiver. The court of appeals reversed. The Supreme Court affirmed, holding that the court of appeals properly concluded that Receiver was subject to the arbitration agreement in the lease. View "Wilmington Trust, Nat'l Ass'n v. 700 Hennepin Holdings, LLC" on Justia Law

In this dispute between two Major League Baseball (MLB) teams and their co-owned regional sports network the Court of Appeals affirmed as modified the judgment of the court of appeals affirming the confirmation of a second arbitration award and directed that a money judgment be vacated, holding that the highly sophisticated parties were bound to the terms of their agreement.In this dispute regarding the fair market value of certain telecast rights Plaintiffs sought to vacate an arbitration award granted by the MLB's Revenue Sharing Definitions Committee (RSDC). Supreme Court vacated the arbitration award based on the RSDC's evident partiality, and the appellate division affirmed. After a second hearing, the RSDC entered a second award. Supreme Court affirmed, and the appellate division affirmed. The Court of Appeals affirmed as modified, holding (1) the courts below correctly confirmed the second arbitration award; and (2) the order must be modified because Supreme Court erred by awarding prejudgment interest and rendering a money judgment. View "TCR Sports Broadcasting Holding, LLP v. WN Partner, LLC" on Justia Law

When she was hired by Kindercare, Westmoreland signed a “Mutual Arbitration Agreement Regarding Wages and Hours,” including a “Waiver of Class and Collective Claims” and a “Savings Clause & Conformity Clause,” stating that if the Waiver of Class and Collective Claims is found to be unenforceable, the agreement is invalid and any claim brought on a class, collective, or representative action basis must be filed in court. Kindercare terminated Westmoreland. She filed suit asserting violations of the Labor Code, on an individual and class action basis. Kindercare successfully moved to compel arbitration of Westmoreland’s individual non-PAGA (Private Attorneys General Act) claims, and to stay her PAGA claim. The court of appeal concluded that the unenforceable PAGA waiver was not severable and rendered the entire agreement unenforceable. The California Supreme Court and the U.S. Supreme Court rejected Kindercare’s petitions for review. Kindercare filed a “Renewed Motion to Compel Arbitration of Non-PAGA Claims and Stay PAGA Claims Based on New Law” citing a July 2021 California decision, “Western Bagel.”The court of appeal affirmed, noting that an order denying a renewed motion is not appealable but exercising its discretion to hear the matter as a petition for writ of mandate. Western Bagel is not “new law” that justifies a different decision. As a consequence of Kindercare’s drafting decisions, the agreement is invalid by operation of the unambiguous “Savings Clause and Conformity Clause.” Kindercare must litigate all of Westmoreland’s claims in court. View "Westmoreland v. Kindercare Education LLC" on Justia Law

Plaintiff signed an online arbitration agreement before starting work at a car dealership. He had to sign if he wanted a job: the car dealership presented it as a take-it-or-leave-it mandatory condition. Plaintiff signed the arbitration contract, and the dealership hired him. The employment relationship turned out to be unsuccessful: Plaintiff sued the dealership for firing him. The dealership moved to compel arbitration. The trial court ruled the arbitration contract was unconscionable.   The Second Appellate District reversed. The court held that Plaintiff suffered no substantive unconscionability, which is indispensable to the unconscionability defense. The court held that, to some extent, the contract-at-issue seems to be a common form, at least for some car dealerships. Second, all four agreements containing the arbitration clauses extended for more than a page of print. Third, the font size and functional readability of the contracts here did not seem to trouble Plaintiff.   Further, the court explained that Plaintiff argues this language implies to laypeople that it bars filing a charge with the Department of Fair Employment and Housing or the Equal Employment Opportunity Commission. The court found that Plaintiff’s argument fails on two counts. As Plaintiff himself notes, there is clear language to the contrary: “I understand and agree that nothing in this agreement shall be construed so as to preclude me from filing any administrative charge with, or from participating in any investigation of a charge conducted by, any government agency such as the Department of Fair Employment and Housing and/or the Equal Employment Opportunity Commission.” More fundamentally, arguments about prolix legalese go to procedural and not substantive unconscionability. View "Basith v. Lithia Motors, Inc." on Justia Law

Plaintiff signed an arbitration agreement with Empire Nissan, Inc. Nissan fired Fuentes, she sued, and Nissan moved to compel arbitration. The trial court found the arbitration agreement unconscionable and denied the motion.   The Second Appellate District reversed and directed the trial court to compel arbitration, holding that this contract lacks substantive unconscionability. The court explained that Plaintiff must show both procedural and substantive unconscionability to establish the defense. These two elements need not be present to the same degree. Rather we evaluate them on a sliding scale. The more substantively oppressive the contract terms, the less evidence of procedural unconscionability is required to conclude that the contract is unenforceable. Conversely, the more deceptive or coercive the bargaining tactics employed, the less substantive unfairness is required. The court explained that tiny and unreadable print indeed is a problem, but is a problem of procedural unconscionability. Accordingly, the court explained that it cannot double count it as a problem of substantive unconscionability. View "Fuentes v. Empire Nissan, Inc." on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the orders of the trial court granting TotalEnergies E&P USA, Inc.'s motion to stay an American Arbitration Association (AAA) arbitration and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration.In this dispute arising over interests in a group of oil-and-gas leases Total E&P sought a declaration construing the parties' "Cost Sharing Agreement." On the same day, Total E&P initiated an arbitration proceeding asking the International Institute to determine the parties' rights under their "Chinook Operating Agreement." MP Gulf subsequently initiated the AAA arbitration proceeding. Total E&P filed a motion to stay the arbitration, which the trial court granted. The court of appeals reversed and compelled AAA arbitration. The Supreme Court affirmed, holding that the parties agreed to delegate the arbitrability issue to the arbitrator. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

Plaintiff Tutor Perini Building Corp. appealed from the district court’s order affirming an order of the United States Bankruptcy Court, which held that Plaintiff may not use 11 U.S.C. Section 365(b)(1)(A) to assert a “cure claim” against the Trustee for the Trustee’s assumption of an unexpired lease to which Plaintiff was neither a party nor a third-party beneficiary.   The Second Circuit affirmed. The court held that a creditor who seeks to assert a “cure claim” under Section 365(b)(1)(A) must have a contractual right to payment under the assumed executory contract or unexpired lease in question, and the court agreed that Plaintiff is not a third-party beneficiary of the assumed lease. The court explained that Tutor Perini’s expansive view of the priority rights conferred by 11 U.S.C. Section 365(b)(1)(A) is inconsistent with applicable principles of Bankruptcy Code interpretation, and its third-party beneficiary argument is inconsistent with controlling principles of New York contract law. View "In re: George Washington Bridge" on Justia Law

In 2013, New Balance entered into a Distribution Agreement with PSG to distribute its products in Peru. The Agreement contained an arbitration clause, which New Balance invoked in 2018. Also joined as respondents in this arbitration were Ribadeneira, PSG’s controlling owner, and Superdeporte, another business entity owned by Ribadeneira in Peru. The arbitrator issued two awards, which imposed liability on PSG and Superdeporte for breach of the Distribution Agreement, and on PSG, Superdeporte, and Ribadeneira for tortious interference. The arbitrator rejected three counterclaims brought against New Balance. Finding that the arbitrator had improperly exercised jurisdiction over nonsignatories Ribadeneira and Superdeporte, the district court vacated the awards.The First Circuit reversed. Theories of assumption and equitable estoppel apply to support arbitral jurisdiction over Ribadeneira and Superdeporte. Superdeporte was PSG's successor-in-interest and assumed PSG's obligation to arbitrate under the Distribution Agreement. Ribadeneira is estopped from denying that the Agreement's arbitration clause is enforceable, just as he is estopped from asserting his nonsignatory status to avoid the obligation to arbitrate under that clause. The tortious interference claims were "related to or arising out of" the Agreement. View "Ribadeneira v. New Balance Athletics, Inc." on Justia Law

Integra is an accountable-care organization under the Medicare Shared Savings Program (MSSP). RIPCPC is an independent practice association of physicians located in Rhode Island. The plaintiffs (Hayden, King, Corsi) are primary care physicians and operated their own independent practices. Each participated in Integra until 2018, when they terminated their respective agreements upon the sale of their respective independent practices (Integra agreements) and terminated their relationships with RIPCPC. The plaintiffs alleged breach of contract, unjust enrichment, breach of the implied covenant of good faith and fair dealing, conversion, and anticipatory breach/repudiation against Integra and RIPCPC, claiming that Integra and RIPCPC owed plaintiffs certain payments and shared savings for 2017 and 2018.The defendant’s motion to dismiss was granted as to breach of the implied covenant of good faith and fair dealing by RIPCPC and anticipatory breach/repudiation by RIPCPC. RIPCPC then successfully moved to stay the proceedings and compel arbitration as to plaintiffs’ claims against RIPCPC for breach of contract, unjust enrichment, conversion, and declaratory judgment. The Rhode Island Supreme Court held that the hearing justice did not err in granting RIPCPC’s motion to compel arbitration with regard to Hayden’s claims for breach of contract, conversion, and unjust enrichment nor in granting RIPCPC’s motion to compel arbitration with regard to Corsi’s claim for breach of contract but erred in granting RIPCPC’s motion to compel arbitration with regard to Corsi’s claims and King’s claims for conversion and unjust enrichment. View "Hayden v. Integra Community Care Network, LLC" on Justia Law