Justia Arbitration & Mediation Opinion Summaries

State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Insurance Company (collectively, “State Farm”) provide automobile insurance in New York and are required to reimburse individuals injured in automobile accidents for necessary health expenses under New York’s No-Fault Act. State Farm alleges that several health care providers and related entities engaged in a scheme to fraudulently obtain No-Fault benefits by providing unnecessary treatments and services, and then pursued baseless arbitrations and state-court proceedings to seek reimbursement for unpaid bills.The United States District Court for the Eastern District of New York granted State Farm’s motion for a preliminary injunction in part, enjoining the defendants from proceeding with pending arbitrations and from initiating new arbitrations and state-court proceedings, but denied an injunction of the pending state-court proceedings. The district court found that State Farm demonstrated irreparable harm due to the fragmented nature of the proceedings, which obscured the alleged fraud, and the risk of inconsistent judgments and preclusive effects.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s decision to grant the preliminary injunction in part. The appellate court held that the district court did not abuse its discretion in finding that State Farm demonstrated irreparable harm, serious questions going to the merits, a balance of hardships tipping in its favor, and that the injunction was in the public interest. The court also concluded that the Federal Arbitration Act did not bar the injunction of the arbitrations because the arbitrations would prevent State Farm from effectively vindicating its RICO claims.Additionally, the appellate court reversed the district court’s decision not to enjoin the pending state-court proceedings, finding that the Anti-Injunction Act’s “expressly-authorized” exception applied. The court determined that the state-court proceedings were part of a pattern of baseless, repetitive claims that furthered the alleged RICO violation, and that enjoining these proceedings was necessary to give RICO its intended scope. The case was remanded for further proceedings consistent with this opinion. View "State Farm Mutual v. Tri-Borough" on Justia Law

The case involves a dispute between Commodities & Minerals Enterprise, Ltd. (CME) and CVG Ferrominera Orinoco, C.A. (FMO). CME sought to confirm a New York Convention arbitration award of $187.9 million against FMO. FMO opposed the confirmation, alleging that CME procured the underlying contract through fraud, bribery, and corruption, arguing that enforcing the award would violate U.S. public policy. The district court confirmed the award, ruling that FMO was barred from challenging the confirmation on public policy grounds because it failed to seek vacatur within the three-month time limit prescribed by the Federal Arbitration Act (FAA).The United States District Court for the Southern District of Florida initially reviewed the case. CME moved to confirm the arbitration award in December 2019. FMO opposed the confirmation nearly two years later, citing public policy concerns. The district court granted CME’s motion, explaining that FMO was barred from opposing confirmation on public policy grounds due to its failure to seek vacatur within the FAA’s three-month time limit.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that, based on its recent en banc decision in Corporación AIC, SA v. Hidroélectrica Santa Rita S.A., FMO should have been allowed to assert its public policy defense in opposition to confirmation. The court clarified that the grounds for vacating a New York Convention arbitration award are those set forth in U.S. domestic law, specifically Chapter 1 of the FAA, which does not recognize public policy as a ground for vacatur. However, the court affirmed the district court’s confirmation of the award, concluding that FMO’s public policy defense failed on the merits because it attacked the underlying contract, not the award itself. View "Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco C.A." on Justia Law

The case involves Gail Dee Lew-Williams, as the surviving spouse and successor in interest of Wilbur Williams, Jr., M.D., and Wilbur Williams, M.D., Inc. (collectively, the Williams plaintiffs) and Sevana Petrosian and her associates Salina Ranjbar, Vana Mehrabian, and Staforde Palmer (collectively, the Petrosian defendants). The Williams plaintiffs accused the Petrosian defendants of embezzling approximately $11.5 million from the Corporation’s bank accounts. The trial court compelled the case to arbitration, but the Williams plaintiffs failed to initiate arbitration proceedings. As a result, the trial court dismissed the Williams plaintiffs’ claims against the Petrosian defendants.The Williams plaintiffs appealed, arguing that they did not have the funds to initiate the arbitration and that the trial court erred in compelling arbitration. The Petrosian defendants argued that the claims were properly dismissed because the Williams plaintiffs had the funds to arbitrate and should not be allowed on appeal to challenge the trial court’s order compelling arbitration before first arbitrating their claims.The Court of Appeal of the State of California, Second Appellate District, Division Seven, concluded that once a trial court has compelled claims to contractual arbitration, the court has “very limited authority with respect to [the] pending arbitration.” If a party fails to diligently prosecute an arbitration, the appropriate remedy is for the opposing party to seek relief in the arbitration proceeding. Therefore, the Court of Appeal held that the trial court exceeded its jurisdiction when it dismissed the Williams plaintiffs’ claims against the Petrosian defendants for failure to prosecute. The court reversed the trial court's dismissal of the case. View "Lew-Williams v. Petrosian" on Justia Law

In this case, the defendant, Bobby Quinton Gentile, pleaded guilty to conspiracy to possess with intent to distribute at least 500 grams of methamphetamine. He later appealed his sentence, arguing that the district court judge improperly coerced him into withdrawing his objections to the drug amount calculation in the Presentence Investigation Report by threatening to deny him his acceptance of responsibility points. The United States Court of Appeals for the Fifth Circuit found no plain error and affirmed the district court's decision. The court held that Gentile's argument that he was judicially coerced to withdraw his objections to the drug amount calculation fails under plain error review because, even assuming arguendo that the district court erred clearly by coercing him, Gentile did not show the error affected his substantial rights. His sentence was affirmed. View "USA v. Gentile" on Justia Law

When Plaintiff became the subject of a federal indictment, the school department (Defendant) suspended her without pay from her position as a school adjustment counselor. Ultimately, the indictment was dismissed. Plaintiff sought reinstatement to her position, but Defendant terminated her employment. Plaintiff filed a grievance challenging the termination, and an arbitrator ordered that she be reinstated. Plaintiff then filed an action seeking confirmation of the arbitration award and back pay for the period of her suspension an the period between her termination and reinstatement. The superior court affirmed the arbitration award but granted summary judgment in favor of Defendant with respect to Plaintiff's back pay claims. The appeals court affirmed the denial of back pay with respect to the period between Plaintiff's termination and reinstatement but reversed with respect to the period of her suspension. The Supreme Court affirmed. Remanded. View "Serrazina v. Springfield Pub. Schs." on Justia Law

Appellant Marcus Minix received documents from the county mediator stating that the county court had received a complaint against him for a violation of Ky. Rev. Stat. 514.030 and directing Appellant to mediation. After attending mediation, Appellant was informed he may need to return to mediation. Appellant petitioned the court of appeals for a writ prohibiting the county attorney from referring felony criminal complaints, including a felony complaint against him, to a mediator before presenting the complaints to a district court for review and issuance of a summons or warrant. The court of appeals denied the petition, finding it was without jurisdiction to address Appellant's claims. The Supreme Court affirmed, holding that a writ of prohibition may not be issued against non-judicial parties such as the Appellees, the county attorney and the mediator, and the substantive relief Appellant sought was within the original jurisdiction of the circuit court, not the court of appeals. View "Minix v. Roberts" on Justia Law