Justia Arbitration & Mediation Opinion Summaries

The Fifth Circuit affirmed the district court's order confirming a $622 million arbitration award. The parties are oil and gas companies incorporated in different countries, and the dispute arose from the Agreement for the Provision of Drilling Services (DSA). About two years into the DSA's term, Vantage and Petrobras executed the Third Novation and Amendment Agreement, which included an arbitration clause.As a preliminary matter, the court stated that it need not decide the issue of whether the appeal waiver was enforceable. On the merits, the court held that there was no public policy bar to confirmation of the arbitration award. In this case, the district court did not engage in inappropriate deference to the arbitrator's decision and the district court did not base its decision just on "mutual mistake." The court also held that Petrobras has not shown that the district court abused its discretion in denying the discovery motions. Finally, the court rejected Petrobras' motion to vacate the arbitration award. View "Vantage Deepwater Co. v. Petrobras America, Inc." on Justia Law

The Supreme Court reversed the circuit court’s order invaliding the arbitration provision at issue in this case involving an oil and gas lease and remanded with directions that the case be dismissed and referred to arbitration.Petitioner and Respondents were parties to an oil and gas lease that included an arbitration provision. Respondents sued Petitioner, seeking to recover payments to which they claimed to be entitled under the lease and various other damages. Petitioner filed a motion to compel arbitration, relying on the arbitration provision in the lease. The circuit court denied Petitioner’s motion to compel arbitration, finding ambiguity in the lease’s arbitration provision. The Supreme Court reversed, holding (1) the circuit court erred in going outside of the provisions in the arbitration clause to find language to create an ambiguity; and (2) the arbitration provision was not ambiguous and therefore should be enforced. View "SWN Production Co. v. Long" on Justia Law

This case arose from competing claims to a portion of the Yuba Goldfields, a 10,000-acre valley on both sides of the Yuba River near Marysville. At issue was whether an arbitration award resolving a dispute between plaintiff Cal Sierra Development, Inc. (Cal Sierra), and Western Aggregates, Inc., served as res judicata to bar Cal Sierra’s lawsuit against Western Aggregates’ licensee George Reed, Inc., and the licensee’s parent Basic Resources, Inc. The Court of Appeal concluded yes. View "Cal Sierra Development v. George Reed, Inc." on Justia Law

Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

Panoche, a producer of electricity, and Pacific Gas and Electric Company (PG&E), a utility that purchases its electricity, disputed which of them should bear the costs of complying with a legislatively-mandated program to reduce greenhouse gas emissions pursuant to the Global Warming Solutions Act (Assem. Bill 32 (2005–2006 Reg. Sess.). PG&E invoked the arbitration clause in its agreement with Panoche. Panoche resisted arbitration, arguing that the controversy was not ripe for resolution because ongoing regulatory proceedings at the California Air Resources Board and the California Public Utilities Commission would at least provide guidance in the arbitration and could render the proceeding unnecessary. The arbitration panel denied Panoche’s motion, and after a hearing determined that Panoche had assumed the cost of implementing AB 32 under the agreement and understood that at the time of signing. The arbitrators also concluded that the parties “provide[ed] for recovery of GHG costs” by Panoche through a “payment mechanism” in the agreement. The trial court agreed with Panoche, ruled that the arbitration was premature, and vacated the award. The court of appeal reversed and ordered confirmation of the award. Panoche identified no procedural disadvantage it suffered in going forward with the arbitration as scheduled and failed to meet the “sufficient cause” prong under Code of Civil Procedure 1286.2(a)(5). View "Panoche Energy Ctr. v. Pac. Gas & Elec." on Justia Law

The complex issues at issue in these three consolidated appeals revolved around four overlapping leases to extract oil and gas from land owned by Plaintiff. Each lease contained an arbitration clause. Plaintiff filed the instant case against Defendants seeking a declaration as to which lease was controlling as to which defendants and seeking damages from Defendants. The circuit court entered an order voiding two of the four leases, addressing the substantive terms of two other leases, and compelling the parties to arbitrate any remaining claims by Plaintiff. The Supreme Court affirmed in part and reversed in part, holding that the circuit court (1) properly found the arbitration clause in one lease to be unenforceable and correctly ruled that the entire lease was unenforceable; (2) erred in compelling certain defendants to participate in arbitration under the terms of a second lease but did not err when it made findings of fact and conclusions of law that addressed the substance of Plaintiff’s claims regarding that lease; (3) erred in voiding a third lease, and its included arbitration clause, in violation the doctrine of severability; and (4) erred in its substantive rulings interpreting a fourth lease, as the court should have referred questions about the lease to arbitration. View "Chesapeake Appalachia, LLC v. Hickman" on Justia Law

Based on an agreement, an oilfield operator was authorized to charge certain costs against revenues prior to paying the oilfield owners. After a dispute arose, an auditor examined the oilfield operator's costs charged to the oilfield owners and found approximately $1 million as being unsubstantiated and, therefore, impermissibly charged to the owners by the operator. The arbitrator reached a different conclusion regarding what charges were permissible and awarded the owners approximately $1.6 million. Satisfied with the arbitrator's decision, the oilfield brought an action in the district court to confirm the award. The oilfield operator, however, moved to vacate the award. The operator argued that the arbitrator improperly considered certain employment documents and that the arbitration was limited in scope by the auditor's findings of the unsubstantiated charges. The district court confirmed the award and denied the operator's motion. The court of appeal affirmed, with one judge dissenting. The issue this case presented for the Supreme Court's review as whether an accountant, serving as an arbitrator, exceeded his arbitral authority. Finding that the arbitrator acted pursuant to the authority lawfully and contractually vested in him by the parties, the Supreme Court affirmed. View "Mack Energy Co. v. Expert Oil & Gas, LLC" on Justia Law

Plaintiff-appellee Randy Howard sought to bring a class action suit against Ferrellgas Partners, LP in federal district court for allegedly overcharging him and other customers. Ferrellgas moved to force plaintiff to pursue his individual claim alone, in arbitration, arguing that arbitration was the procedure the parties had agreed to. The district court was unable to conclude that the parties agreed to arbitrate. Rather than proceed to trial as the Federal Arbitation Act required, the district court entered an order denying arbitration outright. The Tenth Circuit concluded that denial was error: "When it's apparent from a quick look at the case that no material disputes of fact exist, it may be permissible and efficient for a district court to decide the arbitration question as a matter of law through motions practice and viewing the facts in the light most favorable to the party opposing arbitration. . . . Parties should not have to endure years of waiting and exhaust legions of photocopiers in discovery and motions practice merely to learn where their dispute will be heard. The Act requires courts process the venue question quickly so the parties can get on with the merits of their dispute in the right forum. It calls for a summary trial — not death by discovery." View "Howard v. Ferrellgas Partners, et al" on Justia Law

This interlocutory appeal stemmed from litigation concerning a contract dispute among Williams Transport, LLC (Williams Transport), Driver Pipeline Company, Inc. (Driver Pipeline), Buckley Equipment Services, Inc. (Buckley Equipment), and other unnamed defendants. Based on an arbitration clause in the contract, Driver Pipeline filed a motion to compel arbitration. The trial court denied the motion to compel arbitration as well as a subsequent motion for reconsideration. Driver Pipeline filed a petition for interlocutory appeal, which the Supreme Court accepted as a notice of appeal. Finding no error by the trial court in denying Driver Pipeline's motion to compel arbitration, the Supreme Court affirmed. View "Driver Pipeline Company, Inc., Buckley Equipment Services, Inc. v. Williams Transport, LLC" on Justia Law

This case arose from an underlying dispute involving three parties related to an alleged breach of an assignment agreement. The three parties disagreed over the appointment of arbitrators to hear their dispute. The agreement to arbitrate seemed designated for a two-party dispute. Notwithstanding that the parties agreed to arbitrate before three arbitrators, the district court ordered the parties to proceed to arbitration before five arbitrators: three party-appointed arbitrators, who would then choose two neutral arbitrators. If the party-appointed arbitrators could not agree, the district court ordered the parties to petition for appointment of the two neutral arbitrators. On appeal, the Fifth Circuit Court of Appeal affirmed in part and vacated in part the district court's judgment, holding (1) there was a lapse in the naming of the arbitrators in the parties' agreement; (2) the district court was authorized to exercise appointment power under 9 U.S.C. 5; and (3) the district court erred in deviating from the parties' express agreement to arbitrate before a three-member panel. Remanded. View "BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd." on Justia Law