Justia Arbitration & Mediation Opinion Summaries

Henry Searcy, Jr. sought certification as an agent under the NFLPA’s 2012 Regulations Governing Contract Advisors but failed the required exam twice. After an arbitrator sided with the NFLPA, Searcy sued the NFLPA, its Executive Director, Prometric LLC, and Prometric’s Vice President and General Counsel. He alleged breach of contract, negligence, negligent misrepresentation, intentional infliction of emotional distress, and tortious interference with a contractual relationship, and sought vacatur of the arbitration award under the FAA.The United States District Court for the District of Columbia dismissed the claims against Prometric Defendants for lack of subject matter jurisdiction and against the NFLPA Defendants for failure to state a claim. On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the dismissal of claims against Prometric Defendants and instructed the District Court to reconsider its dismissal of claims against the NFLPA Defendants, specifically examining whether Section 301 of the LMRA preempted Searcy’s state law claims.Upon further review, the District Court concluded it had jurisdiction and dismissed the claims under Rule 12(b)(6). Searcy appealed again. The United States Court of Appeals for the District of Columbia Circuit held that the District Court erred in finding subject matter jurisdiction over the claims against the NFLPA Defendants. The court determined that Section 301 of the LMRA does not completely preempt Searcy’s state law claims, as these claims do not require interpretation of the NFL-NFLPA Collective Bargaining Agreement. Consequently, the appellate court affirmed the dismissal on different grounds and remanded the case with instructions to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). View "Searcy v. Smith" on Justia Law

Marvin Jackson attended a World Wrestling Entertainment (WWE) event and alleges that a pyrotechnics blast caused him to lose most of his hearing in his left ear. The tickets were purchased as a surprise gift by his nephew, Ashton Mott, on SeatGeek.com. All ticket purchases required agreement to various terms and conditions, including an arbitration agreement, and stated that entry to the event would constitute acceptance of these terms. Jackson sued WWE in Texas state court for negligence, but WWE moved the case to federal court and requested arbitration per the ticket agreement. The district court granted WWE’s motion, stating that Mott acted as Jackson's agent and that Jackson was therefore bound by the terms of the ticket, including the arbitration agreement.Jackson appealed the decision, arguing that Mott did not have the authority to act on his behalf and therefore the arbitration agreement should not be enforceable against him. The United States Court of Appeals for the Fifth Circuit disagreed with Jackson's argument. The court held that although Mott purchased the tickets without Jackson's knowledge or control, he acted as Jackson’s agent when he presented the ticket on Jackson's behalf for admittance to the event. The ticket's terms and conditions were clear that use of the ticket would constitute acceptance of the arbitration agreement. Therefore, the court affirmed the district court's decision to compel arbitration, as the arbitration agreement is enforceable against Jackson. View "Jackson v. World Wrestling" on Justia Law

Bernstein and France are certified agents, registered with the NFL Players Association to represent NFL players in contract negotiations. Bernstein also owns Clarity, which represents professional athletes in matters such as marketing and endorsement contracts. Golladay signed a standard representation agreement with Bernstein in 2016, before Golladay’s rookie season with the Detroit Lions, and signed a separate agreement with Clarity for representation in endorsement and marketing deals. In January 2019, Golladay terminated both agreements. three days after participating in an autograph-signing event that Bernstein had played no role in arranging. Golladay immediately signed with France.Bernstein believed France was behind the signing event and filed a grievance against France pursuant to the NFLPA dispute resolution provisions. The matter went to arbitration. In pre-hearing discovery, France denied possessing any documents pertaining to the event and denied any involvement in the event. France’s lies were not uncovered until after the arbitration was decided in his favor.The Third Circuit reversed the district court’s confirmation of the arbitration award because France’s fraud procured it. The Federal Arbitration Act, 9 U.S.C. 10, permits an award to be vacated under narrow circumstances, including “where an award was procured by corruption, fraud, or undue means.” France’s fraud was not discoverable through reasonable diligence and was material to the case. View "France v. Bernstein" on Justia Law

Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

The lawsuit underlying this appeal involves a "spin-off" of the Fast & Furious franchise, a project ultimately released as Fast & Furious Presents: Hobbs & Shaw (the film), on which Moritz allegedly worked as a producer pursuant to an oral agreement with Universal. After Moritz filed suit for breach of a binding oral agreement regarding Moritz's work on the film, appellants moved to compel arbitration based on arbitration agreements in the written producer contracts regarding Moritz's work for Universal on the Fast & Furious franchise.The Court of Appeal affirmed the trial court's denial of appellants' motion to arbitrate, holding that the arbitration agreements from the Fast & Furious movies did not apply to the Hobbs & Shaw spin-off dispute. The court stated that not only is it not clear and unmistakable here that the parties agreed to delegate arbitrability questions concerning Hobbs & Shaw to an arbitrator, no reasonable person in their position would have understood the arbitration provisions in the Fast & Furious contracts to require arbitration of any future claim of whatever nature or type, no matter how unrelated to the agreements nor how distant in the future the claim arose. The court explained that the Federal Arbitration Act (FAA) requires no enforcement of an arbitration provision with respect to disputes unrelated to the contract in which the provision appears. In this case, appellants' argument that an arbitration provision creates a perpetual obligation to arbitrate any conceivable claim that Moritz might ever have against them is plainly inconsistent with the FAA's explicit relatedness requirement. View "Moritz v. Universal City Studios LLC" on Justia Law

Since 1986, the GSW NBA basketball team has played their home games at the Authority's Oakland arena. A 1996 License Agreement gave GSW certain obligations to pay the debt incurred in renovating the arena if GSW “terminates” the agreement. In 2012, GSW announced its intention to construct a new arena in San Francisco. GSW did not exercise the renewal option in the Agreement, and, on June 30, 2017, its initial term expired. GSW initiated arbitration proceedings, seeking a declaration that it was no longer obliged to make debt payments if it allowed the License Agreement to expire rather than terminating it.The arbitrator ruled in favor of the Authority and against GSW, awarding the Authority attorney fees. The court of appeal affirmed. Based on extrinsic evidence, the arbitrator found the parties intended to adhere to the terms of a pre-agreement Memorandum of Understanding, which required the team to continue making debt payments after the initial term. The 1996 License Agreement is reasonably susceptible to the parties’ competing interpretations, so parol evidence was admissible to prove what the parties intended. Even assuming that the arbitrator addressed a question of law when she interpreted the Agreement, the parties intended to include a termination of the agreement upon GSW’s failure to exercise the first two options to renew. View "Oakland-Alameda County Coliseum Authority v. Golden State Warriors, LLC" on Justia Law

Defendant California Community College Athletic Association (Athletic Association) administered intercollegiate athletics for the California community college system. The parties agreed that, as a condition of participating in the intercollegiate football league, plaintiff Bakersfield College (the College) agreed to be bound by the Athletic Association’s bylaws and constitution, including a provision requiring the College to resolve any sanctions and penalty disputes by binding arbitration. Instead of proceeding through binding arbitration to challenge the sanctions and penalty decisions issued by the Athletic Association and codefendant the Southern California Football Association (the Football Association) against the College, the College and coplaintiffs Jeffrey Chudy and the Kern Community College District elected to file civil litigation. Plaintiffs argued they were excused from pursuing binding arbitration because the arbitration provision was unconscionable. The trial court said the “issue [wa]s close,” but ultimately, after severing the one-sided attorney fees subsections, found the arbitration provision was not unconscionable. The trial court, therefore, found plaintiffs’ litigation was barred by the failure to exhaust their administrative remedies. The Court of Appeal agreed with the trial court that this was a close case but concluded the arbitration provision was unconscionable. Accordingly, it reversed. View "Bakersfield College v. Cal. Community College Athletic Assn." on Justia Law

Douglas Schoninger was interested in launching a professional rugby league in the United States. Toward that end, he formed PRO Rugby and approached the United States of America Rugby Football Union (“USAR”), the national governing body for rugby in the United States. PRO Rugby and USAR entered into the Sanction Agreement, which authorized PRO Rugby to establish a professional rugby league in the United States. At issue before the Colorado Supreme Court in this appeal was whether a nonsignatory to an arbitration agreement could be required to arbitrate under that agreement by virtue of the fact that it was a purported agent of a signatory to the agreement. Specifically, the Court was asked to decide whether the district court erred when it entered an order requiring petitioner Rugby International Marketing (“RIM”), a nonsignatory to a Professional Rugby Sanction Agreement (the “Sanction Agreement”), to arbitrate pursuant to an arbitration provision in that Agreement that covered the parties and their agents. The court found that because RIM was an agent for USAR, a signatory of the Sanction Agreement, RIM fell “squarely within the broad language of the arbitration provision.” The Supreme Court found that the weight of authority nationally established that, subject to a number of recognized exceptions, only parties to an agreement containing an arbitration provision could compel or be subject to arbitration. Here, because RIM was not a party to the Sanction Agreement and because respondents PRO Rugby and Schoninger had not established any of the recognized exceptions applied, the Supreme Court concluded the district court erred in determining that RIM was subject to arbitration under the Sanction Agreement. View "In re N.A. Rugby Union v. U.S. Rugby Football Union" on Justia Law

San Francisco Baseball Associates (the Giants) unsuccessfully moved to compel arbitration of the wage and hour claims of Melendez, a security guard employed at AT&T Park. Melendez argued that he and other security guards were employed “intermittingly” for specific assignments and were discharged “at the end of a homestand, at the end of a baseball season, at the end of an inter-season event like a fan fest, college football game, a concert, a series of shows, or other events,” and, under Labor Code section 201, were entitled to but did not receive immediate payment of their final wages upon each “discharge.” The Giants argued that immediate payment was not required because, under the terms of the collective bargaining agreement (CBA) between the Giants and the union, Melendez and all such security guards are not intermittent employees but are “year-round employees who remain employed with the Giants until they resign or are terminated pursuant to the CBA.” The Giants argued that the action is preempted by section 301 of the federal Labor Management Relations Act, 29 U.S.C. 185(a). The court of appeal affirmed, finding that the dispute is not within the scope of the CBA's arbitration provision but that arbitration is required by section 301. View "Melendez v. San Francisco Baseball Associates" on Justia Law

The NFLPA filed a complaint on behalf of Ezekiel Elliott, a running back for the Dallas Cowboys, seeking a preliminary injunction preventing enforcement of a forthcoming six game suspension by the NFL and NFL Management Council. The Commissioner of the NFL determined that domestic violence allegations were substantiated and that Elliott should be suspended for six games. An arbitrator issued a decision upholding the suspension on the same day the district court held a preliminary injunction hearing. The district court then enjoined the NFL from enforcing the suspension. The Fifth Circuit vacated the district court's preliminary injunction, holding that the district court lacked subject matter jurisdiction when it issued the preliminary injunction. In this case, when the NFLPA filed the complaint, the arbitrator had not yet issued his decision, and jurisdiction depends on the facts as they exist when the complaint was filed. Accordingly, the court remanded with instructions to dismiss the case. View "NFLPA v. NFL" on Justia Law