Justia Arbitration & Mediation Opinion Summaries

Crispin Torres, a former employee of the Department of Homeland Security's Immigration and Customs Enforcement (ICE), appealed an arbitration decision which upheld his removal from the agency for unauthorized travel and falsification of certified records. The United States Court of Appeals for the Federal Circuit found that the arbitrator did not provide substantial evidence for concluding that two key factors, consistency of penalty with similar offenses (Douglas factor 6) and potential for rehabilitation (Douglas factor 10), weighed in favor of Mr. Torres' removal. The court found that the arbitrator failed to fully consider comparator cases where similar misconduct by other ICE law enforcement officers resulted in suspension rather than removal, and did not adequately explain why Mr. Torres had no potential for rehabilitation. The court vacated the arbitrator's decision and remanded the case for further proceedings consistent with its opinion. View "TORRES v. DHS " on Justia Law

Defendant Klarna, Inc. ("Klarna") provides a "buy now, pay later" service that allows shoppers to buy a product and pay for it in four equal installments over time without incurring any interest or fees. Plaintiff paid for two online purchases using Klarna. Plaintiff incurred $70 in overdraft fees. Plaintiff brought this action on behalf of herself and a class of similarly situated consumers, alleging that Klarna misrepresents and conceals the risk of bank-overdraft fees that consumers face when using its pay-over-time service and asserting claims for common-law fraud and violations of the Connecticut Unfair Trade Practice Act ("CUTPA"). Klarna moved to compel arbitration. The district court denied Klarna's motion.   The Second Circuit reversed he district court's order and remanded with instructions to grant Klarna's motion to compel arbitration. The court explained that when Plaintiff arrived at the Klarna Widget, she knew well that purchasing the GameStop item with Klarna meant that she was entering into a continuing relationship with Klarna, one that would endure at least until she repaid all four installments. The Klarna Widget provided clear notice that there were terms that would govern this continuing relationship. A reasonable internet user, therefore, would understand that finalizing the GameStop transaction, entering into a forward-looking relationship with Klarna, and receiving the benefit of Klarna's service would constitute assent to those terms. The court explained that Plaintiff was on inquiry notice that her "agreement to the payment terms," necessarily encompassed more than the information provided on the Klarna Widget, and the burden was then on her to find out to what terms she was accepting. View "Najah Edmundson v. Klarna Inc." on Justia Law

Housing Authority of the City of Calexico (the Housing Authority) and AMG & Associates, LLC (collectively, the plaintiffs) appealed a superior court confirming an arbitration award, declining to undertake a review of the award on the merits for errors of fact or law (review on the merits) and declining to grant their petition to partially reverse or vacate the award. They contended the superior court should have undertaken a review on the merits because the parties had agreed to such a review. They further contended that, had the superior court undertaken such a review, it would have concluded that no substantial evidence supported the award and that the award was contrary to law. Additionally, plaintiffs contended that, in denying their motion to partially reverse or vacate the award, the superior court left in place a finding by the arbitrator that not only exceeded the arbitrator’s powers but worked as a forfeiture against the Housing Authority. After review, the Court of Appeal concluded the superior court erred in declining to undertake a review on the merits. "[I]n instances in which the parties have agreed that an arbitration award may be subjected to judicial review, it is the superior court and not the Court of Appeal that has original jurisdiction to undertake that review in the first instance, that the superior court is without power to yield that original jurisdiction to the Court of Appeal, and that the superior court should thus have performed the review." View "Housing Auth City of Calexico v. Multi-Housing Tax Credit Partners" on Justia Law

The United States (“the Government”) initiated a civil forfeiture suit in federal district court against a $380 million arbitration award fund, the majority of which is held in the United Kingdom. The fund belongs to PetroSaudi Oil Services (Venezuela) Ltd. (“PetroSaudi”), a private oil company incorporated in Barbados. PetroSaudi won the award in an arbitration proceeding against Petróleos de Venezuela, S.A. (“PDVSA”), a Venezuelan state energy company. The portion of the fund held in the United Kingdom (“the fund”) is held in an account controlled by the High Court of England and Wales (“the High Court”). The Government seeks forfeiture of the fund on the ground that it derives from proceeds of an illegal scheme to steal one billion dollars from the Malaysian sovereign wealth fund 1Malaysia Development Berhad (“1MDB”). PetroSaudi challenged two orders entered by the district court.   The Ninth Circuit affirmed the district court’s interlocutory orders. The panel held that PetroSaudi’s appeal from the district court’s protective order under 18 U.S.C. Section 983 fell within this exception. Accordingly, the court had jurisdiction to consider the appeals of the two orders. The panel concluded that the sovereign immunity of the United Kingdom, as codified in the FSIA, did not protect the arbitration award fund from the two orders issued by the district court. The panel held that because the district court had in rem jurisdiction over the fund, it did not need in personam jurisdiction over PetroSaudi to issue an order preserving the fund. View "USA V. PETROSAUDI OIL SERV. (VENEZUELA) LTD., ET AL" on Justia Law

Plaintiff City of Portsmouth, New Hampshire Police Commission/Police Department (the City) appealed a superior court's denial of the City’s request to modify, correct, or vacate an arbitrator’s award of backpay to Aaron Goodwin, a police officer who was previously employed by the City and who was a member of defendant Portsmouth Ranking Officers Association, NEPBA, Local 220 (the Union). The arbitration arose from a grievance filed by the Union challenging Goodwin’s termination. The arbitrator found that the City wrongfully terminated Goodwin and awarded him approximately twenty-six months of backpay. The superior court confirmed the arbitrator’s termination decision and backpay award. On appeal, the City argued the arbitrator committed plain mistake because she failed to correctly apply the after-acquired-evidence doctrine in determining the amount of the backpay award. Because the New Hampshire Supreme Court agreed with the City that the arbitrator committed a plain mistake of law in reaching the backpay award, it reversed in part, vacated the superior court’s confirmation of the arbitrator’s award, and remanded. View "City of Portsmouth Police Commission/Department v. Portsmouth Ranking Officers Association, NEPBA, Local 220" on Justia Law

Bachman Farms grows apples in Ohio and protected its 2017 crop with federally reinsured crop insurance from Producers Agriculture. When farmers and private insurers enter a federally reinsured crop insurance contract, they agree to common terms set by the Federal Crop Insurance Corporation (FCIC), including a requirement that the parties arbitrate coverage disputes. In those proceedings, the arbitrator must defer to agency interpretations of the common policy. Failure to do so results in the nullification of the arbitration award. Bachman lost at its arbitration with Producers Agriculture and alleged that the arbitrator engaged in impermissible policy interpretation. Bachman petitioned to nullify the arbitration award.The Sixth Circuit affirmed the dismissal of the suit. The petition to nullify did not comply with the substance or the three-month time limit of the Federal Arbitration Act (FAA), 9 U.S.C. 12. When a dispute concerning federally reinsured crop insurance involves a policy or procedure interpretation, the parties “must obtain an interpretation from FCIC.” Bachman did not seek an interpretation from FCIC but went directly to federal court to seek nullification under the common policy and its accompanying regulations—an administrative remedy—rather than vacatur under the FAA. View "Bachman Sunny Hill Fruit Farms v. Producers Agriculture Insurance Co." on Justia Law

LAD-T, LLC, dba Toyota of Downtown Los Angeles (LAD-T), and its parent company Lithia Motors Inc. (Lithia; collectively, Defendants) appeal from an order denying their motion to compel arbitration of Plaintiff’s claims brought under the California Fair Employment and Housing Act (FEHA). Defendants contend the trial court erred in finding Business and Professions Code section 17918 barred them from enforcing an arbitration agreement made in the name of an unregistered fictitious business, DT Los Angeles Toyota.   The Second Appellate District vacated the order denying Defendants’ motion to compel arbitration remanded for the trial court to address whether Defendants have waived their right to compel arbitration. The court ruled that if the trial court finds waiver, it should again deny the motion to compel arbitration; if it finds no waiver, it should grant the motion. The court explained that it agrees with Plaintiff that Defendants failed to act diligently in filing their fictitious business name statement. Accordingly, in the interests of justice the court vacated the court’s order denying the motion to compel arbitration and direct the court to again consider the motion to compel arbitration limited to the narrow issue of whether Defendants have waived their right to compel arbitration by their delay in filing the fictitious business name statement. View "Villareal v. LAD-T, LLC" on Justia Law

Cisco Systems, Inc. hired “John Doe” in September 2015 to work as an engineer. Doe was required to sign an arbitration agreement as a condition of his employment. Under the agreement, Cisco and Doe had to arbitrate “all disputes or claims arising from or relating to” Doe’s employment, including claims of discrimination, retaliation, and harassment. Several years after signing the agreement, Doe filed a complaint with the California Department of Fair Employment and Housing, alleging Cisco discriminated against him because of ancestry or race. He reported that two supervisors denied him opportunities and disparaged him because, under the traditional caste system of India, he was from the lowest caste and they are from the highest. Doe also accused Cisco of retaliating when he complained about being treated unfavorably because of his caste. The Department notified Cisco of Doe’s complaint, investigated it, and decided it had merit. Attempts at informal resolution were unsuccessful. The Department then filed a lawsuit against Cisco and the two supervisors. The Department alleged five causes of action alleging multiple violations of FEHA, and sought a permanent injunction preventing Cisco from committing further violations, and mandatory injunctive relief requiring Cisco to institute policies to prevent employment discrimination. The complaint also requested an order that Cisco compensate Doe for past and future economic losses. Cisco moved to compel arbitration pursuant to the agreement Doe signed. The trial court denied the motion. On appeal, Cisco argued the Department was bound by the terms of Doe’s arbitration agreement. The Court of Appeal affirmed, finding the Department acts independently when it exercises the power to sue for FEHA violations. “As an independent party, the Department cannot be compelled to arbitrate under an agreement it has not entered.” View "Dept. of Fair Employment and Housing v. Cisco Systems, Inc." on Justia Law

The San Diego City Attorney brought an enforcement action under the Unfair Competition Law, Business and Professions Code sections 17200, et seq. (UCL), on behalf of the State of California against Maplebear Inc. DBA Instacart (Instacart). In their complaint, the State alleged Instacart unlawfully misclassified its employees as independent contractors in order to deny workers employee protections, harming its alleged employees and the public at large through a loss of significant payroll tax revenue, and giving Instacart an unfair advantage against its competitors. In response to the complaint, Instacart brought a motion to compel arbitration of a portion of the City’s action based on its agreements with the individuals it hires ("Shoppers"). The trial court denied the motion, concluding Instacart failed to meet its burden to show a valid agreement to arbitrate between it and the State. Instacart challenged the trial court’s order, arguing that even though the State was not a party to its Shopper agreements, they were bound by its arbitration provision to the extent they seek injunctive relief and restitution because these remedies were “primarily for the benefit of” the Shoppers. The Court of Appeal rejected this argument and affirmed the trial court’s order. View "California v. Maplebear Inc." on Justia Law

The Supreme Court affirmed the decision of the court of appeals holding that decisions made under Minn. Stat. 43A.33 are quasi-judicial administrative decisions subject to certiorari review by the court but reversed its holding that the Bureau of Mediation Services was a proper party to the appeal, holding that the Bureau was not a proper party to the certiorari appeal.When the Minnesota Department of Corrections sought certiorari review of an arbitrator's decision granting Appellant's appeal from the discharge of his employment at the Minnesota Department of Corrections, Appellant challenged the court of appeals' jurisdiction to hear the appeal, arguing that review must be undertaken by the district court. The court of appeals upheld the arbitrator's decision. The Supreme Court affirmed in part and reversed in part, holding (1) Appellant and the Department were not parties to an arbitration agreement that invoked the judicial review procedures of the Uniform Arbitration Act; (2) the decision of an arbitrator appointed according to section 43A.33 is a quasi-judicial determination of an inferior tribunal reviewable via writ of certiorari at the court of appeals; and (3) the Bureau was not a proper party to this appeal because it had no legal or equitable interest in the outcome. View "Minn. Department of Corrections v. Knutson" on Justia Law