Justia Arbitration & Mediation Opinion SummariesArticles Posted in U.S. 9th Circuit Court of Appeals
Johnson v. ConsumerInfo.com, Inc.
Plaintiffs filed a putative class action alleging that Consumerinfo had violated various California consumer protection laws. At issue was whether the court had jurisdiction to hear appeals from district court orders staying judicial proceedings and compelling arbitration of the named plaintiffs' individual claims. The court concluded that the structure of the statute suggested that Congress intended to remove appellate jurisdiction from all orders listed in 9 U.S.C. 16(b)(1)-(4), regardless of whether any such order could otherwise be deemed collateral. The history of section 16 also demonstrated that Congress intended 28 U.S.C. 1292(b) to provide the sole avenue to immediate appeal of an order staying judicial proceedings and compelling arbitration. Therefore, the courts joined its sister circuits in concluding that section 1292(b) provided the sole route for immediate appeal of an order staying proceedings and compelling arbitration. Accordingly, the court dismissed plaintiffs' appeal. Alternatively, the court denied plaintiffs' petition for mandamus where the district court's well-reasoned decision was plainly not a usurpation of judicial power or a clear abuse of discretion. View "Johnson v. ConsumerInfo.com, Inc." on Justia Law
MediVas, LLC v. Marubeni Corp.
After MediVas defaulted on a loan, Marubeni foreclosed on promissory notes held by MediVas and threatened to foreclose on additional MediVas assets. MediVas and others filed suit against Marubeni in state court, raising numerous state law claims. Marubeni, invoking a contractual arbitration clause, removed the action to federal court and moved to compel arbitration and initiated arbitration against plaintiffs. At issue was whether an order compelling arbitration was appealable when the district court neither explicitly dismissed or explicitly stayed the action. The court held that such an order implicitly stayed the action and thus was not "a final decision with respect to an arbitration" under the Federal Arbitration Act, 9 U.S.C. 16(a)(3); the court adopted a rebuttable presumption that an order compelling arbitration but not explicitly dismissing the underlying claims stayed the action as to those claims pending the completion of the arbitration; and the court dismissed the appeal for lack of jurisdiction. View "MediVas, LLC v. Marubeni Corp." on Justia Law
In re: Wal-Mart
This appeal arose out of a protracted dispute over attorneys' fees awarded in the Wal-Mart wage and hour multidistrict litigation. Appellants, the Burton Group, appealed from the district court's confirmation of an arbitration award allocating attorneys' fees, contending that the district court erred in declining to vacate the award under section 10(a) of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a). The court concluded that a non-appealability clause in an arbitration agreement that eliminates all federal court review of arbitration awards, including review under section 10(a) of the FAA, was not enforceable. Accordingly, the court proceeded to the merits of the Burton Group's claims, and affirmed the district court's confirmation of the arbitration award in a memorandum disposition filed contemporaneously with this opinion. View "In re: Wal-Mart" on Justia Law
Lee v. Intelius Inc.
After plaintiff purchased a background check and report from Intelius on the Internet, plaintiff discovered that Adaptive, a separate company from Intelius, had been charging his credit card each month for a Family Safety Report. Plaintiff and others filed suit against Intelius in state court. Intelius then filed a third-party complaint against Adaptive. Adaptive filed a motion to compel arbitration of both Intelius's and plaintiff's claims. The court held that plaintiff did not enter into a contract with Adaptive to purchase the Family Safety Report, and did not enter into a contract with Adaptive to arbitrate. Therefore, the court affirmed the district court's denial of the motion to compel. The court remanded for further proceedings. View "Lee v. Intelius Inc." on Justia Law
Smith v. JEM Group, Inc.
Plaintiff filed a class action complaint against JEM, a "back-end" debt-relief company, and others, alleging breach of fiduciary duty, unjust enrichment, aiding and abetting, civil conspiracy, and breach of Washington consumer protection statutes. On appeal, JEM appealed from the district court's denial of its motion to compel arbitration. The court concluded that the district court correctly decided that it, rather than an arbitrator, should decide whether the arbitration clause in the attorney retainer agreement was unconscionable. The court also concluded that the district court properly decided, using non-preempted Washington law, that the arbitration clause was unenforceable. Accordingly, the court affirmed the judgment of the district court. View "Smith v. JEM Group, Inc." on Justia Law
Chavarria v. Ralphs
Plaintiff filed suit against Ralphs alleging violations of the California Labor Code and California Business and Professions Code 17200 et seq. On appeal, Ralphs challenged the district court's denial of its motion to compel arbitration. The court concluded that Ralphs' arbitration policy was unconscionable under California law. The court concluded that Ralphs' arbitration was procedurally unconscionable where, among other things, agreeing to Ralphs' policy was a condition of applying for employment and the terms were not disclosed to plaintiff until three weeks after she had agreed to be bound by it. In regards to substantive unconscionability, the court concluded, among other things, that Ralphs' terms required that the arbitrator impose significant costs on the employee up front, regardless of the merits of the employee's claims, and severely limited the authority of the arbitrator to allocate arbitration costs in the award. Further, the state law supporting such a conclusion was not preempted by the Federal Arbitration Act, 9 U.S.C. 2. Accordingly, the court affirmed and remanded for further proceedings. View "Chavarria v. Ralphs" on Justia Law
Ferguson, et al. v. Corinthian Colleges, Inc., et al.
Plaintiffs filed a putative class action suit on behalf of current and former students, alleging that Corinthian engaged in a deceptive scheme to entice the enrollment of prospective students in violation of California law. Corinthian moved to compel arbitration pursuant to arbitration clauses in plaintiffs' enrollment agreements. The court concluded that the Broughton-Cruz rule, which exempted claims for "public injunctive relief" from arbitration, was preempted by the Federal Arbitration Act (FAA), 9 U.S.C. 2. In the alternative, the court concluded that plaintiffs' claims were within the scope of their arbitration agreements and plaintiffs were required to arbitrate their public injunction claims. Accordingly, the court reversed the district court's order denying Corinthian's motion to compel arbitration and remanded. View "Ferguson, et al. v. Corinthian Colleges, Inc., et al." on Justia Law
Richards v. Ernst & Young, LLP
After the Supreme Court issued its decision in AT&T Mobility LLC v. Concepcion, Ernst & Young filed a motion to compel arbitration of state wage and hour claims asserted by its former employee. The district court denied the motion, concluding that Ernst & Young had waived its right to arbitration by failing to assert that right as a defense in an action brought by two other former employees. The court reversed, concluding that plaintiff had not established any prejudice as a result of Ernst & Young's alleged delay in asserting its arbitral rights. View "Richards v. Ernst & Young, LLP" on Justia Law
Lagstein v. Certain Underwriters
This appeal concerned the parties' dispute over an arbitration award to plaintiff. Plaintiff appealed the district court's ruling on interest and attorney's fees, and Lloyd's cross-appealed requesting return of an alleged overpayment to plaintiff from a fund which held that the award in escrow pending the outcome of litigation. The court concluded that the decision of the arbitrators did not foreclose the district court from awarding interests on the remaining portions of the arbitration award; plaintiff was entitled to post-award, pre-judgment interest pursuant to Nev. Rev. Stat. 17.130; to the extent the mandate must include instructions on pre-judgment interest to comply with Rule 37(b) of the Federal Rules of Appellate Procedure, the court reformed the mandate as such; plaintiff was entitled to collect post-judgment interest on his post-award, pre-judgment interest from the date of this opinion until the date Lloyd's pays the interest; plaintiff was entitled to attorney's fees pursuant to Nev. Rev. Stat. 689A.410(5); and the district court did not impermissibly overpay plaintiff when it released the funds from the escrow account and included interest on the contract damages through the date of payment. Accordingly, the court reversed and remanded in part and affirmed in part. View "Lagstein v. Certain Underwriters" on Justia Law
Murphy v. DirecTV, Inc.
Plaintiffs filed a putative consumer class action suit against DirecTV and Best Buy, alleging violations of California's consumer protection laws. The arbitration agreement at issue in this instance was a customer service agreement between DirecTV and individuals who believed they purchased DirecTV equipment from Best Buy stores. AT&T Mobility v. Concepcion held that Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, preempted the State of California's rule rendering unenforceable arbitration provisions in consumer contracts that waive collective or class action proceedings. The court concluded that the arbitration agreement in this case was enforceable under Concepcion and, therefore, the district court did not err in compelling plaintiffs to arbitrate their claims against DirecTV. The court concluded, however, that plaintiffs were not required to arbitrate their claims with Best Buy. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Murphy v. DirecTV, Inc." on Justia Law