Justia Arbitration & Mediation Opinion Summaries

In 2017, the Brotherhood of Railroad Signalmen (the Union) initiated proceedings against the National Railroad Passenger Corporation (Amtrak) in federal district court. The Union contested Amtrak’s refusal to use Union-represented signalmen in a newly acquired building. The district court sent the case to mandatory arbitration under the Railway Labor Act (RLA). The National Railroad Adjustment Board (the Board) dismissed the claim, stating it lacked jurisdiction because the Union was seeking relief based on hypothetical facts.The district court vacated the Board’s award and remanded for further proceedings, holding that the Board did not consider or interpret the parties’ agreement. Amtrak appealed, arguing that the award should be upheld under the highly deferential judicial standard of review because it was at least arguably based on rail industry common law and Rule 56 of the collective bargaining agreement.The United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s decision. The court found that the Board’s award should be vacated because it did not decide the dispute based on the parties’ contract. Instead, the Board relied on legal principles governing federal courts’ subject-matter jurisdiction, which are outside the scope of the Board’s authority. The court emphasized that the Board must interpret the contract and cannot base its decisions on external legal principles unrelated to the contract. The case was remanded to the district court with instructions to remand to the National Railroad Adjustment Board for proceedings consistent with the opinion. View "Brotherhood of Railroad Signalmen v. National Railroad Passenger Corporation" on Justia Law

A collection of Dutch and Luxembourgish energy companies invested in solar power projects in Spain, relying on promised economic subsidies. Following the 2008 financial crisis, Spain withdrew these subsidies, prompting the companies to challenge Spain's actions through arbitration under the Energy Charter Treaty (ECT). The companies won multi-million-euro awards in arbitration. However, the European Union argued that the ECT's arbitration provision does not apply to disputes between EU Member States, rendering the awards invalid under EU law. The companies sought to enforce the awards in the United States, invoking the ICSID Convention and the New York Convention.The United States District Court for the District of Columbia reviewed the cases. In NextEra Energy Global Holdings B.V. v. Kingdom of Spain and 9REN Holding S.A.R.L. v. Kingdom of Spain, the court held it had jurisdiction under the Foreign Sovereign Immunities Act (FSIA) arbitration exception and denied Spain's motion to dismiss. The court also granted anti-anti-suit injunctions to prevent Spain from seeking anti-suit relief in foreign courts. Conversely, in Blasket Renewable Investments LLC v. Kingdom of Spain, the district court found Spain immune under the FSIA and dismissed the case, denying the requested injunction as moot.The United States Court of Appeals for the District of Columbia Circuit reviewed the cases. The court held that the district courts have jurisdiction under the FSIA’s arbitration exception to confirm the arbitration awards against Spain. However, it found that the district court in NextEra and 9REN abused its discretion by enjoining Spain from pursuing anti-suit relief in Dutch and Luxembourgish courts. The appellate court affirmed in part and reversed in part in NextEra, reversed in 9REN and Blasket, and remanded for further proceedings. View "NextEra Energy Global Holdings B.V. v. Kingdom of Spain" on Justia Law

In 2001, China and Nigeria signed a bilateral investment treaty to encourage investment between the two countries, agreeing to treat each other's investors fairly and protect their investments. Zhongshan Fucheng Industrial Investment, a Chinese company, invested in Nigeria by participating in a joint venture with Ogun State to develop a free-trade zone. After years of development and significant investment, Ogun State abruptly terminated its relationship with Zhongshan, and Nigerian federal authorities expelled the company's executives. Zhongshan initiated arbitration proceedings, and an arbitrator found that Nigeria had breached its obligations under the treaty, awarding Zhongshan over $55 million in damages.The United States District Court for the District of Columbia held that it had jurisdiction over the case, finding that the Foreign Sovereign Immunities Act’s (FSIA) arbitration exception applied because the award was governed by the New York Convention, an international arbitration treaty. Nigeria appealed, arguing that it was immune from suit under the FSIA.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the FSIA’s arbitration exception applied because the arbitration award arose from a legal relationship considered commercial, governed by the New York Convention. The court found that Nigeria had an arbitration agreement with Zhongshan, an arbitration award was issued, and the award was governed by the New York Convention. The court rejected Nigeria's argument that the New York Convention only applies to private acts, holding that the treaty covers arbitral awards arising from sovereign acts when a state consents to arbitration. Thus, the court affirmed the district court's jurisdiction and the enforceability of the arbitration award. View "Zhongshan Fucheng Industrial Investment Co. Ltd v. Federal Republic of Nigeria" on Justia Law

A member of the United Mine Workers of America arbitrated a dispute against Consol Energy, Inc. and won. The Union then sued to confirm the arbitration award, while Consol and its subsidiaries counterclaimed to vacate the award. The Union argued that the subsidiaries could not unilaterally reduce health benefits promised to miners for life, even if they no longer mined coal. Consol, which served as the health-plan administrator, had sent a letter indicating potential changes to benefits after the agreement expired, prompting the arbitration.The United States District Court for the District of Columbia dismissed the Union’s claim for lack of standing, reasoning that the Union was not injured as Consol had not actually modified the benefits. The court also declined to vacate the arbitration award on the merits of the Subsidiaries’ counterclaim. Both parties appealed the decision.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court found that the Union’s claim did not fall under § 301(a) of the Labor Management Relations Act, which only authorizes suits for actual violations of contracts, not anticipated future violations. Consequently, the Union’s claim was dismissed for lack of subject-matter jurisdiction. Regarding the Subsidiaries’ counterclaim, the court determined that the Subsidiaries lacked standing as they were not named in the arbitration award and had not shown a concrete and imminent injury. The court vacated the district court’s orders on the Subsidiaries’ counterclaim and remanded it with instructions to dismiss for lack of standing.Thus, the appellate court affirmed the dismissal of the Union’s claim and vacated and remanded the Subsidiaries’ counterclaim for dismissal due to lack of standing. View "International Union, United Mine Workers of America v. Consol Energy Inc." on Justia Law

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

In this case, a private insurance company, TIG Insurance Company, sought to enforce two judgments against the Republic of Argentina. The dispute centers on whether Argentina, as the successor to a state-owned Argentine company, Caja Nacional de Ahorro y Seguro, is liable under reinsurance contracts that Caja entered into with TIG in 1979. TIG alleged that Caja failed to pay as promised under these contracts, leading to arbitral awards and subsequent judgments in TIG's favor.The United States District Court for the District of Columbia initially ruled in favor of Argentina, finding that Argentina's property was immune from execution under the Foreign Sovereign Immunities Act (FSIA) because it was not used for commercial activity at the time the writ would issue. The court also held that the Illinois district court lacked jurisdiction over Argentina for the 2018 judgment and that TIG needed to amend the 2001 judgment in Illinois to name Argentina before seeking enforcement in D.C. TIG appealed these decisions.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and concluded that two FSIA exceptions—the arbitration and waiver exceptions—might apply. The court held that an agreement could be "made by" a sovereign if it legally binds that sovereign to arbitrate, even if the sovereign was not an original signatory. The court also found that implied waiver does not require evidence of subjective intent but can be based on objective actions, such as agreeing to arbitration or a choice-of-law clause. The court vacated the district court's decisions and remanded for further analysis and factfinding on these issues.The appellate court affirmed the denial of TIG's request for jurisdictional discovery and precluded TIG from advancing an alter ego theory or arguing that Argentina failed to raise its immunity in a responsive pleading. The case was remanded for further proceedings consistent with the appellate court's instructions. View "TIG Insurance Company v. Republic of Argentina" on Justia Law

In a dispute between the Republic of Djibouti and Doraleh Container Terminal (Doraleh), Doraleh secured a $474 million arbitral award against Djibouti. Djibouti then nationalized a majority interest in Doraleh and appointed a provisional administrator, Chantal Tadoral, to manage the company. Quinn Emanuel, a law firm, sought to enforce the arbitral award in the U.S. District Court for the District of Columbia, claiming to represent Doraleh. However, Tadoral stated she did not authorize the filing, and Djibouti requested the case be dismissed.The District Court for the District of Columbia entered judgment for Doraleh, holding that Quinn Emanuel’s authority was irrelevant or, alternatively, that Djibouti had forfeited the issue by not raising it during arbitration. Djibouti appealed, arguing that the district court erred by not determining whether Quinn Emanuel had the authority to represent Doraleh.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and disagreed with the district court. The appellate court held that Quinn Emanuel’s authority is relevant and that the issue of a lawyer’s authority can be challenged at any point in litigation. The court found that Djibouti presented substantial evidence questioning Quinn Emanuel’s authority, which required the district court to determine whether the law firm had the authority to file the suit. Consequently, the appellate court vacated the judgment and remanded the case to the district court to determine Quinn Emanuel’s authority to represent Doraleh. View "Doraleh Container Terminal SA v. Republic of Djibouti" on Justia Law

The case involves the Federal Education Association Stateside Region (FEA-SR), a teachers' union, and the Federal Labor Relations Authority (FLRA). The parties were negotiating a new collective bargaining agreement (CBA) when they reached an impasse. The Federal Service Impasses Panel (FSIP) was called in to resolve the remaining issues. The FSIP issued an order resolving the impasse, but FEA-SR refused to sign the agreement, arguing that the FSIP lacked jurisdiction to resolve certain issues. FEA-SR filed an arbitral grievance claiming that the Department of Defense's submission of the agreement for agency head review without FEA-SR's signature violated the contractual ground rules and constituted bad faith bargaining.The arbitrator found in favor of FEA-SR, concluding that the Department of Defense had committed unfair labor practices by cutting negotiations short and submitting an unexecuted agreement for agency head review. The FLRA, however, set aside the arbitrator's award, finding that the arbitrator could not review whether the FSIP had jurisdiction over the disputed issues and that the agreement was "executed" when the FSIP issued its order.FEA-SR petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the FLRA's decisions. The court held that it had jurisdiction to review the petition because the FLRA's decisions involved an unfair labor practice. However, on the merits, the court rejected FEA-SR's claims and denied the petition for review. The court agreed with the FLRA that the arbitrator lacked authority to review the FSIP order and that the agreement was executed when the FSIP issued its order. View "Federal Education Association Stateside Region v. FLRA" on Justia Law

The case involves the Government of Romania's appeal against three judgments that confirmed an international arbitral award. The dispute originated from Romania's adoption of tax incentives to encourage investment in certain economically "disfavored" regions of the country. The Micula brothers and associated entities built food production facilities in Romania relying on these incentives. However, Romania repealed most of the tax incentives in 2005 in preparation to join the EU, leading the Miculas to file for arbitration in 2005.The district court confirmed the award in 2019 and entered judgment for $356,439,727, net of payments made and with interest. Romania challenged the subject matter jurisdiction, arguing that the arbitration clause in the Sweden-Romania BIT was void as of Romania’s 2007 accession because EU law prohibits intra-EU agreements to arbitrate EU law disputes between a member state and the citizens of another member state. The district court ruled EU law was inapplicable because the parties’ dispute predated Romania’s EU membership and the award did not “relate to the interpretation or application of EU law.”In 2022, Romania sought relief from the 2019 Confirmation, and ensuing sanctions, arguing that two decisions of the EU’s highest court in 2022 held that “the agreement to arbitrate in the [Sweden-Romania] BIT was void the moment that Romania entered the EU.” The district court denied the motion, concluding that the CJEU Decisions did not hold Romania’s accession retroactively voided its pre-EU consent to arbitrate.The United States Court of Appeals for the District of Columbia Circuit affirmed the district court's denial of Romania's Rule 60(b) motion for relief from judgment. The court held that the district court's jurisdictional analysis was not premised on the "interpretation and application of EU law." Rather, the district court independently found the requisite "jurisdictional fact" under the arbitration exception of an agreement to arbitrate with the Miculas. The court also found that the 2022 CJEU decisions did not support the interpretation that Romania’s 2007 accession to the EU retroactively rendered the preexisting agreement to arbitrate with Swedish investors “void ab initio.” View "Micula v. Government of Romania" on Justia Law

In 2002, the Department of Housing and Urban Development (HUD) advertised job openings with a promotion potential to grade thirteen, while existing employees in comparable positions could only be promoted to grade twelve. The American Federation of Government Employees, National Council of HUD Locals Council 222, AFL-CIO, representing the existing employees, filed a grievance arguing that this violated their collective bargaining agreement with HUD. The grievance proceeded to arbitration.The Federal Labor Relations Authority (FLRA) initially declined to resolve the jurisdictional issue of whether the grievance involved classification, which is generally non-arbitrable, or reassignment, which could be resolved in arbitration. The arbitrator determined that the grievance was arbitrable and found that HUD had violated the collective bargaining agreement. The FLRA agreed with HUD's exceptions that the arbitrator's remedy required reclassification and therefore violated the Federal Service Labor-Management Relations Statute (FSLMRS). The FLRA vacated the arbitrator’s remedial award and remanded for an alternative remedy.In 2018, the FLRA held that the grievance concerned classification and that the arbitrator had always lacked jurisdiction over the grievance. The FLRA vacated all of the arbitrator’s pronouncements and its own prior decisions. The union then filed a complaint in district court claiming that the FLRA’s decision was “ultra vires.” The district court rejected the union’s Administrative Procedure Act claim but denied the FLRA’s motion to dismiss the entire complaint for lack of subject matter jurisdiction. The court later granted the union’s motion for summary judgment.On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the district court lacked jurisdiction to review the FLRA's decision. The court found that the Federal Service Labor-Management Relations Statute (FSLMRS) clearly precluded judicial review of FLRA arbitration decisions in both the courts of appeals and the district courts. The court also held that the FLRA did not violate a clear statutory prohibition by vacating the arbitrator's award and its own prior decisions. The court vacated the district court's orders and instructed it to dismiss the complaint. View "American Federation of Government Employees v. FLRA" on Justia Law