Justia Arbitration & Mediation Opinion Summaries

Articles Posted in US Court of Appeals for the Eighth Circuit
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Three elderly individuals spent tens of thousands of dollars buying collectible coins, often priced far above market value, from Asset Marketing Services, LLC (“AMS”). They sued AMS for violating Minnesota law. AMS moved to stay the case and compel arbitration. The district court refused, and AMS appeals.   The Eighth Circuit reversed and remanded for trial on the extent to which the parties agreed to arbitrate. The court explained that the parties agree that Minnesota’s law applies. Under its law, contract formation requires an offer, acceptance, and consideration. In this case, there are genuine issues of material fact about whether and when the parties formed contracts that incorporated the arbitration agreement.   On appeal, AMS advances various new arguments against applying the Consent Order, including that it should be assessed by an arbitrator in the first instance, not a court. This Court declines to address these new arguments. In any event, Plaintiffs cannot enforce the Order because they lack standing to do so—an argument AMS did raise before the district court. View "William Ballou v. Asset Marketing Services, LLC" on Justia Law

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Plaintiffs, independent contractors of American Family Life Insurance Company of Columbus (Aflac), alleged that an Aflac employee, sexually assaulted Plaintiff in her hotel room during a work conference in St. Louis, Missouri. Plaintiffs filed suit against Defendant, asserting tort claims for battery, assault, false imprisonment, and loss of consortium, among others. the beneficiary under Plaintiffs’ Arbitration Agreements with Aflac. The district court denied the motion as to the aforementioned claims, holding that they did not arise under or relate in any way to the arbitration agreements. Defendant appealed, arguing that the claims fall within the scope of the arbitration agreements.   The Eighth Circuit affirmed. The court held that Plaintiffs’ tort claims do not fall within the scope of the Arbitration Agreements. The facts underlying Plaintiffs’ tort claims do not touch matters covered by Plaintiffs’ Arbitration Agreements in light of the Agreements’ limiting language requiring the “dispute arise under or relate in any way to the Associate’s Agreements. As a result, the district court did not err in denying Defendant’s motion to compel arbitration. View "Katherine Anderson v. Jeffrey Hansen" on Justia Law

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After disputes arose between a general contractor and two of its subcontractors, an arbitrator awarded the subcontractors money for the labor and material they had provided the general contractor along with associated costs, attorneys' fees, interest, and other sums. The general contractor declared bankruptcy before paying up, and the surety company that issued a bond guaranteeing the subcontractors would be paid tendered amounts representing only the part of the awards that compensated for labor and material (and some interest). But the subcontractors (or in one case, the subcontractor's assignee) wanted the whole of the awards and sued in federal court to get it.   The district court sided with the surety and granted it summary judgment. The Eighth Circuit reversed and remanded the district court’s decision granting summary judgment to the surety. The court held that the bond at issue obligates the surety to pay not only for labor and material but also for other related items to which Plaintiffs’ subcontracts entitle them (or their assignees). The court explained that the bond provided that if the subcontractors were not paid in full, which is the case here, they were entitled to sums "justly due," which included costs, attorneys' fees and interest. View "Owners Insurance Company v. Fidelity & Deposit Company" on Justia Law

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SUNZ Insurance Company (“SUNZ”) appealed from the denial of its motion to dismiss or, in the alternative, to compel arbitration of the crossclaims filed in a complex insurance dispute. SUNZ argued the district court lacked subject matter jurisdiction over the crossclaims between non-diverse parties in the underlying interpleader action and otherwise erred by denying arbitration.   The Eighth Circuit reversed and remanded the district court’s denial of Defendant’s motion to compel arbitration of the crossclaims. The court explained arbitration agreements are generally favored under federal law. Further, a court may not rule on the potential merits of the underlying claim that is assigned by contract to an arbitrator, even if it appears to be frivolous.Here, the Program Agreement sets forth the terms and conditions of the Policy and contains the disputed statements pertaining to collateral, costs, and fees. The Policy cannot be read without the Program Agreement, which explicitly controls the administration of the Policy and only becomes binding and enforceable after its execution. While the other party’s crossclaim alleges that SUNZ breached the Policy, it is the Program Agreement that drives the question of liability. And, under the Program Agreement, both parties agreed to submit to arbitration any disagreement regarding its terms. This is a challenge to the contract’s validity that, under Buckeye, shall be considered by an arbitrator, not a court. Thus, the district court erred when it denied SUNZ’s alternative motion to compel arbitration. View "SUNZ Insurance Company v. Butler American Holdings Inc." on Justia Law

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After a construction project fell through, Plaintiff sued Defendant. Defendant filed a motion to compel arbitration. At issue in this case is whether the party who signed the contract on behalf of Plaintiff had authority to do so. The district court concluded they did not and the Eighth Circuit affirmed.The Eighth Circuit found that the signing party neither had actual or apparent authority to sign the contract containing the arbitration agreement. Apparent authority is created by the conduct of the principal, not of the agent. View "GP3 II, LLC v. Litong Capital, LLC" on Justia Law

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The parties entered into a contract related to the construction of a bridge. Plaintiff filed a claim against Defendant including those of breach of contract, promissory estoppel, unjust enrichment, quantum meruit, and negligent misrepresentation. Based on an arbitration agreement, the parties presented their cases to an arbitrator, which found in Defendant's favor. The arbitrator awarded attorney's fees to Defendant.The district court reversed the arbitrator's award of attorney's fees, finding that the arbitrator exceeded his authority in awarding the fees.The Eighth Circuit reversed the district court's order reducing Defendant's arbitration award to exclude attorney's fees. The arbitration agreement at issue was not entirely clear on the attorney's fees issues, but Plaintiff cannot show that “the arbitrator based his decision on some body of thought, or feeling, or policy, or law that is outside the contract." View "Ind. Steel Construction, Inc. v. Lunda Construction Company" on Justia Law

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After RMC implemented new staffing grids for registered nurses at its acute-care hospital, the Union filed a grievance under the parties’ collective bargaining agreement (CBA) and later sought arbitration. The grievance alleged that “the hospital intends to displace bargaining unit (BU) RNs [with] supervisory RNs in the performance of BU work as expressed in the hospital’s staffing grids” that were implemented in June 2020 and that “removed RNs in the BU.” RMC refused to process the grievance, claiming that the CBA did not cover the Union’s allegations of wrongdoing. The Union filed suit, seeking to compel arbitration.The Eighth Circuit affirmed summary judgment in favor of the Union. The CBA defines “grievance” as “[a]n alleged breach of the terms and provisions of this Agreement,” sets forth the process for submitting grievances to RMC, and provides that if the grievance is not resolved by the parties, “the Union may advance the grievance to arbitration.” Article 38(1)(F) exempts from arbitration certain disputes. Because the grievance alleges displacement of bargaining unit nurses, which is covered by Article 3, and not issues related to nurse-to-patient staffing levels, which are covered by Article 38, Article 38(1)(F)’s arbitration exemption does not apply. View "National Nurses Organizing Committee-Missouri & Kansas v. Midwest Division-RMC, LLC" on Justia Law

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PSI filed suit seeking to enjoin an arbitration proceeding filed with FINRA. The district court found that the claimants in the underlying arbitration action were involved in joint business ventures with PSI's former registered representative, not securities transactions governed by FINRA, and thus there was no basis to compel PSI to participate in a FINRA arbitration proceeding.The Eighth Circuit affirmed the district court's grant of injunctive relief enjoining claimants from proceeding with arbitration. The court stated that FINRA's purpose is not to make a brokerage firm the insurer of failed business ventures. In this case, claimants, relying on their own knowledge and expertise, engaged in arms-length business transactions outside of a financial advisor's association with PSI that led purportedly to the loss of millions of dollars. The court concluded that claimants cannot compel arbitration under FINRA Rule 12200 because they have failed to demonstrate that they were the financial advisor's customers—that is, in a relationship with the financial advisor that was related directly to investment or brokerage services. View "Principal Securities, Inc. v. Agarwal" on Justia Law

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Plaintiff filed suit against IML in state court, alleging claims for breach of contract, promissory estoppel, unjust enrichment, equitable estoppel, and fraudulent misrepresentation. After removal to federal court, the district court found that there was a genuine dispute of material fact as to whether the parties had agreed to arbitrate and then denied IML's motion to compel arbitration.The Eighth Circuit remanded to the district court for a trial to determine whether an arbitration agreement exists. In this case, viewing the record in the light most favorable to plaintiff, the district court found that material facts remain in dispute as to whether the parties agreed to arbitrate. The court explained that the next step should have been to hold a trial pursuant to 9 U.S.C. 4. View "Duncan v. International Markets Live, Inc." on Justia Law

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The Eighth Circuit reversed the district court's ruling that an arbitration clause found in Walmart.com's terms of use was unenforceable against purchasers of gift cards. In this case, plaintiffs filed suit against Walmart after gift cards they purchased turned out to be worthless because third parties tampered with, and stole the funds on, the gift cards. Walmart sought to compel arbitration based on a notation on the back of the gift cards directing purchasers to see Walmart.com for complete terms.The court concluded, under the point-of-purchase theory, that the parties did not enter into a binding arbitration agreement at the moment plaintiffs purchased their gift cards because Walmart did not state that it wished to have the arbitration agreement bind the parties at the moment of purchase. Rather, the arbitration provision states that a customer accepts arbitration only by using or accessing the Walmart Sites. While the parties do not dispute that this case involves a browsewrap agreement, the court concluded that material disputes of fact exists on the question of whether the parties agreed to arbitration. The court explained that material disputes exist regarding whether plaintiffs used the website, whether the design of the website was sufficient to give a reasonable browser notice of the arbitration, and whether the language on the card was sufficient to put the buyer on notice. Accordingly, the court remanded for further proceedings. View "Foster v. Walmart, Inc." on Justia Law