Justia Arbitration & Mediation Opinion SummariesArticles Posted in US Court of Appeals for the Eleventh Circuit
Positano Place at Naples I Condominium Association, Inc. v. Empire Indemnity Insurance Company
Empire Indemnity Insurance Company issued an insurance policy (the “Policy”) to Positano Place at Naples I Condominium Association, Inc., for coverage of five buildings that Positano owns in Naples, Florida. Following Hurricane Irma, Positano filed a first-party claim for property insurance benefits under the Policy, claiming that Hurricane Irma damaged its property and that the damage was covered by the Policy. Empire determined that there was coverage to only three of the five buildings covered by the Policy but disagreed as to the amount of the loss. Positano sought to invoke appraisal based on the Policy’s appraisal provision. Positano then sued Empire in Florida state court, and Empire removed the case to federal court based on diversity jurisdiction. Positano moved to compel appraisal and to stay the case pending the resolution of the appraisal proceedings, which Empire opposed. The magistrate judge issued a report recommending that the district court grant Positano’s motion, and, over Empire’s objection, the district court ordered the parties to appraisal and stayed the proceedings pending appraisal. Empire timely appealed the district court’s order. The Eleventh Circuit dismissed the appeal for lack of appellate jurisdiction. The court concluded that the district court’s order compelling appraisal and staying the proceedings pending appraisal is an interlocutory order that is not immediately appealable under 28 U.S.C. Section 1292(a)(1). The court also concluded that the order compelling appraisal and staying the action pending appraisal is not immediately appealable under the Federal Arbitration Act (“FAA”). View "Positano Place at Naples I Condominium Association, Inc. v. Empire Indemnity Insurance Company" on Justia Law
International Brotherhood of Teamsters Local 947 v. National Labor Relations Board
After being fired by his employer, Anheuser-Busch Companies, LLC, Intervenor filed suit in federal district court, alleging that his termination reflected racial discrimination and retaliation in violation of Title VII. Anheuser-Busch filed a motion seeking to compel arbitration of Intervenor’s district court claims, asserting that at the time when he was hired, Intervenor had agreed to be bound by the company’s Dispute Resolution Policy. Intervenor disagreed that he was required to arbitrate his claims. After Anheuser-Busch asked the district court to compel arbitration, Intervenor filed an unfair labor practice charge with the NLRB, arguing that Defendant’s efforts to enforce its arbitration agreement contravened the collective bargaining agreement and constituted a unilateral change to the terms of Intervenor’s employment, in violation of the National Labor Relations Act (“NLRA”). The Eleventh Circuit granted the petition for review of the Board’s order dismissing the complaint, vacated the decision of the Board, and remanded for consideration of whether enforcement of the Dispute Resolution Policy against Intervenor would violate the NLRA. The court held that the Board applied an erroneously narrow standard for determining whether Anheuser-Busch’s motion had an illegal objective. The court explained that on remand, the Board should instead determine whether the outcome sought by Anheuser-Busch’s motion— the compelled arbitration of Brown’s Title VII claims under the Dispute Resolution Policy—would violate the NLRA. If the Board decides that the answer to that question is “yes,” it should then order all relief that is appropriate based on Anheuser-Busch’s unlawful conduct. View "International Brotherhood of Teamsters Local 947 v. National Labor Relations Board" on Justia Law
Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A.
This case arose from a dispute between two Guatemalan companies, Corporación AIC, S.A., and Hidroeléctrica Santa Rita, S.A. Pursuant to a contract signed in March of 2012, Corporación AIC agreed to build a new hydroelectric power plant for Hidroeléctrica in Guatemala. Hidroeléctrica issued a force majeure notice that forced Corporación AIC to stop work on the project. Hidroeléctrica filed an arbitration proceeding in the International Court of Arbitration to recover advance payments it had made to Corporación AIC, and the latter counterclaimed for damages, costs, and other expenses. An arbitral panel ordered Corporación AIC to return some portion in advance payments but allowed it to keep what it had earned on the contract. Corporación AIC filed suit in federal court seeking to vacate the award.The Eleventh Circuit vacated the judgment in favor of Hidroeléctrica and remanded for the district court to consider Corporación AIC’s Section 10(a)(4) contention. The court held that the district court correctly followed Industrial Risk and Inversiones, which constituted binding precedent at the time and declined to address Corporación AIC’s argument that the arbitral award should be vacated because the panel exceeded its powers under 9 U.S.C. Section 10(a)(4). View "Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A." on Justia Law
Tecnicas Reunidas De Talara S.A.C. v. SSK Ingenieria Y Construccion S.A.C.
Técnicas Reunidas de Talara S.A.C., a Peruvian corporation, subcontracted with SSK Ingeniería y Construcción S.A.C., another Peruvian corporation, to provide electromechanical work on the refinery project. In response to a contract dispute, the arbitral panel issued a $40 million award to SSK. During the arbitration, two of Técnicas's attorneys withdrew and joined the opposing party’s law firm. More than a month later Técnicas objected in the International Court of Arbitration to alleged conflicts of interest held by the arbitrators, but its objection made no mention of the attorney side switching. The district court agreed with Técnicas that a public policy against attorney side-switching exists in the United States but concluded that the public policy was not contravened in this case because there was no actual prejudice and Técnicas waived its objection. At issue on appeal concerns whether a party to an international arbitration can obtain a vacatur of an adverse arbitral award because two of its attorneys withdrew and joined the opposing party’s law firm during the arbitral proceedings. The Eleventh Circuit affirmed the judgment. The court explained that Técnicas waived its right to complain. The court explained thatTécnicas, the losing party in the arbitration, had knowledge of the attorney side-switching but did not object until Técnicas received an adverse award more than a year later, The court wrote that its conclusion is consistent with the well-settled principle “that a party may not sit idle through an arbitration procedure and then collaterally attack that procedure on grounds not raised . . . when the result turns out to be adverse.” View "Tecnicas Reunidas De Talara S.A.C. v. SSK Ingenieria Y Construccion S.A.C." on Justia Law
Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A.
Corporacion AIC, SA (“AICSA”) and Hidroelectrica Santa Rita S.A. (“HSR”), signed a contract for the construction of a hydroelectric power plant in Guatemala. Under the contract, AICSA was responsible for creating a new power plant for HSR. However, AICSA had to discontinue the project because HSR issued a force majeure notice. HSR sought reimbursement for the advance payments it had made to AICSA and ultimately commenced arbitration proceedings. AICSA sought dismissal of HSR’s claims, counterclaimed and sought to enjoin a subcontractor. A split, three-member arbitration panel denied AICSA’s request to join the subcontractor to the arbitration and ruled for HSR on the merits claims. The district court denied AICSA’s petition seeking to vacate the arbitral award on the basis that the arbitration panel had exceeded its powers. It said that Eleventh Circuit precedent foreclosed AICSA’s claim that a party to a New York Convention arbitration could challenge an arbitration panel’s decision on the exceeding powers ground. The Eleventh Circuit noted that the Circuit is out of line with Supreme Court precedent, however, the court affirmed the district court’s determination. On appeal the relevant questions were whether: (1) an arbitration panel exceeded its powers in a non-domestic arbitration under the New York Convention? And if so, (2) did the arbitration panel in this case indeed exceed its powers. The court held it was compelled to say, under Inversiones, that it may not vacate the arbitration award in this case on the exceeding powers ground. Consequently, the court could not the reach the merits of whether vacatur would be appropriate in the case. View "Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A." on Justia Law
William Attix v. Carrington Mortgage Services, LLC
Plaintiff sued his mortgage service asserting claims under the Fair Debt Collection Practices Act and Florida law. Plaintiff’s claims arose from a mortgage payment he made to Defendant using an automated pay-by-phone service provided by a third-party payment service provider. Before making his mortgage payment, Plaintiff agreed to be bound by the service’s terms and conditions. Those terms and conditions provided that “any dispute arising from” Plaintiff’s use of the service “shall be” arbitrated. They also provided that an “arbitrator shall also decide what is subject to arbitration unless prohibited by law,” and incorporated by reference an arbitration provision of the American Arbitration Association. The district court denied Defendant’s motion to compel arbitration and ruled that the Dodd-Frank Act prohibited enforcement of the parties’ arbitration agreement. The Eleventh Circuit reversed and remanded the district court’s ruling with instructions to compel arbitration. The court explained that in the terms and conditions governing Plaintiff’s use of the service, Plaintiff and Defendant clearly and unmistakably agreed that an arbitrator would decide all threshold questions about the arbitrability of Plaintiff’s claims, including whether their arbitration agreement is enforceable. Plaintiff has not specifically challenged the enforceability of the parties’ agreement to arbitrate threshold questions about the arbitrability of his claims. Plaintiff’s Dodd-Frank Act challenge related only to the enforceability of the parties’ separate agreement to arbitrate the merits of his claims, and the parties have agreed to submit questions about the enforceability of that agreement to an arbitrator. View "William Attix v. Carrington Mortgage Services, LLC" on Justia Law
Gulfstream Aerospace Corporation v. Oceltip Aviation 1 PTY LTD
Gulfstream, a Georgia corporation, and Oceltip, an Australian company, entered a sales agreement (“Agreement”). Gulfstream terminated the Agreement after Oceltip failed to pay the full amount or cure a defect within the ten-day cure period.Oceltip submitted a demand for arbitration to the AAA, seeking a finding that Gulfstream had anticipatorily repudiated the Agreement and that this conduct suspended Oceltip’s duties, allowing Oceltip to recoup the money it had paid, and entitled Oceltip to damages. On appeal, Oceltip asserts that federal jurisdiction is lacking. It also argues that the district court erred in confirming the arbitration award and denying vacatur because, in Oceltip’s view, the Georgia Arbitration Code’s standards for vacatur—not the FAA’s—govern, and the arbitrators manifestly disregarded the law.First, the court found it has jurisdiction under Sec 203 of the FAA. Next, in resolving the disagreement the court analyzed whether arbitrators’ “manifest disregard of the law” supplies a basis for vacating the award. Under the Georgia Arbitration Code, it does, but federal law—the New York Convention and its implementing statute (Chapter 2 of the FAA)—sets forth seven exclusive grounds for vacatur, which does not include “manifest disregard of the law.” The court concluded that the Agreement’s choice-of-law provision does not supplant federal standards for confirmation or vacatur of an arbitral award, reasoning that the plain meaning of the contractual language does not support Oceltip’s position. Thus, the court affirmed the judgment of the district court. View "Gulfstream Aerospace Corporation v. Oceltip Aviation 1 PTY LTD" on Justia Law
Warrior Met Coal Mining, LLC v. United Mine Workers of America
After an arbitrator interpreted a collective bargaining agreement to require Warrior Met Coal Mining to establish just cause to discharge an employee for violating the agreement's four-strike attendance policy, and the arbitrator determined that just cause was not present, the district court vacated the arbitrator's award as contrary to the agreement.The Eleventh Circuit reversed, concluding that the arbitrator arguably interpreted the agreement and the court must defer to his interpretation. The court distinguished Warrior & Gulf Navigation Company v. United Steelworkers, 996 F.2d 279 (11th Cir. 1993), from the circumstances here and concluded that, in this case, the arbitrator relied on past practices to give meaning to the attendance policy. Accordingly, the court remanded with instructions to enter judgment for the union. View "Warrior Met Coal Mining, LLC v. United Mine Workers of America" on Justia Law
Reiterman v. Abid
The Eleventh Circuit affirmed the district court's interlocutory order denying defendant's motion to compel arbitration. Defendant argues that the parties should be required to arbitrate their dispute under the terms of a 2018 Settlement Agreement entered into between her and plaintiff. The court agreed with plaintiff that the district court correctly denied the motion to compel arbitration after finding that the parties mutually rescinded the 2018 Settlement Agreement in 2019 under Florida law. The court found instructive Dasher v. RBC Bank (USA), 745 F.3d 1111 (11th Cir. 2014), which held that arbitration could not be compelled based on an earlier agreement containing an arbitration clause when a subsequent agreement without an arbitration clause entirely superseded the earlier agreement under state law. Furthermore, the district court's credibility determinations are supported, not contradicted, by the objective evidence in this case, and so its findings of fact are untouchable on appeal. View "Reiterman v. Abid" on Justia Law
McLaurin v. The Terminix International Co., LP
After an arbitrator awarded money damages in favor of plaintiffs and against Terminix, plaintiffs filed a motion to confirm with the district court. The district court ordered Terminix to respond, but Terminix opted to forego any substantive opposition to the motion and instead asserted what it believed was its procedural right to file a separate motion to vacate any time within three months. Terminix filed its motion to vacate after the district court's deadline to oppose confirmation and the district court granted the motion to confirm as substantively unopposed and struck the motion to vacate as untimely.The Eleventh Circuit affirmed the district court's order granting the motion to confirm and concluded that the district court did not abuse its discretion when it struck Terminix's later-filed motion and thereby declined to rule on its merits. The court recommended that, when faced with a motion to confirm filed within three months of an arbitration award, district courts enter a briefing schedule that sets simultaneous deadlines for the losing party to file an opposition to the motion to confirm, if any, and to file a motion to vacate, modify, or correct, if any. The court explained that this practice will prevent similar disputes from arising in the future. Finally, the court denied plaintiffs' motion for sanctions. View "McLaurin v. The Terminix International Co., LP" on Justia Law