Justia Arbitration & Mediation Opinion Summaries

Articles Posted in US Court of Appeals for the Ninth Circuit
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The Ninth Circuit reversed the district court's order compelling arbitration of a labor dispute between a waste management company, NASA Services, and the union. The company and union signed a Labor Peace Agreement containing an arbitration clause, and the agreement's terms were expressly conditioned upon the City entering into an exclusive franchise agreement with NASA. The panel held that the agreement clearly and unambiguously contains a condition precedent to formation that is both ascertainable and lawful. Therefore, NASA and the union were parties to a proposed agreement that would become operative, effective, and enforceable if and only if the condition precedent therein was satisfied. Consequently, the condition failed and the district court may not compel arbitration. View "International Brotherhood of Teamsters, Local 396 v. NASA Services, Inc." on Justia Law

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The Ninth Circuit affirmed the district court's order compelling arbitration, holding that the Washington anti-arbitration statute was preempted by the federal Liability Risk Retention Act of 1986 (LRRA) as it applied to risk retention groups chartered in another state. The panel held that the McCarran-Ferguson Act does not reverse-preempt the LRRA. The panel also held that the LRRA preempts Washington's anti-arbitration statute because it offends the LRRA's broad preemption language and fails to fall into one of its exceptions. View "Allied Professionals Insurance Co. v. Anglesey" on Justia Law

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The Ninth Circuit affirmed the district court's denial of defendant's motion to compel arbitration against plaintiff, a smartphone app user. The panel applied Washington state law and held that defendant did not provide reasonable notice, actual or constructive, of its Terms of Use and thus plaintiff did not unambiguously manifest assent to the terms and conditions or the imbedded arbitration provision. In this case, defendant did not notify users that the app had terms and conditions. Rather, a user would need to seek out or stumble upon defendant's Terms, either by scrolling through multiple screens of text before downloading the app or clicking the settings menu within the app during gameplay. View "Wilson v. Huuuge, Inc." on Justia Law

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The Ninth Circuit vacated a final arbitration award between Monster Energy and City Beverages, dba Olympic Eagle. The parties had signed an agreement providing exclusive distribution rights for Monster's products to Olympic Eagle for a fixed term in a specified territory. After Monster exercised its contractual right to terminate the agreement, the parties proceeded to arbitration. In the final arbitration award, the arbitrator determined that Olympic Eagle did not qualify for protection under Washington law. The panel held, given the arbitrator's failure to disclose his ownership interest in JAMS, coupled with the fact that JAMS has administered 97 arbitrations for Monster over the past five years, that vacatur of the award was necessary on the ground of evident partiality. Therefore, the court reversed the district court's judgment, and also vacated the district court's award of post-arbitration fees to Monster for its petition to confirm the award. View "Monster Energy Co. v. City Beverages, LLC" on Justia Law

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After Cerner filed an action in state court against defendants, defendants removed the action to federal district court. Cerner moved to remand to state court, arguing that the removal was improper and that the federal court lacked subject matter jurisdiction over the action. The district court denied the motion to remand and held that it could exercise jurisdiction under 9 U.S.C. 205, which authorizes a defendant to remove to federal court an action previously filed in state court that relates to an arbitration agreement or award falling under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958. The Ninth Circuit reversed and held that this case was not related to an international arbitration agreement or award, as that term is used in section 205. Therefore, section 205 did not provide a proper basis for removal or for federal subject matter jurisdiction over this action. The panel held that the outcome of this case could not conceivably be affected by the arbitration awarded. Accordingly, the panel remanded with instructions to remand to state court. View "Cerner Middle East Limited v. Belbadi Enterprises" on Justia Law

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The Ninth Circuit affirmed the district court's order denying Aegis' motion to compel arbitration in a class action alleging that Aegis engaged in a scheme to defraud seniors. Applying the federal law standard for waiver, the panel affirmed and held that the district court did not err in concluding that Aegis waived its right to arbitrate. In this case, Aegis knew of its right to compel arbitration, but made an intentional decision not to compel arbitration in order to take advantage of the judicial forum. Furthermore, plaintiffs incurred costs as a direct result. View "Newirth v. Aegis Senior Communities, LLC" on Justia Law

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The Ninth Circuit affirmed the district court's denial of defendant's motion to compel arbitration and motion for a mandatory stay in a putative class action alleging that defendant charged excessive prices for its rent-to-own plans for household items. The panel held that the Federal Arbitration Act did not preempt California's rule in McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017), in which the California Supreme Court decided that a contractual agreement purporting to waive a party's right to seek public injunctive relief in any forum is unenforceable under California law. The panel also held that the severance clause in the 2015 agreement at issue, triggered by the McGill rule, instructed the panel to sever plaintiff's Karnette Rental-Purchase Act, Unfair Competition Law, and Consumer Legal Remedies Act claims from the scope of arbitration. Finally, the panel dismissed for lack of jurisdiction defendant's appeal of the district court's denial of a discretionary stay and its decision to defer ruling on a motion to strike class action claims. View "Blair v. Rent-A-Center, Inc." on Justia Law

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The Ninth Circuit vacated a petition for a writ of mandamus seeking to vacate the district court’s order compelling arbitration of claims that UPS overcharged retail customers who shipped packages through third-party facilities by applying Delivery Surcharge Rates higher than the rates UPS advertised. The panel applied California law and held that the district court's order determining that the parties had entered into a binding arbitration agreement was not clearly erroneous as a matter of law. Therefore, the extraordinary remedy of mandamus was not warranted, because plaintiff unequivocally assented to online terms that incorporated the document containing the arbitration clause in question. View "Holl v. United States District Court for the Northern District of California, Oakland" on Justia Law

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The Ninth Circuit denied a petition for writ of mandamus seeking to direct the district court to vacate its order compelling third parties to arbitration. The petition related to an arbitration clause in a software development and licensing agreement. Considering the factors in Bauman v. U.S. Dist. Court, 557 F.2d 650, 654-55 (9th Cir. 1977), the panel held that the district court applied incorrect legal tests, and did not provide sufficient jurisdictional analysis on the current record. Furthermore, the district court's ultimate finding of jurisdiction was not clear. Therefore, because the district court's finding of jurisdiction over the third parties could possibly prove correct, the highly deferential clear error standard was not satisfied and mandamus relief was improper. The panel also held that the other Bauman factors likewise support denying mandamus relief where the third parties have not shown they lack an adequate remedy at law or they will be damaged or prejudiced in a way not correctable on appeal and third parties have not shown that the district court's order was an oft-repeated error, or manifests a persistent disregard of the federal rules. View "In re Boon Global Limited" on Justia Law

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The Ninth Circuit reversed the district court's denial of the Bank's motion for a preliminary injunction against arbitration by FINRA. The panel held that the Bank was likely to succeed on the question of whether the Bank or its Corporate Trust Department (CTD) was a municipal securities dealer and therefore subject to compelled arbitration before FINRA under MSRB Rule G-35. The panel held that neither the CTD or the Bank was a "municipal securities dealer" as defined in the Securities and Exchange Act of 1934. Accordingly, the panel remanded for further proceedings. View "Bank of Oklahoma, NA v. Estes" on Justia Law