Justia Arbitration & Mediation Opinion SummariesArticles Posted in US Court of Appeals for the Sixth Circuit
VIP, Inc. v. KYB Corp.
Plaintiffs purchase KYB shock absorbers from KAC through “buying groups.” There is no arbitration provision in the buying group agreements nor in the invoices reflecting specific purchases between the plaintiffs and KAC. Beginning in 2016, the buying group agreements provided that the individual plaintiffs agreed to accept a rebate from KAC in exchange for servicing consumer warranty issues. The agreement requires the plaintiffs, in exchange for that allowance, to honor the terms of the KYB limited warranty, which mandates arbitration in accordance with American Arbitration Association Commercial Rule 7(1), which delegates to the arbitrator the power to determine his jurisdiction. The plaintiffs filed a putative class action, alleging anticompetitive activities in the auto parts industry. The defendants move to dismiss, citing the Federal Arbitration Act, 9 U.S.C. 1. The Sixth Circuit affirmed the denial of the motion. Before referring a dispute to arbitration, the court must determine whether a valid arbitration agreement exists; if a valid agreement exists and delegates the arbitrability issue to the arbitrator, the court may not decide arbitrability. In this case, the parties did not form an agreement to arbitrate. The warranty’s arbitration provision applies only to original retail purchasers, a group that does not include the plaintiffs. View "VIP, Inc. v. KYB Corp." on Justia Law
Zeon Chemicals, L.P. v. United Food & Commercial Workers
Zeon fired Jenkins on the ground that he violated the company’s attendance policy. Jenkins had missed work because of a 30-day jail sentence based on a felony conviction. The company had refused to suspend him for 30 days, something his 22 years of service made him eligible for, because it did not want to send the message that employees could commit crimes without consequences and nd it declined to let him use vacation days for the time because other employees had already scheduled their days for the relevant weeks. Consistent with the collective bargaining agreement, the local union took Jenkins’ discharge to arbitration. The arbitrator reinstated Jenkins. In a suit under the Labor Management Relations Act, 29 U.S.C. 185(c), the district court vacated the award on the ground that the arbitrator misread the agreement and exceeded his authority in doing so. The Sixth Circuit reversed, noting the deferential standard for arbitration awards. Although the arbitrator’s merits analysis “has some eyesores,” it does not defeat the conclusion that he arguably construed the contract. View "Zeon Chemicals, L.P. v. United Food & Commercial Workers" on Justia Law
Solo v. United Parcel Service Co.
Plaintiffs purchased liability insurance for packages shipped through UPS before December 30, 2013. The price of that insurance was set by a contract that stated that there is no additional charge for the first $100 of coverage whether or not a shipper purchases additional declared value coverage. When Plaintiffs shipped their packages, they were charged $0.85 for each hundred-dollar increment, including the first. Plaintiffs sued UPS on behalf of a proposed class. UPS argued that the controlling phrase was “total value declared” and that “total” value necessarily includes the first $100. In moving for dismissal, UPS stated that it “reserves its right to move to compel arbitration and does not by this motion in any way waive this contractual right.” UPS referenced an arbitration clause found in an amended contract that became effective December 30, 2013, after the shipments at issue were mailed. The Sixth Circuit reversed the dismissal of the suit, relying on the complaint’s allegations that UPS routinely credits customers who complain about the overcharge and “acknowledges the validity of Solo’s reading of the contractual provision.” On remand, UPS raised the obligation to arbitrate as its first affirmative defense. After discovery, UPS moved to compel arbitration. The district court denied the motion on the basis of waiver. The Sixth Circuit affirmed. The Amended UPS Agreement did not retroactively apply to the transactions at issue and, in any event, UPS waived its right to arbitrate. View "Solo v. United Parcel Service Co." on Justia Law
Local 1982, International Longshoremen v. Midwest Terminals of Toledo
A collective bargaining agreement between Local 1982 and Midwest consisted of a Master Agreement (MA), formed between the parties’ affiliated regional employer group and the union, and a Local Agreement. The union filed a grievance for Midwest's failure to establish and contribute to benefit trust plans under MA Section 5.5A. Midwest responded that it considered the grievance procedurally invalid. The Union escalated the grievance to Step Two under the MA, referral to a Joint Grievance Committee comprised of an employer representative and a union representative. Midwest refused to participate; the hearing went forward without Midwest. The Committee determined that Midwest had failed to comply with Section 5.5A. Midwest did not appeal the unfavorable award, which became final. The union filed suit to enforce it. The Sixth Circuit directed the district court to enforce the award. The parties returned to court over ambiguities in the award's content. The Sixth Circuit affirmed a remand to the Committee, rejecting Midwest’s argument that it complied with the award by negotiating about terms of the trust agreement. After the remand but before clarification of the award, the composition of the two-person Committee changed. The new Committee deadlocked. Local 1982 sought to escalate the grievance to Step 3 with an expanded grievance committee. The Sixth Circuit agreed. The award did not lose its effect simply because the original Committee cannot agree on clarification of its contents. Grievance procedure Step Three specifies that if a grievance “is not satisfactorily settled or adjusted in Step 2, it shall be referred to an Expanded Joint Grievance Committee.” View "Local 1982, International Longshoremen v. Midwest Terminals of Toledo" on Justia Law
McGee v. Armstrong
Plaintiff, a management employee of the Summit County Board of Developmental Disabilities, worked under renewable one-year agreements that contained broad arbitration provisions. When Plaintiff joined the Ohio Army National Guard in 2008, his contract provided for “military leave in accordance with Board Policy.” Thereafter, there were several disputes about his entitlement military leave at full pay. Plaintiff refused to sign a proposed 2011–12 contract. Plaintiff filed his first complaint in 2011. In April 2012, shortly after returning from military leave, the Board delivered to Plaintiff a pre-disciplinary hearing notice. The Board subsequently notified Plaintiff of his termination. Plaintiff filed another complaint, alleging wrongful termination of employment, breaches of the employment contract, and discrimination and retaliation based on his military status. The district court granted Defendants’ motion to compel arbitration, excluding two breach of contract claims. An arbitrator determined that all of the claims identified as possibly subject to arbitration were arbitrable, and granted the Defendants summary judgment. The court granted Defendants summary judgment regarding Plaintiff’s breach of contract claims. The Sixth Circuit affirmed. The contract provided that the arbitrators could decide questions of arbitrability and, under Ohio law, the arbitrators did not exceed their powers by entering a decision on Defendants’ motion for summary judgment. Plaintiff failed to show a breach of his contract with respect to military leave. View "McGee v. Armstrong" on Justia Law
In re Application to Obtain Discovery for Use in Foreign Proceedings
In its 28 U.S.C. 1782(a) discovery application, ALJ sought a subpoena for documents from FedEx and deposition testimony of a FedEx corporate representative. ALJ alleged that FedEx Corp. was involved in contract negotiations and performance of two contracts between ALJ and FedEx International, a FedEx subsidiary. Each contract became the subject of commercial arbitration, one pending in Dubai, the other in Saudi Arabia. The arbitration in Saudi Arabia was dismissed. The district court denied ALJ’s application, holding that the phrase “foreign or international tribunal” in section 1782(a) did not encompass the arbitrations. The Sixth Circuit, reversed, noting that the Supreme Court provided guidance for interpretation of section 1782(a) in 2004. Considering the statutory text, the meaning of that text based on common definitions and usage of the language at issue, as well as the statutory context and history the court held that this provision permits discovery for use in the private commercial arbitration at issue. View "In re Application to Obtain Discovery for Use in Foreign Proceedings" on Justia Law
PolyOne Corp. v. Westlake Vinyls, Inc.
Goodrich operated chemical-manufacturing plants at a Calvert City, Kentucky industrial site. In 1988, the Environmental Protection Agency designated the site a “Superfund Site” subject to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9601. PolyOne and Westlake disputed their share of the cleanup costs. The parties entered a settlement agreement in 2007: PolyOne must reimburse Westlake for 100% of “allocable costs,” and every five years, either party may demand arbitration to modify the amount or allocation of costs. Either party may file a complaint in federal court for a “de novo judicial determination” of which costs are allocable after the arbitration panel has issued an award. The arbitration award becomes null-and-void upon the filing of a complaint; the Agreement prohibits either party from even admitting the arbitration award into evidence. PolyOne requested a declaration that the judicial-relief provision is invalid under the Federal Arbitration Act (FAA), 9 U.S.C. 9 and that the Agreement’s other arbitration provisions are unenforceable. The Sixth Circuit affirmed the denial of injunctive and declaratory relief. PolyOne has a strong case but its prior conduct does not align with its present position. Twice, PolyOne demanded arbitration. PolyOne seeks to enjoin the very arbitration it demanded in 2017. The court withheld judgment on whether PolyOne has waived its ability to challenge the arbitration provisions in the future. View "PolyOne Corp. v. Westlake Vinyls, Inc." on Justia Law
GGNSC Louisville Hillcreek v. Estate of Bramer
Robert was admitted to a nursing home multiple times. During his final stay, he fell out of bed, sustained a head injury, and later died. His estate sued in state court, alleging negligence, negligence per se, violations of Kentucky’s Residents’ Rights Act, KRS 216.515(26), corporate negligence, medical negligence, wrongful death, and loss of consortium. The nursing home sought to enforce an arbitration agreement in federal court. The district court held that no valid agreement covering the final visit existed. An Agreement dated January 5, 2015 displays a mark of some kind in the “Signature of Resident” block, but it is difficult to read. Bramer’s estate alleges that this scrawl is a forgery; Robert's widow stated in an affidavit that neither she nor Robert signed that form. On an Agreement dated January 26, 2015, the widow signed in the “Signature of Resident” block. The Alternative Dispute Resolution Agreements are identical, bind successors and assigns, and require arbitration of a wide range of disputes. They purport to remain in effect through discharge and subsequent readmission. Although signing the Agreement was not a condition of admission, it was presented as part of the admissions packet. The estate presented evidence that the staff implied that signing the Agreement was required. The Sixth Circuit affirmed. By requesting a second agreement on January 26, the nursing home effectively abandoned the first agreement. Lacking Robert’s consent, there was no valid agreement to arbitrate. View "GGNSC Louisville Hillcreek v. Estate of Bramer" on Justia Law
Economy Linen & Towel Service, Inc. v. International Brotherhood of Teamsters
Economy Linen and Towel Service faced a shortfall of qualified truck drivers and subcontracted with another firm to provide the necessary drivers. The union filed a grievance on the ground that the new drivers earned a higher hourly rate than the union-represented employees. An arbitrator ruled for the union. The district court and Sixth Circuit affirmed, noting that in reviewing arbitration awards, courts do not ask whether the arbitrator interpreted the contract correctly; “the parties bargained for an arbitrator’s interpretation of the contract, not a federal judge’s interpretation of it.” The court noted that this situation did not involve any allegations of fraud and that the arbitrator did not decide any issue outside of his authority but only determined which contractual provision controlled. View "Economy Linen & Towel Service, Inc. v. International Brotherhood of Teamsters" on Justia Law
Bakery, Confectionery, Tobacco Workers and Grain Millers International Union AFL-CIO v. Kellogg Co.
Local Union 3-G represents employees at Kellogg’s Battle Creek plant and is affiliated with the International Union, which represents employees at additional Kellogg’s plants. “Regular” employees and “non-regular” employees, including casual employees, make up the 3-G bargaining unit. There is a Master Agreement between Kellogg, the International Union, and local unions at four plants, which have Supplemental Agreements. A Memorandum of Agreement, appended to the Battle Creek Supplemental Agreement, states that the Supplemental and Master Agreements will not apply to casual employees and the Company may terminate casual employees without being subject to the grievance procedure. A 2015 Master Agreement “established wage rates, a signing ratification bonus for all employees, the establishment of a transitional employee classification to replace casual employees, and other changes" for all Battle Creek bargaining unit employees. After the ratification vote, Kellogg refused to pay a ratification bonus to casual employees, seasonal employees, and some regular employees. The parties went through the grievance procedure, but Kellogg refused to arbitrate, arguing that the arbitration provisions do not apply to casual employees. The Sixth Circuit previously held that arbitration provisions in the “Memphis Supplemental Agreement” did not cover casual employees. The district court determined that judicial estoppel did not apply to the Battle Creek action and granted the motion to compel arbitration. The Sixth Circuit affirmed, The Agreement has a broad arbitration clause, so the presumption of arbitrability is particularly applicable. View "Bakery, Confectionery, Tobacco Workers and Grain Millers International Union AFL-CIO v. Kellogg Co." on Justia Law