Articles Posted in US Court of Appeals for the Tenth Circuit

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Au pairs and former au pairs filed a class action lawsuit against AuPairCare, Inc. (“APC”) and other au pair sponsoring companies alleging violations of antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Fair Labor Standards Act (“FLSA”), federal and state minimum wage laws, and other state laws. Eventually, the au pairs amended their complaint and added two former au pairs, Juliane Harning and Laura Mejia Jimenez, who were sponsored by APC. In response, APC filed a motion to compel arbitration, which the district court denied. The district court found the arbitration provision between the parties both procedurally and substantively unconscionable and declined to enforce it. Because the arbitration provision contained only one substantively unconscionable clause, the Tenth Circuit concluded the district court abused its discretion by refusing to sever the offending clause and otherwise enforce the agreement to arbitrate. The Court therefore reversed the district court’s ruling and remanded for further proceedings. View "Beltran v. Interexchange, Inc." on Justia Law

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Matthew Ray, a former DISH Network L.L.C. employee who signed an arbitration agreement when he was employed, filed an action in the federal district court alleging violations of the Fair Labor Standards Act (“FLSA”), Colorado’s Wage Claim Act, Colorado’s Minimum Wage Act, and a common law claim for breach of contract. Dish moved to dismiss, demanding that Ray arbitrate his claims pursuant to the Agreement. Ray dismissed the lawsuit and filed with the American Arbitration Association (“AAA”), asserting the same four claims. In addition, and the focus of this case, Ray attempted to pursue his claims as a class action under Fed. R. Civ. P. 23 and a collective action under 29 U.S.C. 216(b). The arbitrator determined that the Arbitration Agreement between the two parties permitted classwide arbitration, and then stayed the arbitration to permit DISH to contest the issue in court. DISH filed a Petition to Vacate Clause Construction Arbitration Award, which the district court denied. After review, the Tenth Circuit determined the arbitrator in this case did not manifestly disregard Colorado law when he concluded that he was authorized to conduct class arbitration by the broad language of the Agreement in combination with the requirement that arbitration be conducted pursuant to the AAA’s Employment Dispute Rules. Accordingly, the district court correctly denied DISH’s petition to vacate the arbitration award. View "Dish Network v. Ray" on Justia Law

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Oklahoma and the Citizen Potawatomi Nation (the “Nation”) entered into a Tribal-State gaming compact; Part 12 of which contained a dispute-resolution procedure that called for arbitration of disagreements “arising under” the Compact’s provisions. The terms of the Compact indicated either party could, “[n]otwithstanding any provision of law,” “bring an action against the other in a federal district court for the de novo review of any arbitration award.” In Hall Street Associates, LLC. v. Mattel, Inc., 552 U.S. 576, (2008), the Supreme Court held that the Federal Arbitration Act (“FAA”) precluded parties to an arbitration agreement from contracting for de novo review of the legal determinations in an arbitration award. At issue before the Tenth Circuit Court of Appeals was how to treat the Compact’s de novo review provision given the Supreme Court’s decision in Hall Street Associates. The Nation argued the appropriate course was to excise from the Compact the de novo review provision, leaving intact the parties’ binding obligation to engage in arbitration, subject only to limited judicial review under 9 U.S.C. sections 9 and 10. Oklahoma argued the de novo review provision was integral to the parties’ agreement to arbitrate disputes arising under the Compact and, therefore, the Tenth Circuit should sever the entire arbitration provision from the Compact. The Tenth Circuit found the language of the Compact demonstrated that the de novo review provision was a material aspect of the parties’ agreement to arbitrate disputes arising thereunder. Because Hall Street Associates clearly indicated the Compact’s de novo review provision was legally invalid, and because the obligation to arbitrate was contingent on the availability of de novo review, the Tenth Circuit concluded the obligation to arbitrate set out in Compact Part 12 was unenforceable. Thus, the matter was remanded to the district court to enter an order vacating the arbitration award. View "Citizen Potawatomi Nation v. State of Oklahoma" on Justia Law

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This interlocutory appeal concerned a contract dispute about the provision of food services at the Fort Riley Army base in Kansas. The Department of the Army (Army) contracts with outside vendors for food preparation and related supporting services for its cafeteria dining facilities at Fort Riley. Since 2006, the State of Kansas, through the Kansas Department for Children and Families (Kansas), successfully bid under the RSA on those food preparation and related services contracts at Fort Riley. Kansas’s most recent contract awarded under the RSA was scheduled to expire in February 2016. As that date approached, the Army determined that its next dining contract at Fort Riley would be for supporting services only. The Army therefore decided that it need not solicit bids under the RSA and it approached another vendor directly, as permitted by the JWOD. Kansas took exception to the Army’s decision because it eliminated Kansas’s ability to bid on the contract. So Kansas initiated arbitration proceedings under the RSA’s dispute resolution provisions. And upon learning that the Army intended to contract with the other vendor despite the commencement of arbitration proceedings, Kansas sued in federal court, seeking to preliminarily enjoin the Army from executing the JWOD contract pending arbitration. The root of the dispute was the intersection of two federal statutes that both address the procurement of food services at federal facilities: (1) the Randolph-Sheppard Vending Facility Act of 1936 (RSA), and (2) the Javits Wagner O’Day Act (JWOD). The parties disagreed as to which of these statutes governed the award of the Fort Riley food services contract. And due to events that have occurred since this action was filed, the parties also disputed whether this appeal was rendered moot. The Tenth Circuit concluded that the issue raised by this appeal fell within an exception to the mootness doctrine for matters capable of repetition yet evading review. Because an arbitration panel has since issued its decision thereby dissolving the injunction at issue in this appeal, the Court declined to address whether the district court correctly granted the injunction. View "Kansas Department for Children v. SourceAmerica" on Justia Law

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At issue before the Tenth Circuit in this case was whether an arbitrator exceeded his authority under section 10(a)(4) of the Federal Arbitration Act (FAA), and whether he manifestly disregarded the law in awarding certain costs and fees to the prevailing party. Under its restrictive standard of review, the Court concluded the arbitrator did not exceed his authority or manifestly disregard the law. View "THI of New Mexico at Vida Enca v. Lovato" on Justia Law