Justia Arbitration & Mediation Opinion Summaries

William Lyons opened a Home Equity Line of Credit (HELOC) account with National City Bank in 2005, which was later acquired by PNC Bank. PNC withdrew funds from Lyons' deposit accounts to offset outstanding HELOC payments without prior notification. Lyons contested these withdrawals, claiming they were unauthorized. PNC responded, asserting their right to make the withdrawals. Lyons then sued for economic and statutory damages, as well as emotional distress.The case was initially heard in the United States District Court for the District of Maryland. PNC moved to compel arbitration on the Truth in Lending Act (TILA) claim, which the district court partially granted. Both parties appealed, and the United States Court of Appeals for the Fourth Circuit held that the Dodd-Frank Act prohibits arbitration of claims related to residential mortgage loans. The case was remanded to the district court, which ruled in favor of PNC on both the TILA and Real Estate Settlement Practices Act (RESPA) claims. The district court held that TILA’s offset provision does not apply to HELOCs and that the CFPB had the authority to exempt HELOCs from RESPA’s requirements.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court held that TILA’s offset provision does apply to HELOCs, reversing the district court’s decision on the TILA claim. The court found that the term "credit card plan" includes HELOCs when accessed via a credit card. However, the court affirmed the district court’s decision on the RESPA claim, agreeing that the CFPB has the authority to exempt HELOCs from RESPA’s definition of “federally related mortgage loans.” The case was reversed and remanded in part and affirmed in part. View "Lyons v. PNC Bank, N.A." on Justia Law

Loretta Marshall applied for a nursing job with Tidelands Health using their online application process. After failing a mandatory physical agility test, she was denied employment. Marshall then sued Tidelands, alleging that the physical agility test constituted prohibited discrimination. Tidelands moved to compel arbitration, arguing that Marshall had agreed to arbitration through the online application process. The district court denied the motion, concluding that Tidelands had not shown the existence of an agreement to arbitrate.The United States District Court for the District of South Carolina reviewed the case. Initially, Tidelands argued that Marshall's 2016 arbitration agreement covered her 2020 application. The magistrate judge found that the 2016 agreement did not apply to future applications. Tidelands then argued that Marshall agreed to arbitration in 2020, but the magistrate judge found that Marshall was not required to scroll through the arbitration agreement in 2020 and was not on reasonable notice of the agreement. The district court agreed with the magistrate judge and denied Tidelands' motion to compel arbitration.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court held that Tidelands failed to show that Marshall had reasonable notice of an offer to arbitrate in 2020. The court noted that Marshall was not required to scroll through the arbitration agreement and that the arbitration notice at the top of the webpage did not provide the actual terms of an agreement. Additionally, the court found that Marshall did not manifest her assent to the arbitration agreement by clicking the "submit" button, as it did not clearly indicate agreement to arbitration. The Fourth Circuit affirmed the district court's judgment, concluding that no arbitration agreement was formed in 2020. View "Marshall v. Georgetown Memorial Hospital" on Justia Law

Alison George sought to represent a class and obtain damages from Rushmore Service Center, LLC, based on a letter that identified Premier Bankcard, LLC as the “current/original creditor” instead of the actual credit card company. George alleged that this violated the Fair Debt Collection Practices Act (FDCPA) by failing to identify the creditor to whom the debt was owed and providing misleading information. She claimed that this would confuse the least sophisticated consumer about the legitimacy of the debt.The United States District Court for the District of New Jersey granted Rushmore’s motion to stay proceedings and compel individual arbitration. George lost in arbitration, where the arbitrator ruled in favor of Rushmore, finding that George was not misled because she admitted she did not read the letter. The District Court then declined to vacate the arbitration award, rejecting George’s arguments that the arbitrator disregarded evidence and law.The United States Court of Appeals for the Third Circuit reviewed the case and focused on whether George had standing to sue. The court concluded that George lacked standing from the outset because her complaint did not allege any specific adverse effects or confusion she personally experienced due to the letter. The court held that confusion alone is insufficient to establish a concrete injury under Article III. Consequently, the Third Circuit vacated the District Court’s orders and remanded with instructions to dismiss the case for lack of standing. The court declined to vacate the arbitration award itself, leaving its enforceability to be determined in a jurisdictionally correct proceeding. View "George v. Rushmore Service Center LLC" on Justia Law

In this case, the plaintiff, Patricia Olivieri, alleged that her employer, Stifel, Nicolaus & Company, Incorporated, and her manager, Neil Isler, subjected her to sexual harassment and a hostile work environment. Olivieri claimed that Isler sexually assaulted and harassed her, and that after she reported his behavior, she faced retaliation and continued harassment from Stifel and other defendants. Olivieri's allegations included inappropriate comments, physical contact, and retaliatory actions such as changes in her job responsibilities and work environment.The United States District Court for the Eastern District of New York initially granted the defendants' motion to compel arbitration based on an arbitration agreement in Olivieri's employment contract. However, after the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), Olivieri moved for reconsideration. The district court vacated its earlier decision, concluding that Olivieri's claims accrued after the EFAA's effective date, making her arbitration agreement voidable under the new law.The United States Court of Appeals for the Second Circuit reviewed the district court's decision. The appellate court agreed with the lower court, applying the continuing violation doctrine to determine that Olivieri's hostile work environment claims accrued after the EFAA's effective date of March 3, 2022. The court held that the EFAA applied to Olivieri's claims, rendering her arbitration agreement invalid and unenforceable. Consequently, the Second Circuit affirmed the district court's order denying the motion to compel arbitration. View "Olivieri v. Stifel, Nicolaus & Company, Inc." on Justia Law

In 2001, China and Nigeria signed a bilateral investment treaty to encourage investment between the two countries, agreeing to treat each other's investors fairly and protect their investments. Zhongshan Fucheng Industrial Investment, a Chinese company, invested in Nigeria by participating in a joint venture with Ogun State to develop a free-trade zone. After years of development and significant investment, Ogun State abruptly terminated its relationship with Zhongshan, and Nigerian federal authorities expelled the company's executives. Zhongshan initiated arbitration proceedings, and an arbitrator found that Nigeria had breached its obligations under the treaty, awarding Zhongshan over $55 million in damages.The United States District Court for the District of Columbia held that it had jurisdiction over the case, finding that the Foreign Sovereign Immunities Act’s (FSIA) arbitration exception applied because the award was governed by the New York Convention, an international arbitration treaty. Nigeria appealed, arguing that it was immune from suit under the FSIA.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the FSIA’s arbitration exception applied because the arbitration award arose from a legal relationship considered commercial, governed by the New York Convention. The court found that Nigeria had an arbitration agreement with Zhongshan, an arbitration award was issued, and the award was governed by the New York Convention. The court rejected Nigeria's argument that the New York Convention only applies to private acts, holding that the treaty covers arbitral awards arising from sovereign acts when a state consents to arbitration. Thus, the court affirmed the district court's jurisdiction and the enforceability of the arbitration award. View "Zhongshan Fucheng Industrial Investment Co. Ltd v. Federal Republic of Nigeria" on Justia Law

A member of the United Mine Workers of America arbitrated a dispute against Consol Energy, Inc. and won. The Union then sued to confirm the arbitration award, while Consol and its subsidiaries counterclaimed to vacate the award. The Union argued that the subsidiaries could not unilaterally reduce health benefits promised to miners for life, even if they no longer mined coal. Consol, which served as the health-plan administrator, had sent a letter indicating potential changes to benefits after the agreement expired, prompting the arbitration.The United States District Court for the District of Columbia dismissed the Union’s claim for lack of standing, reasoning that the Union was not injured as Consol had not actually modified the benefits. The court also declined to vacate the arbitration award on the merits of the Subsidiaries’ counterclaim. Both parties appealed the decision.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court found that the Union’s claim did not fall under § 301(a) of the Labor Management Relations Act, which only authorizes suits for actual violations of contracts, not anticipated future violations. Consequently, the Union’s claim was dismissed for lack of subject-matter jurisdiction. Regarding the Subsidiaries’ counterclaim, the court determined that the Subsidiaries lacked standing as they were not named in the arbitration award and had not shown a concrete and imminent injury. The court vacated the district court’s orders on the Subsidiaries’ counterclaim and remanded it with instructions to dismiss for lack of standing.Thus, the appellate court affirmed the dismissal of the Union’s claim and vacated and remanded the Subsidiaries’ counterclaim for dismissal due to lack of standing. View "International Union, United Mine Workers of America v. Consol Energy Inc." on Justia Law

The case involves a dispute between Commodities & Minerals Enterprise, Ltd. (CME) and CVG Ferrominera Orinoco, C.A. (FMO). CME sought to confirm a New York Convention arbitration award of $187.9 million against FMO. FMO opposed the confirmation, alleging that CME procured the underlying contract through fraud, bribery, and corruption, arguing that enforcing the award would violate U.S. public policy. The district court confirmed the award, ruling that FMO was barred from challenging the confirmation on public policy grounds because it failed to seek vacatur within the three-month time limit prescribed by the Federal Arbitration Act (FAA).The United States District Court for the Southern District of Florida initially reviewed the case. CME moved to confirm the arbitration award in December 2019. FMO opposed the confirmation nearly two years later, citing public policy concerns. The district court granted CME’s motion, explaining that FMO was barred from opposing confirmation on public policy grounds due to its failure to seek vacatur within the FAA’s three-month time limit.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that, based on its recent en banc decision in Corporación AIC, SA v. Hidroélectrica Santa Rita S.A., FMO should have been allowed to assert its public policy defense in opposition to confirmation. The court clarified that the grounds for vacating a New York Convention arbitration award are those set forth in U.S. domestic law, specifically Chapter 1 of the FAA, which does not recognize public policy as a ground for vacatur. However, the court affirmed the district court’s confirmation of the award, concluding that FMO’s public policy defense failed on the merits because it attacked the underlying contract, not the award itself. View "Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco C.A." on Justia Law

A property-insurance dispute arose between a condominium association and its insurer after storms damaged the property. The association demanded an appraisal of the loss, and both parties selected appraisers who then chose an umpire. The association's appraiser disclosed, on the day of final negotiations, that he believed he had a financial stake in the award due to a contingency-fee retainer. The insurer did not object at that time, and the appraisal panel issued an award over a month later. Subsequently, the insurer moved to vacate the award, claiming the appraiser's partiality.The United States District Court for the Southern District of Florida denied the insurer's motion to vacate the award, ruling that the insurer had waived its objection by not raising it sooner. The court also confirmed the appraisal award.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the insurer waived its objection to the appraiser's partiality by failing to object at the time of the disclosure. The court emphasized that a party must timely object to an arbitrator's or appraiser's partiality when it becomes aware of a potential conflict of interest. By waiting over two months and until after the award was issued, the insurer forfeited its right to challenge the appraiser's impartiality. The court did not address other arguments related to the choice of law or the appraiser's partiality, as the waiver issue was dispositive. View "Biscayne Beach Club Condominium Association, Inc. v. Westchester Surplus Lines Insurance Company" on Justia Law

Brent Electric Company (Brent) and the International Brotherhood of Electrical Workers Local Union No. 584 (the Union) have had a long-standing relationship since 1996. In 2018, they entered into a collective bargaining agreement (CBA) that included an interest-arbitration clause allowing either party to unilaterally submit unresolved issues to arbitration if negotiations for a new CBA failed. In 2020, Brent terminated its authorization for the National Electrical Contractors Association (NECA) to negotiate on its behalf and later stopped contributing to the Union pension fund. The Union filed a grievance, and the Labor Management Committee ruled in favor of the Union. In 2021, Brent and the Union failed to negotiate a new CBA, leading the Union to unilaterally submit the dispute to arbitration. The arbitrator imposed a new CBA, which included both mandatory and permissive subjects of bargaining.The United States District Court for the Northern District of Oklahoma dismissed Brent’s complaint to vacate the arbitration award and granted the Union’s motion for summary judgment to enforce the award. The district court found that the interest-arbitration clause in the 2018 CBA was broad and unambiguous, covering all unresolved issues, including permissive subjects of bargaining. The court also rejected Brent’s argument that the arbitration award violated public policy or the Federal Arbitration Act.The United States Court of Appeals for the Tenth Circuit affirmed the district court’s decision. The Tenth Circuit held that the presumption of arbitrability applied because the interest-arbitration clause was validly formed and unambiguously covered both mandatory and permissive subjects of bargaining. The court rejected Brent’s argument that it had a statutory right to refuse the imposition of permissive subjects, noting that Brent had contractually agreed to the interest-arbitration clause. The court also found no violation of public policy, as the arbitration award did not include a self-perpetuating interest-arbitration clause. Finally, the court concluded that the arbitrator did not exceed its powers under the Federal Arbitration Act. View "Brent Electric Company v. International Brotherhood of Electrical Workers" on Justia Law

Henry Searcy, Jr. sought certification as an agent under the NFLPA’s 2012 Regulations Governing Contract Advisors but failed the required exam twice. After an arbitrator sided with the NFLPA, Searcy sued the NFLPA, its Executive Director, Prometric LLC, and Prometric’s Vice President and General Counsel. He alleged breach of contract, negligence, negligent misrepresentation, intentional infliction of emotional distress, and tortious interference with a contractual relationship, and sought vacatur of the arbitration award under the FAA.The United States District Court for the District of Columbia dismissed the claims against Prometric Defendants for lack of subject matter jurisdiction and against the NFLPA Defendants for failure to state a claim. On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the dismissal of claims against Prometric Defendants and instructed the District Court to reconsider its dismissal of claims against the NFLPA Defendants, specifically examining whether Section 301 of the LMRA preempted Searcy’s state law claims.Upon further review, the District Court concluded it had jurisdiction and dismissed the claims under Rule 12(b)(6). Searcy appealed again. The United States Court of Appeals for the District of Columbia Circuit held that the District Court erred in finding subject matter jurisdiction over the claims against the NFLPA Defendants. The court determined that Section 301 of the LMRA does not completely preempt Searcy’s state law claims, as these claims do not require interpretation of the NFL-NFLPA Collective Bargaining Agreement. Consequently, the appellate court affirmed the dismissal on different grounds and remanded the case with instructions to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). View "Searcy v. Smith" on Justia Law