Justia Arbitration & Mediation Opinion Summaries

Plaintiff brought an overtime claim under the Fair Labor Standards Act (FLSA) against Sun Coast in arbitration on behalf of a class of similarly situated employees. In a clause construction award, the arbitrator determined that the agreement clearly provides for collective actions.The Fifth Circuit affirmed the district court's determination that the arbitrator had interpreted the arbitration agreement and that the arbitrator did not exceed his powers. In this case, Sun Coast forfeited its challenge to class arbitrability by not presenting it to the arbitrator at all and then by not presenting it in a timely manner to the district court. Finally, the court rejected Sun Coast's claim that deciding this case without oral argument would be akin to cafeteria injustice. Rather, the court stated that dispensing with oral argument where the panel unanimously agrees it is unnecessary, and where the case for affirmance is so clear, is not cafeteria justice—it is simply justice. View "Sun Coast Resources, Inc. v. Conrad" on Justia Law

A married couple, Beverly Bien and David Wellman, invested money with Mid Atlantic Capital Corporation (“Mid Atlantic”). Their investments performed poorly. Stung by the losses, Ms. Bien and Mr. Wellman initiated arbitration proceedings against Mid Atlantic. The arbitration panel awarded damages, fees and costs to the couple. The panel also ordered Ms. Bien and Mr. Wellman to reassign their ownership interests in their investments to Mid Atlantic. Mid Atlantic moved the federal district court to modify the arbitration award to correct “an evident material miscalculation of figures.” The district court denied the motion because the alleged error that Mid Atlantic sought to remedy did not appear on the face of the arbitration award. In the amended final judgment, in addition to ordering Mid Atlantic to pay Ms. Bien and Mr. Wellman certain damages, the court ordered that prejudgment interest would accrue on the damages portion of the award and that postjudgment interest would accrue at the federal rate specified in 28 U.S.C. 1961. Both parties appealed the district court’s order. Mid Atlantic specifically challenged the court’s denial of its motion to modify the arbitration award; the couple cross-appealed to challenge the court’s rulings with respect to prejudgment interest and the reassignment of distributions they received since the arbitration award due to their ownership interests in the investments. Finding no abuse of discretion or other reversible error, the Tenth Circuit affirmed the district court. View "Mid Atlantic Capital v. Bien" on Justia Law

The Supreme Court affirmed the order of the circuit court denying Petitioners' motion to compel arbitration of Respondents' claims against them, holding that a merger clause in the retail sales installment contract (RISC) between the parties served to supplant the arbitration agreement contained in the previously-executed credit application.Respondents purchased a new truck from Petitioners. Respondents first executed a credit application that contained an arbitration provision. Thereafter, the parties executed the RSIC, which did not contain an arbitration clause. After Respondents defaulted on their loan Petitioners began collection efforts. Respondents filed this complaint asserting that Petitioners harassed them by phone even after being advised they were represented by counsel. Petitioners moved to compel arbitration based on the arbitration provision contained in the credit application. The circuit court denied the motion. The Supreme Court affirmed, holding that the arbitration provisions in the credit application did not survive the merger clause of the RISC, thereby nullifying Respondents' obligation to arbitrate their claims against Petitioners. View "TD Auto Finance LLC v. Reynolds" on Justia Law

Southwest Mississippi Electric Power Association (Southwest) was a nonprofit, member-owned electric cooperative corporation created by statute to provide electricity to rural Mississippians. Plaintiffs Ray Virgil, Barbara Lloyd, and Cassandra Johnson were are members of Southwest who filed a lawsuit alleging Southwest failed to return excess revenues and receipts to its members. Southwest moved to compel arbitration. The trial court granted Southwest’s motion to compel arbitration. Plaintiffs appealed. Finding no reversible error in that judgment, the Mississippi Supreme Court affirmed. View "Virgil v. Southwest Mississippi Electric Power Association" on Justia Law

A “collective action” under the Fair Labor Standards Act, 29 U.S.C. 216(b), alleged that Pilot, a nationwide chain of travel centers, alleged overtime violations. Pilot asserted that the claims are covered by an arbitration agreement. The district court granted conditional certification to 5,145 current and former employees as opt-in Plaintiffs. The Sixth Circuit dismissed an appeal from the denial of a motion to reconsider.Plaintiffs moved to compel the production of the opt-in Plaintiffs' employment dates. The parties reached a partial settlement, covering 1,209 opt-in Plaintiffs who had not signed an arbitration agreement. Pilot moved to compel the remaining Plaintiffs to arbitrate. Before the court ruled, Plaintiffs urged the court to grant its pending motion to produce employment dates, contending that several Plaintiffs were not employees on the date Pilot claimed they signed agreements. The court ordered Pilot to produce the dates. Pilot filed an unsuccessful motion to reconsider, arguing that whether Pilot must turn over those dates was a matter for arbitration. Pilot appealed. The district court, impeded in ruling on Pilot’s motion to compel arbitration because the employment dates had not been produced but unable to compel Pilot to produce the dates, denied, without prejudice, all outstanding motions.The Sixth Circuit dismissed an appeal for lack of jurisdiction. The district court has not yet denied a petition under the Federal Arbitration Act, 9 U.S.C. 16(a)(1)(B) Until the threshold issue of contract formation is decided, there is no need to address the scope of the district court’s authority. View "Taylor v. Pilot Corp." on Justia Law

The Supreme Court reversed the judgment of the circuit court denying Appellants' motion to compel arbitration pursuant to the arbitration agreement contained in the parties' installment-sales contract, holding that the contract was supported by mutual obligations and plainly stated that Appellants did not waive arbitration by obtaining a monetary judgment in the small claims division of district court.Appellees purchased a vehicle with an installment-sales contract but failed to make their scheduled payments. Appellees voluntarily surrendered the vehicle, the vehicle was sold, and Appellees' account was credited. Appellants filed a complaint in the small claims division seeking payment for the remaining balance, and the district court entered judgment against Appellees. Appellees appealed, counterclaimed based on usury and Uniform Commercial Code violations, and sought class certification. Appellants sought to compel arbitration. The circuit court denied the motion, concluding that the arbitration agreement at issue lacked mutuality of obligation and that Appellants waived the right to arbitrate by first proceeding in district court. The Supreme Court reversed, holding (1) the arbitration agreement was valid; and (2) Appellants did not waive arbitration by first seeking monetary relief in district court. View "Jorja Trading, Inc. v. Willis" on Justia Law

The Court of Appeal affirmed the trial court court's order granting plaintiff's motion for a preliminary injunction to enjoin arbitration. The court held that the trial court did not abuse its discretion when it found that plaintiff demonstrated a likelihood he would prevail on the issue of whether his claim was arbitrable. In this case, plaintiff would likely prevail on the merits because he cannot be compelled to submit any portion of his representative Private Attorneys General Act of 2004 claim to arbitration. The court also held that the trial court did not abuse its discretion when it found that plaintiff demonstrated that the interim harm he would suffer if the injunction was denied outweighed the harm AmeriHome would suffer if the injunction was granted. View "Brooks v. AmeriHome Mortgage Co., LLC" on Justia Law

Plaintiff filed suit in Louisiana state court seeking substantial damages against one out-of-state defendant and two in-state defendants. The out-of-state defendant was served with process and immediately removed the case to federal court before the in-state defendants were served. The district court denied plaintiff's motion to remand and entered judgment on the pleadings, dismissing plaintiff's claims with prejudice.The Fifth Circuit affirmed, holding that a non-forum defendant may remove an otherwise removable case even when a named defendant who has yet to be "properly joined and served" is a citizen of the forum state. Therefore, the case was properly retained in federal court. The court also held that the relief, purported harm, and alleged wrongdoing here show that plaintiff's claims, at heart, are in fact an unauthorized collateral attack on the arbitration. Accordingly, the district court correctly dismissed the challenge. Finally, the court denied plaintiff's motion to supplement the record, because the evidence would not change that Section 10 of the Federal Arbitration Act was the appropriate means of challenging the arbitrators' acts, and collateral attacks are not allowed. View "Texas Brine Co., LLC v. American Arbitration Ass'n, Inc." on Justia Law

In an international oil and gas dispute, this appeal challenges the order confirming a private tribunal award of $147 million. At issue was whether an allegedly undisclosed change in the place of incorporation of one party from Texas to Delaware means there was never an agreement to arbitrate.After determining that the district court had jurisdiction to resolve the lawsuit, the Fifth Circuit upheld the order confirming the arbitration award and rejected Ukrnafta's defenses under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The court held that Ukrnafta consented to the arbitration despite Carpatsky's twice identifying itself as a Delaware company, and thus its capacity defense under Article V(1)(a) failed; Ukrnafta's argument, under Article V(1)(b), that American courts cannot enforce the award because it was unable to present its case failed, where Ukrnafta has not identified anything about the arbitration that was fundamentally unfair; Ukrnafta's claims under Article V(1)(c) that the award exceeded the terms of submission were rejected; Ukrnafta's claims under the Article V nonrecognition factors were waived; enforcing the award would further American policy, rather than be contrary to public policy under Article V(2)(b); and Ukrnafta's manifest disregard defense failed. Likewise, the doctrine of claim preclusion would reach the same result with state law claims. View "OJSC Ukrnafta v. Carpatsky Petroleum Corp." on Justia Law

The Federal Arbitration Act expresses a strong policy in favor of arbitration. Based on that, the Supreme Court and the Fourth Circuit have consistently held that contractual provisions capable of being reasonably read to call for arbitration should be construed in favor of arbitration.The Fourth Circuit reversed the district court's denial of PwC's motion to compel arbitration of plaintiff's Title VII claims. Following precedent, the court construed the arbitration provision in the employment agreement between the parties to require arbitration of plaintiff's Title VII claims, and the arbitration provision was neither procedurally nor substantively unconscionable. Accordingly, the court remanded with instructions to compel arbitration. View "Ashford v. PricewaterhouseCoopers LLP" on Justia Law