Justia Arbitration & Mediation Opinion Summaries

Morgan Stanley filed suit under the Federal Arbitration Act (FAA) to confirm an arbitration award against defendant. After defendant did not respond, the district court entered judgment in favor of Morgan Stanley. Then the district court entered an order granting in part Morgan Stanley's motions to appoint a receiver under Federal Rule of Civil Procedure 66 and to enter a charging order under Rule 69(a) and Minn. Stat. 322C.0503. Defendant appealed.The Eighth Circuit affirmed, holding that the district court did not abuse its discretion in appointing a receiver under Federal Rule 66 to exercise extraordinary investigative powers to determine whether Morgan Stanley's substantial judgment can be paid within a reasonable time. The court also held that the district court did not abuse its discretion by appointing a general receiver over his interests in the LLCs. In this case, Morgan Stanley's motion for a charging order under Minn. Stat. 322C.0503 properly relied on Federal Rule 69(a) and state law, while its motion for a receiver relied on the district court's federal equitable powers under Rule 66. View "Morgan Stanley Smith Barney LLC v. Johnson" on Justia Law

The Court of Appeal affirmed the trial court's denial of Monster Energy's motion to compel arbitration of a disability discrimination action brought by plaintiff. While the court agreed with Monster Energy that the trial court relied on an erroneous understanding of applicable law regarding the number of unconscionable provisions that may render an arbitration agreement irreparable by severance, the court held that there has been no argument here about the alternative ground for the ruling. Therefore, the court could not conclude that the trial court abused its discretion when it denied Monster Energy's motion. Rather, the court agreed with the trial court that the parties' arbitration agreement is permeated with too high a degree of unconscionability for severance to rehabilitate. View "Lange v. Monster Energy Co." on Justia Law

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

Brickstructures and Coaster executed a fill‐in‐the‐blank joint venture agreement to design a roller coaster kit, compatible with LEGOs. Many of the blanks went unfilled. The agreement contained an arbitration clause. They successfully released one product but the relationship fizzled. Coaster independently launched another LEGO‐compatible kit, without any credit to Brickstructures. Brickstructures sued, claiming that Coaster breached the agreement and its fiduciary duties and violated the Lanham Act. Coaster moved to dismiss, arguing that the arrangement was not an enforceable contract. The court dismissed the complaint for a jurisdictional defect. An amendment cured that issue. Coaster again moved to dismiss, arguing that the amended complaint did not allege a binding joint venture or, alternatively, that arbitration was the exclusive forum for the claims. Brickstructures demanded that Coaster withdraw the arbitration arguments, claiming Coaster waived them by not advancing them in its first motion. Coaster formally withdrew those arguments. The court found that the amended complaint adequately alleged a binding agreement. Coaster then moved to compel arbitration.The court found that Coaster waived arbitration, rejecting an argument that it was reasonable to abandon an arbitration demand in acquiescence to Brickstructures’s threat to seek sanctions. The Seventh Circuit affirmed. "Having put the arbitration card on the table and then taken it back, Coaster was not permitted to play that card again." A court has the discretion to allow recission of a waiver of the right to arbitrate only in “abnormal” circumstances, View "Brickstructures, Inc. v. Coaster Dynamix, Inc." on Justia Law

After Victrola filed suit against the Jaman Parties, defendants moved to compel arbitration under the Federal Arbitration Act (FAA) based on the parties' real estate purchase agreement. The trial court denied the motion, finding that the procedural provisions of the California Arbitration Act (CAA), rather than those of the FAA, applied to its ruling on the motion.The Court of Appeal reversed, finding that the parties incorporated the procedural provisions of the FAA into the agreement and thus the trial court could not look to section 1281.2(c) of the CAA to deny defendants' motion; the agreement's arbitration clause encompasses all of Victrola's claims against defendants; the FAA preempts section 1298.7 in this instance; and JP and Manheim have standing to enforce the arbitration provision. The court vacated the trial court's order, with instructions to determine whether defendants are prejudicially estopped from claiming the FAA's procedural provisions apply. View "Victrola 89, LLC v. Jaman Properties 8 LLC" on Justia Law

The Supreme Court affirmed as modified the district court's confirmation of an arbitration award of almost $3 million under the Federal Arbitration Act (FAA) and awarding attorney fees as a sanction under Neb. Rev. Stat. 25-824, holding that no grounds existed for vacating or modifying the award, and therefore, the parties were bound by their agreement to arbitrate and the arbitrator's construction of that agreement.The Supreme Court affirmed the district court's confirmation of the arbitration award and the denial of Appellants' motions to vacate and/or modify the award, holding (1) the district court did not err in confirming the arbitration award and denying the motions to vacate and/or modify the award; (2) the district court did not err by denying a motion to supplement the record; (3) the district court did not abuse its discretion in awarding attorney fees; and (4) the court did not err in awarding sanctions. View "Seldin v. Estate of Silverman" on Justia Law

The Supreme Court reversed the judgment of the intermediate court of appeals (ICA) affirming the judgment of the circuit court granting Defendants' motion to compel arbitration of Plaintiff's complaint against a partnership and a partner after concluding that Plaintiff's claims arose out of the agreement founding the partnership, signed by Plaintiff, that contained an arbitration clause, holding that the claims in Plaintiff's complaint were not subject to the arbitration clause in the partnership agreement.Plaintiff, a founding partner of the partnership, brought claims alleging conversion, fraudulent conversion, and punitive damages. The lower courts concluded that Plaintiff's claims arose out of the partnership agreement, and therefore the arbitration clause applied. The Supreme Court reversed, holding that because Defendants failed to initiate arbitration pursuant to Haw. Rev. Stat. 658A-9 before filing a motion to compel arbitration and because the arbitration clause did not encompass Plaintiff's claims for conversion, the ICA erred in affirming the circuit court's order granting Defendants' motion to compel arbitration. View "Yamamoto v. Chee" on Justia Law

In this wrongful death action brought against a nursing home notwithstanding the existence of an arbitration agreement between the decedent and the nursing home the Supreme Judicial Court answered two certified questions by holding that the Legislature intended wrongful death actions to be derivative of the decedent's own cause of action and that, under the circumstances of this case, the arbitration agreement between the decedent and the nursing home controlled the decedent's statutory beneficiaries.After the decedent died in a nursing home, Plaintiff, her daughter, brought this wrongful death action. The United States Court of Appeals for the First Circuit certified two questions to the Supreme Judicial Court. The Supreme Court answered (1) the wrongful death statute, Mass. Gen. Laws ch. 229, 2, provides rights to statutory beneficiaries derivative of, rather than independent from, what would have been the decedent's action for the injuries causing her death; and (2) the arbitration clause in this case was enforceable. View "GGNSC Administrative Services, LLC v. Schrader" on Justia Law

Mac Haik appeals the circuit court’s denial of its motion to compel arbitration. In 2016, plaintiff Brenda Hester purchased a used 2014 Dodge Ram from Jackson Mac Haik CDJR, Ltd. (Mac Haik). Hester executed a retail-installment sale contract with Mac Haik for the purchase of the vehicle. The contract contained an arbitration provision. In 2017, Hester sued Mac Haik, American Financial Warranty Corporation (American Warranty), Randy Miggins d/b/a M&S Towing, and Randy Miggins, alleging that the vehicle she bought from Mac Haik “was defective in materials and workmanship from and after the date of purchase” and “that said defects have existed since the Plaintiff started using said vehicle.” She alleged further that American Warranty issued her a warranty but failed to repair her truck. Hester never served American Warranty with a summons and copy of her complaint. Hester alleged that Mac Haik took possession of her vehicle to make warranted repairs and later allowed it to be towed. Mac Haik, finding that all of Hester’s claims, which sounded in tort or contract and related to her purchase or condition of the vehicle at issue, argued that the claims were subject to arbitration. Mac Haik appealed the circuit court’s denial of its motion to compel arbitration. Because the Mississippi Supreme Court found that the claims fell within the scope of the valid arbitration provision, and that no defenses existed to bar arbitration, it reversed reverse the circuit court’s order denying Mac Haik’s motion to compel arbitration and ordered the claims to arbitration. View "Jackson Mac Haik CDJR, Ltd. v. Hester" on Justia Law

Defendants, commodities futures investors, maintained trading accounts with FCStone, a clearing firm that handled the confirmation, settlement, and delivery of transactions. In 2018, extraordinary volatility in the natural gas market wiped out the defendants’ account balances with FCStone, leaving some defendants in debt. The defendants alleged Commodity Exchange Act violations against FCStone and initiated arbitration proceedings before the Financial Industry Regulatory Authority (FINRA). FCStone sought a declaratory judgment, claiming the parties must arbitrate their disputes before the National Futures Association (NFA), and that FINRA lacks jurisdiction over the underlying disputes. The district court ruled for FCStone, ordered arbitration and designated an arbitration forum, then stayed the case to address related issues, including the arbitration venue. The Seventh Circuit dismissed an appeal for lack of jurisdiction under 28 U.S.C. 1291 or the Federal Arbitration Act, ” 9 U.S.C. 16(a)(3). The district court’s decisions were non-final and no exception to the rule of finality applies. The court rejected an argument that the order amounted to an injunction prohibiting FINRA arbitration. A pro‐arbitration decision, coupled with a stay (rather than a dismissal) of the suit, is not appealable. The court noted that the district court did not decide whether the parties’ arbitration agreements relinquished defendants’ purported rights to FINRA arbitration. View "INTL FCStone Financial Inc. v. Farmer" on Justia Law