Justia Arbitration & Mediation Opinion Summaries

Plaintiffs filed suit against GFA, alleging that GFA solicited charitable donations to benefit the poorest of the poor while covertly diverting the money to a multi-million dollar personal empire. The district court denied GFA's motion to compel arbitration.The Eighth Circuit held that the district court interpreted the scope of the arbitration agreements too narrowly, reasoning that, since none of the mission statements or pledges found in the agreements reach donations made to the church, the dispute was entirely unrelated to the parties' agreements. The court held that, even if the agreements did not reach donations made to GFA, the district court erred because the arbitration agreements did not apply only to disputes arising out of the agreements. Rather, they applied by their terms to any and all disputes of any kind arising out of the relationship between plaintiffs and GFA. Because the court could not say with positive assurance that the donations plaintiffs made to GFA did not arise out of that relationship, the court reversed and remanded. View "Dickson v. Gospel for ASIA, Inc." on Justia Law

In this dispute between a law firm and the party it previously represented, the Supreme Court affirmed the judgment of the Court of Appeal insofar as it reversed the superior court’s judgment entered on an arbitration award but reversed the Court of Appeal’s judgment insofar as it ordered disgorgement of all fees collected, holding that the law firm's conduct rendered the parties' arbitration agreement unenforceable but that the ethical violation did not categorically disentitle the law firm from recovering the value of services it rendered to the opposing party.A law firm agreed to represent a manufacturing company in a federal qui tam action. The law firm was later disqualified, and the parties disagreed as to the manufacturer’s outstanding law firm bills. The dispute was sent to arbitration in accordance with the arbitration clause in the parties’ engagement agreement, and the arbitrators ruled in favor of the law firm. The superior court confirmed the award. The Court of Appeal reversed, concluding (1) the law firm committed an ethical violation that rendered the parties’ agreement, including the arbitration clause, unenforceable in its entirety; and (2) the law firm was disentitled from receiving any compensation for the work it performed for the manufacturer. The Supreme Court agreed that the law firm’s conduct rendered the parties’ agreement unenforceable but concluded that the ethical violation did not categorically disentitle the law firm from recovering the value of the services it rendered to the manufacturer. View "Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co." on Justia Law

At issue was two questions under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention) regarding federal subject matter jurisdiction established in an arbitration agreement and whether the parties entered into an agreement under the meaning of the Convention to arbitrate their dispute.Plaintiff’s predecessor entered into contracts that contained arbitration clauses and included “subcontractors.” Defendant was listed as a subcontractor. Plaintiff and its insurers later filed suit, and the case was removed to federal district court. The district court denied Plaintiffs’ motion to remand and granted Defendant’s motions to compel and dismiss. The Eleventh Circuit affirmed the district court’s denial of the motion to remand but reversed and remanded the order compelling arbitration, holding (1) where jurisdiction is challenged on a motion to remand, the district court shall perform a limited inquiry to determine whether the suit “relates to” an arbitration agreement pursuant to the Convention under the factors articulated in Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005); and (2) on a motion to compel arbitration, the district court must engage in a rigorous analysis of the Bautista factors to determine whether the parties entered into an agreement under the meaning of the Convention to arbitrate their dispute. View "Outokumpu Stainless USA, LLC v. Converteam SAS" on Justia Law

Employees at Akers's manufacturing facility were union members, represented by USW under collective bargaining agreements (CBAs). In 2016, Akers was acquired by Ampco. Former Akers employees who had retired but were under age 65 (not eligible for Medicare) then paid $195 per month for their healthcare. Ampco planned to eliminate that benefit for those who had retired before March 2015. The new plan would require retirees to purchase health insurance on the private market and then be reimbursed up to $500 per month for individuals ($700 for families), for five years. Retirees cited a February 2015 memorandum of agreement (MOA), providing that “[c]urrent retirees will remain on their existing Plan ($195.00 monthly premium).” USW filed a grievance. Ampco rejected the grievance, claiming that the Union no longer represented the retirees. USW and Cup, who retired from the plant in 2014, on behalf of a class, filed a non-substantive claim compelling arbitration under the Labor Management Relations Act, 29 U.S.C. 185; a claim to enforce the CBA; and, alternatively, a claim under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a). Having ruled in the Union’s favor on the arbitration count, the court dismissed the substantive counts. The Third Circuit stayed enforcement of the arbitration order, then concluded that the dispute is not subject to arbitration under the CBA because retiree health benefits are not covered by the CBA. Retiree health benefits are discussed in the MOA, which was never incorporated into the CBA; whether the omission was was intentional or inadvertent, the contracts must be enforced as written. View "Cup v. Ampco Pittsburgh Corp" on Justia Law

Plaintiff Branches Neighborhood Corporation, a community association incorporated pursuant to the Davis-Stirling Common Interest Development Act, filed an arbitration claim against the association’s developer, defendant CalAtlantic Group, Inc., formerly known as Standard Pacific Corp. (Standard), for construction defects. The arbitrator granted summary judgment in Standard’s favor, concluding the association did not receive the consent of its members to file the claim until after the claim was filed, in violation of its declaration of Covenants, Conditions and Restrictions (CC&Rs). The trial court subsequently denied the association’s motion to vacate the award, concluding the court had no power to review the arbitrator’s decision. Branches argued on appeal the trial court incorrectly denied its motion to vacate because the arbitrator exceeded its powers by abridging an unwaivable statutory right or public policy. Finding no such right or policy, the Court of Appeal determined the plain language of the CC&Rs controlled. The Court therefore affirmed the judgment. View "Branches Neighborhood Corp. v. CalAtlantic Group, Inc.," on Justia Law

Plaintiff Alfredo Fuentes entered into a written agreement with defendant TMCSF, Inc., doing business as Riverside Harley-Davidson (Riverside), to buy a motorcycle. At the same time, he entered into a written agreement with Eaglemark Savings Bank (Eaglemark) to finance the purchase. The loan agreement included an arbitration clause; the purchase agreement did not. Fuentes then filed suit against Riverside, alleging that Riverside made various misrepresentations and violated various statutes in connection with the sale of the motorcycle. Riverside petitioned to compel arbitration. The trial court denied the petition. The Court of Appeal held Riverside was not entitled to compel arbitration because it was not a party to the arbitration clause, it was not acting in the capacity of an agent of a party to the arbitration clause, and it was not a third party beneficiary of the arbitration clause. Moreover, Fuentes was not equitably estopped to deny Riverside’s claimed right to compel arbitration. View "Fuentes v. TMCSF, Inc." on Justia Law

Busick, who worked as a Massachusetts Instacart shopper and driver, filed a class action arbitration demand on behalf of herself and similarly situated Massachusetts shoppers and drivers, claiming that Instacart violated California law by classifying them as independent contractors rather than employees. The parties' Independent Contractor Agreement stated that disputes would be submitted to binding arbitration, applying California substantive law and “[a]ny action to review the arbitration award for legal error or to have it confirmed, corrected or vacated” would be decided under California law by a California state court. The parties submitted to the arbitrator the threshold issue whether the Agreement allowed Busick to seek certification of a claimant class within the arbitration. In a “Partial Final Award,” the arbitrator answered in the affirmative, stating that her ruling “determines only that [Busick] may move for class certification as part of the mandated arbitration. It does not address the appropriateness of such certification, nor the underlying claim.” Instacart filed a petition to vacate. The court of appeal affirmed that the superior court lacked jurisdiction. The California Arbitration Act allows a party to an arbitration to petition the superior court to confirm, correct or vacate an arbitrator’s “award,” an award that must be set out in writing and “include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.” The arbitrator’s ruling was not an award. View "Maplebear v. Busick" on Justia Law

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

At issue in this appeal was whether it was a judge or an arbitrator who must decide if the arbitration agreement between Spirit Airlines and members of its $9 Fare Club allows for arbitration of claims brought by a class of claimants. The Eleventh Circuit held that the agreement's choice of American Arbitration Association rules, standing alone, was clear and unmistakable evidence that Spirit intended that the arbitrator decide this question. Therefore, the district court was not permitted to rely on testimony from Spirit's vice president to explain the agreement's meaning, and was correct to reject the offer of that testimony. The court affirmed the judgment of the district court. View "Spirit Airlines, Inc. v. Maizes" on Justia Law

Gaffers is a former employee of Kelly, which provides outsourcing and consulting services to firms around the world, including “virtual” call center support, where employees like Gaffers work from home. Gaffers alleged that Kelly underpaid virtual employees, based on time spent logging in to Kelly’s network, logging out, and fixing technical problems. Gaffers sued on behalf of himself and his co-workers (over 1,600 have joined) seeking back pay and liquidated damages under the Fair Labor Standards Act (FLSA), 29 U.S.C. 216(b). About half of the employees that Gaffers sought to represent signed an arbitration agreement with Kelly (Gaffers did not sign one) stating that individual arbitration is the “only forum” for employment claims, including unpaid-wage claims. Kelly moved to compel individual arbitration under the Federal Arbitration Act, 9 U.S.C. 4. Gaffers contended that the National Labor Relations Act and the Fair Labor Standards Act rendered the arbitration agreements unenforceable. The district court agreed with Gaffers. The Sixth Circuit reversed. In 2018, the Supreme Court held, in Epic Systems, that the National Labor Relations Act does not invalidate individual arbitration agreements. The court rejected arguments that FLSA displaced the Arbitration Act by providing a right to “concerted activities” or “collective action” or rendered the employees’ arbitration agreements illegal and unenforceable. View "Gaffers v. Kelly Services, Inc." on Justia Law