Justia Arbitration & Mediation Opinion Summaries

The case involves a dispute between Coinbase, Inc., a cryptocurrency exchange platform, and its users. The users had agreed to two contracts with Coinbase. The first contract, the User Agreement, contained an arbitration provision stating that an arbitrator must decide all disputes, including whether a disagreement is arbitrable. The second contract, the Official Rules for a promotional sweepstakes, contained a forum selection clause stating that California courts have sole jurisdiction over any controversies regarding the promotion. The users filed a class action in the U.S. District Court for the Northern District of California, alleging that the sweepstakes violated various California laws. Coinbase moved to compel arbitration based on the User Agreement’s arbitration provision. The District Court denied the motion, ruling that the Official Rules’ forum selection clause controlled the dispute. The Ninth Circuit affirmed this decision.The Supreme Court of the United States affirmed the Ninth Circuit's decision. The Court held that when parties have agreed to two contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs. The Court rejected Coinbase's arguments that the Ninth Circuit should have applied the severability principle and that the Ninth Circuit erroneously held that the Official Rules’ forum selection clause superseded the User Agreement’s arbitration provision. The Court also dismissed Coinbase's concern that its ruling would invite chaos by facilitating challenges to delegation clauses. The Court concluded that a court, not an arbitrator, must decide whether the parties’ first agreement was superseded by their second. View "Coinbase v. Suski" on Justia Law

The case involves an employee, Massiel Hernandez, and her employer, Sohnen Enterprises. Hernandez signed an arbitration agreement with Sohnen, which stated that any disputes would be governed by the Federal Arbitration Act (FAA). When Hernandez filed a complaint against Sohnen for disability discrimination and Labor Code violations, the parties agreed to arbitrate. However, Sohnen failed to pay the arbitration fees within 30 days of the due date. Hernandez then filed a motion to withdraw from arbitration and litigate in state court, as permitted under California Code of Civil Procedure section 1281.97. The trial court granted the motion, finding that Sohnen had breached the arbitration agreement.Sohnen appealed, arguing that the FAA, not California law, governed the arbitration agreement and preempted section 1281.97. The Court of Appeal of the State of California, Second Appellate District, Division Five, agreed with Sohnen. The court found that the arbitration agreement was governed by the FAA, including both its substantive and procedural provisions. As a result, the procedures of section 1281.97 did not apply, and the trial court's order was reversed. The court also held that even if section 1281.97 did apply, it would still reverse the order because the FAA preempts the provisions of section 1281.97 that mandate findings of breach and waiver when an agreement falls within the scope of the FAA and does not expressly adopt California arbitration laws. View "Hernandez v. Sohnen Enterprises" on Justia Law

The case revolves around a dispute between Winston Mar and SierraConstellation Partners, LLC (Sierra) and Lawrence Perkins (collectively, Sierra defendants). Mar, who was a partner in Sierra, sought a buyout of his partnership interest. Sierra defendants moved to compel arbitration of Mar's action, based on an arbitration agreement included in Sierra's employee handbook. Mar had refused to sign the arbitration agreement, stating that he would not be bound by it and that Sierra could terminate his employment if it objected. Sierra argued that Mar's continued employment for 19 months after the introduction of the arbitration agreement constituted assent to the agreement.The Superior Court of Los Angeles County denied Sierra defendants' motion to compel arbitration. The court found that Sierra defendants failed to meet their burden to establish the existence of an arbitration agreement because Mar clearly stated that he refused to sign the arbitration agreement and Sierra could terminate his employment if it objected.On appeal, the Court of Appeal of the State of California, Second Appellate District, Division Seven, affirmed the lower court's decision. The appellate court held that while an employee's continued employment can generally be taken as assent to an arbitration agreement, this is not the case when the employee promptly rejects the arbitration agreement and makes clear he or she refuses to be bound by the agreement. In this case, Mar promptly and unequivocally rejected the arbitration agreement, and thus, there was no mutual assent to arbitrate. View "Mar v. Perkins" on Justia Law

The case involves Puerto Rico Fast Ferries LLC ("Fast Ferries") and Mr. Cade, LLC and SeaTran Marine, LLC ("SeaTran") (collectively, "defendants-appellees"). Fast Ferries had entered into a Master Time Charter Agreement with Mr. Cade, LLC to charter the motor vessel Mr. Cade and procure a licensed crew. The agreement contained mediation and forum-selection clauses. When the final Short Form expired, Fast Ferries returned the vessel to its home port in Louisiana. A year later, Fast Ferries filed a complaint against Mr. Cade, LLC and SeaTran alleging breach of contract and liability pursuant to culpa in contrahendo. The defendants-appellees moved to dismiss the complaint, arguing that the Master Agreement was still in effect and required a written agreement for the charter of M/V Mr. Cade.The district court granted the motion to dismiss in part, concluding that the Master Agreement did not contain a termination date and remained in effect. Therefore, the contract's mediation and forum-selection clauses were binding on the parties. However, the district court did not address Fast Ferries' argument that SeaTran was not a signatory of the agreement and, therefore, could not invoke the mediation and forum-selection clauses contained therein.On appeal, the United States Court of Appeals for the First Circuit affirmed the district court's order on the defendants-appellees' motion to dismiss. The court held that the Master Agreement was still in effect and that SeaTran, despite being a non-signatory, could enforce the Master Agreement's mediation and forum-selection clauses. The court reasoned that Fast Ferries' claims against SeaTran were necessarily intertwined with the Master Agreement, and thus, Fast Ferries was equitably estopped from avoiding the mediation and forum-selection clauses with respect to SeaTran. View "Puerto Rico Fast Ferries LLC v. SeaTran Marine, LLC" on Justia Law

The Trustees of the New York State Nurses Association Pension Plan (the Trustees) and White Oak Global Advisors, LLC (White Oak) entered into an investment management agreement, which included an arbitration clause. The Trustees later brought several fiduciary duty claims against White Oak under the Employee Retirement Income Security Act (ERISA), which were resolved through arbitration. The arbitrator issued an award in favor of the Trustees, which the Trustees sought to confirm in the United States District Court for the Southern District of New York.White Oak appealed the confirmation, arguing that the district court lacked jurisdiction and that the court erroneously interpreted the award. The United States Court of Appeals for the Second Circuit affirmed the district court's jurisdiction, finding that the Trustees' petition to confirm the award was cognizable under ERISA § 502(a)(3). The court also affirmed the district court's interpretation of the award regarding the disgorgement of pre-award interest and the "Day One" fees. However, the court vacated and remanded the district court's confirmation of the disgorgement of White Oak's "profits," finding the award too ambiguous to enforce. The court also vacated and remanded the district court's order for White Oak to pay the Trustees' attorneys' fees and costs, finding the district court's findings insufficiently specific. View "Trustees of the NYSNAPP v. White Oak Glob. Adv." on Justia Law

Isabel Garcia, an employee of RAC Acceptance East, LLC (RAC), filed a lawsuit against RAC, Stoneledge Furniture LLC (Stoneledge), and Inderjit Singh, alleging ten claims related to sexual harassment. RAC, Stoneledge, and Singh sought to compel arbitration based on an arbitration agreement they claimed Garcia electronically signed during her employment onboarding process. Garcia denied signing the agreement and argued that RAC failed to prove she executed the agreement.The trial court denied the petitions to compel arbitration. It found that while RAC had initially shown an agreement to arbitrate by providing the agreement, Garcia's denial of signing the agreement shifted the burden back to RAC to prove by a preponderance of the evidence that her electronic signature was authentic. The court found that RAC failed to meet this burden as the declaration provided by RAC did not present sufficient details of the onboarding process to establish how Garcia must have signed the agreement. The court also found that the agreement did not have the appearance of an electronically signed document created in Taleo, the third-party electronic workforce management platform used by RAC.On appeal, the Court of Appeal of the State of California First Appellate District Division Three affirmed the trial court's decision. The appellate court found that the trial court did not err in deciding whether any agreement to arbitrate existed in the first place, rather than delegating that decision to an arbitrator. The appellate court also found that RAC failed to prove the existence of the arbitration agreement. The court concluded that RAC's evidence did not show that only Garcia could have placed the electronic signature on the arbitration agreement. The court also found that the trial court did not abuse its discretion in denying RAC’s request for an evidentiary hearing. View "Garcia v. Stoneledge Furniture LLC" on Justia Law

Five diabetic patients, Henry J. Hebert, Traci Moore, Aliya Campbell Pierre, Tiffanie Tsakiris, and Brenda Bottiglier, were prescribed the Dexcom G6 Continuous Glucose Monitoring System (Dexcom G6) to manage their diabetes. The device allegedly malfunctioned, failing to alert them of dangerous glucose levels, resulting in serious injuries and, in Hebert's case, death. The patients and Hebert's daughters filed separate product liability actions against Dexcom, Inc., the manufacturer. Dexcom moved to compel arbitration, arguing that each patient had agreed to arbitrate disputes when they installed the G6 App on their devices and clicked "I agree to Terms of Use."The trial court granted Dexcom's motions to compel arbitration in all five cases. The plaintiffs petitioned the appellate court for a writ of mandate directing the trial court to vacate its orders compelling them to arbitrate. The appellate court consolidated the cases and issued an order directing Dexcom to show cause why the relief sought should not be granted.The appellate court concluded that the trial court erred. Although a clickwrap agreement, where an internet user accepts a website’s terms of use by clicking an “I agree” or “I accept” button, is generally enforceable, Dexcom’s G6 App clickwrap agreement was not. The court found that Dexcom undid whatever notice it might have provided of the contractual terms by explicitly telling the user that clicking the box constituted authorization for Dexcom to collect and store the user’s sensitive, personal health information. For this reason, Dexcom could not meet its burden of demonstrating that the same click constituted unambiguous acceptance of the Terms of Use, including the arbitration provision. Consequently, arbitration agreements were not formed with any of the plaintiffs. The court granted the petitions and directed the trial court to vacate its orders granting Dexcom’s motions to compel arbitration and to enter new orders denying the motions. View "Herzog v. Superior Court" on Justia Law

The case involves the interpretation of Section 3 of the Federal Arbitration Act (FAA), which outlines procedures for enforcing arbitration agreements in federal court. The petitioners, current and former delivery drivers for an on-demand delivery service operated by the respondents, filed a lawsuit alleging violations of federal and state employment laws. The respondents moved to compel arbitration and dismiss the suit. The petitioners agreed that their claims were arbitrable but argued that Section 3 of the FAA required the District Court to stay the action pending arbitration rather than dismissing it entirely. The District Court issued an order compelling arbitration and dismissed the case without prejudice. The Ninth Circuit affirmed the decision.The Supreme Court of the United States reversed the Ninth Circuit's decision. The Supreme Court held that when a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceeding pending arbitration, Section 3 of the FAA compels the court to issue a stay, and the court lacks discretion to dismiss the suit. The Court reasoned that the statutory text, structure, and purpose all point to this conclusion. The Court further explained that the FAA's structure and purpose confirm that a stay is required. The Court concluded that staying rather than dismissing a suit comports with the supervisory role that the FAA envisions for the courts. The case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Smith v. Spizzirri" on Justia Law

The case involves the Government of Romania's appeal against three judgments that confirmed an international arbitral award. The dispute originated from Romania's adoption of tax incentives to encourage investment in certain economically "disfavored" regions of the country. The Micula brothers and associated entities built food production facilities in Romania relying on these incentives. However, Romania repealed most of the tax incentives in 2005 in preparation to join the EU, leading the Miculas to file for arbitration in 2005.The district court confirmed the award in 2019 and entered judgment for $356,439,727, net of payments made and with interest. Romania challenged the subject matter jurisdiction, arguing that the arbitration clause in the Sweden-Romania BIT was void as of Romania’s 2007 accession because EU law prohibits intra-EU agreements to arbitrate EU law disputes between a member state and the citizens of another member state. The district court ruled EU law was inapplicable because the parties’ dispute predated Romania’s EU membership and the award did not “relate to the interpretation or application of EU law.”In 2022, Romania sought relief from the 2019 Confirmation, and ensuing sanctions, arguing that two decisions of the EU’s highest court in 2022 held that “the agreement to arbitrate in the [Sweden-Romania] BIT was void the moment that Romania entered the EU.” The district court denied the motion, concluding that the CJEU Decisions did not hold Romania’s accession retroactively voided its pre-EU consent to arbitrate.The United States Court of Appeals for the District of Columbia Circuit affirmed the district court's denial of Romania's Rule 60(b) motion for relief from judgment. The court held that the district court's jurisdictional analysis was not premised on the "interpretation and application of EU law." Rather, the district court independently found the requisite "jurisdictional fact" under the arbitration exception of an agreement to arbitrate with the Miculas. The court also found that the 2022 CJEU decisions did not support the interpretation that Romania’s 2007 accession to the EU retroactively rendered the preexisting agreement to arbitrate with Swedish investors “void ab initio.” View "Micula v. Government of Romania" on Justia Law

Jennifer D. Aldea-Tirado, an employee of PricewaterhouseCoopers LLP (PWC), filed a lawsuit against her employer alleging violations of Title VII of the Civil Rights Act, the Pregnancy Discrimination Act of 1978, and Puerto Rico law. Aldea-Tirado claimed she was subjected to adverse employment action due to her gender and pregnancy and was retaliated against for filing a complaint with the United States Equal Employment Opportunity Commission. PWC, however, argued that Aldea-Tirado's employment contract contained an arbitration clause and moved to compel arbitration.The United States District Court for the District of Puerto Rico granted PWC's motion to compel arbitration. The court determined that PWC had established the existence of a valid agreement between PWC and Aldea-Tirado to arbitrate her claims. The court also found that Aldea-Tirado had tacitly consented to the Agreement by continuing to work for PWC after having received the Agreement through both regular mail and email. Aldea-Tirado appealed this decision.The United States Court of Appeals for the First Circuit affirmed the lower court's decision. The appellate court found no merit in Aldea-Tirado's arguments that she did not receive the Agreement or that it was unconscionable to hold her to it. The court also rejected Aldea-Tirado's contention that she was not given "some minimal level of notice" that her continued employment would effect a waiver of her right to pursue her claims in a judicial forum. The court concluded that Aldea-Tirado failed to show that there was any non-speculative basis in the record from which a reasonable factfinder could determine that she did not receive the email to which the Agreement was attached. View "Aldea-Tirado v. PricewaterhouseCoopers, LLP" on Justia Law