Justia Arbitration & Mediation Opinion Summaries

Plaintiffs, on behalf of themselves and others similarly situated, were former students in the nursing program at Salem International University (Salem). When Plaintiffs enrolled, they signed enrollment agreements that contained an arbitration clause. Plaintiffs filed a putative class action complaint against Salem and its president (collectively, Salem) alleging that they were denied the opportunity to complete their coursework in nursing at Salem as a result of the nursing program’s loss of accreditation. Salem filed a motion to stay proceedings pending mandatory alternative dispute resolution. The circuit court denied the motion, concluding that the arbitration agreement did not include an enforceable class action litigation waiver. The Supreme Court reversed, holding that the arbitration agreement acted as a class action litigation waiver barring Plaintiffs from seeking judicial relief as a class. View "Salem International University v. Bates" on Justia Law

Tanguilig, a Bloomingdale’s employee, filed a representative action on behalf of herself and fellow employees pursuant to the Labor Code Private Attorneys General Act (PAGA) (Lab. Code 2698), alleging several Labor Code violations by the company. The trial court denied a motion by Bloomingdale’s to compel arbitration of Tanguilig’s “individual PAGA claim” and stay or dismiss the remainder of the complaint. The court of appeal affirmed. Under California Supreme Court precedent and consistent with the Federal Arbitration Act (FAA) (9 U.S.C. 1), a PAGA representative claim is nonwaivable by a plaintiff-employee by means a predispute arbitration agreement with an employer. A PAGA claim (whether individual or representative) acts as a proxy for the state, with the state’s acquiescence, and seeks civil penalties largely payable to the state; such a plaintiff cannot be ordered to arbitration without the state’s consent. View "Tanguilig v. Bloomingdale's, Inc." on Justia Law

This litigation arose out of the construction of the home of Randie Lawson and Deanna Lawson (together, Respondents). G & G Builders, Inc. (Petitioner) filed suit asserting that it was owed $303,686 under the parties’ construction agreement. Respondents asserted a counterclaim for breach of contract. Petitioner then filed a motion to dismiss Respondents’ counterclaim and to compel arbitration. The circuit court denied the motion, concluding that the arbitration provisions in the construction agreement were not binding on Randie because they were set forth in a document that was never provided to him, nor were they binding on Deanna, who was a non-signatory to the agreement. The Supreme Court affirmed, holding that the circuit court did not err in concluding that there was no agreement between the parties to arbitrate their dispute. View "G & G Builders, Inc. v. Lawson" on Justia Law

After Willie Robinson, Sr. died, his son and estate administrator filed suit against Pine Hills Health and Rehabilitation nursing home. Willie had entered into an arbitration agreement when he was admitted to Pine Hills and the district court granted defendants' motion to dismiss and compel arbitration. The court concluded that, under Arkansas law, the agreement is enforceable even though the National Arbitration Forum (NAF) is unavailable to serve as the arbitrator. Even assuming that all listed arbitration fora are unavailable, the arbitration agreement still requires the parties to arbitrate this dispute. In this case, the arbitration agreement does not say that the parties must either arbitrate before one of the five fora listed in the code or else litigate. The fact that NAF has stopped performing consumer arbitration does not prove that the code has been canceled, and plaintiff has not provided additional persuasive evidence to show cancellation. Finally, under Arkansas law, these allegations are enough for a court to conclude that the parties are closely related and that arbitration is appropriate. View "Robinson v. EOR-ARK, LLC" on Justia Law

Robert Perry was issued a Citibank MasterCard account in 1998. The terms and conditions of the Citibank Card Agreement governing Perry’s account included an arbitration agreement. In 2010, Citibank filed a debt collection action against Perry seek to recover the balance owed on Perry’s account. In 2015, Perry filed an answer to Citibank’s complaint and a class counterclaim alleging that Citibank had violated the West Virginia Consumer Credit and Protection Act. Thereafter, Citibank filed a motion asking the court to compel arbitration of the parties’ claims. The circuit court concluded that Citibank had implicitly waived its right to arbitration by filing suit in circuit court and waiting nearly five years before seeking to invoke its contractual right to arbitrate. Citibank appealed. The Supreme Court reversed, holding that Citibank did not waive its right to compel arbitration in this matter. Remanded. View "Citibank, N.A. v. Perry" on Justia Law

Move commenced arbitration proceedings alleging that Citigroup mismanaged $131 million of Move’s funds by investing in speculative auction rate securities. FINRA provided the parties with a list of thirty proposed arbitrators and their employment histories, including ten proposed arbitrators from FINRA’s chairperson roster. Move ranked “James H. Frank” first who, according to the FINRA Arbitrator Disclosure Report (ADR), received a law degree from Southwestern University in 1975 and was licensed to practice law in California, New York, and Florida. Mr. Frank subsequently served as the chairperson of the panel along with Arthur T. Berggren, a licensed attorney, and Daniel R. Brush, a Certified Public Accountant and Certified Financial Planner. After Move subsequently discovered that Mr. Frank lied about his qualifications, Move filed a complaint arguing that vacatur was warranted because of Mr. Frank's misrepresentations. On appeal, Move challenges the district court's dismissal of its action and denial of its motion to vacate the arbitration award under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The court held that Move’s motion was not untimely because the FAA is subject to equitable tolling. The court also held that Move’s right to a fundamentally fair hearing was prejudiced by the fraudulent misrepresentations of the arbitration panel’s chairperson, resulting in proceedings led by an arbitrator who should have been disqualified from the dispute under the rules and regulations of FINRA. Accordingly, the court reversed and remanded. View "Move, Inc. v. Citigroup Global Markets, Inc." on Justia Law

The parties cross appeal the district court's grant in part and denial in part of a motion for a preliminary injunction to bar enforcement of three local laws restricting operations at a public airport located in and owned and operated by the Town of East Hampton, New York. The district court enjoined the enforcement of only one of the challenged laws—imposing a weekly flight limit—concluding that it reflected a likely unreasonable exercise of the Town’s reserved proprietary authority which is excepted from federal preemption by the Airline Deregulation Act of 1978 (ADA), 49 U.S.C. 41713(b)(3). Plaintiffs contend that none of the challenged laws falls within the ADA’s proprietor exception to federal preemption because the Town failed to comply with the procedural requirements of the Airport Noise and Capacity Act of 1990 (ANCA), 49 U.S.C. 47521–47534, in enacting them. The court identified merit in plaintiffs’ ANCA argument and resolved these cross appeals on that basis without needing to address the Town’s proprietor exception challenge. The court concluded that plaintiffs (1) can invoke equity jurisdiction to enjoin enforcement of the challenged laws; and (2) are likely to succeed on their preemption claim because it appears undisputed that the Town enacted all three laws without complying with ANCA’s procedural requirements, which apply to public airport operators regardless of their federal funding status. The court affirmed the district court’s order insofar as it enjoins enforcement of the weekly flight‐limit law, but vacated the order insofar as it declines to enjoin enforcement of the other two challenged laws. Accordingly, the court remanded to the district court for the entry of a preliminary injunction as to all three laws and for further proceedings. View "Friends of The East Hampton Airport v. Town of East Hampton" on Justia Law

In 2008, the workers’ compensation insurance policy for South Jersey (SJ), a trash-removal business, neared expiration, SJ, through its insurance agent, entered into a three-year Reinsurance Participation Agreement (RPA) with Applied Underwriters. The RPA stated that any disputes would be arbitrated in Tortola or in an agreed location and indicated that it would be governed by Nebraska law. The RPA and its attachments total 10 pages. SJ claims that it believed the RPA was a workers’ compensation insurance policy; that Applied fraudulently presented it as such; that the RPA is actually a retrospective rating insurance policy under which premiums would be based on claims paid during the previous period; and that it was promised possible huge rebates. SJ acknowledged that Applied is not an insurer and cannot issue workers’ compensation insurance. Applied represented that SJ purchased a primary workers’ compensation policy from Continental, which entered into a pooling agreement with California; all are Berskshire Hathaway companies. The pooling agreement was a reinsurance treaty. According to Applied, the RPA was not insurance, but an investment instrument. For 34 months, SJ paid monthly premiums of $40,000-$50,000, expecting a rebate. Claims paid on its behalf were $355,000 over three years. After the RPA expired, Applied declared that SJ owed $300,632.94. SJ did not pay. Applied filed a demand for arbitration. SJ sought declaratory relief as to the arbitration provision and rescission of the RPA. The district court denied the motion to compel arbitration. The Third Circuit reversed. SJ’s challenges to the arbitration agreement apply to the contract as a whole, rather than to the arbitration agreement alone; the parties’ dispute is arbitrable. View "South Jersey Sanitation Co., Inc v. Applied Underwriters Captive Risk Assurance Co., Inc." on Justia Law

Following the death of Cletus Roth, a resident of a nursing facility operated by The Evangelical Lutheran Good Samaritan Society, Roth’s estate and his adult children filed an action against Good Samaritan, alleging, inter alia, wrongful death, negligence, and loss of consortium. After removing the case to federal court, Good Samaritan moved to compel arbitration. The federal district court directed that the claims of Roth’s estate be submitted to arbitration but asked the Supreme Court to answer two certified questions of Iowa law relating to the adult children’s loss-of-consortium claims. The Supreme Court answered (1) Iowa Code 613.15 does not require that adult children’s loss-of-parental-consortium claims be arbitrated when the deceased parent’s estate’s claims are otherwise subject to arbitration; and (2) in light of the Court’s answer to the previous question, the second question has become moot. View "Roth v. Evangelical Lutheran Good Samaritan Society" on Justia Law

After a 2013 fire at the Milwaukee County Courthouse, the county filed a claim with its primary insurer, the State of Wisconsin Local Government Property Insurance Fund. The Fund had engaged Lexington as either its reinsurer or excess insurer (the parties disagree) and maintained a separate insurance policy with Cincinnati Insurance that covered machinery and equipment at the Courthouse. The Fund paid all but a small portion of the county’s claimed losses, filed a reimbursement claim with Lexington, and insisted that the remaining unpaid portion of the county’s claim should be paid by Cincinnati. Pursuant to separate Joint Loss Agreements (JLA) in the county’s policies, the Fund and Cincinnati agreed to arbitrate their dispute. The district court denied Lexington’s motion to be allowed to participate in the arbitration. The Seventh Circuit affirmed. The Fund policy JLA provides a procedure whereby the parties could “signify” an agreement to arbitrate. No such signals were exchanged between Lexington and any other party; no agreement to arbitrate exists between Lexington and the other insurers. Absent such an agreement, Lexington is not entitled to insert itself into the arbitration between the Fund and Cincinnati. View "State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co." on Justia Law