Justia Arbitration & Mediation Opinion Summaries

Plaintiff, a former employee of the St. Louis Rams Partnership, filed an action claiming age discrimination against the Partnership and three of its affiliates. The Rams moved to compel arbitration, citing an arbitration provision of Plaintiff’s employment contract. The trial court granted the motion and ordered that the court action be stayed pending arbitration. Plaintiff petitioned for a writ of mandamus preventing the trial court from compelling arbitration of this dispute. Four judges of the Supreme Court issued a permanent writ of mandamus directing the trial court to vacate its order granting the motion to compel arbitration and to issue an order to compel arbitration whereby the trial court appoints a neutral arbitrator and implies the specific terms of arbitration from applicable statutes in Missouri’s uniform arbitration act, holding (1) the terms of Plaintiff’s employment contract designating the commissioner of the National Football League (NFL) as the sole arbitrator with unfettered discretion to establish the rules for arbitration are unconscionable and, therefore, unenforceable; and (2) Missouri’s uniform arbitration act provides a mechanism to imply the terms missing from the arbitration agreement and provides the rules for appointing an arbitrator to replace the NFL commissioner. View "State ex rel. Hewitt v. Hon. Kerr" on Justia Law

A skilled nursing facility (Plaintiff) terminated an employee (Employee) on the ground that she had failed to make a timely report of an allegation of resident abuse. An arbitrator agreed with Plaintiff that the Employee had improperly delayed reporting an incident of suspected abuse but ordered the Employee reinstated based upon its determination that Plaintiff had just cause to suspend Employee without pay for one month. The trial court denied Plaintiff’s application to vacate the arbitration award. The Appellate Court reversed, concluding that the arbitration award reinstating the Employee’s employment violated Connecticut’s clear public policy requiring the prompt reporting of any incident of suspected abuse of a nursing home resident. The Supreme Court reversed, holding that the arbitration award requiring the reinstatement of the Employee did not violate this public policy. View "Burr Road Operating Co. II, LLC v. New England Health Care Employees Union" on Justia Law

Benihana America obtained a preliminary injunction in aid of arbitration of a dispute arising under its license agreement with Benihana of Tokyo, prohibiting Tokyo from: selling unauthorized food items at the restaurant it operates under the license agreement; using certain trademarks in connection with that restaurant in a manner not approved by the license agreement; and arguing to the arbitral panel, if it rules that Tokyo breached the license agreement, that Tokyo should be given additional time to cure any defaults. The Second Circuit affirmed with respect to the menu offering and trademark use injunctions. The court reasonably concluded that each of the relevant factors favored Benihana America. The court reversed the prohibition on arguing to the arbitral panel for an extended cure period. When a dispute is properly before an arbitrator, a court should not interfere with the arbitral process on the ground that, in its view of the merits, a particular remedy would not be warranted. Benihana America may challenge an arbitrator’s decision in court only after it has been issued. It may not subvert its agreement to arbitrate by obtaining an advance judicial determination that there are no grounds for the arbitrator to grant a particular remedy. View "Benihana, Inc. v. Benihana of Tokyo, LLC" on Justia Law

Plaintiffs signed a form contract with Defendant for the construction of a house. The contract contained an arbitration clause within which was a provision that Defendant contended was a “delegation provision” stating that the parties agreed to delegate, from the courts to an arbitrator, any question about the enforceability of the arbitration clause. Plaintiffs later filed a complaint against Defendant for alleged defects in the house. The circuit court denied Defendant’s motion to dismiss and compel arbitration, finding that the arbitration clause was procedurally and substantively unconscionable. Defendant appealed, arguing that the trial court should have enforced the delegation provision and referred the parties’ claims about arbitrability to arbitration. The Supreme Court affirmed, holding (1) the delegation provision did not reflect a clear and unmistakable intent by the parties to assign to the arbitrator all questions about the enforceability of the arbitration clause; and (2) the circuit court was correct in deciding that the arbitration provision was unenforceable under West Virginia contract law. View "Schumacher Homes of Circleville v. Spencer" on Justia Law

A multiemployer pension plan (the “Pension Fund”) commenced this action under 29 U.S.C. 1401(b)(2) by filing a complaint seeking to vacate or modify an arbitration order entered pursuant to section 1401(a)(1). The Pension Fund later filed an amended complaint that it argued related back to the filing date of the original complaint. The district court concluded that the Pension Fund could challenge the arbitration award only by filing a motion to vacate or modify, as provided in the Federal Arbitration Act. The court then treated the amended complaint as a motion and dismissed it, concluding that it was untimely under section 1401(a)(2) because a motion cannot “relate back” under Fed. R. Civ. P. 15. The Fourth Circuit reversed the district court’s order of dismissal and remanded for further proceedings as a civil action, holding (1) a party seeking to vacate or modify an arbitrator’s award under section 1401(b)(2) must commence an action in a district court by filing a complaint; and (2) the amended complaint in this case related back to the filing date of the original complaint, thus rendering it timely. View "Local Union 557 Pension Fund v. Penske Logistics LLC" on Justia Law

In 2010, Plaintiffs purchased real estate from Charter West National Bank. Plaintiffs later filed suit, alleging that Charter West represented that the property would be free and clear of all liens but manipulated the language of the deed to reflect that the conveyance was subject to liens of record. Charter West moved to compel arbitration pursuant to the real estate purchase agreement, which contained an arbitration clause. Plaintiffs filed an objection asserting that the arbitration clause was void because it failed to comply with Nebraska’s Uniform Arbitration Act, and the Federal Arbitration Act (FAA) was inapplicable because the transaction did not involve interstate commerce. The district court denied the motion to compel arbitration without prejudice based on a lack of evidence that the transaction affected interstate commerce as to trigger the provisions of the FAA. Charter West appealed. The Supreme Court dismissed the appeal on the grounds that there was no final, appealable order entered by the district court capable of appellate review. View "Wilczewski v. Charter West Nat'l Bank" on Justia Law

This dispute arose from a contract signed by the parties in 2006, the Wireless Patent License Agreement, which provided for arbitration as the mechanism to resolve any claims arising under that Agreement. LG Electronics, Inc. sought a declaration in the Court of Chancery that InterDigital Communications, Inc., InterDigital Technology Corporation, and IPR Licensing Inc. that InterDigital had breached a nondisclosure agreement between the parties by disclosing confidential information during a pending arbitration proceeding. The Court of Chancery granted InterDigital's motion to dismiss, holding that all of LG's claims were properly before the arbitral tribunal, and deferred to the "first-filed proceeding" based on the factors established by the Delaware Supreme Court in "McWane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co." After review, the Supreme Court agreed that the McWane doctrine applied in this case, and that it supported dismissing LG's claims. View "LG Electronics, Inc. v. InterDigital Communications, Inc." on Justia Law

A franchisee janitorial worker, on behalf of himself and other similarly situated individuals, filed a complaint against System4 LLC, a master franchisor, and NECCS, Inc., a regional subfranchisor, alleging, among other claims, breach of contract, misclassification as independent contractors in their franchise agreements, and rescission of the franchise agreements. The franchise agreements, signed only by Plaintiffs and NEECS, required the franchisees to arbitrate virtually all disputes. Defendants, citing the arbitration clause in the franchise agreement, moved to stay the court proceedings pending arbitration. The judge concluded that because System4 was not a nonsignatory to the agreements, Plaintiffs could proceed to litigate their claims against System4 in court. The Supreme Judicial Court reversed, holding that, by reason of equitable estoppel, System4 could compel Plaintiffs to arbitrate their substantive claims in accordance with the arbitration provision in Plaintiffs’ franchise agreements. Remanded. View "Machado v. System4 LLC" on Justia Law

3850 & 3860 Colonial Blvd. LLC acquired an interest in Rubicon Media, LLC, a limited liability company controlled by Christopher Griffin. Griffin carried out a recapitalization of Rubicon LLC, which gave rise to Colonial’s principal claims. Rubicon LLC’s operating agreement required arbitration. Griffin later converted Rubicon LLC into Rubicon Media, Inc. At issue in this case was whether Colonial was obligated to arbitrate or whether creation of Rubicon Media as the LLC’s successor - with a charter providing exclusively for litigation - eliminated any right or duty to arbitrate. In a letter opinion, the Court of Chancery stayed proceedings pending arbitration, specifically awaiting resolution of the question of substantive arbitrability. Colonial sought certification of an interlocutory appeal of that order. The Court rejected Colonial’s application for certification of an interlocutory appeal, holding that there was an arguable basis for arbitration that raised a question for resolution in the arbitration forum. View "3850 & 3860 Colonial Blvd., LLC v. Griffin" on Justia Law

Shasta Linen Supply, a California corporation, applied for workers’ compensation insurance coverage from Applied Underwriters, a Nebraska corporation. Shasta accepted Applied’s proposed policy through an agreement entitled a Request to Bind Coverages & Services. On the same day, Shasta entered into a Reinsurance Participation Agreement (RPA) with Applied Underwriters Captive Risk Assurance Company (AUCRA), Applied’s subsidiary and a British Virgin Islands corporation. The request to bind and the RPA contained conflicting provisions regarding the parties’ arbitration process for resolving disputes. After a dispute arose regarding the amount of money that Shasta owed to Applied, the American Arbitration Association (AAA) acknowledged receipt of AUCRA’s demand for arbitration. Shasta filed a complaint seeking a declaratory judgment that the request to bind required arbitration by "JAMS" in Omaha, Nebraska and injunctive relief from the AAA arbitration. The court determined that it had jurisdiction to decide which contract provision controlled and issued a temporary injunction and stay of the AAA arbitration until it decided the parties’ rights. Applied and AUCRA appealed, arguing that the court erred in exercising jurisdiction over the parties’ contract dispute and granting a temporary injunction. The Supreme Court dismissed the appeal, holding that the court’s temporary injunction and stay was an interlocutory order that was not appealable. View "Shasta Linen Supply, Inc. v. Applied Underwriters, Inc." on Justia Law