Justia Arbitration & Mediation Opinion Summaries

The Union filed a grievance against Verizon under the collective bargaining agreement (CBA), after Verizon eliminated communications technician positions. At issue on appeal was whether the arbitrator exceeded his power by issuing a substituted award after he determined that he had exceeded his power in the original award. In this case, the arbitrator decided, at least initially, that the issue submitted included both the “minimal additional training” and the “previously held” language in the CBA. While the arbitrator was later persuaded that this was error, Rule 40 of the AAA Labor Arbitration Rules precluded him from making that determination and issuing the substituted award. Accordingly, the court affirmed the district court's judgment that the arbitrator exceeded his power. View "Local Union 824, International Brotherhood of Electrical Workers v. Verizon Florida, LLC" on Justia Law

Athena incurred $1.4 million in losses on investments with Goldman Sachs and believed that Goldman misrepresented the risks, Goldman and Athena participated in arbitration to settle the dispute. Athena asserted misrepresentation, securities fraud, common law fraud and breach of fiduciary duty. After the first panel session, the Financial Industry Regulatory Authority (FINRA) disclosed that a panel member, Timban, had been charged with the unauthorized practice of law based on an appearance in a New Jersey municipal court. Neither party, nor FINRA, objected to Timban’s continued participation; neither party conducted further due diligence. Following a nine-day hearing, the panel ruled in favor of Goldman. Two panel members signed the award, but Timban did not. Under the Subscription Agreement, only two members needed to sign the award for it to have binding effect. After the award, Athena conducted a background investigation on Timban and learned that Timban failed to disclose numerous regulatory complaints against him. The district court ordered a new arbitration hearing, reasoning that Athena’s rights were compromised by an arbitrator who misrepresented his ability to serve and abandoned the panel before its final ruling. The Third Circuit reversed, finding that Athena waived its right to challenge the award. View "Goldman Sachs & Co v. Athena Venture Partners, L.P." on Justia Law

Plaintiff filed a putative class action against Luxottica asserting four causes of action arising out of his employment with Luxottica, including (1) unlawful business practices, (2) failure to pay overtime compensation, (3) failure to provide accurate itemized wage statements, and (4) failure to pay wages when due. The district court subsequently granted Luxottica's motion to compel arbitration and dismissed the first amended complaint. This appeal presents issues of first impression regarding the scope of Federal Arbitration Act (FAA) preemption, 9 U.S.C. 2 et seq., and the meaning of the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion. The court must decide whether the FAA preempts the California rule announced in Iskanian v. CLS Transportation Los Angeles, which bars the waiver of representative claims under the Private Attorneys General Act of 2004 (PAGA), Cal. Lab. Code 2698 et seq. The court concluded that the FAA does not preempt the Iskanian Rule because the Rule leaves parties free to adopt the kinds of informal procedures normally available in arbitration. It only prohibits them from opting out of the central feature of the PAGA’s private enforcement scheme–the right to act as a private attorney general to recover the full measure of penalties the state could recover. Accordingly, the court reversed the district court’s order dismissing the complaint and returned the issue to the district court and the parties to decide in the first instance where plaintiff's representative PAGA claims should be resolved, and to conduct further proceedings. View "Sakkab v. Luxottica Retail N. Am." on Justia Law

Three petitioners sued their former employer and certain of its agents and associates (collectively, “Employer”) asserting minimum wage and overtime claims individually and on behalf of others similarly situated. The district court entered orders compelling individual arbitration of Petitioners’ claims and denying their motions for class certification. Each petitioner signed the same long-form arbitration agreement, which included a clause waiving the right to initiate or participate in class actions. Petitioners sought extraordinary writ relief, contending that Employer’s failure to countersign the long-form agreement made it unenforceable, that the class action waiver violated state and federal law, and, in the case of one petitioner, Employer waived its right to compel arbitration by litigating with him in state and federal court. The Supreme Court denied writ relief, holding that Petitioners’ arguments were unavailing and that the district court did not err in compelling individual arbitration of their claims. View "Tallman v. Eighth Judicial Dist. Court" on Justia Law

Each of these three cases originated with actions asserting claims against nursing homes for personal injuries suffered by nursing home residents and for wrongful death of the residents. In each case, an attorney-in-fact for the resident executed a written document upon the resident’s admission to the nursing home providing that claims or disputes would be submitted to arbitration rather than adjudication in the courts. In each case, the defendant nursing home facility filed a motion to dismiss the action and compel the parties to submit the claims to a formal arbitration proceeding. The circuit court denied the motions on the grounds that the arbitration agreements were not validly formed between the respective nursing home facility and the resident whose interests were thereby affected. By way of motions for interlocutory relief, several nursing home entities sought relief from orders refusing to compel arbitration of the disputes. The Supreme Court denied the motions for interlocutory relief, holding that because the power-of-attorney instruments involved in these cases provided no manifestation of the principal’s intent to delegate to his agent the power to waive a trial by jury, the principal’s assent to the waiver was never validly obtained. View "Extendicare Homes, Inc. v. Whisman" on Justia Law

In 2010, Yan Chen, who had a business interest in a restaurant, entered into a 10-year lease agreement with Russell Realty, LLC, and MRT, LLC. The property to be leased was located in Greenville. The lease agreement was drafted by Russell Realty and contained an arbitration clause. In 2012, Russell Realty and MRT sued Chen along with Qiaoyun He, Joe Zou, and Yami Buffet, Inc., alleging breach of contract. Chen filed a response to the motion, alleging that she had been in China for a few months, and that she had not been personally served with notice of the lawsuit. She subsequently filed a motion to dismiss the complaint, asserting that the lease agreement contained an arbitration clause and that "said complaint[] fails to state any measures that have been taken in lieu of the fulfillment of such agreed Arbitration Clause." The trial court denied both Russell Realty and MRT's motion for a default judgment and Chen's motion to dismiss. About a month after this, Chen filed a motion to compel arbitration, asserting that, as "part of Plaintiffs['] lease agreement, plaintiff[s] agreed to binding arbitration. In 2013, Chen filed a second motion to dismiss, alleging that Russell Realty and MRT had refused to mediate and had refused to arbitrate. Russell Realty and MRT filed an objection to Chen's second motion to dismiss, asserting that "time of the stay set by the court has almost expired and Defendant Yan Chen has not made any movement, act, or effort to seek Arbitration to resolve the issues." Russell Realty and MRT again sought a default judgment against the defendants, including Chen. She asserted that counsel for Russell Realty and MRT had failed to respond to her attempts to seek a settlement before the hiring of a mediator or arbitrator and that, subsequently, she had contacted a mediator/arbitrator and Russell Realty and MRT had not responded to her choice of mediator/arbitrator. The trial court then entered an order stating that the Chen's appeal was moot as the court had not yet entered a final order. In early 2015, the trial court entered an order awarding Russell Realty and MRT $682,050.10 against all the defendants, including Chen, jointly and severally. Chen appealed. Based on its review of the facts in the circuit court record, the Supreme Court reversed with regard to Chen and remanded the case for the trial court to enter an order requiring arbitration in accordance with the terms of the lease agreement. View "Chen v. Russell Realty, LLC" on Justia Law

This case stems from a dispute over a petition to compel arbitration under a collective bargaining agreement (CBA) between IATSE and InSync. The district court granted IATSE’s petition to compel arbitration pursuant to the parties’ initial agreement and “stayed” the case. The court concluded that the district court's arbitration order was final under 28 U.S.C. 1291 because the stay lacked any legal or practical effect. Therefore, the court has jurisdiction to review the order. On the merits, the court concluded that, given the scope of the arbitration provision and the nature of the parties’ dispute, the arbitrator and not the district court must consider IATSE and InSync’s competing interpretations of the evergreen clause and decide whether the 2003–2007 CBA expired or was terminated. Accordingly, the court affirmed the judgment. View "IATSE Local 720 V. InSync Show Prod." on Justia Law

The litigation resulting in these consolidated appeals stemmed from disputes within the Cohen family. Maurice placed his assets the “Maurice Trust,” and after he died, the trust assets were passed to trust (“the QTIP Trust”), and to a charitable organization (“Fund”). After Maurice’s wife died, the remaining assets of the QTIP Trust rolled over to the Fund. Later, half of the Fund’s assets were given to a new charity, the C-S Foundation (“C-S”). The Fund’s successor, the FPE Foundation (“FPE”) filed this federal case against the Cohens’ two children, one of their spouses, and the advisor to the co-trustees of the QTIP Trust. FPE filed this federal case against members of the Cohen family, alleging that certain Defendants exceeded their powers as co-trustees of the QTIP trust and that the co-trustees’ advisor breached his fiduciary duty to that trust. C-S intervened and counterclaimed against FPE. Defendants filed a motion to dismiss and to compel arbitration, relying on an arbitration clause contained in the Maurice Trust. The district court allowed the motion. The First Circuit affirmed, holding (1) Defendants did not waive their right to arbitration, and thus, dismissal was appropriate; and (2) C-S’s counterclaim was subject to the arbitration clause in the Maurice Trust. View "FPE Found. v. Cohen" on Justia Law

Dr. Meinders sued United Healthcare in Illinois state court, alleging that in 2013, United sent him and a number of similarly-situated persons an unsolicited “junk fax” advertising United’s services, which violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, the Illinois Consumer Fraud and Deceptive Practices Act, and amounted to common law conversion. United removed the case to federal court and successfully moved to dismiss for improper venue under Federal Rule of Procedure 12(b)(3), claiming that Meinders had entered into a “Provider Agreement” with a United-owned entity, ACN, in 2006, which bound him to arbitrate his “junk fax” claims in Minnesota. Meinders unsuccessfully moved to strike or, in the alternative, for leave to file a sur-reply addressing the assumption theory and declaration. The Seventh Circuit reversed because the district court premised its dismissal order on law and facts to which Meinders did not have a full and fair opportunity to respond. View "Dr. Robert L. Meinders, D.C. v. UnitedHealthcare, Inc." on Justia Law

The Zarecors invested $800,000 in the RMK Funds. Morgan Keegan was the lead underwriter for the Funds and was heavily involved in their operations. The Zarecors allege that Morgan Keegan omitted facts regarding policies and structure of the Funds; misrepresented the quality of the Funds to Zarecor; and “was intimately involved with” misrepresentations and omissions made in SEC filings, prospectuses, and other marketing materials. When the Funds collapsed in 2007, the Zarecors lost $718,577. Unrelated plaintiffs filed suit on behalf of a class that purchased mutual funds, including the RMK Funds, claiming that Morgan Keegan was liable as a “controlling person” under the Securities Exchange Act of 1934, 15 U.S.C. 78t(a), and violations of the Securities Act of 1933. 15 U.S.C. 77k. The Zarecors were part of the putative class, but opted out. The class action was resolved by settlement. In 2009, the Zarecors filed a statement of claim in arbitration with the Financial Industry Regulatory Authority (FINRA), alleging that Morgan Keegan had violated federal, New Jersey and Arkansas securities laws. The FINRA arbitration panel awarded them $541,000 in 2010, but a court vacated the award, holding that the dispute was not subject to arbitration under FINRA. The court dismissed their subsequent suit as untimely. The Eighth Circuit affirmed dismissal of claims under Arkansas law and federal law, but concluded that the claim under New Jersey law was timely. View "Zarecor v. Morgan Keegan & Co." on Justia Law