Justia Arbitration & Mediation Opinion Summaries

Haamid Khan created an account with Coinbase, Inc., an online platform for buying, selling, and storing digital currencies. Khan alleged that Coinbase charged customers a hidden “Spread Fee” during transactions, which was not clearly disclosed to users. He claimed that the fee was only revealed if a customer clicked a tooltip icon and that the platform’s design misled less sophisticated users by imposing the fee only on those using the default trading option. Khan sought an injunction under California’s unfair competition and false advertising laws to prohibit Coinbase from continuing these practices.Coinbase responded by filing a petition in the City & County of San Francisco Superior Court to compel arbitration, citing a user agreement that included an arbitration clause and a waiver of class and public injunctive relief. The trial court denied Coinbase’s petition, finding that Khan’s claims sought public injunctive relief, which could not be waived or compelled to arbitration under California law, specifically referencing McGill v. Citibank, N.A. The court determined that the relief sought would benefit the public at large, not just Khan or a defined group of users.The California Court of Appeal, First Appellate District, Division Three, reviewed the case de novo. The appellate court affirmed the trial court’s order, holding that Khan’s complaint seeks public injunctive relief under the standards set forth in McGill. The court found that the arbitration agreement’s waiver of public injunctive relief was invalid and unenforceable. It concluded that Khan’s requested injunction would primarily benefit the general public by prohibiting ongoing deceptive practices, and thus, his claims could proceed in court rather than arbitration. The order denying Coinbase’s petition to compel arbitration was affirmed. View "Kahn v. Coinbase, Inc." on Justia Law

A law firm sought to recover over $1.7 million in fees and costs for representing the Los Angeles County Sheriff, Alex Villanueva, and the Sheriff’s Department in litigation initiated by the County of Los Angeles. Due to a conflict of interest, the County’s Board of Supervisors offered Villanueva independent counsel, allowing him to select his attorney but reserving discretion over compensation. Villanueva chose the law firm, which entered into an engagement agreement with him. The County, however, sent its own retainer agreement to the firm, which the firm refused to sign. The firm continued its representation but was never paid. After the firm demanded arbitration under its engagement agreement, the County and related plaintiffs filed suit seeking a declaration that no valid agreement to arbitrate existed and an injunction against the arbitration.The Superior Court of Los Angeles County granted a preliminary injunction, then summary judgment for the County plaintiffs, finding the Sheriff lacked authority to enter into the engagement agreement. The court denied the law firm’s post-judgment motion for leave to file a cross-complaint, citing both untimeliness and bad faith. The firm then filed a separate lawsuit against the County and related defendants, asserting breach of contract and related claims. The trial court sustained the County’s demurrer, dismissing the complaint with prejudice on grounds that the claims were compulsory cross-claims in the earlier action and for failure to allege compliance with the Government Claims Act.The California Court of Appeal, Second Appellate District, Division Eight, affirmed both the judgment in the County’s action and the dismissal of the law firm’s separate lawsuit. The court held that the Sheriff did not have authority to retain counsel on his own; only the Board of Supervisors could contract for legal services. The law firm’s claims were barred as compulsory cross-claims and for failure to comply with the Government Claims Act. View "County of Los Angeles v. Quinn Emanuel Urquhart & Sullivan, LLP" on Justia Law

Puerto Rico Telephone Company (PRTC) sought to confirm an arbitration award against WorldNet Telecommunications in federal court under section 9 of the Federal Arbitration Act (FAA). PRTC relied on then-existing First Circuit precedent, which allowed federal courts to exercise subject-matter jurisdiction over such applications if the underlying dispute involved a federal question. After the district court dismissed PRTC’s action for lack of Article III standing, PRTC appealed.The United States District Court for the District of Puerto Rico dismissed the case, finding that PRTC had not shown the necessary injury-in-fact to establish standing under Article III of the Constitution. PRTC then appealed to the United States Court of Appeals for the First Circuit. While the appeal was pending, the United States Supreme Court decided Badgerow v. Walters, which held that federal courts lack subject-matter jurisdiction over applications to confirm or vacate arbitration awards under sections 9 and 10 of the FAA, except in circumstances not present in this case. PRTC requested that the First Circuit vacate the district court’s judgment and direct dismissal without prejudice for lack of subject-matter jurisdiction, so that PRTC could pursue relief in the Commonwealth courts. WorldNet argued that the First Circuit should instead affirm the district court’s dismissal on standing grounds.The United States Court of Appeals for the First Circuit held that, in light of Badgerow v. Walters, federal courts do not have subject-matter jurisdiction over PRTC’s application to confirm the arbitration award under section 9 of the FAA. The First Circuit vacated the district court’s judgment and remanded with instructions to dismiss the case without prejudice for lack of subject-matter jurisdiction. The court did not address the standing issue. View "Puerto Rico Telephone Co. v. Worldnet Telecommunications, LLC" on Justia Law

A company that provides employee management services hired an employee in California in September 2021. At the start of her employment, she completed onboarding documents that did not mention arbitration. About five months later, she was asked to sign additional documents, including an arbitration agreement, a voluntary dispute resolution policy, and a confidentiality and non-disclosure agreement (CND). The arbitration agreement required most employment-related disputes to be resolved through binding arbitration, with certain exceptions for claims related to confidential information. The CND allowed the company to bring certain claims in court and permitted the company to seek injunctive relief without posting a bond or proving actual damages. The employee later filed a lawsuit alleging various employment law violations.The Solano County Superior Court reviewed the company’s motion to compel arbitration. The company argued that the arbitration agreement was enforceable and, if any provision was found unenforceable, it should be severed. The employee opposed, arguing the agreement was unconscionable due to the manner in which it was presented and its one-sided terms. The trial court found the arbitration agreement to be both procedurally and substantively unconscionable, particularly because it forced the employee’s claims into arbitration while allowing the company’s likely claims to proceed in court, and because of a confidentiality provision that restricted informal discovery. The court denied the motion to compel arbitration and declined to sever the offending provisions, finding the agreement permeated by unconscionability.The California Court of Appeal, First Appellate District, Division Three, affirmed the trial court’s order. The appellate court held that the arbitration agreement and the CND, read together, were unconscionable due to lack of mutuality and an overly broad confidentiality provision. The court also found no abuse of discretion in the trial court’s refusal to sever the unconscionable terms and concluded that any error in denying a statement of decision was harmless. View "Gurganus v. IGS Solutions LLC" on Justia Law

An 84-year-old man with a history of dementia was admitted to a hospital after several falls and subsequently transferred to a nursing home for rehabilitation. His wife, acting as his “Authorized Representative,” signed an optional arbitration agreement as part of his admission paperwork. During his stay, the man developed a pressure wound that became septic, leading to his removal from the facility and subsequent death. The wife, as personal representative of his estate, filed a wrongful death lawsuit against the nursing home and its administrator, alleging medical negligence and asserting that the man was incompetent and unable to make decisions for himself at the time of admission.The Mobile Circuit Court reviewed the defendants’ motion to compel arbitration, which was based on the signed agreement. The wife opposed the motion, arguing she lacked authority to bind her husband to arbitration because he was permanently incapacitated due to dementia. She provided medical records and her own affidavit to support her claim of his incapacity. The defendants countered with evidence suggesting the man had periods of lucidity and was not permanently incapacitated. The trial court denied the motion to compel arbitration and later denied a postjudgment motion by the defendants that included additional medical records.The Supreme Court of Alabama reviewed the case de novo. It held that the wife did not meet her burden to prove the man was permanently incapacitated or temporarily incapacitated at the time the arbitration agreement was executed. The Court found that the evidence showed the man had lucid intervals and was at times alert and able to communicate, and that no contemporaneous evidence established incapacity at the time of signing. The Supreme Court of Alabama reversed the trial court’s order and remanded the case, holding that the arbitration agreement was enforceable. View "Mobile Nursing and Rehabilitation Center, LLC v. Sliman" on Justia Law

A nursing home resident’s legal representative, acting under a durable power of attorney, sued a nursing home for alleged medical negligence during the resident’s stay. Upon admission, the representative signed several documents, including an agreement to arbitrate any disputes arising from the resident’s care. The representative later claimed not to recall signing the documents but did not dispute her signature. The nursing home moved to compel arbitration based on the signed agreement, which expressly stated it was governed by the Federal Arbitration Act (FAA).The District Court of McCurtain County, Oklahoma, held a hearing on the motion to compel arbitration. The court found that a valid arbitration agreement existed, signed by both an authorized agent of the nursing home and the legal representative. The court determined that the FAA applied due to the involvement of interstate commerce and that the Oklahoma Nursing Home Care Act’s (NHCA) prohibition of arbitration agreements was preempted by federal law. The court granted the nursing home’s motion to compel arbitration and stayed the judicial proceedings.The Supreme Court of the State of Oklahoma reviewed the case de novo. It affirmed the district court’s decision, holding that the FAA preempts the NHCA’s categorical prohibition of arbitration agreements in the nursing home context when interstate commerce is involved and the agreement expressly invokes the FAA. The court found the arbitration agreement was validly executed and not unconscionable, distinguishing this case from prior Oklahoma precedent and aligning with the United States Supreme Court’s decision in Marmet Health Care Center, Inc. v. Brown. The Supreme Court of Oklahoma affirmed the district court’s order compelling arbitration. View "Thompsonl v. Heartway Corp." on Justia Law

Plaintiff was employed by a staffing company and assigned to work at a warehousing and logistics firm, performing duties as a materials handler and forklift operator. He filed a class action and a separate representative action alleging various wage and hour violations, including claims for unpaid minimum wages, waiting time penalties, and civil penalties under the Private Attorneys General Act (PAGA). The two cases were consolidated. The plaintiff and his direct employer had entered into an arbitration agreement, which referenced the American Arbitration Association (AAA) rules but did not explicitly state that the arbitrator would decide issues of arbitrability.The defendants moved in the Superior Court of Los Angeles County to compel arbitration of the plaintiff’s individual claims, dismiss class allegations, and stay judicial proceedings. They argued that the arbitration agreement was governed by the Federal Arbitration Act (FAA) and that the AAA rules incorporated into the agreement delegated arbitrability issues to the arbitrator. The plaintiff opposed, asserting exemption from the FAA as a transportation worker and arguing that certain claims, including those under PAGA and for unpaid wages, were not arbitrable under California law. The trial court found the FAA did not apply, applied California law, and held that the agreement did not clearly and unmistakably delegate arbitrability to the arbitrator. The court compelled arbitration of some claims but allowed others, including minimum wage and PAGA claims, to proceed in court.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The court held that, in the context of a mandatory employment arbitration agreement, mere incorporation of AAA rules without explicit language in the agreement is not clear and unmistakable evidence of intent to delegate arbitrability to the arbitrator. The court also held that claims for waiting time penalties based on minimum wage violations and all PAGA claims were not arbitrable under California law when the FAA does not apply. View "Villalobos v. Maersk, Inc." on Justia Law

A German telecommunications company invested nearly $100 million in an Indian company through a Singaporean subsidiary, acquiring a significant minority stake. The Indian government, through its wholly owned space company, later terminated a contract with the Indian company, prompting the German investor to initiate arbitration in Switzerland under a bilateral investment treaty (BIT) between Germany and India. The arbitral tribunal ruled in favor of the German company, awarding it over $93 million, and courts in Switzerland, Germany, and Singapore confirmed the award.The United States District Court for the District of Columbia was then asked to confirm the arbitral award. India moved to dismiss, arguing sovereign immunity under the Foreign Sovereign Immunities Act (FSIA), forum non conveniens, and that the dispute did not fall within the scope of the BIT’s arbitration clause. The district court denied the motion to dismiss, holding that the FSIA’s arbitration exception applied, that forum non conveniens was unavailable in such proceedings, and that the parties had delegated questions of arbitrability to the arbitrators, thus precluding judicial review of those issues. The court also found that India had forfeited other merits defenses by not raising them earlier.The United States Court of Appeals for the District of Columbia Circuit affirmed the denial of dismissal on immunity and forum non conveniens grounds, but held that the district court erred in refusing to consider India’s substantive defenses to enforcement of the award. The appellate court found that the BIT did not clearly and unmistakably delegate exclusive authority over arbitrability to the arbitrators, so the district court must consider India’s merits defenses under the New York Convention. The judgment confirming the award was vacated and the case remanded for further proceedings. View "Deutsche Telekom, A.G. v. Republic of India" on Justia Law

The plaintiff, a former employee, brought a lawsuit against his employer alleging multiple claims of discrimination and harassment. The employer successfully moved to compel arbitration pursuant to an agreement between the parties. During the arbitration, the arbitration provider issued an invoice for fees, which the employer attempted to pay electronically on the last day of the statutory 30-day deadline. However, due to a processing delay, the payment was not received by the provider until three days after the deadline.The Superior Court of Los Angeles County found that the employer’s failure to ensure the arbitration fees were received within the 30-day period constituted a material breach of the arbitration agreement under California Code of Civil Procedure section 1281.98. The court vacated its prior order compelling arbitration, returned the case to court, and awarded the plaintiff $1,750 in sanctions for expenses incurred in bringing the motion. The plaintiff then sought over $300,000 in attorney fees and costs under section 1281.98, subdivision (c)(1), which allows recovery of all fees and costs associated with an abandoned arbitration. The trial court granted only a reduced amount, reasoning that the plaintiff was entitled only to fees and costs for work rendered useless by the termination of arbitration.On appeal, the California Court of Appeal, Second Appellate District, Division One, considered the impact of the California Supreme Court’s decision in Hohenshelt v. Superior Court (2025) 18 Cal.5th 310. Hohenshelt held that federal law preempts a strict application of section 1281.98, and that forfeiture of arbitral rights occurs only if the failure to pay fees is willful, grossly negligent, or fraudulent. The appellate court determined that the employer’s late payment was not willful, grossly negligent, or fraudulent, and therefore, the plaintiff was not entitled to attorney fees under section 1281.98, subdivision (c)(1). The order awarding attorney fees and costs was reversed. View "Wilson v. Tap Worldwide, LLC" on Justia Law

Ultra Group of Companies and Prince and Prince, LLC entered into a contract regarding the placement and operation of Ultra’s coin-operated amusement machines on Prince’s premises. A dispute arose between the parties, leading to arbitration before a Georgia Lottery Corporation (GLC) hearing officer. On July 30, 2021, the hearing officer issued an “Interim Award” that resolved most substantive contract issues in favor of Prince but left claims for fees and costs unresolved. On September 17, 2021, the hearing officer issued a “Final Award” that incorporated the Interim Award, split arbitration costs, and awarded attorney fees to Ultra. The parties received the Final Award on October 4, 2021.Ultra filed a “Request for Reconsideration and Motion for Review” with the GLC’s chief executive officer (CEO) on October 14, 2021, which was denied by operation of GLC rules after 30 days without a ruling. On December 10, 2021, Ultra filed a timely petition for certiorari to the Superior Court of Fulton County. Prince moved to dismiss, arguing Ultra failed to preserve its appeal rights by not seeking review of the Interim Award within 10 days. The Superior Court of Fulton County agreed and dismissed Ultra’s petition. Ultra appealed to the Court of Appeals of Georgia, which affirmed the dismissal without opinion. Ultra’s motion for reconsideration was denied, and Ultra petitioned the Supreme Court of Georgia for certiorari.The Supreme Court of Georgia held that only the Final Award constituted an appealable order under the GLC’s rules, as it resolved all issues presented in the arbitration. Ultra’s appeal from the Final Award was timely, and the lower courts erred in dismissing the appeal. The Supreme Court reversed the judgment of the Court of Appeals. View "Ultra Group of Companies, Inc. v. Prince and Prince, LLC" on Justia Law