Justia Arbitration & Mediation Opinion Summaries

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Dorsa, a Miraca executive, learned of a purported scheme to defraud the government. Dorsa filed a qui tam action, alleging violations of the False Claims Act (FCA). Dorsa was fired and added a claim for FCA retaliation, 31 U.S.C. 3730(h). The government intervened. Dorsa and the government dismissed the qui tam claims. Miraca unsuccessfully moved to dismiss the retaliation claim because Dorsa had agreed to binding arbitration in his employment agreement. The court found that the arbitration clause did not cover Dorsa’s claim, which did not "have any connection with, an employment agreement."The Sixth Circuit dismissed an appeal for lack of jurisdiction. There was no final order and the narrow provision of the Federal Arbitration Act (FAA, 9 U.S.C. 16) that authorizes immediate appeals of certain interlocutory orders does not apply. Miraca filed its motion to dismiss without asking the court for a stay or an order compelling arbitration. The FAA provides that “[a]n appeal may be taken from an order” either “refusing a stay of any action,” or “denying a petition ... to order arbitration.” Even if the denial of the motion to dismiss had the same impact as refusing to stay the action or denying a petition to order arbitration, there is no test for appealability that hinges on the practical effect of a court’s order. View "Dorsa v. Miraca Life Sciences, Inc." on Justia Law

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The Ninth Circuit held that plaintiff does not create appellate jurisdiction by voluntarily dismissing his claims with prejudice after being forced to arbitrate them. The panel dismissed plaintiff's appeal of the district court's denial of his motions to compel arbitration and reconsideration, and from his own voluntary dismissal. The panel concluded that it lacked jurisdiction over plaintiff's putative class action. In doing so, the panel held that Omstead v. Dell, Inc., 594 F.3d 1081 (9th Cir. 2010), which held that a plaintiff can avoid arbitration and manufacture appellate jurisdiction simply by voluntarily dismissing his claims with prejudice, has been effectively overruled by the Supreme Court's decision in Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017). View "Langere v. Verizon Wireless Services, LLC" on Justia Law

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Aetna brought a qui tam action to recover damages and fees occasioned by the surgical center's fraudulent billing practices. The trial court denied the surgical center's petition to compel arbitration of the quit tam action. At issue is Aetna's claims of fraudulent insurance billing practices by the surgical center and its healthcare billing services in violation of the Insurance Fraud Protection Act (IFPA).The Court of Appeal affirmed and concluded that the qui tam action is not subject to arbitration because it is brought on behalf of the state which is not a party to the contract between the insurance company and the surgical center. In this case, California is the real party in interest and it cannot be compelled to arbitrate this qui tam IFPA action because it is not a signatory to the contracts. View "California ex rel. Aetna Health of California Inc. v. Pain Management Specialist Medical Group" on Justia Law

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The Supreme Court reversed the judgment of the district court granting Defendant's motion to compel arbitration under the "voluntary agreement for arbitration" Rick Miller signed on behalf of his mother, Julia Miller, after she was admitted to Life Care Center of Casper (LCCC), holding that Rick lacked authority to execute the agreement.After Julia died allegedly from injuries sustained during a series of mishaps at LCCC Rick filed this complaint stating claims of negligence and premises liability against Defendant. Defendant filed a motion to compel arbitration. The court granted the motion. The Supreme Court reversed, holding (1) Julia's durable power of attorney for health care did not grant Rick express actual authority to sign the arbitration agreement; (2) Julia did not hold Rick out as having apparent authority to sign the agreement; and (3) Rick was not authorized to execute the arbitration agreement as Julia's "surrogate" under the Wyoming Health Care Decisions Act, Wyo. Stat. Ann. 35-22-401 through 416. View "Miller v. Life Care Centers of America, Inc." on Justia Law

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The State entered into a Memorandum of Understanding (MOU) with the Union regarding terms and conditions of employment for certain state employees classified as bargaining unit 12. The State subsequently appealed the trial court’s order denying its petition to vacate or correct an arbitration award determining that DWR had violated article 16.7(G) of the MOU by using purged documents to support the adverse disciplinary action taken against the employee.The Court of Appeal concluded that the arbitration award interpreted and enforced article 16.7(G) of the MOU in a manner that constitutes a violation of the constitutional merit principle, because it impedes the ability of state departments to make reasonable and sound employment decisions based on merit. Therefore, the award violated public policy and the trial court erred in denying the petition. The court reversed the trial court's order on the petition and the ensuing judgment, remanding the matter to the trial court with instructions to enter a new order vacating the award. View "Department of Human Resources v. International Union of Operating Engineers" on Justia Law

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The Court of Appeal affirmed a judgment confirming an arbitration award in favor of AXQG. The court denied MMG's requests for judicial notice, found MMG's arguments to be meritless, and concluded that the appeal was frivolous.The court concluded that MMG cannot credibly argue that the arbitrator was required to disclose his affiliation with GLAAD because MMG's principal chose to testify about his Catholic faith when that information was irrelevant to the present dispute over his managerial misconduct. The court also concluded that the arbitrator did not fail to hear evidence material to the final award. In this case, there is no basis in the record for MMG's contention that the arbitrator refused to hear testimony from one of its witnesses; MMG's claim that the arbitrator cut off its counsel's cross-examination of a prospective employee fails for lack of support and, in any event, the testimony was immaterial; and the arbitrator did not fail to hear evidence on the authenticity of an exhibit consisting of a chain of emails. Finally, the court concluded that MMG's appeal is objectively and subjectively frivolous, imposing sanctions on MMG and its counsel. View "Malek Media Group LLC v. AXQG Corp." on Justia Law

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The Union represented the workers at the Old Brookville campus. In 2016, LIU contracted out that work to A&A, which became the employer of those workers and assumed an existing collective bargaining agreement, set to expire in August 2017. A&A and the Union entered into a successor CBA, which requires Union membership after 30 days but allows A&A to hire “substitute employees” “to fill in for employees who are out on disability or worker’s compensation or approved extended leaves.” The Union rejected a provision that would have permitted A&A to use non-union “temporary employees” at will for up to 90 days. The agreement has an arbitration provision.Union members noticed new, non-union employees in late 2017. A&A indicated that they were "substitute employees." The Union determined that the number of claimed substitutes exceeded the number of members out on disability, worker’s compensation, and other approved leaves of absence and sent a written grievance. The Union framed the arbitration issue: whether A&A violated the CBA by utilizing temporary employees ... to perform bargaining unit work. A&A argued that the Arbitrator was confined to the issue proposed by the Union in its original grievance, which mentioned only “substitute employees.”The arbitrator held that A&A had violated the CBA and issued an award of $1,702,263.81. The Second Circuit affirmed. The arbitrator did not exceed his authority. While worded differently, the issue that the arbitrator ruled on was substantially identical to the issue in the grievance letter. A party that has previously agreed to arbitrate cannot frustrate the process by refusing to agree on the form of the issue. The arbitrator’s interpretation of the collective bargaining agreement was more than colorable. View "A&A Maintenance Enterprise, Inc. v. Ramnarain" on Justia Law

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Appellants appealed the trial court's order denying their petition to compel arbitration of a lawsuit brought by respondent, individually and as successor in interest to her deceased husband, Ramiro Garcia, regarding Ramiro's treatment at appellants' hospitals.The Court of Appeal affirmed, holding that substantial evidence supported the trial court's conclusion that appellants failed to meet their burden to establish the existence of an enforceable arbitration agreement. The court relied on generally applicable law conditioning the validity of an arbitration agreement executed by a purported agent -- like any other contract executed by a purported agent -- on an adequate evidentiary showing that the agreement falls within the scope of authority, if any, conferred by the principal. Furthermore, the court did not apply this law in a fashion disfavoring arbitration contracts, and thus did not violate the Federal Arbitration Act. View "Garcia v. KND Development 52, LLC" on Justia Law

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Hale, employed by Morgan Stanley since 1984, was disciplined on several occasions between 2013 and 2016. Hale initiated an arbitration action and requested damages for his claims of negligence, defamation, breach of fiduciary duty, and intentional infliction of emotional distress. Following a four-day hearing, the arbitrator issued an award denying all of Hale’s claims. Hale filed suit, requesting that the arbitration award be vacated pursuant to the Federal Arbitration Act, 9 U.S.C. 1. The district court dismissed, holding that it lacked diversity and federal question jurisdiction over the suit.The Sixth Circuit reversed and remanded. There is complete diversity of citizenship between the disputing parties as required by 28 U.S.C. 1332(a) and the amount in controversy is met because Hale requested a damages award of $14.75 million in his complaint (filed as a motion to vacate). In actions where a party seeks to vacate a $0 arbitration award pursuant to section 10 of the FAA, courts should look to the complaint, including the amount sought in the underlying arbitration, for purposes of assessing whether the jurisdictional amount in controversy requirement has been met. View "Hale v. Morgan Stanley Smith Barney LLC" on Justia Law

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Dylan filed suit in district court seeking a declaration of its rights and obligations under the terms of a collective bargaining agreement (CBA). The district court converted defendants' motion to dismiss into a motion to compel arbitration and granted the motion, dismissing Dylan's complaint without prejudice.The Second Circuit affirmed the district court's dismissal; clarified that the district court had federal question jurisdiction to decide whether Dylan was entitled to the declaratory relief requested; and held that, because the Funds have adequately initiated arbitration, regardless of timing, Dylan is required to arbitrate by the terms of the CBA. The court also agreed with the district court's analysis that it was proper in this case to compel arbitration and dismiss Dylan's complaint without prejudice. The court considered Dylan's remaining arguments and found them to be without merit. View "Dylan 140 LLC v. Figueroa" on Justia Law