Justia Arbitration & Mediation Opinion Summaries

Defendant-Employer Tilly’s Inc. (and World of Jeans & Tops, Inc.) hired plaintiff-respondent Maria Rebolledo to work in its warehouse from July 6, 2000, to December 28, 2001. She was rehired on January 28, 2002, and terminated October 30, 2012. In December 2012 she filed a lawsuit on behalf of herself and a putative class of "similarly situated" persons (amended February 2013) alleging her Employer: (1) failed to provide meal periods; (2) failed to provide rest periods; (3) failed to pay wages of terminated or resigned employees; (4) knew and intentionally failed to comply with itemized wage statement provisions; and (5) violated the unfair competition law. Furthermore, plaintiff sought enforcement of Private Attorneys General Act of 2004. Upon review of the matter, the Court of Appeal agreed with the trial court's conclusion the parties' arbitration agreement expressly excluded statutory wage claims from the arbitration obligation. Therefore, the order was affirmed.View "Rebolledo v. Tilly's, Inc." on Justia Law

Plaintiff filed suit challenging the decision of an arbitrator that had denied his claim under a crop insurance policy obtained from ProAg. On appeal, ProAg challenged the district court's grant of plaintiff's motion to vacate the award and motion for summary judgment, vacating the arbitrator's decision. The court concluded that the district court erred in vacating the arbitrator's decision because the arbitrator was entitled to conclude that ProAg had the authority under the policy to set a reasonable deadline for the receipt of necessary documentation in support of the claim; plaintiff's failure to comply with the deadline was an adequate basis for ProAg's denial of his claim; the arbitrator was entitled to make his findings without first seeking a formal opinion of the FCIC; and plaintiff waived any argument based upon the arbitrator's failure to deliver his decision and award within the time limitations provided by the policy. Accordingly, the court reversed and remanded. View "Davis v. Producers Agricultural Ins." on Justia Law

The issue on appeal before the Supreme Court in this case was a trial court's order denying a motion to compel nonparties to a contract to arbitrate pursuant to an arbitration clause in the contract. Finding no reversible error, the Supreme Court affirmed. View "Clearwater REI v. Boling" on Justia Law

Ghazi Abbar, manager of the Abbar family trusts, lost $383 million invested with a United Kingdom affiliate of Citigroup and seeks to arbitrate his grievances under the rules of FINRA against a New York affiliate. The district court permanently enjoined the arbitration because Abbar is not a "customer" of the New York affiliate. The court held that a "customer" under FINRA Rule 12200 is one who, while not a broker or dealer, either (1) purchases a good or service from a FINRA member, or (2) has an account with a FINRA member. While Abbar was certainly a "customer " of Citi UK, that relationship does not allow Abbar to compel arbitration against its corporate affiliates. Because Abbar was not a customer of Citi NY, a FINRA member, he cannot arbitrate his claims against Citi NY. View "Citigroup Global Markets Inc. v. Abbar" on Justia Law

Employers that withdraw from underfunded multiemployer pension plans must pay their share of the shortfall. They can seek recalculation of the plans' assessment within 90 days, 29 U.S.C. 1399(b)(2)(A), and within another 60 days, may invoke a process that the Act calls arbitration, though it is neither contractual nor consensual. Central States Pension Fund concluded that US Foods has withdrawn in part and assessed liability in 2008 and in 2009. US Foods timely requested arbitration of the 2009 assessment, but did not timely seek arbitration of the 2008 assessment. In the Fund’s suit to collect the 2008 assessment, US Foods asked the court to order the arbitrator to calculate the amount due for 2008 and 2009 jointly. The court ruled that US Foods had missed the deadline for arbitral resolution of the 2008 assessment. US Foods appealed, relying on 9 U.S.C.16(a)(1)(B), which authorizes an interlocutory appeal from an order “denying a petition under section 4 of this title to order arbitration to proceed”. The Seventh Circuit dismissed for lack of jurisdiction. An order declining to interfere in the conduct of an arbitration is not an order “denying a petition under section 4 of this title to order arbitration to proceed” under section 16(a)(1)(B). View "Cent. States SE & SW Areas Pension Fund v. US Foods, Inc." on Justia Law

Former employees of RHI filed suit on behalf of themselves and others, alleging that RHI failed to pay overtime and improperly classified them as overtime-exempt employees in violation of the Fair Labor Standards Act (FLSA), 29 U.S.C. 201. Both had signed employment agreements that contained arbitration provisions: “[a]ny dispute or claim arising out of or relating to Employee’s employment, termination of employment or any provision of this Agreement” shall be submitted to arbitration. Neither agreement mentions classwide arbitration. RHI moved to compel arbitration on an individual basis. The district court granted the motion in part, compelling arbitration but holding that the propriety of individual versus classwide arbitration was for the arbitrator to decide. The court entered an order terminating the case. Rather than immediately appealing, RHI proceeded with arbitration until the arbitrator ruled that the employment agreements permitted classwide arbitration. The district court denied a motion to vacate the arbitrator’s partial award. The Third Circuit reversed. Because of the fundamental differences between classwide and individual arbitration, and the consequences of proceeding with one rather than the other, the availability of classwide arbitration is a substantive “question of arbitrability” to be decided by a court absent clear agreement otherwise.View "Opalinski v. Robert Half Int'l, Inc." on Justia Law

Nuance appealed the district court's order remanding this case back to the arbitration panel for clarification of the arbitration award concerning an alleged breach of a corporate merger agreement. The court dismissed the appeal based on lack of jurisdiction because a district court order remanding a case back to an arbitration panel for clarification is not a final order. View "Murchison Capital Partners, L.P., et al v. Nuance Communications, Inc." on Justia Law

In 2007 the McDonalds opened a J.P. Morgan Bank investment account and a brokerage account with its affiliate, J.P. Morgan Securities (JPMS). Different contracts governed the accounts. The Bank managed the money in the investment account, while the McDonalds directed the funds in their JPMS brokerage account. By the end of 2008, the McDonalds had lost $1.5 million from the Bank investment account. The money held in the JPMS account produced a profit. The McDonalds filed an arbitration demand, alleging breach of fiduciary duty, self-dealing, and other misrepresentation and mismanagement. They did not name the Bank, but named only JPMS and Bank employees who set up and oversaw the accounts. The McDonalds claimed that the employees ignored their stated investment goals by putting nearly all their money in an illiquid proprietary hedge fund. The claim charged JPMS (not the Bank) with vicarious liability for failing to supervise. JPMS is registered with the Financial Industry Regulatory Authority, as are the employees. FINRA is an industry self-regulatory organization, and under its rules JPMS and the employees were subject to arbitration at the McDonalds’ request, an obligation reiterated in the contract governing the JPMS account. The Bank is not a member of FINRA; the Bank’s contract did not provide for arbitration. The Bank sought to prevent arbitration. The district court dismissed, finding that the Bank lacked standing to block the arbitration to which it was not a party and that the two employees were indispensable parties. The Seventh Circuit reversed. The Bank has standing to sue because the arbitration would violate a forum-selection clause in its contract with the McDonalds. The McDonalds cannot avoid that clause by naming only an affiliate and the employees, who are not necessary parties.View "J.P. Morgan Chase Bank, N.A. v. McDonald" on Justia Law

Plaintiff filed a class action suit against Lebo, alleging violations of California's Fair Employment and Housing Act (FEHA), Gov. Code 12940 et seq., and Unfair Competition Law, Bus. & Prof. Code, 17200 et seq. On appeal, plaintiff challenged the trial court's order granting defendants' motion to compel him to arbitrate his individual claims, as well as defendants' motion to dismiss all class claims without prejudice. The court held that the question whether the parties agreed to class arbitration was for the arbitrator rather than the trial court to decide, and that the trial court erred by deciding that issue in this case. The court did not reach the merits of whether the arbitration provisions plaintiff signed permit arbitration. The court also did not address plaintiff's argument that the trial court failed to consider extrinsic evidence demonstrating that the parties impliedly agreed to arbitrate on a class-wide basis. Accordingly, the court reversed and remanded with instructions. View "Sandquist v. Lebo Automotive" on Justia Law

The Randolph-Sheppard Act, 20 U.S.C. 107–107e, gives blind persons a priority in winning contracts to operate vending facilities on federal properties. Fort Campbell, Kentucky, operates a cafeteria for its soldiers. For about 20 years, Kentucky’s Office for the Blind (OFB) has helped blind vendors apply for and win the base’s contracts for various services. In 2012, the Army, the federal entity that operates Fort Campbell, published a solicitation, asking for bids to provide dining-facility-attendant services. Rather than doing so under the Act, as it had before, the Army issued this solicitation as a set aside for Small Business Administration Historically Underutilized Business Zones. OFB, representing its blind vendor, filed for arbitration under the Act, and, days later, filed suit, seeking to prevent the Army from awarding the contract. The district court held that it lacked jurisdiction to consider a request for a preliminary injunction. The Sixth Circuit vacated. OFB’s failure to seek and complete arbitration does not deprive the federal courts of jurisdiction. View "Commonwealth of Kentucky v. United States" on Justia Law