Justia Arbitration & Mediation Opinion Summaries

Gove worked for TDC, which had a contract with Loring. TDC employees were informed that CSD had been awarded the Loring contract and would be providing services previously furnished by TDC. Gove applied online for a CSD position, similar to the one that she held with TDC. The application included a provision that any dispute with respect to any issue prior to employment, arising out of the employment process, would resolved in accord with the Dispute Resolution Policy and Arbitration Agreement adopted by CSD for its employees. When Gove was interviewed by CSD, she was visibly pregnant and was asked whether she had other children. Gove was not hired, although CSD continued to have a need for the position and continued to advertise the position. Gove filed a complaint with the Maine Human Rights Commission, which found reasonable grounds, but was unable to persuade the parties to reach agreement. She sued under Title VII of the Civil Rights Act, 42 U.S.C. 2000e, and the Maine Human Rights Act. CSD moved to compel arbitration. The district court found that the arbitration clause was ambiguous as to whether it covered an applicant who was never hired and should be construed against CSD. The First Circuit affirmed. View "Gove v. Career Sys. Dev. Corp." on Justia Law

Brentwood Homes, Inc. and the other appellants in this case (collectively "Brentwood Homes") appealed a circuit court's order denying a motion to stay the proceedings and compel arbitration in a lawsuit filed by Petitioner Fred Bradley that arose out of his purchase of a home in South Carolina. Although Brentwood Homes conceded the Home Purchase Agreement did not meet the technical requirements of the South Carolina Uniform Arbitration Act (the "UAA"), it claimed the court erred in denying the motion because the transaction involved interstate commerce and thus was subject to the Federal Arbitration Act ("FAA"). Upon review, the Supreme Court concluded that because the essential character of the Agreement was strictly for the purchase of a completed residential dwelling and not the construction, the Court found the FAA did not apply. Furthermore, the existence of the national warranty and Bradley's use of out-of-state financing did not negate the intrastate nature of the transaction. Accordingly, the Court affirmed the circuit court's order denying Brentwood Homes' motion to stay the proceedings and compel arbitration as Brentwood Homes failed to offer sufficient evidence that the transaction involved interstate commerce to subject the Agreement to the FAA. View "Bradley v. Brentwood Homes" on Justia Law

This appeal concerned the Eleventh Circuit's authority to review an order remanding an action based on an antecedent and erroneous ruling that an agreement to arbitrate was unenforceable. Petitioner St. Hugh Williams filed in a Florida court a complaint that, while working onboard the M/V Norwegian Sky, he was injured as a result of the negligence and other tortious conduct of the owner of the ship, NCL (Bahamas) Ltd. NCL removed the action to the district court on the ground that Petitioner was contractually bound to arbitrate his complaint under the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards, but Petitioner moved to remand the action to state court. The district court ruled that the arbitration clause was unenforceable and granted Petitioner's motion to remand. NCL appealed, and the Eleventh Circuit later held in "Lindo v. NCL (Bahamas) Ltd.," (652 F.3d 1257 (11th Cir. 2011)), that an agreement to arbitrate under the Convention is enforceable. Petitioner argued that the Eleventh Circuit lacked jurisdiction, but the Court found that it had jurisdiction to review the denial of the motion to compel under "City of Waco v. U.S. Fidelity & Guaranty Co.," (293 U.S. 140 (1934)). The Court reversed the order denying the motion to compel of NCL, vacated the order remanding Petitioner's complaint to state court, and remanded the case with instructions to compel arbitration. View "Williams v. NCL (Bahamas) Ltd." on Justia Law

The issue before the Fourth Circuit concerned commercial arbitration of insurance disputes in foreign tribunals. Appellant-Cross-Appellee ESAB Group, Inc. contended that South Carolina law "reverse preempts" federal law (namely, a treaty and its implementing legislation) pursuant to the McCarran-Ferguson Act. ESAB Group faced numerous products liability suits arising from alleged personal injuries caused by exposure to welding consumables manufactured by ESAB Group or its predecessors. These suits presently were proceeding in numerous state and federal courts in the United States. ESAB Group requested that its insurers defend and indemnify it in these suits. Several, including Zurich Insurance, PLC (ZIP), refused coverage. As a result, ESAB Group brought suit against its insurers in South Carolina state court. The district court then found that ZIP had the requisite minimum contacts with the forum to permit the exercise of personal jurisdiction and that the exercise of jurisdiction over ZIP was otherwise reasonable. Because it had referred to arbitration all claims providing a basis for subject-matter jurisdiction, the district court declined to exercise supplemental jurisdiction over the remaining claims. ESAB Group timely appealed the district court's exercise of subject-matter jurisdiction. ZIP filed a cross-appeal, challenging the district court’s exercise of personal jurisdiction and its authority to remand the nonarbitrable claims to state court. Upon review, the Fourth Circuit affirmed as to the district court’s exercise of subject-matter jurisdiction, and found no error in the district court's order compelling arbitration. Likewise, the Court rejected ZIP's arguments that the district court erred in exercising personal jurisdiction over it and in remanding nonarbitrable claims to state court. View "ESAB Group, Incorporated v. Zurich Insurance PLC" on Justia Law

Defendant-Appellant Branch Banking & Trust Company (BB&T) appealed the denial of its motion to compel arbitration of a putative class action brought by Plaintiff-Appellee Lacy Baras, a customer of BB&T. Barras alleged in her complaint on behalf of herself and the class she sought to represent that BB&T charged her and others overdraft fees for payments from checking accounts even when the account contained sufficient funds to cover the payments. She also alleged that BB&T supplied inaccurate and misleading information about account balances, and failed to notify customers about changes to BB&T's policies for processing checking account transactions, thereby increasing overdraft charges assessed against customers. Barras asserted claims under the state Unfair Trade Practices Act for unfair and deceptive trade practices, breach of contract, breach of the covenant of good faith and fair dealing and unconscionability, and sought to certify a class of BB&T account holders who were likewise charged allegedly inflated overdraft fees. BB&T moved to compel arbitration of all of Barras's claims pursuant to a provision in its "Bank Services Agreement" (BSA). The district court denied BB&T's motion, holding that the arbitration agreement was unconscionable under state law, and could not be enforced. Before the Eleventh Circuit decided BB&T's appeal to that order, the Supreme Court decided "AT&T Mobility, LLC v. Concepcion" (131 S.Ct. 1740 (2011). The Eleventh Circuit remanded the case to the district court for reconsideration in light of that decision. On remand, BB&T renewed its motion to compel arbitration, and again the district court denied it. BB&T appealed that ruling, arguing that: (1) the question of whether the arbitration provision was enforceable must be resolved by an arbitrator; (2) the cost-and-fee shifting provision in the agreement that the district court held unconscionable did not apply to the arbitration provision; (3) "Concepcion" prohibited application of the state unconscionability doctrine to the arbitration provision; (4) the cost-and-fee shifting provision is not unconscionable; and (5) the cost-and-fee shifting privision was severable from the arbitration process. Taking each argument in turn, the Eleventh Circuit reversed the district court's decision and remanded the case with instructions to compel arbitration. View "Barras v. Branch Banking & Trust Co." on Justia Law

The issue before the Supreme Court in this case centered on a binding arbitration clause in an attorney-client retainer agreement and whether that clause was enforceable where the client filed suit for legal malpractice. This case presented two important countervailing public policies: Louisiana and federal law explicitly favor the enforcement of arbitration clauses in written contracts; by the same token, Louisiana law also imposes a fiduciary duty "of the highest order" requiring attorneys to act with "the utmost fidelity and forthrightness" in their dealings with clients, and any contractual clause which may limit the client's rights against the attorney is subject to close scrutiny. After its careful study, the Supreme Court held there is no per se rule against arbitration clauses in attorney-client retainer agreements, provided the clause is fair and reasonable to the client. However, the attorneys' fiduciary obligation to the client encompasses ethical duties of loyalty and candor, which in turn require attorneys to fully disclose the scope and the terms of the arbitration clause. An attorney must clearly explain the precise types of disputes the arbitration clause is meant to cover and must set forth, in plain language, those legal rights the parties will give up by agreeing to arbitration. In this case, the Defendants did not make the necessary disclosures, thus, the arbitration clause was unenforceable. Accordingly, the judgment of the lower courts was affirmed. View "Hodges v. Reasonover" on Justia Law

The United States Bankruptcy Appellate Panel of the Court of Appeals for the Ninth Circuit ("the BAP") certified a question to the Alabama Supreme Court: "In Alabama, is a 'default' judgment premised upon discovery sanctions or other post-answer conduct of the defendant sufficient to support the application of issue preclusion in a later proceeding?" Debtor-Defendant Anthony Malfatti was one of three principals of TA Financial Group ('TAF') purportedly designed to assist credit card holders in arbitration of disputes with the card issuers. The arbitration providers were selected by the card holders from a list provided by TAF. Among the arbitration providers was Arbitration Forum of America, Inc. ('AFOA'). AFOA was not conducting legitimate arbitrations; every arbitration resulted in an award in favor of the card holder, which was then reduced to judgment. Malfatti claims he was unaware that AFOA's practices and the judgments stemming therefrom were illegitimate. At some time after the banks involved learned of the judgments, they filed cross-complaints against the card holders to set aside the judgments as fraudulently obtained. In September 2005, the banks, including Bank of America, N.A. (USA) filed Amended Third Party Complaints against, among others, Malfatti and TAF, alleging tortious interference with contract, abuse of process, wantonness, and civil conspiracy, and sought an injunction against further arbitrations. The Banks moved for default judgments against Malfatti and TAF for failing to comply with discovery orders, repeated failures to appear for depositions, and failure to respond to written discovery. Malfatti and TAF filed a motion to set aside the defaults. The court found Malfatti and TAF to be jointly and severally liable for compensatory damages, awarded punitive damages against Malfatti, and found Malfatti to be liable for punitive damages awarded against TAF under the alter ego doctrine. Malfatti filed for Chapter 7 bankruptcy the Banks filed an adversary proceeding alleging the debt owed to them by Malfatti was nondischargeable. Upon review, the Alabama Supreme Court answered the certified question in the negative: "[f]or purposes of determining whether an issue is precluded by the doctrine of collateral estoppel, Alabama law makes no distinction between a simple default and a penalty default." View "Malfatti v. Bank of America, N.A." on Justia Law

Auto Owners Insurance, Inc. ("Auto Owners"), appealed a circuit court's denial of its motion to dismiss or, in the alternative, to compel arbitration in an action against it filed by Blackmon Insurance Agency, Inc. Blackmon served as an agent for Auto Owners since 1995. The agency agreement the parties signed provided for commission to Blackmon for the sale of Auto Owners policies; the agreement also included an arbitration agreement should there be a dispute among them. In 2010, Blackmon filed a complaint in the circuit court seeking a declaratory judgment as to the arbitrability of a dispute between Blackmon and Auto Owners as to which Auto Owners had already initiated arbitration proceedings. In its complaint, Blackmon alleged that Auto Owners had initiated the arbitration proceedings against Blackmon in Eaton County, Michigan. Blackmon also alleged that in the Michigan arbitration proceeding Auto Owners bases its claims on a 2005 document and 2009 supplemental agreement. Auto Owners moved to dismiss, or in the alternative, to compel arbitration. The circuit court denied Auto Owners' motion, and Auto Owners appealed. Upon review of the documents at the heart of this dispute, the Supreme Court concluded the circuit court erred in denying Auto Owners' motion to compel arbitration. The Court therefore reversed the circuit court and remanded the case with instructions that the lower court grant the motion and either issue a stay of these proceedings pending arbitration, or dismiss the case. View "Auto Owners Insurance, Inc. v. Blackmon Insurance Agency, Inc." on Justia Law

The Cumberland Teachers Association (union), appealed to the Supreme Court that confirmed an arbitrator's award in favor of the Cumberland School Committee (school committee). After protracted contract negotiations, the school committee and the union agreed on a three-year collective bargaining agreement (CBA) that would govern their relations for the 2006-2007, 2007-2008 and 2008-2009 academic years. "However, the parties soon discovered that they had left the negotiating table with two very different understandings of how a key component of their agreement would be implemented." An arbitrator was selected and the parties agreed that the issue to be decided by the arbitrator was whether “the Cumberland School Committee place[d] the aggrieved teachers at the correct salary level for the 2007-08 school year?” On appeal to the Supreme Court, the union argued that the arbitrator manifestly disregarded a contract provision when he found that there was no written agreement about how the new salary schedule would be implemented for the 2007-2008 year. Upon review, the Supreme Court concluded that the union did not demonstrate that the arbitrator manifestly disregarded the contract or that he was completely irrational in arriving at his decision and award. View "Cumberland Teachers Association v. Cumberland School Committee" on Justia Law

Plaintiff appealed the trial court's dismissal of his medical malpractice action for failing to satisfy the applicable statute of limitations. Plaintiff alleged that Defendant Allan Eisemann, M.D., practicing through a medical practice which bore his name, negligently failed to advise Plaintiff or his dentist of the known risks associated with a tooth extraction while Plaintiff was taking intervenous doses of a medication called "Zometa," prescribed for multiple myleoma. Defendant allegedly approved the procedure; Plaintiff's dentist pulled the tooth. Following the procedure, Plaintiff developed osteonecrosis of the jaw. All parties agreed that the statute of limitations period for Plaintiff's malpractice claims would expire October 9, 2009. By a letter dated in September, Plaintiff's counsel proposed to Dr. Eisemann's counsel and other potential defendants a "time out" agreement to toll the statute of limitations for ninety days so that the parties could pursue settlement. Although Dr. Eisemann signed off on the agreement, not all defendants did. As a result of Plaintiff's failure to reach an agreement with all defendants, Plaintiff filed suit on October 7, 2009. Counsel for Dr. Eisemann returned the acceptance of service to Plaintiff's counsel in January, 2010. Plaintiff did not filed the acceptance with the court at that time. The trial court dismissed the case on its own motion on April 15, 2011 based on Plaintiff's failure to prosecute his claim. Three days later, Plaintiff filed the signed acceptances of service. Dr. Eisemann moved to dismiss. On appeal, Plaintiff argued that the Eisemann defendants are equitably estopped from invoking the statute of limitations. Upon review, the Supreme Court concluded that Plaintiff could not rely on the doctrine of equitable estoppel because his own "omissions or inadvertences" contributed to the problem. Accordingly, the Court affirmed dismissal of his case. View "Beebe v. Eisemann" on Justia Law