Justia Arbitration & Mediation Opinion Summaries

In June 2009, defendant filed an arbitration demand against plaintiff alleging claims for wrongful termination and breach of contract based on plaintiff's failure to pay a performance bonus. Defendant subsequently filed a new demand for arbitration in October 2010, which included his original claims plus claims of fraud and breach of contract, after the arbitrator denied his motion to amend the original arbitration demand when he discovered evidence suggesting that plaintiff had padded estimated revenues for defendant's companies by $17 million. Plaintiff argued on appeal that the district court erred by not granting its motion for a preliminary injunction and temporary restraining order; that defendant's withdrawal from the first arbitration waived his right to a second arbitration; and that the first arbitration's October Order, denying defendant leave to amend, was an enforceable arbitration award. The court held that the Federal Arbitration Act, 9 U.S.C. 16(b)(4), precluded the court's review of the district court's order refusing to enjoin the arbitration. The court also held that a final decision with respect to an arbitration required an official dismissal of all claims and thus, where the district court stayed proceedings in lieu of dismissal, the decision was not final. The court further concluded that an arbitration award was a final adjudication of a claim on the merits and a procedural ruling that denied leave to amend was not an award since the decision had no effect on the merits of the proposed claims. Accordingly, the court dismissed the appeal for lack of jurisdiction.

Plaintiff-Appellee Spiska Engineering, Inc. (Spiska) sued Defendant-Appellee SPM Thermo-Shield, Inc. (Thermo-Shield) for breach of contract. Following a number of proceedings and appeals relating to the arbitration of the dispute, an arbitration award was confirmed, and Spiska obtained a money judgment against Thermo-Shield. A receiver was appointed to satisfy the judgment by liquidating Thermo-Shield's assets. Appellant Joseph Raver was Thermo-Shield's president, CEO and sole shareholder. Mr. Raver was not a party to the arbitration proceedings. The receiver mailed Mr. Raver a motion and notice of its intent to sell Thermo-Shield's assets. Mr. Raver appeared at a hearing at the circuit court, and objected to the sale. The court denied Mr. Raver's objection, and approved the sale. Though injunctive relief was not an issue at the hearing, the receiver included language in his proposed findings and conclusions that permanently enjoined Mr. Raver from competing with Thermo-Shield. The court adopted the receiver's findings in its final order. Mr. Raver appealed the award of injunctive relief, arguing that the court lacked jurisdiction over Mr. Raver to enjoin him. Upon review, the Supreme Court concluded that the circuit court lacked jurisdiction to enjoin Mr. Raver from competing with Thermo-Shield. The Court remanded the case for further proceedings.

Plaintiff appealed from a judgment of a single justice of this court denying his petition for relief under G.L.c. 211, 3, alleging, inter alia, violations of the Wage Act, G.L.c. 149, 148 and 150, when plaintiff filed an action in superior court against his former employers and their officers. At issue was whether the justice erred by denying plaintiff's second petition of relief from an order granting defendants' motion to compel arbitration as to some of plaintiff's claims and staying his remaining claims pending arbitration. The court held that the single justice did not err or abuse his discretion by denying relief where plaintiff offered several arguments that the justice's order was wrong on the merits and each of his arguments could be addressed in an appeal from a final judgment and where plaintiff had an alternative interlocutory remedy, namely, a petition for relief under G.L.c. 231, 118.

Plaintiff makes glucose monitors and other diabetes-related products that incorporate software written by defendant, under a contract that entitles it to use the software for two years after the contractâs initial term, 2006-2010, and any extension. It also gives plaintiff a right of first refusal should defendant agree to sell its stock or assets to one of plaintiffâs competitors "during the term of this Agreement." Defendant would not extend the contract after the original expiration date. Plaintiff learned that investors in defendant were negotiating to sell stock to a company that plaintiff considers a competitor. Defendant asserted that, because the transaction would not close until 2011, the right of first refusal did not apply. Plaintiff sought an injunction pending arbitration. Based on concerns about irreparable harm to each party, the district court entered an injunction to allow the sale to proceed, subject to a requirement that plaintiff be allowed to use the software through 2012; the injunction expires when the arbitrator renders a decision. The Seventh Circuit affirmed, modifying to add conditions to ensure that defendant remains a separate firm so that the transaction can be undone if the arbitrator rules in plaintiffâs favor.

Appellants appealed from an order of the district court denying its motion, made after a preliminary injunction was vacated by the court, to recover damages against an injunction bond posted by appellee. At issue was whether the district court correctly concluded that the damages sought were not proximately caused by the injunction, and that, in deciding this issue, the district court should have applied a presumption in favor of recovery against the bond. The court held that a wrongfully enjoined party was entitled to a presumption in favor of recovery against an injunction bond and that the district court's decision was insufficient to permit meaningful appellate review. Accordingly, the court vacated the order and remanded for reconsideration and clarification.

The Brotherhood of Locomotive Engineers and Trainment ("BLET") filed a claim with the Union Pacific Railroad Company ("UP") seeking reinstatement and backpay for a member of the BLET when UP terminated him while he was working under a governing collective-bargaining agreement between the UP and the United Transportation Union ("UTU"). At issue was whether the National Railroad Adjustment Board ("NRAB") properly dismissed the claim. The court affirmed the dismissal and held that the NRAB did not ignore the Article C-17 contract provision in the agreement while interpreting the contract; that the NRAB's interpretation of Article C-17 did not violate 45 U.S.C. 153 First (j); the NRAB acted well within its power by invoking a "claim-processsing" rule; the NRAB was well within its authority in construing the agreement as enunciating the "usual manner" in this workplace; once the NRAB determined that the agreement was controlling, the other agreements and bargaining history became largely irrelevant; and the district court did not abuse its discretion where discovery would not have justified setting aside the NRAB's interpretation of the agreement, nor would it have uncovered a due process violation by the NRAB.

Appellants Bruce and Cindy Thompson filed a claim for basic economic loss benefits against their insurer, Respondent Western National Insurance Company (Western National), arising from injuries they sustained in an automobile accident. Western National paid some benefits, but a dispute arose over the Thompsonsâ obligation to submit to examinations requested by Western National. The Thompsons filed for no-fault arbitration, and Western National moved to stay the arbitration in order to seek a declaratory judgment in the district court. The arbitrator entered awards in favor of the Thompsons. In court, Western National moved for summary judgment, and the Thompsons moved to confirm their awards. The district court denied Western Nationalâs motion and confirmed the awards, concluding that the reasonableness of the Thompsonsâ refusal to attend the examinations was an issue handled by the arbitrator. The appellate court reversed, concluding that the examination question was a question of law for the court to decide. The Supreme Court reversed the appellate court, holding that the examination issue was a question of fact for the arbitrator. The Court reinstated the arbitration awards in favor of the Thompsons.

Plaintiff, a labor organization that represented a bargaining unit of defendant's employees, filed a formal grievance with defendant, challenging defendant's discontinuation of dues "checkoff," or deduction of dues from employees' paychecks, and seeking collection and remittance of all back dues with interest. At issue was whether the district court erred in concluding that the parties' dispute over checkoff of union dues was subject to arbitration pursuant to their expired collective-bargaining agreement. The court held that plaintiff's contractual right to checkoff of union dues survived expiration of the agreement and therefore, subjected the parties' disputes to arbitration.

Respondent filed a sex discrimination suit against petitioner alleging violations of the Texas Commission on Human Rights Act, Tex. Lab. Code 21.001-.556, where petitioner terminated its employment of respondent citing as the basis for its decision a reduction in force due to worsening business conditions. The parties sought arbitration and petitioner appealed the arbitrator's reward. At issue was whether the Texas General Arbitration Act ("TAA"), Tex. Civ. Prac. & Rem. Code 171.001-.098, precluded an agreement for judicial review of an arbitration award for reversible error, and if not, whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 1-16, preempted enforcement of such an agreement. The court held that the TAA presented no impediment to an agreement that limited the authority of an arbitrator in deciding a matter and thus allowed for judicial review of an arbitration award for reversible error. The court also held that the FAA did not preempt enforcement of an agreement to expanded judicial review of an arbitration award enforceable under the TAA. The court further held that, on remand, the court of appeals must determine whether the record was sufficient to review petitioner's complaints. Therefore, the judgment of the court of appeals must be reversed and the case remanded to that court for consideration of the merits of petitioner's challenges to the arbitration award.

The court issued an order and amended the opinion replacing [The district court excluded this evidence under its Alternative Dispute Resolution (ADR) Local Rule 6-11, which it read to create a "privilege" for "evidence regarding the details of the parties' negotiations in their mediation."] in lines 20-24, page 4909, with [The district court excluded this evidence under its Alternative Dispute Resolution (ADR) local rule on "confidential information," which it read to create a "privilege" for "evidence regarding the details of the parties' negotiations in their mediation." A local rule, like any court order, can impose a duty of confidentiality as to any aspect of litigation, including mediation. See N.D. Cal. ADR L.R. 6-12(a); see also 28 U.S.C. 652(d).] The petition for rehearing en banc was denied and no further petitions for rehearing or rehearing en banc may be filed.