Justia Arbitration & Mediation Opinion Summaries

HomeServices of America, Inc.; BHH Affiliates, LLC; and HSF Affiliates, LLC (collectively, “HomeServices”) appealed from the district court’s denial of HomeServices’s motion to compel unnamed class members to arbitrate their claims against it.   The Eighth Circuit affirmed. The court explained that here, HomeServices conceded before the district court that “neither the named plaintiffs nor any purported class member has any contract or direct relationship with HomeServices relevant to the claims asserted in this case.” Moreover, the Listing Agreements and their included Arbitration Agreements do not name HomeServices as a party or third-party beneficiary. The court explained that the district court correctly concluded this “narrow, party-specific language . . . does not clearly and unmistakably delegate to an arbitrator threshold issue of arbitrability between nonparties, including HomeServices.” Thus, the court held that the district court correctly concluded that “the court—not an arbitrator—must address whether HomeServices can enforce the Arbitration Agreements.” Moreover, the court held that the district court did not err in denying HomeServices’s motion to compel the unnamed class members to arbitrate their claims against it. View "Scott Burnett v. HomeServices of America, Inc." on Justia Law

PayPal users can transfer money to businesses and people; they can donate to charities through the Giving Fund, its 501(c)(3) charitable organization. Kass created a PayPal account and accepted PayPal’s 2004 User Agreement, including a non-mandatory arbitration clause and allowing PayPal to amend the Agreement at any time by posting the amended terms on its website. In 2012 PayPal amended the Agreement, adding a mandatory arbitration provision. Users could opt out until December 2012. In 2016, PayPal sent emails to Kass encouraging her to make year-end donations. Kass donated $3,250 to 13 charities through the Giving Fund website. Kass alleges she later learned that only three of those charities actually received her gifts; none knew that Kass had made the donations. Kass claims that, although Giving Fund created profile pages for these charities, it would transfer donated funds only to charities that created a PayPal “business” account; otherwise PayPal would “redistribute” the funds to similar charities.Kass and a charity to which she had donated filed a purported class action. The district court granted a motion to compel arbitration, then affirmed the arbitrator’s decision in favor of the defendants. The Seventh Circuit vacated. In concluding that Kass had consented to the amended Agreement, the district court erred by deciding a disputed issue of fact that must be decided by a trier of fact: whether Kass received notice of the amended Agreement and implicitly agreed to the new arbitration clause. View "Kass v. PayPal Inc." on Justia Law

Petitioners Rick Hendrick Dodge Chrysler Jeep Ram (Rick Hendrick Dodge) and Isiah White argued an arbitrator had to decide whether they could enforce an arbitration provision in a contract even after that contract had been assigned to a third party. The court of appeals rejected this argument and affirmed the circuit court's determinations that: (1) the circuit court was the proper forum for deciding the gateway question of whether the dispute is arbitrable; and (2) Petitioners could not compel arbitration because Rick Hendrick Dodge assigned the contract to a third party. The South Carolina Supreme Court held that the doctrine announced in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) required the arbitrator to decide whether the assignment extinguished Petitioners' right to compel arbitration. Therefore, the Court reversed the court of appeals' decision and vacated the circuit court's discovery order. View "Sanders v. Savannah Highway Automotive Company" on Justia Law

In this appeal from the district court, Plaintiffs A.A. and Kirk Amos Delivery and Courier, LLC (“Kirk Delivery”) challenged an order of the district court compelling the arbitration of various claims that Plaintiffs seek to pursue against Amazon Logistics, Inc. (“Amazon”).  Conceding that each of their claims against Amazon falls within the scope of a binding commercial contract made between Kirk Delivery and Amazon in 2019 — and that an arbitration clause governed by the Federal Arbitration Act (the “FAA”) is set forth within that contract — Plaintiffs contend, in relevant part, that arbitration is not required due to the FAA’s exemption for “contracts of employment” with “transportation workers.”   The Fourth Circuit affirmed the district court’s judgment. The court held that the binding commercial contract is a business services deal struck between two corporate entities, not a “contract of employment” — the FAA’s so-called “transportation worker” exemption is inapplicable in these circumstances. The FAA thus mandates arbitration of all Plaintiffs’ claims. View "Ahaji Amos v. Amazon Logistics, INC." on Justia Law

Discover Bank seeks to compel Plaintiff to arbitrate her claims that Discover Bank unlawfully discriminated against her based on citizenship and immigration status when it denied her application for a consolidation loan for her student loan. Discover Bank argues that two arbitration agreements—one Plaintiff made in connection with the student loan and one she made in connection with the application for the consolidation loan—require arbitration here. The district court declined to compel arbitration, finding that neither agreement required arbitration.   The Ninth Circuit affirmed the district court’s order declining to compel Plaintiff to arbitrate. The panel held that Discover Bank was judicially estopped from arguing that Perez did not opt out of the Discover Bank agreement. The panel determined that Discover Bank’s past position clearly contradicted its current position that the opt-out would only apply to Plaintiff’s future discrimination claims, Discover Bank persuaded the court to accept its previous position, and Discover Bank would derive an unfair advantage absent estoppel. Citing Revitch v. DIRECTV, LLC, 977 F.3d 713 (9th Cir. 2020), the panel further held that Perez and Discover Bank never formed an agreement to arbitrate her discrimination claims involving her application for a consolidation loan via the Citibank agreement. View "ILIANA PEREZ, ET AL V. DISCOVER BANK" on Justia Law

Petitioner appealed from a district court judgment dismissing his to confirm an arbitral award. The court held that a forum selection 2 clause in the parties’ arbitration agreement required that any confirmation action be brought in the state courts of New Jersey or New York, and that this deprived the district court of subject matter jurisdiction.   The Second Circuit vacated. The court concluded that the district court erred in dismissing Petitioner’s petition. First, the court held that the petition adequately pleaded subject matter jurisdiction based on diversity of citizenship. Because parties cannot contractually strip a district court of its subject matter jurisdiction, it was error to conclude that the forum selection clause did so. Second, the court interpreted the relevant forum selection clauses as permissive arrangements that merely allow litigation in certain fora, rather than mandatory provisions that require litigation to occur only there. Accordingly, applying the modified forum non conveniens framework, the court held that the forum selection clauses did not bar proceedings from going forward in the United States District Court for the Southern District of New York. View "Rabinowitz v. Kelman" on Justia Law

Defendant-Appellant TA Operating LLC (TA) appeals the district court’s denial of its motion to compel arbitration of employment-related claims brought by Plaintiff.   The Ninth Circuit vacated the district court’s order denying Defendant’s motion to compel arbitration. The panel held that the district court erred in finding that the arbitration agreement’s delegation clause was unenforceable because it was substantively unconscionable. The district court properly considered whether an “unrelated” jury waiver provision made the delegation clause unconscionable. Here, though, the jury waiver provision applied only if the Agreement were determined to be unenforceable. As such, it could not support the conclusion that an agreement to arbitrate enforceability (i.e., the delegation clause) was unenforceable. View "KENNETH HOLLEY-GALLEGLY V. TA OPERATING, LLC" on Justia Law

This is a putative class action by three truck drivers against their employer, Domino’s Pizza. The court previously affirmed the district court’s denial of Domino’s motion to compel arbitration, holding that because the drivers were a “class of workers engaged in foreign or interstate commerce,” their claims were exempted from the Federal Arbitration Act (“FAA”) by 9 U.S.C. Section 1.   The Ninth Circuit affirmed the district court’s order denying Domino Pizza’s motion to compel arbitration in a putative class action brought by three Domino truck drivers, alleging violations of California labor law. The panel stated that its prior decision squarely rested upon its reading of Rittmann v. Amazon.com, Inc., 971 F.3d 904 (9th Cir. 2020), which concerned Amazon delivery drivers. The panel found no clear conflict between Rittmann and Saxon and nothing in Saxon that undermined the panel’s prior reasoning that because the plaintiff drivers in this case, like the Amazon package delivery drivers in Rittmann, transport interstate goods for the last leg to their final destinations, they are engaged in interstate commerce under Section 1. View "EDMOND CARMONA, ET AL V. DOMINO'S PIZZA, LLC" on Justia Law

The Supreme Court answered two certified questions regarding the interplay between an arbitrated award against one set of tortfeasors and a litigated proceeding against another set of tortfeasors in this case concerning Kansas's one-action rule.Timothy Hunt, a farm employee, was killed when operating a grain vacuum to remove corn from a grain trailer. Plaintiff, Hunt's daughter, filed suit in Kansas federal district court against the manufacturer of the grain vacuum system. In the meantime, Hunt's children, including Plaintiff, entered into an arbitration agreement with the farm. An arbitrator entered an award in favor of the claimants. The circuit court entered final judgment confirming the arbitration award. The defendants in the federal court action subsequently moved for summary judgment, arguing that the suit was barred by the one-action rule. The federal court then certified questions to the Supreme Court. The Supreme Court answered (1) an arbitration action does not qualify as a judicial determination of comparative fault where no other potential tortfeasors were involved in the arbitration; and (2) the confirmation of an arbitration award by a state court judgment does not qualify as a judicial determination of comparative fault so as to invite application of the Kansas one-action rule. View "Hodges v. Walinga USA Inc." on Justia Law

An Asset Purchase Agreement provided that the sellers could receive variable payments (Earn-Out Consideration) if the post-merger company (IAS) achieved specific benchmarks. Section 2.6(c) specifies that IAS had to provide the sellers with the computation for each period, to become final unless they submitted a “notice of disagreement.” Any disagreement would be settled according to Section 2.3(e),” which refers to resolution by an accounting firm. Section 11.17, however, directs the parties generally to use non-binding mediation, followed by litigation if mediation fails.IAS determined that the company did not meet its targets. The sellers claim that IAS intentionally prevented the company from hitting its targets. Negotiations failed. The sellers sued for breach of contract and tortious interference; later, they filed a notice of disagreement and sought a declaration that the lawsuit was outside the scope of sections 2.3(e) and 2.6(d). IAS sought to compel arbitration under 2.3(e). The district court held that the Agreement contained a valid agreement to arbitrate. An accounting firm subsequently determined that the sellers had no right to Earn-Out Consideration. The district court entered judgment for IAS.The Third Circuit vacated. The Purchase Agreement contains an agreement to submit narrow disputes to an accounting firm for expert determination, not arbitration. Although the statement of IAS’s financial benchmarks becomes final after the expert completes its accounting analysis, the authority to resolve legal questions—like whether IAS violated the duty of good faith— remains with the courts. View "Sapp v. Industrial Action Services LLC" on Justia Law