Justia Arbitration & Mediation Opinion Summaries

HyreCar is an intermediary between people who own vehicles and people who would like to drive for services such as Uber and GrubHub. Before leasing a car, HyreCar sends an applicant’s information, including a photograph, to Mitek, which provides identity-verification services. Johnson, a HyreCar driver, brought a putative class action, alleging Mitek used that information without the consent required by the Illinois Biometric Privacy Act. Mitek asked the district court to send the case to arbitration, citing an Arbitration Agreement in Johnson’s contract with HyreCar, applicable to drivers, HyreCar, and “any subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of services or goods provided under the Agreement.The district court concluded that suppliers such as Mitek were not covered. The Seventh Circuit affirmed, rejecting Mitek’s claim that it is a “beneficiary of services or goods provided under the Agreement.” The “services or goods provided under the Agreement” are vehicles. Mitek cannot be classified as a “user” of HyreCar’s services or goods. Mitek has its own contract with HyreCar, but does not have a contract with any HyreCar driver. The Federal Arbitration Act, 9 U.S.C. 2 does not change the result. The court noted that claims under the Illinois Act cannot be litigated in federal court unless the plaintiff can show concrete harm. Johnson seeks only statutory damages. Johnson’s claim must be remanded to state court. View "Johnson v. Mitek Systems, Inc." on Justia Law

FeeDx and HayDay Farms, Inc. entered into an Exclusive Distribution and Processing Agreement (EDPA). HayDay’s President also entered into a Consulting Agreement with FeeDx through Nippon Agricultural Holgins, Inc. The agreements provided for arbitration. The EDPA also made HayDay and Nippon jointly and severally liable. Neither HayDay nor FeeDx performed its side of the agreement. The parties entered a Settlement Agreement, which modified, but did not replace, the EDPA. After the Settlement Agreement did not see fruition, the parties went to arbitration. An arbitration tribunal made awards against FeeDx, and HayDay and Nippon petitioned to confirm the award. FeeDx sought to vacate the award, arguing that it exceeded the tribunal’s powers under the Federal Arbitration Act (“FAA”). The district court vacated $7 million from the award that reflected HayDay’s unpaid installments under the Settlement Agreement, but confirmed the rest of the award.   The Ninth Circuit affirmed in part, and reversed in part, the district court’s order confirming in part an arbitration award of more than $21 million entered against FeeDx. The panel held that arbitration awards that, as here, involve at least one foreign party are governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“Convention”), which Congress incorporated into federal law under the FAA. 9 U.S.C. Section 203 provides federal district courts subject matter jurisdiction over actions or proceedings falling under the Convention. The panel held that the parties’ failure to assert federal question jurisdiction did not deprive the district court of subject matter jurisdiction where HayDay and Nippon’s state court petition established Section 203 jurisdiction. View "HAYDAY FARMS, INC., ET AL V. FEEDX HOLDINGS, INC." on Justia Law

Communications Unlimited Contracting Services, Inc. ("CUI") appealed a circuit court judgment that granted Steve Clanton's motion for a remand for clarification of arbitration award issued by Judicial Arbitration and Mediation Services, Inc. ("JAMS"). Because the awards of money damages for each party were clearly stated and unambiguous in amount and scope, the Alabama Supreme Court concluded the circuit court erred in remanding the arbitration award to JAMS for clarification. The Supreme Court reversed the circuit court's judgment and remanded the case for further proceedings. View "Communications Unlimited Contracting Services, Inc. v. Clanton." on Justia Law

Coinbase, Inc., an online cryptocurrency exchange, appeals the district court’s order denying its motion to compel arbitration in a diversity suit brought by Plaintiff and three other Coinbase users (collectively “Plaintiffs”) who opted into Coinbase’s Dogecoin Sweepstakes in June 2021.   The Ninth Circuit affirmed the district court’s order denying Coinbase, Inc.’s motion to compel arbitration in a diversity suit. The panel held that the “scope” of an arbitration clause concerns how widely it applies, not whether it has been superseded by a subsequent agreement. The district court therefore correctly ruled that the issue of whether the forum selection clause in the Sweepstakes’ Official Rules superseded the arbitration clause in the User Agreement was not delegated to the arbitrator, but rather was for the court to decide.   Further, the court wrote that the district court correctly ruled that because the User Agreement and the Official Rules conflict on the question whether the parties’ dispute must be resolved by an arbitrator or by a California court, the Official Rules’ forum selection clause supersedes the User Agreement’s arbitration clause. View "DAVID SUSKI, ET AL V. COINBASE, INC., ET AL" on Justia Law

The Court of Appeals affirmed the judgment of the appellate division reversing Supreme Court's order granting the petition filed by the City of Yorkers pursuant to N.Y. C.P.L.R. 75 to permanently stay arbitration of the underlying labor dispute, holding that grievances like the present one are arbitrable so long as no public policy, statutory, or constitutional provisions prohibit them and they are reasonably related to the provisions of the collective bargaining agreement (CBA).The underlying dispute between City of Yonkers and its firefighters concerned whether Yonkers must make certain types of payments to firefighters who were permanently disabled for work-related injuries and who qualified for benefits under N.Y. Gen. Mun. Law 207-a(2). Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO (the Union) filed a grievance alleging that Yonkers violated the CBA and then served a demand for arbitration. Yonkers responded by filing a petition to permanently stay arbitration. Supreme Court granted the petition. The appellate division reversed. The Court of Appeals affirmed, holding that this grievance was arbitrable. View "City of Yonkers v. Yonkers Fire Fighters, Local 628, IAFF, AFL-CIO" on Justia Law

Plaintiff-appellant Bernell Beco filed suit against his former employer, defendant Fast Auto Loans, Inc. (Fast Auto) alleging 14 causes of action relating to the termination of his employment. Plaintiff alleged causes of action under with), including claims under the California Fair Employment and Housing Act (FEHA), numerous wage and hour violations under the Labor Code, wrongful termination, unfair competition, and additional tort claims. Fast Auto moved to compel arbitration, arguing that Beco had signed a valid arbitration agreement at the time he was hired. The trial court found the agreement unconscionable to the extent that severance would not cure the defects and declined to enforce it. After its review, the Court of Appeal agreed with the trial court that the agreement was unconscionable, and further rejected Fast Auto’s argument that the arbitrator, not the court, should have decided the issue of unconscionability. Additionally, because the agreement included numerous substantively unconscionable provisions, the appellate court found no abuse of discretion in the trial court’s decision not to sever them. View "Beco v. Fast Auto Loans, Inc." on Justia Law

An arbitrator determined that a borrower and lender were liable to each other for similar amounts, each roughly two and a half million dollars. He then offset the awards against each other, resolving the disputed issue of whether a setoff was proper. A bank, however, had also lent money to the borrower. The bank was not a party to the arbitration, but believed the setoff effectively circumvented the agreement among it, the borrower, and the other lender that the bank’s loan had priority and would be paid back first. Instead of being offset against the other lender’s award, the bank believed, the borrower’s award should have gone toward satisfying the bank’s loan. It thus convinced the trial court to correct the arbitrator’s award by eliminating the setoff. The Court of Appeal held that on the facts presented, the correction affected the merits of the arbitrator’s decision. Accordingly, the correction was improper, and the Court reversed. View "E-Commerce Lighting, Inc. v. E-Commerce Trade LLC" on Justia Law

Defendant, Simplified Labor Staffing Solutions, Inc. (Simplified) appealed an order denying its motion to compel arbitration of Plaintiff’s claims brought under the California Private Attorneys General Act of 2004 (PAGA). Simplified’s motion was based on Plaintiff’s predispute agreement to arbitrate all claims arising from their employment relationship. The trial court understandably denied the motion based on a rule followed by numerous California Courts of Appeal that predispute agreements to arbitrate PAGA claims are unenforceable.   The Second Appellate District reversed and held that this rule cannot survive the U.S. Supreme Court’s recent decision in Viking River Cruises, Inc. v. Moriana (2022) U.S.[142 S.Ct. 1906] (Viking River). The court further held that the scope of the arbitration clause is to be determined by the arbitrator in accordance with the arbitration agreement. Specifically, the parties’ dispute about whether nonindividual PAGA claims are governed by the arbitration agreement, in the same way, individual PAGA claims are, is an issue for the arbitrator to address. View "Lewis v. Simplified Labor Staffing Solutions, Inc." on Justia Law

On engaging services from Pacific Fertility Center, the plaintiffs signed “ ‘Informed Consent and Agreement to Perform Egg Cryopreservation” forms, providing that medical malpractice disputes were subject to arbitration. The plaintiffs signed separate arbitration agreements. Chart, which manufactures Pacific’s cryogenic storage tanks, and Praxair, which sold those tanks to Pacific and assisted with installation, were not signatories to either the informed consent or arbitration agreements.Following the failure of Tank Four, the plaintiffs in 54 coordinated cases filed suit. As to Chart and Praxair, the complaint alleged negligent failure to recall the tank, strict products liability (failure to warn, manufacturing defect, and design defect based on both the consumer expectations test and the risk-utility test), general negligence, and violation of the Unfair Competition Law. After the plaintiffs agreed to arbitrate their claims against Pacific, Chart and Praxair moved to compel arbitration, citing equitable estoppel. The court of appeal affirmed the denial of their motions. The plaintiffs’ claims are not premised on, nor did they arise out of, the plaintiffs’ fertility services agreements with Pacific. The issue of comparative fault and joint liability on certain issues does not inform the equitable estoppel analysis; the joint liability is not based on the same or similar legal theories and/or facts that underlie the obligations under the Pacific contracts. View "Pacific Fertility Cases" on Justia Law

In this appeal centering on the existence of a valid arbitration agreement the Court of Appeals affirmed the decision of the court of appeals reversing the judgment of the circuit court, holding that the circuit court erred in compelling arbitration of the question of whether the arbitration clause in the agreements at issue was valid.The arbitration clause in this case stemmed from transactions between lead paint tort plaintiffs who received structured settlements and affiliated factoring companies that specialize in purchasing structured settlement rights. Defendants filed motions to compel arbitration and stay the case, but Plaintiffs challenged the existence of a valid agreement to arbitrate. The trial court granted the motion to compel arbitration, finding that the arbitrator was to determine the issue of arbitrability. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding that the circuit court erroneously compelled arbitration and that the issue of whether a valid arbitration agreement exists is an issue for the court to determine. View "Access Funding, LLC v. Linton" on Justia Law