Justia Arbitration & Mediation Opinion Summaries

In a dispute between Voltage Pictures, LLC (Voltage) and Gussi S.A. de C.V. (Gussi SA) regarding their Distribution and License Agreement (DLA), the United States Court of Appeals for the Ninth Circuit affirmed the District Court for the Central District of California's decision to confirm an arbitral award in favor of Voltage. The court held that the district court had jurisdiction under Section 203 of Chapter 2 of the Federal Arbitration Act (FAA) and 28 U.S.C. § 1331, despite an incorrect initial assertion of diversity jurisdiction. The court also ruled that Federal procedural law, not California law, governed the service of Voltage's notice of motion to confirm the arbitral award. It held that Voltage had sufficiently served the notice by mailing the motion papers to Gussi SA's counsel. Lastly, the court held that the district court had not erred in refusing to extend comity to an alleged Mexican court order enjoining Voltage from seeking to confirm the award in the United States, as Gussi SA had not certified the genuineness of the purported Mexican court order or its translation. View "VOLTAGE PICTURES, LLC V. GUSSI, S.A. DE C.V." on Justia Law

The Indiana Supreme Court heard a case involving a dispute between Tonia Land and the IU Credit Union (IUCU). When Land became a customer at the credit union, she was given an account agreement that could be modified at any time. Later, when she registered for online banking, she accepted another agreement that allowed the IUCU to modify the terms and conditions of the services. In 2019, the IUCU proposed changes to these agreements, which would require disputes to be resolved through arbitration and prevent Land from initiating or participating in a class-action lawsuit. Land did not opt out of these changes within thirty days as required, which, according to the IUCU, made the terms binding. However, Land later filed a class-action lawsuit against the credit union, which attempted to compel arbitration based on the addendum.The court held that while the IUCU did provide Land with reasonable notice of its offer to amend the original agreements, Land's subsequent silence and inaction did not result in her assent to that offer, according to Section 69 of the Restatement (Second) of Contracts. The credit union petitioned for rehearing, claiming that the court failed to address certain legal authorities and arguments raised on appeal and in the transfer proceedings.Upon rehearing, the court affirmed its original decision, rejecting the credit union's arguments. However, the court also expressed a willingness to consider a different standard governing the offer and acceptance of unilateral contracts between businesses and consumers in future cases. The court found no merit in the credit union's arguments on rehearing and affirmed its original opinion in full. View "Land v. IU Credit Union" on Justia Law

In a dispute between Conti 11 Container Schiffarts-GMBH & Co. KG M.S. and MSC Mediterranean Shipping Company S.A., the United States Court of Appeals for the Fifth Circuit found that the District Court for the Eastern District of Louisiana lacked personal jurisdiction over the case and reversed the district court's decision. The dispute arose from an incident where three chemical tanks exploded onboard a cargo vessel chartered by Conti to MSC, causing extensive damage and three deaths. After Conti won a $200 million award from a London arbitration panel, Conti sought to confirm the award in the Eastern District of Louisiana. MSC argued that the court lacked personal jurisdiction. The Fifth Circuit agreed with the district court’s assessment that when confirming an award under the New York Convention, a court should consider contacts related to the underlying dispute, not just those related to the arbitration itself. However, the Fifth Circuit disagreed with the district court's ruling that MSC waived its personal jurisdiction defense through its insurer’s issuance of a letter of understanding. The court also disagreed with the district court's finding that the loading of the tanks in New Orleans conferred specific personal jurisdiction over MSC, as this contact resulted from the actions of other parties not attributable to MSC. Therefore, the Fifth Circuit reversed the lower court's decision and remanded the case with instructions to dismiss it for lack of personal jurisdiction. View "Conti 11. Container Schiffarts-GMBH & Co. KG M.S. v. MSC Mediterranean Shipping Co. S.A." on Justia Law

Charles Ramsey, a subscriber to Comcast Cable Communications, LLC’s Xfinity services, filed a lawsuit against Comcast for violations of California’s consumer protection statutes. He alleged that Comcast engaged in unfair, unlawful, and deceptive business practices under the Consumers Legal Remedies Act (CLRA) and the unfair competition law (UCL). Ramsey’s complaint sought injunctive relief, not monetary damages. Comcast filed a petition to compel arbitration pursuant to the arbitration provision in the parties’ subscriber agreement which required the parties to arbitrate all disputes and permitted the arbitrator to grant only individual relief. The trial court denied the petition based on the Supreme Court’s decision in McGill v. Citibank, which held that a predispute arbitration provision that waives a plaintiff’s right to seek public injunctive relief in any forum is unenforceable under California law. On appeal, Comcast argued that the trial court erred in concluding that Ramsey was seeking public injunctive relief. Comcast further argued that the Federal Arbitration Act (FAA) preempts McGill. The Court of Appeal of the State of California Sixth Appellate District held that Ramsey’s complaint seeks public injunctive relief, and that McGill is not preempted, thus affirming the trial court’s order. View "Ramsey v. Comcast Cable Communications, LLC" on Justia Law

In a case heard before the Court of Appeal of the State of California Second Appellate District Division Five, Omar Kader, the plaintiff, sued his employer, Southern California Medical Center, Inc., and other defendants due to allegations of sexual harassment and assault. Kader had signed an arbitration agreement with his employer, but this was without disclosure of the ongoing sexual harassment and assault. After the enactment of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the Act), which invalidates predispute arbitration agreements under certain circumstances, Kader brought his suit.The defendants filed a motion to compel arbitration, arguing that the Act does not invalidate the arbitration agreement in this case since the alleged sexual conduct constituted a “dispute” which preexisted the arbitration agreement and the effective date of the Act.The court concluded that a dispute for the purposes of the Act does not arise merely from the fact of injury. Instead, for a dispute to arise, a party must first assert a right, claim, or demand. In this case, there was no evidence of a disagreement or controversy until after the date of the arbitration agreement and the effective date of the Act, when Kader filed charges with the Department of Fair Employment and Housing in May 2022. Therefore, the court held that the predispute arbitration agreement is invalid, and the order denying the motion to compel arbitration was affirmed. View "Kader v. Southern California Medical Center, Inc." on Justia Law

The case involves a dispute between Onecimo Sierra Suarez, an employee, and his employer, Rudolph & Sletten, Inc. (R&S), concerning the payment of arbitration fees. Suarez had initially sued his employer for alleged wage and hour violations. R&S successfully moved to have the case resolved through arbitration, as provided in their employment agreement. However, R&S delayed in paying its share of the initial arbitration fee, leading Suarez to argue that R&S has waived its right to arbitration. The Court of Appeal, Fourth Appellate District Division One, State of California held that the employer's delay in paying the arbitration fees constituted a material breach of the arbitration agreement, thereby waiving its right to arbitration. The court concluded that R&S's payment was late, even if certain provisions of the Code of Civil Procedure could potentially extend the deadline. The court also held that R&S's argument -- that the Federal Arbitration Act (FAA) preempted California's arbitration-specific procedural rules for fee payment -- was incorrect. The court found that such rules neither prohibited nor discouraged the formation of arbitration agreements, and therefore, were not preempted by the FAA. The court granted Suarez's petition and ruled that the case should proceed in court. View "Suarez v. Super. Ct." on Justia Law

In 2020, Loring De Martini agreed to sell a commercial property to Puja Gupta. A dispute arose and the parties entered arbitration. Subsequently, Gupta filed a petition to confirm the arbitration award and recorded a lis pendens on the property. Gupta obtained a judgment confirming the award, but abandoned the case after De Martini successfully moved to expunge the lis pendens. Gupta then filed a new action seeking to compel De Martini to complete the sale and recorded another lis pendens. De Martini moved to expunge the new lis pendens, arguing that Gupta needed the court's permission to record it under the Code of Civil Procedure section 405.36, as it was recorded by the same claimant and affected the same property. The trial court denied the motion, concluding that section 405.36 only applies to successive lis pendens filed in the same action and Gupta had established a prima facie case regarding the probable validity of a real property claim.De Martini petitioned the Court of Appeal of the State of California, First Appellate District, Division Three for a writ of mandate. The court granted the petition, concluding that the trial court erred both in its interpretation of section 405.36 and its application of the prima facie standard in determining the probable validity of the real property claim. The court held that section 405.36 requires a claimant to seek court permission before recording a lis pendens on the same property in a subsequent proceeding if a lis pendens in a prior, related proceeding has been expunged. Additionally, the court determined that the trial court should have applied a preponderance of the evidence standard, not a prima facie standard, in determining the probable validity of the real property claim. The court ordered the trial court to vacate its order denying expungement of the lis pendens and to enter a new order granting the requested expungement and ruling on De Martini's motion for attorney fees. View "Di Martini v. Superior Court" on Justia Law

The United States Court of Appeals for the Second Circuit has decided an appeal from The Resource Group International Limited, TRG Pakistan Limited, Mohammed Khaishgi, and Hasnain Aslam against Muhammad Ziaullah Khan Chishti. The appellants sought to avoid arbitration proceedings initiated by the appellee, arguing that a later-executed release agreement superseded the arbitration agreement in the original Stock Purchase Agreement. The appellants also sought a preliminary injunction to halt the ongoing arbitration, but the District Court denied their request, asserting that they failed to show a likelihood of success on their claims and that they would suffer irreparable harm without the injunction.On appeal, the Circuit Court held that it had jurisdiction over the case, finding that the parties had chosen New York law to govern the arbitration proceedings, thereby bypassing the restrictions on appellate review under the Federal Arbitration Act. The court also held that the District Court had relied on an erroneous view of the law in concluding that the appellants failed to show a likelihood of success on the merits of their claims and that they would suffer irreparable harm. The court found that the release agreement, which contained a forum selection clause, superseded the Stock Purchase Agreement's arbitration clause. The court also clarified that being forced to arbitrate a non-arbitrable claim could constitute irreparable harm, particularly where attorneys' fees and arbitration costs could not adequately compensate the harm.As a result, the court vacated the District Court's decision and remanded the case for further proceedings. View "The Resource Group International Limited v. Chishti" on Justia Law

In a case before the Court of Appeal of the State of California Fourth Appellate District Division Two, the plaintiff, a minor identified as J.R., filed a putative class action against Electronic Arts Inc. (EA), alleging causes of action for unlawful and unfair business practices, violation of the Consumer Legal Remedies Act, and unjust enrichment. J.R. claimed that EA deceptively induced players, particularly minors, to purchase in-game currency for its game, Apex Legends. EA sought to compel arbitration under the terms of its user agreement, which J.R. had accepted to play Apex Legends. The lower court denied EA's motion to compel on the grounds that J.R. had exercised his power under Family Code section 6710 to disaffirm all of his contracts with EA, including the arbitration agreement. EA appealed, arguing that an arbitrator, not the court, should decide issues of arbitrability due to a delegation provision within the agreement. The appellate court rejected EA's arguments, affirming the lower court's decision. The court held that J.R.'s disaffirmance of "any... contract or agreement" accepted through his EA account was sufficient to challenge the validity of the delegation provision specifically, thereby authorizing the court to assess the validity of J.R.'s disaffirmance. View "J.R. v. Electronic Arts" on Justia Law

This case involves a dispute over an arbitration agreement between an employee and her employer. The employee, Aljarice Hasty, was employed by the American Automobile Association of Northern California, Nevada & Utah (Association). After her employment ended, Hasty sued the Association for race discrimination, disability discrimination, retaliation, harassment, wrongful discharge, and retaliation. The Association sought to compel arbitration per an agreement in Hasty's employment contract, but the trial court found the arbitration agreement was unconscionable and declined to sever the unconscionable terms. The Association appealed this decision.The Court of Appeal of the State of California Third Appellate District affirmed the trial court’s decision. The court found the arbitration agreement to be both procedurally and substantively unconscionable. Procedural unconscionability was found due to the adhesive nature of the agreement, the lack of negotiation, and the hidden nature of the unconscionable provision within the complex document. Substantive unconscionability was found due to the agreement's one-sided nature, the overly broad confidentiality provision, and the waiver of the employee's right to bring representative actions under the Private Attorneys General Act of 2004. The court also found that the trial court did not abuse its discretion by refusing to sever the unconscionable terms, as the arbitration agreement was permeated with unconscionability. View "Hasty v. American Automobile Assn. of Northern Cal., Nev. & Utah" on Justia Law