Arbitration & Mediation - Justia Case Law Summaries

ORR V. UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, RIVERSIDE

2026-06-09T08:32:53-08:00

A former seasonal employee of a package delivery company filed suit against her employer, alleging violations of California labor laws, including wage-related claims and a Private Attorneys General Act (PAGA) claim. She had signed an arbitration agreement as a condition of employment, which included a class action waiver and a delegation clause assigning threshold arbitrability issues to an arbitrator. The agreement specified that the Federal Arbitration Act (FAA) would govern unless it did not apply, in which case state law would control. After her work schedule was repeatedly changed or canceled with little notice, she was not given further work despite her inquiries and subsequently initiated legal action on behalf of herself and proposed classes. After the case was removed from state court, the United States District Court for the Central District of California granted the employer’s motion to compel arbitration of the individual claims and stayed class claims. The district court declined to decide whether the FAA or the California Arbitration Act (CAA) governed the agreement, reasoning that the result would be the same under either statute. The court also denied the employee’s motion for clarification, maintaining that the question of which law applied and whether the FAA’s “contracts of employment” exclusion was relevant could be resolved by the arbitrator rather than the court. On mandamus review, the United States Court of Appeals for the Ninth Circuit held that the district court committed clear legal error by failing to determine whether the FAA or state law governed the arbitration agreement before compelling arbitration. The Ninth Circuit emphasized that, under New Prime Inc. v. Oliveira, the court—not an arbitrator—must decide whether the FAA applies, including any statutory exclusions. The Ninth Circuit granted the writ of mandamus, directing the district court to vacate its prior order and to determine the statutory basis for its authority to compel arbitration before referring the parties to arbitration. View "ORR V. UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, RIVERSIDE" on Justia Law

Unite Here Local 1 v Magnificent Mile Hotel Management, LLC

2026-06-05T13:00:46-08:00

An employee at a hotel was terminated after he displayed a knife in the workplace, prompting another employee to feel threatened. The worker’s union filed a grievance under the collective bargaining agreement, which specified that arbitration disputes would be resolved by an arbitrator chosen at random from a list of nine individuals. The union used a random selection website to designate an arbitrator, but the hotel objected, arguing the selected arbitrator was already handling another dispute between the parties and that the usual practice was to mutually agree on an arbitrator or strike names from the list. The United States District Court for the Northern District of Illinois, Eastern Division, first ordered the hotel to proceed with arbitration using the contractually specified method. The arbitrator chosen by the union determined that the employee’s conduct warranted a suspension without pay but did not justify termination, ordering the employee’s reinstatement with back pay minus ten days’ wages. When the hotel refused to comply, the district court, upon the union’s motion, ordered the hotel to abide by the arbitrator’s ruling. The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the collective bargaining agreement’s method of selecting an arbitrator must be followed unless there was a demonstrable lapse in the process, which was not present here. The court also held that the arbitrator’s factual findings regarding the absence of workplace violence were binding and that Illinois public policy did not prohibit the remedy imposed. The Seventh Circuit affirmed the district court’s judgment confirming the arbitrator’s award, finding no error in either the selection of the arbitrator or the substance of his decision. View "Unite Here Local 1 v Magnificent Mile Hotel Management, LLC" on Justia Law

LAS VEGAS POLICE PROTECTIVE ASSOC. VS. CITY OF LAS VEGAS

2026-06-03T10:08:09-08:00

Several municipal court and deputy city marshals, represented by a police association, alleged that the City miscalculated their longevity pay, resulting in underpayment. The collective bargaining agreement (CBA) between the police association and the City required a four-step grievance process culminating in arbitration for disputes about the CBA’s application or interpretation. The marshals submitted grievances claiming underpayment since 2013. The City argued that these grievances were untimely, as they were filed years after the alleged underpayment was or should have been discovered, and insisted on a bifurcated arbitration process to resolve timeliness before addressing the merits of the longevity pay issue. Additional grievances were filed and rejected by the City as untimely. The police association filed two complaints in the Eighth Judicial District Court, Clark County, seeking declaratory relief: one to have the City pay alleged backpay and another to require the City to comply with the CBA’s arbitration provision and submit timeliness disputes to arbitration. The parties consolidated these actions, and the City moved for summary judgment. The district court granted the motion, accepting the City's interpretation that it could unilaterally reject grievances as untimely and dictate the arbitration format, and it ruled on the merits of the longevity pay dispute. The Supreme Court of Nevada reviewed the district court’s grant of summary judgment de novo. It held that, unless a contract specifies otherwise, procedural questions such as timeliness and the format of arbitration are reserved for the arbitrator, not a party or the court. The City was not entitled to unilaterally decide the timeliness of grievances or require a bifurcated arbitration process. Further, since the longevity pay dispute was arbitrable, the district court should not have ruled on its merits. The Supreme Court of Nevada reversed the district court’s order and remanded the case. View "LAS VEGAS POLICE PROTECTIVE ASSOC. VS. CITY OF LAS VEGAS" on Justia Law

Khalsa v. Ridnour

2026-06-01T13:36:01-08:00

Two neighbors in Bonner County, Idaho, own adjacent properties—one is lakefront and the other sits directly behind it without lake access. After years of disputes over easements relating to beach, lake, and parking access, the parties entered litigation. During trial, the district court mediated a settlement, which was read into the record and later formalized as a Stipulated Agreement and Order. This agreement outlined the parties’ rights to use the properties and set procedures for mediation and arbitration if further disputes arose. After signing the agreement and a minor modification by the district court, further conflicts emerged, especially regarding the construction and location of one party’s patio, use of a parking easement, a maintenance corridor, and a sprinkler system. Pursuant to the agreement, the unresolved issues were submitted to arbitration. The arbitrator ruled in favor of the lakefront property owner on all issues, finding that the other party had not complied with the agreement. The dissatisfied party then moved in the District Court of the First Judicial District to vacate the arbitration award, alleging bias and that the arbitrator had exceeded his authority. The district court denied the motion, finding the arbitrator had acted within the scope of his authority. On appeal, the Supreme Court of the State of Idaho reviewed the district court’s denial. The Court held that the arbitrator’s decisions were within the authority granted by the parties’ agreement and the Idaho Uniform Arbitration Act. The Court found no evidence of bias and concluded the arbitrator had not rewritten or exceeded the terms of the agreement, but rather interpreted and applied it as authorized. Therefore, the Supreme Court affirmed the district court’s denial of the motion to vacate the arbitration award and granted attorney fees on appeal to the prevailing party under Idaho Code section 12-121. View "Khalsa v. Ridnour" on Justia Law

Miller v. Miller

2026-06-01T13:35:57-08:00

Elizabeth Miller filed for divorce from Mark Miller after a lengthy marriage in which Mark was a successful physician and Elizabeth was primarily a homemaker caring for their eight children. Following resolution of custody issues, the parties agreed to submit the remaining financial disputes to binding arbitration, with Elizabeth waiving her claim to spousal support. The arbitrator ultimately awarded Elizabeth 60% of the marital assets and retroactive child support, and required Mark to pay her remaining attorney fees. After the arbitrator amended the award to comply with Idaho law by removing post-majority child expenses, Mark challenged the validity of the arbitration award. The Magistrate Court of Ada County denied Mark’s requests to vacate or modify the award, finding that it had authority to refer the divorce action to arbitration under Idaho’s Uniform Arbitration Act (UAA), and confirming the arbitrator’s award. Mark appealed to the District Court of the Fourth Judicial District, arguing that Idaho Code section 32-715 gave the court exclusive jurisdiction over divorce matters, and that the arbitrator exceeded authority by awarding retroactive child support and an unequal asset division. The District Court rejected Mark’s jurisdictional challenge and affirmed the arbitration award, except for vacating the arbitrator’s award of attorney fees. The court awarded Elizabeth partial attorney fees on appeal, finding Mark had pursued the jurisdictional argument unreasonably. On further appeal, the Supreme Court of the State of Idaho affirmed the District Court’s ruling. The Court held that Idaho’s UAA authorizes courts to refer divorce actions to arbitration when the parties agree, and that nothing in Idaho Code section 32-715 prohibits this. The Court also determined the arbitrator had not exceeded the scope of authority. The Supreme Court upheld the award of partial attorney fees to Elizabeth for the district court appeal, and remanded the case for consideration of appellate attorney fees under Idaho Code section 32-704(3). View "Miller v. Miller" on Justia Law

Credit Acceptance Corporation v. Stanley

2026-06-01T11:47:08-08:00

The case involves a dispute between a finance company and two individuals who purchased a used vehicle using a retail installment contract containing an arbitration clause. After defaulting on payments, the individuals surrendered the vehicle for repossession, but the resale did not cover the remaining debt. The finance company filed a civil action in the Circuit Court of Jackson County to recover the outstanding balance. The individuals initially responded without counsel, contesting the debt, and later, after several years, obtained legal counsel and filed an amended answer with counterclaims alleging violations of various state and federal laws. Over the course of litigation, the finance company served limited discovery and moved for summary judgment based on unanswered requests for admission. The individuals’ amended answer and counterclaims expanded the complexity of the dispute, seeking damages and equitable relief. Shortly after, the finance company moved to compel arbitration of all claims, relying on the contract’s arbitration clause. The Circuit Court denied the motion, finding that the finance company had waived its right to arbitrate due to substantial litigation activity and the passage of time before asserting arbitration. The Supreme Court of Appeals of West Virginia reviewed the circuit court’s denial de novo, applying state contract principles and the Federal Arbitration Act. The Court held that the finance company did not impliedly waive its contractual arbitration rights, emphasizing that the arbitration clause expressly allowed arbitration to be invoked before or after a lawsuit or counterclaims. The Court concluded that the litigation activity was limited and not inconsistent with the right to arbitrate, especially given the late and substantial expansion of the dispute by the counterclaims. The circuit court’s order was reversed, and the case remanded with instructions to permit arbitration and stay further proceedings pending its outcome. View "Credit Acceptance Corporation v. Stanley" on Justia Law

Global Voice Group SA v. Republic of Guinea

2026-05-29T06:31:52-08:00

A telecommunications and financial services company based in Seychelles contracted with a Guinean regulatory authority to help develop Guinea’s telecommunications industry. The agreement included an arbitration clause. Disputes arose regarding unpaid invoices and alleged contractual obligations, leading the company to seek arbitration against both the regulatory authority and the Republic of Guinea. The arbitral tribunal determined that Guinea was both a party and beneficiary to the agreement and awarded damages to the company. Attempts to annul the award in French courts were unsuccessful, resulting in a final judgment against Guinea and the regulatory authority. The company then sued Guinea in the United States District Court for the District of Columbia, seeking confirmation of the arbitral award and recognition of the foreign court judgment. The United States District Court for the District of Columbia dismissed both claims for lack of subject matter jurisdiction, finding that Guinea was immune from suit under the Foreign Sovereign Immunities Act (FSIA). The court concluded that Guinea was not a party to the arbitration agreement and had not waived its sovereign immunity. It did not distinguish between the award-confirmation and judgment-recognition claims in its analysis. The United States Court of Appeals for the District of Columbia Circuit reviewed the case. It held that the district court incorrectly failed to apply the analytical framework established in TIG Insurance v. Republic of Argentina when considering the award-confirmation claim, which requires determining whether the arbitration agreement legally binds the sovereign, regardless of formal party status. The appellate court vacated the dismissal of the award-confirmation claim and remanded for further proceedings. Separately, relying on Amaplat Mauritius Ltd. v. Zimbabwe Mining Development Corp., it affirmed the dismissal of the judgment-recognition claim, holding that neither the FSIA’s arbitration nor waiver exceptions provide jurisdiction for such claims. View "Global Voice Group SA v. Republic of Guinea" on Justia Law

Hubbard v. Nexion Health at Clinton, Inc.

2026-05-29T01:21:59-08:00

Benard Hubbard II electronically signed an admissions packet and a stand-alone arbitration agreement for his father’s admission to Woodlands Rehabilitation and Healthcare Center in Clinton, Mississippi. At the time, Hubbard Sr. was competent and able to communicate with staff. Two years later, Hubbard Sr. filed a medical-negligence claim against the facility’s parent company, a physician, and a medical practice. The defendants moved to compel arbitration based on the agreement signed by Hubbard II. At the hearing, both parties acknowledged that Hubbard II did not have power of attorney or formal authority and that the arbitration agreement was separate from the admission itself. Hubbard II submitted an affidavit stating he signed without consulting or receiving authority from his father, and no evidence was presented to refute this. The Hinds County Circuit Court granted the motion to compel arbitration, expressing concern about Hubbard II contesting the agreement but failing to specify any factual basis for its decision or address the defendants’ request for additional discovery. The defendants subsequently conceded in the Supreme Court of Mississippi that the factual record was insufficient to affirm the trial court’s order and requested a remand for further findings. The Supreme Court of Mississippi reviewed the trial court’s decision de novo and found that the record lacked evidence establishing Hubbard II’s authority to bind his father to arbitration. The court also determined that the defendants had abandoned their motion for additional discovery by failing to secure a trial court ruling. Accordingly, the Supreme Court reversed the trial court’s order compelling arbitration and remanded the case for further proceedings consistent with its opinion. View "Hubbard v. Nexion Health at Clinton, Inc." on Justia Law

Flowers Foods, Inc. v. Brock

2026-05-28T06:45:10-08:00

Angelo Brock operated as a franchisee distributing baked goods for a large national baking company in Colorado. He picked up products from a local warehouse and delivered them to stores within the state, never leaving Colorado or directly interacting with vehicles that crossed state lines. In 2022, Brock and other distributors alleged in federal court that the baking company underpaid them, violating federal and state laws. The company moved to compel arbitration, citing an agreement Brock had signed requiring disputes to be arbitrated, and invoked the Federal Arbitration Act (FAA). The United States District Court denied the company's motion to compel arbitration. On appeal, the United States Court of Appeals for the Tenth Circuit affirmed this denial. The Tenth Circuit focused on Section 1 of the FAA, which exempts “contracts of employment” for workers “engaged in interstate commerce.” The appellate court found that even though Brock’s deliveries were confined to Colorado and he did not interact with interstate vehicles, his role as part of the continuous interstate distribution of goods qualified him for the exemption. The court determined that Brock was part of a class of workers engaged in interstate commerce, placing his contract outside the FAA’s compulsory arbitration requirements. The Supreme Court of the United States reviewed whether the FAA’s exemption for “workers engaged in interstate commerce” applies to workers who do not cross state lines or interact with vehicles that do. The Court held that a worker transporting goods on an intrastate segment of an interstate journey can fall under the FAA’s Section 1 exemption, even without leaving the state or handling vehicles engaged in interstate transit. The judgment of the Tenth Circuit was affirmed. View "Flowers Foods, Inc. v. Brock" on Justia Law

Kostandian v. American Honda Motor Co.

2026-05-27T14:01:46-08:00

A lessee filed a lawsuit against a vehicle manufacturer and an authorized dealership, alleging that his leased vehicle had multiple defects that could not be repaired after several attempts. The lessee claimed he revoked acceptance of the vehicle due to these defects, but the defendants refused to provide the remedies he sought. Both the lease agreement and the manufacturer’s warranty booklet contained arbitration provisions, including opt-out clauses, and the lessee signed documents confirming receipt of these materials. The Superior Court of Los Angeles County denied the defendants’ motion to compel arbitration. The court found that the defendants did not establish the existence of enforceable arbitration agreements. Specifically, it determined there was insufficient evidence that the dealership, Standard Motor, was doing business as the named lessor in the lease. The court also concluded that the manufacturer, American Honda Motor Co., could not enforce the arbitration provision, and that the warranty booklet’s arbitration agreement was unenforceable due to concerns about consumer assent. The California Court of Appeal, Second Appellate District, Division Two, reviewed the case. It held that the defendants met their initial burden by presenting copies of the arbitration agreements and reciting the relevant terms. The court emphasized that the lessee’s own pleadings constituted a judicial admission that Standard Motor was doing business as the named lessor, and the lessee did not dispute the authenticity or existence of the arbitration agreements. The court also found the lessee failed to present evidence disputing the existence of an arbitration agreement in the warranty booklet. The Court of Appeal reversed the trial court’s order and remanded with instructions to grant the motion to compel arbitration. View "Kostandian v. American Honda Motor Co." on Justia Law

Hinkes v Reddy

2026-05-22T12:31:36-08:00

Sarah Hinkes brought a lawsuit against her employer and two individual employees, alleging discrimination in violation of federal statutes. The dispute was stayed pending arbitration, as required under federal law. After the arbitrator ruled in favor of the employer, Hinkes sought to have the arbitration award set aside in the United States District Court for the Northern District of Illinois. The district judge confirmed the award, and Hinkes appealed that decision. On appeal, subject-matter jurisdiction was challenged due to lack of diversity between the parties, as both Hinkes and one defendant, Ravi Reddy, were citizens of Illinois. Although Hinkes attempted to argue that Reddy should be disregarded because she was not seeking relief against him, the court noted that Reddy remained a party to the action. Hinkes later asked for the appeal to be dismissed, but Sunera Technologies, the employer, argued for federal-question jurisdiction under 28 U.S.C. §1331. The Seventh Circuit identified that the original suit arose under federal law, and, following recent precedent from Kinsella v. Baker Hughes Oilfield Operations, LLC and Jules v. Andre Balazs Properties, concluded that federal-question jurisdiction continued to support the district court’s confirmation of the arbitration award. The United States Court of Appeals for the Seventh Circuit reviewed Hinkes’s challenges to the arbitration award, which centered on procedural objections and alleged misconduct under 9 U.S.C. §10(a)(3). The court determined that Hinkes had not shown arbitrator misconduct warranting vacatur, as the arbitrator did not improperly refuse to hear evidence and was not bound by federal evidentiary or discovery rules. Finding no misbehavior or prejudice, the Seventh Circuit affirmed the district court’s confirmation of the arbitration award. View "Hinkes v Reddy" on Justia Law

Sessoms v. USHealth Advisors, LLC

2026-05-21T11:30:39-08:00

In this case, the plaintiff, acting individually and on behalf of a proposed class, alleged that the defendant, a health insurance marketing company, violated the Telephone Consumer Protection Act (TCPA) by sending her a prerecorded telemarketing call without her prior express consent. The defendant argued that the plaintiff had given such consent when she used a third-party “lead generation” website operated by a non-party, where she filled out a form seeking insurance quotes. The online process included an agreement (the “Terms of Use”) with an arbitration clause covering disputes related to the website’s use and consent to be contacted by marketing partners, although the defendant was not named in the agreement. After the plaintiff filed suit in the United States District Court for the Eastern District of North Carolina, the defendant moved to compel arbitration, arguing that it could enforce the arbitration clause as a third-party beneficiary under Delaware law. The district court denied the motion, holding that, although the defendant benefited from the agreement, it was not a third-party beneficiary because the benefit was not central to the contract’s purpose. The court also determined that, under Fourth Circuit precedent, the court—not an arbitrator—must decide whether a non-signatory like the defendant can enforce the arbitration agreement. On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s denial of arbitration de novo. The Fourth Circuit agreed that the district court, not an arbitrator, was the proper forum to decide the defendant’s standing to enforce the arbitration clause. However, the court disagreed with the district court’s interpretation of Delaware law, concluding that the benefit to the defendant was material to the agreement’s purpose, making the defendant a third-party beneficiary. The Fourth Circuit reversed the district court’s order and remanded with instructions to compel arbitration and stay the federal court proceedings. View "Sessoms v. USHealth Advisors, LLC" on Justia Law

OLSON V. FCA US, LLC

2026-05-21T08:01:11-08:00

Jeffrey Olson leased a Jeep Grand Cherokee from a car dealership under a lease agreement that included an arbitration provision and a delegation clause, which assigned questions about the scope of arbitration to an arbitrator. FCA US, LLC, the manufacturer of the Jeep, was not a signatory to the lease agreement. Olson later became the named plaintiff in a federal class-action lawsuit against FCA, alleging defects in the vehicle’s headrest system. FCA, not being a party to the lease, sought to compel Olson to arbitrate the dispute based on the arbitration agreement between Olson and the dealership. The United States District Court for the Eastern District of California denied FCA’s motion to compel arbitration. The district court found that FCA, as a non-signatory to the lease agreement, could not enforce the arbitration provision or its delegation clause against Olson. The court concluded that the arbitration agreement applied only to Olson and the dealership (including its employees, agents, successors, or assigns), and FCA did not qualify under any of those categories. Additionally, the court rejected FCA’s argument that it could use equitable estoppel to compel arbitration, holding that none of Olson’s claims were sufficiently intertwined with the lease agreement to justify such an exception under California law. The United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The Ninth Circuit held that FCA could not compel Olson to arbitrate because FCA was not a party to the arbitration agreement and no applicable exception—such as equitable estoppel—applied. The court clarified that, under both federal and California law, only parties to an arbitration agreement (or those qualifying under specific, limited exceptions) may enforce it. The court also rejected FCA’s reliance on Supreme Court precedent, finding it inapplicable to non-signatories in these circumstances. View "OLSON V. FCA US, LLC" on Justia Law

District of Columbia Metropolitan Police Dep't v. District of Columbia Public Employee Relations Board

2026-05-21T06:43:50-08:00

An off-duty police officer in the District of Columbia shot and seriously injured a man outside a residence in Maryland after suspecting an attempted vehicle break-in. The officer did not call 911 as trained, confronted the individual, and used deadly force, although no weapon or evidence of crime was found on the victim. Following internal reviews, the police department sought to terminate the officer. His union invoked arbitration, as allowed by the collective bargaining agreement. An arbitrator determined that the officer’s conduct was reckless, violated departmental policies, and met the definition of reckless endangerment under Maryland law. However, the arbitrator concluded that termination was not warranted and reduced the discipline to a 45-day suspension, referencing a prior similar case involving another officer. The District of Columbia Public Employee Relations Board (PERB) sustained this sanction. The Superior Court of the District of Columbia affirmed PERB’s decision. On a prior appeal, the District of Columbia Court of Appeals remanded the case, directing PERB to further explain its reasoning regarding whether the arbitral award was contrary to law or public policy. After PERB again upheld the arbitrator’s decision on remand and the Superior Court affirmed, the case returned to the District of Columbia Court of Appeals. The court reviewed whether the arbitral award was “on its face contrary to law and public policy.” The court held that the award was not contrary to law because the arbitrator did not purport to apply and misapply the Douglas factors, nor was the penalty so disproportionate as to be illegal. The court further held that the award was not contrary to public policy, noting the absence of a statutory or regulatory mandate requiring termination under these circumstances and emphasizing the narrow grounds for overturning arbitral awards on public policy. The court affirmed the judgment upholding PERB’s decision. View "District of Columbia Metropolitan Police Dep't v. District of Columbia Public Employee Relations Board" on Justia Law

JACKSON v. STEVENSON

2026-05-19T04:14:17-08:00

The dispute arose from a real estate development joint venture between two groups of entities owned by Jackson and Stevenson, governed by operating agreements containing mandatory arbitration clauses. After Jackson’s entities initiated a buy-sell process to terminate the venture, Stevenson’s entities elected to purchase Jackson’s interest. Shortly after, Jackson terminated a consulting agreement. Stevenson’s entities sought arbitration, naming Jackson’s entities as respondents and later including RICSHA, a company owned by Jackson but not a signatory to the operating agreements. They alleged that Jackson’s entities and RICSHA conspired to deprive the venture of valuable assets prior to the buyout. The arbitrator ordered RICSHA to be joined in the proceedings and ultimately issued an award in favor of Stevenson’s entities against both the Jackson entities and RICSHA. The Superior Court confirmed the arbitration award against all respondents, finding that the arbitrator did not exceed his powers by including RICSHA, and denied RICSHA’s motion to vacate. The Court of Appeals of Georgia affirmed, holding that the arbitrator permissibly applied principles of equitable estoppel to compel RICSHA to arbitrate and that judicial review of the arbitrator’s ruling was limited under the Federal Arbitration Act. The Supreme Court of Georgia reviewed the case on certiorari and concluded that the lower courts erred by deferring to the arbitrator on the threshold question of whether RICSHA, a nonsignatory, could be compelled to arbitrate. The Court held that under Georgia law and the Federal Arbitration Act, equitable estoppel does not apply to compel a nonsignatory defendant to arbitrate claims brought by signatory plaintiffs, absent direct benefits from the agreement. The Supreme Court of Georgia reversed the judgment of the Court of Appeals, vacated the arbitration award against RICSHA, and remanded for further proceedings. View "JACKSON v. STEVENSON" on Justia Law

Jackson v. Protas, Spivok & Collins LLC

2026-05-18T10:30:34-08:00

Donte Jackson received a $30,000 loan from WebBank, which was later sold to Velocity Investments, LLC. After Jackson defaulted on the loan, Velocity, represented by the law firm Protas, Spivok & Collins LLC (PSC), sued Jackson in Maryland state court to collect the debt. Velocity eventually dismissed the state court suit with prejudice. Subsequently, Jackson brought a class action lawsuit against both Velocity and PSC, alleging that their practice of suing on time-barred debts was unlawful. In the United States District Court for the District of Maryland, both Velocity and PSC moved to compel arbitration based on an arbitration clause in Jackson’s original promissory note. The district court found that Velocity, as a subsequent holder of the note, was a party to the arbitration agreement but had waived its right to arbitrate by filing suit in state court. The court ruled that PSC was not a party to the agreement, as it did not fit the contractual definition of an entity “servicing” the note, which the court interpreted in accordance with Maryland law. Only PSC appealed the denial of its motion to compel arbitration. The United States Court of Appeals for the Fourth Circuit reviewed the district court’s ruling de novo. The Fourth Circuit held that PSC, as the law firm representing Velocity, was not a party to the arbitration agreement because it did not “service” the note in the relevant contractual sense, which involves collecting and maintaining a payment schedule for the loan. The court concluded that the arbitration agreement covered only creditors and loan servicers, not lawyers. The Fourth Circuit affirmed the district court’s denial of PSC’s motion to compel arbitration. View "Jackson v. Protas, Spivok & Collins LLC" on Justia Law

Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild S.P.A

2026-05-18T09:00:12-08:00

A Chilean company contracted with an Italian construction firm to design and build a hospital in Santiago, Chile, with disputes to be resolved by arbitration in Chile. The Italian firm later underwent a restructuring proceeding in Italy, during which it spun off its operating business and merged into another Italian company, Webuild S.p.A., which acquired most of its assets. After the contract was terminated due to project delays, arbitration in Chile resulted in an award in favor of the Chilean company and against the original Italian firm. The Chilean courts reduced but otherwise affirmed the arbitral award, and further appeal was denied. Seeking to enforce the arbitral award in the United States, the Chilean company brought an action in the United States District Court for the District of Delaware against Webuild, claiming it was the successor in interest to the award debtor. The company asked the District Court to assert quasi in rem jurisdiction by attaching Webuild’s shares in a Delaware subsidiary. The District Court granted Webuild’s motion to dismiss for lack of personal jurisdiction, holding that there were insufficient contacts between the forum, Webuild, and the underlying controversy. The District Court also held that, even if an exception to the minimum contacts requirement applied, it would not permit jurisdiction here because no court had yet determined that Webuild was indeed liable for the arbitral debt. On appeal, the United States Court of Appeals for the Third Circuit held that, under the Supreme Court’s decision in Shaffer v. Heitner, a court may exercise traditional quasi in rem jurisdiction to enforce a foreign arbitral award in an action to collect on an already adjudicated debt, without requiring minimum contacts. The appellate court vacated the District Court’s dismissal and remanded for a determination of whether Webuild is the successor in interest to the original award debtor. View "Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild S.P.A" on Justia Law

Dept. of Human Resources v. Cal. Correctional Peace Officers

2026-05-15T11:03:25-08:00

A correctional officer who also served as a union representative at a state prison was disciplined after posting materials related to her own prior disciplinary action on a union bulletin board. The materials, which included the surnames of other officers, were visible to inmate workers and were perceived by prison management as potentially fostering a “code of silence” among correctional staff. The officer was suspended for 60 workdays for this posting. She appealed the discipline to the State Personnel Board (SPB), arguing her posting was protected speech regarding the Department’s disciplinary practices. Separately, her union filed a grievance, claiming the suspension violated the memorandum of understanding (MOU) and the Ralph C. Dills Act, which prohibit retaliation for protected union activities. The SPB ultimately upheld the suspension, determining that the posting constituted inexcusable neglect of duty and failure of good behavior, and justified the imposed penalty. The question of whether the discipline was retaliatory under the Dills Act was reserved for arbitration. The arbitrator later found in favor of the union, concluding the Department had retaliated against the officer for protected union activity and failed to prove it would have imposed the same discipline absent that activity. The arbitrator ordered the Department to rescind the discipline and make the officer whole, including backpay. The California Court of Appeal, Third Appellate District, reviewed the trial court’s decision that had struck the arbitrator’s remedy of rescinding the discipline and making the officer whole. The appellate court held that the arbitrator did not exceed her powers by issuing this award and that no explicit public policy or constitutional provision barred the arbitrator’s remedial authority under the MOU and Dills Act. The court reversed the trial court’s judgment and directed entry of a new judgment confirming the arbitration award in its entirety. View "Dept. of Human Resources v. Cal. Correctional Peace Officers" on Justia Law

Jules v. Andre Balazs Properties

2026-05-14T14:55:54-08:00

The case concerns an employee who worked at a Los Angeles hotel and was terminated in March 2020, allegedly due to COVID-19-related staffing issues. The employee sued the hotel and its affiliates in the United States District Court for the Southern District of New York, alleging federal and state law discrimination claims. However, before starting work, the employee had signed an arbitration agreement covering disputes related to employment or termination. The hotel moved to stay the court proceedings and compel arbitration under the Federal Arbitration Act (FAA), and the District Court stayed the case pending arbitration. Arbitration proceeded, resulting in an award against the employee on all claims, as well as sanctions for misconduct. After the arbitrator’s award, the hotel moved to confirm the award in the District Court under §9 of the FAA, while the employee sought to vacate it under §10. The employee argued that the District Court lacked jurisdiction to confirm or vacate the award because the post-arbitration motions did not independently satisfy the requirements for federal-question or diversity jurisdiction. The District Court disagreed, held that it retained jurisdiction, and confirmed the arbitral award. The United States Court of Appeals for the Second Circuit affirmed, distinguishing the case from Supreme Court precedent involving freestanding FAA motions, and holding that the District Court’s original jurisdiction over the employee’s federal claims extended to the post-arbitration proceedings. The Supreme Court of the United States affirmed the Second Circuit’s judgment. It held that when a federal court has original jurisdiction over claims and stays those claims pending arbitration under §3 of the FAA, the court retains jurisdiction to confirm or vacate the resulting arbitral award under §9 and §10. The Court reasoned that nothing in the FAA divests the court of jurisdiction over the original claims while arbitration is pending, and that post-arbitration motions are integral to the resolution of those stayed claims. View "Jules v. Andre Balazs Properties" on Justia Law

Cole v. Southeast Iowa Orthopaedics and Sports Medicine

2026-05-08T06:03:53-08:00

A resident of a skilled nursing facility signed an arbitration agreement upon admission. Twelve days later, the resident died. The resident’s husband, acting both individually and as executor of her estate, brought suit in Iowa District Court for Henry County against the nursing facility and several related entities, as well as additional healthcare providers. He alleged negligence, gross negligence, wrongful death, and dependent adult abuse. Nearly a year into the litigation, the nursing facility defendants moved to compel arbitration based on the agreement signed by the decedent. The Iowa District Court for Henry County granted the motion to compel arbitration. The court reasoned that, under the existing Iowa precedent, waiver of the right to arbitrate requires both conduct inconsistent with that right and prejudice to the opposing party—a two-part test established in prior Iowa Supreme Court cases. Applying this standard, the district court found limited prejudice to the plaintiff because discovery had not been extensive and the trial date was still far off. The plaintiff was granted interlocutory appeal. The Supreme Court of Iowa reviewed the case for correction of errors at law. The court determined that the Federal Arbitration Act (FAA) governed because the agreement involved interstate commerce, and that the FAA preempts Iowa's arbitration-specific waiver rule, which requires a showing of prejudice. Instead, the court held that the generally applicable contract law standard for waiver applies: the voluntary or intentional relinquishment of a known right. Applying this standard, the Supreme Court of Iowa concluded that the nursing facility had impliedly waived its contractual right to arbitration by participating in litigation and discovery for months after being aware of the arbitration agreement, and by delaying a motion to compel arbitration. The Supreme Court of Iowa reversed the district court’s order and remanded the case for further proceedings. View "Cole v. Southeast Iowa Orthopaedics and Sports Medicine" on Justia Law

Hill v. Jackson Offshore Holdings

2026-05-05T15:30:26-08:00

A seaman was severely injured while working on an offshore supply vessel operated by his employer. Following his injury, the employer provided both mandatory and supplemental benefits, including housing and transportation. Six months after the incident, the employer’s executives presented the seaman with an agreement offering continued supplemental benefits in exchange for his commitment to arbitrate any future claims against the company. The agreement included a delegation clause stating that any disputes about the validity, interpretation, or application of the agreement would be resolved by an arbitrator. The seaman signed, acknowledging he had the opportunity to consult an attorney but later alleged he felt pressured and feared losing benefits if he did not sign. The seaman filed suit in the United States District Court for the Eastern District of Louisiana, alleging negligence and seeking a declaration that the agreement and its arbitration provisions were invalid due to fraud, duress, and his medical condition. The employer moved to compel arbitration and to stay the litigation, arguing that the delegation clause required an arbitrator to decide issues of enforceability. The district court denied the motion without prejudice and allowed limited discovery on the enforceability of the agreement, concluding it must decide if a valid arbitration agreement existed. On appeal, the United States Court of Appeals for the Fifth Circuit held that the district court erred by failing to enforce the delegation clause. The appellate court found the seaman’s arguments challenged the agreement as a whole, not the delegation clause specifically. Under Supreme Court precedent, such challenges must be resolved by an arbitrator when a valid delegation clause exists and is not directly challenged. The Fifth Circuit vacated the district court’s order and compelled arbitration, remanding for further proceedings consistent with this holding. View "Hill v. Jackson Offshore Holdings" on Justia Law

Toothman v. Redwood Toxicology Laboratory

2026-05-05T12:31:49-08:00

Robert Toothman was initially employed by Apex Life Sciences, LLC, a temporary employment agency, which placed him at Redwood Toxicology Laboratory, Inc. During his employment with Apex, Toothman signed an arbitration agreement that required him to arbitrate employment disputes with Apex and its defined affiliates, subsidiaries, and parent companies. In April 2018, Toothman’s employment with Apex ended, after which he was hired directly by Redwood and worked there until June 2022. Toothman and Redwood did not sign an arbitration agreement. Several months after leaving Redwood, Toothman filed a class action alleging Labor Code violations based solely on his direct employment with Redwood, not his prior period as an Apex employee. The Sonoma County Superior Court reviewed Redwood’s motion to compel arbitration and to dismiss the class claims. Redwood argued that it was either a party to the Apex arbitration agreement as an affiliate, a third-party beneficiary, or entitled to enforce the agreement under equitable estoppel. Redwood also claimed that Toothman’s class claims should be dismissed based on the arbitration agreement. The trial court denied Redwood’s motion, finding that Redwood was not a signatory to the arbitration agreement, was not an affiliate as defined by the agreement, and could not compel arbitration under any alternative theory. The California Court of Appeal, First Appellate District, Division Four, reviewed the trial court’s order de novo. It held that Redwood was not a party to the arbitration agreement and did not qualify as an affiliate or third-party beneficiary. The court further determined that Toothman’s claims were not sufficiently intertwined with the arbitration agreement to justify equitable estoppel. The appellate court affirmed the trial court’s order denying Redwood’s motion to compel arbitration and to dismiss the class claims. View "Toothman v. Redwood Toxicology Laboratory" on Justia Law

Tejon v. Zeus Networks, LLC

2026-05-01T13:03:29-08:00

Roger Tejon subscribed to a video streaming service operated by Zeus Networks, LLC, through its online platform using an Apple device. To register, Tejon chose between an annual or monthly plan by clicking one of two large, red buttons on a “Choose your plan” page. Below these buttons, in small, gray text was a hyperlinked “Terms of Service,” which included a mandatory arbitration clause, but there was no requirement that Tejon click on this link to complete his subscription. Tejon later alleged that Zeus shared his viewing history and personally identifiable information with a social media company without his consent and sued Zeus for violating the Video Privacy Protection Act. Zeus moved to compel arbitration, arguing that Tejon had consented to the arbitration clause by signing up for an account. The United States District Court for the Southern District of Florida denied this motion. The district court found that the terms of service hyperlink was not conspicuous enough to put a reasonably prudent user on inquiry notice of the arbitration provision. The United States Court of Appeals for the Eleventh Circuit reviewed the district court’s denial de novo. The Eleventh Circuit held that the design of Zeus’s subscription page did not provide sufficient inquiry notice of the arbitration agreement to bind Tejon. The court explained that the hyperlink to the terms was small, in gray font, and located beneath prominent action buttons, making it easy to overlook. The court further noted that the page did not explicitly state that clicking the subscription button would bind the user to arbitration. The Eleventh Circuit affirmed the district court’s order denying the motion to compel arbitration. View "Tejon v. Zeus Networks, LLC" on Justia Law

Vela v. Harbor Rail Services of California, Inc.

2026-05-01T11:33:41-08:00

An employee worked as a railcar repairman for a company that performs inspections and repairs on freight cars at a train yard. He was hired with an agreement that required all employment-related disputes to be resolved through arbitration and included a waiver of class and representative actions, except for certain claims that cannot be waived by law. After his employment ended, the employee sued for various wage and hour violations under California law, asserting claims on his own behalf and on behalf of a proposed class of other employees. The Superior Court of Los Angeles County reviewed the case after the employer moved to compel arbitration of the individual claims and to dismiss the class claims. The court ordered further proceedings to clarify whether the arbitration agreement was part of a contract of employment and whether the employee fell within a federal exemption for certain transportation workers. After additional evidence was submitted, the court granted the employer’s motion, compelling arbitration of individual claims and dismissing the class claims, finding the employee was not exempt from arbitration under the Federal Arbitration Act (FAA). On appeal, the California Court of Appeal, Second Appellate District, Division One, affirmed the order dismissing and striking the class claims. The court held that the FAA applied to the arbitration agreement because the employee was neither a “railroad employee” nor a transportation worker directly involved in the interstate transportation of goods under the FAA’s section 1 exemption. The court found that repairing out-of-service railcars did not constitute direct engagement in interstate commerce. The court also held that, because the FAA applied, the waiver of class claims was enforceable under federal law, thus preempting contrary state law. The appeal as to the order compelling arbitration was treated as a petition for writ of mandate and was denied. View "Vela v. Harbor Rail Services of California, Inc." on Justia Law

Bernal v Kohl's Corporation

2026-05-01T09:04:03-08:00

A group of consumers residing in California purchased products online from a national retailer’s website between 2020 and 2022. To complete their purchases, they were required to agree to the retailer’s Terms and Conditions, which included an arbitration clause mandating that any disputes be resolved through arbitration before the American Arbitration Association (AAA) and that certain pre-arbitration steps be followed. When the consumers later believed that the retailer had engaged in false and deceptive marketing, they followed the pre-arbitration process as outlined, served notices of dispute, attempted mediation, and, after those efforts failed, filed demands for arbitration with the AAA and paid all required fees. After the consumers initiated arbitration, the AAA notified the parties that the retailer had not filed its arbitration agreement with the AAA as required by AAA rules. The AAA requested compliance, but the retailer refused to register its agreement. As a result, the AAA, following its Consumer Arbitration Rules, terminated the arbitration proceedings and closed the consumers’ cases. The consumers then filed a petition in the United States District Court for the Eastern District of Wisconsin seeking to compel arbitration, arguing that the retailer’s refusal to register the agreement and pay related fees constituted a refusal to arbitrate under the Federal Arbitration Act. The district court denied the petition, relying on precedent which holds that, when arbitration proceeds and ends in accordance with the agreed rules—even if terminated by the arbitral forum for procedural reasons—a court may not intervene to compel further arbitration. The United States Court of Appeals for the Seventh Circuit affirmed, holding that because the parties’ agreement delegated procedural questions to the AAA and the AAA exercised its discretion under its rules in terminating the proceedings, there was no refusal to arbitrate that would justify judicial intervention under the Act. View "Bernal v Kohl's Corporation" on Justia Law

Schlacks v. Chheda

2026-04-29T07:01:20-08:00

Two brothers, who are co-founders, directors, and major shareholders of a company, were involved in a business arrangement with a venture capital investor who was also a director and significant shareholder in the same company. The parties executed two option agreements and a partnership agreement related to the creation of a venture capital fund, which was to be capitalized with company shares. The brothers signed option agreements giving a corporate entity managed by the investor the right to acquire a portion of their shares. These agreements were twice amended, with the second amendment doubling the shares to be transferred—an action the brothers allege was done without their knowledge. Separately, a partnership agreement established the venture fund as a limited partnership under Delaware law, with all partners being corporate entities associated with the brothers and/or the investor. The partnership agreement included an arbitration clause governed by JAMS rules. When the investor’s entity tried to exercise its right to purchase shares, the brothers refused, disputing the validity of the second amendment. The investor and his entities initiated arbitration under the partnership agreement, prompting the brothers to sue for injunctions to stop arbitration. The defendants responded by moving to compel arbitration. The United States District Court for the Western District of Missouri denied all motions, including the motion to compel arbitration. The United States Court of Appeals for the Eighth Circuit reviewed the denial de novo. It held that the district court properly decided the question of arbitrability because the brothers, as non-signatories to the partnership agreement, were not bound by its arbitration clause. The appellate court further found that principles of equitable estoppel and agency law under Delaware law did not require the brothers to arbitrate, as they had not directly benefited from the agreement nor acted as agents of the signatories. The Eighth Circuit affirmed the district court’s decision. View "Schlacks v. Chheda" on Justia Law

Stoker v. Blue Origin, LLC

2026-04-24T12:11:14-08:00

A senior director was employed by a space exploration company from 2020 until his termination in 2022. Upon hiring, he signed an employee agreement containing a broad arbitration provision requiring most disputes with the company and its affiliates to be resolved by arbitration, with some exceptions. After his termination, the employee filed a lawsuit alleging, among other claims, sexual/gender discrimination, sexual/gender harassment, retaliation, wrongful termination, and intentional infliction of emotional distress. The company moved to compel arbitration under the agreement, while the employee argued that the arbitration provision was both unconscionable and unenforceable under federal law. The Superior Court of Los Angeles County reviewed the motion and found that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) applied, concluding that the employee’s allegations sufficiently stated discrimination based on gender. On this basis, the court denied the company’s motion to compel arbitration, without reaching the issue of whether the arbitration agreement was unconscionable. The company filed a timely appeal from the denial of its motion. The California Court of Appeal, Second Appellate District, reviewed the order de novo. The appellate court concluded that the arbitration agreement was both procedurally and substantively unconscionable. Procedural unconscionability was established because the agreement was a contract of adhesion, presented on a take-it-or-leave-it basis with no real opportunity for negotiation. Substantive unconscionability resulted from the agreement’s overbroad coverage, lack of mutuality, waiver of the right to a jury trial, and waiver of representative actions, including those under the Private Attorneys General Act. The court found that severance was not an appropriate remedy because the unconscionable provisions were pervasive and central to the agreement. The Court of Appeal affirmed the lower court’s order denying the motion to compel arbitration. View "Stoker v. Blue Origin, LLC" on Justia Law

Santana v. Studebaker Health Care Center

2026-04-22T18:09:29-08:00

An employee began working at a skilled nursing facility, which was later acquired by a new employer. As part of the onboarding process, the employer required the employee to sign three related agreements to arbitrate most employment disputes, except certain representative actions under the California Private Attorneys General Act (PAGA). After ending his employment, the employee filed a class action lawsuit for various wage-and-hour violations, including a PAGA claim. The agreements also contained class action waivers and a confidentiality agreement. The employer moved to compel arbitration of the employee’s individual claims, including his individual PAGA claim, and to enforce the class action waiver. The Superior Court of Los Angeles County denied the motion, ruling that conflicting and ambiguous terms among the three arbitration agreements and other documents meant there was no enforceable agreement to arbitrate. The court also ruled, in the alternative, that the agreement was unconscionable due to both procedural and substantive defects, including an unenforceable waiver of the right to bring a PAGA action and certain provisions in the confidentiality agreement. The California Court of Appeal, Second Appellate District, Division Seven, reviewed the order denying arbitration. The court held that the agreements, although containing some ambiguities and minor inconsistencies, reflected a clear mutual intent to arbitrate employment-related disputes. The court found the agreements were not so uncertain as to be unenforceable, and any conflicting provisions could be severed. The court further determined that, while the agreements reflected some procedural unconscionability as contracts of adhesion, they did not contain substantively unconscionable terms. The Court of Appeal reversed the trial court’s order and directed that arbitration be compelled. View "Santana v. Studebaker Health Care Center" on Justia Law

Chemaly v. Lampert

2026-04-22T08:34:06-08:00

A seaman who worked aboard a Cayman Islands-flagged yacht suffered a right shoulder injury while helping recover an underwater scooter at the direction of his captain. After the incident, the seaman alleged he was denied pain medication, reassigned to night shifts to hide his injury from guests, and eventually repatriated to his home country without his belongings. He sued the yacht’s beneficial owner, the captain, the vessel’s record owner, his nominal employer, the yacht’s manager, and the insurer, asserting various claims including negligence under the Jones Act, unseaworthiness, failure to provide maintenance and cure, failure to treat, negligence, conversion, and breach of insurance contract. The defendants (except the insurer) removed the case to the United States District Court for the Southern District of Florida under the New York Convention, citing an arbitration provision in the seaman’s employment agreement requiring disputes to be arbitrated in the Cayman Islands. The district court compelled arbitration as to the Jones Act, maintenance and cure, and failure to treat claims against the yacht owner, the beneficial owner, and the employer, but remanded the remaining claims to state court. The insurer later settled. On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s decision compelling arbitration for the Jones Act, maintenance and cure, and failure to treat claims against the nominal employer, and for the maintenance and cure and failure to treat claims against the yacht owner and beneficial owner. However, it reversed the order to the extent it compelled arbitration of the Jones Act claim against the yacht owner and beneficial owner, finding insufficient allegations of concerted misconduct to warrant estoppel. The court dismissed the cross-appeal for lack of jurisdiction as to the remanded claims. The main holding is that arbitration must be compelled for the relevant claims as to the nominal employer, and for maintenance and cure and failure to treat as to the yacht owner and beneficial owner, but not for the Jones Act claim against the latter two. View "Chemaly v. Lampert" on Justia Law

Joyce v. Forest River, Inc.

2026-04-17T10:34:00-08:00

In June 2020, an individual purchased a recreational vehicle manufactured by two companies. The vehicle quickly developed problems, prompting the owner to seek repairs on multiple occasions and to notify the manufacturers of ongoing defects. Over the course of about two years, the vehicle underwent several repair attempts by both manufacturers and their authorized agents. After further repair offers were declined by the owner, statutory defect notices were sent, and additional repairs were made. The owner eventually sought relief under Florida’s Lemon Law, alleging that the manufacturers failed to adequately repair the defects. The dispute was submitted to arbitration pursuant to Florida Statute § 681.1095. The arbitration board concluded that the owner did not meet the burden of eligibility for a refund under the Lemon Law and only ordered limited repairs. The owner then appealed to the United States District Court for the Southern District of Florida. That court granted summary judgment for both manufacturers, holding that the owner failed to establish entitlement to relief because the statutory presumptions for repairs or days out-of-service were not met, and deemed as admitted the manufacturers’ statements of material facts due to procedural deficiencies in the owner’s filings. On appeal, the United States Court of Appeals for the Eleventh Circuit found that the district court erred by treating the statutory presumptions in Florida’s Lemon Law as mandatory requirements for relief. The court clarified that these presumptions are not prerequisites but rather examples of when a “reasonable number of attempts” has been made. Applying the correct standard, the appellate court affirmed summary judgment for one manufacturer because the owner failed to satisfy initial notice and repair requirements. However, as to the other manufacturer, it found genuine disputes of material fact regarding whether a reasonable number of attempts had been made and therefore reversed and remanded for further proceedings. View "Joyce v. Forest River, Inc." on Justia Law

LENNAR COMM. NEV., LLC VS. WHALEN

2026-04-16T09:11:38-08:00

Pamela Whalen was injured when she tripped over a utility box in a community owned and maintained by Lennar Communities Nevada, LLC, and Greystone Nevada, LLC. Before the accident, Pamela had signed an amendment to a Purchase and Sale Agreement (PSA) to buy a home from Lennar, which included an arbitration clause. The injury occurred during a tour of the community, not on the property she purchased. Following the accident, Pamela sued Lennar for negligence. After Pamela filed her complaint, Lennar responded with an answer and demanded a jury trial. Both parties engaged in extensive discovery over 17 months, including multiple disclosures, written discovery, and three medical examinations of Pamela at Lennar’s request. Lennar did not assert its right to arbitrate until after this lengthy discovery process. When Pamela declined to stipulate to arbitration, Lennar filed a motion to compel arbitration based on the PSA. The Eighth Judicial District Court, Clark County, denied Lennar’s motion, determining that the dispute fell outside the scope of the arbitration clause. The Supreme Court of the State of Nevada reviewed the case. The court held that the district court erred in interpreting the scope of the arbitration clause, as the PSA delegated questions of arbitrability to the arbitrator. However, the Supreme Court held that Lennar had waived its right to arbitrate by actively litigating the case for 17 months before seeking arbitration. The court found this conduct inconsistent with the right to arbitrate and prejudicial to Pamela, especially given the discovery obtained that might not have been available in arbitration. The Supreme Court of Nevada affirmed the district court’s order denying the motion to compel arbitration, albeit on the grounds of waiver rather than contract interpretation. View "LENNAR COMM. NEV., LLC VS. WHALEN" on Justia Law

Carter v SP Plus Corp.

2026-04-15T13:30:42-08:00

Rashaan Carter brought a lawsuit against SP Plus Corporation, his employer, alleging violations of state and federal minimum wage laws. During Carter’s onboarding, the employer claimed that he had agreed to arbitrate all claims by electronically checking a box and providing an electronic signature. However, Carter later submitted an affidavit stating that an employee from SP Plus’s human resources staff completed and signed the forms on his behalf, without explaining the documents or allowing Carter to view or decline them. The United States District Court for the Northern District of Illinois initially granted SP Plus's motion to stay the litigation in favor of arbitration, relying on the onboarding records. After Carter presented his affidavit challenging the validity of his assent to arbitration, the district judge reconsidered, lifted the stay, and denied SP Plus’s motion. The district court explained that, based on the record, it could not find that a valid arbitration agreement had been formed. The judge also noted that neither party had been given the required notice or an opportunity for a hearing to determine whether Carter had personally agreed to arbitration. SP Plus appealed to the United States Court of Appeals for the Seventh Circuit, arguing that the order was appealable and that the district court should have compelled arbitration. The Seventh Circuit held that, because SP Plus failed to request an evidentiary hearing or present evidence to dispute Carter’s affidavit in the district court, it forfeited any right to such a hearing. The appellate court further concluded that the district court’s order was a final denial of the request to compel arbitration and found no clear error in the district court’s determination that Carter did not agree to arbitrate. The Seventh Circuit affirmed the district court’s order. View "Carter v SP Plus Corp." on Justia Law

Geneva Enterprises, LLC v. Chavez

2026-04-10T10:30:29-08:00

A group of former employees initiated a mass arbitration against their previous employers, alleging violations of the Virginia Wage Payment Act and, for one claimant, the Fair Labor Standards Act. The employers contended that not all claimants were bound by arbitration agreements and that procedural requirements for arbitration had not been met, leading them to refuse payment of required arbitration initiation fees. In response, the employers filed suit in the Circuit Court of Fairfax County, seeking to enjoin the arbitrations and obtain a declaratory judgment on the arbitration agreements’ scope. The employees removed the case to the United States District Court for the Eastern District of Virginia, where they also filed a petition to compel arbitration and stay the proceedings. The United States District Court for the Eastern District of Virginia denied the employers’ request to enjoin the arbitrations and granted a stay of the court proceedings pending arbitration. The district court did not compel arbitration outright, reasoning that the matters had already been referred to arbitration. When the employers continued to refuse payment of arbitration fees, the employees returned to the district court seeking an order to lift the stay, compel arbitration, and require the employers to pay the fees. The court again declined, maintaining its previous order referring the case to arbitration and keeping the stay in place. The United States Court of Appeals for the Fourth Circuit reviewed the employees’ interlocutory appeal challenging the district court’s denial of their renewed motion. The Fourth Circuit held that it lacked appellate jurisdiction under section 16 of the Federal Arbitration Act because the district court’s order was either an order granting a stay pending arbitration or directing arbitration to proceed—neither of which is appealable at this stage. Accordingly, the appeal was dismissed for lack of appellate jurisdiction. View "Geneva Enterprises, LLC v. Chavez" on Justia Law

JUVENILE JUSTICE PROB. OFFICERS ASSOC. VS. CLARK CNTY.

2026-04-10T06:06:23-08:00

A union member employed by a county juvenile justice agency was terminated after it was discovered that he had failed to disclose instances of prior disciplinary actions related to his behavior with residents at a previous job in another county. During a background check required by the Prison Rape Elimination Act (PREA), the county learned that the employee had misrepresented the circumstances of his departure from his earlier position, specifically omitting that he resigned while under investigation for inappropriate conduct. Based on PREA regulations, which mandate termination for material omissions regarding such misconduct, the county dismissed the employee. Following his termination, the union initiated a grievance on his behalf under the collective bargaining agreement (CBA) with the county, which allows for arbitration of certain employment disputes. When the county denied the grievance, the union sought arbitration. The county then moved in the Eighth Judicial District Court to stay arbitration, arguing that terminations pursuant to PREA regulations were not subject to arbitration under the CBA. The district court agreed, determining that the arbitration clause was narrow and applied only to disciplinary actions defined as “corrective actions” intended to help an employee overcome deficiencies related to behavior or performance, not to terminations required by federal regulation. The Supreme Court of Nevada reviewed the matter and affirmed the district court’s order granting the motion to stay arbitration. The court held that the arbitration clause in the CBA was narrow and could not be interpreted to cover the termination at issue, as the action was implemented pursuant to federal regulation, not as a corrective measure for employee improvement. The Supreme Court of Nevada did not address the merits of the termination, only its arbitrability under the CBA. View "JUVENILE JUSTICE PROB. OFFICERS ASSOC. VS. CLARK CNTY." on Justia Law

OLSON V. FCA US, LLC

2026-04-07T08:01:11-08:00

The plaintiff entered into a lease agreement with a car dealership to lease a Jeep Grand Cherokee. The lease included an arbitration agreement containing a delegation clause, which specified that disputes about the scope of the arbitration agreement would be decided in arbitration. Later, the plaintiff filed a federal class action lawsuit against the vehicle’s manufacturer, alleging defects in the headrest. The manufacturer, however, was not a party to the lease agreement and did not claim to be an employee, agent, successor, or assign of the dealership. After the lawsuit was filed in the United States District Court for the Eastern District of California, the manufacturer moved to compel arbitration, arguing that the delegation clause required an arbitrator—not the court—to decide whether the manufacturer could enforce the arbitration agreement. In the alternative, the manufacturer asserted that either the plain language of the agreement or the doctrine of equitable estoppel entitled it to compel arbitration. The district court denied the motion, finding that the manufacturer could not enforce the arbitration agreement because it was not a party to the contract and none of the exceptions allowing enforcement by a non-signatory applied. The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s denial of the motion to compel arbitration. The appellate court held that, absent a relevant exception, a non-party to an arbitration agreement cannot enforce the agreement’s terms against a signatory. It found that the language of the arbitration agreement did not cover disputes with the manufacturer, and under California law, the manufacturer could not use equitable estoppel to compel arbitration because the plaintiff’s claims were not founded in or intertwined with the lease agreement. The court’s disposition was to affirm the district court’s order. View "OLSON V. FCA US, LLC" on Justia Law

United Mexican States v. Lion Mexico Consolidated L.P.

2026-04-07T07:02:31-08:00

A Canadian investment company provided loans to Mexican companies owned by a businessman, securing these loans with mortgages and promissory notes. When the Mexican companies defaulted, the investor attempted to recover its funds through negotiations and litigation in Mexico. The investor alleged that a fraudulent scheme, orchestrated by the businessman, led to a forged settlement used in Mexican court to void the loans. After Mexican courts did not provide relief, the investor initiated arbitration against Mexico under NAFTA, claiming Mexico failed to provide the protections required for foreign investments. The arbitral tribunal, seated in Washington, D.C., found that only the mortgages—not the promissory notes—qualified as protected “investments” under NAFTA. The tribunal concluded that Mexico had breached its obligations under Article 1105(1) by failing to provide fair and equitable treatment to the investor’s qualifying investments, awarding $47 million in compensation to the investor. Mexico then petitioned the United States District Court for the District of Columbia to vacate the award, arguing the arbitrators exceeded their authority and disregarded the law. The district court rejected these arguments, confirming the award. Separately, the businessman sought to intervene in the proceedings, claiming his interests were harmed, but the district court denied intervention. The United States Court of Appeals for the District of Columbia Circuit reviewed the case. It held that the arbitral tribunal did not exceed its powers, as it at least arguably interpreted the relevant treaty provisions, and did not act in manifest disregard of the law. The appellate court also held that the district court did not abuse its discretion in denying the businessman’s motion to intervene, finding Mexico adequately represented his interests. The court affirmed the district court’s order in full. View "United Mexican States v. Lion Mexico Consolidated L.P." on Justia Law

O'DELL V. AYA HEALTHCARE SERVICES, INC.

2026-04-01T08:01:06-08:00

Former employees of a travel-nursing agency brought a putative class action against the agency, alleging wage-related violations. Each employee had signed an arbitration agreement with the agency that contained a delegation clause requiring an arbitrator—not a court—to decide on the validity of the agreement. Four initial plaintiffs had their disputes sent to arbitration: two arbitrators found the agreements valid, while two found them invalid due to unconscionable fee and venue provisions. After these initial arbitrations, the United States District Court for the Southern District of California confirmed three out of four arbitral awards. At this stage, an additional 255 employees joined the action as opt-in plaintiffs under the Fair Labor Standards Act. The agency moved to compel arbitration for these additional plaintiffs under their individual agreements. However, a different district judge raised the issue of whether non-mutual offensive collateral estoppel barred the enforcement of the arbitration agreements. After briefing, the district court denied the agency’s motion, concluding that the two arbitral awards finding the agreements invalid precluded arbitration for all 255 employees, effectively rendering their agreements unenforceable. On appeal, the United States Court of Appeals for the Ninth Circuit reversed the district court’s judgment. The Ninth Circuit held that the application of non-mutual offensive collateral estoppel to preclude the enforcement of arbitration agreements is incompatible with the Federal Arbitration Act (FAA). The court reasoned that such an approach undermined the principle of individualized arbitration and the parties’ consent, which are fundamental to the FAA. The Ninth Circuit concluded that the FAA does not permit using non-mutual offensive collateral estoppel to invalidate arbitration agreements and remanded the case for further proceedings. View "O'DELL V. AYA HEALTHCARE SERVICES, INC." on Justia Law

Harris v W6LS, Inc.

2026-03-31T10:04:44-08:00

Two Illinois residents obtained online loans of $600 each from a lender operating under the laws of the Otoe-Missouria Tribe of Indians, with interest rates approaching 500% per year. The loan agreements included an arbitration clause, which delegated to the arbitrator all questions including the enforceability and formation of the agreement, specifying that such issues would be determined under “tribal law and applicable federal law.” At the time the loans were issued, the referenced tribal law did not exist. After receiving the loans, the borrowers filed a putative class action in the United States District Court for the Northern District of Illinois, alleging violations of Illinois consumer-protection statutes and federal laws. The defendants moved to compel arbitration under the terms of the loan agreements. The district court denied the motion, finding that the arbitration and delegation provisions were unenforceable because they effectively forced the plaintiffs to waive their substantive rights under Illinois law, applying the “prospective waiver” doctrine. On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s denial de novo. The Seventh Circuit affirmed, holding that there was no mutual assent to the arbitration and delegation provisions. The court determined that, at the time of contracting, the specified tribal law did not exist, and federal law does not supply substantive contract-formation rules. Because the contract’s governing law provision referred to a body of law that was nonexistent and subject to unilateral creation by the defendants’ affiliate, there was no meeting of the minds as to an essential term. The Seventh Circuit concluded that the absence of mutual assent rendered the arbitration and delegation provisions unenforceable and affirmed the district court’s order denying the motion to compel arbitration. View "Harris v W6LS, Inc." on Justia Law

Mallette v. Revette

2026-03-27T01:17:52-08:00

Mitchell Glenn Revette sought medical care from Dr. Andrew Mallette at The Surgical Clinic Associates, P.A. for abdominal pain and underwent surgery for diverticulitis in June 2021. He later returned for a follow-up surgery in January 2022, after which he died due to complications related to respiratory depression. His wife, Nitkia Revette, brought a wrongful death and medical negligence lawsuit on behalf of his estate, alleging that negligent anesthesia and pain management led to his death. The defendants, Dr. Mallette and the Clinic, moved to compel arbitration based on an arbitration agreement included in an intake packet mailed to Mitchell. The agreement was signed "Mitchell Revette," but during a hearing in the Hinds County Circuit Court, Nitkia testified that she signed her husband’s name without his knowledge or presence, and she stated she had no authority to sign for him. The Clinic’s staff testified that patients were required to sign such agreements personally. The circuit court found that Mitchell did not sign the arbitration agreement and that Nitkia lacked authority to bind him, thus ruling the agreement unenforceable and denying the motion to compel arbitration. On appeal, the Supreme Court of Mississippi reviewed the circuit court’s findings, applying a deferential standard to factual determinations and de novo review to the denial of arbitration. The Supreme Court affirmed the circuit court’s decision, holding that substantial evidence supported the findings that Nitkia lacked both actual and apparent authority to sign for Mitchell and that there was no basis for binding the estate via direct-benefits estoppel. The case was remanded to the circuit court for further proceedings. View "Mallette v. Revette" on Justia Law

BLC Lexington SNF, LLC v. Bonnie Town

2026-03-26T13:30:37-08:00

Linda Elam, after suffering significant medical issues including a stroke and complications from cancer treatment, was admitted to a nursing home operated by BLC Lexington SNF, LLC for rehabilitation. Her sister, Bonnie Townsend, acting under a power of attorney, handled the admission process and signed both the admission and an optional arbitration agreement as Elam’s representative. Following further health decline, Elam died, and her estate alleged that her death resulted from negligent care at the facility. After the estate filed suit in Kentucky state court against BLC Lexington and a former administrator, BLC Lexington responded in federal court, seeking to compel arbitration based on the agreement Townsend signed. The United States District Court for the Eastern District of Kentucky compelled arbitration for nearly all claims except wrongful death claims by nonsignatories. An arbitrator, after a week-long hearing, ruled in favor of BLC Lexington on all claims, finding Townsend had not met her burden of proof. The district court then confirmed the arbitration award, denying Townsend’s motions for reconsideration and to vacate the award. On appeal to the United States Court of Appeals for the Sixth Circuit, Townsend argued that compelling arbitration was improper because she did not sign as attorney-in-fact, that the arbitration agreement was indefinite, and that post-arbitration relief was warranted due to alleged arbitrator misconduct and the application of an incorrect legal standard. The Sixth Circuit affirmed the district court’s decisions, holding that the arbitration agreement was enforceable under Kentucky law, Townsend had acted as Elam’s representative, and no intervening change in law or arbitrator misconduct justified vacating the award. The court also found the arbitrator applied the correct evidentiary standard. The judgment of the district court was affirmed. View "BLC Lexington SNF, LLC v. Bonnie Town" on Justia Law

O'Leary v. Jones

2026-03-24T11:01:59-08:00

This case arose from a contractual dispute involving a commercial lease. Michael Scheinker, who later passed away and was succeeded by Jennifer O’Leary, leased property to Green America Inc. Walter Jones III signed the lease on behalf of Green America and also signed a guarantee clause, making him personally responsible for obligations under the lease, including attorney fees. After disputes developed, Green America initiated litigation against Scheinker. Scheinker successfully compelled arbitration, where he asserted claims against Green America and Jones. The arbitrator issued an award in Scheinker’s favor, finding Jones liable as guarantor. Scheinker then sought to confirm the arbitration award in the Superior Court of Riverside County. The Superior Court confirmed the arbitration award against Green America but denied the petition as to Jones, citing lack of personal jurisdiction since Jones had not been joined as a party before the matter was sent to arbitration. The court also expressly declined to rule on Jones’s request to vacate the arbitration award. Afterward, Jones moved for attorney’s fees and costs, arguing he was the prevailing party under Civil Code section 1717. The Superior Court denied attorney’s fees, reasoning that no party prevailed on the contract because the merits of enforceability as to Jones had not been resolved. The court did not separately address Jones’s request for costs. The California Court of Appeal, Fourth Appellate District, Division One, reviewed the case. It held that the Superior Court acted within its discretion in denying Jones’s motion for attorney’s fees, finding that Jones had obtained only an interim victory and the substantive contract issues remained unresolved. However, the appellate court found that Jones was entitled to reasonable court costs under Code of Civil Procedure section 1032, as he was a defendant in whose favor a dismissal was entered. The order was affirmed as to attorney’s fees and remanded for the award of costs to Jones. View "O'Leary v. Jones" on Justia Law

Miller v. Miller

2026-03-24T07:03:39-08:00

A married couple with eight children began divorce proceedings after a long marriage during which the husband was a successful ophthalmologist and the wife primarily cared for the children at home. During the proceedings, the wife initially sought spousal support, child support, and an equitable division of property, while the husband sought joint custody and an equitable property division. The parties agreed, through counsel and with court approval, to divide the husband's income and a business account temporarily, avoiding a child support calculation at that stage. Once custody was resolved, the parties entered into two successive arbitration agreements, under which the wife waived spousal support in exchange for arbitration of all remaining issues, including property division and child support. The arbitrator awarded the wife 60% of the marital assets and retroactive child support. After the arbitration, the husband challenged the award in the Magistrate Court of the Fourth Judicial District, Ada County, arguing the court lacked jurisdiction to refer divorce matters to arbitration and that the arbitrator exceeded authority by awarding retroactive child support and an unequal asset division. The magistrate court rejected these arguments and confirmed the award. On appeal, the District Court affirmed the magistrate court, holding that Idaho law permits arbitration of divorce issues and that the arbitrator acted within the scope of the agreement. The district court did, however, vacate part of the attorney fee award based on the arbitration award, but affirmed an award of appellate attorney fees to the wife, finding the husband's jurisdictional challenge was unreasonable. The Supreme Court of the State of Idaho affirmed the district court’s decision. The main holding is that Idaho law permits courts to refer divorce actions to binding arbitration if the parties agree, and such referral does not divest the court of jurisdiction. The court also held that the arbitrator did not exceed authority in awarding retroactive child support and an unequal division of property. The case was remanded for consideration of appellate attorney fees under Idaho Code section 32-704(3). View "Miller v. Miller" on Justia Law

International Brotherhood of Electrical Workers Local Union 29 v. Energy Harbor Nuclear Corp

2026-03-23T10:00:38-08:00

Energy Harbor Nuclear Corporation operated a power plant in Pennsylvania, where its employees were represented by the International Brotherhood of Electrical Workers, Local 29. After a 2021 dispute over health care benefit contributions, an arbitrator found that Energy Harbor had underpaid and ordered it to make additional contributions for 2021. Later, the parties entered into a new collective-bargaining agreement (CBA) on October 1, 2021, which included a broad arbitration clause and a merger clause voiding prior agreements not incorporated into the new CBA. When the union later alleged that Energy Harbor similarly underpaid contributions for 2022, it filed a grievance, contending that Energy Harbor failed to adjust 2022 contributions as required by the prior arbitration award. The United States District Court for the Western District of Pennsylvania reviewed the matter after the union sought to compel arbitration. The District Court, adopting a magistrate judge’s recommendation, held that the broad arbitration clause in the new CBA covered the dispute regarding the 2022 contributions. The court reasoned that because the grievance referenced the contribution-increase provision of the CBA, the dispute was subject to arbitration, and found no evidence that the parties intended to exclude such claims from arbitration. On appeal, the United States Court of Appeals for the Third Circuit reversed. The Third Circuit held that, although the arbitration clause was broad, the union’s grievance regarding 2022 contributions did not arise under the new CBA but instead relied on the prior arbitration award, which was not incorporated into the new agreement. The court concluded that the dispute had “nothing to do with” the rights under the CBA because there was no evidence of a required increase in Energy Harbor’s health care plan costs from 2021 to 2022. The Third Circuit reversed and remanded with instructions to grant summary judgment for Energy Harbor. View "International Brotherhood of Electrical Workers Local Union 29 v. Energy Harbor Nuclear Corp" on Justia Law

Fetch! Pet Care, Inc. v. Atomic Pawz Inc.

2026-03-20T11:30:36-08:00

Fetch! Pet Care, Inc., a nationwide franchisor of pet-care services, alleged that a group of former franchisees coordinated to exit their franchise agreements and start competing businesses, allegedly misappropriating Fetch!’s branding, client lists, intellectual property, and trade secrets. The franchisees contended that the newer “2.0” franchise model imposed high fees, delivered poor support, and led to high attrition, while some “1.0” franchisees claimed they were forced out of the system unexpectedly, leaving them no choice but to start their own businesses. A franchisee association was formed, and many franchisees sent rescission notices and pursued arbitration. Fetch! responded by filing suit for breach of contract, trademark infringement, and misappropriation of trade secrets, and sought injunctive relief to prevent the franchisees from operating competing businesses or using its intellectual property. The United States District Court for the Eastern District of Michigan held evidentiary hearings and granted Fetch!’s motion for a temporary restraining order and preliminary injunction in part, ordering defendants to stop using Fetch!’s trademarks and cease communication with current Fetch! franchisees, but denied broader injunctive relief. The court reasoned that a full injunction could harm ongoing arbitration proceedings and found sufficient evidence to invoke the doctrine of unclean hands against Fetch!, based on allegedly deceptive conduct in selling franchises. Fetch! timely appealed the district court’s order. The United States Court of Appeals for the Sixth Circuit reviewed the district court’s application of the unclean hands doctrine for abuse of discretion and affirmed. The appellate court held that the district court acted within its discretion in denying broad injunctive relief based on Fetch!’s bad faith and deceptive marketing practices as an underlying cause of franchisee conduct. The court clarified standards for irreparable harm and affirmed the partial denial of preliminary injunction, relying on the doctrine of unclean hands rather than other defenses. View "Fetch! Pet Care, Inc. v. Atomic Pawz Inc." on Justia Law

USAA Savings Bank v Goff

2026-03-19T12:31:01-08:00

USAA Savings Bank closed Michael Goff’s credit card account, providing him with inconsistent explanations for its actions. Goff pursued arbitration under the arbitration agreement contained in his credit card contract, seeking actual and punitive damages. The agreement allowed the arbitrator to award punitive damages but explicitly required a post-award review of such damages, with procedural protections and a written, reasoned explanation, before any punitive damages award could become final. An arbitrator held an evidentiary hearing and determined that USAA had violated the Equal Credit Opportunity Act by failing to provide Goff with adequate notice upon closing his account. Despite finding that Goff suffered no actual damages, the arbitrator awarded $10,000 in punitive damages and over $77,000 in attorney’s fees. USAA requested the post-award review mandated by the agreement, but the arbitrator declined, citing American Arbitration Association rules, and finalized the award without conducting the review. USAA filed a motion in the United States District Court for the Northern District of Illinois, seeking to vacate the arbitral award on the ground that the arbitrator had exceeded her authority by disregarding the post-award review requirement. The district court acknowledged the arbitrator’s error but confirmed the award, concluding it nonetheless “drew from the essence of the arbitration agreement.” USAA appealed, and Goff sought sanctions. The United States Court of Appeals for the Seventh Circuit held that the arbitrator exceeded her authority by ignoring the arbitration agreement’s clear requirement for a post-award review of punitive damages. The court determined there was no “possible interpretive route” to support the arbitrator’s action, vacated the district court’s judgment, denied Goff’s motion for sanctions, and remanded with instructions to refer the matter back to the original arbitrator for proceedings consistent with the agreement. View "USAA Savings Bank v Goff" on Justia Law

SANDLER V. MODERNIZING MEDICINE, INC.

2026-03-19T08:01:21-08:00

An individual brought suit against her employer, a Delaware corporation, alleging various claims of discrimination based on age and disability under state and federal law. The employment contract between the parties included an arbitration provision, specifying that all employment-related disputes were to be resolved through binding arbitration under the Federal Arbitration Act (FAA), in accordance with procedures outlined in the California Arbitration Act. The contract also incorporated JAMS rules, which assign the arbitrator authority to resolve issues regarding the validity and enforceability of the arbitration agreement itself. The United States District Court for the Southern District of California reviewed the employer’s motion to compel arbitration. The court recognized that the arbitration agreement, by incorporating the JAMS rules, delegated questions about the agreement's validity to an arbitrator. However, relying on California state court decisions, the district court determined that the presence of a severability clause—allowing a court or other competent body to sever invalid provisions—negated a “clear and unmistakable” delegation to the arbitrator. Consequently, the district court concluded it was responsible for determining validity and found the arbitration agreement unconscionable, denying the motion to compel arbitration. The United States Court of Appeals for the Ninth Circuit reviewed the district court’s judgment de novo. The appellate court held that the contract’s delegation clause, by clearly incorporating JAMS rules, unmistakably reserved the issue of the arbitration agreement’s validity for the arbitrator. The existence of a severability clause did not undermine this delegation. The Ninth Circuit reversed the district court’s denial of the motion to compel arbitration, vacated its unconscionability judgment, and remanded with instructions to compel arbitration and stay the case pending arbitration. View "SANDLER V. MODERNIZING MEDICINE, INC." on Justia Law

Goldman Sachs Bank USA v. Brown

2026-03-18T10:30:28-08:00

Two individuals, each of whom held credit card debt with Goldman Sachs, filed for bankruptcy—one under Chapter 13 and the other under Chapter 7—in the United States Bankruptcy Court for the Western District of Virginia. After receiving notice of the bankruptcy filings, Goldman Sachs allegedly continued collection efforts on the debts, including repeated communications warning of adverse credit reporting. The debtors claimed these actions violated the automatic stay imposed by the Bankruptcy Code. They commenced an adversary proceeding in the bankruptcy court under 11 U.S.C. § 362(k), seeking damages and injunctive relief, and proposed to represent a class of similarly situated individuals. Goldman Sachs responded by moving to compel arbitration of the debtors’ claims based on an arbitration clause in the credit card agreements, and sought to stay the adversary proceeding. The United States Bankruptcy Court for the Western District of Virginia denied Goldman Sachs’ motion, finding that the claim for a willful violation of the automatic stay was a core bankruptcy matter, and that enforcing arbitration would irreconcilably conflict with the purposes of the Bankruptcy Code. The United States District Court for the Western District of Virginia affirmed, holding that arbitration would undermine the bankruptcy court’s authority to enforce the automatic stay and disrupt the centralized resolution of bankruptcy-related disputes. On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s ruling. The Fourth Circuit held that compelling arbitration of a statutory and constitutionally core claim for violation of the automatic stay would conflict with the underlying purposes of the Bankruptcy Code, including centralization of claims, uniform enforcement, the debtor’s “fresh start,” and the specialized expertise of bankruptcy courts. The court concluded that under these circumstances, the bankruptcy court did not abuse its discretion in denying the motion to compel arbitration. View "Goldman Sachs Bank USA v. Brown" on Justia Law

Wright v. WellQuest Elk Grove

2026-03-18T10:02:01-08:00

A woman with dementia was admitted to a memory care facility, where her family warned staff about her tendency to wander and need for supervision. Three days after admission, she was found unattended in a courtyard on a 102-degree day, suffering from severe burns and heatstroke, ultimately dying days later. Her family, acting as successors in interest and individually, sued the facility for elder neglect, negligence, fraud, wrongful death, and negligent infliction of emotional distress. Upon admission, her niece had signed an arbitration agreement on her behalf, which the family argued should not bind their individual claims or override their right to a jury trial. The Superior Court of Sacramento County considered the facility’s motion to compel arbitration and stay the proceedings. The court found a valid arbitration agreement existed for the decedent’s survivor claims but ruled that the agreement did not bind the family members' individual claims, as they were not parties to the agreement. The court also declined to compel arbitration of the survivor claims under California Code of Civil Procedure section 1281.2, subdivision (c), citing the risk of conflicting rulings if the family’s claims proceeded in court while survivor claims were arbitrated. The court further held that the agreement’s reference to the Federal Arbitration Act (FAA) did not expressly incorporate the FAA’s procedural provisions to preempt California law. On appeal, the California Court of Appeal, Third Appellate District, affirmed the trial court’s judgment. It held that the arbitration agreement did not clearly and unmistakably delegate threshold issues of arbitrability to the arbitrator, and that the FAA’s procedural provisions were not expressly adopted by the agreement. Therefore, California law applied, and the trial court properly exercised its discretion to deny arbitration to avoid inconsistent rulings. The judgment was affirmed, and costs were awarded to the plaintiffs. View "Wright v. WellQuest Elk Grove" on Justia Law

Abdisalam v. Strategic Delivery Solutions, LLC

2026-03-17T13:00:04-08:00

Abdulkadir Abdisalam worked as a courier delivering medical supplies for a company that classified its couriers as independent contractors. To work for the company, Abdisalam was required to form his own corporation, Abdul Courier, LLC, which then entered into a contract with the company. This contract included an arbitration provision requiring disputes to be arbitrated. Abdisalam signed the contract as the owner of his corporation, not in his individual capacity. After several years of providing courier services, Abdisalam alleged that the company misclassified him and others as independent contractors and failed to pay them proper wages, in violation of Massachusetts law. He filed a lawsuit on behalf of himself and a proposed class of couriers seeking remedies under Massachusetts statutes. The company removed the case to the United States District Court for the District of Massachusetts and filed a motion to compel arbitration based on the arbitration provision in its contract with Abdul Courier, LLC. The district court denied the motion, finding that Abdisalam, having signed only as the owner of the LLC and not in his personal capacity, was not bound by the contract’s arbitration clause. The court also rejected the company’s arguments that Abdisalam should be compelled to arbitrate under theories of direct benefits estoppel, intertwined claims estoppel, or as a successor in interest. The United States Court of Appeals for the First Circuit affirmed the district court’s order. The First Circuit held that, under Massachusetts law, it was for the court—not an arbitrator—to decide whether Abdisalam was bound by the arbitration agreement. The court further held that Abdisalam, as a nonsignatory to the agreement in his personal capacity, was not bound by its arbitration provision, and none of the equitable estoppel or successor theories advanced by the defendant provided a basis to compel arbitration. View "Abdisalam v. Strategic Delivery Solutions, LLC" on Justia Law

Ex parte Smith

2026-03-06T06:30:59-08:00

Brian Smith, through several companies he formed, was engaged in purchasing and developing property around Lake Martin. In March 2025, Smith and his companies initiated arbitration proceedings with the American Arbitration Association, asserting claims such as fraud and breach of contract against various individuals and entities involved in the land transactions. These respondents, who were involved in the transactions as real estate agents, agencies, a closing agency, and a consultant, had not signed the contracts containing the arbitration provisions at issue. In response, the individuals and entities named in the arbitration, now plaintiffs, filed a declaratory-judgment action in the Tallapoosa Circuit Court. They sought a judgment declaring there was no valid and enforceable agreement requiring them to arbitrate disputes with Smith and his companies and requested a stay of the arbitration. The defendants moved to compel arbitration based on provisions in the relevant land-sale contracts, arguing that even as nonsignatories, the plaintiffs were bound by the arbitration clauses due to equitable estoppel or because they were third-party beneficiaries. The defendants further contended that the question of arbitrability—whether the claims against the plaintiffs should be arbitrated—was itself a matter for the arbitrator, not the court, to decide. The circuit court disagreed, stayed the arbitration, and decided it would determine whether a valid arbitration agreement existed. The Supreme Court of Alabama reviewed the matter and held that, under its precedent, when an arbitration provision contains a delegation clause or incorporates the AAA rules, the question of whether claims against nonsignatories are subject to arbitration must be decided by the arbitrator. The Court concluded the circuit court erred in staying the arbitration and in failing to compel arbitration. The Court reversed the circuit court’s order and remanded the case for entry of an order compelling arbitration. The petition for writ of mandamus was dismissed as moot. View "Ex parte Smith" on Justia Law

VEGAS AQUA, LLC VS. JUPITOR CORP.

2026-03-05T11:08:41-08:00

A business agreement was made in early 2020 for the rental of a yacht for an event. The agreement involved a payment of $18,280, which was to cover a deposit and a down payment toward the rental fee. The event was canceled due to the COVID-19 pandemic, and the party that made the payment requested a refund. The yacht provider did not return the funds. The party seeking the refund sued under several theories, including unjust enrichment and breach of contract. After mandatory arbitration resulted in an award for the plaintiff, the defendant requested a trial de novo, and the matter proceeded under Nevada’s Short Trial Program. A short trial judge rendered a proposed judgment in favor of the plaintiff. The defendant objected to this proposed judgment, but the short trial judge, after consulting with the Alternative Dispute Resolution Office, ruled on the objection and later denied the defendant’s NRCP 59 motion to alter or amend the judgment, or for a new trial. The district court then entered judgment in favor of the plaintiff, apparently approving the short trial judge’s proposed judgment. On appeal, the Supreme Court of Nevada considered whether a short trial judge has authority to adjudicate objections to a proposed judgment and post-judgment NRCP 59 motions. The court held that under the plain language of NSTR 3(d), only the district court—not a short trial judge—may review and adjudicate objections to proposed judgments and NRCP 59 motions. The court found that the short trial judge exceeded her authority by ruling on these matters. The Supreme Court of Nevada vacated the district court’s judgment and the short trial judge’s post-judgment orders, remanding the case to the district court for further proceedings consistent with its opinion. View "VEGAS AQUA, LLC VS. JUPITOR CORP." on Justia Law

Perruzzi v. The Campbell's Company

2026-03-04T12:30:06-08:00

Two individuals each owned companies that distributed snack foods for a larger food company. Years earlier, they had joined a class action lawsuit claiming that the company misclassified them as independent contractors rather than employees. That class action ended in a settlement, which included an optional provision: class members could agree to arbitrate future disputes in exchange for an additional payment. Both individuals opted into that provision and accepted the payment, thereby agreeing to resolve future disputes through arbitration. Several years later, the two individuals brought a new lawsuit in the United States District Court for the District of Massachusetts, again asserting claims related to alleged misclassification and seeking damages. The defendant company moved to stay the case and compel arbitration under the Federal Arbitration Act (FAA), citing the prior agreement. The plaintiffs opposed, arguing that they were exempt from the FAA as transportation workers under Section 1. The district court rejected that exemption argument, but did not order arbitration. Instead, it stayed and administratively closed the case without entering judgment, stating it was not compelling arbitration but was closing its doors to further proceedings. The United States Court of Appeals for the First Circuit reviewed the district court’s handling. The court held that, although the district court did not expressly deny the motion to compel arbitration, its actions amounted to a denial, and thus appellate jurisdiction existed under 9 U.S.C. § 16(a)(1)(B). The First Circuit vacated the district court’s order and remanded the case for further proceedings, directing the district court to determine whether the motion to compel arbitration should be granted or denied and to explain its reasoning. The court also clarified that, under the parties’ agreement, any compelled arbitration must proceed on an individual, not class, basis. View "Perruzzi v. The Campbell's Company" on Justia Law

Bouvet v. Illinois Union Insurance Company

2026-03-04T12:00:41-08:00

This case arises from multi-district litigation involving claims that certain aqueous film-forming foam products caused injuries, and that Illinois Union Insurance Company issued excess liability policies to BASF Corporation, which allegedly designed and sold components of those products. Plaintiffs, who originally filed their cases in Wisconsin state court, assert that Illinois Union is directly liable under Wisconsin law for BASF’s conduct. After removal to federal court, the cases were consolidated for pretrial proceedings in the United States District Court for the District of South Carolina under the multi-district litigation statute. The District Court for the District of South Carolina, managing the consolidated proceedings, had entered case management orders requiring motions either to be signed by lead counsel or, if not, to be preceded by a motion for leave of court. Illinois Union sought leave to file a motion to stay the proceedings against it pending arbitration, contending that its insurance policies required arbitration of the dispute. The district court denied Illinois Union’s motion for leave, first citing a failure to consult with lead counsel as required, but then acknowledging that consultation had ultimately occurred. The decisive reason for denial was that lead counsel did not consent to Illinois Union’s motion, and the district court ruled that, absent such consent, the motion could not be filed. The United States Court of Appeals for the Fourth Circuit reviewed the district court’s order. It held that, while district courts have broad discretion to manage multi-district litigation, they may not exercise this authority in a way that prevents a party from asserting its statutory right under the Federal Arbitration Act to seek a stay of litigation pending arbitration. Because the district court’s order effectively barred Illinois Union from filing its stay motion based on lack of lead counsel’s consent, the Fourth Circuit vacated the district court’s order and remanded for further proceedings. View "Bouvet v. Illinois Union Insurance Company" on Justia Law

Sorokunov v. NetApp, Inc.

2026-03-03T12:31:39-08:00

A former employee brought suit against his prior employer, alleging that the employer’s compensation plan for commissions violated several provisions of the California Labor Code. The employee claimed that the employer’s use of a “windfall” provision, which limited commission payments when revenue goals were substantially exceeded, resulted in retroactive reductions to earned commissions. The employer invoked this provision after the employee and others exceeded their sales goals, causing the employee’s final commission payment to be lower than anticipated. The employee resigned and later sought civil penalties under the Private Attorneys General Act (PAGA), as well as damages for alleged unpaid wages and other Labor Code violations. The Superior Court of Alameda County compelled arbitration of the employee’s individual claims but allowed the PAGA claims to proceed in court. During arbitration, the arbitrator found in favor of the employer on all individual claims, concluding that the compensation plan’s “windfall” provision did not violate the Labor Code sections at issue. The arbitrator determined that the commissions in question were not subject to the statutory requirements argued by the employee, and that the plan did not involve unlawful wage recapture or secret underpayment. The trial court confirmed the arbitration award, denied the employee’s motion for summary adjudication on the PAGA claim, and subsequently granted the employer’s motion for judgment on the pleadings, finding that the arbitration resolved the issue of whether the employee was an “aggrieved employee” with standing under PAGA. The California Court of Appeal, First Appellate District, Division Four, affirmed the lower court’s judgment. The court held that the arbitration agreement was not illusory, that the arbitrator’s findings precluded the employee from maintaining PAGA standing, and that the employer’s commission plan did not violate the cited Labor Code provisions. The judgment in favor of the employer was affirmed. View "Sorokunov v. NetApp, Inc." on Justia Law

Garofalo v. Di Vincenzo

2026-02-26T06:40:25-08:00

A financial advisor sold her company to a buyer, with a portion of the purchase price to be paid up front and the remainder in quarterly installments. When the buyer failed to make the scheduled payments, the seller initiated arbitration through the Financial Industry Regulatory Authority (FINRA), as required by their agreement. The arbitration panel found the buyer in default and awarded damages to the seller. The buyer then sought to vacate the arbitration award in the Circuit Court for the City of Richmond, arguing that one of the arbitrators had “evident partiality” due to undisclosed past connections with the seller and her company. The circuit court reviewed the motion to vacate and applied the “evident partiality” standard as interpreted by the Fourth Circuit in ANR Coal Co., Inc. v. Cogentrix of N.C., Inc., and denied the motion, finding no clear evidence of bias. The buyer appealed to the Court of Appeals of Virginia, which affirmed the circuit court’s decision. The appellate court concluded that the arbitrator’s prior connections with the seller and her company were too remote and insubstantial to suggest partiality, and that the undisclosed interactions did not create an appearance of bias that would require vacatur of the award. The Supreme Court of Virginia reviewed the case to clarify the standard for “evident partiality” under the Virginia Uniform Arbitration Act. The court held that, to vacate an arbitration award for evident partiality, a party must objectively show that a reasonable person, knowing all relevant facts, would perceive the arbitrator’s conduct as obvious bias against that party. Applying this standard, the Supreme Court of Virginia found that the arbitrator’s remote and inconsequential past connections did not meet this threshold. The court affirmed the judgment of the Court of Appeals and remanded for further proceedings regarding attorney fees. View "Garofalo v. Di Vincenzo" on Justia Law

Bruce v. Adams & Reese, LLP

2026-02-25T13:00:59-08:00

The plaintiff was employed as a legal assistant and later a paralegal in a law firm’s Liquor Group, initially at one firm and then at another firm, Adams and Reese, LLP, after her group switched employers. She alleged that a supervisor, who moved with the group, persistently directed sexualized comments and jokes at her in the workplace, which included derogatory remarks, inappropriate suggestions, and comments about her appearance and personal life. She also claimed that after her employer changed her work schedule, she experienced difficulties related to her disabilities and was subsequently terminated when she was unable to comply with the new attendance requirements. She brought claims of sexual harassment and violations of the Americans with Disabilities Act (ADA). The United States District Court for the Middle District of Tennessee reviewed the employer’s motions to dismiss the sexual harassment claim and to compel arbitration of the ADA claims, based on an arbitration agreement between the parties. The district court denied both motions, holding that the plaintiff sufficiently stated a plausible sexual harassment claim under applicable standards and that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) barred enforcement of the arbitration agreement as to her entire case, not just the sexual harassment claim. On appeal, the United States Court of Appeals for the Sixth Circuit affirmed the district court’s decision. The court held that the plaintiff’s complaint plausibly alleged pervasive sexual harassment sufficient to survive a motion to dismiss. It further determined that the EFAA renders predispute arbitration agreements unenforceable with respect to an entire “case” relating to a sexual harassment dispute, not just the specific sexual harassment claim. Therefore, the arbitration agreement could not be enforced as to any of the plaintiff’s claims in this action. The disposition was to affirm and remand for further proceedings. View "Bruce v. Adams & Reese, LLP" on Justia Law

Bluebird v. World Business Lenders

2026-02-24T16:05:05-08:00

A Montana limited liability company and its sole member obtained a $450,000 loan secured by real property from a lender affiliated with New York-based entities. The loan documents included a promissory note, guaranty, and deed of trust, all referencing the lender as Axos Bank, though the servicing and assignment of the loan eventually resided with the lender’s subsidiaries. The loan imposed a high annual interest rate, and after the company defaulted, the property was sold. The borrower alleges it paid more than twice the loan amount and asserts that the lender’s arrangement with Axos Bank was a scheme to avoid Montana’s usury laws. The borrowers sued in the Montana Eighteenth Judicial District Court, seeking, among other relief, a declaration that the lender—not Axos Bank—was the true lender and subject to Montana usury law. The lender moved to dismiss and compel arbitration under the arbitration provisions in the loan documents. The District Court considered extrinsic evidence, including the borrower’s declaration, and found that the arbitration provisions conflicted with bold, capitalized jury trial waiver language, resulting in ambiguity. The District Court determined that the borrower had not knowingly, voluntarily, and intelligently waived its constitutional right of access to the courts, denied the motion to compel arbitration, and the lender appealed. The Supreme Court of the State of Montana reviewed the District Court’s denial of the motion to compel arbitration de novo. The Supreme Court affirmed, holding that the loan documents were ambiguous due to conflicting provisions regarding dispute resolution, and that such ambiguity prevented the borrower from giving the required knowing, voluntary, and intelligent consent to arbitrate and waive constitutional rights. As a result, the arbitration provisions were held unenforceable, and the District Court’s denial of the motion to compel arbitration was affirmed. View "Bluebird v. World Business Lenders" on Justia Law

Manhattan Nursing and Rehabilitation Center, LLC v. Hawkins

2026-02-20T02:16:04-08:00

A man was admitted to a long-term healthcare facility by his wife, who signed all required admission documents, including an arbitration agreement. The arbitration agreement stated that all disputes related to the facility’s care would be resolved by binding arbitration, but it was not a condition of admission or continued care. After the man’s death, his wife, individually and on behalf of his wrongful death beneficiaries, sued the facility and two nurses, alleging improper care and treatment resulting in his death. The defendants moved to compel arbitration, contending there was a valid agreement and that the wife had the authority to enter into it as her husband’s healthcare surrogate, since he allegedly lacked capacity at admission. The wife countered that there had been no proper determination of her husband’s incapacity at the time of admission and, regardless, that signing an arbitration agreement was not a healthcare decision. The Hinds County Circuit Court denied the motion to compel arbitration, relying on precedent holding that a healthcare surrogate’s authority is limited to healthcare decisions, and that an arbitration agreement is not a healthcare decision unless it is an essential part of receiving care. The court found that, since arbitration was not a condition of admission or care, the wife lacked authority to bind her husband. On appeal, the Supreme Court of Mississippi reviewed the denial de novo. The Court reaffirmed that under Mississippi law, a surrogate’s authority extends only to healthcare decisions, and an arbitration agreement is only such a decision if required for admission or care. Because the arbitration agreement in this case was not a condition of admission or care, the wife lacked authority to execute it. The Supreme Court of Mississippi affirmed the trial court’s denial of the motion to compel arbitration and to stay proceedings, holding the arbitration agreement invalid and unenforceable. View "Manhattan Nursing and Rehabilitation Center, LLC v. Hawkins" on Justia Law

Christianson v. Grand Forks Public School District

2026-02-19T12:06:19-08:00

David Christianson was employed during the 2023-24 school year as a teacher at Grand Forks Red River High School, holding both a standard teaching contract and two additional “director contracts” for Pep Band Director and Music-Instrumental Head Director. After two pranks occurred under his supervision at graduation events, Christianson was reassigned to a different school and his director contracts were not renewed. He pursued a grievance with the School District, culminating in a formal hearing and a School Board denial of his appeal. The School Board subsequently issued a written decision two days after the contractual deadline, prompting Christianson to formally object. The case was reviewed by the District Court of Grand Forks County, Northeast Central Judicial District. Both parties moved for summary judgment. The School District argued Christianson was required to arbitrate his grievance before pursuing litigation, while Christianson claimed the School District failed to follow mandatory nonrenewal procedures. The district court found that the School District had waived its right to enforce arbitration by not complying with contractual notice requirements and determined that Christianson’s director contracts were extracurricular, not curricular. Therefore, statutory nonrenewal procedures did not apply. Summary judgment was granted in favor of the School District. Upon appeal, the Supreme Court of the State of North Dakota reviewed the case de novo. The Court affirmed the district court’s judgment, holding that the School District’s failure to timely provide written notice constituted a waiver of its right to require arbitration. The Court further held that Christianson’s director contracts were extracurricular and not subject to teacher contract nonrenewal protections under North Dakota law. The judgment of the district court was affirmed. View "Christianson v. Grand Forks Public School District" on Justia Law

Eastern Steel v. Int Fidelity Ins. Co.

2026-02-18T07:10:03-08:00

A steel subcontractor was hired to perform work for a university construction project and entered into a subcontract with the general contractor. The general contractor began defaulting on payments, prompting the subcontractor to notify the surety insurance company, which had issued a payment bond guaranteeing payment for labor, materials, and equipment. The surety made partial payment but disputed the remaining amount. The subcontractor then demanded arbitration against the contractor, with the surety notified and invited to participate. The contractor filed for bankruptcy and did not defend in arbitration, nor did the surety participate. The arbitrator awarded the subcontractor damages, including attorneys’ fees and interest, and the award was confirmed in court. The subcontractor sought to enforce the arbitration award against the surety, including attorneys’ fees and prejudgment interest, and also brought a bad faith claim under Pennsylvania’s insurance statute. The Centre County Court of Common Pleas initially excluded evidence of the arbitration award against the surety at trial and ruled the surety was not liable for attorneys’ fees or bad faith damages. A jury found for the subcontractor on the underlying debt, and the court awarded prejudgment interest at the statutory rate. Both parties appealed. The Superior Court held the arbitration award was binding and conclusive against the surety, who had notice and opportunity to participate, and affirmed liability for attorneys’ fees related to pursuing the contractor in arbitration. The court rejected the bad faith claim, holding the statute did not apply to surety bonds, and confirmed the statutory interest rate. On appeal, the Supreme Court of Pennsylvania affirmed in all respects. It held that Pennsylvania’s insurance bad faith statute does not apply to surety bonds, based on statutory language. The court also held that the surety is bound by the arbitration award against its principal, and is liable for attorneys’ fees incurred in arbitration and prejudgment interest at the statutory rate. View "Eastern Steel v. Int Fidelity Ins. Co." on Justia Law

Stabil LLC v. Russian Federation

2026-02-13T08:04:09-08:00

In 2014, Russia invaded and subsequently asserted control over Crimea, an area internationally recognized as part of Ukraine. Ukrainian businesses operating in Crimea—including an electricity distributor and a group of petrol station owners—had their assets seized and operations transferred to Russian-controlled entities without compensation. These businesses, having made investments under Ukrainian law and while the 1998 Agreement Between the Government of the Russian Federation and the Cabinet of Ministers of Ukraine on the Encouragement and Mutual Protection of Investments (“Investment Treaty”) was in effect, pursued arbitration against Russia for expropriation and treaty violations. The Ukrainian companies initiated separate arbitrations under the Investment Treaty’s arbitration clause. The arbitral tribunals found Russia liable for breaches and awarded significant damages to the companies. Russia challenged the arbitral jurisdiction and the awards in foreign courts, but those efforts were unsuccessful. The companies then filed petitions in the United States District Court for the District of Columbia to enforce the awards under the New York Convention and the Federal Arbitration Act. Russia moved to dismiss, arguing the courts lacked subject-matter and personal jurisdiction under the Foreign Sovereign Immunities Act (FSIA). The District Court rejected Russia’s arguments, finding jurisdiction appropriate under the FSIA’s arbitration exception and personal jurisdiction proper upon valid service. On appeal, the United States Court of Appeals for the District of Columbia Circuit reviewed whether the District Court correctly exercised jurisdiction. The appellate court held that the FSIA’s arbitration exception applied because the companies established the existence of an arbitration agreement, a qualifying arbitral award, and a treaty potentially governing enforcement. The court further held that foreign states are not entitled to the Fifth Amendment’s due process protections against personal jurisdiction. The judgments of the District Court were affirmed. View "Stabil LLC v. Russian Federation" on Justia Law

Jim Rose v Mercedes-Benz USA, LLC

2026-02-13T07:30:43-08:00

Two individuals each purchased a Mercedes-Benz vehicle that included a subscription-based system called “mbrace,” which provided various features through a 3G wireless network. When newer cellular technology rendered the 3G-dependent system obsolete, both customers asked their dealerships to replace the outdated system at no charge, but their requests were denied. Subsequently, they filed a class action lawsuit against Mercedes-Benz USA, LLC and Mercedes-Benz Group AG, asserting claims including breach of warranty under federal and state law. The United States District Court for the Northern District of Illinois, Eastern Division, considered Mercedes’s motion to compel arbitration pursuant to the Federal Arbitration Act, based on the arbitration provision within the mbrace Terms of Service. The district court found in favor of Mercedes, concluding that the plaintiffs were bound by an agreement to arbitrate their claims. Since neither party requested a stay, the court dismissed the case without prejudice. The plaintiffs appealed, arguing that they had not agreed to arbitrate. The United States Court of Appeals for the Seventh Circuit reviewed the district court’s factual findings for clear error and legal conclusions de novo. Applying Illinois contract law, the appellate court determined that Mercedes had provided sufficient notice of the arbitration agreement to the plaintiffs through the subscription activation process and follow-up communications. The court found that Mercedes established a rebuttable presumption of notice, which the plaintiffs failed to overcome, as they only stated they did not recall receiving such notice, rather than expressly denying it. The Seventh Circuit held that the plaintiffs had assented to the agreement by subscribing to the service and thus were bound by the arbitration provision. The judgment of the district court was affirmed. View "Jim Rose v Mercedes-Benz USA, LLC" on Justia Law

Fortis Advisors LLC vs. Stillfront Midco AB

2026-02-13T07:01:30-08:00

A dispute arose following the acquisition of an online video game company, where the buyer agreed to pay a base purchase price with the possibility of an additional earnout payment if certain financial targets were met. The merger agreement included a provision requiring disputes over the calculation of this earnout to be resolved by a mutually agreed-upon accounting firm acting as an arbitrator. After closing, the seller representative alleged that the buyer acted in bad faith to reduce the earnout, failed to provide required information and access, and breached both express and implied contractual obligations. The buyer responded by invoking the alternative dispute resolution (ADR) clause and moved to compel arbitration. The Court of Chancery of the State of Delaware granted the buyer’s motion, finding that the seller’s claims—including those alleging bad-faith conduct and denial of information access—were fundamentally disputes over the earnout calculation and thus fell within the scope of the ADR provision. The court held that questions about information access and related procedural matters were for the arbitrator to decide. The seller’s complaint was dismissed with prejudice, and the dispute proceeded to arbitration, where the arbitrator ruled in favor of the buyer. The Court of Chancery later confirmed the arbitrator’s award, rejecting the seller’s arguments regarding undisclosed conflicts of interest. The Supreme Court of the State of Delaware reviewed the case. It affirmed the Court of Chancery’s judgment, holding that the bad-faith breach claims and the information-access claim were properly subject to arbitration under the agreement. The court found no error in the lower court’s refusal to vacate the arbitration award, concluding that the seller failed to demonstrate an undisclosed relationship that would indicate evident partiality. The Court of Chancery’s decisions to compel arbitration and to confirm the award were affirmed. View "Fortis Advisors LLC vs. Stillfront Midco AB" on Justia Law

Reardon v. American Airlines

2026-02-11T16:30:30-08:00

An airline employee, who began working in 1996 and served as a union representative, was terminated in 2023 after allegedly violating both company policy and the terms of a Last Chance Agreement (LCA) he had previously entered into. The LCA was signed following an earlier incident in which he admitted to theft, and it stipulated that any further violation of company policy during its term would result in immediate termination. In October 2023, the employee entered a restricted area in violation of company policy, leading to his discharge. Following his termination, the employee filed a lawsuit in the United States District Court for the Northern District of Texas, alleging retaliatory termination under the Railway Labor Act (RLA) and asserting that his termination was motivated by anti-union animus due to his activities as a union representative. The airline moved to dismiss the complaint, arguing that the dispute was a “minor” one under the RLA, which meant it was subject to mandatory arbitration as outlined in the collective bargaining agreement (CBA), thus depriving the federal court of subject-matter jurisdiction. The district court agreed and granted the airline’s motion to dismiss under Rule 12(b)(1), finding that the dispute was minor and did not fall within any exceptions allowing for judicial intervention. On appeal, the United States Court of Appeals for the Fifth Circuit reviewed whether the district court properly dismissed the case for lack of subject-matter jurisdiction. The Fifth Circuit affirmed the district court’s decision, holding that the dispute was a minor one under the RLA because it could be resolved by interpreting the LCA and CBA, and that none of the exceptions to exclusive arbitral jurisdiction applied. The court also found no sufficient evidence of anti-union animus to invoke an exception to arbitral exclusivity. View "Reardon v. American Airlines" on Justia Law

Parrott v. International Bank

2026-02-10T10:30:53-08:00

A former employee of a bank holding company, who participated in a company-sponsored retirement savings plan, brought suit alleging that the bank, the plan’s administrative committee, and a subsidiary breached their fiduciary duties under ERISA, resulting in financial loss to his plan distribution. After the employee’s separation and payout, the company amended the plan in early 2024 to add a retroactive arbitration clause that required all claims to proceed individually in arbitration, barred class or representative actions, and included a jury trial waiver and a provision that only individual relief could be awarded. The United States District Court for the Western District of Texas denied the defendants’ motion to compel arbitration, holding that the arbitration agreement was not valid under Texas law due to lack of consideration. The company appealed, arguing that the plan’s consent, not the individual participant’s, was sufficient to bind parties to arbitration for claims brought on behalf of the plan under 29 U.S.C. § 1132(a)(2), and that the arbitration clause was enforceable. The company also preemptively addressed potential objections under the effective vindication doctrine and claims that the arbitration provisions unlawfully limited statutory remedies. The United States Court of Appeals for the Fifth Circuit reversed the denial of arbitration as to the § 1132(a)(2) claim, holding that the plan’s consent through its unilateral amendment provision was sufficient to bind the participant to arbitration for plan-based claims, but affirmed the denial as to the participant’s individual claims because he had not consented. The court further held that the arbitration clause’s prohibition on representative actions and its limitation to individual relief violated the effective vindication doctrine, and voided the standard-of-review provision to the extent it applied to fiduciary-breach claims. The case was remanded for the district court to determine whether the offending arbitration provisions could be severed. View "Parrott v. International Bank" on Justia Law

Khalsa v. Ridnour

2026-02-09T12:19:35-08:00

The dispute centers on two neighboring property owners at Priest Lake, Idaho, whose properties are subject to several easements, and who have a history of disagreements concerning the use of a shared beach, lake access, and parking. The parties previously reached a court-mediated settlement agreement addressing these issues, which included a provision for future mediation and arbitration of disputes. Disagreements soon arose, particularly over the construction of a patio by one owner, leading the parties to arbitration as provided by their agreement. The arbitrator, after considering substantial evidence and briefing, ruled in favor of one party on all contested issues, including the patio’s location and construction, the use of easements, and parking arrangements. Prior to this appeal, the District Court of the First Judicial District, Bonner County, reviewed a motion to vacate the arbitration award. The moving party argued that the arbitrator exceeded his authority and was biased, primarily because the award was unfavorable and allegedly altered the terms of the court-approved settlement agreement. After considering the arguments, the district court denied the motion, finding that the arbitrator had acted within the scope of his authority and that no evidence of bias was presented. Upon review, the Supreme Court of the State of Idaho affirmed the district court’s decision. The court held that under Idaho’s Uniform Arbitration Act, judicial review of arbitration awards is extremely limited and does not allow for overturning an award simply due to alleged errors in law or fact, or because the outcome was unfavorable. The court found no evidence that the arbitrator exceeded his authority or acted with bias. Additionally, the court awarded attorney fees on appeal to the prevailing party under Idaho Code section 12-121, concluding the appeal was frivolous and without foundation. The district court’s denial of the motion to vacate was affirmed. View "Khalsa v. Ridnour" on Justia Law

Center for Excellence v. Accreditation Alliance

2026-02-06T09:01:32-08:00

The case centers around an accrediting agency’s decision to withdraw accreditation from an online university operated by a nonprofit educational organization. After years of below-benchmark graduation and employment rates, probation, and repeated warnings, the accrediting agency concluded the university was not compliant with its accreditation standards. The university responded by investing in improvement initiatives and shifting enrollment to a single online institution, but continued to struggle with student achievement. When accreditation was finally withdrawn, the university appealed internally and subsequently sought binding arbitration, arguing that the agency’s process was unfair, especially in its refusal to consider evidence about probationary treatment of other schools. Following arbitration, the arbitrator affirmed the agency’s decision, finding substantial evidence to support the withdrawal and concluding that the excluded evidence regarding other schools was irrelevant. The university then filed a motion to vacate the arbitration award and a complaint in the United States District Court for the Eastern District of Virginia, asserting due process violations and tortious interference. The district court denied the motion to vacate and granted judgment on the pleadings for the accrediting agency, holding that the university’s claims amounted to an impermissible collateral attack on the arbitration award, barred by the exclusivity provisions of the Federal Arbitration Act. On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the district court’s rulings de novo. It affirmed both the denial of the motion to vacate and the grant of judgment on the pleadings. The Fourth Circuit held that the arbitration process did not deprive the university of a fair hearing and that the university’s complaint constituted an impermissible collateral attack on the arbitration award. The court formally adopted the impermissible-collateral-attack rule, concluding that such claims must be dismissed and the district court’s judgment was affirmed. View "Center for Excellence v. Accreditation Alliance" on Justia Law

Lanesborough 2000, LLC v. Nextres, LLC

2026-02-06T09:00:22-08:00

Lanesborough 2000, LLC and Nextres, LLC entered into a loan agreement for the funding of a self-storage facility in Corning, New York. The deal included an arbitration agreement that required disputes to be resolved by binding arbitration. Lanesborough alleged that Nextres breached the agreement by failing to disburse loan funds as promised. An arbitrator found in favor of Lanesborough, awarding consequential damages, declaratory and injunctive relief, and attorney’s fees based on Nextres’s bad faith conduct. The arbitration agreement contained a waiver of the “right to appeal,” but did not specify its scope. The United States District Court for the Southern District of New York partially confirmed the arbitrator’s awards. It confirmed the awards of consequential damages, declaratory relief, and attorney’s fees, finding that the fee award was permissible because it was based on a finding of bad faith. The District Court also granted Lanesborough’s requests for injunctive relief by ordering Nextres to comply with the loan agreement and enjoining Nextres from pursuing foreclosure actions, including a pending state court foreclosure against a related party. The District Court awarded Lanesborough post-award prejudgment interest and stayed enforcement of its judgment pending appeal. On appeal, the United States Court of Appeals for the Second Circuit first held that the parties’ contractual waiver of the “right to appeal” was ambiguous and not sufficiently clear or unequivocal to preclude appellate review. On the merits, the Second Circuit affirmed the district court’s confirmation of the arbitrator’s awards and its grant of post-award prejudgment interest. However, it vacated the district court’s injunction barring the state-court foreclosure action because the lower court had not considered whether the injunction was consistent with the Anti-Injunction Act. The case was remanded for further proceedings on that issue. View "Lanesborough 2000, LLC v. Nextres, LLC" on Justia Law

Bedi v Premium Healthcare Solutions LLC

2026-02-03T12:09:38-08:00

Premium Healthcare Solutions, LLC, an Illinois company, had two competing judgment creditors: Vivek Bedi and MedLegal Solutions, Inc. Bedi obtained a state court judgment against “Premier Healthcare Solutions, LLC” in 2022, which was a misnomer for Premium. His lien on Premium’s assets was thus not discoverable to other creditors. MedLegal, a medical billing company, later secured an arbitration award and a federal court judgment against Premium in 2024 after discovering Premium had breached their contract. Both Bedi and MedLegal initiated collection efforts targeting Premium’s assets, particularly its accounts receivable managed by third parties. After Bedi discovered the misnomer in his judgment, he obtained a corrective order in Illinois state court in September 2024, amending his judgment nunc pro tunc to name Premium as the debtor and making the correction effective as of the original judgment date. Concerned that Bedi’s corrected judgment might threaten its priority, MedLegal sought a federal court order establishing its claim as superior. In the United States District Court for the Northern District of Illinois, Bedi intervened but focused his opposition on jurisdictional grounds, invoking the Rooker-Feldman doctrine. The district court rejected this argument and granted MedLegal’s motion for partial summary judgment, ruling MedLegal’s interest as superior. The court subsequently issued a turnover order requiring certain third parties to transfer Premium’s assets to MedLegal. On appeal, the United States Court of Appeals for the Seventh Circuit held that appellate jurisdiction was proper because the February 11, 2025, turnover order was a final decision. The Seventh Circuit also found that Rooker-Feldman did not bar the district court’s jurisdiction, as MedLegal was not a party to the prior state court action. Finally, because Bedi failed to raise any substantive arguments on priority in the district court, the Seventh Circuit affirmed the district court’s turnover order in favor of MedLegal. View "Bedi v Premium Healthcare Solutions LLC" on Justia Law

Fuentes v. Empire Nissan

2026-02-02T10:01:33-08:00

A prospective employee, Fuentes, applied for work at Empire Nissan and signed an “Applicant Statement and Agreement” that included a mandatory arbitration provision. The document was printed in an extremely small, blurry font that was nearly unreadable and contained a lengthy, complex paragraph filled with legal jargon and statutory references. Fuentes was given only five minutes to review the entire employment packet, was not offered an opportunity to ask questions, and did not receive a copy. Later, she signed two confidentiality agreements that appeared to allow Empire Nissan to seek judicial remedies, not mentioning arbitration. After working at Empire Nissan for over two years, Fuentes was terminated following a request for extended medical leave and subsequently sued the company for wrongful discharge and related claims. Empire Nissan moved to compel arbitration. The Los Angeles County Superior Court denied the motion, finding the arbitration agreement unconscionable due to its illegibility, complexity, and the lack of a meaningful opportunity for review or negotiation, establishing a high degree of procedural unconscionability and a low to moderate degree of substantive unconscionability. The court also found that the confidentiality agreements appeared to carve out certain claims from arbitration for Empire Nissan. The Second District Court of Appeal reversed, holding that “tiny and unreadable print” concerns procedural unconscionability only—not substantive—and, interpreting the agreements as requiring arbitration, found no substantive unconscionability and declined to address procedural unconscionability. The Supreme Court of California reviewed the case and held that a contract’s format, such as illegibility, is generally irrelevant to substantive unconscionability, which concerns the fairness of the contract’s terms. However, courts must more closely scrutinize the terms of contracts that are difficult to read for unfairness or one-sidedness when there is high procedural unconscionability. The Court reversed the Court of Appeal’s judgment and remanded the matter to the trial court for further proceedings consistent with its clarified standards. View "Fuentes v. Empire Nissan" on Justia Law

Koponen v. Romanov

2026-02-01T09:03:53-08:00

The dispute centers on an attorney’s contingency fee agreement concerning legal representation for heirs of an Alaska Native allotment. After the attorney successfully represented the heirs in a federal lawsuit against the government for mismanagement of oil and gas leases, a fee dispute arose. The attorney sued one heir in federal court, claiming unpaid fees under the agreement. That heir moved to compel arbitration of the fee dispute pursuant to Alaska Bar Rules, and the federal court stayed the litigation pending arbitration. An Alaska Bar Association arbitration panel was convened. Bar Counsel advised the panel to limit its review to whether the amount of the attorney’s fee was reasonable, excluding issues of enforceability of the agreement, such as claims of duress or illegality under federal Indian law. The panel accepted this narrowed scope and ultimately found the attorney’s fee reasonable, declining to address other challenges. The panel also chose not to refer any ethical concerns to Bar Counsel for disciplinary review. The heir petitioned the Alaska Superior Court (Second Judicial District, Utqiaġvik) to vacate the arbitration award, arguing the panel exceeded its authority, was not impartial, and that the fee agreement was unenforceable. The superior court confirmed the arbitration panel’s decision, finding the panel’s scope limitation a reasonably possible interpretation of its authority under the Bar Rules. The court also awarded the attorney enhanced attorney’s fees for costs incurred in the post-arbitration proceedings, citing Alaska Civil Rule 82. The Supreme Court of the State of Alaska reviewed the case and affirmed the superior court’s decision. The court held that a fee arbitration panel’s decision to narrow its review to the reasonableness of a fee is proper if it is a reasonably possible interpretation of the panel’s authority. Additionally, it held that attorney’s fees may be awarded under Civil Rule 82 for post-arbitration proceedings governed by the Revised Uniform Arbitration Act. View "Koponen v. Romanov" on Justia Law

Maccarone v. Siemens Industry, Inc.

2026-01-29T14:30:03-08:00

The plaintiff brought claims against her former employer alleging violations of federal and state wage and hour laws. After removal to the United States District Court for the District of Rhode Island, some claims were resolved at summary judgment, leaving the federal wage claims for trial. Before trial, the parties participated in a court-ordered mediation before a magistrate judge, during which they reached an oral settlement agreement whose terms were recited on the record. The agreement included payment to the plaintiff, confidentiality, non-defamation, and no-rehire clauses, as well as dismissal of the action with prejudice. Both parties, including the plaintiff and her counsel, confirmed their assent to the agreement. Following the mediation, the defendant prepared written settlement documents and a stipulation of dismissal. However, the plaintiff refused to sign, asserting she felt pressured and that certain terms were ambiguous or not sufficiently definite. The district court reviewed these objections after the defendant moved to enforce the settlement. The court found the agreement enforceable, denied the plaintiff’s request for an evidentiary hearing on alleged undue influence due to lack of factual support, and ordered her to execute the documents. After the plaintiff failed to comply, the court ultimately dismissed the case with prejudice under Federal Rule of Civil Procedure 41(b). On appeal, the United States Court of Appeals for the First Circuit held that the district court did not err in enforcing the oral settlement agreement or in denying the plaintiff’s motion for reconsideration and request for an evidentiary hearing. The appellate court found no genuine dispute of material fact as to the existence or terms of the settlement and affirmed the district court’s judgment, awarding costs and attorney fees to the defendant. View "Maccarone v. Siemens Industry, Inc." on Justia Law

AVERY V. TEKSYSTEMS, INC.

2026-01-28T09:02:06-08:00

A group of former and current employees of a staffing agency alleged that the company misclassified recruiters as exempt from state overtime laws and failed to provide required meal and rest breaks. After the employees filed a putative class action in state court, which the company removed to federal court, the parties engaged in over a year of discovery and completed class certification briefing. Shortly after class certification briefing closed, the company implemented a new, mandatory arbitration agreement for internal employees, including the putative class members. This agreement required class members to either quit their jobs or affirmatively opt out of arbitration if they wished to remain in the class, effectively reversing the typical opt-out structure of class actions under Federal Rule of Civil Procedure 23. The United States District Court for the Northern District of California granted class certification and, after reviewing the company’s communications about the new arbitration agreement, found them misleading and potentially coercive. The court determined that the communications disparaged class actions, omitted key information, and confused recipients about their rights and deadlines, especially as the emails were sent during a holiday period. Consequently, when the company moved to compel arbitration against class members who had not opted out, the district court denied the motion, relying on its authority under FRCP 23(d) to ensure the fairness of class proceedings. On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s decision. The Ninth Circuit held that district courts have broad authority under FRCP 23(d) to refuse to enforce arbitration agreements when a defendant’s conduct undermines the fairness of the class action process, especially where communications are misleading and subvert the opt-out mechanism. The court also held that the arbitration agreement’s delegation provision did not prevent the district court from ruling on enforceability in this context. View "AVERY V. TEKSYSTEMS, INC." on Justia Law

Dahdah v. Rocket Mortgage, LLC

2026-01-26T14:00:13-08:00

An individual seeking to refinance his mortgage visited a website that offers mortgage information and referrals to affiliated lenders. During three separate visits, he entered personal information and clicked buttons labeled “Calculate” or “Calculate your FREE results.” Immediately below these buttons, the website displayed language in small font stating that clicking would constitute consent to the site’s Terms of Use, which included a mandatory arbitration provision and permission to be contacted by the site or affiliates. The Terms of Use were accessible via a hyperlinked phrase. After using the site, the individual was matched with a particular lender but did not pursue refinancing. Later, he received multiple unwanted calls from the lender and filed a class-action lawsuit under the Telephone Consumer Protection Act, alleging violations such as calling numbers on the Do Not Call registry. The United States District Court for the Eastern District of Michigan initially dismissed the complaint on the merits and denied the lender’s motion to compel arbitration as moot. Upon realizing the arbitration issue should have been decided first, the court reopened the case but found no enforceable agreement to arbitrate existed, denying the motion to compel arbitration. The court also denied reconsideration and allowed the plaintiff to amend his complaint. The lender appealed the denial of arbitration. The United States Court of Appeals for the Sixth Circuit reviewed the denial de novo. It held that, under California law, the website provided reasonably conspicuous notice that clicking the buttons would signify assent to the Terms of Use, including arbitration. The court found that the plaintiff’s conduct objectively manifested acceptance of the offer, forming a binding arbitration agreement. The court also concluded that the agreement was not invalid due to unspecified procedural details and that questions of arbitrability were delegated to the arbitrator. The Sixth Circuit reversed the district court’s decision and remanded for further proceedings. View "Dahdah v. Rocket Mortgage, LLC" on Justia Law

Berkeley Research Group, LLC v. Southern Advanced Materials, LLC

2026-01-23T11:14:06-08:00

Berkeley Research Group, LLC and Southern Advanced Materials, LLC entered into a contract in 2019 for consulting services, which included an arbitration clause specifying that any disputes would be resolved via arbitration in Philadelphia, Pennsylvania. After Southern allegedly failed to pay for Berkeley's services, the parties participated in arbitration administered by JAMS, with the arbitrator located in Philadelphia. The arbitration was conducted via Zoom, and the arbitrator ultimately awarded Berkeley $433,815.34. Berkeley then filed a petition in the Shelby County Chancery Court in Tennessee to confirm the arbitration award. The Shelby County Chancery Court denied Southern’s motion to dismiss, finding it had jurisdiction and confirming the award. Southern appealed, and the Tennessee Court of Appeals affirmed the trial court’s subject matter jurisdiction under Tennessee Code Annotated section 29-5-323 but reversed on personal jurisdiction grounds, holding that Southern lacked sufficient contacts with Tennessee. The appellate court remanded with orders to dismiss. The Supreme Court of Tennessee granted permission to appeal and reviewed whether Tennessee courts have subject matter jurisdiction to confirm an arbitration award where the agreement specified arbitration in another state. The Court held that, under the Uniform Arbitration Act (UAA), Tennessee courts only have subject matter jurisdiction to confirm arbitration awards when the agreement provides for arbitration in Tennessee. Because the parties’ contract required arbitration to occur in Pennsylvania and did not allow for arbitration in Tennessee, the Shelby County Chancery Court lacked subject matter jurisdiction. The Supreme Court of Tennessee vacated the judgments of both lower courts and dismissed Berkeley’s petition to confirm the award. The disposition by the Supreme Court of Tennessee was to vacate and dismiss for lack of subject matter jurisdiction. View "Berkeley Research Group, LLC v. Southern Advanced Materials, LLC" on Justia Law

Oenga v. Givens

2026-01-23T10:01:06-08:00

A dispute arose from a contingency fee agreement between the heirs of an Alaska Native allotment and an attorney who helped them recover substantial compensation from the federal government for mismanagement of oil and gas leases on their land. After a settlement was reached, years later, one of the heirs was sued by the attorney in federal court for allegedly failing to make required payments under the fee agreement. The heir then invoked mandatory fee arbitration under Alaska Bar Association rules, which prompted the federal court to stay the proceedings pending the outcome of arbitration. The arbitration was conducted before an Alaska Bar Association panel, which, following guidance from Bar Counsel, limited its review to whether the amount of the attorney’s fee was reasonable, and declined to address broader challenges to the enforceability of the fee agreement, including claims of duress and illegality under federal Indian law. The panel ultimately found the fee amount reasonable. Dissatisfied, the heir petitioned the Alaska Superior Court to vacate the panel’s decision, arguing that the panel exceeded its authority by not deciding enforceability issues and raising other statutory grounds under the Revised Uniform Arbitration Act (RUAA). The Superior Court denied the petition, confirmed the arbitration award, and granted enhanced attorney’s fees to the attorney for post-arbitration litigation. On appeal, the Supreme Court of the State of Alaska affirmed the Superior Court’s confirmation of the arbitration award. The Supreme Court held that a fee arbitration panel’s decision to narrow the scope of review is subject to a “reasonably possible” standard and that the panel did not exceed its authority in this case. The court also held that awards of attorney’s fees under Alaska Civil Rule 82 are permissible in post-arbitration proceedings governed by the RUAA and found no abuse of discretion in the Superior Court’s award. View "Oenga v. Givens" on Justia Law

Tuufuli v. West Coast Dental Admin. Services

2026-01-13T15:02:47-08:00

The plaintiff was employed by the defendant as a collector and customer service representative in California, and upon being hired, electronically signed an arbitration agreement. The agreement broadly required arbitration for disputes relating to employment or termination, and covered claims based on federal, state, or local laws, including the California Labor Code. It also expressly prohibited class or collective adjudication and stated that it “shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.” In 2023, the plaintiff sued the defendant, asserting both individual and class claims for alleged violations of labor and business statutes. After the complaint was filed in the Superior Court of Los Angeles County, the defendant moved to compel arbitration of the plaintiff’s individual claims and to dismiss the class claims. The defendant submitted evidence that it is a Delaware corporation, previously had offices in Washington, and sourced materials from outside California. The plaintiff opposed, arguing that the Federal Arbitration Act (FAA) did not apply because her employment was exclusively within California and no evidence showed the agreement involved interstate commerce. The trial court found the arbitration agreement valid, held that the FAA applied based on the agreement’s express terms and supporting evidence, and dismissed the class claims per the agreement’s prohibition. On appeal, the California Court of Appeal, Second Appellate District, Division Eight, considered whether the trial court correctly found the FAA governed the arbitration agreement. The appellate court held that the FAA applies because the parties expressly agreed in the contract to be governed by the Act, regardless of whether the underlying transaction actually involved interstate commerce. The court affirmed the order compelling arbitration of the plaintiff’s individual claims and dismissing the class claims. The defendant was awarded costs on appeal. View "Tuufuli v. West Coast Dental Admin. Services" on Justia Law

Barbanell v. Lodge

2026-01-08T16:02:04-08:00

The parties in this case entered into a settlement agreement in 2005 to resolve a longstanding water rights dispute between their respective parcels, providing that future disputes would be resolved by mediation and, if necessary, binding arbitration before a retired judge with water law expertise in San Diego County. The agreement included provisions for attorney fees for the prevailing party in certain circumstances. In 2016, a new dispute arose over groundwater resources and the parties proceeded to arbitration. During the arbitration, the arbitrator withdrew after Lodge filed demands for disqualification, leaving the dispute unresolved. While the Barbanell entities sought a replacement arbitrator, Lodge initiated a separate lawsuit asserting the same claims as those in arbitration. The Barbanell entities then filed a distinct action, petitioning the Superior Court of San Diego County to appoint a new arbitrator. The Superior Court of San Diego County granted the Barbanell entities’ petition to appoint a new arbitrator and entered judgment in their favor, designating them as prevailing parties entitled to seek attorney fees. Upon subsequent motion, the court found that the settlement agreement entitled the Barbanell entities to recover reasonable attorney fees incurred in obtaining the appointment of a new arbitrator, and awarded them $68,800 in fees. An amended judgment was issued to reflect this award. The Court of Appeal, Fourth Appellate District, Division One, reviewed only the postjudgment award of attorney fees. It affirmed the Superior Court’s decision, holding that the Barbanell entities were prevailing parties in the discrete action to appoint an arbitrator and were entitled to attorney fees under the settlement agreement and Civil Code section 1717. The appellate court clarified that the presence of related claims pending elsewhere did not preclude a fee award for this separate, concluded action. View "Barbanell v. Lodge" on Justia Law

NEVADA RESORT ASSOCIATION-INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES AND MOVING PICTURE MACHINE OPERATORS OF THE US AND CANADA LOCAL 720 PENSION TRUST V. JB VIVA VEGAS, LP

2026-01-06T09:00:33-08:00

JB Viva Vegas, L.P. challenged the assessment of withdrawal liability imposed by the Nevada Resort Association-International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the US and Canada Local 720 Pension Trust under the Multiemployer Pension Plan Amendments Act (MPPAA). JB had contributed to the Trust’s pension plan for stagehands working on a theatrical production, which later closed. The Trust asserted withdrawal liability, arguing that its plan no longer qualified for the entertainment industry exception due to a shift in employee work from entertainment to convention-related activities. After JB’s request for review went unanswered, it initiated arbitration. The arbitrator initially ruled in JB’s favor, finding the plan qualified for the entertainment exception and ordering rescission of the withdrawal liability. The Trust then sought to vacate the arbitration award in the United States District Court for the District of Nevada. The district court vacated the award, reasoning that the relevant year for determining the plan’s status was the year JB withdrew, not when it joined, and remanded to the arbitrator. On remand, the arbitrator granted summary judgment to the Trust, concluding that the MPPAA was ambiguous as to how much entertainment work was required and that the plan did not “primarily” cover entertainment employees because less than half earned most of their wages from entertainment work. The district court affirmed the arbitrator’s decision, granting summary judgment to the Trust. On appeal, the United States Court of Appeals for the Ninth Circuit reviewed the district court’s summary judgment de novo. The court held that the MPPAA’s entertainment industry exception does not require a minimum amount of entertainment work for an individual to qualify as an “employee in the entertainment industry.” Therefore, the Trust’s plan primarily covers such employees if a majority perform any entertainment work. The Ninth Circuit reversed the district court’s decision and remanded the case. View "NEVADA RESORT ASSOCIATION-INTERNATIONAL ALLIANCE OF THEATRICAL STAGE EMPLOYEES AND MOVING PICTURE MACHINE OPERATORS OF THE US AND CANADA LOCAL 720 PENSION TRUST V. JB VIVA VEGAS, LP" on Justia Law

Sierra Pacific Industries Wage and Hour Cases

2026-01-06T08:01:15-08:00

A former hourly, nonexempt employee of a large lumber manufacturer filed a class action in October 2018 alleging wage and hour violations on behalf of eight classes of present and former employees. Many employees had signed arbitration agreements that precluded class actions and required arbitration of employment-related disputes, but neither the named plaintiff nor other named plaintiffs were signatories. Throughout several years of litigation, the employer did not identify signatory employees or produce the signed arbitration agreements, despite being ordered to do so. The employer participated in extensive discovery and litigation regarding all putative class members, including those who had signed the agreements. The Superior Court of Shasta County reviewed the case and, after extensive discovery disputes, granted class certification for eight classes in November 2022. Following class certification, the employer produced over 3,000 signed arbitration agreements and promptly moved to compel arbitration for class members who had signed the agreements. The plaintiffs opposed this, arguing the employer had waived its right to compel arbitration due to its prior litigation conduct, including failure to produce agreements and treating signatory employees as class members throughout discovery. The trial court denied the employer’s motion to compel arbitration, finding waiver under the St. Agnes test, and granted sanctions precluding the employer from presenting evidence of the arbitration agreements or arguing that class members had signed them. Upon appeal, the Court of Appeal of the State of California, Third Appellate District, affirmed the order denying the motion to compel arbitration and dismissed the appeal from the sanctions order. The main holding was that the employer had waived its contractual right to compel arbitration by conduct that was inconsistent with an intent to arbitrate, including withholding the agreements and treating signatory employees as class members, as established by clear and convincing evidence. The court dismissed the appeal regarding sanctions for lack of appellate jurisdiction. View "Sierra Pacific Industries Wage and Hour Cases" on Justia Law

WALKER SPECIALTY CONSTR., INC. V. BD. OF TR. OF THE CONSTR. INDUS. AND LABORERS JOINT PENSION TRUST

2026-01-05T09:00:31-08:00

A construction company in southern Nevada ceased contributing to a multiemployer pension plan after it stopped operating in the state. The pension plan’s trustees assessed the company for withdrawal liability, asserting the company owed over $2.8 million under the Multiemployer Pension Plan Amendments Act (MPPAA). The company challenged the assessment, arguing it was exempt from liability because its asbestos abatement work qualified for the “building and construction industry” exception in the MPPAA. The company pointed out that asbestos abatement involves removing or remediating hazardous materials from buildings, including demolition and substantial alterations to structures. An arbitrator initially ruled in favor of the pension plan’s trustees, interpreting the “building and construction industry” narrowly to include only work that literally builds new structures, and finding that asbestos abatement did not meet this definition. The company then brought suit in the United States District Court for the District of Nevada to vacate or modify the arbitration award. The district court rejected the arbitrator’s and trustees’ narrow construction, instead adopting a broader understanding of the industry that includes maintenance, repair, alteration, and demolition. The district court granted summary judgment to the company, holding that its asbestos abatement work qualified for the statutory exception, and ordered the return of payments made toward the assessed liability. On appeal, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s judgment. The Ninth Circuit held that the phrase “building and construction industry” in the MPPAA incorporates the definition established by the National Labor Relations Board under the Taft-Hartley Act, which includes erection, maintenance, repair, and alteration of buildings and structures. Applying this definition, the court ruled that asbestos abatement is covered by the exception, exempting the company from withdrawal liability. View "WALKER SPECIALTY CONSTR., INC. V. BD. OF TR. OF THE CONSTR. INDUS. AND LABORERS JOINT PENSION TRUST" on Justia Law

LaCour v. Marshalls of California

2025-12-26T10:30:50-08:00

A former employee worked for a retail company and, during his employment, signed an arbitration agreement that included a waiver of class, collective, and Private Attorneys General Act (PAGA) representative actions. This agreement stated that any dispute must be brought in arbitration on an individual basis and not as a representative action. The agreement also included a severability clause, specifying that if any part of the waiver was found invalid, a private attorney general claim would have to be litigated in court. After his employment ended, the employee filed a lawsuit against the company under PAGA, alleging wage-and-hour violations on behalf of himself, other employees, and the State of California. The claims and requested relief were pleaded in the aggregate, and the complaint did not separately seek penalties for violations suffered by the plaintiff alone. The employer moved to compel arbitration, arguing that the Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana allowed for arbitration of the “individual” component of a PAGA claim even if representative claims could not be arbitrated. The Alameda County Superior Court denied the motion, reasoning that there is no such thing as an “individual PAGA claim” under California law. On appeal, the Court of Appeal of the State of California, First Appellate District, Division Four, affirmed the trial court’s decision. The appellate court held that, based on the language of the arbitration agreement, the parties did not agree to arbitrate individual PAGA claims. The court reasoned that as of the time the agreement was drafted, there was no clear distinction in California law between “individual” and “non-individual” PAGA claims. Therefore, the court declined to compel arbitration of the PAGA claim and affirmed the lower court’s order. Costs on appeal were awarded to the employee. View "LaCour v. Marshalls of California" on Justia Law

LaCour v. Marshalls of California

2025-12-23T16:00:49-08:00

A former employee brought a single-count action under the Private Attorneys General Act of 2004 (PAGA) against his previous employer, alleging violations of various wage-and-hour provisions of the California Labor Code. The employee had previously signed an arbitration agreement that included waivers of class action, collective action, and representative PAGA claims, with a severability clause stating that any invalidation of the PAGA waiver would require such claims to be litigated in court, not arbitrated. The complaint sought civil penalties on behalf of the employee, other current and former employees, and the State of California, but did not separately seek penalties for violations suffered by the employee personally. The employer moved to compel arbitration, arguing that recent federal and state precedent required arbitration of the "individual component" of the PAGA claim, relying on Viking River Cruises, Inc. v. Moriana and subsequent California cases. The Superior Court of Alameda County denied the motion, reasoning that under California law there was no such thing as an "individual PAGA claim" and, therefore, the claim could not be compelled to arbitration. Reviewing the denial, the Court of Appeal of the State of California, First Appellate District, Division Four, considered the parties’ arguments regarding the interpretation of the arbitration agreement and relevant case law. The court held that, based on the language of the agreement and the intent of the parties at the time it was signed, there was no clear agreement to arbitrate individual PAGA claims if the PAGA waiver was invalidated. The court reasoned that, although recent decisions allow splitting PAGA actions into individual and non-individual claims, the agreement in this case did not provide for such arbitration. Accordingly, the court affirmed the order denying the motion to compel arbitration. View "LaCour v. Marshalls of California" on Justia Law

Wise v. Tesla Motors, Inc.

2025-12-22T15:00:57-08:00

Plaintiff was employed by defendant and, as a condition of employment, electronically signed both an offer letter containing an arbitration provision and a separate nondisclosure agreement (NDIAA) on the same day. The offer letter required arbitration for most employment-related disputes, while the NDIAA included terms such as a waiver of bond for injunctive relief and a heightened burden of proof for public domain information. Plaintiff’s employment ended in March 2023, after which she sued defendant in Alameda County Superior Court for disability discrimination, retaliation, and related claims under California’s Fair Employment and Housing Act, as well as wrongful termination. None of her claims involved confidential information or sought injunctive relief. Defendant moved to compel arbitration, asserting the Federal Arbitration Act (FAA) governed and that plaintiff’s claims fell within the arbitration agreement’s scope. The trial court found the arbitration agreement and NDIAA should be read together under California Civil Code section 1642, determined that certain NDIAA provisions were unconscionable, and concluded that unconscionability permeated the arbitration agreement. The court declined to sever the NDIAA’s unconscionable provisions and denied the motion to compel arbitration. On appeal, the California Court of Appeal, First Appellate District, Division Five, disagreed with the trial court’s refusal to sever. The appellate court held that the FAA does not preempt section 1642, and even assuming the NDIAA’s challenged provisions were unconscionable and properly considered alongside the arbitration agreement, those provisions were collateral to the arbitration agreement’s central purpose and did not affect the claims at issue. Applying Ramirez v. Charter Communications, Inc., the appellate court determined that the unconscionable terms should have been severed and the arbitration agreement enforced. Consequently, the order denying arbitration was reversed. View "Wise v. Tesla Motors, Inc." on Justia Law

VIP MORTGAGE INCORPORATED V. GATES

2025-12-22T10:03:10-08:00

Jennifer Gates, a former loan officer at VIP Mortgage, claimed that VIP violated the Fair Labor Standards Act (FLSA) and Arizona state law by failing to pay her required overtime wages. She alleged that she was made to work more than forty hours per week but was instructed to record only eight-hour days on her timesheet. After her resignation in September 2022, Gates initiated arbitration as required by her employment agreement. VIP responded with counterclaims for breach of fiduciary duty and breach of contract, but these were later settled, with both parties agreeing to bear their own attorneys’ fees and costs for the counterclaims. The arbitration took place under the Federal Arbitration Act, and the arbitrator ultimately issued an award in favor of Gates, granting her unpaid overtime, liquidated damages, and attorneys’ fees. Despite the prior stipulation regarding counterclaims, the arbitrator did not distinguish between time spent on Gates’s claims and VIP’s counterclaims when awarding attorneys’ fees. VIP petitioned the United States District Court for the District of Arizona to vacate the award, arguing that the arbitrator erred by awarding attorneys’ fees that included time spent on the counterclaims. The district court found the arbitrator’s decision to be detailed and reasoned, concluding that the arbitrator did not manifestly disregard the law or act irrationally. The United States Court of Appeals for the Ninth Circuit reviewed the case de novo and affirmed the district court’s rulings. The court held that federal courts may vacate arbitration awards based on a factual error only in rare cases where the error involves a “legally dispositive fact” that was obvious and intentionally ignored by the arbitrator. Here, although the factual error was legally dispositive, the arbitrator’s failure to recall the fee stipulation was not so obvious or intentional as to warrant vacatur. The arbitration award was confirmed. View "VIP MORTGAGE INCORPORATED V. GATES" on Justia Law

Silva v. Schmidt Baking Distribution, LLC

2025-12-22T07:30:06-08:00

Two commercial truck drivers, residents of Connecticut, began working as delivery drivers for a baked goods company through a staffing agency, classified as W-2 employees. After several months, the company required them to create corporations and enter into “Distributor Agreements” in their capacities as presidents of those corporations to continue working. These agreements included mandatory arbitration clauses and disclaimed an employee-employer relationship. Despite the new contractual arrangement, the drivers’ daily responsibilities remained unchanged, consisting of picking up baked goods from the company’s warehouse and delivering them to retail outlets. Seeking relief under Connecticut wage and overtime laws, the drivers initiated a putative class action in Connecticut Superior Court. The baked goods company removed the case to the United States District Court for the District of Connecticut, invoking diversity jurisdiction. The company then moved to compel arbitration pursuant to the contractual arbitration clauses. The drivers opposed, arguing that the agreements were “contracts of employment” exempt from the Federal Arbitration Act (FAA) under § 1, that they were not bound in their individual capacities, and that the clauses were unenforceable. The District Court ruled in favor of the company, granting the motion to compel arbitration, and held that the agreements were not “contracts of employment” under § 1 of the FAA. On interlocutory appeal, the United States Court of Appeals for the Second Circuit reviewed the District Court’s order de novo. The Second Circuit held that the agreements, though signed by corporate entities created at the company’s request, were “contracts of employment” within the meaning of § 1 of the FAA, as they were contracts for the performance of work by workers. Consequently, the court vacated the District Court’s order compelling arbitration and remanded for further proceedings. View "Silva v. Schmidt Baking Distribution, LLC" on Justia Law

CH Offshore v. Mexiship Ocean

2025-12-19T17:30:12-08:00

A Singapore-based company that supplies offshore vessels entered into a charter agreement with a Mexico-based marine oil and gas company. The agreement allowed the Mexican company to charter a vessel for eighteen months, with provisions for termination if payments were not made and an obligation to redeliver the vessel at the end of the term. After the charter expired, the Singaporean company alleged that the Mexican company failed to pay required fees and did not return the vessel, leading to arbitration in Singapore. The arbitrator awarded the Singaporean company damages and ordered the vessel’s return, but the Mexican company did not comply. Meanwhile, an email revealed that the Mexican company was set to receive a large refund from a third party, to be sent to a U.S. bank account in the name of a related U.S. entity. The Singaporean company filed suit in the United States District Court for the Southern District of Texas, seeking to attach the funds in the U.S. account as security for the arbitration award under federal maritime law and, later, Texas state law. The district court initially granted the writ of garnishment, but after limited discovery, vacated the writ, finding no evidence that the Mexican company owned the funds in the U.S. account. The district court also denied the plaintiff’s request for leave to amend its complaint to assert an alter ego theory, which would have permitted attachment based on state law. On appeal, the United States Court of Appeals for the Fifth Circuit held that the district court abused its discretion by failing to consider relevant evidence and legal standards regarding ownership and control of the funds. The appellate court also determined that the district court erred in denying leave to amend without adequate explanation. The Fifth Circuit vacated the district court’s order and remanded the case, instructing the district court to allow the plaintiff to amend its complaint. View "CH Offshore v. Mexiship Ocean" on Justia Law

Aramark Services v. Aetna Life Insurance

2025-12-18T10:30:12-08:00

Aramark, a company that self-funds employee health benefit plans governed by ERISA, contracted with Aetna to serve as third-party administrator for these plans. Under the agreement, Aetna was responsible for processing claims, managing provider networks, and handling various administrative tasks. Aramark alleged that Aetna breached its fiduciary duties by paying improper or fraudulent claims, retaining undisclosed fees, providing inadequate subrogation services, making post-adjudication adjustments detrimental to Aramark, and commingling plan assets. Aramark filed suit in the United States District Court for the Eastern District of Texas, asserting ERISA claims for breach of fiduciary duty and prohibited transactions. Aetna responded by seeking to compel arbitration in a Connecticut federal district court, relying on the arbitration clause in the parties’ Master Services Agreement (MSA), and moved to stay the Texas proceedings pending arbitration. The district court denied the stay, holding that the parties had not “clearly and unmistakably” delegated the threshold question of arbitrability to an arbitrator. The court found that the MSA's arbitration clause carved out disputes seeking equitable relief—such as Aramark’s ERISA claims—from arbitration and that these claims were equitable in nature. On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s denial of a motion to stay litigation pending arbitration de novo. It held that the threshold issue of arbitrability was not clearly and unmistakably delegated to an arbitrator under the terms of the MSA, especially given the placement of the carve-out for equitable relief. The Fifth Circuit further held that Aramark’s ERISA claims constituted equitable, not legal, relief under Supreme Court and Fifth Circuit precedent. The Fifth Circuit affirmed the district court’s orders, finding no error or abuse of discretion. View "Aramark Services v. Aetna Life Insurance" on Justia Law

Mertens v. Benelux Corporation

2025-12-17T10:30:12-08:00

Several individuals who worked as waitstaff at a club operated by Benelux Corporation brought a lawsuit in 2024, alleging violations of the Fair Labor Standards Act. In 2020, Benelux had distributed an arbitration agreement to its employees. The agreement included two signature boxes—one for the employee and one for Benelux’s representative—and stated that by signing, both parties represented that they had read and understood the agreement and agreed to be bound by its terms. One employee, Cadena, signed both signature boxes, but Benelux’s general manager did not sign the agreement due to an oversight. After being sued, Benelux moved to compel arbitration based on the unsigned agreement. Cadena argued that the agreement was not enforceable because Benelux had not signed it, stating she did not intend to be bound unless Benelux also signed. The United States District Court for the Western District of Texas adopted the Magistrate Judge’s recommendation and denied Benelux’s motion to compel, finding that the agreement required signatures from both parties to be enforceable, and Benelux had not signed. On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s decision de novo. Applying Texas contract law, the Fifth Circuit held that the language of the arbitration agreement clearly required signatures from both the employee and Benelux’s representative for the agreement to be enforceable. Because Benelux did not sign, there was no valid arbitration agreement between Benelux and Cadena. The court affirmed the district court’s judgment denying Benelux’s motion to compel arbitration. View "Mertens v. Benelux Corporation" on Justia Law

Quilala v. Securitas Security Services USA

2025-12-16T11:07:32-08:00

An employee was hired by a security services company in 2012 and, as a condition of employment, signed an arbitration agreement requiring that any employment-related disputes be resolved through arbitration under the Federal Arbitration Act (FAA). In 2023, the employee was assigned to work at Oracle Park, where he was subjected to hostile and derogatory conduct by supervisors and coworkers based on his perceived sexual orientation, including intrusive questioning, mocking, and reduction of work hours. After formally complaining about this treatment, the employee was terminated. He then filed a lawsuit against his employer and two individuals, asserting multiple claims, including sexual harassment under California’s Fair Employment and Housing Act. The defendants sought to compel arbitration based on the prior agreement, arguing that all claims fell within its scope and that both federal and state law required enforcement. The plaintiff opposed the motion, challenging the agreement’s validity but not specifically referencing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). The Superior Court of the City and County of San Francisco issued a tentative ruling, later adopted as final, finding that the EFAA rendered the arbitration agreement unenforceable because the plaintiff stated a valid sexual harassment claim. The court further found that the EFAA barred arbitration of the entire case, not just the sexual harassment claim, and that the plaintiff’s conduct showed he elected to pursue his claims in court. On appeal, the California Court of Appeal, First Appellate District, Division Three, affirmed the trial court’s denial of the motion to compel arbitration. The court held that the EFAA applies to cases involving sexual harassment claims and bars enforcement of predispute arbitration agreements for the entire case at the plaintiff’s election, without requiring an explicit invocation of the EFAA. The court also held that the trial court properly considered the EFAA’s applicability and provided due process, even without supplemental briefing. View "Quilala v. Securitas Security Services USA" on Justia Law

Valli v. Avis Budget Group Inc

2025-12-16T10:00:56-08:00

A woman rented a car from a rental company in 2014 and, after a traffic camera recorded a violation during her rental, the company paid the fine and charged her both the fine amount and an administrative fee. She filed a putative class action in the United States District Court for the District of New Jersey on behalf of customers who were charged fines and fees in similar circumstances, alleging state-law claims such as violations of consumer fraud statutes and unjust enrichment. The rental company later updated its rental agreements in 2016 to include an arbitration clause and class-action waiver, but this provision applied only prospectively to rentals after its adoption. The named plaintiffs’ rentals predated this clause. The District Court, after years of litigation that included several amended complaints, discovery, mediation, and a motion to certify a class, ultimately certified a subclass that included some renters whose agreements contained the arbitration provision. The District Court found that the rental company had waived its right to enforce arbitration by participating in litigation for several years without moving to compel arbitration. The company then filed a motion to compel arbitration for the affected class members, which the District Court denied again on waiver grounds, emphasizing that the company had not sought to enforce arbitration until after class certification. On appeal, the United States Court of Appeals for the Third Circuit reviewed the waiver issue de novo. The Third Circuit held that waiver of the right to compel arbitration did not occur here, because the company’s conduct—such as raising arbitration as an affirmative defense and the futility of seeking to compel arbitration prior to class certification—did not evince an intentional relinquishment of that right. The Third Circuit vacated the District Court’s order denying the motion to compel arbitration and remanded for consideration of other unresolved questions about enforceability. View "Valli v. Avis Budget Group Inc" on Justia Law

Prime Healthcare Management v. Super. Ct.

2025-12-16T09:31:17-08:00

The case centers on an employee who brought multiple claims against her former employer, including several for violations of California’s Labor Code and a representative claim under the Private Attorneys General Act (PAGA). The employee had signed an arbitration agreement at the start of her employment. As a result, all non-PAGA claims were compelled to arbitration, while the PAGA claims (both individual and representative) were stayed. The arbitrator found in favor of the employer on all Labor Code violations, concluding that the alleged violations did not occur. Following the arbitration, the Superior Court of San Bernardino County confirmed the arbitrator’s award and granted judgment on the pleadings against the employee on her PAGA claim, ruling that the arbitration results established she was not an “aggrieved employee” under PAGA, and therefore lacked standing to pursue the PAGA claim. When the employee appealed, the California Court of Appeal, Fourth Appellate District, Division Two, affirmed the denial of her motion to vacate the arbitration award but reversed the judgment on the pleadings as to the PAGA claim, holding that the arbitration did not preclude her from pursuing PAGA penalties. Subsequently, the employer filed a renewed motion for judgment on the pleadings, arguing that subsequent appellate court decisions and the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc., constituted an intervening change in the law, rendering the law of the case doctrine inapplicable. The trial court denied this motion, finding that its prior ruling remained law of the case. Reviewing this denial, the California Court of Appeal, Fourth Appellate District, Division Two, held that the law of the case doctrine properly applied because there had been no controlling intervening change in the law. The court denied the employer’s writ petition, confirming that the arbitrator’s findings on non-PAGA claims did not preclude judicial determination of the employee’s standing under PAGA. View "Prime Healthcare Management v. Super. Ct." on Justia Law

Williams v. Shapiro

2025-12-15T11:03:29-08:00

Several participants in a terminated employee stock ownership plan asserted claims under the Employee Retirement Income Security Act (ERISA) following the sale and dissolution of their plan. The plan, created by A360, Inc. in 2016, purchased all company stock and became its sole owner. In 2019, A360 and its trustee sold the plan’s shares to another entity, amending the plan at the same time to include an arbitration clause that required all claims to be resolved individually and prohibited representative, class, or group relief. The plan was terminated shortly thereafter, and the proceeds were distributed to participants. The plaintiffs alleged that the defendants undervalued the shares and breached fiduciary duties, seeking plan-wide monetary and equitable relief. The United States District Court for the Northern District of Georgia considered the defendants’ motion to compel arbitration based on the plan’s amended arbitration provisions. The district court determined that although the plan itself could assent to arbitration, the arbitration provision was unenforceable because it precluded plan-wide relief authorized by ERISA. The court found that the provision constituted a prospective waiver of statutory rights and concluded that, per the plan amendment’s own terms, the arbitration provision was not severable and thus entirely void. The United States Court of Appeals for the Eleventh Circuit reviewed the district court’s denial of the motion to compel arbitration de novo. The Eleventh Circuit held that the arbitration provision was unenforceable under the effective vindication doctrine because it barred participants from seeking plan-wide relief for breaches of fiduciary duty, as provided by ERISA. The court joined other circuits in concluding that such provisions violate ERISA’s substantive rights and affirmed the district court’s invalidation of the arbitration procedure and denial of the motion to compel arbitration. View "Williams v. Shapiro" on Justia Law

Sierra Pacific Industries Wage and Hour Cases

2025-12-09T14:02:09-08:00

A former hourly employee brought a class action lawsuit against his former employer, a large wood products company, alleging various wage and hour violations under California law. The proposed classes included both employees who had signed arbitration agreements and those who had not. While some nonexempt employees had signed arbitration agreements requiring individual arbitration and waiving class actions, the named plaintiffs had not. The employer did not initially assert arbitration as a defense and, when ordered by the court to produce copies of signed arbitration agreements for putative class members, failed to do so for several years. During the course of discovery in the Superior Court of Shasta County, the employer repeatedly resisted requests to identify or produce arbitration agreements for employees who had signed them, leading to multiple discovery sanctions. The employer participated in extensive discovery and mediation involving employees who had signed arbitration agreements, without distinguishing them from other putative class members. Only after class certification did the employer finally produce thousands of signed arbitration agreements and immediately moved to compel arbitration for those employees. Plaintiffs opposed, arguing the employer had waived its right to arbitrate by years of litigation conduct inconsistent with an intent to arbitrate, and sought evidentiary and issue sanctions for delayed production. The California Court of Appeal, Third Appellate District, reviewed the case. Applying the California Supreme Court’s standard from Quach v. California Commerce Club, Inc., the appellate court held that the employer waived its right to compel arbitration by clear and convincing evidence. The employer’s prolonged failure to produce arbitration agreements and its conduct throughout litigation was inconsistent with an intention to enforce arbitration. The order denying the motion to compel arbitration was affirmed, and the appeal from the order granting evidentiary and issue sanctions was dismissed as nonappealable. View "Sierra Pacific Industries Wage and Hour Cases" on Justia Law

Town of Vinton v. Indian Harbor

2025-12-08T16:30:16-08:00

The dispute centers on insurance policies purchased by several Louisiana public entities, including the Town of Vinton, from a group of foreign and American insurers. The policies included an arbitration clause and a contract endorsement stating that each policy is a “separate contract” between the insured and each insurer. After alleged breaches, the insured entities sued all participating insurers in Louisiana state court. Subsequently, the insureds dismissed the foreign insurers with prejudice, leaving only American insurers as defendants. Following the dismissal of the foreign insurers, the remaining American insurers removed the cases to the United States District Court for the Western District of Louisiana. They sought to compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Federal Arbitration Act. The district court denied these motions, holding that the contract endorsement created separate agreements between each insurer and the insured, and, since the foreign insurers were no longer parties, no agreement involved a non-American party. The court also rejected the American insurers’ equitable estoppel argument, finding it precluded by Louisiana law, which expressly bars arbitration clauses in insurance contracts covering property in the state. On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s decision. The Fifth Circuit held that the Convention does not apply because no foreign party remains in any agreement to arbitrate. The court further concluded that Louisiana law prohibits enforcement of arbitration clauses in these insurance contracts and that equitable estoppel cannot override this prohibition. Lastly, the court determined that the delegation clause in the arbitration agreement could not be enforced because Louisiana law prevents the valid formation of an arbitration agreement in this context. View "Town of Vinton v. Indian Harbor" on Justia Law

Peterson v. Zhang

2025-12-08T12:31:44-08:00

Two neighbors in a residential community disagreed about a tree branch that obstructed one neighbor’s view. Jinshu Zhang, the owner seeking the view, used his homeowners association’s dispute resolution process, which included mediation and arbitration services provided by Charles Peterson, an independent mediator. When the association dismissed Zhang’s application, Zhang sued Peterson for breach of fiduciary duty, claiming Peterson was a director or officer of the association and thus owed him such a duty. However, Peterson was neither a director nor an officer, but an independent contractor. Zhang lost his lawsuit against Peterson following a nonsuit at trial, and did not appeal. After that case concluded, Peterson filed a malicious prosecution action against Zhang, alleging Zhang’s earlier suit was baseless and continued without probable cause once Zhang had evidence Peterson was not an officer or director. In response, Zhang filed a special motion to strike under California’s anti-SLAPP statute (Code of Civil Procedure section 425.16), seeking to dismiss Peterson’s malicious prosecution claim. The Superior Court of Los Angeles County denied Zhang’s anti-SLAPP motion, finding Peterson’s case had at least minimal merit based on evidence showing Zhang lacked probable cause and may have acted with malice in pursuing the prior suit. The California Court of Appeal, Second Appellate District, Division Eight, reviewed Zhang’s appeal. The court affirmed the denial of Zhang’s anti-SLAPP motion, holding that the denial of a discretionary sanctions motion in the underlying suit did not establish probable cause under the “interim adverse judgment rule,” and did not bar the malicious prosecution claim. The court concluded that Peterson’s evidence on lack of probable cause and malice was sufficient to allow his case to proceed, and remanded for further proceedings. View "Peterson v. Zhang" on Justia Law

Design Gaps, Inc. v. Distinctive Design & Construction LLC

2025-12-05T12:00:15-08:00

A dispute arose from the design and installation of cabinetry in a luxury home in Charleston, South Carolina. Design Gaps, Inc., owned by David and Eva Glover, had a longstanding business relationship with Shelter, LLC, a general contractor operated by Ryan and Jenny Butler. After being dissatisfied with Design Gaps’ performance, the homeowners, Dr. Jason and Kacie Highsmith, and Shelter terminated their contract with Design Gaps and hired Distinctive Design & Construction LLC, owned by Bryan and Wendy Reiss, to complete the work. The Highsmiths and Shelter initiated arbitration against Design Gaps, which led to the arbitrator ruling in favor of the homeowners and Shelter on their claims, and against Design Gaps on its counterclaims, including those for copyright infringement, tortious interference, and unfair trade practices. After the arbitration, Design Gaps sought to vacate the arbitration award in the United States District Court for the District of South Carolina, but the court instead confirmed the award. Concurrently, Design Gaps filed a separate federal lawsuit against several parties, including some who were not part of the arbitration. The defendants moved to dismiss, arguing that res judicata and collateral estoppel barred the new claims, or alternatively, that the claims failed on other grounds such as the statute of limitations and laches. The district court agreed, dismissing most claims based on preclusion or other legal bars, and granted summary judgment on the remaining claims. The United States Court of Appeals for the Fourth Circuit reviewed the district court’s decisions. The court held that res judicata and collateral estoppel applied to bar most of Design Gaps’ claims, even against parties not directly involved in the arbitration but in privity with those who were. For the remaining claims, the court found they were properly dismissed on grounds such as the statute of limitations, waiver, or laches. The Fourth Circuit affirmed the district court’s judgment in full. View "Design Gaps, Inc. v. Distinctive Design & Construction LLC" on Justia Law

Wiggins v. Southern Securities Group, LLC

2025-12-05T02:24:47-08:00

Two financial advisors entered into two agreements as part of a business transaction: an operating agreement establishing them as members of a wealth management firm and a purchase-and-sale contract under which one advisor would gradually buy out the other's ownership interest. The operating agreement contained a noncompete clause and provisions for mediation and arbitration. After the buyout concluded, the selling advisor remained employed with the company and could only be terminated for cause. In January 2024, he was terminated for cause and immediately began working at a competing firm within the restricted radius specified in the noncompete provision. Following his termination, the company and the buying advisor filed suit in the Circuit Court of Forrest County, alleging breach of contract and seeking, among other relief, a temporary restraining order and preliminary injunction to enforce the noncompete clause. The trial court granted the injunction and denied the selling advisor’s motions to dissolve the restraining order, to deny the injunction, and to compel mediation and/or arbitration. The trial court found that the noncompete clause remained binding and that the parties had not shown a clear intent to compel mediation or arbitration for this dispute, given specific contractual language. On appeal, the Supreme Court of Mississippi reviewed whether the noncompete provision was enforceable, whether the trial court erred in issuing the preliminary injunction, and whether the denial of the motion to compel mediation/arbitration was proper. The Court held that the noncompete provision was binding based on the evidence at the preliminary injunction stage, that the trial court did not err in granting the preliminary injunction, and that the mediation/arbitration provisions were not clearly applicable to this dispute. The Supreme Court of Mississippi affirmed the trial court’s order in all respects. View "Wiggins v. Southern Securities Group, LLC" on Justia Law

Lyles v. Santander Consumer USA

2025-11-25T06:06:20-08:00

A consumer purchased a used vehicle from a dealership, with the transaction documented in two contracts: a purchase order and a retail installment sale contract (RISC). The purchase order included an arbitration provision for disputes arising from the purchase or financing of the vehicle, while the RISC detailed the financing terms but did not include an arbitration clause. The RISC contained an assignment clause by which the dealership assigned its interest in "this contract" (the RISC) to a third-party lender, and defined the agreement between the buyer and the assignee as consisting "only" of the RISC and any addenda. The consumer later filed a class action against the lender, alleging improper fees under Maryland law. The Circuit Court for Baltimore City found for the lender, ruling that the purchase order and RISC should be read together as one contract for the purposes of the transaction, and that the arbitration agreement was enforceable against the consumer. The court granted the lender’s motion to compel arbitration. On appeal, the Appellate Court of Maryland affirmed, holding that the consumer was bound by the arbitration provision and that the assignee lender could enforce it, even though the consumer did not receive or sign a separate arbitration agreement. The Supreme Court of Maryland reviewed the case, focusing on contract interpretation and the scope of the assignment. The court held that, even if the purchase order’s arbitration provision was binding between the consumer and the dealer, it was not within the scope of the assignment to the lender. The RISC’s assignment language made clear that only the RISC and its addenda, not the purchase order or its arbitration clause, were assigned to the lender. As a result, the Supreme Court of Maryland reversed the judgment of the Appellate Court and remanded the case for further proceedings. View "Lyles v. Santander Consumer USA" on Justia Law

Holtec International Corp. v. Michigan State Utility Workers Council

2025-11-24T13:30:16-08:00

An employee at a nuclear power plant operated by a subsidiary corporation left active work due to a medical condition but remained employed while on short-term disability. After the employee transitioned to long-term disability, the employer terminated his employment. The union, representing the plant’s workers, filed a grievance on the employee’s behalf, arguing that the collective bargaining agreement (CBA) required continued employment and benefits. The union initiated arbitration against the employer but mistakenly named the employer’s parent company as the respondent. Despite the error, counsel for the correct employer participated in the arbitration, and all parties consistently identified the subsidiary as the actual employer during the proceedings. After the arbitrator issued an award in favor of the union—ordering reinstatement and benefits for the employee—the employer did not comply. Instead, the parent and subsidiary together filed suit in the United States District Court for the Western District of Michigan, seeking to vacate the award due to the mistaken caption. The union counterclaimed for confirmation of the award. The district court ruled for the union, finding extensive evidence that the subsidiary had engaged in and intended to be bound by the arbitration, and that the erroneous caption was merely a procedural defect to which the employer had waived any objection by participating fully and not raising a timely challenge. The United States Court of Appeals for the Sixth Circuit affirmed the district court’s judgment. The Sixth Circuit held that when an arbitration demand and award misname the party against whom the award is meant to be entered, but there is no ambiguity about the real party, a federal court may enforce the award. The court further held that any objection to the misnomer was waived by the employer’s participation and failure to object, and that the error was a curable misnomer not warranting vacatur or modification of the award. View "Holtec International Corp. v. Michigan State Utility Workers Council" on Justia Law