Federal Cases
Eighth Circuit: Party-Appointed Arbitrators Need Not Be Neutral
Winfrey v. Simmons Food, Inc., No. 06-3353, 2007 WL 2050833 (8th Cir. July 19, 2007)
7/19/2007
In upholding a unanimous arbitration award in favor of a group of poultry growers, the Eighth Circuit Court of Appeals explained that party-appointed arbitrators need not be neutral. However, as the Court noted, “evident partiality” may be a basis for vacating an arbitration award if the alleged bias of a party-appointed arbitrator had a prejudicial impact on the award.
In Winfrey v. Simmons Food, Inc., No. 06-3353, 2007 WL 2050833 (8th Cir. July 19, 2007), a group of poultry growers (the Growers) sued Simmons Food (Simmons) for damages under the Packers and Stockyards Act. The district court ordered the parties to submit the dispute to arbitration in accordance with an arbitration clause in their contract... Full Story
Third Circuit Holds Broad Arbitration Agreement Applicable to Intentional Tort Claim
Steigerwalt v. Terminix Int'l Co., No. 06-4751, 2007 WL 1780054 (3d Cir. June 21, 2007)
6/21/2007
Third Circuit Court of Appeals held that an employee's intentional tort claim falls within the scope of an arbitration agreement according to its plain meaning.
In Steigerwalt v. Terminix Int'l Co., No. 06-4751, 2007 WL 1780054 (3d Cir. June 21, 2007), Steigerwalt signed an arbitration agreement with his employer, Terminix, a pest control organization. Steigherwalt sued Terminix after he suffered medical injuries from inhaling methyl bromide, a toxic chemical used for fumigation... Full Story
Eleventh Circuit Allows Non-Signatories to Invoke Arbitration Agreement
Becker v. Davis, No. 06-12654, 2007 WL 1988551 (11th Cir. July 11, 2007)
7/11/2007
In a case with a non-signatory on each side of the fence, the Eleventh Circuit Court of Appeals has held: (1) that a non-signatory claimant was bound by an arbitration agreement to the extent that her claims relied on the terms of the underlying contract; and (2) that non-signatory respondents could enforce the arbitration agreement because the claimant was alleging "substantially interdependent and concerted misconduct" by the signatories and non-signatories.
In Becker v. Davis, No. 06-12654, 2007 WL 1988551 (11th Cir. July 11, 2007), Becker inherited $9 million and moved to Florida, where she met Davis, who was the owner and agent of multiple entities engaged in financial planning. On Davis' advice, Becker created a trust (the Trust), which subsequently entered into an arbitration agreement with one of Davis' financial planning entities... Full Story
California District Court Holds Registrant Has Standing to Challenge Inevitable Domain Name Transfer
Mann v. AFN Investments, Ltd., No. 07CV0083BENCAB, 2007 WL 2177030 (S.D. Cal. July 27, 2007)
7/27/2007
A domain name registrant may bring an action under the Anticybersquatting Consumer Protection Act (ACPA) when a domain name transfer has been ordered and the transfer is inevitable without court intervention, regardless of whether the transfer is yet effective, according to a federal district court in California.
In Mann v. AFN Investments, Ltd., No. 07CV0083BENCAB, 2007 WL 2177030 (S.D. Cal. July 27, 2007), Mann brought an action under the ACPA, challenging a National Arbitration Forum (FORUM) administrative proceeding decision ordering the transfer of Mann's domain name to AFN. The administrative proceeding was properly conducted under the FORUM's Uniform Domain Name Dispute Resolution Policy (UDRP)... Full Story
Questions of Fact Preclude Court from Ordering Non-Signatory to Arbitrate
Jackson v. Daimler Chrysler Financial Services Americas, LLC, No. CV-07-96-EBLW, 2007 WL 2051233 (D. Idaho July 12, 2007)
7/12/2007
Without clear factual findings establishing an agency relationship between a signatory and non-signatory to an arbitration agreement, the statutory presumption favoring arbitration cannot supersede the non-signatory's constitutional right to a jury trial, according to a federal district court in Idaho.
In Jackson v. Daimler Chrysler Financial Services Americas, LLC, No. CV-07-96-EBLW, 2007 WL 2051233 (D. Idaho July 12, 2007), Jackson sued the following parties for wrongful repossession of his motor vehicle: (1) Daimler, a financing company; (2) Stallings, a repossession company; and (3) McClane, a Stallings' employee. In addition, Daimler filed a claim for indemnity against Stallings... Full Story
Evidence Supporting Specific Statutory Basis for Vacatur Required to Challenge Award Confirmation
Buechner v. Mid-America Energy, Inc., No. 1:07-CV-109, 2007 WL 2174723 (W.D. Ky. July 27, 2007)
7/27/2007
Confirmation of an arbitration award cannot be challenged without proper and relevant evidence that would support the specific statutory grounds for vacatur or modification of an award, according to a federal district court in Kentucky.
In Buechner v. Mid-America Energy, Inc., No. 1:07-CV-109, 2007 WL 2174723 (W.D. Ky. July 27, 2007), Buechner sued Mid-America and others for breach of contract, breach of fiduciary duty, conversion, and various statutory violations under several security contracts... Full Story
Court Denies Arbitration to Non-Signatory Where Claims Against the Non-Signatory Were Not "Intertwined" with the Dispute Between the Signatories
Tres Jeanee, Inc. v. Brolin Retail Systems Midwest, Inc., No. 3:07 CV 139 H, 2007 WL 2071776 (W.D. Ky. July 17, 2007)
7/17/2007
A federal district court in Kentucky denied a non-signatory's motion to compel arbitration because the claims against the non-signatory were not sufficiently "intertwined" with the dispute between the signatories to the agreement.
In Tres Jeanee, Inc. v. Brolin Retail Systems Midwest, Inc., No. 3:07 CV 139 H, 2007 WL 2071776 (W.D. Ky. July 17, 2007), Brolin agreed to install and maintain a software system in a restaurant owned by Tres Jeanee. The agreement contained an arbitration clause... Full Story
State Cases
Arbitration Agreement Does Not Carry Over When Financial Advisor Switches Firms
Mishal v. Venus Capital Management, Inc., No. B194492, 2007 WL 2110488, (Cal. Ct. App. July 24, 2007)
7/24/2007
In affirming an order denying a financial advisor's motion to compel arbitration, the California Court of Appeal explained that an arbitration agreement entered into between the investor and the investment firm did not apply where the financial advisor was acting as the agent of a separate investment firm.
In Mishal v. Venus Capital Management, Inc., No. B194492, 2007 WL 2110488, (Cal. Ct. App. July 24, 2007), Mishal sued Venus Capital Management (VCM) and its CEO, Mehrotra, alleging that they gave him fraudulent investment advice... Full Story
Court Exercises Inherent Authority to Control Its Docket and Stays Litigation Pending the Outcome of Related Arbitration
Friendly Ghost Enterprises v. McWilliams, C.A. No. 2935-VCN, 2007 WL 2198767 (Del. Ch. July 27, 2007)
7/27/2007
Setting aside its previous decision that litigation and arbitration should proceed at the same time, the Delaware Court of Chancery cited judicial efficiency concerns and a court's inherent authority to control its docket in staying litigation proceedings until the related arbitration process is completed.
In Friendly Ghost Enterprises v. McWilliams, C.A. No. 2935-VCN, 2007 WL 2198767 (Del. Ch. July 27, 2007), Friendly Ghost and McWilliams are in dispute over the management of their shared corporation, Stamack, Inc. Friendly Ghost sought to resolve the dispute in court, while McWilliams sought to compel arbitration according to Stamack's shareholder's agreement... Full Story
Arbitration Agreement's Cost-Sharing Provision Trumps AAA Rules
Lofxaine C. Brady, v. The Williams Capital Group, Index No. 114198/06 (N.Y. Sup. Ct. June 29, 2007)
6/29/2007
In refusing to order the American Arbitration Association (AAA) to enter default judgment against an employer who refused to pay the entire cost of arbitration, a New York trial court held that the parties' agreement to equally split arbitration costs trumped the AAA rules requiring an employer to pay the entire cost of an employment discrimination arbitration proceeding.
In Lofxaine C. Brady, v. The Williams Capital Group, Index No. 114198/06 (N.Y. Sup. Ct. June 29, 2007), Williams, a securities broker, hired Brady as a salesperson of fixed income securities. Brady later filed an arbitration claim against Williams, alleging discrimination in violation of state and federal law... Full Story
Under FAA, Res Judicata Defense Decided by Arbitrator, Not Court
WMS, Inc. v. Alltel Corp., No. COA06-793, 2007 WL 2238450 (N.C. Ct. App. Aug. 7, 2007)
8/7/2007
Under the Federal Arbitration Act (FAA), arbitrators must resolve procedural questions such as "gateway arbitrability" issues. Therefore a res judicata defense must be decided by an arbitrator and not by the court if the agreement is subject to the FAA, according to a North Carolina appellate court.
In WMS, Inc. v. Alltel Corp., No. COA06-793, 2007 WL 2238450 (N.C. Ct. App. Aug. 7, 2007), WMS and Alltel entered into a cellular dealer agreement. WMS filed suit asserting various claims arising out of the business dealings between the parties. WMS included a motion to compel arbitration in compliance with the agreement... Full Story
Ohio Choice of Law Requires Application of Forum State Law to Determine Enforceability of Arbitration Agreements
Credit General Ins. Co. v. Insurance Service Group, Inc., No. E2007-00033-COA-R3CV, 2007 WL 2198475 (Tenn. Ct. App. July 31, 2007)
7/31/2007
Under a valid Ohio choice of law provision, forum state courts are required to apply the substantive law of that forum state to determine whether an agreement to arbitrate is enforceable, according to the Tennessee Court of Appeals.
In Credit General Ins. Co. v. Insurance Service Group, Inc., No. E2007-00033-COA-R3CV, 2007 WL 2198475 (Tenn. Ct. App. July 31, 2007), Credit General and Insurance Service entered into an agency contract, which included both a choice of law provision and an agreement to arbitrate... Full Story
ADR Legislation & Regulation
LEGISLATION
NC H 820
SAME AS: NC S 845
AUTHOR: Allen L [D]
TITLE: Natural Resources Laws
INTRODUCED: 03/15/2007
DISPOSITION: To Governor
Commentary:
Directs the Environmental Review Commission to study issues related to the transfer of water from one river basin to another river basin; amends the laws governing the transfer of water from one river basin to another river basin. Amendments include: (h) Settlement Discussions, which allows for the appointment of a mediation officer on request of an applicant. Directs the mediation officer to make a reasonable effort to initiate settlement discussions. Provides that "[e]vidence of statements made and conduct that occurs in a settlement discussion...shall not be subject to discovery and shall be inadmissible in any subsequent proceeding." Affords the Commission the authority to "adopt rules to govern the conduct of the mediation process."
NY S 1589
SAME AS: NY A 434
SPONSOR: Libous [R]
TITLE: Motor Vehicle Franchise Dealer Administrative Hearings
INTRODUCED: 01/23/2007
LAST AMEND: 06/18/2007
DISPOSITION: To Governor
Commentary:
The May 7, 2007 amended version of this bill provides a system for mediation of franchisor dealer disputes. Under the new statute, any franchised motor vehicle dealer aggrieved under the provisions of the motor vehicle franchise statute would be entitled to mediation upon request. The bill does not state who would provide the mediation services.
OR H 3242
AUTHOR: Schaufler [D]
TITLE: Construction Contractors
INTRODUCED: 03/12/2007
LAST AMEND: 06/27/2007
ENACTED: 07/27/2007
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary:
Creates categories and levels of construction contractor licensing... modifies claim and recovery provisions. Outlines arbitration procedures for disputes involving the "Construction Contractor's Board," must be properly licensed to initiate claim, can avoid arbitration if requested within 30 days of notice.
OR S 248
AUTHOR: Courtney [D]
TITLE: Employment Agreements
INTRODUCED: 01/12/2007
ENACTED: 08/06/2007
DISPOSITION: Enacted
Commentary:
"A written arbitration agreement entered into between an employer and employee and otherwise valid ... is void and may not be enforced by the court unless: (a) The employer informs the employee at the time the offer of employment is first communicated to the employee that an arbitration agreement is required as a condition of employment; or (b) The arbitration agreement is entered into upon a subsequent bona fide advancement of the employee by the employer."
OR S 484
AUTHOR: Commerce Cmt
TITLE: Unlawful Trade Practices
INTRODUCED: 02/05/2007
ENACTED: 08/03/2007
DISPOSITION: Enacted
Commentary:
The June 5, 2007 amended bill allows a consumer to revoke a provision of contract that requires the consumer to assert a claim against another party to a contract in a forum that is not in Oregon. The effect of a revocation of a clause requiring arbitration in another state is that the proceeding that requires or allows attendance by consumer must be conducted in Oregon.
US H 2337
SPONSOR: Rahall [D]
TITLE: Energy Policy Reforms and Public Accountability
INTRODUCED: 05/16/2007
DISPOSITION: Pending
LOCATION: HOUSE
Commentary:
Enacting a bill to promote energy policy reforms and public accountability, alternative energy and efficiency, and carbon capture and climate change mitigation, and for other purposes.
(3) PROCEDURE outlines procedure for arbitration if dispute between the surface estate owner and the operator is not settled within 90 days.
US H 2419
SPONSOR: Peterson C [DFL]
TITLE: Continuation Of Agricultural Programs
INTRODUCED: 05/22/2007
LAST AMEND: 07/27/2007
DISPOSITION: Pending
LOCATION: SENATE
Commentary:
An act providing for the continuation of agricultural programs through fiscal year 2012, and for other purposes.
SEC. 416. ARBITRATION OF LIVESTOCK AND POULTRY CONTRACTS.
(a) Issuance of Regulations The Secretary of Agriculture shall promulgate regulations to establish standards related to the inclusion of arbitration provisions in livestock and poultry production contracts.
(1) establish permissible agreements with respect to venue of arbitration, allocation of arbitration costs, number and appointment of arbitrators, and any other element of an arbitration agreement that the Secretary determines to be necessary;
(2) permit a producer to seek relief in a small claims court in lieu of arbitration for disputes or claims within the jurisdiction of a small claims court, despite the existence of an arbitration agreement; and
(3) require any person appointed or to be appointed as an arbitrator to disclose any circumstance likely to raise doubt as to the arbitrator's impartiality.'.
US H 3220
SPONSOR: Pelosi [D]
TITLE: United States Energy Independence
INTRODUCED: 07/30/2007
DISPOSITION: Pending
LOCATION: Multiple Committees
Commentary:
An act to move "the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure. Bill provides for referral to arbitration or resolution within 90 days of notice provided by operator, who must pay for arbitration. Further provides that the Secretary must identify qualified arbitrators and provide to the surface owners and operators. Provides for reasonable attorney fees in addition to what is awarded in court or arbitration. Surface Transportation Board mediation of rights of way use requests: provides that if an "authority cannot reach agreement with a rail carrier to use trackage of, and have related services provided by, the rail carrier for purposes of fixed guideway transportation, the public transportation authority or the rail carrier may apply to the Board for nonbinding mediation." Mediation shall be conducted "in accordance with the mediation process in the Code of Federal Regulations.
US S 1925
SPONSOR: Kohl [D]
TITLE: Credit Card Issuers
INTRODUCED: 08/01/2007
DISPOSITION: Pending
LOCATION: Senate Banking, Housing and Urban Affairs Committee
Commentary:
Would enact the "Student Credit Card Protection Act." The act would: 1) require credit card companies to verify annual gross income of a full time student under the age of 21; 2) require a parent, legal guardian or spouse to co sign if the student has no verifiable income and also require approval for increases in credit by the co signer; 3) Limit the amount of credit to a student based on their annual income; 4) Prohibit a credit card company from issuing multiple cards to students.
REGULATION
Maine 10-144-101, Ch. 1, Section 1
AGENCY: Department of Health and Human Services/Office of MaineCare Services
TITLE: General Administrative Policies And Procedures
PROPOSED: 07/11/2007
Commentary: Regulation to amend rules relating to the MaineCare Benefits Manual. In lieu of the administrative hearing procedure to resolve disputes arising under the MaineCare Benefits Manual, the parties may choose binding arbitration by a qualified arbitrator or panel of arbitrators as an alternative means of resolving a dispute. Both parties must agree to this optional method of dispute resolution. The Maine Uniform Arbitration Act shall regulate the arbitration.
Rhode Island Proposed Regulation (Uncodified)
AGENCY: Department of Administration/Office of Purchasing
TITLE: State Procurement Regulations
PROPOSED: 07/19/2007
ADOPTED: 07/19/2007
Commentary: Establishes emergency rules regarding the criteria for public agencies to select methods of construction management services. Arbitration mentions include: 1.5.3.1 Public Works Contracts - In accordance with [37-2-48] disputes involving public works contracts shall be resolved in accordance with the provisions for arbitration set forth in Chapter 37-16 of the General Laws of Rhode Island. Remaining mentions include arbitration in a list of adjudication.
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