Federal Cases
Court Upholds Class Waiver in Wireless Service Agreement Because Customer Had "Meaningful Opportunity" to Reject the Agreement
Crandall v. AT & T Mobility, LLC, No. 07-750, 2008 WL 2796752 (S.D. Ill. July 18, 2008)
7/18/2008 12:00:00 AM
A federal district court in Illinois dismissed a class action lawsuit brought against a wireless service provider because the parties had entered into an arbitration agreement that contained a class waiver barring class-wide proceedings. The Court upheld the class waiver because the non-drafting party had a "meaningful opportunity" to reject the contract.
In Crandall v. AT & T Mobility, LLC, No. 07-750, 2008 WL 2796752 (S.D. Ill. July 18, 2008), Crandall and another AT&T customer (collectively, Customers) brought a class action lawsuit against AT&T, alleging that AT&T was liable for statutory and common law fraud for failing to inform customers that a company merger would not require them to buy new phones... Full Story
Eighth Circuit: Order Compelling Minnesota No-Fault Auto Arbitration Not Immediately Appealable as a Final Order
Alpine Glass, Inc. v. Illinois Farmers Insurance Co., 531 F.3d 679 (8th Cir. 2008)
7/9/2008 12:00:00 AM
Orders compelling arbitration under the Minnesota No-Fault Automobile Insurance Act (No-Fault Act) are not "final decisions" that trigger a right to immediate appellate review, according to the Eighth Circuit Court of Appeals.
In Alpine Glass, Inc. v. Illinois Farmers Insurance Co., 531 F.3d 679 (8th Cir. 2008), Alpine made a series of repairs for Illinois Farmers Insurance (IFI) policyholders. After IFI allegedly failed to pay the entire amount due to Alpine for the repairs, Alpine sought a district court order compelling consolidation of all its claims against IFI into one arbitration proceeding under the Minnesota No-Fault Act. See Minn. Stat. §§ 65B.41-65B.71... Full Story
Court Upholds Arbitration Agreement with Abbreviated Statute of Limitations
Jean v. Stanley Works, No. 1:04CV1904, 2008 WL 2778849 (N.D. Ohio July 14, 2008)
7/14/2008 12:00:00 AM
While considering several arguments that an arbitration agreement was unconscionable, a federal court in Ohio held that a one-year limitation period in the agreement was not unconscionable because Ohio law permits parties to contract for a period shorter than the 15-year statute of limitations.
In Jean v. Stanley Works, No. 1:04CV1904, 2008 WL 2778849 (N.D. Ohio July 14, 2008), Jean was a distributor of Stanley's tools, and brought a class action suit against Stanley on behalf of all Stanley distributorships, alleging that Stanley's business model dooms its distributors to fail... Full Story
Arbitration Award Confirmed as Court Holds that Use of Credit Card Demonstrates an Intent to be Bound by Credit Card Contract
Reeves v. Chase Bank USA, NA, No. 4:07CV1101 HEA, 2008 WL 2783231 (E.D. Mo. July 15, 2008)
7/15/2008 12:00:00 AM
A federal court in Missouri confirmed an arbitration award where a credit card holder argued that she never received the credit card contract despite her own testimony that she received the credit card and an agreement containing terms and conditions of the credit card contract.
In Reeves v. Chase Bank USA, NA, No. 4:07CV1101 HEA, 2008 WL 2783231 (E.D. Mo. July 15, 2008), Reeves opened a credit card account with Chase and began using her new Chase credit card. Under the credit card contract, use of the credit card served as acceptance of the contract's terms, and the contract contained an arbitration agreement... Full Story
Court Sinks Fraud in the Execution Claim and Compels Party to Arbitrate
McCaddin v. Southeastern Marine Inc., No. 07-CV-4303 (JFB), 2008 WL 2890876 (E.D.N.Y. July 22, 2008)
7/22/2008 12:00:00 AM
A New York federal court determined that a boat owner's allegations that a maritime salvage company misrepresented the scope of services described in an agreement the boat owner signed at most constituted fraud in the inducement to be decided in arbitration and could not constitute fraud in the execution of the contract, which is an issue that would be decided by the court.
In McCaddin v. Southeastern Marine Inc., No. 07-CV-4303 (JFB), 2008 WL 2890876 (E.D.N.Y. July 22, 2008), McCaddin went boating in his 42-foot motor pleasure craft, the Pandonna. While near the Long Island Sound, the Pandonna's engines lost power and unexpectedly caught fire... Full Story
Class Waiver in Wireless Contract Enforceable Under Georgia Law But Not Washington Law
McGinnis v. T-Mobile USA, Inc., No. C08-106Z, 2008 WL 2858492 (W.D. Wash. July 22, 2008)
7/22/2008 12:00:00 AM
A Washington federal court has upheld a class action waiver in a cellular telephone contract under Georgia law, but refused to enforce that same waiver under Washington law.
In McGinnis v. T-Mobile USA, Inc., No. C08-106Z, 2008 WL 2858492 (W.D. Wash. July 22, 2008), Johnson of Georgia, McGinnis of Minnesota, and Trolf of California filed a class action lawsuit against T-Mobile, alleging a violation of consumer protection laws and breach of contract. T-Mobile moved to compel arbitration in accordance with an arbitration agreement that contained a class waiver barring class-wide proceedings. The plaintiffs opposed the motion by arguing that the class waiver was unconscionable... Full Story
"Ward of the Admiralty" Doctrine Does Not Shift Burden of Proof from Party Challenging Arbitration Agreement to Party Seeking Enforcement of Agreement
Barbieri v. K-Sea Transportation Corp., No. 05-CV-04950 (ENV)(MDG), 2008 WL 2842937 (E.D.N.Y. July 23, 2008)
7/23/2008 12:00:00 AM
In upholding a post-dispute arbitration agreement between an employer and employee, a federal court in New York held that the "ward of the admiralty" doctrine does not shift the burden of proof from the party challenging the arbitration agreement to the party seeking enforcement of the agreement.
In Barbieri v. K-Sea Transportation Corp., No. 05-CV-04950 (ENV)(MDG), 2008 WL 2842937 (E.D.N.Y. July 23, 2008), Barbieri was employed by K-Sea as the captain of a petroleum barge. Barbieri was injured while on the ship, and, pursuant to a collective bargaining agreement, K-Sea paid Barbieri maintenance while he recuperated at home... Full Story
Massachusetts Federal Court Decides Arbitrable Question of Contract Validity, Despite Uncontroverted Existence of Contract
City of Westfield v. Harris & Associates Painting, Inc., Civ. A. No. 07-30241-MAP, 2008 WL 2856421 (D. Mass. July 24, 2008)
7/24/2008 12:00:00 AM
Despite clear evidence of a concluded contract, a Massachusetts federal district court retained the authority to decide whether a public works contract was unenforceable due to a foreign corporation's failure to follow state filing requirements.
In City of Westfield v. Harris & Associates Painting, Inc., Civ. A. No. 07-30241-MAP, 2008 WL 2856421 (D. Mass. July 24, 2008), the City of Westfield (Westfield) and Harris, a foreign corporation, entered into a public works contract. The contract contained an arbitration agreement. After a dispute arose over delays in performance, Harris and Westfield proceeded to arbitration... Full Story
Appeal from Denial of Motion to Compel Arbitration Divests District Court of Jurisdiction to Proceed with Case Pending Appeal
Industrial Wire Products, Inc. v. Costco Wholesale Corp., No. 4:08-CV-70 CAS, 2008 WL 2906716 (E.D. Mo. July 24, 2008)
7/24/2008 12:00:00 AM
A federal court in Missouri followed the precedent of a majority of circuit courts of appeal and held that a notice of appeal under § 16 of the Federal Arbitration Act (FAA) divests the district court of jurisdiction to proceed with the case pending appeal.
In Industrial Wire Products, Inc. v. Costco Wholesale Corp., No. 4:08-CV-70 CAS, 2008 WL 2906716 (E.D. Mo. July 24, 2008), Industrial Wire Products (IWP) sued Costco, and Costco moved to compel arbitration pursuant to an arbitration agreement in the parties' contract. The Court denied the motion to compel, holding that none of IWP's claims fell within the scope of the arbitration agreement... Full Story
Nursing Home Arbitration Agreement Involves Interstate Commerce and Thus Comes Within Scope of FAA
Bales v. Arbor Manor, No. 4:08CV3072, 2008 WL 2660366 (D. Neb. Jul. 03, 2008)
7/3/2008 12:00:00 AM
In enforcing a nursing home arbitration agreement, a Nebraska federal court ruled that nursing home residency involved interstate commerce and thus came within the scope of the Federal Arbitration Act (FAA) and that wrongful death claims are derivative under Nebraska law and thus subject to the decedent's arbitration agreement.
In Bales v. Arbor Manor, No. 4:08CV3072, 2008 WL 2660366 (D. Neb. Jul. 03, 2008), Diane Bales sued Arbor Manor, alleging that it had negligently caused the death of her father, Edward Fredenburg. Arbor Manor moved to compel arbitration in accordance with the nursing home residency agreement... Full Story
State Cases
California Court Denies Arbitration of Mobile Home Park Dispute Based on Possibility of Conflicting Rulings
Adams v. MHC Colony Park Ltd. Partnership, No. F053046, 2008 WL 2502527 (Cal. Ct. App. June 24, 2008)
6/24/2008 12:00:00 AM
Despite holding that arbitration agreements in mobile home lot leases do not offend public policy, a California state appellate court has affirmed a trial court's refusal to compel arbitration based on the presence of third-party non-signatories that might result in inconsistent decisions at court and arbitration.
In Adams v. MHC Colony Park Ltd. Partnership, No. F053046, 2008 WL 2502527 (Cal. Ct. App. June 24, 2008), Adams and other tenants of MHC's mobile home park filed suit alleging MHC's failure to keep common areas in good repair. Seventeen of the tenants signed leases with MHC containing arbitration agreements, and MHC moved to compel arbitration of those plaintiffs' claims. The trial court denied the motion, holding that the agreements were void as a matter of public policy. Alternatively, it held that allowing the arbitration of some claims could lead to inconsistent judgments... Full Story
Attorney Reasonably Relying on Representations of Client Spokesperson Has Apparent Authority to Settle
Messer v. Huntington Anesthesia Group, Inc., No. 33663, 2008 WL 2523158 (W. Va. June 26, 2008)
6/26/2008 12:00:00 AM
A West Virginia appellate court held that an attorney had apparent authority to enter into a mediated settlement agreement after he reasonably relied on a statement agreeing to the settlement given by the client through their spokesperson and the client did not offer any information rebutting the attorney's apparent authority.
In Messer v. Huntington Anesthesia Group, Inc., No. 33663, 2008 WL 2523158 (W. Va. June 26, 2008), Theresa Messer brought suit against the eight doctors comprising HAGI for failing to reasonably accommodate her physical disabilities sustained from a back injury. The suit proceeded to court-annexed mediation... Full Story
California Court Finds Arbitration Agreement Unconscionable Based Partly on Provision Delegating Unconscionability Questions to the Arbitrator
Ontiveros v. DHL Express (USA), Inc., 79 Cal. Rptr. 3d 471 (Cal. Ct. App. 2008)
6/30/2008 12:00:00 AM
The California Court of Appeal affirmed a lower court ruling that an employee's arbitration agreement was unconscionable under California law. The Court based its unconscionability determination partly on a provision giving the arbitrator exclusive authority to decide the enforceability of the arbitration agreement.
In Ontiveros v. DHL Express (USA), Inc., 79 Cal. Rptr. 3d 471 (Cal. Ct. App. 2008), Ontiveros sued DHL, her former employer, for sexual harassment and discrimination. In response, DHL moved to compel arbitration pursuant to an arbitration agreement that Ontiveros signed when she was hired. The trial court denied the motion on the ground that the arbitration agreement was unconscionable and therefore unenforceable... Full Story
Court Refuses to Enforce Nursing Home Arbitration Agreement Signed by Resident's Friend
Mt. Holly Nursing Center v. Crowdus, No. 2007-CA-001708-MR, 2008 WL 2852881 (Ky. Ct. App. July 25, 2008)
7/25/2008 12:00:00 AM
In affirming a lower court order denying a nursing home's motion to compel arbitration, the Kentucky Court of Appeals found no apparent authority and also rejected a third-party beneficiary theory because the resident was competent to sign the agreement and the agreement specifically stated that it must be signed by the resident if competent.
In Mt. Holly Nursing Center v. Crowdus, No. 2007-CA-001708-MR, 2008 WL 2852881 (Ky. Ct. App. July 25, 2008), McGaughey designated Crowdus, her friend, as her health care surrogate, but did not provide her with a general power of attorney. Later, McGaughey was admitted to the Mt. Holly Nursing Center, and during the admission process, Crowdus signed various documents, including an arbitration agreement, on McGaughey's behalf... Full Story
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