Federal Cases
CROA Claims Arbitrable, Even Without Specific Named Arbitration Rules, but Distant Venue Deemed Unconscionable
Vegter v. Forecast Financial Corp., No. 1:07-CV-279, 2007 WL 4178947 (W.D. Mich. Nov. 20, 2007)
11/20/2007
A federal court in Michigan rejected an argument that failure to specify rules of arbitration, including the method of arbitrator selection, rendered the arbitration agreement fatally indefinite; severed a provision for a distant venue as unconscionable because the defendant was aware the plaintiff was financially stressed and would be unable to travel; and cited precedent establishing that Credit Repair Organization Act claims are arbitrable.
In Vegter v. Forecast Financial Corp., No. 1:07-CV-279, 2007 WL 4178947 (W.D. Mich. Nov. 20, 2007), Barbara Vegter entered into a debt management contract with Forecast Financial. Vegter filed suit, claiming Forecast Financial violated federal and state credit and consumer protection acts, including the federal Credit Repair Organization Act (CROA)... Full Story
New York Federal Court Holds FAA Preempts New York Law Invalidating Arbitration Agreements Clauses in Consumer Goods Contracts
Nichols v. Washington Mut. Bank, No. 07-CV-3216 (JG)(VVP), 2007 WL 4198252 (E.D.N.Y. Nov. 21, 2007)
11/21/2007
Granting a motion to compel arbitration of a consumer credit dispute, a New York federal court held that the Federal Arbitration Act (FAA) preempts New York state laws rendering arbitration agreements for consumer goods unenforceable.
In Nichols v. Washington Mut. Bank, No. 07-CV-3216 (JG)(VVP), 2007 WL 4198252 (E.D.N.Y. Nov. 21, 2007), Nichols obtained a secured loan from Washington Mutual. When Nichols failed to make payments on her loan, Washington Mutual transferred the delinquent account to National Foreclosure Relief... Full Story
Arbitrators' Lack of Information Does Not Constitute "Mistake" That Would Warrant Award Modification
AIG Baker Sterling Heights, LLC v. American Multi-Cinema, Inc., No. 07-10130, 2007 WL 4180608(11th Cir. Nov. 28, 2007)
11/28/2007
In a case involving a property tax dispute where one of the parties failed to inform the arbitration panel of a substantial tax payment, the Eleventh Circuit Court of Appeals held that the arbitrators' failure to account for the payment did not constitute an "evident material mistake" within the meaning of the Federal Arbitration Act (FAA). Specifically, the Court reasoned that a lack of information in the hands of the arbitrators does not constitute a mistake that would warrant award modification under the FAA.
In AIG Baker Sterling Heights, LLC v. American Multi-Cinema, Inc., No. 07-10130, 2007 WL 4180608(11th Cir. Nov. 28, 2007), AIG Baker (Baker) leased space in two shopping malls – one in Kansas, one in Michigan – to American Multi-Cinema (AMC). The lease agreement required AMC to pay Baker for a share of the property taxes... Full Story
Rule 11 Sanctions Imposed for Frivolous Challenge to Arbitration Award
Washington Mut. Bank v. Forgue, No. 07-MC-6027-CJS, 2007 WL 4232708 (W.D.N.Y. Nov. 27, 2007)
11/27/2007
A federal court in New York ordered reasonable attorney fees as a sanction under Rule 11 against a credit card debtor for a frivolous challenge to an arbitration award confirmation.
In Washington Mut. Bank v. Forgue, No. 07-MC-6027-CJS, 2007 WL 4232708 (W.D.N.Y. Nov. 27, 2007), Gretchen Forgue had a credit card account with Washington Mutual. Ms. Forgue began complaining about what she referred to as "billing errors" based on Washington Mutual's alleged failure to provide certain disclosures when she opened the account. Forgue disputed her balance as a result... Full Story
Pennsylvania Federal Court Declines to Enforce Employee Handbook Arbitration Clause
Plebani v. Bucks County Rescue Emergency Medical Services, No. Civ. A.03-5816, Civ. A. 03-6225, 2007 WL 4224365 (E.D.Pa. Nov. 27, 2007)
11/27/2007
Dismissing a motion to compel arbitration of an employment dispute, a Pennsylvania federal court held that an arbitration clause in an employee handbook did not constitute an agreement to arbitrate because the employee did not sign it.
In Plebani v. Bucks County Rescue Emergency Medical Services, No. Civ. A.03-5816, Civ. A. 03-6225, 2007 WL 4224365 (E.D.Pa. Nov. 27, 2007), Lisa Plebani and her father, Michael Plebani, sued Bucks County Rescue Emergency Medical Services (BCRS) for alleged sex discrimination against Lisa Plebani and subsequent retaliation against both of them. BCRS moved to compel arbitration asserting the Plebanis were bound to a mandatory arbitration provision contained in the employee handbook... Full Story
State Cases
No Res Judicata Effect on Non-Party to Arbitration
Ross v. Gandolfo, No. B189709, 2007 WL 4171206 (Cal. Ct. App.2d Nov. 27, 2007)
11/27/2007
In reversing a trial court ruling, a California appellate court held that there is no res judicata effect from an arbitration award applied to a non-party where the non-party's liability cannot be derived from a party to the arbitration proceeding.
In Ross v. Gandolfo, No. B189709, 2007 WL 4171206 (Cal. Ct. App.2d Nov. 27, 2007), Bar and Helena Ross, along with their minor child, lived in a home containing a garage converted into living space by landlord Pamela Stableford. The remodeling had been done without the required permits. The Ross' discovered a carbon monoxide leak which led them to stop paying rent and notify authorities... Full Story
Price Is Right: Court Finds Arbitration Is "Faster, More Efficient Dispute Resolution Process"
Riegert v. Barker, No. B193471, 2007 WL 4201091 (Cal. Ct. App. Nov. 29, 2007)
11/29/2007
Affirming a trial court's ruling confirming an arbitration award, a California appellate court held that an arbitration clause was not unconscionable because arbitration provided the parties with a "faster, more efficient dispute resolution process."
In Riegert v. Barker, No. B193471, 2007 WL 4201091 (Cal. Ct. App. Nov. 29, 2007), Riegert worked as production assistant on "The Price is Right" (TPIR). Pearson Television took over the production of the program in October 2000. On October 9, 2000, TPIR offered all program staff, including Riegert, a two-page separation agreement and general release, which contained an arbitration provision. The agreement stipulated that TPIR would lay off Riegert and pay her a $7,670 severance... Full Story
Failure to Satisfy State Disclosure Requirements Renders Nursing Home Arbitration Agreement Unenforceable
Swayne v. Torrance Care Center West, Inc., 2007 WL 4157576 (Cal. Ct. App.2d Nov. 26, 2007)
11/26/2007
In affirming a lower court order denying a nursing home's motion to compel arbitration, the California Court of Appeal held that the arbitration agreements failed to satisfy the disclosure requirements set forth in California regulations governing the use of arbitration agreements by nursing homes.
In Swayne v. Torrance Care Center West, Inc., 2007 WL 4157576 (Cal. Ct. App.2d Nov. 26, 2007), Rogers died during her residency at a nursing home run by Torrance Care Center (TCC). Her estate sued TCC for wrongful death... Full Story
North Carolina Court Affirms Dismissal of Claims Covered by Mediation Settlement Agreement
Weaver v. Saint Joseph of Pines, Inc., No. COA06-1524, 2007 WL 4104888 (N.C. Ct. App. Nov 20, 2007)
11/20/2007
Affirming a trial court order dismissing claims covered by a Release agreement signed in mediation, a North Carolina appellate court held that a Release agreement covering "any and all claims whether known or unknown" was broad enough to encompass claims not specifically mentioned in the Release.
In Weaver v. Saint Joseph of Pines, Inc., No. COA06-1524, 2007 WL 4104888 (N.C. Ct. App. Nov 20, 2007), Weaver, administrator of Frankie Vampers's estate, sued Saint Joseph of Pines (SJP) for negligence and wrongful death. On May 20, 2003 SJP employees transported Ms. Vamper in a van to receive dialysis treatment. A piece of the mechanical wheelchair lift broke and landed on Ms. Vamper's leg. Weaver asserted Ms. Vamper suffered serious injuries ultimately resulting in her leg's amputation and eventual death three years later... Full Story
ADR Legislation & Regulation
LEGISLATION
OK H 2198
AUTHOR: Carey [D]
TITLE: Illegal Intimidation
PREFILED: 12/11/2007
DISPOSITION: Pending Carryover
LOCATION: HOUSE
Commentary: Increases the penalty for a person who directly or indirectly intimidates or obstructs judicial or ministerial officers, jurors, referees, arbitrators, umpires or assessors or any other persons authorized by law to hear or determine any controversy from a misdemeanor to a felony.
PA S 1 PN: 1646
AUTHOR: Pileggi [R]
TITLE: Right to Know Act of 1957
INTRODUCED: 03/29/2007
LAST AMEND: 12/10/2007
DISPOSITION: Pending
LOCATION: Bills on Concurrence in House Amendments
Commentary: Amends the Right to Know Act of 1957, establishing an informal mediation process to resolve disputes under the act. Also excepts from public record status a record pertaining to strategy or negotiations relating to an arbitration award. However, that doesn't apply to any final or executed contract or agreement or arbitration award between the parties.
US H 2419
SPONSOR: Peterson C [DFL]
TITLE: Continuation Of Agricultural Programs
INTRODUCED: 05/22/2007
LAST AMEND: 12/12/2007
DISPOSITION: Pending
LOCATION: SENATE
Commentary: An act providing for the continuation of agricultural programs through fiscal year 2012, and for other purposes. As it relates to arbitration, the bill states, "The Secretary of Agriculture shall promulgate regulations to establish standards related to the inclusion of arbitration provisions in livestock and poultry production contracts." This includes establishing 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. It also includes a small claims exception, and a requirement that arbitrators disclose grounds for an evident partiality challenge. This bill has passed the House and been received by the Senate.
US H 3688
SPONSOR: Hoyer [D]
TITLE: United States Peru Trade Promotion Agreement
INTRODUCED: 09/27/2007
ENACTED: 12/14/2007
DISPOSITION: Enacted
LOCATION: Signed by President
Commentary: Implements the United States Peru Trade Promotion Agreement, which provides for arbitration of claims.
US S 1782
SPONSOR: Feingold [D]
TITLE: Arbitration
INTRODUCED: 07/12/2007
DISPOSITION: Pending
LOCATION: Senate Judiciary Committee
Commentary: Arbitration Fairness Act of 2007. This bill seeks to amend the Federal Arbitration Act to ban the use of predispute consumer, franchise and employment arbitration agreements. Senate hearings were held on the bill on December 12.
US S 2411
SPONSOR: Wyden [D]
TITLE: Credit Card Safety Star Rating System
INTRODUCED: 12/05/2007
DISPOSITION: Pending
LOCATION: Senate Banking, Housing and Urban Affairs Committee
Commentary: A bill to require the establishment of a credit card safety star rating system for the benefit of consumers, and for other purposes. A Credit Card Safety Star Advisory Commission would be created to rate cards based upon how favorable they are to consumers. A card that contains an arbitration clause would be penalized, and awarded fewer stars than a card without a clause.
US S 2452
SPONSOR: Dodd [D]
TITLE: Truth In Lending Act
INTRODUCED: 12/12/2007
DISPOSITION: Pending
LOCATION: Senate Banking, Housing and Urban Affairs Committee
Commentary: Amends the Truth in Lending Act to provide protection to consumers with respect to certain high cost loans. The text of the bill has not yet been published.
WI S 294
AUTHOR: Breske [D]
TITLE: Interstate Insurance Product Regulation Compact
INTRODUCED: 10/22/2007
LAST AMEND: 12/11/2007
DISPOSITION: Pending
LOCATION: ASSEMBLY
Commentary: This bill would enact the Interstate Insurance Product Regulation Compact (compact). The stated purposes of the compact include promoting and protecting the interests of consumers of annuity, life insurance, disability income, and long term care insurance products (insurance products); developing uniform standards for insurance products; establishing a central clearinghouse for review of insurance products, and advertisements related to insurance products, that are filed with the Interstate Insurance Product Regulation Commission (commission); and giving regulatory approval to insurance products and related advertisements filed with the commission. As it relates to ADR, the Compact would restrict the use of arbitration clauses in such contracts that were not pre-approved by rule or pre-approved by the Interstate Insurance Product Regulation Commission or which do not conform with the form contracts in use among the compacting states.
WI S 352
AUTHOR: Wirch [D]
TITLE: Residential Mortgage Loans
INTRODUCED: 12/10/2007
DISPOSITION: Pending
LOCATION: Senate Veterans and Military Affairs, Biotechnology and Financial Institutions Committee
Commentary: This bill would require a number of disclosures to be made in connection with residential mortgage loans, including whether an arbitration agreement is part of the loan documents.
REGULATIONS
Kentucky 803 KAR 25:110
AGENCY: Environmental and Public Protection Cabinet/Department for Labor/Office of Workers' Claims
TITLE: Workers' Compensation Managed Health Care Plans
PROPOSED: 08/08/2007
Commentary: As it relates to arbitration, the proposed Regulation states that managed care plans may provide for alternate means of dispute resolution including arbitration and mediation. Comment deadline 10/1/07.
Kentucky 101 KAR 2:230
AGENCY: Personnel Cabinet
TITLE: Kentucky Employee Mediation Program
PROPOSED: 11/09/2007
Commentary: This administrative regulation establishes the Kentucky Employee Mediation Program for state employees. The program uses the state's existing mediator pool to hear disputes.
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