Federal Cases
Sixth Circuit Concludes Arbitrators Did Not Exceed Powers and Upholds Summary Arbitration Award
Electronic Data Systems Corp. v. Donelson, Nos. 06-1211, 06-1478, 2007 WL 108280 (6th Cir. Jan. 18, 2007)
1/18/2007
In an employment discrimination case where the employees prevailed at arbitration, the Sixth Circuit Court of Appeals held that the arbitrators did not exceed their powers by failing to issue findings of fact and conclusions of law. It was crucial to the Court's holding that the parties did not agree to submit the dispute to arbitration until after the alleged statutory violations had occurred.
In Electronic Data Systems Corp. v. Donelson, Nos. 06-1211, 06-1478, 2007 WL 108280 (6th Cir. Jan. 18, 2007), Donelson and Lotts sued Electronic Data Systems (EDS), their former employer, for alleged discrimination. After the lawsuits were filed, the parties agreed to submit the dispute to arbitration. The parties further agreed that the three-member arbitration panel would render a decision within two weeks of final briefing... Full Story
Challenge to Validity of the Contract As a Whole Must Go to the Arbitrator
Qwest Communications Corp. v. Ansari, No. 05-1836 (EGS), 2007 WL 172318 (D.D.C. Jan. 23, 2007)
1/23/2007
In ordering arbitration of a telecommunications dispute, a federal court applied the Buckeye doctrine that a challenge to the validity of a contract as a whole is a matter for the arbitrator.
In Qwest Communications Corp. v. Ansari, No. 05-1836 (EGS), 2007 WL 172318 (D.D.C. Jan. 23, 2007), Qwest and Broadband Utility Resources (BUR) entered into a contract whereby BUR could use part of Qwest's telecommunications network. Two years later, BUR sued Qwest in federal court in Colorado, alleging several torts and violations of the Federal Communications Act. Qwest filed a motion to compel arbitration pursuant to the parties' contract... Full Story
Texas Federal Court Overturns Arbitral Award Based on Parties' Agreement for a Heightened Standard of Review
National Resort Management Corp. v. Cortez, No. 4:06-CV-641-A, 2007 WL 142589 (N.D. Tex. Jan. 16, 2007)
1/16/2007
In a case where five employees prevailed on their sexual harassment claims at arbitration, a federal district court in Texas vacated the arbitration award pursuant to the arbitration agreement's provision for heightened judicial review.
In National Resort Management Corp. v. Cortez, No. 4:06-CV-641-A, 2007 WL 142589 (N.D. Tex. Jan. 16, 2007), Cortez and four co-workers alleged that National Resort Management Corporation (NRMC), their employer, was liable for sexual harassment... Full Story
Bill of Lading That Incorporates Charter Agreement Binds Parties to Arbitrate Pursuant to Arbitration Clause in Charter Agreement
Ibeto Petrochemical Industries Ltd v. M/T Beffen, No. 05-6610 CV, 2007 WL 106165 (2d Cir. Jan. 17, 2007)
1/17/2007
A bill of lading between two parties that incorporates the terms of a charter agreement between one party to the bill and a third party is sufficient to bind both parties to the bill to the terms of the charter agreement, the Second Circuit Court of Appeals held.
In Ibeto Petrochemical Industries Ltd v. M/T Beffen, No. 05-6610 CV, 2007 WL 106165 (2d Cir. Jan. 17, 2007), Ibeto brought an action against the Beffen and Bryggen Shipping, claiming that a shipment of oil was contaminated with seawater. Bryggen Shipping shipped the oil on the Beffen to Ibeto in Nigeria... Full Story
Party May Not Rely on Sham Arbitration Award to Substantiate Other Claims
Buczek v. Trans Union LLC, No. 05-80834 CIV, 2006 WL 3666635 (S.D. Fla. Nov. 09, 2006)
11/9/2006
A Florida federal court held that a party cannot rely on a sham arbitration award to substantiate a Fair Credit Reporting Act ("FCRA") claim.
In Buczek v. Trans Union LLC, No. 05-80834 CIV, 2006 WL 3666635 (S.D. Fla. Nov. 09, 2006), Shane Buczek leased a BMW but claimed that he "does not recall" signing the agreement or possessing the car. After Buczek defaulted on the payments, the car was repossessed. He became current on the payments and the car was returned to him. After a second repossession, the car was sold at auction... Full Story
Federal Court Orders Arbitration Where Claim Brought As Intervening Claim in E.E.O.C. Proceeding
E.E.O.C. v. Hooters of America, Inc., No. 06-CV-6138CJS, 2007 WL 64163 (W.D.N.Y. Jan. 09, 2007)
1/9/2007
A federal court held that an intervenor plaintiff in an action brought by the E.E.O.C. must arbitrate her claims against her former employer when the claims are subject to an arbitration clause.
In E.E.O.C. v. Hooters of America, Inc., No. 06-CV-6138CJS, 2007 WL 64163 (W.D.N.Y. Jan. 09, 2007), Melissa Vicari, a Hooters employee, alleged discrimination for her disabilities. The E.E.O.C. brought suit on her behalf, and Vicari moved to intervene into the proceeding... Full Story
A Party Does Not Waive Its Right to Arbitrate by Bringing Claims in Court When Those Claims Are Not Governed by an Arbitration Agreement
Konica Minolta Business Solutions, U.S.A., Inc. v. Allied Office Products, Inc., No. 206-CV-71, 2006 WL 3827461 (S. D. Ohio Dec. 27, 2006)
12/27/2006
An Ohio federal court held that a party did not waive its right to arbitrate the opposing party's counterclaims because the original claim arose out of an agreement that did not contain an arbitration clause, while the counterclaim arose out of an agreement that did contain an arbitration clause, and the claims and counterclaim presented distinct legal and factual issues.
In Konica Minolta Business Solutions, U.S.A., Inc. v. Allied Office Products, Inc., No. 206-CV-71, 2006 WL 3827461 (S. D. Ohio Dec. 27, 2006), Allied was an authorized dealer of equipment made by Konica Minolta (KMBS). The parties had executed a dealer agreement, which contained an arbitration clause, and a promissory note, which did not contain an arbitration clause. The note did not reference the dealer agreement... Full Story
Pennsylvania Federal District Court Says Antitrust Suit Not Subject to Limited Arbitration Clause
In re Pharmacy Benefit Managers Antitrust Litigation, No. 06-md-01782-JF, 2006 WL 3759712 (E.D. Pa. Dec. 18, 2006)
12/18/2006
A federal court in Pennsylvania held that an arbitration agreement requiring the arbitrator to "follow the rule of law" and "only award remedies provided in this Agreement" did not encompass antitrust claims.
In In re Pharmacy Benefit Managers Antitrust Litigation, No. 06-md-01782-JF, 2006 WL 3759712 (E.D. Pa. Dec. 18, 2006), a class action alleging violations of antitrust laws, the issue before the Court was whether preliminary determinations should be submitted to arbitration pursuant to an arbitration agreement... Full Story
Citing Ambiguous Evidence from Credit Card Issuer, Court Grants Limited Discovery to Cardholder Contesting Motion to Compel Arbitration
Azur v. MBNA Corp., No. 06-1047, 2007 WL 120049 (W.D. Pa. Jan. 10, 2007)
1/10/2007
A credit card holder contesting a motion to compel arbitration was granted limited rights to discovery by a federal district court in Pennsylvania in a case where the card issuer had presented potentially ambiguous evidence.
In Azur v. MBNA Corp., No. 06-1047, 2007 WL 120049 (W.D. Pa. Jan. 10, 2007), a case regarding the fraudulent use of one of Azur's credit cards, the Court held that because the testimony of an MBNA vice president regarding credit card numbers belonging to Azur created "potential ambiguity," Azur would be allowed limited discovery in opposing MBNA's motion to compel arbitration... Full Story
State Cases
Receipt of Medicaid Payments Triggers Application of Federal Arbitration Act to Employment Dispute
In re December Nine Co., No. 08-06-00225-CV, 2006 WL 3924098 (Tex. Ct. App. Dec. 7, 2006)
12/7/2006
The Texas Court of Appeals held that the Federal Arbitration Act (FAA) applied to arbitration agreements between a mental health facility and its employees because the facility was reimbursed for the employees' services through Medicaid, a federally funded program administered by the state.
In In re December Nine Co., No. 08-06-00225-CV, 2006 WL 3924098 (Tex. Ct. App. Dec. 7, 2006), Estrada and Daher sued December Nine, their former employer, for wrongful discharge. December Nine filed a motion to compel arbitration pursuant to its ADR program. The trial court denied the motion.
On appeal, the Court first examined whether the employees' arbitration agreements involved interstate commerce and thus were subject to the FAA... Full Story
Limited Right of Modification Makes Arbitration Agreement Fair and Enforceable
Harby ex rel. Brooks v. Wachovia Bank, N.A., No. 2758, 2007 WL 189371 (Md. Ct. Spec. App. Jan. 26, 2007)
1/26/2007
In sending an employment dispute to arbitration, the Maryland Special Court of Appeals held that the employer's unilateral right of modification did not render the parties' arbitration agreement void for lack of consideration because the employer had to give 30 days notice before exercising the right of modification.
In Harby ex rel. Brooks v. Wachovia Bank, N.A., No. 2758, 2007 WL 189371 (Md. Ct. Spec. App. Jan. 26, 2007), Edwards was the court-appointed guardian of property belonging to her minor son, Brooks. Using a $100,000 check payable to her son, Edwards opened an account at Wachovia Bank (Wachovia)... Full Story
Parties Must Expressly Elect Federal Arbitration Act to Avoid State Arbitration Procedures
Rambus Inc. v. Hynix Semiconductor, Inc., Nos. A112076, A113221, 2007 WL 18829 (Cal. Ct. App. Jan. 3, 2007)
1/3/2007
The California Court of Appeal held that while the substantive provisions of the Federal Arbitration Act (FAA) preempt conflicting state arbitration law, parties must expressly elect to arbitrate under FAA procedures.
In Rambus Inc. v. Hynix Semiconductor, Inc., Nos. A112076, A113221, 2007 WL 18829 (Cal. Ct. App. Jan. 3, 2007), Rambus sued a series of defendants, alleging a price fixing conspiracy. Two defendants moved to compel arbitration, which the trial court denied based upon a California law granting courts discretion to deny arbitration when at least one codefendant is not subject to an arbitration clause. Cal. Civ. Proc. Code §1281.2(c)... Full Story
Arbitration Conducted According to JAMS Rules Upheld, Despite Agreement That State Bar Guidelines or AAA Rules Would Govern
Webb & Carey, A.P.C. v. Keenan, No. D045968, 2006 WL 3826693 (Cal. App. Dec. 29, 2006)
12/26/2006
A California appellate court upheld an arbitration award conducted by a JAMS arbitrator and applying JAMS rules, despite the fact that the parties' agreement required certain disputes to be arbitrated in accordance with State Bar of California Guidelines or the American Arbitration Association (AAA) rules.
In Webb & Carey, A.P.C. v. Keenan, No. D045968, 2006 WL 3826693 (Cal. App. Dec. 29, 2006), Webb & Carey brought claims against Keenan to collect fees due under an attorney-client fee agreement. The arbitration hearing was conducted by JAMS, and the JAMS arbitrator issued an award in Webb & Carey's favor... Full Story
Question Regarding Attorney's Settlement Authority Precludes Enforcement of Settlement Agreement
Moussa v. Vozza, 2007 WL 108315 (N.J. Super. Ct. App. Div. Jan. 18, 2007)
1/18/2007
The Appellate Division of the New Jersey Superior Court refused to uphold an order enforcing a settlement agreement because there was a factual question as to whether or not the plaintiff's attorney was authorized to settle the case on her behalf.
In Moussa v. Vozza, 2007 WL 108315 (N.J. Super. Ct. App. Div. Jan. 18, 2007), Moussa was awarded $20,000 in a non-binding arbitration proceeding for injuries suffered in a motor vehicle accident. She rejected the award by filing a demand for a trial de novo. During subsequent settlement negotiations, Moussa's attorney accepted a settlement offer of $40,000, but Moussa later claimed that she had not authorized her attorney to settle on her behalf. The trial court granted a motion to enforce the settlement agreement... Full Story
Association Bound to Arbitrate Pursuant to Arbitration Agreements Signed by Members
Tennessee Medical Ass'n v. BlueCross BlueShield of Tennessee, Inc., No. M2005-01278-COA-R3CV, 2007 WL 63610 (Tenn. Ct. App. Jan. 09, 2007)
1/9/2007
A representative organization that brings an action on behalf of its members is bound to arbitrate when the organization's members have signed arbitration agreements with the opposing party, a state court in Tennessee held.
In Tennessee Medical Ass'n v. BlueCross BlueShield of Tennessee, Inc., No. M2005-01278-COA-R3CV, 2007 WL 63610 (Tenn. Ct. App. Jan. 09, 2007), Tennessee Medical Association (TMA) brought a series of claims against BlueCross BlueShield of Tennessee (BCBST) on behalf of TMA member physicians... Full Story
California Court Applies Discover Bank to Wireless Agreement and Finds Arbitration Clause Unconscionable
In re Cingular Cases, No. D047603, 2007 WL 93229 (Cal. App. Jan. 16, 2007)
1/16/2007
A California appellate court denied a wireless provider's motion to compel arbitration, refusing to enforce an arbitration agreement that contained a class action waiver as unconscionable under Discover Bank.
In In re Cingular Cases, No. D047603, 2007 WL 93229 (Cal. App. Jan. 16, 2007), Cingular customers brought a class action alleging that Cingular engaged in a deceptive advertising campaign... Full Story
Arbitrator's Prior Role As a Mediator Not a Required Disclosure in California
Guseinov v. Burns, Nos. B188984, B191645, 2006 WL 3691602 (Cal. Ct. App., Dec. 15, 2006)
12/15/2006
An arbitrator's previous role as a volunteer mediator in a dispute where one of the parties' counsel had represented a third party is not required disclosure, a California state court held.
In Guseinov v. Burns, Nos. B188984, B191645, 2006 WL 3691602 (Cal. Ct. App., Dec. 15, 2006), Burns discovered that the arbitrator had previously served as a volunteer mediator in an unrelated matter where plaintiff's counsel had represented a party. This fact was disclosed to both parties' attorneys prior to the arbitration, but Burns did not learn of it until the arbitration had already commenced... Full Story
Failure to Participate in Court-Ordered Mediation Contributes to Sanctions
JNG, LLC v. United States Fire Ins. Co., No. B188517, 2007 WL 106167 (Cal. Ct. App. Jan. 17, 2007)
1/17/2007
The California Court of Appeal issued terminating sanctions against a party who repeatedly ignored court orders, failed to comply with discovery, and refused to appear at a court-ordered mediation session.
In JNG, LLC v. United States Fire Ins. Co., No. B188517, 2007 WL 106167 (Cal. Ct. App. Jan. 17, 2007), insurance broker JNG obtained insurance for Merchants Building Maintenance (Merchants) from United States Fire Insurance Co. (U.S. Fire.). Claiming that JNG withheld premium payments, U.S. Fire sued JNG for unjust enrichment... Full Story
Individual Members of Group Health Plan Are Entitled to Arbitration Disclosures Required by California Law
Medeiros v. Superior Court, No. B193042, 2007 WL 93170 (Cal. Ct. App. Jan. 16, 2007)
1/16/2007
In construing a California statute that imposes disclosure requirements on arbitration clauses in health care plans, the California Court of Appeals held that an individual member of a group health plan is entitled to the requisite disclosures.
In Medeiros v. Superior Court, No. B193042, 2007 WL 93170 (Cal. Ct. App. Jan. 16, 2007), Health Net and San Bernardino County (the County) entered into a group service agreement whereby Health Net would provide health insurance to County employees. The group service agreement contained an arbitration clause... Full Story
ADR Legislation & Regulation
FEDERAL LEGISLATION
United States Senate Bill 183 (Introduced 1/4/2007)
Subjects: Fuel emissions; arbitration
Establishes a corporate average fuel economy standard for passenger automobiles of forty miles per gallon by 2017, and allows for an "arbitration option" in resolving disputes with the Secretary of Commerce regarding gas emission reduction credits.
United States Senate Bill 237 (Introduced 1/10/2007) [see also House Bill 371]
Subjects: Agriculture; arbitration
Provides for arbitration procedures when an alien files a complaint of termination from agricultural employment without just cause.
STATE LEGISLATION
Arizona Senate Bill 1438 (Introduced 1/25/2007)
Subjects: Home loans; arbitration
Titled the "Home Loan Protection Act," the bill prohibits certain refinancing practices, acceleration clauses, and forcing default in home loan contracts. Also, mandatory arbitration or "similar" provisions are prohibited to the extent they require the borrower to arbitrate outside of their county, pay for any part of arbitration costs, or prohibit class actions.
Florida Senate Bill 978 (Introduced 1/26/2007)
Subjects: Non-binding court–ordered ADR
Concerning court-ordered non-binding arbitration, the bill provides for specified costs when a trial de novo following an arbitration proceeding differs in result to a certain degree.
Georgia House Bill 163 (Introduced 1/25/2007)
Subjects: Deferred Presentment Services Act; Arbitration
Makes licensing requirements for deferred presentment services and states that such an arrangement is not to be considered a "loan" under Georgia law. A written agreement documenting a deferred presentment services transaction shall not contain a mandatory arbitration clause, unless it complies with AAA's National Consumer Dispute Advisory Committee standards. Nothing in the bill is intended to prohibit a licensee and consumer from entering into an arbitration agreement.
Hawaii House Bill 1698 (Introduced 1/24/2007) [see also Senate Bill 1803]
Subjects: Health care; unfair claim settlement practices
Outlines unfair claim settlement practices in health care, which includes "Making known to insureds or claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration."
Hawaii House Bill 1795 (Introduced 1/24/2007)
Subjects: Homeowners' association; mediation
Allows parties to a homeowner's associate dispute to request mediation to settle the dispute.
Hawaii House Bill 1846 (Introduced 1/24/2007)
Subject: Construction defects; mediation
"Right to repair" bill with perquisite four-hour mediation session prior to initiation of a construction defects dispute against a construction contractor.
Hawaii Senate Bill 1654 (Introduced 1/24/2007)
Subjects: Condominium ADR; mediation
Provides for mediation requested by the board of directors in a condominium management dispute.
Montana Draft 600 (Introduced 1/25/2007)
Subjects: Dissolution of marriage; mediation
The Court will require mediation of a dissolution dispute regarding custody of minor children, unless the Court finds mediation inappropriate.
New Mexico Senate Bill 393 (Introduced 1/23/2007)
Subjects: Consumer loans; arbitration
When making a consumer loan, a licensee shall not "require the consumer to submit to arbitration or impose onerous legal notice provisions in the case of a dispute." States that a provision of a promissory note or other contract evidencing a consumer loan requiring arbitration of any dispute arising under that loan shall not be enforceable.
New York Senate Bill 1747 (Introduced 1/25/2007)
Subjects: Commercial leases; arbitration
Provides that tenants have a right to renew commercial retail leases in cities with a population of one million or more, and establishes a commercial arbitration panel.
Utah House Bill 329 (Introduced 1/23/2007)
Subjects: Deferred deposit loans; unconscionable practices
Relates to deferred deposit loans; requires disclosures on loan contracts indicating that borrower cannot be criminally prosecuted for failure to repay. Also prohibits other unconscionable practices related to lending, but does not mention arbitration.
Utah House Bill 340 (Introduced 1/24/2007)
Subjects: Insurer receiverships; arbitration
This bill relates to the "Insurer Receivership Act" and modifies provisions allowing parties to submit disputes to binding arbitration. Claims and counterclaims against the estate may be arbitrated pursuant to the chapter's provisions.
Washington House Bill 1702 (Introduced 1/25/2007) [see also Senate Bill 5522]
Subjects: Annexation of library districts; arbitration
Provides for annexation of a portion of a rural county library district by a city, code city, or town, and allows for arbitration of related disputes.
Washington Senate Bill 5089 (Introduced 1/10/2007)
Subjects: Personal wireless services; arbitration
Allows for parties to use binding arbitration to resolve disputes over personal wireless services charges between a city and service provider.
REGULATIONS
Florida Regulation 31179 (Proposed Rule Change 1/26/2007)
Subjects: Energy facilities; mediation
Establishes an expedited process for resolution of disputes between renewable energy generating facilities and investor-owned utilities. The companies involved in the dispute must have attempted to resolve their dispute either through negotiation or by seeking mediation from an independent third party or Commission staff.
Maryland Regulation 10930 (Proposed 1/19/2007) [see also Regulation 10931]
Subjects: Mediation; disabilities legislation
Makes technical changes in state regulations related to the Individuals with Disabilities Act of 2004, and mediation of related claims.
New Hampshire Regulation 6544 (Proposed 1/25/2007)
Subjects: Marital mediators
Revises academic eligibility requirements for becoming a marital mediator in New Hampshire.
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