Federal Cases
First Circuit: Order Denying Non-Signatory’s Motion to Compel Arbitration Pursuant to International Agreement Immediately Appealable
Sourcing Unlimited, Inc. v. Asimco Int’l, Inc., No. 07-2754, 2008 WL 2132838 (1st Cir. May 22, 2008)
5/22/2008 12:00:00 AM
A federal appellate court has jurisdiction to hear an interlocutory appeal of the denial of a non-signatory’s motion to compel arbitration in accordance with an international agreement, according to the First Circuit Court of Appeals.
In Sourcing Unlimited, Inc. v. Asimco Int’l, Inc., No. 07-2754, 2008 WL 2132838 (1st Cir. May 22, 2008), Sourcing Unlimited, Inc., (“SUI”) entered into a manufacturing partnership contract with Asimco Technologies, Inc. (“ATI”). The contract contained a broadly-worded arbitration agreement... Full Story
Debt Purchaser Fails to Prove Right to Enforce Class Action Waiver
Buford v. Palisades Collection, LLC, No. 07 C 4974, 2008 WL 2009885 (N.D. Ill. May 9, 2008)
5/9/2008 12:00:00 AM
In denying a motion to dismiss, a federal district court held that a debt purchaser who failed to provide an assignment or contract evidencing an assignment of all contractual rights did not acquire the assignor’s rights to enforce a class action waiver provision.
In Buford v. Palisades Collection, LLC, No. 07 C 4974, 2008 WL 2009885 (N.D. Ill. May 9, 2008), Buford brought a class action lawsuit against Palisades, alleging that Palisades purchased consumer debts from AT&T and sued the consumers more than two years after the debt accrued in violation of 47 U.S.C. § 415 of the Fair Debt Collection Practices Act... Full Story
State Cases
Party Who Received Notice of Arbitration But Did Not Object Can Not Raise Post-Award Challenge to Existence of Arbitration Agreement
Advantage Assets, Inc. II v. Howell, No. COA07-878, 2008 WL 1946828 (N.C. Ct. App. May 6, 2008)
5/6/2008 12:00:00 AM
When a party receives notice of an arbitration proceeding but does not object to the arbitration, the party is procedurally barred from raising a post-award challenge to the existence of the arbitration agreement, according to the North Carolina Court of Appeals.
In Advantage Assets, Inc. II v. Howell, No. COA07-878, 2008 WL 1946828 (N.C. Ct. App. May 6, 2008), Advantage Assets (Advantage) filed an arbitration claim against Howell, seeking to collect the unpaid balance on an MBNA credit card. Howell did not participate in the arbitration, and the arbitrator issued an award in favor of Advantage... Full Story
Validity of Class Waivers in Employment Contracts Decided on Case-by-Case Basis
Iskanian v. CLS Transportation Los Angeles LLC, No. B198999, 2008 WL 2171792 (Cal. Ct. App. May 27, 2008)
5/27/2008 12:00:00 AM
A California Court of Appeals remanded a case to the trial court to decide if the class action waiver in an employment arbitration agreement should be enforced.
In Iskanian v. CLS Transportation Los Angeles LLC, No. B198999, 2008 WL 2171792 (Cal. Ct. App. May 27, 2008), an employee, Iskanian, sued his employer, CLS Transportation (CLS), as part of a class of employees for failing to pay statutorily required overtime compensation. CLS successfully moved to compel arbitration individually based on an arbitration agreement in the employment contract that also contained a class waiver... Full Story
California Court Allows Arbitration Administrator to Resolve Dispute Over Arbitrator Selection
Sampson v. Judicial Arbitration and Mediation Services, Inc., No. A116239, 2008 WL 1892686 (Cal. Ct. App. Apr. 30, 2008)
4/30/2008 12:00:00 AM
In affirming dismissal of a suit brought against an arbitration administrator, a California Court of Appeal found that a pre-award dispute over arbitrator selection is a procedural matter that should be resolved by the arbitration administrator.
In Sampson v. Judicial Arbitration and Mediation Services, Inc., No. A116239, 2008 WL 1892686 (Cal. Ct. App. Apr. 30, 2008), the Sampsons lost money investing in a fund operated by St. Geme. In accordance with their agreement, the parties submitted the investment dispute to arbitration administered by JAMS... Full Story
Illinois Court Refuses to Honor Choice-of-Law Provision and Invalidates Class Waiver
Wigginton v. Dell, Inc., No. 5-07-0076, 2008 WL 2267173 (Ill. App. Ct. June 2, 2008)
6/2/2008 12:00:00 AM
In a case arising from the sale of a personal computer, the Illinois Court of Appeals refused to honor a Texas choice-of-law provision on the ground that the application of Texas law would violate Illinois public policy by giving effect to an arbitration agreement that barred class-wide proceedings. However, instead of invalidating the entire arbitration agreement, the Court upheld the lower court’s decision to strike the offending provision and enforce the remainder of the agreement.
In Wigginton v. Dell, Inc., No. 5-07-0076, 2008 WL 2267173 (Ill. App. Ct. June 2, 2008), Wigginton, an attorney, bought two Dell computers for his law firm. He ordered the computers by phone. When Dell denied Wigginton’s request for a $500 rebate, Wigginton filed a class action lawsuit alleging breach of contract, unjust enrichment, and a violation of the Illinois Consumer Fraud Act... Full Story
Illinois Court Finds That FAA Does Not Preempt Law Disallowing Agreements to Arbitrate Nursing Home Disputes
Carter v. SSC Odin Operating Co., 885 N.E.2d 1204 (Ill. App. Ct. Apr. 4, 2008)
4/4/2008 12:00:00 AM
In affirming a lower court order denying a nursing home’s motion to compel arbitration, an Illinois appellate court held that the Federal Arbitration Act (FAA) did not preempt the lower court’s public policy refusal to enforce the arbitration agreement because the statute underlying the public policy determination, though disallowing waiver of the right to a jury trial, is not specifically targeted at arbitration agreements but also reaches other agreements to waive a jury trial.
In Carter v. SSC Odin Operating Co., 885 N.E.2d 1204 (Ill. App. Ct. Apr. 4, 2008), Joyce Gott died during her residency in a nursing home owned by SSC Odin (Odin). Her estate sued Odin for wrongful death and under the Nursing Home Care Act. Odin moved to compel arbitration pursuant to an arbitration agreement signed by Gott’s legal representative. The trial court denied the motion on various grounds, including public policy... Full Story
Montana Supreme Court: Condition Precedent to Contract Formation Raises Question for the Court, Not the Arbitrator
Thompson v. Lithia Chrysler Jeep Dodge of Great Falls, Inc., NO. DA 07-0066, 2008 WL 2139567 (Mont. May 20, 2008)
5/20/2008 12:00:00 AM
Citing United States Supreme Court dicta, the Montana Supreme Court has held that challenges to an entire contract containing an arbitration agreement based on the failure of a condition precedent to formation should be resolved by the court rather than the arbitrator.
In Thompson v. Lithia Chrysler Jeep Dodge of Great Falls, Inc., NO. DA 07-0066, 2008 WL 2139567 (Mont. May 20, 2008), Thompson agreed to buy a truck from Lithia by trading in his old truck and financing the balance of the purchase at a 3.9 percent interest rate. As part of the transaction, Thompson signed a financing contract containing an arbitration agreement... Full Story
Court Decides Issue of Waiver Based on Litigation Activity
Good Samaritan Coffee Co. v. LaRue Distributing, Inc., No. S-07-300, 2008 WL 2004303 (Neb. May 9, 2008)
5/9/2008 12:00:00 AM
In affirming the denial of a motion to stay litigation and compel arbitration, the Nebraska Supreme Court held that courts should decide issues of waiver based on litigation activity, and a party waived its right to arbitrate by actively litigating for three years.
In Good Samaritan Coffee Co. v. LaRue Distributing, Inc., No. S-07-300, 2008 WL 2004303 (Neb. May 9, 2008), Good Samaritan sued LaRue for breach of a contract that contained an arbitration clause. LaRue filed multiple answers and a counterclaim, engaged in years of discovery, and received an unfavorable ruling on its own motion for partial summary judgment. After that ruling and three years after Good Samaritan originally sued, LaRue moved to stay litigation and compel arbitration... Full Story
North Carolina Court of Appeals, Citing Change in Unconscionability Analysis, Remands Motion to Compel and Class Action Injunction to Trial Court
Kucan v. Advance Am., Nos. COA06-447, COA06-505, COA06-506, 2008 WL 2201662 (N.C. Ct. App. May 6, 2008)
5/29/2008 12:00:00 AM
A North Carolina state appellate court has remanded an order that granted a motion to compel arbitration but refused to grant a class action injunction, holding that a recent change in unconscionability analysis under North Carolina law required additional fact finding.
In Kucan v. Advance Am., Nos. COA06-447, COA06-505, COA06-506, 2008 WL 2201662 (N.C. Ct. App. May 6, 2008), Kucan and other consumers brought statutory claims against Advance and other consumer loan companies. As part of the transactions, the consumers and the loan companies executed arbitration agreements and class action waivers. The trial court held that the arbitration agreements were enforceable, but declined to enforce the class action waiver... Full Story
Nursing Home Arbitration Agreement Unenforceable Where Upfront Costs Might Preclude a Remedy
Hill v. NHC HealthCare/Nashville, LLC, No. M2005-01818-COA-R3-CV, 2008 WL 1901198 (Tenn. Ct. App. Apr. 30, 2008)
4/30/2008 12:00:00 AM
A Tennessee appellate court affirmed a trial court's holding that a nursing home arbitration agreement was unconscionable because it imposed large upfront costs on the party seeking arbitration, was a contact of adhesion, and was not prominently placed in the admissions contract or clearly explained to the patient.
In Hill v. NHC HealthCare/Nashville, LLC, No. M2005-01818-COA-R3-CV, 2008 WL 1901198 (Tenn. Ct. App. Apr. 30, 2008), Bridget Hill, a nursing home resident, died during ambulance transport from NHC to the hospital. Her children filed a wrongful death suit against NHC and the ambulance provider... Full Story
Court Determines that Arbitration Agreement in Homeowners Insurance Policy is Enforceable
In re Farmers and Ranchers Mutual Insurance Co., No. 04-08-00128-CV, 2008 WL 2133116 (Tex. App. May 21, 2008)
5/21/2008 12:00:00 AM
A Texas appellate court determined that an insurance company's inclusion of an agreement to arbitrate in a homeowners insurance policy was valid and enforceable because insured was charged with knowledge of the policy terms and conditions.
In In re Farmers and Ranchers Mutual Insurance Co., No. 04-08-00128-CV, 2008 WL 2133116 (Tex. App. May 21, 2008), Farmers issued a homeowners insurance policy to DeLeon. Following, DeLeon sued Farmers for breach of contract after a dispute arose about a claim he made under the policy... Full Story
ADR Legislation & Regulation
LEGISLATION
CT H 5324
INTRODUCER: Joint Program Review and Investigations
TITLE: Regional Planning Organizations
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary: Amends act regarding economic development and regional planning. As it relates to ADR, amendments include the deletion of "Each proposal shall have attached to it (A) a resolution by the legislative body of each municipality affected by the proposal endorsing such proposal: and (B) certification by each such municipality that there are no legal obstacles to provision of services in the manner specified in the proposal including, but not limited to, binding arbitration."
CT H 5577
INTRODUCER: Joint Banks
TITLE: Responsible Lending And Economic Security
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Relates to lending. Amendments include: "(e) Nothing in sections 8 265cc to 8 265kk, inclusive, as amended by this act, shall prevent a mortgagor from exercising rights that may exist under the foreclosure mediation program and those rights may be exercised concurrently with the rights afforded under sections 8 265cc to 8 265kk, inclusive, as amended by this act, provided the exercise of rights under the foreclosure mediation program shall not cause a delay in the determination under subsection (d) of section 8 265ff, as amended by this act." The bill also amended the section regarding what may not be included by removing "mandatory arbitration clause" from the head of "waiver of participation in a class action," and adding "or a provision requiring a borrower, whether acting individually or on behalf of others similarly situated, to assert any claim or defense in a nonjudicial forum that: (A) Utilizes principles which are inconsistent with the law as set forth in the general statutes or common law: (B) limits any claim or defense the borrower may have: or (C) is less convenient, more costly or more dilatory for the resolution of a dispute than a judicial forum established in this state where the borrower may otherwise properly bring a claim or defense."
FL S 1892
COMPARE: FL S 2008
AUTHOR: Appropriations General Government Cmt
TITLE: State Data Center System
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Amends a bill relating to governmental operations. As it relates to ADR, amendments include: "1. A service level agreement, at a minimum, must: ... Provide for mediation of disputes by the Division of Administrative Hearings pursuant to s. 120.573."
MI H 6236
SPONSOR: Scott [D]
TITLE: Mortgage Foreclosures
DISPOSITION: Pending
LOCATION: House Banking and Financial Services Committee
Commentary: Regarding Mortgage Foreclosures. Establishes 90 day mediation program and 1 year moratorium for mortgage foreclosures.
MO H 2058
SPONSOR: Pearce [R]
TITLE: Tax Incentives For Business Development
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary: Provides for tax incentives for business development. As it relates to dispute resolution, the bill provides: "[u]pon agreement of the parties, [a dispute] may be stayed while the parties proceed with mediation or arbitration upon terms agreed to by the parties. The final decision of the administrative hearing commission shall be subject to judicial review in the circuit court of the county involved."
NH H 1236
AUTHOR: Williams Bo [D]
TITLE: Motor Vehicle Law
DISPOSITION: Pending
LOCATION: Eligible for Governor
Commentary: New Motor Vehicle Arbitration Board: Term limitation removed: no longer a 2 3 year term limit.
NJ A 2971
SPONSOR: Schaer [D]
TITLE: Arbitrators
DISPOSITION: Pending
LOCATION: Assembly Regulated Professions Committee
Commentary: This bill would require arbitrators appointed to the Public Employment Relations Commission's special panel of arbitrators to annually file a financial disclosure statement with the commission.
NJ A 2972
SPONSOR: Greenwald [D]
TITLE: Public Employment Relations Commission Arbitrators
DISPOSITION: Pending
LOCATION: Assembly State Government Committee
Commentary: This bill changes, prospectively, the selection process for arbitrators involved in negotiations for public contracts overseen by the Public Employment Relations Commission (PERC). Currently, the arbitrator is selected by the parties involved. This bill requires that the arbitrator be selected randomly by PERC and not chosen by the parties involved.
OH H 138
SPONSOR: Foley [D]
TITLE: Judicial Sales of Real Property
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Amends a bill regarding Judicial Sales of Real Property. As it relates to ADR, the amendments include: "Sec. 2323.06. In an action for the foreclosure of a mortgage, the court may at any stage in the action require the mortgagor and the mortgagee to participate in mediation as the court considers appropriate and may include a stipulation that requires the mortgagor and the mortgagee to appear at the mediation in person."
OH H 323
SPONSOR: Gibbs [R]
TITLE: Partition Fences
DISPOSITION: To Governor
LOCATION: To Governor
Commentary: Revises the Fences law. The bill outlines the arbitration procedure beginning with the requirement of a written request for arbitration and notice and ending with emphasizing the finality of the arbitrator's decision. Notably, the arbitrator's written decision must be given to both parties, with one copy to be certified and filed with the applicable county recorder.
OH H 499
SPONSOR: Oelslager [R]
TITLE: Ohio Trust Code
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary: Enacts an act modifying the State Trust Code and Fiduciary Law. As it relates to ADR, "If an agreement entered into under this section contains a provision requiring binding arbitration of any disputes arising under the agreement, the provision is enforceable." The act further gives the trustee the right to "[r]esolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution."
OK S 1428
AUTHOR: Sparks [D]
TITLE: Insurance Service Warranty Association
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Regards insurance warranties. As it relates to ADR, the amendments include provision for arbitration through the AAA. Further, provides that arbitration of insurance contract disputes shall be arbitrated in Oklahoma.
TN S 4075
AUTHOR: Tracy [R]
TITLE: Hospitals and Health Care Facilities
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary: Previously an ADR bill concerning hospitals and health care facilities: the bill was recently amended to create by the general assembly a committee to study the effects of litigation on the nursing home industry.
US H 6207
SPONSOR: Akin [R]
TITLE: Energy Independence
DISPOSITION: Pending
LOCATION: Multiple Committees
Commentary: Develops American energy independence, lower gas prices, and open reliable national sources of energy. As it relates to ADR, provides for arbitration in Washington, D.C., administered by the AAA.
REGULATIONS
No new regulations.
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