Federal Cases
Ninth Circuit Finds Wireless Company's Arbitration Agreement and Class Action Waiver Unconscionable
Janda v. T-Mobile USA, Inc., No. 06-15712, 2008 WL 510401 (9th Cir. Feb. 25, 2008)
2/25/2008
In accordance with its prior decision in Shroyer v. New Cingular Wireless Servs., Inc., the Ninth Circuit Court of Appeals has denied a wireless company's motion to compel arbitration and dismiss a class action claim, holding the agreement and waiver within unconscionable.
In Janda v. T-Mobile USA, Inc., No. 06-15712, 2008 WL 510401 (9th Cir. Feb. 25, 2008), a district court denied T-Mobile's motion to compel arbitration and dismiss a class action suit brought by Janda... Full Story
Court Defines its Role in Reviewing Class Arbitration Clause Construction Awards
Dealer Computer Services, Inc. v. Dub Herring Ford, No. 07-10263, 2007 WL 1560204 (E.D. Mich. May 29, 2007)
5/29/2007
According to the United States District Court for the Eastern District of Michigan, the Federal Rules of Civil Procedure govern the timeliness of amended motions to vacate clause construction awards, and reviews of clause construction awards are within courts' subject-matter jurisdiction. Furthermore, the Court held that motions to vacate a claim construction award can only be granted due to a "manifest disregard of applicable law" by arbitrators.
In Dealer Computer Services, Inc. v. Dub Herring Ford, No. 07-10263, 2007 WL 1560204 (E.D. Mich. May 29, 2007), a three-arbitrator panel entered a clause construction award, determining that a putative class of automobile dealers could be formed for arbitration against Dealer Computer Services (DCS). This award prompted a motion by DCS to vacate the panel's ruling, either under the Federal Arbitration Act (FAA), or, in the alternative, due to the panel's alleged manifest disregard of applicable law. In response, the putative dealer class filed a motion to dismiss DCS's motion to vacate, arguing DCS's motion was not timely under the FAA, and that the Court lacked subject-matter jurisdiction because the clause construction award was not a final judgment... Full Story
State Cases
Award Vacatur on Public Policy Grounds Requires Interference With Statutory Rights
Hardie v. Bell Gardens Bicycle Club, No. B193869, 2008 WL 534752 (Cal. Ct. App. Feb. 28, 2008)
2/28/2008
A California appellate court rejected a party's arguments that an arbitration award violated public policy, because nothing in the arbitration award violated the party's statutory rights.
In Hardie v. Bell Gardens Bicycle Club, No. B193869, 2008 WL 534752 (Cal. Ct. App. Feb. 28, 2008), Hardie sold his interest in the Club to its remaining partners. The Club agreed to pay Hardie under a promissory note. Also, the parties executed an agreement that neither party would interfere with the business of the other, and they agreed to resolve any disputes through arbitration... Full Story
Court Confirms Credit Card Company's Arbitration Award, Absent Any Objections from the Customer
Chase Bank USA, N.A., v. Roach, No. 07-1172, 2008 WL 585095 (La. Ct. App. March 5, 2008)
3/5/2008
A Louisiana appellate court determined that Federal arbitration law governed the parties' dispute, and the lower court erred in refusing to confirm the arbitration award based on lack of jurisdiction under a Louisiana statute.
In Chase Bank USA, N.A., v. Roach, No. 07-1172, 2008 WL 585095 (La. Ct. App. March 5, 2008), Roach, a resident of Lafayette, Louisiana, defaulted on her credit card payments to Chase. The credit card agreement included an agreement to arbitrate under the National Arbitration Forum Code of Procedure... Full Story
New Jersey Court Recognizes Arbitral Immunity of Arbitrators and Arbitral Organizations from Suits Alleging a Failure to Control Proceedings
Malik v. Ruttenberg, No. A-6615-06T3, 2008 WL 552876 (N.J. Super. Ct. App. Div. Mar. 3, 2008)
3/3/2008
Arbitrators and arbitral organizations enjoy immunity from civil liability for injuries sustained by a party to the arbitration stemming from the arbitrator's alleged failure to "control the proceedings," according to a New Jersey state appellate court.
In Malik v. Ruttenberg, No. A-6615-06T3, 2008 WL 552876 (N.J. Super. Ct. App. Div. Mar. 3, 2008), Malik was a party to an arbitration proceeding presided over by American Arbitration Association (AAA) arbitrator Liloia. During the contentious proceedings, Malik requested that opposing counsel be ejected from the proceedings. Liloia denied the request. Later, during a brief recess, outside the room where the proceedings were being held, Malik alleged that he was assaulted by opposing counsel... Full Story
Wyoming Supreme Court Affirms Award Confirmation: Appellate Record Was Insufficient and Objections Untimely
Vogt v. MBNA America Bank, No. S-07-0188, 2008 WL 596180 (Wyo. Mar. 6, 2008)
3/6/2008
The Wyoming Supreme Court has affirmed the confirmation of a consumer credit arbitration award because the appellant failed to provide a sufficient record to the court and failed to properly contest the award through a motion for vacatur or modification.
In Vogt v. MBNA America Bank, No. S-07-0188, 2008 WL 596180 (Wyo. Mar. 6, 2008), an arbitration award was entered in favor of creditor MBNA against Vogt. After the award was issued, MBNA filed a petition to confirm the award... Full Story
ADR Legislation & Regulation
LEGISLATION
AZ H 2845
AUTHOR: Driggs [R]
TITLE: Uniform Arbitration Act
DISPOSITION: Passed House on 3/11
LOCATION: SENATE
Commentary: Concerns the Uniform Arbitration Act. Added chapter 21, which includes general provisions regarding definitions relating to arbitration, notice, applicability, effect of agreement to arbitrate/waiver, application for judicial relief, motions to compel or stay arbitration, interim relief, initiation of arbitration, consolidation of separate arbitration proceedings, appointment of, disclosures made by, and immunity of arbitrators, and other issues relating to arbitration/the arbitration process.
CA A 2611
AUTHOR: Lieu [D]
TITLE: Debt Management and Settlement: Credit Counselors
DISPOSITION: Pending
Commentary: Enacts the Debt Settlement Services Act. Provides for regulation of persons who provide debt settlement services. As it relates to arbitration, an agreement may not, "[e]xcept as permitted by the California Arbitration Act (Title 9 (commencing with Section 1280) of Part 3 of the Code of Civil Procedure), contain a provision that modifies or limits otherwise available forums or procedural rights, including the right to trial by jury, that are generally available to the individual under law other than as provided in this division," nor may it "[c]ontain a provision that restricts the individual's remedies under this division or under another law of this state."
CA S 1734
AUTHOR: Kuehl [D]
TITLE: Hospitals: Level of Care
DISPOSITION: Pending
Commentary: Amends an act regarding health care facilities. Amendments require that "[t]he department shall establish a mediation process to prevent any unresolved dispute between the real estate investment trust and the operator of the hospital that would result in a hospital closure."
FL H 1185 IDENTICAL: FL S 2330
AUTHOR: Ambler [R]
TITLE: Homeowners' Associations
DISPOSITION: Pending
LOCATION: House Courts Committee
Commentary: Relates to homeowners' associations; modifies existing provisions relating to alternative dispute resolution of disputes between parcel owners and homeowners' associations.
FL S 2330 IDENTICAL: FL H 1185
AUTHOR: Justice [D]
TITLE: Homeowners Associations
DISPOSITION: Pending
LOCATION: Senate Regulated Industries Committee
Commentary: This bill would require alternative dispute resolution of disputes (first mediation then arbitration) between parcel owners and homeowners' associations. The program would be administered by the Department of Business and Professional Regulation.
IA S 2395
AUTHOR: Judiciary Cmt
TITLE: Business Associations
DISPOSITION: Pending
LOCATION: SENATE
Commentary: Relates to business associations, by providing for limited liability companies and conversion involving corporations, providing fees and penalties, and providing an effective date. Specifically allowed arbitration or mediation participation as an "approved" "winding up" activity for a dissolving LLC.
IN S 159
AUTHOR: Gard [R]
TITLE: Third Party Health Service Agreements
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary: Specifies terms under which a third party may obtain a contractor's rights and responsibilities concerning a provider's delivery of health care services. As it relates to arbitration, a health care contract may provide for arbitration of disputes arising under the bill.
MN S 3717 COMPANION: MN H 3975
AUTHOR: Bonoff [DFL]
TITLE: Insurance Policy Breach
DISPOSITION: Pending Carryover
LOCATION: Senate Commerce and Consumer Protection Committee
Commentary: Relates to insurance; provides recovery of damages and attorney fees for breach of an insurance policy. Specifically disallows attorney's fees if matter is required to be submitted to arbitration or if insurer agrees to submit matter to arbitration.
OK S 2122
AUTHOR: Sparks [D]
TITLE: Insurance Business Crimes
DISPOSITION: Pending
LOCATION: HOUSE
Commentary: Relates to regulation of receivers under the Uniform Insurers Liquidation Act. As it relates to arbitration, the bill states that the receiver has the power "To enter into contracts, and to assume or reject any executory contract or unexpired lease to which the insurer is a party; provided, however, notwithstanding anything which may appear to the contrary in this act, any statute of this state or of any other state, or of the United States, receiver shall not be bound by any provision of any contract of or by the insurer which requires arbitration."
SD S 52
AUTHOR: Commerce Cmt
TITLE: Regulation of Business Opportunities
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Revisions to law relating to business opportunities include "Section 21. A written provision in a franchise contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of the contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of the contract, transaction, or refusal, is valid, irrevocable, and enforceable except upon such grounds as exist at law or in equity for the revocation of any contract. However, any condition, stipulation, or provision requiring a franchisee to waive compliance with or relieving a person of a duty or liability imposed by or a right provided by this Act or a rule or order under this Act is void."
WA S 6776
AUTHOR: Kline [D]
TITLE: State Whistleblower Protections
DISPOSITION: To Governor
LOCATION: To Governor
Commentary: Modifies state whistleblower protections. As it relates to arbitration, "(11) Instead of filing with the commission, a complainant may pursue arbitration conducted by the American Arbitration Association or another arbitrator mutually agreed by the parties, with the cost of arbitration shared equally by the complainant and the respondent."
REGULATIONS
None
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