Federal Cases
Upholding Class Waiver Under Texas Law Did Not Violate Public Policy of Washington
Carideo v. Dell, Inc., No. C-06-1772, 2007 WL 3011096 (W.D. Wash. Oct. 15, 2007)
10/15/2007
In the wake of a Washington Supreme Court decision invalidating a class waiver, a federal district court in Washington revisited its decision to apply Texas law to the validity of a class waiver and held that upholding the waiver under Texas law did not violate a fundamental public policy of Washington because the amount in controversy was sufficient to warrant individual claims.
In Carideo v. Dell, Inc., No. C-06-1772, 2007 WL 3011096 (W.D. Wash. Oct. 15, 2007), Carideo bought a laptop computer from Dell. The “Terms and Conditions of Sale” included a Texas choice-of-law provision and an arbitration agreement with a class waiver (i.e., a bar on class-wide proceedings)... Full Story
Non-Disclosure of Employment Link Sufficient to Support Vacatur of Arbitration Award
New Regency Productions, Inc. v. Nippon Herald Films, Inc., No. 05-55224, 2007 WL 2472467 (9th Cir. Sept. 4, 2007)
9/4/2007
The Ninth Circuit Court of Appeals determined that an arbitrator’s failure to disclose his acceptance of a high-level job with a company related to a party in arbitration before him created a reasonable impression of evident partiality, which supported vacatur of the arbitration award.
In New Regency Productions, Inc. v. Nippon Herald Films, Inc., No. 05-55224, 2007 WL 2472467 (9th Cir. Sept. 4, 2007), New Regency and Nippon entered into an agreement for Nippon to distribute five films produced by New Regency... Full Story
Arbitrator Selection Considered a “Gateway Matter” for the Court
Redman Home Builders Co. v. Lewis, No. CV-2-07-107, 2007 WL 3088579 (S.D. Ala. July 25, 2007)
7/25/2007
A federal district court in Alabama has ruled that the question of arbitrator selection is a “gateway matter” that confers subject matter jurisdiction on the court. Accordingly, the Court retained jurisdiction over that issue, while dismissing for lack of jurisdiction a separate question regarding the permissibility of class-wide arbitration.
In Redman Home Builders Co. v. Lewis, No. CV-2-07-107, 2007 WL 3088579 (S.D. Ala. July 25, 2007), the Lewises purchased a Redman mobile home from Future Housing. Redman provided the Lewises with a one-year limited warranty, which contained an arbitration provision. Nine months later, a dispute arose regarding the condition of the manufactured home... Full Story
California Federal Court Upholds Class Action Waiver Absent Evidence of a Deliberate “Scheme”
Torres v. Chrysler Financial Co., No. C 07-00915 JW, 2007 WL 3165665 (N.D. Cal. Oct. 25, 2007)
10/25/2007
Granting a motion to compel arbitration and rejecting claims that an arbitration clause’s class action waiver provision was unconscionable, a California federal court upheld the class action waiver, as there was no evidence showing the party with the superior bargaining power used the waiver to cheat large sums of customers of small sums of money.
In Torres v. Chrysler Financial Co., No. C 07-00915 JW, 2007 WL 3165665 (N.D. Cal. Oct. 25, 2007), Torres purchased a car and an extended automobile warranty from Chrysler. A dispute arose when Torres canceled the extended automobile warranty. Chrysler credited the refund towards the interest owed while Torres sought a cash refund or credit against his monthly payments. Torres responded by bringing a putative class action claim against Chrysler for conspiracy and violation of the California Legal Remedies Act. Chrysler moved to compel arbitration pursuant to an arbitration agreement in the parties’ sales contract... Full Story
Court Determines Employer’s Arbitration Award Was Not Procured by Fraud
Caldwell v. Wachovia Securities, LLC, No. 3:06-01006, 2007 WL 3036466 (D. Tenn. Oct. 15, 2007)
10/15/2007
A Tennessee federal court concluded that an arbitration award was not procured by fraud because the alleged fraud did not materially relate to an issue that was arbitrated.
In Caldwell v. Wachovia Securities, LLC, No. 3:06-01006, 2007 WL 3036466 (D. Tenn. Oct. 15, 2007), Caldwell worked for Wachovia’s securities business. After Caldwell joined, a promissory note in favor of Wachovia was executed... Full Story
Foreclosure Actions and Construction Liens Arising from an Arbitrable Payment Dispute Are Also Arbitrable
Sunnyrock Bldg. & Design Co., Inc. v. Balch, Civ. No. 2007-121, 2007 WL 3125010 (D. V.I. Oct. 23, 2007)
10/23/2007
A Virgin Islands federal district court has held that payment disputes arising out of a construction contract containing an arbitration agreement are arbitrable, rendering disputes regarding foreclosure actions and liens arising out of the payment dispute arbitrable as well.
In Sunnyrock Bldg. & Design Co., Inc. v. Balch, Civ. No. 2007-121, 2007 WL 3125010 (D. V.I. Oct. 23, 2007), Sunnyrock and Balch entered into a construction contract which contained an agreement to arbitrate. A dispute over payments under the contract arose, and Sunnyrock filed a construction lien against Balch’s property... Full Story
State Cases
Power of Attorney for Health Care Decisions Authorized Attorney-in-Fact to Enter Arbitration Agreement
Owens v. National Health Corp., No. M2005-01272-SC-R11-CV, 2007 WL 3284669 (Tenn. Nov. 8, 2007)
11/8/2007
The Tennessee Supreme Court held that a power of attorney for health care decisions authorized the attorney-in-fact to enter an arbitration agreement on the principal’s behalf because the decision to sign the arbitration agreement was necessary to implement the underlying health care decision – namely, the decision to admit the principal into a nursing home.
In Owens v. National Health Corp., No. M2005-01272-SC-R11-CV, 2007 WL 3284669 (Tenn. Nov. 8, 2007), Mary King executed a Durable Power of Attorney for Health Care Decisions authorizing Gwyn Daniel, as her attorney-in-fact, to make health care decisions on her behalf. The power of attorney also authorized Daniel to execute “any waiver, release or other document which may be necessary in order to implement the health care decisions”... Full Story
Statutory Deadline Bars Party Who Participated in Arbitration From Arguing No Arbitration Agreement
MBNA America Bank, N.A. v. Gilbert, No. CA. 06-1324, 2007 WL 3171824 (Ark. Ct. App. Oct. 31, 2007)
10/31/2007
Reversing a trial court’s refusal to confirm an arbitration award, the Arkansas Court of Appeals held that a party who fails to timely challenge an arbitration award and participates in arbitration waives its right to seek vacatur on the ground that there was no arbitration agreement.
In MBNA America Bank, N.A. v. Gilbert, No. CA. 06-1324, 2007 WL 3171824 (Ark. Ct. App. Oct. 31, 2007), MBNA filed an arbitration claim against Gilbert for the unpaid balance on an MBNA credit card. The arbitrator awarded MBNA $10,816.95. MBNA filed a petition to confirm the award. In opposing the petition, Gilbert argued that he had not entered into an arbitration agreement with MBNA. The trial court denied confirmation... Full Story
Judge Must Determine Whether Contract Containing an Arbitration Provision Was Forged
Operis Group, Corp. v. E.I. at Doral, LLC, No.3D07-298, 2007 WL 3085429 (Fla. Dist. Ct. App. Oct. 24, 2007)
10/24/2007
A Florida appellate court held that Florida’s arbitration code requires a trial court to determine whether a contract was a forgery because this raises a substantial question as to the making of the arbitration agreement.
In Operis Group, Corp. v. E.I. at Doral, LLC, No.3D07-298, 2007 WL 3085429 (Fla. Dist. Ct. App. Oct. 24, 2007), Doral hired Operis to perform work on a hotel construction project. A dispute arose between the parties over the scope of the work. Operis claimed Doral hired it as the primary contractor while Doral claimed it hired Operis only to clear the land before construction... Full Story
Federal Law Does Not Preempt State Law Governing Vacatur
Strausbaugh v. H & R Block Financial Advisors, Inc., No. 2005-CA-001083-MR, 2007 WL 3122257 (Ky. Ct. App. Oct. 26, 2007)
10/26/2007
In affirming confirmation of an arbitration award, the Kentucky Court of Appeals held that the Federal Arbitration Act (FAA) did not preempt Kentucky law governing vacatur of arbitration awards because Kentucky’s limited grounds for vacatur do not undermine the goals of the FAA. Specifically, manifest disregard of the law is not a basis for vacatur under Kentucky law.
In Strausbaugh v. H & R Block Financial Advisors, Inc., No. 2005-CA-001083-MR, 2007 WL 3122257 (Ky. Ct. App. Oct. 26, 2007), Robert and Ginger Strausbaugh held a securities account with H & R Block. After a disappointing return on their investment following the tech-stock bubble burst, the Strausbaughs filed an arbitration claim with the National Association of Securities Dealers (NASD)... Full Story
Award Upheld Despite Claim That Arbitrators Exceeded Powers in Awarding Punitive Damages
Samber v. Mullinax Ford East, No. 2007-L-032, 2007 WL 3133804 (Ohio Ct. App.11d Oct 26, 2007)
10/26/2007
An Ohio appellate court refused to vacate a $105,000 award, including over $50,000 in punitive damages and treble actual damages, in favor of a consumer over the purchase of a $6,500 car.
In Samber v. Mullinax Ford East, No. 2007-L-032, 2007 WL 3133804 (Ohio Ct. App.11d Oct 26, 2007), Michael Samber purchased a used vehicle from Mullinax for approximately $6,500. Several express warranties regarding the vehicle were made to Samber, including a money back guarantee... Full Story
Texas Appellate Court Finds Order Mandating Arbitral Rehearing Not Ripe for Appeal
Thrivent Financial for Lutherans v. Brock, Nos. 01-07-00356-CV, 01-07-00484-CV, 2007 WL 3227620 (Tex. App. Nov. 01, 2007)
11/1/2007
Finding it lacked appellate jurisdiction to decide whether a trial court was correct to vacate an arbitration award and order an arbitral rehearing, a Texas appellate court held that an order mandating an arbitral rehearing is not appealable because the issue is not ripe for review.
In Thrivent Financial for Lutherans v. Brock, Nos. 01-07-00356-CV, 01-07-00484-CV, 2007 WL 3227620 (Tex. App. Nov. 01, 2007), a dispute arose between Brock and Thrivent over Thrivent’s alleged nonpayment of disability claims. The trial court ordered the parties to arbitrate their dispute. The arbitrator ruled for Thrivent and Thrivent moved to confirm the arbitrator’s award... Full Story
ADR Legislation & Regulation
LEGISLATION
IL H 4169
SPONSOR: Molaro [D]
TITLE: Cable Video Arbitration
INTRODUCED: 11/02/2007
DISPOSITION: Pending
LOCATION: House Rules Committee
Commentary:
Amends the Cable and Video Competition Law of 2007 in the Public Utilities Act. Provides that, if an independent programmer has reason to believe that it has not been treated in a fair, reasonable, and nondiscriminatory manner concerning carriage of a competing programming channel, then it may submit a request for commercial arbitration with the vertically integrated cable operator over the terms and conditions of carriage within 90 days after a first time request for carriage or renewal of a carriage agreement.
IL S 1400
SPONSOR: Jacobs M [D]
TITLE: Redevelopment and Annexation
INTRODUCED: 02/09/2007
LINE ITEM: 11/05/2007
DISPOSITION: Enacted
LOCATION: Amendatorily Vetoed by Governor
Commentary:
Bill levying an assessment on wind energy turbines; portion allowing for binding arbitration of disputes over deconstruction of abandoned turbines was vetoed by the Governor.
NJ A 4430
SPONSOR: Manzo [D]
TITLE: Board Of Health Care Management
PREFILED: 06/21/2007
INTRODUCED: 11/08/2007
DISPOSITION: Pending
LOCATION: Assembly Financial Institutions and Insurance Committee
Commentary:
A bill entitled the "New Jersey Board of Health Care Management Act." Creates the New Jersey Board of Health Care Management within the Department of Banking and Insurance. The Board would be required, among other things, to create a transition plan, in consultation with the Department of Banking and Insurance and the Department of Health and Senior Services, to phase out the current managed care system over a period of two years, which plan shall include the means for a transition to the offering of health benefits plans certified by the board as consistent with the requirements of this act. The Board would also be required to establish procedures for the mandatory arbitration of disputes between carriers, health care providers, and insureds, which procedures shall include, in situations in which a carrier disputes its responsibility to pay an insured claim submitted by a hospital or other health care facility, a requirement that the carrier pay the claim as submitted, prior to submitting the disputed claim to the arbitration process for resolution.
NJ S 2868
SPONSOR: Sarlo [D]
TITLE: Binding Arbitration In Contract Disputes
PREFILED: 06/21/2007
INTRODUCED: 11/08/2007
DISPOSITION: Pending
LOCATION: Senate Commerce Committee
Commentary:
This act "requires binding arbitration in contract disputes between hospitals and health insurance carriers." The arbitration proceeding shall be conducted through an independent third party and the costs of the arbitration proceeding shall be borne equally by the parties. The commissioner shall designate those organizations that may conduct arbitration proceedings.
OH H 332
SPONSOR: Wagoner [R]
TITLE: Revised Uniform Partnership Act
INTRODUCED: 10/02/2007
LAST AMEND: 11/08/2007
DISPOSITION: Pending
LOCATION: Bills for House Third Consideration
Commentary:
Adopts the Revised Uniform Partnership Act; governs new partnerships that elect to be governed by the act; establishes that the act governs all partnerships in the State; establishes that the existing Partnership Law no longer governs partnerships. Amendments include changing the definition of tribunal to include an arbitrator, arbitration panel, or other tribunal, if agreed. AND allows for the written consent to the jurisdiction of an arbitrator and method of notice.
OH H 377
SPONSOR: Blessing [R]
TITLE: Video Programming Disputes
INTRODUCED: 11/01/2007
DISPOSITION: Pending
LOCATION: House Rules and Reference Committee
Commentary:
To enact section 1332.36 of the Revised Code to require cable operators to participate in arbitration regarding disputes with providers of competing video programming.
US H 2419
SPONSOR: Peterson C [DFL]
TITLE: Continuation Of Agricultural Programs
INTRODUCED: 05/22/2007
LAST AMEND: 11/06/2007
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.
US H 4047
SPONSOR: Woolsey [D]
TITLE: Administration of Whistleblower Protections
INTRODUCED: 11/01/2007
DISPOSITION: Pending
LOCATION: House Education and Labor Committee
Commentary:
Streamlines the administration of whistleblower protections for private sector employees. As it relates to arbitration, states, "Notwithstanding any other provision of law, any clause of any agreement between an responsible party and a whistleblower that requires arbitration of a claim arising under this title, whether in force before, on or after the date of enactment of this Act, shall not be enforceable."
US H 4065
SPONSOR: Sensenbrenner [R]
TITLE: Immigration Law Enforcement
INTRODUCED: 11/01/2007
DISPOSITION: Pending
LOCATION: Multiple Committees
Commentary:
Amends the Immigration and Nationality Act to strengthen enforcement of immigration laws, to enhance border security, and for other purposes. Amendments include a mediation requirement. “(c) Required Mediation The Legal Services Corporation may not bring a civil action for damages on behalf of a nonimmigrant described in section 101(a)(15)(H)(ii)(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H)(ii)(a)), unless at least 90 days prior to bringing the action a request has been made to the Federal Mediation and Conciliation Service to assist the parties in reaching a satisfactory resolution of all issues involving all parties to the dispute and mediation has been attempted.”
US S 2113
SPONSOR: Baucus [D]
TITLE: United States Peru Trade Promotion Agreement
INTRODUCED: 09/27/2007
DISPOSITION: Pending
LOCATION: SENATE
Commentary:
Implements the United States Peru Trade Promotion Agreement, which includes a section on arbitration of claims.
US S 2284
SPONSOR: Dodd [D]
TITLE: Flood Insurance Fund
INTRODUCED: 11/01/2007
DISPOSITION: Pending
LOCATION: SENATE
Commentary:
Relates to the national flood insurance program. Outlines the requirements for participation in state sponsored flood insurance mediation.
WI A 542
AUTHOR: Lasee [R]
TITLE: Interstate Insurance Product Regulation Compact
INTRODUCED: 10/16/2007
DISPOSITION: Pending
LOCATION: Assembly Insurance Committee
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 A 568
AUTHOR: Richards [D]
TITLE: Regulating Foreclosure Reconveyances
INTRODUCED: 11/06/2007
DISPOSITION: Pending
LOCATION: Assembly Financial Institutions Committee
Commentary:
A bill to regulate foreclosure reconveyances. A foreclosure reconveyance is defined as a transaction under which the mortgagor transfers title to residential real property in foreclosure to a third party, called a foreclosure purchaser in the bill. As it relates to arbitration, the bill provides that any provision in a contract requiring arbitration of any dispute arising under the provisions is void at the option of the foreclosed homeowner. A violation of the statute may be considered criminal fraud.
WI S 294
AUTHOR: Breske [D]
TITLE: Interstate Insurance Product Regulation Compact
INTRODUCED: 10/22/2007
DISPOSITION: Pending
LOCATION: Senate Transportation and Tourism Committee
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 298
AUTHOR: Sullivan [D]
TITLE: Foreclosure Reconveyances
INTRODUCED: 11/02/2007
DISPOSITION: Pending
CALENDAR COMMENT: (LRB 2833)
COMMITTEE: Senate Veterans and Military Affairs, Biotechnology and Financial Institutions Committee
HEARING: 11/13/2007 1: 00 pm
Commentary:
A bill to regulate foreclosure reconveyances. A foreclosure reconveyance is defined as a transaction under which the mortgagor transfers title to residential real property in foreclosure to a third party, called a foreclosure purchaser in the bill. As it relates to arbitration, the bill provides that any provision in a contract requiring arbitration of any dispute arising under the provisions is void at the option of the foreclosed homeowner. A violation of the statute may be considered criminal fraud.
REGULATION
Arizona 054.00.07-002
AGENCY: Department of Insurance
TITLE: Annual Audited Financial Reports
PROPOSED: 09/10/2007
ADOPTED: 11/08/2007
CITATION: 054.00.07
Commentary: Amends rules relating to audited financial reports. As it relates to the dispute resolution, the rules would be amended to allow a qualified independent certified public accountant to enter into an agreement with an insurer to have disputes relating to an audit resolved by mediation or arbitration.
Delaware 18 DAC 1313
AGENCY: Department of Insurance
TITLE: Arbitration of Health Disputes
PROPOSED: 11/01/2007
Commentary: Requires health insurance carriers to submit to arbitration any dispute with a health care provider regarding reimbursement for an individual claim, procedure, or service upon request by the health care provider. Currently, the system would be administered by the State. A link to the text of the proposed regulation is here: http: //www.delawareinsurance.gov/departments/documents/ProposedRegs/Reg_1313-Arbitration_of_HealthDisputes101507.pdf
There will be no hearing on the regulation. Written comments are due December 3.
North Carolina 22: 09 NCR 786
AGENCY: Department of Environment and Natural Resources/Soil and Water Conservation Commission
TITLE: Agriculture Cost Share Program/Community Conservation
PROPOSED: 11/01/2007
CITATION: 15A NCAC 06E .0102, .0105, .0107-.0108; 06I .0107-.0108
Commentary: Clarifies rules regarding the Agriculture Cost Share Program and the Community Conservation Assistance Program to improve efficiency and effectiveness in protecting water quality. The proposed regulation also provides for "binding mediation" to resolve disputes.
Oregon OAR 812-004-0590
AGENCY: Construction Contractors' Board
TITLE: Contested Case Hearings
PROPOSED: 11/01/2007
Commentary: The proposed regulation would allow the Construction Contractors' Board to refer a complaint to the Office of Administrative Hearings for a contested case and bypass arbitration if the agency determines that would provide a better resolution to the complaint.
Texas 32 TEXREG 7824
AGENCY: Residential Construction Commission
TITLE: False Statements
PROPOSED: 10/22/2007
CITATION: 10 TAC 7.305.A.305.10
Commentary: Proposes rules regarding violations for making a false statement in connection with applying for or renewing a registration or certification as a builder, a designated agent for a builder, a third-party inspector, or arbitrator.
United States 72 FR 43209
AGENCY: Federal Mediation and Conciliation Service
TITLE: Freedom of Information Act
PROPOSED: 08/02/2007
CITATION: 29 CFR Part 1401
Commentary: No text available, but purports to clarify rules regarding the Freedom of Information Act.
Washington 07-21-060
AGENCY: Department of Agriculture
TITLE: Complaints for Arbitration, Fees for Seed Services
PROPOSED: 03/01/2007
ADOPTED: 10/12/2007
CITATION: WAC 16-301-105, -16-303
Commentary
Amends rules for filing a seed arbitration complaint (agricultural).
© 2007 National Arbitration Forum -
www.adrforum.com - Unsubscribe
