Federal Cases
Three-Month Deadline for Challenging Award Started to Run When Award Was Placed in the Mail
Webster v. A.T. Kearney, Inc., No. 06-3094, 2007 WL 3225367 (7th Cir. Nov. 2, 2007)
11/2/2007
The Seventh Circuit Court of Appeals relied on a provision in the applicable rules of arbitration in holding that the three-month statute of limitations for challenging an award under the Federal Arbitration Act (FAA) started to run when the award was placed in the mail and not when the aggrieved party received the award.
In Webster v. A.T. Kearney, Inc., No. 06-3094, 2007 WL 3225367 (7th Cir. Nov. 2, 2007), Webster filed an arbitration claim against A.T. Kearney (ATK), his former employer, alleging age discrimination and breach of contract. Webster filed the claim with the American Arbitration Association (AAA) because the arbitration agreement in his employment contract designated the AAA as the arbitration administrator... Full Story
Third Party Cannot Compel Arbitration Unless Agent or Assign of Party to Agreement
Starr v. Hameroff Law Firm, P.C., No. CIV06-520TUCFRZGEE, 2007 WL 3231988 (D. Ariz. Oct. 31, 2007)
10/31/2007
A federal court in Arizona held that a third party to an arbitration agreement cannot compel arbitration unless they offer proof that they are an agent or assign of a party to the agreement.
In Starr v. Hameroff Law Firm, P.C., No. CIV06-520TUCFRZGEE, 2007 WL 3231988 (D. Ariz. Oct. 31, 2007), Michael and Lorita Starr were the defendants in a collection proceeding in state court. The Starrs brought suit against the state court plaintiff, Unifund (which had acquired the debt from Bank One) and its law firm, Hameroff (collectively “the Defendants”) for alleged violations of the Fair Debt Collection Practices Act (FDCPA)... Full Story
Consumer’s Use of Internet Debt Elimination “Scam” Does Not Frustrate Award Confirmation
Carmack v. The Chase Manhattan Bank (USA), No. C 07-02124 WHA, 2007 WL 3274151 (N.D. Cal. Aug. 3, 2007)
8/3/2007
An internet debt reduction “scam” encouraging consumers to contest credit card debts and arbitration agreements on specious grounds is ineffective in relieving debt or frustrating arbitration, according to a federal district court in California.
In Carmack v. The Chase Manhattan Bank (USA), No. C 07-02124 WHA, 2007 WL 3274151 (N.D. Cal. Aug. 3, 2007), Carmack entered into a credit card agreement with Chase. After becoming delinquent on the credit card account, Carmack obtained the services of Internet firm NAES to help her “eliminate” her debt... Full Story
Arbitration Award Confirmed Due to Lack of Proof of Manifest Disregard or Evident Partiality
Williams Fund Private Equity Group, Inc. v. Engel, No. CIV.A.06-02266(HHK), 2007 WL 3277297 (D. D.C. Nov. 07, 2007)
11/7/2007
A District of Columbia federal court confirmed an arbitration award over allegations of manifest disregard of the law and evident partiality because the petitioner offered no evidence to support these arguments.
In Williams Fund Private Equity Group, Inc. v. Engel, No. CIV.A.06-02266(HHK), 2007 WL 3277297 (D. D.C. Nov. 07, 2007), Williams Fund entered into a stock purchase agreement with David Engel and later defaulted on the agreement. Engel moved to foreclose on the assets of Williams Fund and its stock, which had been used as collateral for the purchase... Full Story
Employment Arbitration Agreement Valid; Court Severs Fee-Splitting Provision
Griffin v. Yellow Transportation, Inc., No. 06-2264-CM, 2007 WL 3120419 (D. Kan. Oct. 22, 2007)
10/22/2007
A Kansas federal court enforced an employment arbitration agreement after striking the fee-splitting provision, even though the employee did not recall signing the agreement.
In Griffin v. Yellow Transportation, Inc., No. 06-2264-CM, 2007 WL 3120419 (D. Kan. Oct. 22, 2007), Griffin was employed at Yellow from 2002 until 2006. Griffin signed a dispute resolution agreement when he began his employment at Yellow, requiring all disputes arising out of his employment to be resolved exclusively by arbitration... Full Story
Court Refuses to Compel Arbitration Under an Agreement to Submit Disputes to Unspecified Alternative Dispute Resolution Procedures
Storm Reconstruction Services, Inc. v. Kellogg Brown & Root Services, Inc., Civ. A. No. 1:06CV726-LG-JMR, 2007 WL 3124559 (S.D. Miss. Oct. 24, 2007)
10/24/2007
A court cannot compel arbitration of a dispute when the underlying agreement refers generally to alternative dispute resolution procedures instead of referring to arbitration, according to a federal district court in Mississippi.
In Storm Reconstruction Services, Inc. v. Kellogg Brown & Root Services, Inc., Civ. A. No. 1:06CV726-LG-JMR, 2007 WL 3124559 (S.D. Miss. Oct. 24, 2007), Kellogg subcontracted with Storm Reconstruction Services (SRS) to provide clean-up services. SRS allegedly did not comply with minimum wage requirements under federal law, and Kellogg demanded damages. SRS instead sought a declaratory judgment with the court that it was not liable for the wage damages. Kellogg moved to compel arbitration of the claim... Full Story
Court Describes Discover Bank As a “Minority Position” in Upholding Class Waiver Under South Dakota Law
Dumanis v. Citibank (South Dakota), N.A., NO. 07-CV-6070, 2007 WL 3253975 (W.D. N.Y. Nov. 2, 2007)
11/2/2007
A federal district court in New York, applying South Dakota law, upheld a class waiver in an arbitration agreement, finding that the cardholder’s ability to opt out of the agreement precluded a finding of procedural unconscionability. Moreover, as the Court noted, the case law limiting the enforceability of class waivers is a “minority position.”
In Dumanis v. Citibank (South Dakota), N.A., NO. 07-CV-6070, 2007 WL 3253975 (W.D. N.Y. Nov. 2, 2007), Dumanis transferred a large sum of credit card debt onto a Citibank Platinum credit card under the assumption that he would receive a 1.99% interest rate until the balance was paid in full... Full Story
Oregon Federal Court Upholds Arbitration Agreement; Severs Discovery Limitation
Hulett v. Capitol Auto Group, Inc., No. CIV. 07-6151-AA, 2007 WL 3232283 (D. Or. Oct. 29, 2007)
10/29/2007
Granting a motion to compel arbitration of an employment discrimination suit, a federal district court in Oregon upheld an arbitration clause while severing a provision that unfairly limited an employee’s access to discovery.
In Hulett v. Capitol Auto Group, Inc., No. CIV. 07-6151-AA, 2007 WL 3232283 (D. Or. Oct. 29, 2007), Hulett sued Capitol on behalf of her deceased husband’s estate for age and disability discrimination her husband allegedly suffered while employed with Capitol. Capitol moved to compel arbitration pursuant to an arbitration clause in the employment contract between Hulett’s husband and Capitol. In opposing the motion, Hulett arguing the arbitration clause was unconscionable... Full Story
State Cases
Challenge to Arbitration Award Did Not Meet Statutory Deadline
CACV of Colorado, LLC v. Christian, No. CV054003701S, 2007 WL 317368, (Conn. Super. Ct. Oct. 12, 2007)
10/12/2007
Under Connecticut state law, motions to vacate, modify, or correct an arbitration award must be filed within thirty days of notice of the award, and beyond this time, the court lacks subject matter jurisdiction to take any action except to confirm the award, says a Connecticut Superior Court.
In CACV of Colorado, LLC v. Christian, No. CV054003701S, 2007 WL 317368, (Conn. Super. Ct. Oct. 12, 2007), CACV and Christian resolved their dispute through arbitration. Notice of the award in favor of CACV was mailed on December 28, 2004... Full Story
Arbitrator’s Determination That Employee Was Terminated Without Cause Precludes Subsequent Court Finding to the Contrary
Manganella v. Jasmine Co., Inc., Civ. A. No. 06-2790-BLS2, 2007 WL 3244436 (Mass. Super. Ct. Oct. 16, 2007)
10/16/2007
An arbitrator’s finding that an employee was terminated without cause precludes a contrary finding by a court in later proceedings, but only on the narrow grounds actually submitted to arbitration, according to a Massachusetts state court.
In Manganella v. Jasmine Co., Inc., Civ. A. No. 06-2790-BLS2, 2007 WL 3244436 (Mass. Super. Ct. Oct. 16, 2007), Manganella was hired as a Jasmine executive, and entered into an employment agreement and a stock purchase agreement with the company. Upon a complaint that Manganella engaged in sexual harassment, Jasmine sent a letter terminating his employment and a letter demanding the return of certain proceeds from stock purchases, both stating that Manganella was being fired for cause. Manganella refused to return the proceeds, claiming that he was fired without cause and was under no obligation under the purchase agreement to return the proceeds... Full Story
ADR Legislation & Regulation
LEGISLATION
PA S 1
PN: 1553
AUTHOR: Pileggi [R]
TITLE: Right to Know Act of 1957
INTRODUCED: 03/29/2007
LAST AMEND: 11/14/2007
DISPOSITION: Pending
CALENDAR COMMENT: Day 1
LOCATION: Senate Bills on Second Consideration Re Reported from Committee as Amended
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 3688
SPONSOR: Hoyer [D]
TITLE: United States Peru Trade Promotion Agreement
INTRODUCED: 09/27/2007
DISPOSITION: Pending
LOCATION: Passed House 11/13/07 and moved to Senate
Commentary:
Implements the United States Peru Trade Promotion Agreement, which provides for arbitration of claims.
US H 3915
SPONSOR: Miller B [D]
TITLE: Consumer Mortgage Practices
INTRODUCED: 10/22/2007
LAST AMEND: 11/14/2007
DISPOSITION: Pending
LOCATION: Passed House 11/16/07 and moved to Senate
Commentary:
This bill would create a number of new regulations for consumer mortgage practices, would establish licensing and registration requirements for residential mortgage originators, and other provisions. As it relates to arbitration, the bill states, "(1) IN GENERAL No residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer (other than a reverse mortgage) may include terms which require arbitration or any other nonjudicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction. (2) POST CONTROVERSY AGREEMENTS Subject to paragraph (3), paragraph (1) shall not be construed as limiting the right of the consumer and the creditor or an assignee, including a securitizer, to agree to arbitration or any other nonjudicial procedure as the method for resolving any controversy at any time after a dispute or claim under the transaction arises."
US H 4122
SPONSOR: Costa [D]
TITLE: High Speed Rail Development
INTRODUCED: 11/08/2007
DISPOSITION: Pending
LOCATION: House Transportation & Infrastructure Committee
Commentary:
Would establish a high speed rail system in the United States. The bill provides for arbitration of disputes.
REGULATION
Washington, DC
54 DCR 9572
AGENCY: Department of Mental Health
TITLE: Mental Health Grants
PROPOSED: 10/05/2007
ADOPTED: 11/16/2007
CITATION: DCMR Title 22A, Chapter 44
Commentary: Proposes rules regarding standards for the announcement, selection and issuance of non-federal grants originated by the Department of Health. 4415.1 The Director may require informal, non-binding mediation between the parties before issuing a final decision if, due to the nature of the dispute, the Director considers it to be in the best interests of the District.
Oklahoma
OAC 785: 4-5-1.1
AGENCY: Water Resources Board
TITLE: Mediation
PROPOSED: 11/15/2007
Commentary: Relating to water resources, the proposed regulation proposes new rules regarding pre-hearing actions and proceedings to require parties in a contested proceeding to mediate disputes. A statement summarizing the attempt to settle would be made part of the permanent record.
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