Federal Cases

• Treaty is Not an "Act of Congress" Within Meaning of McCarran-Ferguson Act
• Sixth Circuit Holds That USERRA Claims are Arbitrable
• Failure to Object to Arbitrator's Authority During Arbitration Waives Right to Challenge Award at Confirmation Proceedings
• Former Employee's Mileage Reimbursement Claim Runs Out of Gas in Federal Court, Towed to Arbitration
• Non-Party's Objections to Arbitration Panel's Subpoena Found Arbitrable
• Pennsylvania Federal District Court Rejects Consumer's Attempt to Avoid Arbitration Based on Mere Introduction of the Arbitration Fairness Act

State Cases

• Alabama Supreme Court Joins Other Courts in Declaring "Manifest Disregard" Dead After Hall Street
• California Appellate Court Finds Expert Witness Cost Provision Offends Armendariz
• Failure of All Mediation Parties to Waive Confidentiality Fatal to Widow's Effort to Admit and Enforce Settlement Agreement
• California Supreme Court: No Implied Waiver of Mediation Confidentiality
• Violation of Mediation Confidentiality Does Not Warrant Dismissal in Absence of Prejudice to the Aggrieved Party
• Kentucky Court Upholds Class Action Waiver as Right to Bring Action in Small Claims Court Preserved Any Right to Litigate
• Lack of Mutuality Does Not Render Arbitration Agreement Unenforceable if Contract is Supported by Adequate Consideration
• Issue of Valid Arbitration Agreement Must be Raised Before Trial Court to be Brought on Appeal
• Submission of Demand and Filing Fees to Arbitration Administrator in a Particular Amount Does Not Function as a Cap on Potential Recovery
• Evidentiary Hearing Required to Evaluate Party's Pre-Litigation Conduct Waiver Allegations
• Emailed Notice of Arbitration Claim Not Compatible With Statutory Requirements, Says Washington State Appellate Court

Federal Cases

Treaty is Not an "Act of Congress" Within Meaning of McCarran-Ferguson Act
Safety National Casualty Corp. v. Certain Underwriters at Lloyd's London, No. 06-30262, 2008 WL 4378515 (5th Cir. Sept. 29, 2008)
9/29/2008 12:00:00 AM

The Fifth Circuit Court of Appeals held that international treaties, whether self-executing or not, do not constitute an "Act of Congress" within the meaning of the McCarran-Ferguson Act. Accordingly, the McCarran-Ferguson Act did not cause a Louisiana statute to reverse preempt the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

In Safety National Casualty Corp. v. Certain Underwriters at Lloyd's London, No. 06-30262, 2008 WL 4378515 (5th Cir. Sept. 29, 2008), the Louisiana Safety Association of Timbermen-Self Insurers Fund (the Fund) entered into reinsurance contracts with Certain Underwriters at Lloyd's London (the Underwriters), and each contract contained an arbitration agreement. The Fund assigned its rights under the reinsurance contracts to Safety National Casualty Corporation (SNCC), but the Underwriters refused to recognize the assignment, so SNCC sued the Underwriters...  Full Story

Sixth Circuit Holds That USERRA Claims are Arbitrable
Landis v. Pinnacle Eye Care, LLC, No. 07-6204, 2008 WL 3267618, (6th Cir. Aug. 11, 2008)
8/11/2008 12:00:00 AM

The Sixth Circuit Court of Appeals followed Fifth Circuit precedent in holding that Uniformed Services Employment and Reemployment Act of 1994 (USERRA) claims are arbitrable since arbitration presents the service member with a "fair opportunity" to prove their claim.

In Landis v. Pinnacle Eye Care, LLC, No. 07-6204, 2008 WL 3267618, (6th Cir. Aug. 11, 2008), Landis sued Pinnacle, his employer, alleging that Pinnacle violated USERRA by refusing to honor the terms of Landis' employment following his military service in Afghanistan. Pinnacle moved to compel arbitration. The trial court granted the motion...  Full Story

Failure to Object to Arbitrator's Authority During Arbitration Waives Right to Challenge Award at Confirmation Proceedings
Environmental Barrier Co., LLC v. Slurry Systems, Inc., No. 06-3910, 2008 WL 3982997 (7th Cir. Aug. 29, 2008)
8/29/2008 12:00:00 AM

The Seventh Circuit Court of Appeals held that a disappointed party at arbitration could not challenge the authority of the arbitrator to decide a claim where the party failed to object to the arbitrator's jurisdiction during the arbitration proceedings.

In Environmental Barrier Co., LLC v. Slurry Systems, Inc., No. 06-3910, 2008 WL 3982997 (7th Cir. Aug. 29, 2008), Slurry Systems (SSI) subcontracted certain jobs to Geo-Con. The parties' subcontract contained an arbitration agreement. After the subcontract was concluded but before their accounts were settled, Geo-Con declared bankruptcy. Geo-Con's assets were purchased by and assigned to Environmental Barrier Company (EBC)...   Full Story

Former Employee's Mileage Reimbursement Claim Runs Out of Gas in Federal Court, Towed to Arbitration
Arreguin v. Global Equity Lending, Inc., No. C 07-06026 MHP, 2008 WL 4104340 (N.D. Cal. Sept. 2, 2008)
9/2/2008 12:00:00 AM

A federal district court issued an order compelling arbitration of an employee's statutory claim for mileage reimbursement, though the Court severed provisions in the arbitration agreement providing for a non-mutual scope and out-of-state proceedings.

In Arreguin v. Global Equity Lending, Inc., No. C 07-06026 MHP, 2008 WL 4104340 (N.D. Cal. Sept. 2, 2008), Arreguin was employed by Global Equity Lending (Global). Arreguin signed a broadly worded employment arbitration agreement with Global. As part of her duties, Arreguin was required to use her personal automobile. After the employment relationship ended, Arreguin filed suit on her own behalf and those similarly situated for Global's alleged failure to reimburse mileage expenses under Cal. Labor Code § 2802 and Cal. Bus. & Prof. Code § 17200, et seq. Global filed a motion to compl arbitration...  Full Story

Non-Party's Objections to Arbitration Panel's Subpoena Found Arbitrable
Federal Insurance Co. v. Law Offices of Edward T. Joyce, P.C., No. 08 C 0431, 2008 WL 4348604 (N.D. Ill. Mar. 13, 2008)
3/13/2008 12:00:00 AM

An Illinois federal district court has refused to examine the propriety of an arbitration panel's subpoena for documents from a non-party, finding the issues raised by the non-party to be fully arbitrable.

In Federal Insurance Co. v. Law Offices of Edward T. Joyce, P.C., No. 08 C 0431, 2008 WL 4348604 (N.D. Ill. Mar. 13, 2008), Federal sought to enforce a discovery subpoena issued during an arbitration proceeding against Joyce, a non-party to the proceedings. Joyce objected to the subpoena, alleging that it was overbroad, sought irrelevant materials, and included privileged documents in its scope. Joyce also argued that Federal was estopped from discovery due to delay...  Full Story

Pennsylvania Federal District Court Rejects Consumer's Attempt to Avoid Arbitration Based on Mere Introduction of the Arbitration Fairness Act
Grimm v. First National Bank of Pennsylvania, Civ. A. Nos. 08-785, 08-816, 2008 WL 4279855 (W.D. Pa. Sept. 16, 2008)
9/16/2008 12:00:00 AM

A federal district court in Pennsylvania has compelled arbitration of a consumer's claims against a bank and credit card company, noting that the mere pendency of legislative action that would invalidate the arbitration agreements at issue did not warrant ignoring present federal law favoring their enforcement.

In Grimm v. First National Bank of Pennsylvania, Civ. A. Nos. 08-785, 08-816, 2008 WL 4279855 (W.D. Pa. Sept. 16, 2008), Grimm held accounts with First National (the Bank) and with Chase. After disputes arose with both regarding withdrawals and charges on these accounts, Grimm sued both parties. The Bank and Chase moved to compel arbitration of Grimm's claims, the former in accordance with an arbitration agreement on the Bank account contracts and the latter in accordance with an arbitration agreement in the cardmember contract...  Full Story

State Cases

Alabama Supreme Court Joins Other Courts in Declaring "Manifest Disregard" Dead After Hall Street
Hereford v. D.R. Horton, Inc., No. 1070396, 2008 WL 4097594 (Ala. Sept. 5, 2008)
9/5/2008 12:00:00 AM

In light of the United States Supreme Court's recent Hall Street decision, the Alabama Supreme Court has held that manifest disregard of the law is no longer a valid ground for vacatur under the Federal Arbitration Act.

In Hereford v. D.R. Horton, Inc., No. 1070396, 2008 WL 4097594 (Ala. Sept. 5, 2008), Hereford contracted with Horton for construction of a home. The contract contained an arbitration agreement. After Hereford occupied the home, she discovered water damage in one of the bedrooms. Horton attempted to repair the damage, but Hereford was unsatisfied with the repairs. Hereford sought and obtained repairs through her homeowners insurance and later sued Horton for failure to make the repairs...  Full Story

California Appellate Court Finds Expert Witness Cost Provision Offends Armendariz
Murray v. United Services Automobile Ass'n, Nos. A117596, A117598, 2008 WL 4196581 (Cal. Ct. App. Sept. 15, 2008)
9/15/2008 12:00:00 AM

Determining that an employment arbitration agreement's only unconscionable provision was one requiring each party to bear its own expert witness costs, a California appellate court has rejected a trial court's complete invalidation of the agreement and remanded the matter to evaluate the severability of the offending provision.

In Murray v. United Services Automobile Ass'n, Nos. A117596, A117598, 2008 WL 4196581 (Cal. Ct. App. Sept. 15, 2008), USAA hired Murray and McLorg (the Employees) as trial attorneys. During their period of employment, USAA implemented a dispute resolution program, Dialogue, ultimately requiring binding arbitration of employment-related claims. After the Employees were terminated, they brought suits alleging employment discrimination and wrongful termination. USAA moved to compel arbitration...  Full Story

Failure of All Mediation Parties to Waive Confidentiality Fatal to Widow's Effort to Admit and Enforce Settlement Agreement
Rael v. Davis, Nos. B197971, B200217, 2008 WL 4335179 (Cal. Ct. App. Sept. 24, 2008)
9/24/2008 12:00:00 AM

A California appellate court has affirmed a trial court's refusal to admit and enforce a settlement agreement reached during a confidential mediation session, finding that all parties to the session had not waived confidentiality as required by statute.

In Rael v. Davis, Nos. B197971, B200217, 2008 WL 4335179 (Cal. Ct. App. Sept. 24, 2008), Cruz Rael, her husband Tony Rael, and Tony Rael's children participated in a mediation session regarding the distribution of Tony Rael's assets after his death. After Tony Rael died, Cruz Rael sought to enforce an alleged written settlement reached during this mediation session. The children opposed enforcement, noting that one of them, Tony's son Mark, did not sign the settlement agreement and that Tony Rael did not intend to enforce the agreement without all parties' assent...   Full Story

California Supreme Court: No Implied Waiver of Mediation Confidentiality
Simmons v. Ghaderi, 187 P.3d 934 (Cal. 2008)
7/21/2008 12:00:00 AM

Strengthening the mediation protections available under state law, the California Supreme Court has held that mediation confidentiality can not be impliedly waived by litigation conduct and that settlement agreements reached during mediation are admissible only with the express consent of both parties.

In Simmons v. Ghaderi, 187 P.3d 934 (Cal. 2008), Simmons filed a wrongful death complaint against Ghaderi. The parties proceeded to mediation. Before discussion of the claim, Ghaderi executed a "consent to settle" form for her insurance company, CAP, authorizing it to enter into a settlement agreement with Simmons during mediation. The instrument stated that it could only be revoked in a writing delivered to CAP's offices...  Full Story

Violation of Mediation Confidentiality Does Not Warrant Dismissal in Absence of Prejudice to the Aggrieved Party
Hill v. Greyhound Lines, Inc., 988 So.2d 1250 (Fla. Dist. Ct. App. Aug. 29, 2008)
8/29/2008 12:00:00 AM

A Florida appellate court overturned the sanction of dismissal for a party's violation of mediation confidentiality where there was not an adequate showing of prejudice and no finding that the party willfully violated mediation confidentiality.

In Hill v. Greyhound Lines, Inc., 988 So.2d 1250 (Fla. Dist. Ct. App. Aug. 29, 2008), Hill filed a workers compensation claim against Greyhound. At mediation, Greyhound stated that it would not authorize back surgery because Hill's treating physician had given inconsistent recommendations. Following mediation, Hill relayed this conversation to his treating physician...  Full Story

Kentucky Court Upholds Class Action Waiver as Right to Bring Action in Small Claims Court Preserved Any Right to Litigate
Schnuerle v. Insight Communications Co., No. 2006-CA-002121-MR, 2008 WL 4367840 (Ky. Ct. App. Sept. 26, 2008)
9/26/2008 12:00:00 AM

In affirming a trial court's holding that a consumer arbitration agreement containing a class action waiver was valid and enforceable, the Kentucky Court of Appeals held that whatever the benefits of class actions may be, the Federal Arbitration Act (FAA) requires piecemeal resolution when necessary to give effect to an arbitration agreement, and the right to bring an action in small claims court preserves any right to litigate.

In Schnuerle v. Insight Communications Co., No. 2006-CA-002121-MR, 2008 WL 4367840 (Ky. Ct. App. Sept. 26, 2008), Schnuerle brought a class action lawsuit against Insight Communications Company, an internet service provider (ISP). Their service contract contained an arbitration agreement and class action waiver. As such, Insight moved to compel arbitration and dismiss the putative class action...   Full Story

Lack of Mutuality Does Not Render Arbitration Agreement Unenforceable if Contract is Supported by Adequate Consideration
Schreier v. Solomon, No. 277687, 2008 WL 4330192 (Mich. Ct. App. Sept. 23, 2008)
9/23/2008 12:00:00 AM

In reversing a trial court's order which ruled that a construction arbitration agreement was unenforceable due to lack of mutuality, the Michigan Court of Appeals held that the enforceability of an arbitration agreement depends on consideration and not mutuality of obligation.

In Schreier v. Solomon, No. 277687, 2008 WL 4330192 (Mich. Ct. App. Sept. 23, 2008), Schreier entered into a construction contract with Southwick Builders to make an addition and renovations to Schreier's home. The contract contained an arbitration agreement providing that the owner, Schreier, was required to bring any claims against Southwick in binding arbitration. It did not require Southwick to arbitrate its claims against Schreier...  Full Story

Issue of Valid Arbitration Agreement Must be Raised Before Trial Court to be Brought on Appeal
CACV of Colorado, LLC v. Wells, No. COA08-195, 2008 WL 4211147 (N.C. Ct. App. Sept. 16, 2008)
9/16/2008 12:00:00 AM

A North Carolina appellate court rejected a credit card holder's argument that no valid arbitration agreement existed, because the cardholder failed to object to the arbitration proceedings or raise the issue before the trial court. Instead, the cardholder first raised the issue on appeal.

In CACV of Colorado, LLC v. Wells, No. COA08-195, 2008 WL 4211147 (N.C. Ct. App. Sept. 16, 2008), CACV filed a demand for arbitration against Wells for the unpaid balance on her credit card. An arbitration award was granted in favor of CACV...  Full Story

Submission of Demand and Filing Fees to Arbitration Administrator in a Particular Amount Does Not Function as a Cap on Potential Recovery
Carroll v. Ferro, No. COA07-1417, 2008 WL 4007461 (N.C. Ct. App. Sept. 2, 2008)
9/2/2008 12:00:00 AM

The submission of a demand and filing fees to an arbitration administrator in a particular amount at the commencement of proceedings does not function as a cap on a party's potential recovery at arbitration, according to the North Carolina Court of Appeals.

In Carroll v. Ferro, No. COA07-1417, 2008 WL 4007461 (N.C. Ct. App. Sept. 2, 2008), Carroll and Ferro entered into a business venture to develop land and sell manufactured housing. The parties entered into several operations contracts that contained arbitration agreements...  Full Story

Evidentiary Hearing Required to Evaluate Party's Pre-Litigation Conduct Waiver Allegations
Webb v. ALC of W. Cleveland, Inc., No. 90843, 2008 WL 4358554 (Ohio Ct. App. Sept. 25, 2008)
9/25/2008 12:00:00 AM

Neglecting to address whether the parties' agreement reserved the issue of waiver for the arbitrator, an Ohio appellate court has held that a party must be given the opportunity to develop a factual record in an evidentiary hearing before a trial court when alleging waiver of the right to arbitrate through pre-litigation conduct.

In Webb v. ALC of W. Cleveland, Inc., No. 90843, 2008 WL 4358554 (Ohio Ct. App. Sept. 25, 2008), Webb purchased a vehicle from ALC. After signing a retail sales contract containing an arbitration agreement, Webb paid the agreed downpayment and left with the automobile...  Full Story

Emailed Notice of Arbitration Claim Not Compatible With Statutory Requirements, Says Washington State Appellate Court
Westcott Homes LLC v. Chamness, No. 60762-6-I, 2008 WL 4210480 (Wash. Ct. App. Sept. 15, 2008)
9/15/2008 12:00:00 AM

A Washington state appellate court has held that a notice of initiation of arbitration proceedings sent via email does not comply with the delivery requirements in Washington's Uniform Arbitration Act.

In Westcott Homes LLC v. Chamness, No. 60762-6-I, 2008 WL 4210480 (Wash. Ct. App. Sept. 15, 2008), Westcott and Chamness were involved in a protracted series of disputes regarding an easement across Chamness' land. A third-party developer allegedly damaged Chamness' land during construction, and Chamness demanded remedial damages...   Full Story

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