Federal Cases
Sixth Circuit Confirms Arbitration Award and Dismisses Claim That Arbitrator Made an Inaccurate Conflicts Disclosure
Nolder v. Permanente Medical Group, No. H029816, 2007 WL 2819316 (6th Cir. Sept. 28, 2007)
9/28/2007
The Sixth Circuit Court of Appeals determined that under California ethics standards, the neutral arbitrator was not required to disclose that his adult son previously worked in the law firm that represented one of the parties in the arbitration.
In Nolder v. Permanente Medical Group, No. H029816, 2007 WL 2819316 (6th Cir. Sept. 28, 2007), Nolder commenced arbitration proceedings against Permanente on her medical malpractice claims pursuant to the parties’ arbitration agreement... Full Story
Nonsignatory May Invoke Lender’s Arbitration Agreement Where the Agreement Anticipates Including Nonsignatory Within Its Scope
Balezos v. Cavalry Portfolio Service, LLC, No. CV-06-1952-PHX-SMM, 2007 WL 2752383 (D. Ariz. Sept. 21, 2007)
9/21/2007
Declining to clarify an order compelling arbitration, an Arizona federal court held that all parties involved in the dispute were subject to arbitration, as the arbitration agreement expressly inured to the benefit of third parties named as defendants.
In Balezos v. Cavalry Portfolio Service, LLC, No. CV-06-1952-PHX-SMM, 2007 WL 2752383 (D. Ariz. Sept. 21, 2007), Balezos moved for clarification of a court order to compel arbitration, asking the Court to clarify that the order to arbitrate did not apply to the Ewing defendants... Full Story
New York Convention Trumps McCarran-Ferguson Act Provisions That Preclude Enforcement of International Arbitration Agreements
Murphy Oil USA, Inc. v. SR International Business Insurance Co., NO. 07-CV-1071, 2007 WL 2752366 (W.D. Ark. Sept. 20, 2007)
9/20/2007
A federal court in Arkansas held that in light of the importance of international comity, the New York Convention trumps any application of the McCarran-Ferguson Act that would preclude enforcement of an international arbitration agreement.
In Murphy Oil USA, Inc. v. SR International Business Insurance Co., NO. 07-CV-1071, 2007 WL 2752366 (W.D. Ark. Sept. 20, 2007), a Murphy Oil refinery was damaged in Hurricane Katrina, resulting in an oil spill. Murphy Oil was insured by SR International for excess insurance coverage and sought insurance coverage for losses incurred in litigation over the oil spill... Full Story
Court Rejects Speculation About Inadequate Discovery and Grants Non-Signatory Demand for Arbitration
Amisil Holdings Ltd. v. Clarium Capital Management, No. C06-05255 MJJ, 2007 WL 2768995 (N.D. Cal. Sept. 20, 2007)
9/20/2007
According to a federal district court in California, speculation that discretionary discovery is inadequate does not defeat a motion to compel arbitration, and individual non-signatory defendants can demand arbitration of related claims that arise out of their agency relationship with a signatory corporation.
In Amisil Holdings Ltd. v. Clarium Capital Management, No. C06-05255 MJJ, 2007 WL 2768995 (N.D. Cal. Sept. 20, 2007), Amisil entered into an agreement with Clarium as an investor in a hedge fund. After repeated attempts by Clarium and its manager Thiel to buy out Amisil, and repeated attempts by Amisil to gain access to Clarium records, Amisil filed a complaint against Clarium and many of its managers individually... Full Story
Employees Assent to New Arbitration Policy by Failing to Opt-Out After Notice
Johnson v. Macy’s South, LLC, No. 1:07-cv-1256-WSD, 2007 WL 2904126 (N.D. Ga. Sept. 27, 2007)
9/27/2007
According to a federal district court in Georgia, employees adequately notified of the addition of an arbitration agreement to terms of employment are bound by the agreement’s terms if the employee is informed of his or her ability to opt out of the policy and fails to affirmatively do so within the allotted period of time.
In Johnson v. Macy’s South, LLC, No. 1:07-cv-1256-WSD, 2007 WL 2904126 (N.D. Ga. Sept. 27, 2007), Johnson was employed by Macy’s as a part-time security officer. During the course of Johnson’s employment, Macy’s implemented a policy requiring mandatory arbitration of employment-related disputes. Macy’s notified current employees, including Johnson, of the dispute resolution policy both at work and through mailings. While Macy’s offered employees the option of affirmatively opting out of the policy through the return of an election form, Johnson failed to do so by the opt-out deadline... Full Story
Proof of Substantial Prejudice Necessary for Waiver of Arbitration
Levey v. Brownstone Inv. Group, LLC, No. 06 CV 0747 (VM), 2007 WL 2710401 (S.D. N.Y. Sep 17, 2007)
9/17/2007
A federal court in New York held that a man who waited nearly a year after the commencement of litigation to request arbitration did not waive his right to arbitrate because no information was received through discovery that would not have been received in arbitration and the opposing party did not offer proof that they had been sufficiently prejudiced.
In Levey v. Brownstone Inv. Group, LLC, No. 06 CV 0747 (VM), 2007 WL 2710401 (S.D. N.Y. Sep 17, 2007), Brownstone brought suit against Gordon Levey seeking injunctive relief and damages for claims of breach of fiduciary duty and misappropriation of trade secrets. Levey answered, asserting various affirmative defenses and filing a third party action... Full Story
Court Upholds Employee’s Arbitration Agreement by Blue Lining Unfair Venue Provision
Sanchez-Santiago v. Guess, Inc., Civil No. 06-1887(SEC), 2007 WL 2823675 (D. P.R. Sept. 28, 2007)
9/28/2007
In compelling arbitration of an employment dispute, a federal district court in Puerto Rico rejected the employee’s argument that a language barrier vitiated her consent. However, the Court agreed that the California venue provision was unreasonable and thus required the arbitration to take place in Puerto Rico.
In Sanchez-Santiago v. Guess, Inc., Civil No. 06-1887(SEC), 2007 WL 2823675 (D. P.R. Sept. 28, 2007), Sanchez, an employee at a Guess store in Puerto Rico, suffered medial complications during her pregnancy. When her employment was terminated, she sued Guess for allegedly discriminating on the basis of sex and disability... Full Story
State Cases
Award Confirmation Does Not Require Signed Agreement
MBNA America Bank v. Harper, No. C-060937, 2007 WL 2812906 (Ohio Ct. App. Sept. 28, 2007)
9/28/2007
The Ohio Court of Appeals held that a party seeking confirmation of an arbitration award does not have to produce a signed arbitration agreement because the statutory procedure only requires a written agreement. A signature requirement would run afoul of the Federal Arbitration Act by placing special restrictions on arbitration agreements.
In MBNA America Bank v. Harper, No. C-060937, 2007 WL 2812906 (Ohio Ct. App. Sept. 28, 2007), MBNA filed an arbitration claim for unpaid debt on Harper’s credit card. The arbitrator awarded MBNA $6,071.65, and MBNA filed an application to confirm the award pursuant to Ohio Rev. Code Ann. § 2711.09... Full Story
California Court Sanctions Non-Party for Filing Frivolous Motion to Compel Arbitration
Jacobsen v. Winkler, No. G038300, 2007 WL 2758897 (Cal. Ct. App. Sep. 24, 2007)
9/24/2007
Affirming a trial court’s ruling denying a motion to compel arbitration, a California appellate court held that a non-party to an arbitration agreement cannot use the agreement to compel arbitration when that party is not an intended third party beneficiary.
In Jacobsen v. Winkler, No. G038300, 2007 WL 2758897 (Cal. Ct. App. Sep. 24, 2007), Winkler and Jacobsen entered into an agreement to form a company named Advent Development, LLC (Development). The agreement contained an arbitration clause mandating arbitration of disputes arising under the agreement. In late 2006, Winkler brought a claim before the Labor Commission claiming Advent Corporation owed him back wages. Neither Jacobsen nor Development were parties to the wage claim... Full Story
Interpleader Permissible After Arbitration Award in Order to Avoid Multiple Liability
Delta Building Group, Inc. v. Laurenzano, No. 55A04-0611-CV-653, 2007 WL 2811081, (Ind. Ct. App. Sept. 28, 2007)
9/28/2007
The Indiana Court of Appeals upheld an interpleader order allowing a home buyer to deposit with the court an arbitration award due the home builder, thus enabling the home buyer to avoid double liability to the subcontractors who had not been paid. In affirming the order, the Court rejected the builder’s argument that the interpleader complaint was an impermissible attempt to modify the award.
In Delta Building Group, Inc. v. Laurenzano, No. 55A04-0611-CV-653, 2007 WL 2811081, (Ind. Ct. App. Sept. 28, 2007), Laurenzano and Delta entered into a construction contract that contained an arbitration agreement. Later, Laurenzano fired Delta and initiated arbitration. Following a hearing, the arbitrator issued a net award of $45,804.01 in Delta’s favor... Full Story
FAA Preempts New York Rule Requiring Written Confirmation of Arbitration Agreements
Kahan Jewelry Corp. v. Venus Casting, Inc., No. 105609/07, 2007 WL 2871001, (N.Y. Sup. Ct. Sept. 5, 2007)
9/5/2007
Given the preemptive force of the Federal Arbitration Act (FAA), the New York Rule, requiring written confirmation of arbitration agreements, is only enforceable if the subject matter of the contract does not involve interstate commerce, according to a New York trial court.
In Kahan Jewelry Corp. v. Venus Casting, Inc., No. 105609/07, 2007 WL 2871001, (N.Y. Sup. Ct. Sept. 5, 2007), Kahan and Venus engaged in many transactions for the purchase of gold using a certain blank check and delivery ticket system. Each purchase’s delivery ticket featured terms and conditions, including an agreement to arbitrate all related disputes with a Beth Din rabbinical court of Kahan’s choosing. The delivery tickets were not signed by either party... Full Story
Court Upholds Arbitration Agreement over Investor’s Challenge to Cost Allocation
Peltz v. Moyer, No. 06 BE 11, 2007 WL 2758604 (Ohio Ct. App. Sept. 17, 2007)
9/17/2007
The Ohio Court of Appeals held that an arbitration agreement was not unconscionable where it clearly allocated the costs of arbitration to the party initiating arbitration, even though the arbitration filing fee was $1,700 and the court filing fee was only $150.
In Peltz v. Moyer, No. 06 BE 11, 2007 WL 2758604 (Ohio Ct. App. Sept. 17, 2007), Peltz sued Moyer, his investment adviser, alleging that Moyer guaranteed investment returns which never materialized. Moyer moved to stay further proceedings pursuant to an arbitration agreement in the parties’ contract. In opposing the motion, Peltz argued that the arbitration agreement was unconscionable... Full Story
Washington Court Finds Evident Partiality Challenge After Award to Be Untimely
Hudson Co., Inc. v. King, No. 35601-5-II, 2007 WL 2482150 (Wash. Ct. App. Sept. 5, 2007)
9/5/2007
Under Washington law, a party alleging evident partiality of an arbitrator must make the allegation “in a timely manner” when learning of “any basis of partiality,” and cannot bring a partiality challenge after the arbitrator reaches a decision, according to the Washington Court of Appeals.
In Hudson Co., Inc. v. King, No. 35601-5-II, 2007 WL 2482150 (Wash. Ct. App. Sept. 5, 2007), King entered into a home remodeling contract with Hudson. The contract contained a dispute resolution provision, requiring mediation of all disputes, followed by binding arbitration if mediation proved unsuccessful... Full Story
ADR Legislation & Regulation
LEGISLATION
CA A 467
AUTHOR: Feuer [D]
TITLE: Courts: Access to Justice
INTRODUCED: 02/20/2007
VETOED: 10/14/2007
DISPOSITION: Vetoed
Commentary:
If a party in a civil case whose trial court fees and costs were initially waived recovers ten thousand dollars ($10,000) or more in value by way of settlement, compromise, arbitration award, mediation settlement, or other recovery, the waived fees and costs shall be paid to the court out of the settlement, compromise, award, or other recovery. Imposes a lien against any settlement, compromise or award or other recovery in excess of $10,000 to repay the court costs.
CA A 709
AUTHOR: Keene [R]
TITLE: Real Estate Appraisers
INTRODUCED: 02/22/2007
LAST AMEND: 09/05/2007
VETOED: 10/13/2007
DISPOSITION: Vetoed
LOCATION: Vetoed
Commentary:
This bill would provide that when a public agency decides that a contract with a designated member of an appraisal organization is necessary to provide an appraisal, as defined, of real property, any designated member of any appraisal organization that is a member of the Appraisal Foundation shall be allowed to submit a proposal if specified criteria are met. The bill would authorize that member to bring a civil action for equitable relief against a public agency that violates this provision, as specified, and would prohibit the office from participating in that action. A September 5, 2007 amendment to the bill, while not prohibiting arbitration, states, "Any waiver by a member, including, but not limited to, an agreement to arbitrate a claim, that is required as a condition of submitting a proposal or doing business with a public agency shall be presumed involuntary, unconscionable, against public policy, and unenforceable. The public agency has the burden of proving that any waiver of rights, including any agreement to arbitrate a claim, was knowing, voluntary, and not made a condition of submitting a proposal or doing business with the agency."
CA A 765
AUTHOR: Evans [D]
TITLE: Horse Racing
INTRODUCED: 02/22/2007
ENACTED: 10/13/2007
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary:
Requires arbitration of certain horse racing disputes.
CA A 1164
AUTHOR: De Leon [D]
TITLE: Child Care: Provider Organization: Representation
INTRODUCED: 02/23/2007
VETOED: 10/14/2007
DISPOSITION: Vetoed
Commentary:
This bill formerly related to competition in the video/broadband industry and providing for binding arbitration of grievances was gutted and amended to relate instead to child care. The current bill also provides that, "An agreement pursuant to this section may provide for binding arbitration of grievances."
CA A 1178
AUTHOR: Hernandez [D]
TITLE: Medical Information: Disclosures
INTRODUCED: 02/23/2007
ENACTED: 10/11/2007
DISPOSITION: Enacted
Commentary:
"A provider of health care, a health care service plan, or a contractor shall disclose medical information if the disclosure is compelled by any of
the following...By an arbitrator or arbitration panel, when arbitration is lawfully requested by either party, pursuant to a subpoena duces tecum issued under Section 1282.6 of the Code of Civil Procedure, or any other provision authorizing discovery in a proceeding before an arbitrator or arbitration panel."
CA A 1687
AUTHOR: Brownley [D]
TITLE: Confidential Information
INTRODUCED: 02/23/2007
ENACTED: 10/12/2007
DISPOSITION: Enacted
Commentary:
Mental Health bill: Medical records relating to individuals with developmental disabilities and mental illness are confidential, except that providers shall disclose medical information if the disclosure is compelled by any arbitration hearing.
CA S 574
AUTHOR: Negrete McLeod [D]
TITLE: Alcoholic Beverages
INTRODUCED: 02/22/2007
ENACTED: 10/08/2007
DISPOSITION: Enacted
Commentary:
An act amending the Business and Professions Code in relation to alcoholic beverages. (Alcohol Beverage Control Act). Amendments include: "(1) An arbitration held under this subdivision shall be held in California through a private arbitration services provider with at least three offices in California and a statewide roster of at least 70 neutral arbitrators, of which at least 30 have prior experience as a sole arbitrator in franchise, distribution, or related business litigation." Additional amendments outline the arbitration process.
IL H 4
SPONSOR: Jefferson [D]
TITLE: Airport Authorities Act
PREFILED: 12/05/2006
INTRODUCED: 01/10/2007
LAST AMEND: 05/30/2007
LINE ITEM: 08/17/2007
DISPOSITION: Pending
LOCATION: Amendatorily Vetoed by Governor
Commentary:
Amending the Airport Authorities Act. Amendments include: the Rail has the authority (xii) To enter into arbitration arrangements, which may be final and binding. The Governor did not veto the portions of this bill relating to arbitration.
ME LR 3228
AUTHOR: Office of Martin
TITLE: Divorce Mediation
PREFILED: 10/09/2007
DISPOSITION: Pending
LOCATION: Legislature
Commentary:
Requires a waiting period from the close of divorce mediation before a valid mediation agreement is signed.
REGULATION
New Hampshire 2007-98
AGENCY: Department of Safety/Division of Motor Vehicles/New Motor Vehicle Arbitration Board
TITLE: Motor Vehicle Arbitration Board Rules
PROPOSED: 07/06/2007
ADOPTED: 10/11/2007
Commentary:
This regulation would readopt the current motor vehicle arbitration rules set to expire in November of 2007.
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