ADR LAW & POLICY UPDATE

Federal Cases

Employer Does Not Repudiate Arbitration Agreement by Refusing to Arbitrate When Employee Fails to Properly Initiate Arbitration
Cox v. Ocean View Hotel Corp., No. 06-15903, 2008 WL 2813057 (9th Cir. July 23, 2008)
7/23/2008 12:00:00 AM

The Ninth Circuit Court of Appeals held that where an employee makes an informal request for arbitration that is not in accord with the parties' arbitration agreement, an employer does not repudiate the arbitration agreement nor waive its right to arbitration by responding that the dispute is not yet ripe for arbitration.

In Cox v. Ocean View Hotel Corp., No. 06-15903, 2008 WL 2813057 (9th Cir. July 23, 2008), Cox signed an employment contract with Ocean View (OV) that contained an arbitration agreement. The arbitration agreement incorporated the American Arbitration Association's (AAA's) arbitration Rules... Full Story

Court Compels Arbitration Where Contract Provides that Questions of Arbitrability Will Be Decided by the Arbitrator
Gatlin v. Criscione, No. 1:07-cv-7212, 2008 WL 2745956 (N.D. Ill. July 11, 2008)
7/11/2008 12:00:00 AM

A federal court in Illinois held that where an arbitration agreement in a motor vehicle purchase contract clearly stipulates that questions of arbitrability will be submitted to arbitration, a court must submit any questions of arbitrability to the arbitrator.

In Gatlin v. Criscione, No. 1:07-cv-7212, 2008 WL 2745956 (N.D. Ill. July 11, 2008), Gatlin signed a contract to buy a car from Bill Kay. The contract contained an arbitration agreement which provided that "'dispute' includes any question regarding whether a matter is subject to arbitration under this Arbitration Agreement."... Full Story

Arbitration Award Has Res Judicata Effect, Will Not Be Vacated Unless FAA Grounds for Vacatur Are Established
Theriault v. FIA Card Services, N.A., No. 07-2978, 2008 WL 2787465 (E.D. La. July 17, 2008)
7/17/2008 12:00:00 AM

A federal district court in Louisiana held that an arbitration award has the effect of res judicata and will not be vacated unless the objecting party establishes one of the specific grounds for vacating the award under the Federal Arbitration Act (FAA).

In Theriault v. FIA Card Services, N.A., No. 07-2978, 2008 WL 2787465 (E.D. La. July 17, 2008), Theriault opened a credit card account with FIA Card Services ("FIA"). The parties' original contract stated that FIA reserved the right to make binding amendments to the contract. Later, FIA amended the contract by adding a mandatory, binding arbitration agreement, which required arbitration with the National Arbitration Forum (FORUM)... Full Story

New York Federal Court Holds "Manifest Disregard of the Law" Standard is No Longer Good Law in Light of Hall Street v. Mattel
Robert Lewis Rosen Associates, Ltd. v. Webb, No. 07 Civ. 11403, 2008 WL 2662015 (S.D.N.Y. July 7, 2008)
7/7/2008 12:00:00 AM

A federal district court in New York held that in light of the U.S. Supreme Court's recent decision in Hall Street v. Mattel, the "manifest disregard of the law" standard is no longer a basis for vacating arbitration awards in the Second Circuit.

In Robert Lewis Rosen Associates, Ltd. v. Webb, No. 07 Civ. 11403, 2008 WL 2662015 (S.D.N.Y. July 7, 2008), Robert Lewis Rosen Associates (RLR) contracted with Webb to represent Webb and manage his career as a director of televised sporting events. A dispute arose between the parties, and Webb refused to pay RLR's fees, so RLR commenced arbitration against Webb... Full Story

Washington Federal Court Holds Lack of Mutuality Renders Arbitration Agreement Unconscionable
Reimer v. Center for Counseling & Health Resources, No. C07-1123 MJP, 2008 WL 2782899 (W.D. Wash. July 15, 2008)
7/15/2008 12:00:00 AM

A federal court in Washington held that an arbitration agreement is unconscionable where it provides that only one of the parties to the agreement may refer a dispute to binding arbitration.

In Reimer v. Center for Counseling & Health Resources, No. C07-1123 MJP, 2008 WL 2782899 (W.D. Wash. July 15, 2008), Reimer sought treatment from the Center for Counseling and Health Resources (Center). Before Reimer received any treatment, she and the Center signed a contract that contained an arbitration agreement... Full Story

State Cases

Texas Court of Appeals: Parties Cannot Obtain Heightened Judicial Review by Arguing That Arbitrator Exceeded Their Powers
Quinn v. Nafta Traders, Inc., No. 05-07-00340-CV, 2008 WL 2426665 (Tex. Ct. App. June 17, 2008)
6/17/2008 12:00:00 AM

Parties seeking heightened judicial review of arbitration awards based on an incorrect application of the law cannot do so by arguing that the arbitrator exceeded their powers, according to the Texas Court of Appeals.

In Quinn v. Nafta Traders, Inc., No. 05-07-00340-CV, 2008 WL 2426665 (Tex. Ct. App. June 17, 2008), employee Quinn sued employer Nafta for statutory employment law violations. Quinn and Nafta were parties to an arbitration agreement encompassing Quinn's claims, and the trial court compelled the parties to arbitration... Full Story

Court Upholds Arbitration Award for Specific Performance
Van Dyke v. ConAgra Grocery Products, No. F053235, 2008 WL 2764874 (Cal. Ct. App. July 17, 2008)
7/17/2008 12:00:00 AM

A California appellate court held that where an arbitrator orders specific performance of an option to purchase land, neither public policy nor statutory rights exceptions allow a court to review or vacate the award.

In Van Dyke v. ConAgra Grocery Products, No. F053235, 2008 WL 2764874 (Cal. Ct. App. July 17, 2008), Van Dyke and ConAgra entered into a lease agreement, and the lease contained an option for ConAgra to purchase the leased-land for $8,000 an acre. ConAgra had wanted to purchase the land, but Van Dyke did not want to sell, so Van Dyke set the option price at double the price of irrigated farmland in the area... Full Story

California Courts Undo Arbitrator's Findings on Existence of Contractor's License
Betts v. Compaction Plus, Inc., Nos. E043258, E043739, 2008 WL 2811215 (Cal. Ct. App. July 22, 2008)
7/22/2008 12:00:00 AM

In a decision that seemingly conflicts with the federal rule that arbitrators must decide a challenge to the validity of the underlying contract, the California Court of Appeal has affirmed a trial court's correction of a construction arbitration award.

In Betts v. Compaction Plus, Inc., Nos. E043258, E043739, 2008 WL 2811215 (Cal. Ct. App. July 22, 2008), a dispute arose over a construction contract. Betts and CPI sued each other, each claiming breach of contract. The parties later agreed to resolve their claims in arbitration in accordance with American Arbitration Association (AAA) rules... Full Story

California Court Holds Employment Arbitration Agreement Invoking Second-Level Arbitral Appellate Review Does Not Violate Armendariz
Campos v. Champion Chevrolet, Inc., No. B202202, 2008 WL 2814629 (Cal. Ct. App. July 23, 2008)
7/23/2008 12:00:00 AM

An appellate court in California held that an employment arbitration agreement that invokes second-level arbitral appellate review does not violate the requirements for judicial review set forth in Armendariz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83 (2000), as long as both levels of arbitration produce a reasoned award and there is no money threshold that determines the right to second-level appellate review.

In Campos v. Champion Chevrolet, Inc., No. B202202, 2008 WL 2814629 (Cal. Ct. App. July 23, 2008), Campos began working for Champion and signed an arbitration agreement that required binding arbitration of all disputes arising out of the employment context. Campos later sued Champion for harassment and discrimination... Full Story

"Manifest Disregard" Not a Basis for Vacatur Under New Jersey Arbitration Act
Maguire v. Freehold Subaru, L.L.C., No. A-1258-07T2, 2008 WL 2796393 (N.J. Super. Ct. App. Div. July 22, 2008)
7/22/2008 12:00:00 AM

A New Jersey appellate court has held that a party to a private arbitration proceeding may not seek vacatur of an award based on "manifest disregard of the law" under the New Jersey Arbitration Act.

In Maguire v. Freehold Subaru, L.L.C., No. A-1258-07T2, 2008 WL 2796393 (N.J. Super. Ct. App. Div. July 22, 2008), Maguire and Freehold entered into a buyer's order and automobile lease. Both documents contained an arbitration agreement. Maguire later brought suit against Freehold, alleging violations of the New Jersey Consumer Fraud Act. Freehold responded with a successful motion to compel arbitration... Full Story

Court Denies Enforcement of Nursing Home Arbitration Agreement Signed by Daughter
Thornton v. Allenbrooke Nursing and Rehabilitation Center, LLC, No. W2007-00950-COA-R3-CV, 2008 WL 2687697 (Tenn. Ct. App. July 3, 2008)
7/3/2008 12:00:00 AM

The Tennessee Court of Appeals refused to compel arbitration in a case where a daughter signed a nursing home arbitration agreement for her mother, as the mother was still competent, and the daughter did not have her mother's power of attorney and did not purport to be her mother's attorney-in-fact.

In Thornton v. Allenbrooke Nursing and Rehabilitation Center, LLC, No. W2007-00950-COA-R3-CV, 2008 WL 2687697 (Tenn. Ct. App. July 3, 2008), Ira Lee Jones was admitted into the Allenbrooke Nursing Center, and her daughter, Patricia Raybon, signed several documents for Ms. Jones's admission, including an arbitration agreement... Full Story

ADR Legislation & Regulation

LEGISLATION

None.

REGULATIONS

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