Federal Cases
Federal Court Retains Diversity Jurisdiction Upon Finding No Basis for Injunctive Relief Claim Against Arbitrator
Tucker v. Citigroup Global Markets Inc., No. 2:06-cv-585-FtM-34DNF, 2007 WL 2071502 (M.D. Fla. July 17, 2007)
7/17/2007
Based on the doctrine of fraudulent joinder, a federal court in Florida retained diversity jurisdiction over an action challenging the propriety of an arbitration award because the party challenging the award could not prove irreparable harm and thus had no viable claim for injunctive relief against the arbitrator (i.e., the non-diverse defendant).
In Tucker v. Citigroup Global Markets Inc., No. 2:06-cv-585-FtM-34DNF, 2007 WL 2071502 (M.D. Fla. July 17, 2007), Tucker and Citigroup submitted a dispute to arbitration. The arbitration panel issued an award in favor of Citigroup, and Tucker challenged the award by suing Citigroup and one of the arbitrators, Architetto, in a Florida court... Full Story
Court Upholds Arbitration Agreement Despite Absence of Magic Word "Arbitration"
Health Care Logistics, Inc. v. Adonix Transcomm, Inc., No. 2:06-CV-815, 2007 WL 1974944 (S.D. Ohio July 3, 2007)
7/3/2007
In compelling arbitration of a contract dispute, a federal district court in Ohio upheld a somewhat vague arbitration agreement, as there was sufficient evidence indicating the parties intended to arbitrate any disputes.
In Health Care Logistics, Inc. v. Adonix Transcomm, Inc., No. 2:06-CV-815, 2007 WL 1974944 (S.D. Ohio July 3, 2007), Health Care Logistics sued Adonix for breach of a computer services contract. Adonix moved to compel arbitration pursuant to a Software Agreement Addendum... Full Story
No Agreement to Arbitrate Where Employee "Must Have Known" Arbitration Agreement Existed
Kirleis v. Dickie, McCamey & Chicolte, PC, No. Civ A 06-1495, 2007 WL 2142397 (W.D. Pa. Jul. 24, 2007)
7/24/2007
Denying a motion to compel arbitration of a sex discrimination suit, a Pennsylvania federal court held that the mere fact that an employee "must have known" there was an arbitration provision did not establish a valid arbitration agreement.
In Kirleis v. Dickie, McCamey & Chicolte, PC, No. Civ A 06-1495, 2007 WL 2142397 (W.D. Pa. Jul. 24, 2007), Kirleis, a Dickie, McCamey & Chicolte attorney and shareholder, sued the law firm for sex discrimination. The law firm moved to compel arbitration, as the partnership's By-Laws contained an arbitration provision... Full Story
Court Finds No Hidden Costs in Franchise Contract and Enforces Arbitration Agreement
Wasserman v. We The People Forms and Service Centers USA, Inc., No. 3:07-CV-0606-D, 2007 WL 2228617 (N.D. Tex. Aug. 3, 2007)
8/3/2007
A federal district court in Texas found no "hidden costs" that would render a franchise agreement arbitration clause substantively unconscionable where the arbitration administrator displayed the arbitration fees on its website.
In Wasserman v. We The People Forms and Service Centers USA, Inc., No. 3:07-CV-0606-D, 2007 WL 2228617 (N.D. Tex. Aug. 3, 2007), Wasserman and We The People Forms ("We The People") entered into a franchise agreement that contained an arbitration clause. Wasserman filed suit against We The People for breach of contractual obligations under the franchise agreement... Full Story
"Arising Out Of" a Contract Defines a Narrower Scope for a Non-Arbitration Forum Selection Clause Than Does "Related To" a Contract
Phillips v. Audio Active Ltd., No. 05-7017-CV, 2007 WL 2090202 (2d Cir. July 24, 2007)
7/24/2007
Forum selection language requiring that all claims "arising out of" a contract be litigated in a specific country only encompass claims with a causal connection to the contract, and not all claims "related to" the contract as the term is construed in agreements to arbitrate, according to the Second Circuit Court of Appeals. This contrasts with the broader interpretation that courts give to "arising out of" in the arbitration context.
In Phillips v. Audio Active Ltd., No. 05-7017-CV, 2007 WL 2090202 (2d Cir. July 24, 2007), Phillips sued Audio Active, alleging the breach of a recording contract, copyright infringement, and state law claims of unjust enrichment and unfair competition... Full Story
Lack of Mutuality, Standing Alone, Does Not Constitute Substantive Unconscionability Under Virgin Islands Law
Edwards v. Hovensa, LLC, No. 06-4601, 2007 WL 2200473 (3d Cir. Aug. 2, 2007)
8/2/2007
Under Virgin Islands law, a lack of mutuality does not by itself demonstrate substantive unconscionability, according to the Third Circuit Court of Appeals. A lack of mutuality warrants a finding of substantive unconscionability only if the agreement also denies a party substantive rights and remedies that would be available in a court of law.
In Edwards v. Hovensa, LLC, No. 06-4601, 2007 WL 2200473 (3d Cir. Aug. 2, 2007), Edwards entered into an arbitration agreement with Wyatt, his employer, before he started working at a Hovensa factory. The arbitration agreement applied to claims against Hovensa... Full Story
Employee in Texas Assented to Arbitration Agreement Through Notice of Agreement and Continued Employment
Armstrong v. Associates International Holdings Corp., No. 06-11177, 2007 WL 2114512 (5th Cir. July 24, 2007)
7/24/2007
Under Texas law, an arbitration clause may be added to an at-will employment agreement at the employer's sole discretion, so long as the employee has notice of the change and thereafter continues their employment, according to the Fifth Circuit Court of Appeals.
In Armstrong v. Associates International Holdings Corp., No. 06-11177, 2007 WL 2114512 (5th Cir. July 24, 2007), Armstrong was hired by Citifinancial, a division of Associates International. Later, Citifinancial modified the employment agreements with its at-will employees by adding an agreement to arbitrate employment claims, and notifying employees of the change through a memorandum and revised employee handbook. Armstrong acknowledged that he received these documents by signing each of them... Full Story
Summary Judgment Improper in Light of Conflicting Testimony on Validity and Unconscionability of Arbitration Agreement
Beverly Enterprises-Mississippi Inc. v. Powell, No. 06-60468, 2007 WL 2228537 (5th Cir. Aug. 03, 2007)
8/3/2007
The Fifth Circuit Court of Appeals has held that a district court improperly granted summary judgment where there was conflicting testimony on whether an illiterate nursing home resident, the decedent, had signed an arbitration agreement and whether the nursing home employees read him the agreement.
In Beverly Enterprises-Mississippi Inc. v. Powell, No. 06-60468, 2007 WL 2228537 (5th Cir. Aug. 03, 2007), Charles McAlister allegedly signed an arbitration agreement when he became a resident of Beverly, though he was illiterate. Upon his death, his sister, Bertha Powell, filed suit for wrongful death, alleging various claims. Beverly moved to compel arbitration... Full Story
Eleventh Circuit Upholds Arbitrator's Refusal to Hear Irrelevant Evidence
Rosensweig v. Morgan Stanley & Co., No. 05-15325, 2007 WL 2265515 (11th Cir. Aug. 9, 2007)
8/9/2007
Arbitrators enjoy wide latitude in conducting arbitration proceedings, and evidence that is irrelevant or cumulative may be rejected so long as it does not prejudice the rights of the parties, says the Eleventh Circuit Court of Appeals.
In Rosensweig v. Morgan Stanley & Co., No. 05-15325, 2007 WL 2265515 (11th Cir. Aug. 9, 2007), Rosensweig was employed by Morgan Stanley. As an experienced securities broker, Rosensweig brought client information with him, which was organized in a computer program called Broker's Ally... Full Story
Court Finds Statutory Waiver Requirements Inapplicable to Jury Trial Waiver in Arbitration Agreement
Linton v. KB Home Indiana, Inc., No. 1:07-cv-0048-DFH-TAB, 2007 WL 2002134 (S.D. Ind. July 5, 2007)
7/5/2007
In compelling arbitration of an employment discrimination claim, a federal district court in Indiana held that the Older Workers Benefit Protection Act's (OWBPA) waiver requirements do not apply to jury trial waivers in arbitration agreements.
In Linton v. KB Home Indiana, Inc., No. 1:07-cv-0048-DFH-TAB, 2007 WL 2002134 (S.D. Ind. July 5, 2007), Linton sued KB Home, her former employer, alleging violations of the Age Discrimination in Employment Act. KB Home moved to compel arbitration pursuant to an arbitration clause in the employment contract. In opposing the motion, Linton argued that her claims were not subject to arbitration because she did not knowingly and voluntarily waive her right to a judicial forum as required by the OWBPA... Full Story
Arbitrator Did Not Exceed His Authority Where Power to Grant Remedies Was Unrestricted by Agreement
Sanluis Developments, L.L.C. v. CCP Sanluis, L.L.C., 2007 WL 2219115 (S.D.N.Y. Aug. 2, 2007)
8/2/2007
A federal court in New York upheld an arbitration award finding that the arbitrator did not manifestly disregard the law and did not exceed his authority in determining the meaning of fair market value because his power to grant remedies was not restricted by the agreement between the parties.
In Sanluis Developments, L.L.C. v. CCP Sanluis, L.L.C., 2007 WL 2219115 (S.D.N.Y. Aug. 2, 2007), CCP Sanluis and AIP-Sanluis were formed in part to make an equity investment ("the Respondents") in Sanluis Developments, Sanluis Investments, and Sanluis Corporacion (collectively, "the Company"). Pursuant to an operating agreement entered into by the parties, Sanluis Investments ("the Petitioner") was designated a Class A shareholder and CCP Sanluis and AIP-Sanluis were designated Class B shareholders of the Company... Full Story
State Cases
Alter Ego Theory of Liability Gives Corporate Shareholders Right to Invoke Corporation's Arbitration Agreement
Rowe v. Exline, No. A116463, 2007 WL 2181517 (Cal. Ct. App. July 31, 2007)
7/31/2007
In a case alleging that corporate shareholders were liable for breach of contract because the corporation was a mere alter ego, the California Court of Appeal held that the shareholders could enforce the corporation's arbitration agreement even though the shareholders were not parties to the agreement.
In Rowe v. Exline, No. A116463, 2007 WL 2181517 (Cal. Ct. App. July 31, 2007), Rowe entered into a settlement agreement with Initiatek, a corporation in which Exline and Trahan were shareholders and officers. The agreement was signed by Rowe as an individual and by Exline and Trahan as officers of Initiatek... Full Story
Award Is Confirmed Where Proper Evidence of Agreement Provided and No Motion to Vacate Is Filed
NCO Portfolio Management Inc. v. Lewis, No. 06CA009001, 2007 WL 2229251 (Ohio Ct. App.9d Aug. 06, 2007)
8/6/2007
An appellate court in Ohio held that a one year statutory time period for confirmation of an arbitration award is permissive, and held that an award should be confirmed where the moving party produces the award and a copy of the standard credit cardholder arbitration agreement and the opposing party does not move to vacate the award.
In NCO Portfolio Management Inc. v. Lewis, No. 06CA009001, 2007 WL 2229251 (Ohio Ct. App.9d Aug. 06, 2007), Janet and Kevin Lewis entered into a credit card agreement with MBNA which provided for binding arbitration of disputes. A dispute arose and arbitration culminated in an award in favor of MBNA's assignee NCO in early May of 2004... Full Story
Hospital Waives Right to Arbitrate by Substantially Participating in Judicial Process
In re Christus Spohn Health System Corp., No. 13-07-399-CV, 2007 WL 2199120, (Tex. App. July 31, 2007)
7/31/2007
Affirming a trial court's denial of a motion to compel arbitration of a wrongful death claim, a Texas Appeals Court held that a hospital waived its arbitration rights by substantially litigating the case to where compelling arbitration would prejudice the decedent's relatives.
In In re Christus Spohn Health System Corp., No. 13-07-399-CV, 2007 WL 2199120, (Tex. App. July 31, 2007), Slough sued Spohn Health, a hospital, on December 16, 2005 for his wife's wrongful death. Spohn Health moved to compel arbitration on February 8, 2007 after a trial date had been set for the third time. The trial court denied the motion and Spohn Health appealed... Full Story
ADR Legislation & Regulation
LEGISLATION
NY S 1589
SAME AS: NY A 434
SPONSOR: Libous [R]
TITLE: Motor Vehicle Franchise Dealer Administrative Hearings
INTRODUCED: 01/23/2007
ENACTED: 08/15/2007
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary:
This bill provides a system for mediation of franchisor dealer disputes. Under the new statute, any franchised motor vehicle dealer aggrieved under the provisions of the motor vehicle franchise statute would be entitled to mediation upon request. The bill does not state who would provide the mediation services.
OH S 207
SPONSOR: Miller [D]
TITLE: Check Cashing Loan Act
INTRODUCED: 08/14/2007
DISPOSITION: Pending
LOCATION: Senate Reference Committee
Commentary:
Would modify the Check Cashing Loan Act to state as follows: "No check cashing business ... shall ...Require the borrower to waive the borrower's right to legal recourse under any otherwise applicable provision of state or federal law; [or] Require the borrower to submit to arbitration or impose onerous legal notice provisions in the case of a dispute.
REGULATION
No new regulations.
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