Federal Cases
Supreme Court Holds That "Judge Alex" Must Arbitrate Dispute with Alleged Talent Agent
Preston v. Ferrer, No. 06-1463, 2008 WL 440670 (Feb. 20, 2008)
2/20/2008
In a case arising from a dispute between a TV judge and his alleged talent agent, the United States Supreme Court held that the Federal Arbitration Act (FAA) preempted the application of a California law that would have given the commissioner of an administrative agency original jurisdiction to decide the validity of the parties' contract.
In Preston v. Ferrer, No. 06-1463, 2008 WL 440670 (Feb. 20, 2008), Preston, an entertainment attorney, and Ferrer, known on TV as "Judge Alex," entered into a contract whereby Preston would render managerial services in aid of Ferrer's entertainment career... Full Story
Supreme Court Holds That FAA Grounds for Vacatur Are Exclusive
Hall Street Associates, L.L.C. v. Mattel, Inc., No. 06-989, 2008 WL 762537 (Mar. 25, 2008)
3/25/2008
The United States Supreme Court has held that the statutory grounds for vacating or modifying an arbitration award under the Federal Arbitration Act (FAA) are exclusive. Accordingly, parties cannot obtain heightened judicial review under the FAA by drafting an arbitration agreement that supplements the statutory grounds for vacatur. However, the Court allowed for the possibility that heightened review of arbitration awards may be available outside of the FAA.
In Hall Street Associates, L.L.C. v. Mattel, Inc., No. 06-989, 2008 WL 762537 (Mar. 25, 2008), Mattel leased a manufacturing site from Hall Street. Following the discovery of environmental contamination, Mattel notified Hall Street of its intent to terminate the lease... Full Story
Arbitrator Exceeded His Powers by Disregarding Parties' Instructions to Apply Wisconsin Law
Edstrom Industries, Inc. v. Companion Life Insurance Co., 516 F.3d 546 (7th Cir. 2008)
2/11/2008
In a case arising from an insurance dispute, the Seventh Circuit Court of Appeals held that the arbitrator exceeded his powers by disregarding a Wisconsin statute and thereby failing to abide by the parties' directive that he apply Wisconsin law. In reaching this holding, the Court distinguished this case from those cases in which the parties have altered the standard of review by creating contractual grounds for vacatur.
In Edstrom Industries, Inc. v. Companion Life Insurance Co., 516 F.3d 546 (7th Cir. 2008), Edstrom Industries (Edstrom) obtained a "stop loss" insurance policy from Companion Life Insurance (Companion). The policy insured Edstrom against any medical expenses exceeding $65,000 that Edstrom would be required to pay under a group health insurance plan for its employees and their dependents... Full Story
Sixth Circuit Holds That Non-Signatories Have No Right to Interlocutory Appeal of Order Denying Arbitration
Carlisle v. Curtis, Mallet-Prevost, Colt & Mosle, LLP, No. 06-5290, 2008 WL 942035 (6th Cir. Apr. 9, 2008)
4/9/2008
Non-signatories may not seek an interlocutory appeal of an order denying a motion to stay proceedings because non-signatories are not parties to a "written agreement," according to the Sixth Circuit Court of Appeals.
In Carlisle v. Curtis, Mallet-Prevost, Colt & Mosle, LLP, No. 06-5290, 2008 WL 942035 (6th Cir. Apr. 9, 2008), Carlisle sought advice from accounting firm Arthur Andersen, financial advisor Bricolage, and law firm Curtis regarding investments designed to minimize tax liability. Allegedly upon their advice, Carlisle invested in a type of tax shelter. In connection with the investment, Carlisle entered into a management contract with Bricolage; the contract contained an arbitration agreement. Arthur Andersen and Curtis were not parties to the management contract... Full Story
Eighth Circuit Upholds Class Waiver Where Arbitration Agreement and Statutory Fee-Shifting Provision Would Allow Claimant to Recover Her Attorney Fees
Pleasants v. American Express Co., No. 07-3235, 2008 WL 4133390 (8th Cir. Sept. 9, 2008)
9/9/2008
In affirming an order compelling arbitration on an individual basis, the Eighth Circuit Court of Appeals held that a class waiver did not render an arbitration agreement unenforceable under Missouri law because the arbitration agreement did not limit the claimant's remedies, thus permitting the claimant to recover her attorney fees if she were to prevail on her statutory claim.
In Pleasants v. American Express Co., No. 07-3235, 2008 WL 4133390 (8th Cir. Sept. 9, 2008), American Express mailed three prepaid cards to Pleasants in exchange for her participation in an online survey. The cards could be used at any establishment accepting American Express credit cards. The terms and conditions of the card included an arbitration agreement and a class waiver requiring arbitration on an individual basis... Full Story
Sixth Circuit Continues to Apply Manifest Disregard After Hall Street
Coffee Beanery, Ltd. v. WW, L.L.C., No. 07-1830, 2008 WL 4899478 (6th Cir. Nov. 14, 2008)
11/14/2008
The Sixth Circuit Court of Appeals has recognized manifest disregard of the law as a valid ground for vacatur of an arbitration award under the Federal Arbitration Act (FAA) after the Supreme Court's Hall Street decision, citing the high court's "hesitation" to reject manifest disregard in all circumstances and the doctrine's previously universal recognition.
In Coffee Beanery, Ltd. v. WW, L.L.C., No. 07-1830, 2008 WL 4899478 (6th Cir. Nov. 14, 2008), WW entered into a contract as a franchisee of Coffee Beanery. As part of the contract, WW signed a broadly-worded arbitration agreement... Full Story
Clause Construction Award Not Ripe for Judicial Review According to Sixth Circuit
Dealer Computer Services, Inc. v. Dub Herring Ford, No. 07-1819, 2008 WL 4911169 (6th Cir. Nov. 18, 2008)
11/18/2008
The Sixth Circuit Court of Appeals has held that private arbitral rules cannot expand an Article III court’s jurisdiction to hear an appeal by circumventing the requisite showing of ripeness. Accordingly, the Court held that a clause construction award was not subject to judicial review under the Federal Arbitration Act, partly because the arbitrator had only determined that arbitration might proceed on a class-wide basis, not that it would proceed on a class-wide basis.
In Dealer Computer Services, Inc. v. Dub Herring Ford, No. 07-1819, 2008 WL 4911169 (6th Cir. Nov. 18, 2008), a group of automobile dealers obtained computer systems from Dealer Computer Services (DCS). The contracts all contained broadly-worded arbitration agreements invoking the rules of the American Arbitration Association (AAA)...
Full Story
State Cases
North Carolina Supreme Court Finds Arbitration Cost-Prohibitive Where Agreement Required Losing Party to Pay for Arbitral Appeal
Tillman v. Commercial Credit Loans, Inc., No. 360A06, 2008 WL 201750 (N.C. Jan. 25, 2008)
1/25/2008
The North Carolina Supreme Court found that arbitration under a lender's arbitration agreement would be cost-prohibitive because the agreement provided for an arbitral appeal to a three-member panel and required the losing party to pay the cost of the appeal. Accordingly, the Court held that the arbitration agreement was unenforceable.
In Tillman v. Commercial Credit Loans, Inc., No. 360A06, 2008 WL 201750 (N.C. Jan. 25, 2008), Tillman and Shirley (collectively, Borrowers) each obtained a loan from Commercial Credit Loans (CCL). Both loan agreements contained an arbitration provision that (1) barred class-wide proceedings, (2) carved out foreclosure proceedings and claims totaling less than $15,000, and (3) provided that either party could appeal an arbitration award to a three-arbitrator panel with the party losing on appeal required to pay all expenses of the appeal... Full Story
Arbitrator Did Not Exceed Powers by Applying Equitable Principles and Excusing Noncompliance with Notice-and-Cure Provision
Gueyffier v. Ann Summers, Ltd., 184 P.3d 739 (Cal. 2008)
7/28/2008
The California Supreme Court held that an arbitrator did not exceed his powers by excusing noncompliance with a notice-and-cure provision because even though the arbitration agreement expressly foreclosed the arbitrator's authority to modify the notice-and-cure provision, it did not contain any unambiguous limitations on the arbitrator's authority to excuse noncompliance on equitable grounds.
In Gueyffier v. Ann Summers, Ltd., 184 P.3d 739 (Cal. 2008), Gueyffier and Ann Summers entered into a franchise agreement (the Agreement) whereby Gueyffier would open an Ann Summers store in a Beverly Hills shopping center. The store, which sold lingerie and sex toys, opened to controversy and closed shortly after the opening... Full Story
California Law Allows Parties to Contract for Heightened Judicial Review of Arbitration Awards
Cable Connection, Inc. v. DIRECTV, Inc., No. S147767, 2008 WL 3891556 (Cal. Aug. 25, 2008)
8/25/2008
The California Supreme Court has ruled that California law allows parties to an arbitration agreement to contract for heightened judicial review of arbitration awards regardless of whether heightened review is available under the Federal Arbitration Act (FAA). The Court's ruling does not raise any preemption concerns because it upholds the terms of the arbitration agreement and thus advances the purpose of the FAA.
In Cable Connection, Inc. v. DIRECTV, Inc., No. S147767, 2008 WL 3891556 (Cal. Aug. 25, 2008), several DIRECTV dealers (the Dealers) filed a demand for class arbitration, alleging that DIRECTV had withheld commissions and assessed improper charges. The Dealers filed their demand with the American Arbitration Association (AAA) in accordance with the parties' arbitration agreement... Full Story
Under California Law, Arbitrators May Order Non-Parties to Provide Discovery, But Non-Parties May Obtain Full Judicial Review of Any Discovery Orders
Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P., No. S144813, 2008 WL 2757560 (Cal. July 17, 2008)
7/17/2008
The California Supreme Court has held that the same statutory language granting an arbitrator the authority to order discovery against non-parties and to sanction non-compliance does not limit the scope of judicial review of those orders when review is sought by non-parties.
In Berglund v. Arthroscopic & Laser Surgery Center of San Diego, L.P., No. S144813, 2008 WL 2757560 (Cal. July 17, 2008), Berglund brought suit against various medical care providers for battery and breach of fiduciary duty by a doctor allegedly abusing narcotics. Berglund had agreed to arbitrate his disputes with all defendants but ALSC, so a court compelled arbitration of all claims except those against ALSC... Full Story
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
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 Supreme Court: No Implied Waiver of Mediation Confidentiality
Simmons v. Ghaderi, 187 P.3d 934 (Cal. 2008)
7/21/2008
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
Colorado Supreme Court Limits Scope of Mediation Confidentiality
Yaekle v. Andrews, No. 07SC420, 07SC874, 2008 WL 4616772 ( Colo. Oct. 20, 2008)
10/20/2008
The Colorado Supreme Court has held that the Colorado Dispute Resolution Act only provides confidentiality for mediation communications made "for the purposes of, in the course of, or pursuant to specific mediation proceedings," and that mediated settlement agreements may be enforced on common law contract grounds outside the Act's statutory confidentiality exception for written, signed agreements.
In Yaekle v. Andrews, No. 07SC420, 07SC874, 2008 WL 4616772 ( Colo. Oct. 20, 2008), the Court considered whether Colorado's Dispute Resolution Act "establishes the exclusive method by which parties can arrive at a binding agreement through mediation." Colo. Rev. Stat. § 13-22-307, -308... Full Story
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