Federal Cases
Second Circuit Won't Allow Non-Signatory to Invoke Arbitration Agreement in Antitrust Lawsuit Against Credit Card Issuers
Ross v. American Express Co., Nos. 06-4598-cv(L), 06-4759-cv(XAP), 2008 WL 4630314 (2d Cir. Oct. 21, 2008)
10/21/2008 12:00:00 AM
The Second Circuit Court of Appeals has held that a "complete stranger" to an arbitration agreement, with no contractual relationship to either the signatories or the obligations under the contract, cannot enforce the arbitration agreement under the doctrine of equitable estoppel.
In Ross v. American Express Co., Nos. 06-4598-cv(L), 06-4759-cv(XAP), 2008 WL 4630314 (2d Cir. Oct. 21, 2008), Ross filed a putative class action lawsuit alleging that American Express (Amex) and other credit card issuers participated in a conspiracy to fix certain fees charged to cardholders... Full Story
Lack of Mutuality Renders Employee's Arbitration Agreement Unenforceable Under Arkansas Law
Jackson v. Hino Motors Manufacturing USA, Inc., No. 3:07CV00104 JLH, 2008 WL 4425300 (E. D. Ark. Sept. 25, 2008)
9/25/2008 12:00:00 AM
Based on its use of the term "I" rather than "we," a federal district court in Arkansas found that an employee's arbitration agreement lacked mutuality of obligation, which rendered the agreement unenforceable under Arkansas law. Accordingly, the Court denied the employer's motion to compel arbitration.
In Jackson v. Hino Motors Manufacturing USA, Inc., No. 3:07CV00104 JLH, 2008 WL 4425300 (E. D. Ark. Sept. 25, 2008), Jackson sued Hino Motors, his former employer, for race discrimination. In response, Hino filed a motion to compel arbitration pursuant to an arbitration agreement that Jackson signed when he was hired. In opposing the motion, Jackson argued that the arbitration agreement was unenforceable because it lacked mutuality of obligation... Full Story
Federal Court in Texas Rejects Manifest Disregard Challenge and Upholds Arbitration Award in Favor of Injured Employee
Acuna v. Aerofreeze, Inc., Civ. No. 2:06-CV-432 (TJW), 2008 WL 4755749 (E.D. Tex. Oct. 29, 2008)
10/29/2008 12:00:00 AM
In confirming an arbitration award, a federal court in Texas recognized the questionable validity of the "manifest disregard of the law" standard for vacatur, but the Court nevertheless applied the standard and, in so doing, held that the arbitrator did not refuse to apply a clearly applicable legal standard when he used a general negligence standard instead of a premises liability standard to evaluate an employee's personal injury claims.
In Acuna v. Aerofreeze, Inc., Civ. No. 2:06-CV-432 (TJW), 2008 WL 4755749 (E.D. Tex. Oct. 29, 2008), Acuna was employed by Pilgrim Pride (Pilgrim) as a cleaner in its frozen food plant. While Acuna was cleaning the top of an Aerofreeze freezer, a panel collapsed, and Acuna fell sixteen feet and sustained injuries. Acuna sued both Pilgrim and Aerofreeze, and the case went to arbitration... Full Story
Washington's Mediation Privilege Only Extends to the Underlying Dispute and Does Not Reach a Separate, Subsequent Dispute
Mutual of Enumclaw v. Cornhusker Casualty Ins. Co., No. CV-07-3101-FVS, 2008 WL 4330313 (E. D. Wash. Sept. 16, 2008)
9/16/2008 12:00:00 AM
A federal district court in Washington construed the mediation privilege that applies under Washington law as confined to the underlying dispute. Accordingly, communications made during the mediation of a personal injury dispute were not privileged in a subsequent coverage dispute between two insurance companies.
In Mutual of Enumclaw v. Cornhusker Casualty Ins. Co., No. CV-07-3101-FVS, 2008 WL 4330313 (E. D. Wash. Sept. 16, 2008), a motor vehicle owned by the Clarks was involved in accident that injured another motorist named Green. The Clarks had two insurance policies that might provide coverage – one issued by Mutual of Enumclaw (Enumclaw), the other by Cornhusker... Full Story
State Cases
Second Circuit Cites Hall Street in Rejecting Argument for Heightened Review, But Still Reviews Award for Manifest Disregard
Esso Exploration and Production Chad, Inc. v. Taylors International Services, Ltd, No. 06-5673-CV, 2008 WL 4280059 (2d Cir. Sept. 17, 2008)
9/17/2008 12:00:00 AM
The Second Circuit Court of Appeals rejected an argument for heightened review of an arbitration award based on the Supreme Court's decision in Hall Street. Instead, the Court applied the manifest disregard standard even though Hall Street cast some doubt on whether manifest disregard remains a viable basis for vacatur.
In Esso Exploration and Production Chad, Inc. v. Taylors International Services, Ltd, No. 06-5673-CV, 2008 WL 4280059 (2d Cir. Sept. 17, 2008), Esso Exploration (Esso) and Taylors International Services (TIS) submitted a dispute to arbitration, at which the arbitrator issued an award in favor of Esso. The district court confirmed the award... Full Story
"All Civil Remedies" Language Renders Check-Cashing Arbitration Agreement Invalid for Lack of Mutuality
Advance America Servicing of Arkansas, Inc. v. McGinnis, No. 08-492, 2008 WL 4823542 (Ark. Nov. 6, 2008)
11/6/2008 12:00:00 AM
In affirming a trial court's denial of a motion to compel arbitration, the Arkansas Supreme Court held that an arbitration agreement that gives only one party access to "all civil remedies" in a check-cashing agreement, and thus exclusive access to a judicial forum, renders the arbitration agreement invalid for lack of mutuality.
In Advance America Servicing of Arkansas, Inc. v. McGinnis, No. 08-492, 2008 WL 4823542 (Ark. Nov. 6, 2008), McGinnis and Advance America (Advance) entered into a check-cashing contract containing an arbitration agreement. In one of the contract provisions separate from the arbitration agreement, the contract provided that Advance was entitled to "all civil remedies" if McGinnis' check was dishonored... Full Story
Parties Ordered to Arbitrate Disputes Regarding Performance and Confidentiality of Settlement Agreement Requiring Predetermined Award
Nelson v. American Apparel, Inc., No. B205937, 2008 WL 4713262 (Cal. Ct. App. Oct. 28, 2008)
10/28/2008 12:00:00 AM
A California appellate court has held that disputes arising out of the performance and confidentiality of a settlement agreement were arbitrable, despite its requirement that the parties participate in an arbitration proceeding with a predetermined outcome.
In Nelson v. American Apparel, Inc., No. B205937, 2008 WL 4713262 (Cal. Ct. App. Oct. 28, 2008), Nelson sued American Apparel for sexual harassment and wrongful termination. While the matter was pending, the parties reached a settlement agreement whereby Nelson would be paid 1.3 million dollars in exchange for her participation in arbitration proceedings which would result in an award in American Apparel's favor. The settlement allowed the company to issue a press release regarding the resulting award. The settlement also contained separate arbitration agreements encompassing claims regarding the confidentiality and performance of the settlement... Full Story
Contractor's Motion to Compel Arbitration Does Not Satisfy Statutory Requirement for Preserving Lien
Brookshire v. GP Construction of Palm Beach, Inc., No. 4D08-2643, 2008 WL 4791048 (Fla. Dist. Ct. App. Nov. 5, 2008)
11/5/2008 12:00:00 AM
In granting a petition for a writ of mandamus to discharge a lien, an appellate court in Florida held that a contractor's motion to compel arbitration did not meet the statutory requirements for commencing an action to enforce a lien, and thus the lien had to be discharged.
In Brookshire v. GP Construction of Palm Beach, Inc., No. 4D08-2643, 2008 WL 4791048 (Fla. Dist. Ct. App. Nov. 5, 2008), Brookshire, the homeowner, and GP Construction (GP), the contractor, entered into a construction contract that contained an arbitration agreement. After a dispute, GP recorded a contractor's lien on Brookshire's house... Full Story
Arbitration Rules Allowed for Facsimile Delivery of Arbitration Award, Rendering Motion to Vacate Untimely
Nowicki v. Project Paint Research Labs, No. 99764, 2008 WL 4820804 (Kan. Ct. App. Nov. 7, 2008)
11/7/2008 12:00:00 AM
In upholding an arbitration award issued in a franchise dispute, the Kansas Court of Appeals found that the aggrieved party's motion to vacate was untimely because it was filed over 90 days after the award was delivered by facsimile as allowed by the parties' chosen rules.
In Nowicki v. Project Paint Research Labs, No. 99764, 2008 WL 4820804 (Kan. Ct. App. Nov. 7, 2008), Nowicki demanded arbitration of certain franchise claims against Project Paint and its individual principal, Thurber. Thurber refused to participate in the proceedings as an individual. The arbitrator ultimately entered an award in favor of Nowicki. The arbitration administrator attempted to transmit a copy of the award to the fax number Thurber had provided, but it did not connect. The administrator then mailed a copy of the award, but the award was returned. Finally, at Thurber's request, opposing counsel faxed a copy to Thurber at a different number, and opposing counsel's fax machine indicated the transmission was successful... Full Story
Non-Signatory May Enforce Arbitration Agreement in Home Improvement Contract Even If Agreement Did Not Comply with Statutory Requirements
Case Handyman & Remodeling Services, LLC v. Schuele, No. 2134, Sept. Term, 2007, 2008 WL 4756899 (Md. Ct. App. Oct. 31, 2008)
10/31/2008 12:00:00 AM
An arbitration agreement in a home improvement contract need not strictly comply with all Maryland statutory requirements to be enforced by a non-signatory under the doctrine of equitable estoppel, according to a Maryland appellate court.
In Case Handyman & Remodeling Services, LLC v. Schuele, No. 2134, Sept. Term, 2007, 2008 WL 4756899 (Md. Ct. App. Oct. 31, 2008), Schuele contracted with Professional Home Repair (PHR) for certain home repairs. PHR was an independently owned franchisee of Case. After a dispute arose over PHR's ability to finish the agreed-to repairs, Schuele filed suit against PHR and franchisor Case. Case moved to compel arbitration pursuant to an arbitration agreement between PHR and Schuele. The trial court denied the motion... Full Story
Washington Appellate Court Finds That Express Statutory Reference Not Required for Effective Waiver of Right to Challenge Arbitration Award
Bach v. Parrish, No. 60406-6-I, 2008 WL 4767480 (Wash. Ct. App. Nov. 3, 2008)
11/3/2008 12:00:00 AM
A Washington appellate court held that the knowing and voluntary waiver of the right to appeal an arbitration award is effective under Washington law, with or without an express reference in the waiver to the state's vacatur statute.
In Bach v. Parrish, No. 60406-6-I, 2008 WL 4767480 (Wash. Ct. App. Nov. 3, 2008), Bach authored the book Jonathan Livingston Seagull. After Bach married Parrish, Bach filed for bankruptcy. At the proceedings, Parrish bought the copyright to Jonathan Livingston Seagull... Full Story
ADR Legislation & Regulation
LEGISLATION
NJ S 1599
SPONSOR: Rice [D]
TITLE: Homeownership Preservation Act
LOCATION: SENATE
Commentary: Amends the New Jersey Homeownership Preservation Act to include foreclosure mediation and legal services "in conjunction with loan modifications and other foreclosure prevention activities." A November 13, 2008 amendment eliminated the mediation provision of this bill.
TX S 222
AUTHOR: West [D]
(2009) TITLE: Arbitration Agreements
LOCATION: SENATE
Commentary: This bill would amend the Texas Arbitration Act to prohibit predispute arbitration agreements in employment, consumer, franchise, and civil rights disputes or any dispute in which the parties are of unequal bargaining power. The bill is essentially a mirror of the Arbitration Fairness Act of 2007 introduced in Congress.
REGULATIONS
Colorado 4 CCR 723-6
AGENCY: Department of Regulatory Agencies/Public Utilities Commission
TITLE: Transportation by Motor Vehicle
Commentary: The basis and purpose of the proposed rules is generally to describe the manner of regulation over persons providing transportation service by motor vehicle in the State of Colorado. One of the amendments to existing regulation would be to add a consumer advisement and rule requiring household goods movers to offer binding arbitration of disputes.
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