Federal Cases
Second Circuit: Sarbanes-Oxley Whistleblower Claims Are Arbitrable
Guyden v. Aetna, Inc., No. 06-4954-CV, 2008 WL 4426478 (2d Cir. Oct. 2, 2008)
10/2/2008 12:00:00 AM
The Second Circuit Court of Appeals has held that claims based on the whistleblower provision in the Sarbanes-Oxley Act are fully arbitrable in the same manner as claims brought under other federal employment statutes.
In Guyden v. Aetna, Inc., No. 06-4954-CV, 2008 WL 4426478 (2d Cir. Oct. 2, 2008), Guyden was employed by Aetna as a compliance officer. As a condition of employment, Guyden entered into an arbitration agreement covering all employment-related claims. After allegedly pointing to potential violations of Sarbanes-Oxley, Guyden was terminated... Full Story
Sixth Circuit: Party Named Merely as “Stakeholder” Defendant Did Not Waive Right to Arbitrate Through Litigation Activity or Delay
Gordon v. Dadante, No. 07-3560, 2008 WL 4372951 (6th Cir. Sept. 23, 2008)
9/23/2008 12:00:00 AM
The Sixth Circuit Court of Appeals has reversed a district court’s ruling that a party waived its right to arbitrate through litigation conduct and delay, noting that no relevant event had yet triggered the moving party’s obligation to seek arbitration.
In Gordon v. Dadante, No. 07-3560, 2008 WL 4372951 (6th Cir. Sept. 23, 2008), Gordon sued Dadante for alleged mismanagement of brokerage accounts. Although Gordon’s complaint did not assert a claim against H&R Block, it was named as a defendant as a “stakeholder” in an account that was a subject of the litigation. When Dadante opened the H&R Block account in dispute, he agreed to arbitrate all claims related to the account... Full Story
Court Rejects Cost-Based Challenge and Upholds Employee’s Arbitration Agreement Under California Law
Carlile v. Russ Berrie and Co., No. SACV 08-0887 AG (RNBx), 2008 WL 4534281 (C.D. Cal. Oct. 6, 2008)
10/6/2008 12:00:00 AM
In ordering arbitration of an employment dispute, a California federal district court upheld the arbitration agreement over the employee’s unconscionability challenge, noting that the applicable arbitration rules would require the employer to pay the bulk of the arbitration costs.
In Carlile v. Russ Berrie and Co., No. SACV 08-0887 AG (RNBx), 2008 WL 4534281 (C.D. Cal. Oct. 6, 2008), Carlile was employed by Russ Berrie as a sales representative. After Carlile allegedly sent a letter to management criticizing its “bonus plan,” Russ Berrie terminated Carlile. Carlile sued Russ Berrie for unlawful retaliation and wrongful termination, and Russ Berrie moved to compel arbitration in accordance with an arbitration agreement between the parties. Full Story
Non-Party Documents or Depositions Cannot Be Subpoenaed Before the Date of the Arbitral Hearing
Matria Healthcare, LLC v. Duthie, No. 08 C 5090, 2008 WL 4500173 (N.D. Ill. Oct. 6, 2008)
10/6/2008 12:00:00 AM
An Illinois federal district court ruled that non-party depositions or documents cannot be the subject of a pre-hearing arbitral subpoena under the Federal Arbitration Act.
In Matria Healthcare, LLC v. Duthie, No. 08 C 5090, 2008 WL 4500173 (N.D. Ill. Oct. 6, 2008), Matria sought to compel depositions and discovery of certain documents from Duthie before the parties’ arbitration hearing. Matria sought and received a subpoena from the arbitrator for Duthie to produce documents and participate in discovery, but Duthie objected, alleging that he was not required to do so under 9 U.S.C. § 7 and would not do so unless certain legal fees were advanced. Matria refused to advance those fees and sought court enforcement of the arbitral subpoena... Full Story
Out-of-State Attorney’s Collection Activities and Firm’s Communication with Arbitral Forum Do Not Violate the FDCPA
Cohen v. Wolpoff & Abramson, LLP, Civ. A. No. 08-1084 (SRC), 2008 WL 4513569 (D.N.J. Oct. 2, 2008)
10/2/2008 12:00:00 AM
A New Jersey federal district court has held that neither debt-collection activities by an out-of-state attorney, nor a debt-collection firm’s communication with an arbitral forum regarding a claim against a debtor, violate the FDCPA.
In Cohen v. Wolpoff & Abramson, LLP, Civ. A. No. 08-1084 (SRC), 2008 WL 4513569 (D.N.J. Oct. 2, 2008), Wolpoff contacted the National Arbitration Forum (FORUM) on behalf of FIA in order to commence contractual arbitration of a debt collection dispute with cardholder Cohen. After an arbitration award was issued in favor of FIA, Cohen brought suit against Wolpoff, alleging that its communication with the FORUM violated the Fair Debt Collection Practices Act (FDCPA) and that certain misrepresentations regarding the debt violated the FDCPA and the New Jersey Consumer Fraud Act (NJCFA)... Full Story
Court Upholds Arbitration Agreement Signed by Son of Nursing Home Resident
Olson v. Alterra Healthcare Corp. , No. C08-5506FDB, 2008 WL 4379056 (W.D. Wash. Sept. 23, 2008)
9/23/2008 12:00:00 AM
In granting a nursing home’s motion to compel arbitration, a federal court in Washington rejected an unconscionability challenge to the arbitration agreement, explaining that the signatory’s initials weighed against any finding of procedural unconscionability and that the arbitrator would have authority to sever any offending provisions.
In Olson v. Alterra Healthcare Corp. , No. C08-5506FDB, 2008 WL 4379056 (W.D. Wash. Sept. 23, 2008), Larry Olson, on behalf of his mother Lorraine, signed a nursing home residency contract that contained an arbitration agreement with Alterra Healthcare. When signing the contract, Larry separately initialed as having read and understood several different provisions, including the arbitration agreement... Full Story
State Cases
Cost and Discovery Provisions Render Employment Arbitration Agreement Unenforceable Under Armendariz
Rondeau v. Ducommun Aerostructures, Inc., No. B198379, 2008 WL 4381304 ( Cal. Ct. App. Sept. 29, 2008)
9/29/2008 12:00:00 AM
A California appellate court has held that an employment arbitration agreement’s discovery, cost, and scope provisions unconscionably restricted a former employee’s ability to vindicate his statutory claims, rendering it wholly unenforceable under California law.
In Rondeau v. Ducommun Aerostructures, Inc., No. B198379, 2008 WL 4381304 ( Cal. Ct. App. Sept. 29, 2008), Rondeau sued former employer Ducommun, alleging wrongful termination and age discrimination. Ducommun moved to compel arbitration under an agreement between the parties. The trial court denied the motion, finding the agreement unconscionable and unenforceable under Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83, 102 ( Cal. 2000) (specifying minimal requirements for arbitration agreements involving certain unwaivable civil rights)... Full Story
Court Relies on Opt-Out Provision in Upholding Arbitration Agreement in Credit Card Contract
Citibank (South Dakota), N.A. v. Walker, No. A117770, 2008 WL 4175125 ( Cal. Ct. App. Sept. 11, 2008)
9/11/2008 12:00:00 AM
A California appellate court upheld an arbitration agreement added to a credit card contract via a bill stuffer because the amendment also included instructions for opting out of the proposed changes.
In Citibank (South Dakota), N.A. v. Walker, No. A117770, 2008 WL 4175125 ( Cal. Ct. App. Sept. 11, 2008), Citibank issued a credit card to Walker. Some time later, Citibank mailed Walker a change-of-terms document along with his monthly billing statement. The change-of-terms document added an arbitration agreement and class waiver to the credit card contract. The document also included instructions for opting out of the proposed amendments. Walker did not opt out... Full Story
Employee Seeking to Compel Arbitration Must Provide Copy of Arbitration Agreement
Nicholas Labs., LLC v. Chen, No. G039883, 2008 WL 4717313 (Cal. Ct. App. Oct. 28, 2008),
10/28/2008 12:00:00 AM
A California appellate court has held that an employee cannot compel arbitration without providing the trial court with a copy of the purported arbitration agreement.
In Nicholas Labs., LLC v. Chen, No. G039883, 2008 WL 4717313 (Cal. Ct. App. Oct. 28, 2008), Chen was employed by Nicholas. After Chen left his position, Nicholas brought various breach of contract and tort claims against Chen. Chen responded by filing an answer, cross-complaint, and motion to compel arbitration... Full Story
Failure to Appear at Confirmation Hearing after Filing a Responsive Pleading Does Not Render Disposition a “Default Judgment”
MBNA Am. Bank v. Montgomery, No. 28706, 2008 WL 4491656 ( Mo. Ct. App. Oct. 8, 2008)
10/8/2008 12:00:00 AM
When a party files a responsive pleading challenging a motion to confirm an arbitration award but fails to appear at the related hearing, the resulting confirmation is not a “default judgment” that accords the challenging party a more expansive opportunity to reopen or appeal that confirmation, according to a Missouri appellate court.
In MBNA Am. Bank v. Montgomery, No. 28706, 2008 WL 4491656 ( Mo. Ct. App. Oct. 8, 2008), MBNA demanded arbitration of a credit card dispute with Montgomery, which resulted in an award in MBNA’s favor. MBNA moved to confirm the award. Montgomery moved to dismiss, vacate the award, and stay the proceedings. On August 5, 2005, the trial court conducted a hearing. Montgomery did not attend. The trial court confirmed the award... Full Story
Limited Education of Non-Drfting Party, Combined with Prohibitive Cost Provisions, Renders Arbitration Agreement Unconscionable
Brunke v. Ohio State Home Services, Inc., No. 08CA009320, 2008 WL 4615578 (Ohio Ct. App. Oct. 20, 2008)
10/20/2008 12:00:00 AM
An Ohio appellate court has affirmed the denial of a motion to compel arbitration, deciding that the non-moving party’s “limited” education and comprehension skills, combined with certain “prohibitive” cost provisions, warranted invalidation of the entire agreement.
In Brunke v. Ohio State Home Services, Inc., No. 08CA009320, 2008 WL 4615578 (Ohio Ct. App. Oct. 20, 2008), OSHS provided Brunke with home waterproofing services under a contract containing an arbitration agreement. After a dispute arose over the quality of services, Brunke sued OSHS. OSHS moved to compel arbitration of Brunke’s claims... Full Story
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