Federal Cases
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 12:00:00 AM
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
Non-Signatory Not Allowed to Compel Arbitration of Claims Against It for Tortious Interference with Contract Containing the Arbitration Agreement
Sokol Holdings, Inc. v. BMB Munai, Inc., No. 07-2871-cv, 2008 WL 4249201 (2d Cir. Sept. 18, 2008)
9/18/2008 12:00:00 AM
Calling an alleged tortfeasor’s arguments for compelling arbitration “a mockery,” the Second Circuit Court of Appeals affirmed a district court order denying a non-signatory’s motion to compel arbitration of claims that it tortiously interfered with the performance of a signatory’s contract.
In Sokol Holdings, Inc. v. BMB Munai, Inc., No. 07-2871-cv, 2008 WL 4249201 (2d Cir. Sept. 18, 2008), Sokol entered into a contract to purchase a majority share in Emir. The Emir contract contained an agreement to arbitrate all disputes in Kazakhstan. Later, BMB allegedly contracted with one of Emir’s principals for the same controlling interest in the company. Sokol sued BMB for tortious interference with its contract with Emir... Full Story
Cost-Sharing Provision Renders Employee’s Arbitration Agreement Unenforceable
Gray v. Rent-A-Center W., Inc., No. 07-35185, 2008 WL 3890501 (9th Cir. Aug. 21, 2008)
8/21/2008 12:00:00 AM
The Ninth Circuit Court of Appeals has refused to enforce an arbitration agreement because of “onerous” substantive unconscionability in a cost-sharing provision. The Court declined to address the severability of the offending provision because the district court did not consider the severance issue in its order compelling arbitration.
In Gray v. Rent-A-Center W., Inc., No. 07-35185, 2008 WL 3890501 (9th Cir. Aug. 21, 2008), Gray sued his former employer, Rent-A-Center, alleging violations of the injured worker discrimination law, Or. Rev. Stat. § 659A.040, and Oregon’s Family Leave Act. Or. Rev. Stat. § 659A.150. Rent-A-Center maintained that the parties had entered into an arbitration agreement when Gray began employment, and moved to compel arbitration of Gray’s claims. The trial court granted the motion... Full Story
Party Could Not Appeal Order Compelling Arbitration Under One Agreement to Argue for the Enforceability of Separate Arbitration Agreement
Adams v. Monumental General Casualty Co., No. 07-14547, 2008 WL 4051030 (11th Cir. Sept. 2, 2008)
9/2/2008 12:00:00 AM
The Eleventh Circuit Court of Appeals has held that it had no jurisdiction to entertain a party’s appeal of an order compelling arbitration under one agreement where the party sought to argue that the lower court should have ordered arbitration under a separate arbitration agreement.
In Adams v. Monumental General Casualty Co., No. 07-14547, 2008 WL 4051030 (11th Cir. Sept. 2, 2008), Adams entered into a retail installment contract to finance the purchase of a truck and an associated insurance policy from Monumental. Both the retail contract and the insurance policy issued by Monumental contained an arbitration agreement. After Adams paid off the loan early, she sued Monumental to recover a portion of the premium she had paid. Monumental moved to compel arbitration. The district court granted the motion... Full Story
Use of Credit Card Indicates User’s Assent to Arbitration Agreement
Jefferson v. HSBC Bank, Nevada, N.A., No. 2:08-cv-121-WKW, 2008 WL 2559395 (M.D. Ala. June 23, 2008)
6/23/2008 12:00:00 AM
A federal district court in Alabama upheld a credit card arbitration agreement treating the cardholder’s use of the card as assent to the corresponding terms and conditions.
In Jefferson v. HSBC Bank, Nevada, N.A., No. 2:08-cv-121-WKW, 2008 WL 2559395 (M.D. Ala. June 23, 2008), Jefferson bought a computer using his HSBC credit card. Jefferson alleged that he later returned the computer, but instead of being credited for the price of the computer, he was charged a second time... Full Story
California Federal Court Finds Franchise Arbitration Agreement Unconscionable Based on Several Provisions
Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., No. 2:08-cv-00767-MCE-EFB, 2008 WL 3876341 (E.D. Cal. Aug. 20, 2008)
8/20/2008 12:00:00 AM
A California federal district court has refused to enforce a franchise-related arbitration agreement, finding substantive unconscionability in its provisions regarding injunctive relief, availability of remedies, statutes of limitations, forum selection, and class action waivers.
In Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., No. 2:08-cv-00767-MCE-EFB, 2008 WL 3876341 (E.D. Cal. Aug. 20, 2008), Bridge Fund executed a contract for the operation of a Fastbucks payday lending franchise. The contract contained an arbitration agreement, a choice of law provision, and a forum selection clause. The contract required arbitration of all disputes in Texas under Texas law, but Bridge Fund alleged that a later addendum for California franchisees provided for arbitration in California under California law... Full Story
Federal Court in California Refuses to Stay Litigation Pending Appeal of Denial of Motion to Compel Arbitration
Kaltwasser v. Cingular Wireless LLC, No. C 07-00411, 2008 WL 3925445 (N.D. Cal. Aug. 22, 2008)
8/22/2008 12:00:00 AM
After denying a wireless provider’s motion to compel arbitration, a federal court in California also denied a motion to stay litigation pending appeal because there was a lack of probability of success on the merits of the appeal.
In Kaltwasser v. Cingular Wireless LLC, No. C 07-00411, 2008 WL 3925445 (N.D. Cal. Aug. 22, 2008), Kaltwasser sued Cingular Wireless (Cingular), and after settlement negotiations failed, Cingular moved to compel arbitration pursuant to an arbitration agreement in the parties’ wireless contract... Full Story
Industry Association Had Jurisdiction to Arbitrate Dispute Even Though Underlying Contract Predated the Parties’ Membership in the Association
The Andersons, Inc. v. Walker, Nos. 08-CV-2083, 08-CV-2098, 2008 WL 3983244 (C.D. Ill. Aug. 28, 2008)
8/28/2008 12:00:00 AM
A federal court in Illinois held that where membership in an industry association provides a mechanism for members to arbitrate disputes, parties to a contract who later join the association are still subject to the jurisdiction of the association’s arbitral tribunal.
In The Andersons, Inc. v. Walker, Nos. 08-CV-2083, 08-CV-2098, 2008 WL 3983244 (C.D. Ill. Aug. 28, 2008), The Andersons, a company, filed suit against the Walkers regarding contracts for the purchase of corn and wheat from Fall Grain. The Walkers had allegedly agreed to guarantee the obligations of Fall Grain to The Andersons... Full Story
Court Dismisses Lawsuit As Impermissible Collateral Attack on Arbitration Award
Reliable Onshore Services Co., L.L.C. v. Tanner Marine Co., No. Civ. A. 08-3500, 2008 WL 3876416 (E.D. La. Aug. 20, 2008)
8/20/2008 12:00:00 AM
Characterizing the lawsuit as an “impermissible collateral attack” on an arbitration award, a Louisiana federal district court has dismissed a court action filed by a disappointed party against a subsidiary of the company that prevailed in arbitration.
In Reliable Onshore Services Co., L.L.C. v. Tanner Marine Co., No. Civ. A. 08-3500, 2008 WL 3876416 (E.D. La. Aug. 20, 2008), Reliable and Tanner agreed to resolve a commercial dispute through arbitration. The arbitration panel issued an award resolving all disputes between Reliable, Tanner, and their subsidiary companies... Full Story
Severability Clause Created Ambiguity That Precluded Finding of “Clear and Unmistakable” Intent to Arbitrate Questions of Arbitrability
Morris v. Regis Corp., No. 08-68-P-H, 2008 WL 2945431 (D. Me. July 25, 2008)
7/25/2008 12:00:00 AM
A federal district court in Maine denied an employer’s motion to compel arbitration of a dispute over the enforceability of an employee’s arbitration agreement because the arbitration agreement contained a severability clause empowering the court to sever any offending provisions from the agreement, thus creating an ambiguity that precluded the Court from finding “clear and unmistakable” evidence of the parties’ intent to arbitrate the enforceability of the arbitration agreement.
In Morris v. Regis Corp., No. 08-68-P-H, 2008 WL 2945431 (D. Me. July 25, 2008), Morris and her employer Regis entered into an arbitration agreement that precluded an award of punitive damages, shortened the statute of limitations, and required the parties to share the costs of arbitration... Full Story
Once Again, Federal Court Finds National Arbitration Forum to Be a “Fair and Reasonable Forum”
Davis v. Dell, Inc., Civ. No. 07-630 (RBK), 2008 WL 3843837 (D. N.J. Aug. 15, 2008)
8/15/2008 12:00:00 AM
In ordering arbitration of a warranty dispute, a federal district court in New Jersey rejected the claimant’s allegation of bias by pointing out that the National Arbitration Forum, the designated administrator, “has been repeatedly held up as a fair and reasonable forum.”
In Davis v. Dell, Inc., Civ. No. 07-630 (RBK), 2008 WL 3843837 (D. N.J. Aug. 15, 2008), Davis purchased an LCD television through Dell’s website. As part of the checkout process, Davis checked a box agreeing to various terms and conditions, including an arbitration agreement and a class action waiver... Full Story
"Cold Pizza" Makeup Artist Ordered to Arbitrate Claims Against Non-Signatory ESPN Under Doctrine of Equitable Estoppel
Ragone v. Atlantic Video at Manhattan Center, No. 07 Civ. 6084(JGK), 2008 WL 4058480 (S.D.N.Y. Aug. 29, 2008)
8/29/2008 12:00:00 AM
A New York federal district court applied the doctrine of equitable estoppel ordered arbitration of a make-up artist’s sexual harassment and retaliation claims against her employer and its client, ESPN.
In Ragone v. Atlantic Video at Manhattan Center, No. 07 Civ. 6084(JGK), 2008 WL 4058480 (S.D.N.Y. Aug. 29, 2008), Ragone was hired by Atlantic Video (AV) to provide make-up artist services to air talents employed by ESPN on the morning sports show "Cold Pizza." After repeated complaints to AV and ESPN management, Ragone was singled out for termination by ESPN and AV and was later fired. Ragone brought claims of sexual harassment and retaliation against AV and ESPN... Full Story
Court Enforces FORUM Arbitration Agreement in Loan Contract
Prousi v. Bankcorp Bank, No. 08-2208, 2008 WL 4083178 (E.D. Pa. Aug. 28, 2008)
8/28/2008 12:00:00 AM
In ordering arbitration of a loan dispute, a federal district court in Pennsylvania rejected the borrower’s unconscionability challenge to the arbitration agreement as lacking in evidentiary support.
In Prousi v. Bankcorp Bank, No. 08-2208, 2008 WL 4083178 (E.D. Pa. Aug. 28, 2008), Prousi sued Bankcorp for predatory lending, asserting that Bankcorp used unfair and deceptive acts to induce Prousi to execute construction loan documents. In response, Bankcorp filed a motion to compel arbitration pursuant to an arbitration agreement in the loan documents. The arbitration agreement provided that all disputes, claims or controversies would be arbitrated pursuant to the National Arbitration Forum Code of Procedure and the Federal Arbitration Act... Full Story
Court Confirms Arbitration Award Where Credit Card Issuer Provided Sufficient Evidence of Arbitration Agreement
Walters v. Chase Manhattan Bank, No. CV-07-0037-FVS, 2008 WL 3200739 (E.D. Wash. Aug. 6, 2008)
8/6/2008 12:00:00 AM
A federal district court in Washington confirmed an arbitration award in favor of a credit card issuer where, despite the cardholder’s claim that she never agreed to arbitrate, the evidence demonstrated that notice of the arbitration agreement was mailed to the cardholder, and she continued to use the card without objection.
In Walters v. Chase Manhattan Bank, No. CV-07-0037-FVS, 2008 WL 3200739 (E.D. Wash. Aug. 6, 2008), Chase filed an arbitration claim against Walters seeking to collect the unpaid balance on a Chase credit card. The arbitrator issued an award in Chase’s favor. Later, Walters sued Chase for an alleged Truth in Lending Act (TILA) violation. Chase counterclaimed for confirmation of the arbitration award... Full Story
State Cases
Alabama Supreme Court Holds Reservation of Right to Arbitrate in Pleadings and Correspondence Precludes Finding of Waiver
ClimaStor IV, L.L.C. v. Marshall Consruction, L.L.C., No. 1051833, 2008 WL 4097589 (Ala. Sept. 5, 2008)
9/5/2008 12:00:00 AM
Significant litigation activity does not constitute conduct that may waive the right to arbitrate when the moving party expressly reserves the right to pursue resolution of claims in arbitration and asserts the arbitration agreement as an affirmative defense in its initial answer, according to the Alabama Supreme Court.
In ClimaStor IV, L.L.C. v. Marshall Consruction, L.L.C., No. 1051833, 2008 WL 4097589 (Ala. Sept. 5, 2008), ClimaStor contracted with Marshall for construction of a warehouse facility. The contract contained an arbitration agreement. After ClimaStor refused to deliver the final payment, Marshall filed a lien against the property and eventually filed suit in state court against ClimaStor to recover the balance... Full Story
Attorney's Declaration Not Enough to Establish Arbitrator Failed to Make Required Disclosure in Construction Arbitration
Blank v. Bounds, No. G039284, 2008 WL 4147554 (Cal. Ct. App. Sept. 9, 2008)
9/9/2008 12:00:00 AM
A California appellate court held that an attorney's declaration that an arbitrator failed to make a required disclosure is not sufficient evidence to vacate the award for lack of disclosure in a construction arbitration case.
In Blank v. Bounds, No. G039284, 2008 WL 4147554 (Cal. Ct. App. Sept. 9, 2008), Blank contracted with Bounds to remodel Blank's home. The contract contained an arbitration agreement requiring arbitration through the Better Business Bureau (BBB). Blank was dissatisfied with Bounds's work, so Blank submitted claims to arbitration through the BBB, and Bounds submitted a cross-claim... Full Story
California Employment Arbitration Agreement Upheld Over Myriad of Unconscionability Claims
Macias v. Ralphs Grocery Co., No. B202625, 2008 WL 3974197 (Cal. Ct. App. Aug. 28, 2008)
8/28/2008 12:00:00 AM
A California appellate court reversed a trial court's ruling and held that an employment arbitration agreement was not unconscionable for its provisions governing selection of the arbitrator, the statute of limitations, costs, and confidentiality.
In Macias v. Ralphs Grocery Co., No. B202625, 2008 WL 3974197 (Cal. Ct. App. Aug. 28, 2008), Macias applied for a job with Ralphs. As part of the application process, Macias signed an application form that contained an arbitration agreement... Full Story
Arbitrator has Broad Authority to Consider Claims, Award Damages, and Interpret Arbitration Rules
Bow Tile Corp. v. Gangi Builders, Inc., No. B202177, 2008 WL 3906433 (Cal. Ct. App. Aug. 26, 2008)
8/26/2008 12:00:00 AM
In response to an arbitrator's refusal to deny a party's request to increase claimed damages as an impermissible amendment of the party's arbitration claim, a California appellate court held that where the contract contains a broad arbitration agreement, the arbitrator has broad authority to consider claims, award damages, and interpret the arbitration rules.
In Bow Tile Corp. v. Gangi Builders, Inc., No. B202177, 2008 WL 3906433 (Cal. Ct. App. Aug. 26, 2008), Gangi Builders (Gangi), a general contractor, subcontracted tile and paving work of a condominium project to Bow Tile. The subcontract contained an arbitration agreement that was very broad in its scope, and required arbitration before the American Arbitration Association (AAA)... Full Story
Arbitration Agreement Providing for Foreign Forum Invalid Under California Law Where No Clear Agreement to Forum Existed
Winter v. Window Fashions Professionals, Inc., No. F053691, 2008 WL 3845229 (Cal. Ct. App.5d Aug. 19, 2008)
8/19/2008 12:00:00 AM
A California appellate court held that an arbitration agreement in a franchising contract was not validly formed where one of the documents provided during negotiation contained language warning of the potential lack of enforceability under California law of a forum selection and choice of law clause providing for arbitration outside of California.
In Winter v. Window Fashions Professionals, Inc., No. F053691, 2008 WL 3845229 (Cal. Ct. App.5d Aug. 19, 2008), the Winters bought a window coverings franchise from Window Fashion Professionals (WFP). The franchise agreement contained an arbitration agreement with a forum selection and choice of law clause providing for the application of Texas law and arbitration to take place in Texas... Full Story
Credit Card Arbitration Agreement Upheld and Award Confirmed in Face of Various Attacks on Award's Validity
Reiss v. Chase Bank USA, N.A., No. CV084030653, 2008 WL 3916049 (Conn. Super. Ct. July 30, 3008)
7/30/2008 12:00:00 AM
A Connecticut court held that an arbitration agreement in a credit card contract was valid, and that if a party brings a motion to vacate based on § 52-418 of the Connecticut Statutes after the thirty-day deadline set forth in § 52-420(b), courts are without jurisdiction to consider the motion.
In Reiss v. Chase Bank USA, N.A., No. CV084030653, 2008 WL 3916049 (Conn. Super. Ct. July 30, 3008), Reiss opened a credit card account with Chase Bank. The credit card contract contained an arbitration agreement. After Reiss's account became delinquent, Chase filed a claim against Reiss with the National Arbitration Forum (FORUM) seeking to collect the money owed under the account... Full Story
Florida Court Holds Broad Power of Attorney Includes Authority to Enter Agreement to Arbitrate
Jaylene, Inc. v. Moots, No. 2D08-707, 2008 WL 4181140 (Fla. Ct. App. Sept. 12, 2008)
9/12/2008 12:00:00 AM
Likening the power to enter into an arbitration agreement to settlement or contracting powers, a Florida appellate court has held that a broadly-worded power of attorney grants authority to an attorney-in-fact to enter into an arbitration agreement on another's behalf.
In Jaylene, Inc. v. Moots, No. 2D08-707, 2008 WL 4181140 (Fla. Ct. App. Sept. 12, 2008), Crisson executed a power of attorney in favor of Moots. Approximately seventeen months later, Crisson was admitted to a Jaylene nursing home facility. Upon admission, Moots signed admission documents on Crisson's behalf, including an arbitration agreement. After Crisson passed away, Moots asserted claims on his behalf under Fla. Stat. § 400.022 (Florida's nursing home resident rights statute). Jaylene moved to compel arbitration of the claims. The trial court denied the motion, deciding that Moots did not have the authority as attorney-in-fact to enter into the arbitration agreement... Full Story
Court Refuses to Modify Arbitration Award to Grant Pre-Award Interest
Chamois v. Countrywide Home Loans, Inc., No. 9938/2007, 2008 WL 4149749 (N.Y. Sup. Ct. Sept. 9, 2008)
9/9/2008 12:00:00 AM
A New York court held that where an employment arbitration award is silent regarding pre-award interest, a court may not modify the award by awarding pre-award interest itself. However, it is within the court's discretion to grant post-award, prejudgment interest.
In Chamois v. Countrywide Home Loans, Inc., No. 9938/2007, 2008 WL 4149749 (N.Y. Sup. Ct. Sept. 9, 2008), Alice Chamois and Rachel Douglas were employees of Countrywide Home Loans (Countrywide). After a dispute arose between the employees and Countrywide, the parties went to arbitration. An award was issued in favor of the employees: Chamois was awarded $125,000, and Douglas was awarded $70,000... Full Story
Ohio Appeals Court Finds That Trial Court's Unconscionability Determination Was Not Adequately Tied to the Terms of the Arbitration Agreement
Roe v. Rent-A-Center, Inc., No. CA2007-09-224, 2008 WL 3893563 (Ohio Ct. App. Aug. 25, 2008)
8/25/2008 12:00:00 AM
Noting contrary holdings in federal cases where courts compelled arbitration of claims under the same agreement, an Ohio state appellate court has reversed a trial court's denial of a motion compelling arbitration, describing the lower court's findings regarding unconscionability as "not sufficiently detailed."
In Roe v. Rent-A-Center, Inc., No. CA2007-09-224, 2008 WL 3893563 (Ohio Ct. App. Aug. 25, 2008), Roe and other former employees (Roe plaintiffs) filed suit against Rent-A-Center for negligence, wrongful discharge, and discrimination. Rent-A-Center moved to compel arbitration in accordance with an agreement signed by the Roe plaintiffs during their employment. The trial court denied the motion, agreeing with the Roe plaintiffs that the agreement was unconscionable... Full Story
Unilateral Selection of an Arbitrator, Standing Alone, Does Not Render Arbitration Agreement Unconscionable
Reno v. Bethel Village Condominium Ass'n, No. 08AP-10, 2008 WL 4078416 (Ohio Ct. App. Sept. 4, 2008)
9/4/2008 12:00:00 AM
An Ohio appellate court determined that a provision allowing one party to unilaterally select an arbitrator was not enough to render the arbitration agreement unconscionable, absent "a direct connection or substantial nexus" between the arbitrator and the selecting party.
In Reno v. Bethel Village Condominium Ass'n, No. 08AP-10, 2008 WL 4078416 (Ohio Ct. App. Sept. 4, 2008), Reno purchased a condo in the Bethel Village condominium complex. The following year, Bethel Village eliminated the street parking in front of Reno's unit. Reno sued Bethel Village... Full Story
Under Oregon Law, Appeal of Order Denying Motion to Compel Arbitration Must Be Taken Within 30 Days
Snider v. Production Chemical Manufacturing, Inc., Nos. 050201434, A131621, 2008 WL 3411399 (Or. Ct. App. Aug. 13, 2008)
8/13/2008 12:00:00 AM
Oregon law requires a party to appeal an order denying a motion to compel arbitration within 30 days of the order's entry at the trial court, according to the Oregon Court of Appeals.
In Snider v. Production Chemical Manufacturing, Inc., Nos. 050201434, A131621, 2008 WL 3411399 (Or. Ct. App. Aug. 13, 2008), Snider was employed by PCM. As part of the parties' employment contract, Snider and PCM entered into an arbitration agreement covering employment-related claims... Full Story
Attorney-in-Fact Does Not Have Authority to Delegate Core Powers to Others
Jones v. Kindred Healthcare Operating, Inc., No. W2007-02568-COA-R3-CV, 2008 WL 3861980 (Tenn. Ct. App. Aug. 20, 2008)
8/20/2008 12:00:00 AM
A Tennessee appellate court determined that a nursing home resident's attorney-in-fact did not have the authority to assign the power to enter into an agreement to arbitrate to another individual.
In Jones v. Kindred Healthcare Operating, Inc., No. W2007-02568-COA-R3-CV, 2008 WL 3861980 (Tenn. Ct. App. Aug. 20, 2008), Marie Hurst executed a durable power of attorney and named her daughter Brenda as her attorney-in-fact. Hurst's health deteriorated and she required nursing home care. Brenda composed a letter which conveyed the power to make medical and financial decisions to her sister, Rebecca... Full Story
Court May Not Modify Ambiguous Arbitration Award Unless Parties Seek Modification of Award
Garza/Phelps Dodge Refining Corp. v. Phelps Dodge Refining Corp./Garza, No. 08-07-00079-CV, 2008 WL 3870102 (Tex. App. Aug. 21, 2008)
8/21/2008 12:00:00 AM
In confirming an arbitration award but reversing the judgment of a trial court in part, a Texas appellate court held that a trial court cannot award back pay to an employee in a confirmation proceeding where the award does not mention back pay and neither party seeks modification or clarification of the award.
In Garza/Phelps Dodge Refining Corp. v. Phelps Dodge Refining Corp./Garza, No. 08-07-00079-CV, 2008 WL 3870102 (Tex. App. Aug. 21, 2008), Phelps Dodge fired Garza. Pursuant to an arbitration agreement, the parties went to arbitration, and the arbitrator determined that Phelps Dodge did not have good cause to fire Garza, but there was good cause to issue a leave without pay for thirty days. Phelps Dodge then reinstated Garza to his previous position... Full Story
Limitation on Remedies for Worker's Compensation Retaliation Severed from Employee's Arbitration Agreement
In re Poly-America, L.P., No. 04-1049, 2008 WL 3990993 (Tex. Aug. 29, 2008)
8/29/2008 12:00:00 AM
The Texas Supreme Court has held that the remedies provided to Texas workers under the Texas Worker's Compensation Act cannot be waived in an arbitration agreement, but declined to hold the arbitration agreement's fee-splitting or discovery limitations unconscionable without further evidentiary support.
In In re Poly-America, L.P., No. 04-1049, 2008 WL 3990993 (Tex. Aug. 29, 2008), Luna was employed by Poly-America. Luna signed an arbitration agreement covering all employment-related claims. Luna later suffered injury on the job and filed a worker's compensation claim. After the injury continued to bother him, Poly-America allegedly terminated his employment... Full Story
Class Waiver and Other Provisions Render Arbitration Agreement Unconscionable Under Washington Law
McKee v. AT&T Corp., No. 81006-1, 2008 WL 3932188 (Wash. Aug. 28, 2008)
8/28/2008 12:00:00 AM
The Washington Supreme Court of Washington held that a wireless service provider's arbitration agreement was unconscionable by virtue of its class waiver, confidentiality requirement, abbreviated statute of limitations, and limitation on fee-shifting.
In McKee v. AT&T Corp., No. 81006-1, 2008 WL 3932188 (Wash. Aug. 28, 2008), McKee signed up for AT&T phone service, and weeks later, AT&T mailed him the service contract, which contained an arbitration agreement. The arbitration agreement prohibited class actions, required that all arbitrations be kept confidential, provided that any claim must be brought within two years, and limited McKee's right to recover punitive damages and attorney fees... Full Story
Washington Court of Appeals Holds Statutes of Limitations Do Not Apply in Arbitral Proceedings Under Washington Arbitration Act
Broom v. Morgan Stanley DW Inc., No. 60115-6-I, 2008 WL 4053440 (Wash. Ct. App. Sept. 2, 2008)
9/2/2008 12:00:00 AM
According to the Washington Court of Appeals, statutes of limitations do not apply as a bar to claims in arbitration proceedings conducted under the Washington Arbitration Act (WAA), absent a contrary agreement by the parties or the incorporation of contrary arbitral rules.
In Broom v. Morgan Stanley DW Inc., No. 60115-6-I, 2008 WL 4053440 (Wash. Ct. App. Sept. 2, 2008), Broom filed a demand for arbitration with the National Association of Securities Dealers (NASD), alleging that Morgan Stanley had mismanaged his late father's investment account. Morgan Stanley filed a motion to dismiss, arguing to the NASD arbitration panel that Broom's claims were barred by statutes of limitations. The arbitrators agreed and granted Morgan Stanley's motion to dismiss... Full Story
ADR Legislation & Regulation
LEGISLATION
CA A 69
AUTHOR: Lieu [D]
TITLE: Mortgage Lending: Reporting
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Originally a bill to enact the Uniform Debt Settlement Services Act, the Debt Management Act, and the Credit Counselors Law to provide for the licensure and regulation of providers of debt settlement and debt management services, the bill was amended to remove any ADR reference and instead relate to disclosures of residential mortgage lenders.
CA A 1867
AUTHOR: Keene [R]
TITLE: Real Estate Appraisers
DISPOSITION: Vetoed
LOCATION: Vetoed
Commentary: Amendments to the Business and Professions Code that "Any waiver by a member, including, but not limited to, an agreement to arbitrate a claim, that is required as a condition of submitting a proposal or doing business with a public agency shall be presumed involuntary, unconscionable, against public policy, and unenforceable."
CA A 2702
AUTHOR: Nunez [D]
TITLE: Maddy Emergency Medical Service Fund: Los Angeles
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: This bill would require distribution of a specified percentage of the balance in the Maddy Emergency Medical Service Fund pursuant to prescribed provisions in certain small and rural hospitals located in Los Angeles County that meet certain requirements. As it relates to ADR, the bill requires arbitration of disputes relating to claims for reimbursement.
NJ A 1965
SPONSOR: Cohen [D]
TITLE: Pet Food
DISPOSITION: Failed (Withdrawn 9-22-08)
LOCATION: ASSEMBLY
Commentary: Authorizes civil action for certain damages when a pet animal becomes ill, is injured, or dies from consuming or coming into contact with adulterated pet food. Upon the filing of the cause of action, the court shall refer the matter to mediation, and shall order the outcome of the mediation to be binding on all parties.
NJ A 2085
SPONSOR: Cohen [D]
TITLE: Prompt Pay Act
DISPOSITION: Failed (Withdrawn 9-22-08)
LOCATION: ASSEMBLY
Commentary: Amends law regarding health insurance carriers. Amendments provide for arbitration initiated by either party, under certain procedural requirements, including that the amount in dispute be over $1000. A payer shall establish an internal appeal mechanism to resolve any dispute regarding compliance with the requirements of this act. The payer shall conduct the appeal at no cost to the health care provider. Any dispute regarding the determination of an internal appeal may be referred to arbitration. The commissioner shall contract with a nationally recognized, independent organization that specializes in arbitration to conduct the arbitration proceedings.
PA H 2525 PN: 4434
AUTHOR: Casorio [D]
TITLE: Dog Act of 1982
DISPOSITION: Pending
LOCATION: Senate Appropriations Committee
Commentary: Amends the Dog Act of 1982 to provide for arbitration of disputes arising under fines imposed by the State dog warden. This bill originally disallowed arbitration.
US H 6978
SPONSOR: Tierney [D]
TITLE: Credit Card Safety Star Rating System
DISPOSITION: Pending
LOCATION: House Financial Services Committee
Commentary: Bill establishes a credit card safety star rating system for the benefit of consumers. One point shall be subtracted for terms in an agreement that are deemed negative. For example, the required use of binding or nonbinding arbitration resolve disputes results in a one point deduction.
US S 2450
SPONSOR: Leahy [D]
TITLE: Federal Rules of Evidence
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: "Amends the Federal Rules of Evidence to address the waiver of the attorney client privilege and the work product doctrine...Notwithstanding Rules 101 and 1101, this rule applies to State proceedings and to Federal court annexed and Federal court mandated arbitration proceedings, in the circumstances set out in the rule. And notwithstanding Rule 501, this rule applies even if State law provides the rule of decision."
REGULATIONS
None.
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