Federal Cases
Sureties Not Bound to Arbitrate Bond Disputes When a Bond Incorporates a Contract Containing an Arbitration Clause by Reference
Liberty Mut. Ins. Co. v. Mandaree Public School District #36, No. 06-3957, 2007 WL 2935805 (8th Cir. Oct. 10, 2007)
10/10/2007
According to the Eight Circuit Court of Appeals, a bond’s incorporation by reference of a contract containing an arbitration agreement does not constitute an agreement to arbitrate bond-related disputes by the surety.
In Liberty Mut. Ins. Co. v. Mandaree Public School District #36, No. 06-3957, 2007 WL 2935805 (8th Cir. Oct. 10, 2007), Mandaree and contractor Tooz entered into a contract for the remodeling and expansion of a school. The contract contained a clause providing that all related disputes would be resolved through arbitration. To secure Tooz’s performance, Liberty Mutual issued a performance bond, incorporating this construction contract by reference... Full Story
No Evident Partiality in Arbitrator Considering Findings of Judge with a Common Background
Amicorp Inc. v. General Steel Domestic Sales, LLC, No. 07-cv-01105-LTB-BNB, 2007 WL 2890089 (D. Colo. Sept. 27, 2007)
9/27/2007
Tenth Circuit courts address claims of evident partiality under the “actual bias” standard, and will not find such partiality when an arbitrator considers prior findings made by a judge who merely worked at the same law firm, attended the same law school, and shared membership in a social group.
In Amicorp Inc. v. General Steel Domestic Sales, LLC, No. 07-cv-01105-LTB-BNB, 2007 WL 2890089 (D. Colo. Sept. 27, 2007), Amicorp and General Steel were embroiled in a construction dispute. The parties agreed to resolve the dispute via arbitration and selected Kahn as the arbitrator, with Kahn ultimately rendering an award in favor of Amicorp... Full Story
The Right to Pursue USERRA Claims in Court Can Be Waived by Arbitration Agreement
Kitts v. Menards, Inc., No. 3:06-CV-708, 2007 WL 2901142 (N.D. Ind., Sept. 28, 2007)
9/28/2007
The right to pursue a federal USERRA claim in a judicial forum is a procedural right, and, absent any contrary intent expressed by Congress, can be waived through an arbitration agreement as long as the complainant’s underlying substantive rights are not abridged, according to a federal district court in Indiana.
In Kitts v. Menards, Inc., No. 3:06-CV-708, 2007 WL 2901142 (N.D. Ind., Sept. 28, 2007), Kitts was hired by Menards and signed an agreement to arbitrate all claims and disputes related to his work. Later, Kitts brought a claim against Menards under the Uniformed Services Employment and Reemployment Rights Act (USERRA) for unlawful retaliation based on military service. Menards sought to stay the action and compel arbitration, maintaining that the USERRA claim fell within the scope of the agreement to arbitrate. Kitts opposed, alleging that Congress had intended to preclude arbitration of claims arising under USERRA... Full Story
Arbitration Agreement Applies to Real Estate Commission Disputes, Not Antitrust Claims
Home Quarters Real Estate Group, LLC v. Michigan Data Exchange, Inc., No. 07-12090, 2007 WL 2984120 (E.D. Mich. Oct. 12, 2007)
10/12/2007
Antitrust claims are not arbitrable under an agreement that applied only to disputes over the division of real estate commissions, according to a federal district court in Michigan.
In Home Quarters Real Estate Group, LLC v. Michigan Data Exchange, Inc., No. 07-12090, 2007 WL 2984120 (E.D. Mich. Oct. 12, 2007), Home Quarters Real Estate (HQRE) signed an agreement with the trade association Michigan Data Exchange (MDE) as a shareholder in the Michigan Multiple Listing Service (MLS). The agreement stated that the parties would agree to adhere to the bylaws, rules and regulations of the MLS service and would agree to arbitrate any and all disputes in accordance with the Code of Ethics and Arbitration Manual of the National Association of Realtors... Full Story
Adhesive Arbitration Agreements Not Per Se Unconscionable and Parties’ Signatures Not Necessary Under Nebraska Law
Chilson v. Retalix USA, Inc., No. 8:07CV101, 2007 WL 2904185 (D. Neb. Oct. 2, 2007)
10/2/2007
Under Nebraska law, an adhesion contract calling for arbitration of claims is not unenforceable per se, and parties to such a contract need not sign it to render it valid and enforceable, according to a federal district court in Nebraska.
In Chilson v. Retalix USA, Inc., No. 8:07CV101, 2007 WL 2904185 (D. Neb. Oct. 2, 2007), Retalix executed employment documents, including an agreement to arbitrate, with IDS employee Chilson after Retalix took over IDS... Full Story
Nebraska Federal Court Compels Arbitration Absent Evidence of Prohibitive Costs or of Congressional Intent to Bar Arbitration of Statutory Claims
Schreiner v. Credit Advisors, Inc., No. 8:07CV78, 2007 WL 2904098 (D. Neb. Oct. 2, 2007)
10/2/2007
Mere speculation as to prohibitive costs in arbitration does not render an arbitration agreement unenforceable, and federal statutory claims are arbitrable unless Congress has clearly expressed an intention to preclude arbitration as to those claims, according to a federal district court in Nebraska.
In Schreiner v. Credit Advisors, Inc., No. 8:07CV78, 2007 WL 2904098 (D. Neb. Oct. 2, 2007), Schreiner contracted with Credit Advisors to act as his agent in making monthly payments to his creditors. In addition, the contract specified that any controversy or claim arising out of or relating to the contract would be sent to mediation, and, if necessary, then to arbitration... Full Story
Class Action Arbitration Waivers Valid in New Jersey for Claims with Remedies Sufficient to Attract Competent Counsel
Jones v. The Chubb Institute, Civ. A. No. 06-4937 (KSH), 2007 WL 2892683 (D. N.J. Sept. 28, 2007)
9/28/2007
Under New Jersey law, contractual waivers of the right to bring a class action are valid and enforceable if the remedy available to successful claimants would be sufficient to attract representation by competent counsel, according to a federal district court in New Jersey.
In Jones v. The Chubb Institute, Civ. A. No. 06-4937 (KSH), 2007 WL 2892683 (D. N.J. Sept. 28, 2007), Jones and other students at trade school Chubb executed an enrollment agreement containing a provision requiring arbitration of any and all claims and statutory claims against Chubb. Later, Jones and other students filed a class action suit against Chubb for violating a New Jersey consumer fraud statute... Full Story
Lack of Evidentiary Hearing Not Grounds For Vacatur
Wise v. Marriott International, Inc., No. 06 CIV. 11439, 2007 WL 2780395 (S.D.N.Y. Sept. 24, 2007)
9/24/2007
A federal district court in New York upheld an arbitration award over objection that the arbitrator exceeded his powers by not holding an evidentiary hearing. In upholding the award, the Court explained that fundamental fairness does not require an evidentiary hearing.
In Wise v. Marriott International, Inc., No. 06 CIV. 11439, 2007 WL 2780395 (S.D.N.Y. Sept. 24, 2007), Wise filed an arbitration claim against Marriott, his former employer, alleging discrimination on the basis of race and sexual orientation. At arbitration, the arbitrator issued an award granting Marriott’s motion for summary judgment... Full Story
State Cases
No Waiver of the Right to Arbitrate Where Urgent Need Justifies Resort to the Courts
Stark v. Molod Spitz DeSantis & Stark, P.C., 2007 WL 2988825 (N.Y. Oct. 16, 2007)
10/16/2007
The New York Court of Appeals determined that a law firm did not waive its right to compel arbitration when it participated in litigation because the resort to the courts was justified by urgent need.
In Stark v. Molod Spitz DeSantis & Stark, P.C., 2007 WL 2988825 (N.Y. Oct. 16, 2007), after four years as an equity partner in Molod Spitz DeSantis & Stark (“the firm”), Stark became a contract partner under an employment agreement she negotiated with the firm. The agreement stipulated that all controversies and claims arising out of the agreement were to be resolved by binding arbitration... Full Story
Ohio Courts Must Consider Execution of Arbitration Agreement in Granting Motion to Compel
Strader v. Magic Motors of Ohio, Inc., No. 2006CA00376, 2007 WL 2893422, (Ohio Ct. App. Oct. 1, 2007)
10/1/2007
Under Ohio law, courts must consider evidence regarding the nature and execution of an arbitration agreement, and not just its terms, in considering a motion to compel, according to the Ohio Court of Appeals.
In Strader v. Magic Motors of Ohio, Inc., No. 2006CA00376, 2007 WL 2893422, (Ohio Ct. App. Oct. 1, 2007), Strader brought various court claims against Magic Motors, alleging the improper repossession of an automobile. Magic Motors presented the trial court with the terms of an arbitration agreement signed by the parties, and asked the trial court to compel arbitration of the claims. The trial court granted the motion to compel, and Strader appealed... Full Story
Minor Children Not Bound to Arbitrate Loss of Parental Consortium Claims Because of Parent’s Agreement to Arbitrate Employment Claims
In re SSP Partners, No. 13-07-00291-CV, 2007 WL 2948313 (Tex. App. Oct. 11, 2007)
10/11/2007
Without evidence that the parent signed the agreement for their benefit or as their representative, minor children cannot be compelled to arbitrate loss of parental consortium claims pursuant to an agreement to arbitrate their parent’s employment-related claims, according to the Texas Court of Appeals.
In In re SSP Partners, No. 13-07-00291-CV, 2007 WL 2948313 (Tex. App. Oct. 11, 2007), Garcia, an employee of SSP, agreed to participate in the company’s employee injury benefit plan. The plan included an agreement to arbitrate all disputes arising between the company and employees... Full Story
Court Finds Lack of Mutuality Where Employer May Bring Some Disputes in Court and Employee Cannot
Colombo v. BNC Mortg., Inc., No. C052291, 2007 WL 2783328 (Cal. Ct. App.3d Sept. 26, 2007)
9/26/2007
An appellate court in California upheld a trial court’s determination that an arbitration agreement was unconscionable; rejecting an argument that the “voluntarily entered into” language in the arbitration agreement precluded a finding of procedural unconscionability and further finding a lack of mutuality based on ambiguous language in a separate intellectual property agreement.
In Colombo v. BNC Mortg., Inc., No. C052291, 2007 WL 2783328 (Cal. Ct. App.3d Sept. 26, 2007), Colleen Colombo, along with five other female employees of BNC (collectively “Colombo Plaintiffs”), filed suit for sexual harassment and retaliation... Full Story
Reservation of Right to Modify Arbitration Agreement, Even in Good Faith, Renders It Substantively Unconscionable
Diaz v. West Coast Laboratories, Inc., No. B195232, 2007 WL 2985284 (Cal. Ct. App. Oct. 15, 2007)
10/15/2007
According to the California Court of Appeal, substantive unconscionability is found in an arbitration agreement which reserves the employer’s right to unilaterally modify it, regardless of whether the employer exercises that right in good faith.
In Diaz v. West Coast Laboratories, Inc., No. B195232, 2007 WL 2985284 (Cal. Ct. App. Oct. 15, 2007), Diaz was employed by West Coast Laboratories (WCL) as a machine worker. While working at WCL, Diaz was injured in an accident. According to WCL, Diaz was later fired for failing to perform certain job duties and inaccurately reporting work time, while Diaz alleged that she was fired for requesting accommodations and medical attention for the work injury... Full Story
Court Dismisses Challenge to Award due to Lack of Evidence of Substantial Prejudice as Required by California’s Arbitration Statute
Niblack v. Le, No. G037849, 2007 WL 2800289 (Cal. Ct. App. Sept. 27, 2007)
9/27/2007
A California Appellate Court affirmed a lower court award confirmation in a real estate contract dispute because there was no evidence of substantial prejudice.
In Niblack v. Le, No. G037849, 2007 WL 2800289 (Cal. Ct. App. Sept. 27, 2007), Niblack and Le entered into a lease agreement with an option for Niblack to purchase the property. When Niblack decided the purchase the property, the parties executed a standard Residential Purchase Agreement, and agreed that Niblack would obtain financing... Full Story
Arbitration Rules Demonstrate Intent to Arbitrate Questions of Arbitrability
BAYPO Ltd. Partnership v. Technology JV, LP, No. CIV.A. 2693-VCL, 2007 WL 2896369 (Del. Ch. Oct. 2, 2007)
10/2/2007
A Delaware trial court ruled that the arbitrability of a dispute was a question for the arbitrator based on a Delaware rule whereby a broad arbitration agreement that incorporates rules which empower the arbitrator to decide questions of arbitrability is sufficient to overcome the presumption that courts decide questions of arbitrability.
In BAYPO Ltd. Partnership v. Technology JV, LP, No. CIV.A. 2693-VCL, 2007 WL 2896369 (Del. Ch. Oct. 2, 2007), the Bayer Corporation and its affiliates (collectively, Bayer) entered into a joint venture agreement with the Lyondell Chemical Company and its affiliate (collectively, Lyondell). The underlying agreement contained a broad arbitration clause that provided for arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the Rules)... Full Story
Unintentional Failure to Initial Arbitration Agreement Does Not Invalidate Agreement
Community Care Center of Vicksburg, LLC v. Mason, No. 2006-CA-00599-COA, 2007 WL 2917585 (Miss. Ct. App. Oct. 9, 2007)
10/9/2007
The Mississippi Court of Appeals held that a nursing home resident entered into a valid arbitration agreement even though she failed to initial that page of the admission contract because there was no evidence that her failure to initial the arbitration agreement was intentional.
In Community Care Center of Vicksburg, LLC v. Mason, No. 2006-CA-00599-COA, 2007 WL 2917585 (Miss. Ct. App. Oct. 9, 2007), Mason admitted herself into a nursing home run by Community Care Center of Vicksburg (Vicksburg). During the admission process, she signed an admission contract containing an arbitration agreement, but she did not initial the page containing the arbitration agreement... Full Story
ADR Legislation & Regulation
LEGISLATION
WI A 542
AUTHOR: Lasee [R]
TITLE: Interstate Insurance Product Regulation Compact
INTRODUCED: 10/16/2007
DISPOSITION: Pending
LOCATION: Assembly Insurance Committee
Commentary:
This bill would enact the Interstate Insurance Product Regulation Compact (compact). The stated purposes of the compact include promoting and protecting the interests of consumers of annuity, life insurance, disability income, and long-term care insurance products (insurance products); developing uniform standards for insurance products; establishing a central clearinghouse for review of insurance products, and advertisements related to insurance products, that are filed with the Interstate Insurance Product Regulation Commission (commission); and giving regulatory approval to insurance products and related advertisements filed with the commission. As it relates to ADR, the Compact would restrict the use of arbitration clauses in such contracts that were not pre approved by rule or pre approved by the Interstate Insurance Product Regulation Commission or which do not conform with the form contracts in use among the compacting states.
REGULATION
Alaska 3 AAC 48.121, .140, .180
AGENCY: Department of Commerce, Community and Economic Development/Regulatory Commission of Alaska
TITLE: Alternative Dispute Resolution
Commentary:
Establishes an ADR program for telecommunications interconnection disputes. Permits a party to file a motion for alternative dispute resolution, which includes mediation, but specifically excludes arbitration.
Massachusetts 130 CMR 610
AGENCY: Executive Office of Health and Human Services/Division of Medical Assistance
TITLE: MassHealth: Fair Hearings
PROPOSED: 07/27/2007
ADOPTED: 10/05/2007
Commentary:
Provides for voluntary mediation under the MassHealth program.
Texas 32 TEXREG 2577
40 TAC 2.106.G.106.1201, .1203, .1205, .1207, .1211, .1213, .1215, .1217, .1219, .1221, .1223, .1225, .1227, .1229, .1231, .1233
AGENCY: Department of Assistive and Rehabilitative Services
TITLE: Business Enterprises
PROPOSED: 04/30/2007
ADOPTED: 10/08/2007
Commentary:
Clarifies and updates program rules from the former Texas Commission for the Blind, which was consolidated into the Department of Assistive and Rehabilitative Services in 2004, into rule applicable to programs now administered by the Division for Blind Services, Department of Assistive and Rehabilitative Services; BET director shall obtain the services of an arbitrator from the American Arbitration Association ("AAA") or other similar organization to conduct the hearing...
(G) The hearing shall be conducted in accordance with the rules of the American Arbitration Association, except that the arbitrator shall be requested to announce orally a decision at the conclusion of the hearing.
Utah 30277
AGENCY: Tax Commission/Division of Administration
TITLE: Agency Review and Reconsideration
PROPOSED: 07/31/2007
ADOPTED: 10/15/2007
CITATION: R861-1A-29
Commentary:
Provides for mediation of certain tax disputes.
Utah 30278
AGENCY: Tax Commission/Division of Administration
TITLE: Formal Adjudicative Proceedings
PROPOSED: 07/31/2007
ADOPTED: 10/15/2007
CITATION: R861-1A-24
Commentary:
Provides for mediation of certain tax disputes.
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