Articles Posted in Arbitration & Mediation

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In two separate actions against HomeAway, the Fifth Circuit reversed the district court's judgment in Plaintiff Ivan Arnold's case and affirmed the judgment in Plaintiff Deirdre Seim's case, holding that plaintiffs were bound to arbitrate their threshold arbitrability questions. In Arnold's case, the court held that there was a contract between the parties that contained a putative arbitration provision, the parties have agreed to delegate threshold questions about the arbitration provision to an arbitrator, and Arnold did not specifically challenge the validity of the delegation clause. In Seim's case, the district court was correct to order arbitration but should not have assessed threshold questions itself. Accordingly, the court remanded both cases with instructions to compel arbitration. View "Arnold v. HomeAway, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's motion to compel arbitration. Determining that it had jurisdiction and the premature notice of appeal was effective, the court held that the Green Tree Parties had standing to compel arbitration even if some were not signatories to the arbitration. In this case, the House Parties' allegation supported application of Mississippi's intertwined claims test to permit Green Tree and WIMC to compel arbitration as non-signatories. The court also held that the district court did not err in ruling that the parties' express incorporation of the JAMS rules provided clear evidence that they agreed that the arbitrator would decide arbitrability. Finally, the district court correctly referred the question of fraud to the arbitrator. View "Green Tree Servicing LLC v. House" on Justia Law

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The Fifth Circuit affirmed the district court's grant of DoorDash's motion to compel arbitration and dismissal of an action brought by an independent contractor. Plaintiff had filed a putative class action, alleging claims under the Fair Labor Standards Act (FLSA). The court held that the district court did not err in compelling arbitration before considering the class certification where arbitrability was a threshold question to be determined at the outset. The court also held that the district court did not err in enforcing the arbitration agreement where the Independent Contractor Agreement contained an agreement to arbitrate, which, through incorporation of the AAA rules, contained an agreement to delegate issues of arbitrability to the arbitrator. The court treated the delegation clause as valid and rejected plaintiff's remaining claims. View "Edwards v. DoorDash, Inc." on Justia Law

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McCall resigned from Shaw and later became the CEO of Allied, Shaw’s direct competitor. Shaw sued, citing noncompete and nonsolicitation agreements in McCall’s employment contract. Those agreements call for arbitration and state that the employer may seek injunctive relief without waiving the right to arbitrate. The state court issued a Joint Protective Order. Aptim acquired the rights to McCall’s employment agreement but withdrew a subsequent motion for substitution in the suit. Aptim filed a demand for arbitration with the American Arbitration Association. Shaw filed an amended petition, deleting its request for damages, and a motion to dismiss the amended petition with prejudice. McCall filed an opposition, an answer, a counterclaim, a petition for declaratory judgment, a motion to consolidate, and a motion for constructive contempt against Aptim for demanding arbitration in violation of the protective order, though Aptim was not then a party to the case. Aptim, without Shaw, sued in federal court to compel arbitration and to stay the state-court proceeding. Before the federal court ruled, the state court issued an order joining Aptim in the state-court action, retroactively effective, finding that Aptim and Shaw had waived their arbitration rights. The federal district court then ordered arbitration and stayed the state-court action. The Fifth Circuit affirmed, finding that the factors weighed against abstention because the case does not involve jurisdiction over a thing and federal law provides the rules of decision on the merits and strongly favors arbitration. View "Aptim Corp. v. McCall" on Justia Law

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The Fifth Circuit affirmed the district court's decision reversing the magistrate judge's grant of a motion to compel arbitration. In this case, plaintiff alleged violations of the Sherman Antitrust Act, 1 U.S.C. 15, and the Texas Free Enterprise and Antitrust Act. Defendants moved to compel arbitration pursuant to a clause in the parties' contract (the Dealer Agreement). The court held that, regardless of whether an agreement clearly and unmistakably delegates the question of arbitrability, defendants' arguments for arbitrability were wholly groundless. Therefore, this action was not subject to mandatory arbitration. The court need not reach the question of whether the third parties to the arbitration clause could enforce such an arbitration clause. View "Archer and White Sales, Inc. v. Henry Schein, Inc." on Justia Law

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The NFLPA filed a complaint on behalf of Ezekiel Elliott, a running back for the Dallas Cowboys, seeking a preliminary injunction preventing enforcement of a forthcoming six game suspension by the NFL and NFL Management Council. The Commissioner of the NFL determined that domestic violence allegations were substantiated and that Elliott should be suspended for six games. An arbitrator issued a decision upholding the suspension on the same day the district court held a preliminary injunction hearing. The district court then enjoined the NFL from enforcing the suspension. The Fifth Circuit vacated the district court's preliminary injunction, holding that the district court lacked subject matter jurisdiction when it issued the preliminary injunction. In this case, when the NFLPA filed the complaint, the arbitrator had not yet issued his decision, and jurisdiction depends on the facts as they exist when the complaint was filed. Accordingly, the court remanded with instructions to dismiss the case. View "NFLPA v. NFL" on Justia Law

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Defendant initially filed suit against Green Tree and Walter Investment in Mississippi state court (Charles I). Charles I was subsequently removed to federal court on diversity jurisdiction and is currently stayed pending arbitration. Before the district court stayed the proceedings in Charles I, Green Tree and Walter Investment moved as plaintiffs in a separate action against defendant (Charles II) to compel him to participate in arbitration for the claims he brought against them in Charles I. The district court granted the motion and ordered that the proceedings in Charles I be stayed and entered judgment dismissing Charles II with prejudice. The Fifth Circuit dismissed for lack of appellate jurisdiction, holding that the order in Charles II compelling arbitration was not a "final appealable order" over which the court has jurisdiction. View "Green Tree Servicing, LLC v. Charles" on Justia Law

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The Fifth Circuit affirmed the district court's order compelling arbitration and final judgment in a suit between IQ and WD-40. The court held that the 1996 Agreement between the parties contained an arbitration clause and IQ acknowledges that this arbitration covered some set of claims; IQ waived its challenged to the district court's conclusion that the parties clearly and unmistakably intended to delegate the issue of arbitrability to the arbitrator by conceding it before the district court; and WD-40's assertion of arbitrability was not wholly groundless. The court also held that the arbitrators acted within their authority in deciding that the dispute was arbitrable, and the district court was correct to deny IQ's motion to vacate the award under 9 U.S.C. 10(a)(4). View "IQ Products Co. v. WD-40 Co." on Justia Law

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Brittania-U filed suit against defendants for fraud, misrepresentation, and tortious interference with business relations arising out of a bidding process for oil leases in Nigeria. The Fifth Circuit affirmed the district court's denial of Brittania-U's motion to remand and the grant of defendants' motions to dismiss based on an arbitration provision in a confidentiality agreement between Brittania-U and Chevron. The court held that jurisdiction exists, and removal was proper, under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. 203. The court also held that the district court did not err in recognizing that the confidentiality agreement's arbitration provision delegated the question of arbitrability to the arbitrators. View "Brittania-U Nigeria, Ltd. v. Chevron USA, Inc." on Justia Law

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The Fifth Circuit held that, because the matter was not ripe at the time the district court entered judgment in this case, the district court's judgment was void for lack of subject matter jurisdiction. Therefore, the court vacated the judgment. The court explained that, even though subsequent intervening events have created a controversy that was now ripe, the court could not retroactively resurrect the district court's void judgment under the facts of this case. Nevertheless, because the basic underlying controversy, originally raised and pursued by these same parties, was now ripe, the court remanded the case to the district court for such orders and proceedings as the district court deemed necessary and appropriate. View "Lower Colorado River Authority v. Papalote Creek II LLC" on Justia Law