Justia Arbitration & Mediation Opinion Summaries

The case involves a dispute between several plaintiffs, who are foreign nationals participating in an au pair program, and Cultural Care, Inc., a Massachusetts company that places au pairs with host families in the U.S. The plaintiffs allege that Cultural Care violated their rights under the Fair Labor Standards Act (FLSA) and various state wage and hour laws by failing to pay them legal wages. They also claim violations of state deceptive trade practices laws.The United States District Court for the District of Massachusetts denied Cultural Care's motion to dismiss the complaint, including its defense of derivative sovereign immunity under Yearsley v. W.A. Ross Construction Company. Cultural Care appealed, but the United States Court of Appeals for the First Circuit affirmed the District Court's decision, concluding that Cultural Care had not established entitlement to protection under Yearsley. After the case returned to the District Court, Cultural Care filed a motion to compel arbitration based on agreements in contracts signed by the au pairs with International Care Ltd. (ICL), a Swiss company. The District Court denied this motion, ruling that Cultural Care had waived its right to compel arbitration and that it could not enforce the arbitration agreement as a nonsignatory.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the District Court's denial of the motion to compel arbitration. The court held that Cultural Care, as a nonsignatory to the ICL Contract, could not enforce the arbitration agreement under either third-party beneficiary theory or equitable estoppel. The court emphasized that the arbitration agreement did not demonstrate with "special clarity" that the signatories intended to confer arbitration rights on Cultural Care. Additionally, the plaintiffs' statutory claims did not depend on the ICL Contract, making equitable estoppel inapplicable. View "Posada v. Cultural Care, Inc." on Justia Law

Michael Kosor, Jr., a homeowner in Southern Highlands, a Las Vegas residential common-interest community, sued the Southern Highlands Community Association (HOA) and its developer, Southern Highlands Development Corporation (SHDC), for declaratory and injunctive relief regarding the homeowners' right to elect the HOA's board of directors. Kosor claimed that the community had surpassed the 75% home-sale threshold, ending the declarant control period, yet SHDC continued to appoint three of the five board members, violating homeowners' voting rights. The HOA and SHDC disputed Kosor's interpretation and calculations.The Eighth Judicial District Court of Clark County denied Kosor's motion for a temporary restraining order, largely denied the HOA's and SHDC's motion to dismiss, and denied Kosor's motion for summary judgment. Kosor then sought to voluntarily dismiss the action without prejudice, but the court dismissed it with prejudice and awarded fees and costs to the HOA and SHDC. Kosor appealed but later withdrew his appeal, acknowledging that he could not reinstate it or raise the same issues again. Subsequently, the HOA and SHDC sought additional fees and costs incurred on appeal, prompting Kosor to file a motion under NRCP 60(b)(4), arguing that the district court lacked subject matter jurisdiction due to noncompliance with NRS 38.310's pre-suit ADR requirement.The Supreme Court of Nevada reviewed the case and held that NRS 38.310, which mandates pre-suit mediation or arbitration for certain HOA-related claims, is a procedural claim-processing rule, not a jurisdictional requirement. The court determined that the district court had jurisdiction despite the parties' noncompliance with NRS 38.310 and properly denied Kosor's motion to vacate its judgment and fee-award orders as jurisdictionally void. The Supreme Court of Nevada affirmed the district court's decision. View "KOSOR VS. S. HIGHLANDS CMTY. ASS'N" on Justia Law

Following the September 11 attacks, Kellogg Brown & Root International (KBR) contracted with the U.S. Army to provide logistics support in Iraq and Kuwait. KBR subcontracted with First Kuwaiti General Trading & Contracting W.L.L. (First Kuwaiti) to provide trailers for troops. First Kuwaiti incurred significant unanticipated costs and sought additional payment from KBR. Disputes arose, leading to arbitration before the International Center for Dispute Resolution (ICDR). The ICDR Panel issued a final award denying First Kuwaiti’s claim for payment and resolving all disputes. First Kuwaiti’s request for changes to the award was rejected by the ICDR Panel.First Kuwaiti filed a motion in the U.S. District Court for the Eastern District of Virginia to vacate the arbitration award, which KBR opposed as untimely. KBR also filed a cross-motion to confirm the award. The district court denied First Kuwaiti’s motion to vacate as untimely and granted KBR’s motion to confirm the award. Additionally, the district court denied First Kuwaiti’s request for prejudgment interest on two other claims unrelated to the trailer damages.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s decision, holding that First Kuwaiti’s motion to vacate was untimely as it was filed more than three months after the final arbitration award was delivered. The court also held that the district court had the authority to confirm the arbitration award under Chapter Two of the Federal Arbitration Act, which applies to arbitrations involving foreign parties and does not require consent for judicial confirmation. Lastly, the court found no abuse of discretion in the district court’s denial of prejudgment interest, as the stipulations did not explicitly provide for such interest and the circumstances did not warrant it. The Fourth Circuit affirmed the district court’s orders. View "First Kuwaiti General Trading & Contracting W.L.L. v. Kellogg Brown & Root International, Incorporated" on Justia Law

Jesus Yanez was hired by EchoStar Communications Corporation in 2001 and signed an arbitration agreement as part of his employment. Over the years, EchoStar underwent several corporate changes, including a name change to DISH Network Corporation and the creation of a new company, EchoStar Corporation. Yanez was terminated in 2018 and subsequently filed discrimination claims. After receiving right to sue letters, he sued in Texas state court, alleging age and nationality discrimination. The case was removed to federal court, where the district court granted a motion to compel arbitration and transferred the case. The arbitration proceeded slowly, and the district court eventually dismissed the case without prejudice due to the parties' failure to file a status report.The United States District Court for the Western District of Texas granted the motion to compel arbitration and stayed the case pending arbitration. The case was transferred to the Western District of Texas, El Paso division. The district court issued multiple show cause notices due to slow arbitration proceedings and ultimately dismissed the case without prejudice when the parties failed to file a required status report. Yanez filed a motion to alter or amend the judgment, which was denied by the district court, citing a recent Supreme Court decision.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's decision to compel arbitration, finding that the arbitration agreement was valid and enforceable under Texas law. However, the court reversed the district court's dismissal of the case, holding that the dismissal was effectively with prejudice due to the statute of limitations and did not meet the heightened standard required for dismissals with prejudice. The case was remanded for further proceedings consistent with the ruling. View "Yanez v. Dish Network" on Justia Law

Three former or current employees of Cross Country Staffing, Inc. (plaintiffs) filed a lawsuit against their employer, alleging various labor law violations. Upon hiring, each plaintiff signed two agreements: an Arbitration Agreement mandating arbitration for all employment-related claims and an Employment Agreement that included provisions favoring the employer, such as non-compete clauses and the right to seek injunctive relief in court without posting a bond.The Superior Court of Los Angeles County denied Cross Country Staffing's motion to compel arbitration, finding that the Arbitration Agreement, when read together with the Employment Agreement, was unconscionable. The court determined that the agreements were procedurally unconscionable due to their adhesive nature and substantively unconscionable because they unfairly favored the employer by allowing it to litigate its likely claims in court while forcing employees to arbitrate their likely claims. The court also noted the non-mutual attorney fees provisions and the employee's mandated concessions regarding injunctive relief.The California Court of Appeal, Second Appellate District, Division Five, affirmed the trial court's decision. The appellate court agreed that the two agreements should be read together under Civil Code section 1642, as they were part of the same transaction and related to the same subject matter. The court found significant substantive unconscionability in the agreements' imbalance of arbitration obligations and the employer's access to court for its claims. The court also upheld the trial court's refusal to sever the unconscionable provisions, concluding that the agreements' unconscionability permeated the entire arbitration framework and that refusing to enforce the Arbitration Agreement served the interests of justice. View "Silva v. Cross Country Healthcare, Inc." on Justia Law

Emergency air medical providers challenged award determinations made under the No Surprises Act (NSA). The NSA, enacted in 2022, protects patients from surprise bills for emergency services from out-of-network providers by creating an Independent Dispute Resolution (IDR) process for billing disputes between providers and insurers. Guardian Flight transported a patient in Nebraska, and a dispute arose with Aetna over the service value. Similarly, Guardian Flight and its affiliates provided emergency services to patients insured by Kaiser, leading to disputes over payment amounts. Both disputes were submitted to Medical Evaluators of Texas (MET) as the IDR entity, which sided with the insurers.The United States District Court for the Southern District of Texas consolidated the cases. The court dismissed Guardian Flight’s claims against Aetna and Kaiser, ruling that the providers failed to plead sufficient facts to trigger vacatur of the awards. However, the court denied MET’s motion to dismiss based on arbitral immunity, leading to MET’s cross-appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the NSA does not provide a general private right of action to challenge IDR awards, incorporating Federal Arbitration Act (FAA) provisions that allow courts to vacate awards only for specific reasons. The court affirmed the district court’s dismissal of the providers’ claims against Aetna and Kaiser, finding that the providers did not allege facts sufficient to show that the awards were procured by fraud or undue means under the FAA.Additionally, the Fifth Circuit addressed MET’s claim of arbitral immunity. The court concluded that MET, functioning as a neutral arbiter in the IDR process, is entitled to the same immunity from suit typically enjoyed by arbitrators. Consequently, the court reversed the district court’s judgment on this point and remanded with instructions to dismiss the providers’ claims against MET. View "Guardian Flight, L.L.C. v. Aetna Health, Inc." on Justia Law

Michael Satink, an employee of the City of Lakewood's Department of Public Works, was terminated for alleged insubordinate and inappropriate behavior. The union representing Satink, Ohio Council 8, AFSCME, AFL-CIO, filed a grievance, leading to a last-chance agreement (LCA) that reinstated Satink with the condition that any further misconduct would result in immediate termination without recourse to the grievance or arbitration provisions of the collective-bargaining agreement (CBA). Satink was terminated again for workplace misconduct, and the union filed another grievance. The city refused to arbitrate, citing the LCA, prompting the union to seek arbitration through the Cuyahoga County Court of Common Pleas.The common pleas court denied the city's motion to dismiss for lack of subject-matter jurisdiction and granted the union's motion to compel arbitration. The city appealed to the Eighth District Court of Appeals, which reversed the lower court's decision, holding that the State Employment Relations Board (SERB) had exclusive jurisdiction over the matter because the union's claims were dependent on collective-bargaining rights created by R.C. Chapter 4117.The Supreme Court of Ohio reviewed the case and held that the union's claims did not allege an unfair labor practice or conduct constituting an unfair labor practice under R.C. 4117.11. Therefore, SERB did not have exclusive jurisdiction. The court emphasized that the right to arbitrate is a contractual right derived from the CBA, independent of R.C. Chapter 4117. The court also noted that R.C. 4117.09(B)(1) allows a party to bring a suit for a violation of a collective-bargaining agreement in a court of common pleas. Consequently, the Supreme Court of Ohio reversed the Eighth District's judgment and remanded the case for further proceedings. View "Ohio Council 8, AFSCME, AFL-CIO v. Lakewood" on Justia Law

Jessica Hines, a dancer, sued National Entertainment Group, LLC (NEG), an adult entertainment club, for failing to properly compensate its employees under various federal and state laws, including the Fair Labor Standards Act and Ohio wage laws. Hines had signed three separate Lease Agreement Waivers with NEG, each containing an arbitration provision. NEG moved to dismiss the suit or stay the proceedings pending arbitration, arguing that Hines had agreed to arbitrate any disputes.The United States District Court for the Southern District of Ohio denied NEG’s motion to dismiss, finding that Hines had plausibly alleged sufficient facts to support standing. The court also denied NEG’s motion to stay the proceedings pending arbitration, concluding that the arbitration provision was both procedurally and substantively unconscionable, and thus unenforceable.The United States Court of Appeals for the Sixth Circuit reviewed the case and vacated the district court’s denial of NEG’s motion to stay. The appellate court held that the arbitration provision was neither procedurally nor substantively unconscionable. The court found that Hines had reasonable opportunity to understand the plain terms of the arbitration clause, which were not hidden in fine print. The court also determined that the arbitration agreement was supported by adequate consideration and that any inconvenience or potential inconsistency caused by separate actions was not a legitimate basis for overriding the arbitration agreement.The Sixth Circuit remanded the case for the district court to consider the remaining factors under Stout v. J.D. Byrider, which include whether the claims fall within the scope of the arbitration agreement, whether Congress intended the federal claims to be arbitrable, and whether to stay the case pending arbitration if some but not all claims are subject to arbitration. View "Hines v. National Entertainment Group" on Justia Law

Monroe Operations, LLC, doing business as Newport Healthcare, hired Karla Velarde as a care coordinator and required her to sign an arbitration agreement as a condition of employment. Velarde was later terminated and filed a lawsuit alleging discrimination, retaliation, and violation of whistleblower protections. Newport Healthcare and its director of residential services, Amanda Seymour, filed a motion to compel arbitration, which the trial court denied. The court found that Velarde was pressured to sign the agreement, which she did not want to do, and that the agreement unlawfully prohibited her from seeking judicial review of an arbitration award.The Superior Court of Orange County ruled that the arbitration agreement was procedurally unconscionable because it was presented as an adhesive contract buried among 31 documents that Velarde had to sign quickly while an HR manager waited. Additionally, Newport Healthcare's HR manager made false representations about the nature and terms of the agreement, which contradicted the written terms, rendering the agreement substantively unconscionable. The court denied the motion to compel arbitration based on these findings.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the trial court's decision. The appellate court found ample evidence of procedural unconscionability due to the pressure and misrepresentations made by Newport Healthcare. The court also found substantive unconscionability because the agreement did not conform to Velarde's reasonable expectations and placed her in a disadvantageous position. The appellate court concluded that the arbitration agreement was unenforceable and affirmed the order denying the motion to compel arbitration. View "Velarde v. Monroe Operations, LLC" on Justia Law

Devas Multimedia Private Ltd. entered into a satellite-leasing agreement with Antrix Corporation Ltd., a company owned by the Republic of India. The agreement was terminated by Antrix under a force majeure clause when the Indian Government decided it needed more satellite capacity for itself. Devas initiated arbitration, and the arbitral panel awarded Devas $562.5 million in damages plus interest. Devas sought to confirm the award in the United States District Court for the Western District of Washington, which confirmed the award and entered a $1.29 billion judgment against Antrix.The United States Court of Appeals for the Ninth Circuit reversed the District Court's decision, finding that personal jurisdiction was lacking. The Ninth Circuit held that under the Foreign Sovereign Immunities Act of 1976 (FSIA), personal jurisdiction over a foreign state requires not only an immunity exception and proper service but also a traditional minimum contacts analysis as set forth in International Shoe Co. v. Washington. The court concluded that Antrix did not have sufficient suit-related contacts with the United States to establish personal jurisdiction.The Supreme Court of the United States reviewed the case and held that personal jurisdiction under the FSIA exists when an immunity exception applies and service is proper. The Court determined that the FSIA does not require proof of minimum contacts beyond the contacts already required by the Act’s enumerated exceptions to foreign sovereign immunity. The Court reversed the Ninth Circuit's decision and remanded the case for further proceedings consistent with its opinion. View "CC/Devas (Mauritius) Ltd. v. Antrix Corp." on Justia Law