This Lexology article by Todd D. Wozniak, Lindsey R. Camp, Chelsea Ashbrook McCarthy and Megan C. Eckel of Holland & Knight discusses recent decisions addressing the enforceability of arbitration provisions in ERISA plans, concluding that “[w]ithout clear direction from the Supreme Court or legislative action, district courts and circuit courts of appeal will continue to create uncertainty around the enforceability of class action waivers and/or arbitration provisions in plan and other employment-related documents in ERISA-based litigation.”
Matthew Kirtland, Katie Connolly, Esha Kamboj of Norton Rose Fulbright have this article in Lexology, discussing a California District Court’s decision in Monster Energy Co v City Beverages, 5:17-CV-00295, 2021 WL 650275 (CD, Cal, 17 Feb 2021), in which the court held that JAMS’ submissions of amicus briefs in litigation challenging the impartiality of one of its arbitrators did not preclude its oversight of the underlying arbitration in subsequent proceedings.
The California Court of Appeals decision in Bilodeau v. Modern Mobile Homes, Inc. provides a cautionary tale to contract drafters. A prevailing party in an arbitration sought to recover attorneys’ fees incurred in connection with post-award proceedings that unsuccessfully sought to vacate the arbitration award. As the court noted, the arbitration provision contained in the parties’ purchase agreement “did not contain an attorney fee clause.” However, the promissory note used to effect the purchase did contain such a provision: “If any action is instituted on this Note, I/we promise to pay such sums as the Court may fix as attorney’s fees.”
Notwithstanding the attorneys’ fees language in the promissory note, the court held that the arbitration agreement in the purchase agreement controlled and its failure to include an attorneys’ fee provision precluded their award by the court.
Meredith-Anne Berger and Anne Dana of Seyfarth Shaw have authored this article, available through JD Supra, discussing the recent decision by the U.S. District Court for the District of New Jersey in New Jersey Civil Justice Institute v. Grewal, in which the court held that New Jersey’s ban on enforcement of mandatory pre-dispute arbitration provisions for all claims of employment discrimination, retaliation, and harassment is pre-empted by the Federal Arbitration Act.
The Illinois Appellate Court’s recent decision in Zuniga v. Major League Baseball is the subject of this JD Supra article by Patrick Hammon of McManis Faulker. As noted by Mr. Hammon, “the appellate court focused on the consideration that made this case different from many other unconscionability cases—specifically, the fact that Ms. Zuniga did not purchase, but instead was gifted, the ticket at issue.” As he predicts, “[w]hile the case will have no binding impact on any cases brought by sports fans against teams located outside of Illinois, it is likely that clubs located across the country (and across all major sports) will take notice of what some might call the Zuniga loophole—where a potential plaintiff was not the purchaser, but instead merely a recipient, of the ticket at issue.”
In American Family Life Assurance Company v. Baker, a Second Circuit panel affirmed the Southern District’s decision to compel arbitration of ERISA claims, when the employer was forced to unravel conflicting contract provisions that on their face served to collectively preclude the employees from asserting their claims altogether. One contractual provision purported to mandate arbitration of “any dispute,” while another provision “limit[ed] the scope of any arbitration to claims for breach of contract, fraud, or willfully tortious conduct.” Arguing that the two provisions, read together, precluded them from “vindicat[ing] their statutory rights in any forum,” the employees argued that the arbitration provisions should be voided, thereby enabling them to pursue their ERISA claims in court.
The employer responded by representing to the court that it would waive the second arbitration provision, thereby enabling the employees to arbitrate their ERISA claims. Based upon this waiver, the lower court held–and the Second Circuit affirmed–that the dispute was arbitrable. The Second Circuit alternatively noted that, even had the company not waived the second arbitration provision, it was severable.
Chael Clark of Carlton Fields has authored this article, available in JD Supra, discussing the Southern District’s decision in Copragri S.A. v. Agribusiness United DMCC. As the article explains, [t]he court held that because Copragri was not a party to the bill of lading and therefore did not consent to arbitration in New York, the arbitration panel acted outside its scope and authority when issuing its award.” Moreover, “the arbitration panel’s failure to analyze or even address Copragri’s various objections … constituted a manifest disregard for the law, further justifying vacatur.”
Those interested in additional insight into the court’s decision, especially as it relates to the ongoing vitality of the manifest disregard decision, should take a look at Dave Reif’s article discussing Copragi.
Contract drafters who treat choice of law provisions as insignificant should think twice, at least if there is a desire to ensure disputes will be arbitrated. In Frederick v. Law Office of Fox Kohler & Associates PLLC LLC , the Third Circuit, called to assess whether the lower court had incorrectly interpreted an arbitration provision under New Jersey rather than Delaware law, concluded that the court indeed erred and that the law of the two states did substantively differ regarding the enforceability of the arbitration provision. In the particular matter, however, the lower court’s error was deemed harmless, as the Third Circuit concluded that the dispute was arbitrable even under the more restrictive New Jersey statutory language.
As described in this article in Scottish Legal News, the United Kingdom has set aside a £1 million budget to incentivize mediation, by providing 2000 couples on a first come, first served basis with tax-free vouchers, with the hope of relieving burdens on the courts. Interesting idea, that if utilized in appropriate circumstances, could pay for itself many times over.