G.P. Diminich, Laura Johnson Evans, Mary B. Ramsay and Lisa T. Thomas of Shumaker Loop & Kendrick have this article in Lexology, discussing the South Carolina Supreme Court’s decision in Arrendondo v. SNH SE Ashley River Tenant, LLC, holding that an arbitration agreement with an assisted-living facility signed by the attorney-in-fact/agent of a resident of the facility was unenforceable because the power of attorney was not sufficiently broad to empower its holder to agree to arbitration.

In O’Hanlon v. Uber Technologies, Inc., the Third Circuit framed the issue as follows:

“As Uber would tell it, when Plaintiffs filed their disability-discrimination suit in federal court, they wound themselves in a Gordian knot: They do not have standing to sue unless they would agree to Uber’s Terms of Use, but those terms would require Plaintiffs to arbitrate their claim instead of litigating it in federal court.“

In a case brought by motorized wheelchair users, plaintiffs alleged that Uber violated the Americans with Disabilities Act by not offering a “wheelchair accessible vehicle” in the Pittsburgh area. Uber moved to compel, asserting that “even though Plaintiffs had never registered for an Uber account or accepted its Terms of Use, they were nevertheless bound by the mandatory arbitration clause of that agreement.”

Both the lower court and the Third Circuit on interlocutory appeal rejected Uber’s claim that, by not downloading and agreeing to Uber’s terms of use–which included an arbitration provision–plaintiffs lacked standing. Likewise, the courts rejected Uber’s contention that, even though plaintiffs had not agreed to the terms of use, they were equitably estopped from avoiding the obligation to arbitrate.

JD Supra has published this article by Alex Silverman of Carlton Fields, discussing the District Court of Minnesota’s recent decision in International Seaway Trading Corp. v. Target Corp., disagreeing with decisions from other circuits and holding that Eighth Circuit precedent permitting a pre-hearing document subpoena also authorizes pre-hearing deposition subpoenas. According to the court, “[t]he same interest in efficiency [warranting pre-hearing review of documents] supports the Court’s conclusion here: implicit in an arbitrator’s power to subpoena a witness to testify before him or her at a hearing is the power to order the witness to testify at a pre-hearing deposition so that the parties may review and digest the relevant testimony before the hearing occurs.”

Goldberg Segalla attorneys Christian A. Cavallo, Marci Goldstein Kokalas, David L. Brown and Jeffrey L. Kingsley have authored this article, available at Lexology, discussing the New Jersey Appellate Division’s decision in Crystal Point Condo. Assoc., Inc. v. Kinsale Insurance Co., ruling that a condominium association seeking to recover a default judgment obtained against insureds under an architects and engineers professional liability policy, could sue the insurer directly without being subject to the arbitration provision contained in the policy. Acknowledging that the condominium association was a third party beneficiary, the court nonetheless held that it was not required to arbitrate because the insurer failed to attempt to resolve the coverage dispute directly with the association, instead requiring it to prosecute the coverage claims.

A Ninth Circuit panel, by a 2-1 vote, vacated a labor arbitration award entered in favor of the employee, holding that “the proceedings violate[d] the rule of fundamental fairness.” In Costco Wholesale Corporation v. International Brotherhood of Teamsters, Local No. 542, the court recounted the events that supported its decision of vacatur:

The arbitrator engaged in “extensive post-hearing ex parte communications with Diaz and the Union,” including an unauthorized $6,000 settlement offer to Diaz of which Costco was unaware. The arbitrator rendered his decision via a vague and bizarre email only sent to the Union and reading: “The above named grievant prevails in his grievance. The Union’s arguments as to double jeopardy were correct. Union remedy is adopted. So that I can look at myself in the mirror, my resignation is effective today.” The arbitrator resigned after rendering his email judgment, thereby preventing Costco from obtaining clarification of his decision. Costco requested that the arbitrator email a copy of the completed Board of Adjustment Decision form, but never received the form. A copy of the form was filed in the district court and stated with no elaboration: “Double Jeopardy was proved by preponderance of evidence presented. Employee to be made whole.” Because the arbitrator failed to provide a reasoned decision, Costco was left with uncertainty as to the parameters of the remedy ordered by the arbitrator. “Based on the facts of the case before us, we simply cannot conclude that [Costco] received a fundamentally fair hearing,” and Costco “is entitled to vacatur.”

Rejecting the dissenter’s opinion that “the arbitrator’s decision drew its essence from the collective bargaining agreement,” the majority found that “there was no essence of the decision because there was no decision rendered, and no reasoning proffered. For all we know, the arbitrator flipped a coin, consulted a ouija board, or threw darts at a dartboard to determine the outcome. He certainly gave no explanation to the parties of his decision despite a request from Costco that he do so.”

Concluding that the arbitrator’s “ex parte communications and an unauthorized settlement offer reflect consummate bias and lack of commitment to a transparent proceeding,” the majority of the appellate panel vacated the award.

A couple of days ago, I noted the Southern District in MD Islam v. Lyft recently determined that rideshare drivers are engaged in interstate commerce, thereby falling within an exception to the Federal Arbitration Act and rendering an arbitration provision in their agreement to be unenforceable under federal law. Nonetheless, the court held that arbitration was appropriate under New York state law.

Dave Reif in his superb blog provides a more detailed discussion of the Islam decision, as well as two other recent rideshare decisions. Those interested in the current state of the law regarding arbitrability of such claims would do well to review Dave’s post, available here.

The Sixth Circuit’s recent decision in Swiger v. Rosette is the subject of this article by the Buckley law firm, available at Lexology. As the article explains, “[o]n remand, the 6th Circuit stated that its decision does not bear on the merits of the case but merely addresses who resolves the plaintiff’s challenges to the arbitration agreement.”

In MD Islam v. Lyft, the Southern District of New York, noting “that this is a close question that has divided courts to date, sided with those holding “that rideshare drivers in the United States are a ‘class of workers engaged in . . . interstate commerce,’ 9 U.S.C. § 1, such that the Federal Arbitration Act cannot be the basis to compel Plaintiff to arbitrate his claims.” Victory for the putative plaintiff class of Lyft drivers was short-lived, however, as the court held that under New York state law arbitration still was required in that “[t]he language of the contract, which repeatedly emphasizes that the parties ‘agree[d] to waive [their] respective rights to resolution of disputes in a court of law…clearly demonstrates the parties’ intent to arbitrate disputes.'”

Tom McParland of New York Law Journal discusses in this article the Southern District of New York’s decision in Ohanian v. Apple Inc., in which the court rejected Apple’s contention that the doctrine of equitable estoppel enabled it to compel arbitration of a proposed class action alleging “that Apple’s operating-system flaw, combined with T-Mobile’s practice of recycling old phone numbers, caused users’ private photos, videos and texts to be shared with other customers via their iMessage and FaceTime apps.”

Writing for the court, U.S. District Judge Lorna Schofield held that under applicable Florida law, Apple was incorrect to argue that “claims merely need to ‘arise’ from an agreement with a ‘broad’ arbitration clause for equitable estoppel to apply.” Instead, according to Judge Schofield, “courts have construed arbitration clauses to include non-signatories where claims alleged against the non-signatories were derived from the agreements or where there was an agency relationship between the signatory and non-signatory.”

On the facts alleged, Judge Schofield held that Apple failed to satisfy that standard. For one thing, “[t]he Complaint neither alleges any claims against Apple that “make reference to or presume the existence of a written agreement,” nor, in asserting the claims, “rel[ies] on the terms of the written agreement.” Secondly, the allegations did not assert “substantially interdependent and concerted misconduct by a signatory and nonsignatory,” insofar as “[t]he Complaint makes separate allegations about Apple and its conduct, including Apple’s alleged knowledge and deliberate concealment of security breaches,” and “describe[s] how Apple’s and T-Mobile’s actions independently caused harm, inadvertently compounding the problems.”

As have other states, New Jersey recently enacted legislation purporting to protect employees’ rights to pursue claims in court rather than arbitration. This article, by Erica Clifford of Genova Burns, available at JD Supra, addresses the lower court decision in Janco v. Bay Ridge Automotive Management Corp., holding that New Jersey’s amendment to its Law Against Discrimination, purporting to prohibit a waiver of the statute’s rights and remedies, including its right to a jury trial, is pre-empted by the Federal Arbitration Act.