In Smart v. West Creek Financial, Inc., a Georgia federal court denied a finance company’s motion to compel arbitration, accepting the plaintiff’s disavowal that he ever signed the rent-to-own agreement containing the arbitration provision that the finance company sought to enforce. Victory was ephemeral, however, as the court proceeded to dismiss multiple statutory claims brought by plaintiff predicated on alleged unlawful conduct by the defendant associated with the unsigned rent-to-own agreement. Only one count–for unjust enrichment, based upon the defendant’s alleged removal of $110.45 from the plaintiff’s account–survived.

Earlier this week, I referenced the decision by a Michigan district court in Kaki v. Tenet Healthcare Corporation, rejecting an attempt by a health care system and its hospitals to vacate an arbitration award finding that they retaliated against physicians who raised complaints regarding patient safety and Medicare/Medicaid fraud. Business Insurance now reports that the healthcare system has appealed the lower court’s decision to the Sixth Circuit.

Lauren Evans of McDermott Will & Emery has authored this article, available in The National Law Review, discussing the Ninth Circuit’s decision in Setty v. Shrinivas Sugandhalaya LLP, Case No. 18-35573 (9th Cir. Jan. 20, 2021), which included both choice of law and equitable estoppel analyses. Attorney Evans posits that “[t]he Setty decision appears to demonstrate a shift in the US arbitration landscape, and parties may begin to see an increase in the use of equitable estoppel theories by non-signatories. Practitioners should keep in mind that this theory may be used by non-signatories affirmatively to attempt to compel arbitration, but it may open the door to enforcement of an obligation to arbitrate against non-signatories as well.”

Those interested in the increasing presence of third party funding in litigation may be interested in this article discussing the concomitant infusion of outside funding in international arbitration, and the rules and guidelines implemented by various international arbitration tribunals. The article, authored by Adam Erusalimsky, Charlie Morris, Helena Eatock and Zachary Krug of Woodsford, is published by Lexology.

In Kaki v. Tenet Healthcare Corporation, a Michigan federal district court has taken an emphatic position regarding an arbitration decision in favor of physicians claiming that a health care system and its hospitals retaliated against them “for complaints they made regarding patient safety and Medicare/Medicaid fraud.”

First, the court rejected the defendants’ argument that the arbitration could be vacated as being in manifest disregard of the law. Reviewing case law since the United States Supreme Court decision in Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576,
582, 584 (2008), the court held that, in the Sixth Circuit, “the most that published decisions have said of manifest disregard is that its continuing applicability ‘is an open question.'” Here, the district court determined that “[o]n balance, the weight of authority in and out of the Sixth Circuit points to manifest disregard no longer being a viable option in the wake of Hall Street, despite the fact that our Court of Appeals has not had occasion to formally decide the issue.”

Second, the court rejected the defendants’ claim that the award should be sealed. As the court held, “[a]lthough ‘arbitration hearings normally proceed outside of the public sphere,’ courts, including those in the Sixth Circuit, typically find that ‘this veil of secrecy is lifted once the parties turn to federal court to confirm, vacate, or modify an arbitration award.’”

David B. Honig, Brian Sabey and Jake B. Kolisek of Hall Render Killian Heath & Lyman PC have this article in Lexology, discussing the Sixth Circuit’s decision in United States ex rel. Dorsa v. Miraca Life Sciences, Inc., 983 F.3d 885 (2020), and noting that those “who wish to have the option of an interlocutory appeal need to be sure that they satisfy the formal conditions of appealability.” As the authors note, in Dorsa, the appellate court held that a defendant seeking an interlocutory appeal “should have requested the court to compel arbitration and/or to stay the case pending arbitration instead of simply requesting dismissal of the retaliation claim.”

Jonathan Ingrisano and David Konkel of Godfrey & Kahn have this article in The National Law Review, discussing the pros and cons of including a mandatory arbitration provision in a trust agreement.

Lowell Ritter and Lucky Meinz of Sheppard, Mullin have authored this article, available in The National Law Review, discussing the California Court of Appeal’s decision in Garcia v. Haralambos Beverage Co. As they explain, the court “embraced the adage ‘time kills all deals’ to conclude that an employer waived its right to arbitrate the wage-hour claims at issue in the case,” and that “[b]y waiving its right to arbitrate, the employer also lost its ability to strike class claims as a result.”

Lexology has published this article from Buckley LLP, discussing a Pennsylvania District Court’s recent decision compelling arbitration of a consumer’s claim that a cable company violated FCRA by reviewing his credit reports without a permissible purpose. Although the consumer did not sign the agreement containing the arbitration provision, the court held he was equitably estopped from avoiding its reach, since he “actively sought and obtained benefits provided pursuant to the Subscriber Agreement.” The takeaway: those watching television or using the internet on a household account are subject to the provider’s arbitration policy.

Christopher Buch and Sean Power of Polsinelli have this article in JD Supra discussing the decision in Hensiek v.Board of Directors of Casino Queen Holding Company, Inc., No. 3:20-CV-377-DWD (7^th Cir. January 25, 2021), denying a motion to compel arbitration for the reason that the amendment to the ESOP adding a mandatory and binding arbitration provision and class waiver was enacted without additional consideration being provided to the plan participants. As the authors explain, “[f]ollowing the reasoning outlined here, no amendment to a qualified plan will be valid unless participants receive something in return for such amendment (perhaps an enhanced benefit under the plan?).” They do note, however, that this issue currently is pending before the Seventh Circuit in another case.