A federal court matter in the Western District of Pennsylvania is not off to a good start, with the plaintiff seeking an interlocutory appeal over the court’s order, following the initial Rule 16 conference, that the parties engage in an early neutral evaluation. In Pennsylvania Skill Games, LLC v. Action Skill Games, LLC, the plaintiff, challenging the method of ADR, and the asserted cost burden, sought certification of an interlocutory appeal of the order to the Third Circuit, asserting that the court is implementing the ADR process “in violation of the United States Constitution, Amendments V, XIII and XIV.” The court disagreed, holding that the District’s ADR program was well-established under the the Alternative Dispute Resolution Act of 1998, 28 U.S.C. § 652(a), and that plaintiff’s request for certification failed to meet the requirement that certification be granted “only in exceptional cases in which an intermediate appeal may avoid protracted and expensive litigation.”

United States District Judge Dominic Lanza appeared to be frustrated or worse in directing the parties to arbitration in Quantum Fluids LLC v. Kleen Concepts LLC. As Judge Lanza describes the matter:

“This case, which arises from a seemingly straightforward business dispute between Plaintiff Quantum Fluids LLC (“Quantum”) and Defendant Kleen Concepts LLC (“Kleen”), has spawned a flurry of chaotic and procedurally irregular motions and litigation maneuvers.
“Last year, when the dispute first arose, the parties appeared to be addressing it in a
professional manner-their attorneys traded emails and discussed mediation. Things escalated, however, when Quantum sought a no-notice TRO against Kleen (even though the TRO request addressed one of the topics the parties were actively attempting to resolve informally). Separately, Kleen filed a motion to compel Quantum to arbitrate pursuant to the ADR clause in the parties’ contract. And before that motion became fully briefed, Kleen initiated a parallel arbitration proceeding against Quantum, prompting Quantum to file a motion to stay that proceeding. What a mess.“

Mess or not, the arbitrability analysis was straightforward, and Judge Lanza has sent the parties off to the American Arbitration Association.

In Bufford v. VXI Global Solutions LLC an Arizona District Court, in compelling arbitration, rejected a claim that the agreement was substantively unconscionable in requiring a party to pay for transcription of arbitration proceedings. As the court explained,

“Transcript costs are not significantly prohibitive. They are comparable to the costs
associated with transcribing the matter in district court. Moreover, Plaintiff has not shown why transcription is essential to vindicate Plaintiffs’ rights or presented any evidence as to what the costs would be. In addition, the AAA guidelines, under which the parties agreed to arbitrate, requires payment for transcripts from ‘the requesting party.’…Therefore, the Agreement’s provision is not inconsistent with the costs of typical AAA arbitration. Finally, even if the cost-bearing provision was unconscionable, the remedy would be to sever the violative section from the Agreement, not to find the Delegation Provision unconscionable.”

Thus, as the court held, “[t]he Court cannot find that the speculative costs would deter an employee from arbitrating his or her claim or cost significantly more than raising the same claim in federal court. As a result, the Court will not conclude the Agreement forecloses the vindication of Plaintiffs’ rights.”

Dave Reif offers this interesting take on the federal district court decision in ADT LLC v. Richmond, 2021 U.S. Dist. LEXIS 8830 (N.D. Tex. Jan. 8, 2021) assessing whether there exists diversity jurisidiction to entertain an action to compel arbitration.

Sarah Meyer of Womble Bond Dickinson has this article in JD Supra, discussing the recent decision in Proctor v. First Premier Corp., 2021 U.S. Dist. LEXIS 6502 (D.D.C. Jan. 13, 2021), denying a motion to compel arbitration “in a Fair Credit Reporting Act case, on the grounds that First Premier did not sufficiently establish that the card agreement containing the arbitration clause was mailed to the cardholder.”

Sarah Meyer of Womble Bond Dickinson has authored this article, available through The National Law Review, discussing the decision in Proctor v. First Premier Corp., 2021 U.S. Dist. LEXIS 6502 (D.D.C. Jan. 13, 2021), denying a motion to compel arbitration “in a Fair Credit Reporting Act case, on the grounds that [the movant] did not sufficiently establish that the card agreement containing the arbitration clause was mailed to the cardholder.”

JD Supra has published this article by Morris James attorneys Albert Manwaring, IV, Tyler O”Connell and Bryan Townsend, discussing the decision in Gulf LNG Energy, LLC v. ENI USA Gas Mktg., LLC, No. 22, 2020 (Del. Nov. 17, 2020) The article explains that the court determined it was appropriate to enjoin claims of “irregularities in the prior arbitration or seeks to rectify the harm it suffered, which are issues subject to exclusive review under the post-award procedure in the Federal Arbitration Act.”

Katherine Galle and David Zwally of Haug Partners LLP have authored this article, available in JD Supra, discussing the upcoming appeal in Balan v. Tesla Motors Inc., No. C19-67 MJP, 2019 WL 2635903 (W.D. Wash. June 27, 2019), addressing the arbitrability of a defamation claim brought by a former employee against her employer. With the agreement at issue provided that “any and all disputes, claims, or causes of action, in law or equity, arising from or relating to your employment, or the termination of your employment,” the lower court took a Solomonic approach, concluding “that the parties shall arbitrate defamation claims deemed to arise out of Balan’s performance, while adjudicating the remaining statements of alleged criminal conduct at trial.”

Lexology has published this article authored by Buckley LLP, discussing the decision in Maldonado v. Fast Auto Loans, Inc., in which, as the article notes, the arbitration provision conflicted with California statutory rights to injunctive relief.

Those attorneys who appreciate the importance of developing and presenting detailed factual arguments may enjoy reading the California appellate decision in Fisher v. Bird Rides, Inc., where the court denied an employer’s motion to compel arbitration, finding that the employee did not electronically sign an arbitration agreement.

Although the employer produced electronic documents purporting to have been acknowledged by the employee, together with evidence describing the onboarding process, including a declaration that “it was ‘impossible’ to go through the onboarding process without seeing and signing the arbitration agreement,” the court deferred to testimony from the employee that, whatever the general onboarding process, he did not sign the arbitration agreement and that it was added thereafter.