Arbitration Pre-Emption Battle Takes Shape

“WeWork Executive Wants Fast Appeal of N.Y.-Based Arbitration Ban.” Patrick Dorrian has this article in Bloomberg Law, which describes the legal issue as follows: “Ayesha Whyte wants the Southern District of New York to certify for interlocutory review for the Second Circuit the question of whether the Federal Arbitration Act preempts New York Civil Practice Law and Rules § 7515, which prohibits mandatory arbitration of job discrimination and harassment claims.”

Court Erred In Ignoring An Arbitration Award That Entered Prior To The Court Deciding Similar Issues

The New York Appellate Division determined that timing is everything, in reversing an Administrative Law Judge’s decision that ignored a contrary decision of a labor arbitration. In the Matter of the Claim of Matthew Bruce, the ALJ refused a collective request of the parties to adjourn a hearing addressing the claimant’s discharge, pending the issuance of an arbitrator’s decision. Following the conclusion of the judicial hearing, but prior to the issuance of the judge’s order, the arbitrator issued a decision finding that the discharge of the employee was appropriate. The judge failed to take judicial notice of the arbitration award, and thereafter ruled contrary to the arbitrator.

On appeal, the judge’s decision was reversed, with the Appellate Division remanding so that the evidence and circumstances of the arbitration award could be considered by the ALJ.

Mediation Settlement Enforceable, Even Though One Party Refused To Sign An Agreement Required By The Settlement

In Miller v. Miller, the Georgia Court of Appeals affirmed a lower court’s determination that a binding settlement agreement was reached at a mediation, even though one of the parties refused to sign a Purchase Agreement that was contemplated by the settlement. According to the court, “[t]he parties entered into a mutual binding agreement [at the mediation]. Thereafter, the drafting of documents necessary to effectuate the settlement agreement may have been a condition of the performance but it was not an act necessary to acceptance of the offer to settle.”

When Are Arbitrators’ Changes To An Award OK?

So, how does a court determine whether an arbitrator has attempted to modify an arbitration award in violation of statutory prescriptions on such action? More specifically, as a California court posits the issue in Lonky v. Patel, “[w]here… an arbitrator issues a series of rulings during an arbitration proceeding, how does a court determine which of those rulings constitutes an ‘award’?”

Courts Reach Different Results Re Agreements To Arbitrate

An Alabama federal court, in Carusone v. Nintendo of America, stayed a putative class action alleging a defect in a joystick controller, holding that the clickwrap agreement accepted by the plaintiff contained an enforceable arbitration provision. The court noted that the End-User License Agreement provided for a purchaser to opt-out of the agreement’s arbitration requirement by providing written notice with 30 days of purchase, an opportunity which, unsurprisingly, the plaintiff failed to pursue.

Meanwhile, on the other coast, a California federal court has denied without prejudice a defendant’s motion to compel arbitration of claimed violations of California’s consumer protection and lending and credit services laws. In Belyea v. Greensky, Inc., 20-cv-01693-JSC, the court rejected a lender’s argument that a borrower, by utilizing a loan facility to pay for certain home repairs had, by her conduct and the posting of the arbitration provisions on the lender’s website, had evidenced her acceptance of the arbitration requirement, leaving open the possibility of reconsidering the issue once certain discovery occurs.

Court Not Permitted To Review Merits Of Arbitrated Dispute

The Supreme Court of Nevada, in SVRE, LLC v. Queensridge Realty, LLC, reversed a trial court’s determination that an arbitration panel manifestly disregarded the law in its determination of a brokerage commission dispute. According to the Supreme Court, the lower court erred when it “consider[ed] the underlying merits of the dispute.”

Court Rejects Claim That Party Waived Right To Arbitrate

According to the Florida Court of Appeals, a party, by filing an answer and participating in minimal discovery, did not waive its right to compel arbitration. What seems to have determinatively impacted the outcome, in Performance Air Mechanical, Inc. v. Miller Construction Services, Inc., is the failure of the opposing party to “file an answer brief in this appeal, leaving Performance Air’s arguments unrebutted.”

Court Determines Arbitrator Must Decide Whether Claim Is Subject To Arbitration

In Doe v. TCSC, LLC, d/b/a Hendrick Toyota of North Charleston, the South Carolina Court of Appeals punted to an arbitrator to decide whether a car dealer’s broad arbitration provision encompasses events arising four-and-a-half years after Jane Doe purchased her car. The factual context, as described by the court: “Doe returned to the dealership to have the car serviced. She also spoke with a salesman about trading in her 2011 car for a new one. Despite the salesman’s persistent pitches, Doe decided to buy elsewhere. The rebuffed salesman, for reasons known only to him, sought revenge by posting an ad posing as Doe on a sexually explicit website, together with Doe’s contact information. Minutes later, Doe began receiving strange telephone calls and text messages, some of which were sexually suggestive.”

Participation In Litigation Constituted Waiver Of Right To Arbitrate

We conclude substantial evidence supported the trial court’s determination that Defendants waived their right to arbitrate the dispute.” So concludes a California Court of Appeal in T&S Therapy Centre International, Inc. v. Apex Dental Sleep Lab Incorporated.

Attorney’s Challenges Re Arbitrator Result In Sanctions For His Client

Against a fact pattern that will make your head spin, a three judge Pennsylvania panel in Wallace v. State Farm Mutual Auto Insurance has affirmed a sua sponte award of attorneys’ fees against a party whose attorney raised “vexatious and obdurate” challenges to the arbitrator’s participation.