In the past year, if I wrote about “FLSA” and “arbitration” in the same post, it likely meant that another federal court had found employers can include class action waivers in their employment contracts without violating the Fair Labor Standards Act. Today, however, is different. The Eleventh Circuit last week found that it was the
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The Next Frontier of Arbitration Litigation: Lessons From State Courts
After reading more than 40 decisions about arbitration from state high courts, issued just in the past eight months, I have two bits of wisdom to share. First, that is not the best way to spend your summer vacation, even for a devoted arbitration nerd. And second, there are arbitration issues percolating in state courts…
Court Affirms Arbitrator's Decision to Preclude Party From Defending Against Claim as Sanction for Fabricating Evidence
In a decision that confirms arbitrators’ broad discretion to not only fashion remedies, but also fashion sanctions, the Minnesota Court of Appeals held that an arbitrator did not exceed his power by issuing a severe sanction: denying one party the right to defend against certain claims after finding that party had fabricated evidence relating to…
SCOTUS Says “Tough Luck” To Plaintiffs Whose Claims Are Too Pricey To Prove In Individual Arbitrations
In American Express Co. v. Italian Colors Restaurant, a divided Supreme Court today reversed the Second Circuit and held that plaintiffs may not invalidate an arbitration agreement containing a class action waiver merely because proving their claims on an individual basis would cost many times more than their potential recovery. In doing so, Justice…
Fourth Circuit Sends Franchisee To Individual Arbitration, Expands Application of Concepcion
The Fourth Circuit issued a bold new arbitration decision last week, sending a putative class of shuttle drivers to arbitration while expanding its application of SCOTUS’ Concepcion decision beyond cases involving federal preemption of state arbitration law. Muriithi v. Shuttle Express, Inc., __ F.3d __, 2013 WL 1287859 (4th Cir. 2013).
Muriithi was a…
Contributions To Arbitrator's Judicial Campaign Are Not Enough To Establish "Evident Partiality"
The Third Circuit refused to vacate an arbitrator’s award, despite allegations that she failed to disclose contributions the defendant’s parent company had made to her judicial campaign and failed to disclose that she co-taught a seminar with in-house counsel for the defendant’s parent company. Freeman v. Pittsburgh Glass Works, LLC, __ F.3d __, 2013 WL…
Prius Owners Put the Brakes On Arbitration With Non-Signatory Toyota
The Ninth Circuit ruled this week that a class of car owners could pursue their court claims against the manufacturer, Toyota, for product defects and false advertising, despite the existence of an arbitration agreement in each of the owners’ purchase agreements with the car dealerships. The court held that Toyota had not proven either of…
Abstention Trumps Arbitration In Tenth Circuit
The Tenth Circuit this week refused to consider a plaintiff’s substantive arguments about its right to arbitrate because it found abstention was appropriate under the Colorado River doctrine. D.A. Osguthorpe Family P’ship v. ASC Utah, Inc., __ F.3d __, 2013 WL 150221 (10th Cir. Jan. 15, 2013). Though the factual situation in Osguthorpe is…
Defendant Did Not "Waive" Goodbye to Arbitration Despite Litigating For 6 Months
In contrast to recent decisions from other circuit courts, the Fourth Circuit found a defendant did not waive its right to arbitrate, despite litigating for more than 6 months and conducting discovery. Rota-McLarty v. Santander Consumer USA, Inc., __ F.3d __, 2012 WL 5936033 (4th Cir. Nov. 28, 2012).
In this potential class…
Another Turkey Waives Its Right to Arbitration
In answer to the proverbial question “how much litigation waives the right to arbitrate?,” the Third Circuit has responded that ten months does the trick, if the party seeking arbitration has engaged in significant motion practice, regardless of whether any discovery was exchanged. In re Pharmacy Benefit Managers Antitrust Litig., __ F.3d __, 2012…