Articles Posted in Arbitration & Mediation

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Lee Tillett, Inc. developed and registered a trademark for a line of cosmetics products known as Kroma cosmetics. Tillett entered into an agreement with Kroma EU to give it exclusive rights to sell and distribute Kroma products. Kimberly, Kourtney, and Khloe Kardashian entered into a licensing agreement with Boldface Licensing + Branding, Inc. to create a Kardashian makeup line called “Khroma.” After Tillett, Boldface, and the Kardashians settled a cosmetics trademark infringement suit, Tillett refused to share any of its settlement recovery with Kroma EU. Kroma EU subsequently filed this suit alleging trademark infringement and tortious interference claims against Boldface, vicarious liability for trademark infringement claims against the Kardashians, and a promissory estoppel claim against Tillett. The district court granted Tillett’s motion to compel Kroma EU to arbitrate, but denied the Kardashians’ motion to compel Kroma EU to arbitrate its claims against them. In this case, while the Kardashians are not signatories to the agreement between Kroma EU and Tillett, they contend that they can compel arbitration of Kroma EU’s claims against them by using Florida’s doctrine of equitable estoppel. The court held, however, that Florida’s doctrine of equitable estoppel permits a nonsignatory to an agreement to avail herself of an arbitration clause only when the claims asserted against her fall within the scope of the clause that the signatories had agreed upon. Accordingly, the court concluded that the district court correctly denied the Kardashians’ motion to compel arbitration. View "Kroma Makeup EU, LLC v. Kardashian" on Justia Law

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This case began as a contract dispute between two corporations: PTA-FLA, Inc., and ZTE USA, Inc. Shortly thereafter, three corporations affiliated with PTA-FLA filed similar cases against ZTE USA and its parent corporation, ZTE Corp., in several different federal district courts. All of the parties involved in these disputes participated in a consolidated arbitration proceeding that resulted in a zero-dollar award binding ZTE USA and the four affiliated plaintiff corporations. ZTE USA then moved the district court in the Middle District of Florida to reopen PTA-FLA’s case, join the three other plaintiff corporations to the case, and, finally, to confirm the arbitrator’s award against all four plaintiff corporations. But before the district court could rule on that motion, PTA-FLA (the original plaintiff) voluntarily dismissed its claims. The district court eventually confirmed the arbitral award against all parties, concluding that it had subject matter jurisdiction (grounded in diversity of citizenship) to confirm the award against the original parties and supplemental jurisdiction to confirm the award against the later-joined parties despite PTA-FLA’s voluntary dismissal and the reduction in the amount in controversy. The three joined parties appealed the confirmation of the award, claiming that the district court was without subject matter or supplemental jurisdiction. After careful review, the Eleventh Circuit concluded that the district court properly exercised its jurisdiction and, accordingly, affirmed. View "PTA-FLA, Inc. v. ZTE USA, Inc." on Justia Law

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The Union filed suit to compel arbitration under its collective bargaining agreement (CBA) with Shaw. The district court granted the Union’s motion to compel arbitration and ordered the parties to select an arbitrator, which they did. After holding a hearing, the arbitrator issued a written decision siding with the Union. Shaw moved the district court to vacate the award, contending, among other things, that the arbitrator had exceeded her power by improperly modifying the CBA instead of interpreting it. The district court then vacated the award and the Union appealed. In light of United Steelworkers of Am. v. Enter. Wheel & Car Corp., the court concluded that it must resolve the ambiguity in the stated reasons for the award in favor of enforcement. Therefore, the court concluded that the arbitrator interpreted instead of modified the agreement. The court reversed and remanded. View "Wiregrass Metal Trades Council v. Shaw Envtl." on Justia Law

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Plaintiff filed suit against NBCal regarding a payday loan she acquired in 2013. On appeal, NBCal challenges the district court's denial of its motion to compel arbitration under the loan agreement. The court concluded that the arbitration agreement’s forum selection clause mandates the use of an illusory and unavailable arbitral forum. Because neither party disputes that the Cheyenne River Sioux Tribe( CRST) forum is unavailable, the court agreed with the district court that it cannot enforce the delegation clause or the underlying arbitration agreement. Accordingly, the court affirmed the district court's order. View "Parm v. National Bank of CA" on Justia Law

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Plaintiff, a United States citizen, worked as the lead trumpeter on a passenger Royal Caribbean cruise ship. The ship is a Bahamian flagged vessel with a home port in Fort Lauderdale, Florida. Royal Caribbean, the operator of the vessel, is a Liberian corporation with its principal place of business in Florida. After plaintiff became ill while working for Royal Caribbean, he filed suit alleging unseaworthiness, negligence, negligence under the Jones Act, maintenance and cure, and seaman’s wages and penalties. Royal Caribbean moved to compel arbitration, and the district court granted the motion. This appeal presents an issue of first impression: whether a seaman’s work in international waters on a cruise ship that calls on foreign ports constitutes “performance . . . abroad” under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. 202. The Convention makes enforceable an arbitration agreement between United States citizens if their contractual relationship “envisages performance . . . abroad.” The court affirmed the order compelling arbitration of the dispute because a seaman works abroad when traveling in international waters to or from a foreign state. View "Alberts v. Royal Caribbean Cruises, Ltd." on Justia Law

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After Cooks terminated him, plaintiff filed suit against the company, alleging claims under the Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301, 4302(b), and Alabama state law. The district court entered an order striking from the arbitration agreement two terms that violated USERRA, dismissing the suit without prejudice, and ordering plaintiff to submit his claims to arbitration. On appeal, plaintiff contends that the district court erred by failing to apply the plain language of USERRA’s non-waiver provision. The court concluded that the contract's arguable delegation clause - which would require that the arbitrator, rather than the court, determine whether the arbitration agreement is enforceable - does not control this appeal. The court also concluded that, in reaching whether the arbitration agreement is enforceable, section 4302(b) is not in conflict with the Federal Arbitration Act (FAA), 9 U.S.C. 1, 2, and the district court properly determined the arbitration agreement is enforceable. Accordingly, the court affirmed the district court's decision to compel arbitration. View "Bodine v. Cook's Pest Control" on Justia Law

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Plaintiff filed suit against JSC for an alleged violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692. The district court concluded that plaintiff's claim was outside the scope of the arbitration clause and denied JSC's motion to compel arbitration. The court held that plaintiff failed to establish the existence of any agreement between plaintiff and FBD, the issuer of the credit card, beyond the agreement to pay whatever charges plaintiff incurred by using the credit card. Therefore, the court affirmed the judgment on different grounds. View "Bazemore v. Jefferson Capital Sys." on Justia Law

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The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, T.I.A.S. No. 6997, 21 U.S.T. 2517, requires signatory states to recognize written arbitration agreements “concerning a subject matter capable of settlement by arbitration.” In this appeal, the court addressed an issue of first impression for the Circuit: whether a cruise ship employee who is injured on the job, and whose employment contract contains an arbitration agreement governed by the New York Convention and Chapter 2 of the Federal Arbitration Act, 9 U.S.C. 201, can bar arbitration by showing that high costs may prevent him from effectively vindicating his federal statutory rights in the arbitral forum. The court concluded that it need not definitely answer this question because, even if the court were to assume that plaintiff could raise a cost-based (public policy) defense in response to NCL's motion to compel arbitration, on this record he has plainly failed to establish that the costs of arbitration would preclude him from arbitrating his federal statutory claims. Therefore, the court affirmed the district court’s order compelling the parties to arbitrate. However, the court denied defendant's motion for sanctions. View "Suazo v. NCL (Bahamas), Ltd." on Justia Law

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Plaintiff filed a collective action against J&G under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., alleging that J&G failed to pay its truck drivers for overtime work. J&G waived its contractual right to compel arbitration by participating in the litigation, but when plaintiff amended his complaint to add state law claims for breach of contract and quantum meruit, J&G moved to compel arbitration as to those new claims. The district court denied the motion to compel arbitration. The court held that J&G’s waiver through litigation of the right to arbitrate plaintiff’s FLSA claim does not extend to the state law claims that were pleaded for the first time after J&G had litigated to the point of waiver the FLSA claim. Finding a Seventh Circuit case instructive, Dickinson v. Heinold Securities, Inc., the court concluded that J&G did not waive the right to arbitrate the state law claims raised in the second amended complaint because those claims were not in the case when it waived by litigation the right to arbitrate the FLSA claim. Therefore, the court vacated and remanded for further proceedings. View "Collado v. J. & G. Transport, Inc." on Justia Law

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Plaintiff filed suit alleging that CashCall and Western Sky’s business practices exploit tribal sovereign immunity and illicitly avoid federal and state regulations. The district court denied CashCall's motion to compel arbitration. The Supreme Court has explained that where an arbitration agreement contains a delegation provision - committing to the arbitrator the threshold determination of whether the agreement to arbitrate is enforceable - the courts only retain jurisdiction to review a challenge to that specific provision. Absent such a challenge, the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., requires that the court treat a delegation provision as valid and permit the parties to proceed to arbitration. The court held that when a plaintiff seeks to challenge an arbitration agreement containing a delegation provision, he or she must challenge the delegation provision directly. Accordingly, the court concluded that the district court erred in neglecting to recognize the delegation provision in the agreement in this case. The court reversed and remanded. View "Parnell v. Cashcall, Inc." on Justia Law