Articles Posted in Arbitration & Mediation

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Farmers brought an interlocutory appeal of the district court's rulings interpreting an arbitration agreement in an employment contract. The Eighth Circuit dismissed the appeal based on lack of jurisdiction, holding that when a district court enters a stay instead of a dismissal, that order is not appealable. In this case, the district court's decision stayed the case pending arbitration, but did not dismiss the claims. The court held that it lacked jurisdiction under 9 U.S.C. 16(a)(1)(B) absent an order denying arbitration outright, and the court declined to apply the collateral order doctrine to find jurisdiction in this case. View "Webb v. Farmers of North America, Inc." on Justia Law

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The Eighth Circuit reversed the district court's order vacating an arbitration award originally in favor of the union. The court held that the arbitration award drew its essence from the collective bargaining agreement. In this case, the arbitrator appropriately considered the relevant language of the Recognition Clause, even though it did not quote the Recognition Clause in its entirety. Accordingly, the court remanded for further proceedings. View "National Elevator Bargaining Assoc. v. International Union of Elevator Constructors" on Justia Law

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The Eighth Circuit reversed the district court's order vacating an arbitration award reinstating a union member to his former position without back pay after he was discharged by the company. The court held that the arbitrator was at least arguably construing the contract between the parties in making the award. In this case, the arbitrator explained at length why he interpreted the contract to allow for review of the discipline and, even if there was serious error in the analysis, the arbitrator was arguably construing the contract. Furthermore, under the arbitrator's decision, the absolute cause provision established conduct for which the company has an absolute right to impose discipline, even though it did not give the company unfettered authority to select discharge as the appropriate penalty. Accordingly, the court remanded with directions to confirm the arbitration award. View "CenterPoint Energy Resources Corp. v. Gas Workers Union" on Justia Law

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In an action arising out of a fee dispute between a law firm and two clients, the action was removed to federal court and then the unpaid-fees claims proceeded to arbitration. The district court granted the firm relief from the stay and issued an order dividing the counterclaims into two categories: those the clients could raise in arbitration and those they could not. Determining that it had jurisdiction, the Eighth Circuit held that the clients' counterclaims were within the scope of what the parties agreed to arbitrate and the counterclaims seeking something else -- like money from the firm -- were not. Accordingly, the court affirmed the district court's judgment, with one exception. The court held that the district court should not have decided that the clients terminated the relationship, because the arbitrator should decide the issue. View "Meierhenry Sargent LLP v. Williams" on Justia Law

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Defendant appealed the district court's vacatur of the arbitration award plaintiff received against his insurer, Great American, for wrongfully denying his claim for damage to his corn crop. The court vacated and remanded for further proceedings, holding that vacatur of the arbitration award was improper because the arbitrators rendered a sufficiently mutual, final, and definite award. The court held that the arbitration panel's failure to break down the award by county did not mean that it was so imperfectly executed such that it rendered no mutual, final, and definite award. The court also found that the panel's written explanation for the award amount was adequate. View "Great American Insurance Co. v. Russell" on Justia Law

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Plaintiffs filed suit against GFA, alleging that GFA solicited charitable donations to benefit the poorest of the poor while covertly diverting the money to a multi-million dollar personal empire. The district court denied GFA's motion to compel arbitration. The Eighth Circuit held that the district court interpreted the scope of the arbitration agreements too narrowly, reasoning that, since none of the mission statements or pledges found in the agreements reach donations made to the church, the dispute was entirely unrelated to the parties' agreements. The court held that, even if the agreements did not reach donations made to GFA, the district court erred because the arbitration agreements did not apply only to disputes arising out of the agreements. Rather, they applied by their terms to any and all disputes of any kind arising out of the relationship between plaintiffs and GFA. Because the court could not say with positive assurance that the donations plaintiffs made to GFA did not arise out of that relationship, the court reversed and remanded. View "Dickson v. Gospel for ASIA, Inc." on Justia Law

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The Eighth Circuit affirmed the district court's judgment confirming an arbitrator's award of attorney's fees and expenses to Beumer. The court held that the arbitrator acted within the scope of his authority and did not violate the arbitration agreement's provision when he determined that attorneys' fees were "costs" and not "loss" under Missouri law. Therefore, these costs were not subject to the limitation of liability. The court held that ProEnergy failed to demonstrate grounds to vacate the arbitration award under 9 U.S.C. 10, and denied Beumer's motion for sanctions. View "Beumer Corp. v. ProEnergy Services, LLC" on Justia Law

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Plaintiffs brought a class action against Bluestem, alleging that the company engaged in unscrupulous business practices in violation of federal and state laws. The Eighth Circuit agreed with Bluestem that all of plaintiffs' claims fell within the scope of the arbitration clause. The court held that the agreements contained broad arbitration clauses and plaintiffs' state-law usury, state and federal financial disclosure and state-law unjust enrichment claims all fell within the scope of the arbitration agreements. Accordingly, the court remanded with directions to order arbitration on those claims. View "Parm v. Bluestem Brands, Inc." on Justia Law

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The trustee for the Laudine L. Ploetz, 1985 Trust filed suit against Morgan Stanley, alleging that it had transferred funds from the account without authorization. The trustee later moved the district court to vacate the arbitration award under the Federal Arbitration Act (FAA) after she learned that the chairperson of the arbitration panel had undisclosed service in a case years earlier involving Morgan Stanley. The Eighth Circuit affirmed the district court's denial of the trustee's motion to vacate the arbitration, holding that the trustee did not warrant relief from the award under any of the court's evident-partiality standards since she did not explain how the chairperson's undisclosed mediation of the previous case created even an impression of possible bias. The court held that the mere fact that non-disclosure of the past service violated FINRA rules governing arbitration did not provide the district court with any basis to conclude he was evidently partial. Furthermore, arbitrator misbehavior that results only in the violation of a party's rights under FINRA rules was not significant enough to merit relief under 9 U.S.C. Sec. 10(a)(3) unless the party was deprived of a fair hearing. View "Ploetz v. Morgan Stanley Smith Barney, LLC" on Justia Law

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The City filed suit against Baseline, alleging contract, negligence and professional malpractice, fraud, and negligent misrepresentation. The City's claims stemmed from a contract with Baseline, in which Baseline would assist with the permitting, design, and construction of a water treatment plant for the City. The Eighth Circuit held that, to the extent an arbitration provision was like a forum-selection clause, the motion seeking to compel arbitration was not properly construed under Federal Rule of Civil Procedure 12(b)(3); just as a forum selection clause has no bearing on the issue of whether venue was wrong or improper, an arbitration agreement has no relevance to the question of whether a given case satisfied constitutional or statutory definitions of jurisdiction; contrary to Baseline's contention, the July 2009 Contract's arbitration clause did not strip the federal courts of jurisdiction; and therefore the district court erred in construing the motion as a Rule 12(b)(1) challenge to subject matter jurisdiction. The court agreed with the City that Baseline's motion was properly analyzed under either Rule 12(b)(6) or Rule 56. Under both rules, the summary judgment standard applied. The court reversed and remanded for summary judgment proceedings in the district court. View "City of Benkelman, NE v. Baseline Engineering Corp." on Justia Law