Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Arbitration & Mediation
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The Eighth Circuit reversed the district court's order denying Sundance's motion to compel arbitration of plaintiff's claims. Plaintiff filed suit against Sundance for violations of the Fair Labor Standards Act (FLSA), alleging that Sundance failed to pay her, and other similarly situated employees, for overtime. The court concluded that the district court erred in determining Sundance waived its right to arbitrate because Sundance's conduct, even if inconsistent with its right to arbitration, did not materially prejudice plaintiff.In this case, Sundance does not dispute its knowledge of an existing right to arbitration because the employment agreement included the arbitration clause; Sundance acted inconsistently with its right to arbitration where it substantially invoked the litigation machinery primarily by waiting eight months to assert its right to arbitrate this dispute, and failed to mention the arbitration clause in its answer or motion to dismiss; but plaintiff was not prejudiced by Sundance's litigation strategy where discovery was not conducted and the record lacks any evidence that plaintiff would have to duplicate her efforts during arbitration. View "Morgan v. Sundance, Inc." on Justia Law

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The Eighth Circuit previously affirmed an interlocutory ruling that several counterclaims were non-arbitrable. See Meierhenry Sargent LLP v. Williams, 915 F.3d 507, 510–12 (8th Cir. 2019).The primary issue on appeal here is whether the district court "improperly rewrote" its original order by enjoining defendants from seeking damages in arbitration in excess of fees owed. Although the court could review the district court's decision, the court declined to overturn it, explaining that all the district court did was clarify its original order, which it had the authority to do. In this case, the original order stated that the counterclaims were arbitrable to the extent they reduced the amount defendants owed to the firm, and the district court clarified on remand that this restriction applied to the breach-of-contract claim too. Finally, the court concluded that it lacked jurisdiction to consider the remaining claims. View "Meierhenry Sargent LLP v. Williams" on Justia Law

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Ohio law allows nonsignatory agents to compel arbitration under general principles of contract and agency law. The Eighth Circuit reversed the district court's denial of Navient's motion to compel arbitration against plaintiff. The court disagreed with the district court's finding that the relevant arbitration clause does not include Navient as a party and so Navient cannot compel arbitration. Rather, the court held that Ohio law permits plaintiff to compel arbitration as a nonsignatory agent of the holder of the loan. The court also held that Ohio's rule of alternate estoppel prevents plaintiff from disavowing the arbitration clause because his claim arises out of the same contract. Therefore, plaintiff is estopped from avoiding the arbitration clause because his claims are integrally intertwined with the contract containing the agreement to arbitrate. Accordingly, the court remanded for further proceedings. View "Neal v. Navient Solutions, LLC" on Justia Law

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The Eighth Circuit reversed the district court's dismissal of the union's claims against Trane concerning an arbitration award. In this case, the June Award indicated that the arbitrator did not intend for it to be final because he explicitly retained jurisdiction "until the terms of the award are met." When a dispute did arise regarding damages, the arbitrator resolved that dispute in the September Award and then expressly stated that he was "no longer retaining jurisdiction in this matter." Therefore, the express relinquishment of jurisdiction in the September Award indicated that the arbitrator intended the September Award to be final and did not contemplate further disputes regarding the award.The court held that the union is not time-barred from seeking to vacate the arbitration award because the text of the June Award indicates that it was not the final award. The court stated that the September Award is the final award and the union filed its claim to vacate within 90 days of it. Therefore, the union's claim was timely and the district court erred in concluding otherwise. The court remanded for further proceedings. View "International Union v. Trane U.S. Inc." on Justia Law

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This appeal stemmed from a collective bargaining agreement (CBA) dispute between the parties where an arbitrator resolved the dispute in favor of the union. The Eighth Circuit held that because the arbitrator was arguably construing or applying the contract and acting within the scope of his authority, there is no basis for vacating the arbitrator's finding that Exide violated the CBA.The court also held that the district court correctly determined that it did not have jurisdiction over Exide's claim that the arbitrator's decision that unilaterally changing Family Medical Leave Act leave administrators was a material, substantial and significant change in the employees' terms and conditions of employment in violation of Section 8 of the National Labor Relations Act. Rather, Congress has empowered the NLRB to resolve unfair-labor-practice claims in the first instance. Furthermore, the cases cited by the parties do not expand the court's original jurisdiction. View "Exide Technologies v. International Brotherhood of Electrical Workers" on Justia Law

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Morgan Stanley filed suit under the Federal Arbitration Act (FAA) to confirm an arbitration award against defendant. After defendant did not respond, the district court entered judgment in favor of Morgan Stanley. Then the district court entered an order granting in part Morgan Stanley's motions to appoint a receiver under Federal Rule of Civil Procedure 66 and to enter a charging order under Rule 69(a) and Minn. Stat. 322C.0503. Defendant appealed.The Eighth Circuit affirmed, holding that the district court did not abuse its discretion in appointing a receiver under Federal Rule 66 to exercise extraordinary investigative powers to determine whether Morgan Stanley's substantial judgment can be paid within a reasonable time. The court also held that the district court did not abuse its discretion by appointing a general receiver over his interests in the LLCs. In this case, Morgan Stanley's motion for a charging order under Minn. Stat. 322C.0503 properly relied on Federal Rule 69(a) and state law, while its motion for a receiver relied on the district court's federal equitable powers under Rule 66. View "Morgan Stanley Smith Barney LLC v. Johnson" on Justia Law

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On remand from the district court, the Eighth Circuit affirmed the district court's grant of Catamaran's motion for summary judgment. Pursuant to recent Supreme Court precedent in Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1416-17 (2019), an ambiguous agreement cannot provide the necessary contractual basis to conclude that the parties agreed to class arbitration. Therefore, the court must determine whether there is an affirmative contractual basis to conclude that the parties agreed to class arbitration.The court held that there was no contractual basis to conclude that the parties agreed to class arbitration. In this case, the agreements were not inconsistent with individual arbitration and do not support the conclusion that the parties intended class arbitration and believed that intent was so evident from the terms of the written agreements that it was unnecessary to express that intent within the agreements themselves. View "Catamaran Corp. v. Towncrest Pharmacy" on Justia Law

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Defendant appealed the district court's order vacating an arbitration award, contending that the district court did not properly defer to the arbitrator's decision. Plaintiff cross appealed. In this case, defendant issued a crop insurance policy to plaintiff, a South Dakota farmer, in 2015 and subsequently determined that the appraised value of plaintiff's crop exceeded his policy's guaranteed minimum crop production, denying his claim.The Eighth Circuit held that the arbitrator did not exceed his powers because the dispute about the interpretation of "appraised value" was not even before the arbitrator. Furthermore, the arbitrator's findings supported the denial of plaintiff's claims on a different ground -- that he abandoned his crop -- despite plaintiff's argument to the contrary in his cross appeal. The court also held that, even if the arbitrator did exceed his powers by making a good farming practices determination, the error was harmless because he did not exceed his powers in denying plaintiff's claim based on the appraised value of plaintiff's crop. Accordingly, the court reversed in part, affirmed in part, and remanded to the district court to enter an order confirming the arbitration award. View "Balvin v. Rain and Hail, LLC" on Justia Law

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The Eighth Circuit reversed the district court's denial of the law firm's motion to compel arbitration between the firm and its client. The court held that the law firm's offer to pay plaintiff's share of the arbitration costs cured any substantive unconscionability that the agreement may have contained; the offer also cured any issue regarding substantive unconscionability where the arbitration provision in effect allowed only the firm to obtain redress of claims; plaintiff has not demonstrated that she lacked meaningful choice, and thus the circumstances giving rise to the lawsuit did not render the retainer agreement procedurally unconscionable; and the language in the agreement adequately disclosed the consequences of the arbitration provision, and the agreement was not unenforceable because the firm violated their ethical duties under DC Circuit precedent. View "Plummer v. McSweeney" on Justia Law

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The Eighth Circuit reversed the district court's grant of summary judgment for Northport in a wrongful death action brought by plaintiff, Mark, as the representative of the estate of his deceased father. Another son, Matt, signed the admission agreement, which included an arbitration agreement, at the residential rehabilitation center owned by Northport. Northport sought to compel arbitration and the district court granted the motion. Mark appealed, asserting that the district court misused the third-party beneficiary theory when no underlying agreement was present between the Poseys and Northport.Arkansas courts have repeatedly declined to find that individuals like Matt—relatives without power-of-attorney or other legal authority who admit a family member to a nursing home—possess valid authority to bind their relatives to arbitration under a third-party beneficiary theory. In this case, because Matt was undisputedly not his father's legal guardian or attorney-in-fact, he lacked the capacity to sign the contract as his father's representative. Accordingly, the court reversed the order compelling arbitration and remanded for further proceedings. View "Northport Health Services of Arkansas, LLC v. Posey" on Justia Law