Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Plaintiffs, individuals who enrolled in a cosmetology program at Milan Institute, filed a class action against the college and its President, alleging that defendants violated state labor laws and the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. On appeal, defendants challenged the district court's denial of their motion to compel arbitration. The court concluded that the district court did not err in deciding the litigation conduct waiver issue itself. If the parties intend that an arbitrator decide that issue under a particular contract, they must place clear and unmistakable language to that effect in the agreement. Defendants failed to do so in this case and thus the district court did not err by deciding the conduct waiver issue. The court also concluded that defendants waived their right to arbitration because they engaged in acts inconsistent with their right to arbitration, and plaintiffs were prejudiced. Accordingly, the court affirmed the judgment. View "Martin v. Yasuda" on Justia Law

After Renee Tillman filed suit against her law firm, arbitration proceeded for a time until Tillman ran out of funds. The arbitration was then terminated and now the parties disagree about what should now happen to Tillman’s federal court case against the firm. The court concluded that Tillman's case “has been had in accordance with the terms of the agreement,” so it is no longer appropriate to stay the proceedings below; the district court appropriately excused Tillman’s failure to pay for arbitration on the grounds of financial incapacity; and, under these circumstances, the court held that the FAA does not require dismissal of Tillman’s case. Rather, Tillman's case should go forward in federal court and thus the court remanded with instructions on how to proceed. View "Tillman v. Rheingold firm" on Justia Law

Pow! Mobile (the Company), not a party here, is a mobile content provider that marketed a “reverse auction” game called “Bid and Win.” Both Mobile Messenger and m-Qube (defendants) are “billing aggregators” who serve as financial intermediaries between customers and content providers. Plaintiff filed a class action alleging that defendants have engaged in a scheme “that causes Washington consumers to become unknowingly and unwittingly subscribed to premium text message services.” The district court held that defendants are not intended third-party beneficiaries entitled to enforce the arbitration clause at issue and denied defendants' motion to compel arbitration. The court concluded that the Terms and Conditions in this case create a direct obligation from the subscriber to the Company’s suppliers. The signatory to the Terms and Conditions agrees to waive all claims against the Company’s suppliers. Therefore, the Company’s suppliers are intended third-party beneficiaries of the Terms and Conditions. Thus, if defendants are suppliers of the Company, they may enforce the arbitration clause. The court remanded for the district court to make determinations in the first instance regarding assent to the Terms and Conditions, and whether defendants are Pow! Mobile’s suppliers. View "Geier v. m-Qube Inc." on Justia Law

Drywall entered into a labor agreement with the Union according to which Drywall assigned to a contractors' association authority to bargain on its behalf. After Drywall attempted to terminate the agreement, it discovered that the Union and association had executed a Memorandum of Understanding extending the term of the agreement. An arbitrator held that Drywall was bound by the Memorandum.The district court vacated the arbitration award and held that the arbitrator’s interpretation of the parties’ agreement was not “plausible” and was, moreover, contrary to public policy. The court held that the district court's decision exceeded its narrow authority to determine whether the arbitrator’s award was based on the parties’ contract and whether it violated an “explicit, well-defined, and dominant public policy,” and therefore the court reversed the district court's decision. View "SWRCC v. Drywall Dynamics" on Justia Law

ItalFlavors filed suit against Caffe Vergnano, blaming the failure of an Italian cafe venture on Caffe Vergnano's failure to offer support. The parties had entered into an agreement, the Commercial Contract, which appears to be a franchise agreement setting forth the rights and responsibilities of the parties. The second agreement is the Hold Harmless Agreement. Caffe Vergnano filed a petition to compel arbitration and the district granted the petition. The court concluded that the declaration in the Hold Harmless Agreement signed contemporaneously with the Commercial Contract proves that the latter was a mere sham to help Hector Rabellino obtain a visa. Therefore, the court concluded that the Commercial Contract was not a contract and is thus unenforceable. Because the court found that the document the parties described as the Commercial Contract was a sham, the arbitration clause is no more enforceable than any other provision in that document. Accordingly, the court reversed the judgment. View "Casa del Caffe Vergnano v. ItalFlavors, LLC" on Justia Law

Uthe filed suit against defendants, alleging a conspiracy to unlawfully take over one of Uthe’s overseas subsidiaries. In its original federal court action, Uthe brought claims for, inter alia, violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961–68, against both defendants and foreign defendants. A Singapore arbitration resulted in an award against the foreign defendants. Afterwards, Uthe reinstated the present action against defendants requesting relief under RICO's treble damages provision. The district court subsequently granted summary judgment in favor of defendants, holding that an award of additional damages under RICO would violate the "one satisfaction" rule. The court held, however, that Uthe is entitled to seek treble damages under RICO against defendants because the arbitral award did not constitute full satisfaction of Uthe's pre-existing RICO claim. Accordingly, the court reversed and remanded for further proceedings. View "UTHE Tech. Corp. v. Aetrium, Inc." on Justia Law

Plaintiff filed a putative class action against Luxottica asserting four causes of action arising out of his employment with Luxottica, including (1) unlawful business practices, (2) failure to pay overtime compensation, (3) failure to provide accurate itemized wage statements, and (4) failure to pay wages when due. The district court subsequently granted Luxottica's motion to compel arbitration and dismissed the first amended complaint. This appeal presents issues of first impression regarding the scope of Federal Arbitration Act (FAA) preemption, 9 U.S.C. 2 et seq., and the meaning of the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion. The court must decide whether the FAA preempts the California rule announced in Iskanian v. CLS Transportation Los Angeles, which bars the waiver of representative claims under the Private Attorneys General Act of 2004 (PAGA), Cal. Lab. Code 2698 et seq. The court concluded that the FAA does not preempt the Iskanian Rule because the Rule leaves parties free to adopt the kinds of informal procedures normally available in arbitration. It only prohibits them from opting out of the central feature of the PAGA’s private enforcement scheme–the right to act as a private attorney general to recover the full measure of penalties the state could recover. Accordingly, the court reversed the district court’s order dismissing the complaint and returned the issue to the district court and the parties to decide in the first instance where plaintiff's representative PAGA claims should be resolved, and to conduct further proceedings. View "Sakkab v. Luxottica Retail N. Am." on Justia Law

This case stems from a dispute over a petition to compel arbitration under a collective bargaining agreement (CBA) between IATSE and InSync. The district court granted IATSE’s petition to compel arbitration pursuant to the parties’ initial agreement and “stayed” the case. The court concluded that the district court's arbitration order was final under 28 U.S.C. 1291 because the stay lacked any legal or practical effect. Therefore, the court has jurisdiction to review the order. On the merits, the court concluded that, given the scope of the arbitration provision and the nature of the parties’ dispute, the arbitrator and not the district court must consider IATSE and InSync’s competing interpretations of the evergreen clause and decide whether the 2003–2007 CBA expired or was terminated. Accordingly, the court affirmed the judgment. View "IATSE Local 720 V. InSync Show Prod." on Justia Law

Plaintiff appealed from the district court’s order dismissing his action in favor of arbitration. Opus Bank cross appealed from the district court’s implicit denial of its motion to seal plaintiff’s complaint, and the district court’s denial of its motion for reconsideration as moot. The court held that federal arbitrability law applies in the present case; that the district court did not err in concluding that these parties’ incorporation of the Rules of the American Arbitration Association (AAA) constituted “clear and unmistakable” evidence of their intent to submit the arbitrability dispute to arbitration; that Rent-A-Center, West, Inc. v. Jackson controls the present case where there are multiple severable arbitration agreements, only one of which is at issue; and that in this case, plaintiff failed to challenge the specific agreement at issue, as Rent-A-Center requires. The court concluded that the district court erred in denying as moot Opus Bank's motion for reconsideration to seal plaintiff's complaint because final judgment and even the filing of a notice of appeal does not divest a district court of its jurisdiction over matters ancillary to the appeal, such as protective orders. Accordingly, the court affirmed in part, and vacated and remanded in part. View "Brennan v. Opus Bank" on Justia Law

Plaintiff filed suit against his employer, Archstone, in California state court alleging, among other claims, unlawful retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and equivalent state-law claims. Archstone moved to federal district court. On appeal, Archstone challenged the district court's denial of its motion to compel arbitration pursuant to a Company Policy Manual containing a Dispute Resolution Policy. The court concluded, pursuant to Kummetz v. Tech Mold, Inc., that the scope of the Federal Arbitration Act (FAA), 9 U.S.C. 2, is narrowed by other federal statutes, such as Title VII, which "limit the enforcement of arbitration agreements with regard to claims arising under" the statute. This case is distinguishable from Kummetz and Nelson v. Cyprus Bagdad Copper Corp. where the acknowledgment that plaintiff signed explicitly notified plaintiff that the Manual contained a Dispute Resolution Policy. Archstone presented plaintiff the "express" choice lacking in both Kummetz and Nelson and plaintiff knowingly waived his right to judicial forum for claims. Accordingly, the court reversed and remanded. View "Ashbey v. Archstone Prop. Mgmt." on Justia Law