It’s good to be back after some travel. Fall has hit New England and the leaves are changing; it’s a beautiful time of the year.
Unsigned Arbitration Agreements
Flores v. BJ’s Restaurant Operations Co., 2023 U.S. App. LEXIS 26711 (5th Cir. October 6, 2023), provides guidance to those faced with a situation where the client has not signed the arbitration agreement, yet wishes to enforce it. In a per curiam opinion, a panel consisting of Judges Clement, Haynes, and Oldham, opines that “to make a signature a condition precedent to enforcement of a contract – including an arbitration agreement – the agreement must clearly and explicitly require a signature before it becomes binding.” (Internal citation omitted, emphasis added). Absent such a mandate, the court decides whether, based upon the language of the agreement and the circumstances of its execution, the non-signing party intended to be bound. Remember, though, that this case is decided under Texas law; you will need to look to applicable substantive law in your own case.
Delegation; Waiver for Non-payment of Fees
In Navcan.DC, Inc. v. Rinde, 2023 U.S. Dist. LEXIS 182979 (S.D.N.Y. October 11, 2023)(Schofield, J.), defendant sought to compel arbitration; plaintiff argued that any such right had been waived or, alternatively, that the arbitrator should resolve the question. Judge Schofield holds that the parties’ agreement does not delegate the issue of waiver to the arbitrator. The facts upon which she makes that determination are unusual. The parties’ agreement provided that they would jointly select an arbitration service, with a default to the AAA if they could not settle on another provider. The usual rule is that selection of the AAA delegates most issues, including waiver arising outside the litigation itself, to the arbitrator, since the AAA rules provide that the arbitrator decides his or her jurisdiction. The court holds, however, that the selection of the AAA in this case was “conditional and arises only if the parties do not agree upon another service with another set of rules.” Since the agreement did not otherwise specify that issues of arbitrability were to be delegated, the court holds that there was not a “clear and unmistakable” intent to remove such threshold questions from judicial determination. The court, then, holds that, since Defendant’s failure to pay administrative fees resulted in the AAA’s termination of the case, Rinde waived any right to arbitrate.
Confirming a Satisfied Award; Sealing
Even though the arbitration award in its favor had been fully satisfied, the petitioner in Strong v. Cashbet Alderney Limited, 2023 U.S. Dist. LEXIS 183134 (N.D. Cal. October 11, 2023), filed an application to confirm, attaching a copy of the confidential award to the petition. Judge Scott Corley holds that, under Article III of the U.S. Constitution, plaintiff lacked standing to sue as there was no longer any “case” or “controversy.” Since the award had been satisfied, Petitioner no longer had any “concrete injury that confirmation of the Arbitration Award will address.” The court also agrees to seal the award, holding that, because the petition was moot, the award itself is irrelevant to the court’s decision; therefore, the usual public interest in access to the award is no longer applicable. Judge Schofield criticizes Strong’s decision to jettison the confidentiality of the award by attaching it to the Petition, opining that “the Court will not reward this conduct by unsealing the Arbitration Award in an action in which the Petitioner lacks Article III standing.”
Stay v. Dismissal after Compelling Arbitration
Hillery v. Genisys Credit Union, 2023 U.S. Dist. LEXIS 183185 (E.D. Mich. October 11, 2023), joins the cases addressing whether a court should stay or dismiss a case after compelling arbitration of all issues. Judge Steeh holds that, even though Section 3 of the Federal Arbitration Act references only a “stay until the arbitration process is complete,” he has the authority to dismiss the case, as there are no remaining non-arbitrable issues. However, the court only stays the case, reasoning that a dismissal would allow an immediate appeal, which would “undercut the pro-arbitration appellate-review provisions of the Act” – a reference to the fact that the granting of an application to compel arbitration is not appealable, see 9 U.S.C. § 16(b). As an aside, SCOTUS may have an opportunity to resolve the clear Circuit split over whether dismissal is even available as a remedy upon granting a motion to compel. A petition for cert. has been filed in Smith v. Spirrizzi, Dkt. 22-1218, which raises that question. The Justices seem interested, as they specifically requested a response to the petition, the due date for which has been extended to November 6th. As always, you can get the full petition and will be able to get all other filings at Scotusblog, Scotusblog.com.
For those of you who have me in your contact file (thank you!!), my mailing address has changed to Reif ADR, Suite 7, 470 James Street, New Haven, Connecticut 06513. The phone number and email are still the same. Have a good weekend.
David Reif, FCIArb