Arbitration as Collateral Estoppel – Shasha v. Malkin, 2026 U.S. App. LEXIS 3753 (2d Cir. Feb. 6, 2026)(Sack and Perez, CJ; Preska, DJ., sitting by designation)

Res judicata arising from arbitration proceedings bars not only claims actually raised to the arbitrator, but also those that could have been raised. Investors in the Empire State Realty Trust brought an arbitration action, claiming reaches of contract and fiduciary duty, fraud, and violations of the securities laws pursued arbitration claims. They simultaneously filed this lawsuit in order to toll the statute of limitations. After losing in arbitration, Plaintiffs sought to proceed with the litigation as to claims they alleged were not addressed by the arbitration panel. Rejecting this attempt, the Second Circuit holds that the arbitral award constitutes a final judgment on the merits that precludes relitigation of claims that “were, or could have been, raised in the prior action.” Pike v. Freeman, 266 F.3d 78 (2d Cir. 2001)(Emphasis added). The Court of Appeals, in a summary order, and the court below hold that Plaintiffs’ arguments fail on two fronts. First, the panel’s final award explicitly stated it was “in full settlement of all claims and counterclaims submitted to this Arbitration,” with all claims “not expressly granted herein” being “denied.” Second, to the extent that the Plaintiffs here seek equitable relief which they did not ask for in the arbitration, they are wrong, because arbitrators possess “broad and flexible authority to fashion appropriate remedies, including equitable relief.” Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887(2d Cir. 2015).

In summary, parties cannot use litigation as a second bite at the apple for claims that should have been brought in arbitration, even when those claims were not asserted or, in general, seek different forms of relief.

Waiver After Morgan

Golden Krust Caribbean Bakery, Inc. v. Sheriff, 2026 U.S. Dist. LEXIS 23729 (S.D.N.Y. Feb. 4, 2026) (Román, J.) – In an important case elaborating on the Morgan doctrine and the Second Circuit’s follow-up case law, Judge Román holds that filing compulsory counterclaims does not waive arbitration rights, at least where the party opposing the waiver claim initiated arbitration before the party arguing for waiver filed suit. Under Morgan v. Sundance, Inc., 596 U.S. 411 (2022), a state may not adopt a waiver rule different from that which it would apply in non-arbitration cases, specifically in that case a requirement of prejudice. Doyle v. UBS Financial Services Inc., 144 F.4th 127 (2d Cir. 2025),resolved a conflict among the Circuit’s district court, holding that waiver requires that a party “knowingly relinquished the right to arbitrate by acting inconsistently with that right.

This case started as an arbitration. Three months into that proceeding Golden Krust brought this action seeking to declare Sheriff’s employment agreement and its attendant arbitration clause null and void. Sherriff filed a five counterclaims. Golden Krust argued that those raising those counterclaims in court waived Sheriff’s he court here holds that there was no inconsistent conduct which manifested that intent. After plaintiffs obtained a preliminary injunction staying the arbitration, Sheriff filed an answer with five counterclaims—breach of contract, promissory estoppel, unjust enrichment, quantum meruit, and breach of the covenant of good faith and fair dealing—expressly reserving her right to arbitrate. Applying Doyle, but also looking to authority outside the Circuit, Judge Román finds no waiver where defendant Sheriff commenced arbitration in October 2024, before plaintiffs Golden Krust filed their declaratory judgment action. He distinguishes Doyle, where defendants sought arbitration only after the district court denied their motion to dismiss. In addition, the court emphasizes that compulsory counterclaims are “required to respond to the litigation or waive the right to bring that claim,” not voluntary expansions of litigation. Schwebke v. United Wholesale Mortgage LLC, 96 F.4th 971, 976 (6th Cir. 2024). Filing a counterclaim within the time frame required by the Federal Rules of Civil Procedure.

This is an important case for lawyers to put in their arbitration law notebook. Judge Román, in what he considers to be a decision of first impression, goes deeply into the law of other jurisdictions, so his decision has value to litigators outside the Second Circuit. This nuanced opinion is an important read.

Collateral Attack on an Award

Center for Excellence in Higher Education., Inc. v. Accreditation Alliance of Career Schools., 2026 U.S. App. LEXIS 3661 (4th Cir. Feb. 5, 2026) (Wynn, J. writing for himself, Diaz,C.J., and Harris, J.) – Complaints which purport to bring independent claims, but actually seek to vacate an arbitration award, must be dismissed as impermissible collateral attacks on the arbitral award. After the Alliance withdrew CEHE’s accreditation and an arbitrator affirmed that decision, CEHE filed both a motion to vacate and a separate complaint alleging due process violations and tortious interference. Joining the Fifth, Sixth, and Tenth Circuits, the Fourth Circuit adopts the rule that “purportedly independent claims are not a basis for a challenge if they are disguised collateral attacks on the arbitration award.” Texas Brine Company., L.L.C. v. American Arbitration Association, Inc., 955 F.3d 482, 487 (5th Cir. 2020). Courts examine “the relationship between the alleged wrongdoing, purported harm, and arbitration award.” Id. at 488. CEHE’s complaint alleged the arbitrator refused to consider evidence of disparate treatment – conduct that the court opines is within the scope of section 10 the FAA, which allows vacatur for “refusing to hear evidence pertinent and material to the controversy.” 9 U.S.C. § 10(a)(3). Its purported harms (loss of students, reputation, and goodwill) all flowed from the loss of accreditation decided by the arbitrator. And the requested relief – a declaration that the withdrawal was arbitrary and capricious, injunctive relief reversing the decision, and damages – was “so intimately connected with the kind of relief one would seek in a Section 10 motion to vacate as to be barred by the impermissible-collateral-attack rule.” In short, litigants cannot evade the FAA’s exclusive remedies by recasting vacatur grounds as independent torts or constitutional claims. So, heads up, counsel, file that application to vacate under the FAA or applicable state law as soon as possible after the award; don’t try an end run around the award.

Waiver of Appeal Rights

Lanesborough 2000, LLC v. Nextres, LLC, 2026 U.S. App. LEXIS 3752 (2d Cir. Feb. 6, 2026) (Park, J., writing for himself, Carney, J., and Robinson, J.) – How can the parties – assuming they would ever want to – carve out the right to take an appeal from an unpleasant District Court decision on an opponent’s motion to confirm? Lanesborough 2000, LLC v. Nextres, LLC, 2026 U.S. App. LEXIS 3752 (2d Cir. Feb. 6, 2026), tells you what does not work, but reserves the question of whether such a waiver is ever possible.

The court holds that a contractual waiver of the “right to appeal” must be clear and unequivocal to foreclose appellate review of a district court’s order confirming an arbitration award. In this case, the parties’ arbitration agreement contained a “Waivers” clause stating: “THE PARTIES HEREBY FREELY WAIVE THE RIGHT TO TRIAL BY JUDGE OR JURY, THE RIGHT TO APPEAL, PRETRIAL DISCOVERY AND APPLICATION OF THE RULES OF EVIDENCE.” After the district court confirmed most of the arbitral award and granted post-award prejudgment interest, Nextres appealed. Lanesborough responded by moving to dismiss, arguing that the quoted portion of the arbitration clause waived any right to seek review beyond the District Court. Finding the waiver provision ambiguous because it “fails to specify what is meant by the ‘right to appeal,'” the Second Circuit proceeds to the merits. Unlike waivers that expressly reference appeals from district court orders confirming or vacating arbitration awards, this clause could plausibly refer to appeals from the arbitration award itself (which do not exist) or appeals from judicial proceedings. Without deciding “whether a clear waiver of the right to appeal a district court’s order confirming, vacating, or otherwise ruling on an arbitration award would be enforceable,” the court leaves that question for another day.

On the merits, the panel affirms the partial confirmation and award post-award prejudgment interest award. However, it reverses the court’s granting of an injunction, as the lower court failed to consider whether its injunction of a state court foreclosure action violated the Anti—Injunction Act.

Parties seeking to waive appellate rights must use precise language that unmistakably references appeals from district court orders, not merely “the right to appeal” in general terms. In light of the rules of several arbitral institutions providing for appeals within that system, they should also be sure that they harmonize their “no appeal” provisions with those rules.

QUICK HITS

Waiver

Crosswhite v. Royal Ent. Events, LLC, 2026 U.S. Dist. LEXIS 24013 (E.D. Va. Feb. 4, 2026) (Payne, S.J.) – The court finds a waiver where defendant, after learning of its right to compel arbitration on October 9, 2025, re-requested a hearing on its motion to dismiss during an October 16 conference call, participated in the October 30 hearing, and obtained a ruling from the court on October 31 – all before filing its motion to compel arbitration on October 20. Re-requesting a hearing, participating in it, and seeking a ruling “are all utterly inconsistent with [defendant’s] right to compel arbitration.” Applying Morgan v. Sundance, Inc., 596 U.S. 411 (2022), defendant must “accept the result of its chosen litigation strategy: waiver of its right to compel arbitration.” Note the difference in timing here compared to that in Gold Krust, above. There, the defendant sought arbitration before it took any judicial action.

Kenneth R. Berman, Column: On Reconsideration: Why Cases Can Be So Hard to Settle, 52 Litigation 55 (Fall 2025)

This thoughtful analysis identifies the structural barriers that make settlement difficult – even when both sides would benefit from resolving their dispute early. Drawing on the prisoners’ dilemma, Berman explains how litigation’s adversarial nature encourages parties to pursue self-interest over common interest, leaving both worse off. Three key obstacles emerge: informational disparities (parties spend heavily to gain factual advantages that shift settlement leverage), resource imbalances (deeper pockets create staying power that reduces settlement incentives), and cognitive biases (each lawyer’s “vision to victory” leads to overconfidence in their own position and undervaluation of the opponent’s offers). Even with perfect information and equal resources, opposing counsel’s competing “visions to victory” create their own settlement impasse. For mediators, the article highlights the challenge of helping parties overcome these ingrained dynamics—lawyers who fall in love with their cases tend to discount mediator assessments, having experienced situations where rejecting settlement advice led to better trial outcomes. Berman advocates a paradigm shift: litigators should see themselves first as problem-solving advisors who explore common interests and creative resolutions before donning their warrior armor. The analysis provides a framework for understanding why parties and their counsel struggle to reach efficient settlements and how mediators can help them reach an agreement.

Enjoy the rest of the week. And a quick reminder – in publishing Highlights, I try to capture the court’s holding. As a working arbitrator, I know that all cases are different. I am not adopting or rejecting the court’s reasoning in any of these blogs.

David A. Reif, FCIArb
Reif ADR
Dreif@reifadr.com

Delegation as to Non-Signatories – Sheet Metal Workers Loc. No. 20 Welfare v. CVS Pharm., Inc., 2026 U.S. Dist. LEXIS 21975 (D.R.I. Feb. 3, 2026)(McConnell, J)

In Sheet Metal Workers, the Court addresses a consolidated class action that demonstrates the transformative impact of the First Circuit’s decision in Morales-Posada v. Cultural Care, Inc., 141 F. 4^th 301 (1st Cir. 2025). This case centers on whether CVS, a non-party to contracts between third-party payors (TPPs) and pharmacy benefit managers (PBMs), can invoke delegation clauses in the TPP-PBM arbitration agreements to compel arbitration.

Morales-Posada clarified the legal landscape in the First Circuit by establishing that a nonsignatory’s ability to invoke an arbitration agreement depends on the specific state law governing the underlying contract. This required Judge McConnell to reconsider his prior arbitration orders in this case, in which he held that the question of arbitrability of all claims by non-signatories was delegated to the arbitrator.  The First Circuit decision, Chief Judge McConnell opines, clarified that district courts must apply the applicable state’s test as to non-signatory delegation; only if a nonsignatory satisfies that state’s test may it invoke the arbitration clause, including any delegation provision.

Applying this framework, the court finds that for jurisdictions applying “rely on” or “concerted misconduct” tests, CVS satisfies the threshold to invoke both the arbitration provisions and delegation clauses, sending all arbitrability questions to the arbitrator. These claims are dismissed. However, for six jurisdictions applying the stricter “detrimental reliance” test (Colorado, Illinois, Indiana, New Jersey, Oregon, and Wisconsin), CVS cannot satisfy the state law requirements. Because CVS cannot invoke the arbitration clause itself under these states’ laws, the court never reaches the delegation provision. These claims proceed in federal court.

The decision establishes that for nonsignatories, delegation requires that counsel and the court undertake the potentially tedious process of looking at all relevant state laws to determine the right of a third party, under a variety of standards, to enforce the arbitration agreement.

Walking Through the Arbitration Analysis – Archie v. Crawford & Co., 2026 U.S. Dist. LEXIS 20819 (E.D. Tex. Feb. 2, 2026)(Mazzant, J.)

This FLSA overtime opinion provides a detailed roadmap for analyzing motions to compel arbitration involving both signatory and non-signatory plaintiffs.

Step One: Contract Formation. The court begins by applying Texas law to determine whether valid arbitration agreements exist with the signatory plaintiffs. Finding valid agreements, the analysis proceeds to the next step.[1]

Step Two: Delegation Analysis. The court addresses the plaintiffs’ unconscionability challenge by examining whether the parties delegated such gateway questions to the arbitrator. Under Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63 (2019), when parties clearly delegate arbitrability questions, courts must honor that delegation. The agreement incorporates AAA rules and contains explicit delegation language. Plaintiffs’ unconscionability challenge must be submitted to the arbitrator, as the parties do not challenge the delegation clause specifically, but raise that claim as to the contract as a whole.

Step Three: Stay Analysis for Parties Not Bound by the Arbitration Clause. The court applies the Fifth Circuit’s three-factor test from Waste Management, Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339 (5th Cir. 2004) to determine whether the case should be stayed as to those not bound by the arbitration agreement.  First, do the arbitrated and litigated disputes share the same operative facts? Second, are the claims in the two forums inherently inseparable? Third, will litigation of those claims critically impact arbitration? While the first factor favors a stay, the court finds the second and third weigh against it. Following Vallejo v. Garda CL Southwest., Inc.,  2013 U.S. Dist. LEXIS 167740 (S.D. Tex. Nov. 26, 2013), and Matthews v. Priority Energy Services., LLC, 2016 U.S. Dist. LEXIS 180649 (E.D. Tex. Dec. 2, 2016),  the court holds that because each plaintiff seeks recovery for their own violations, non-signatories’ FLSA claims are not inherently inseparable from those of the arbitrating parties.  Therefore, Judge Mazzant stays the case as to signatory plaintiffs while allowing non-signatories to proceed.

Who determines whether a contract is illegal – Steven Huynh v. Boom Shakalaka, Inc., 2026 U.S. Dist. LEXIS 21628 (C.D. Cal. Jan. 28, 2026) (Vera, J.)[2]

In this daily fantasy sports case, plaintiff argues the entire contract is void because it provided access to an illegal gambling platform under California law, arguably rendering both the contract and arbitration clause unenforceable. The court applies Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006), and holds that challenges to contract illegality affect “the contract as a whole” rather than the arbitration provision specifically. Under the Supreme Court’s framework, enforceability questions, the court holds, must be decided by the arbitrator in the first instance when, as the court finds here, a valid delegation provision exists. The court distinguishes formation issues (which courts decide) from enforceability issues (which arbitrators decide), finding the illegality challenge falls in the latter category.

Incorporating the AAA’s rules satisfies the FAA requirement that the parties’ arbitration agreement provide that a court may confirm the award – Scanlon v. VerAleo, LLC, 2026 U.S. Dist. LEXIS 21184 (D.D.C. Feb. 2, 2026) (Sooknanan, J.).

Section 9 of the Federal Arbitration Act provides that parties may seek confirmation of an arbitration award where, inter alia, they have “agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration. . . .”   After losing in arbitration, VerAleo moved to dismiss the petition to confirm, arguing the parties’ arbitration clause does not expressly provide for judicial confirmation. The court disagrees, holding that agreeing to AAA arbitration inherently incorporates AAA rules, including Rule 54(c) which provides that the parties consent to judicial confirmation. Citing the Second Circuit’s reasoning in Idea Nuova, Inc. v. GM Licensing Group, Inc., 617 F.3d 177 (2d Cir. 2010), the court opines that “AAA arbitration is arbitration conducted according to AAA rules.” Judge Sooknanan closes her opinion by throwing a little shade on the Respondent. “The Court strongly suspects that had VerAleo initiated an arbitration against the Petitioners and prevailed, its position would be that the award is confirmable.  Although VerAleo may be unhappy that it lost in arbitration, that is not a reason for a different result.”

The No Surprises Act does not provide for confirmation of an award from the IDR process – Worldwide Aircraft Servs., Inc. v. Aetna Life Ins. Co., 2026 U.S. Dist. LEXIS 22848 (M.D. Fla. Feb. 4, 2026) (Mizelle, J.)

Aetna denied a portion of an air ambulance claim by Petitioner, allowing only $165,517.94 of a $235,782 charge.  Worldwide won an IDR proceeding under the No Surprise Act and, here, seeks to confirm that arbitration. The court holds that the NSA’s independent dispute resolution (IDR) process does not create a private right of action to confirm arbitration awards. Following the Fifth Circuit’s decision in Guardian Flight, L.L.C. v. Health Care Services Corp., 140 F.4th 271 (5th Cir. 2025), the court holds that the NSA contains no express right of action to enforce or confirm IDR awards. The statute, Judge Mizelle holds, expressly bars judicial review of IDR awards “except in a case described in” FAA § 10(a), which addresses only vacatur for fraud or arbitrator misconduct—not confirmation. The court finds this language dispositive; if Congress wanted to incorporate FAA § 9 (which provides for confirmation), it could have done so explicitly as it has in other statutes. Instead, Congress chose to reference only § 10(a)’s limited vacatur provisions. The term “judicial review” is broad enough to include confirmation orders, and the NSA’s express prohibition on review except for § 10(a) purposes precludes confirmation petitions. Additionally, the petition fails under § 9 of the FAA because the parties have no agreement providing for judicial confirmation – a specific requirement for FAA jurisdiction. The court dismisses with prejudice, holding that IDR awards under the NSA are enforceable only through administrative penalties, not private judicial actions. One might cynically wonder about what drove Congress’ decision to foreclose medical providers from an easy way of getting payment on their IDR awards or whether this is just careless statutory drafting.  The case is also a reminder to counsel drafting an arbitration clause which will not be institution-based that it is crucial to include a sentence allowing a court to confirm the award.

Have a good weekend – and, go Seahawks.  As a disgruntled Jets follower (is there any other kind?), I have to root for their cast-off Sam Darnold to, once again, make Big Green look bad.

David A. Reif, FCIArb
Reif ADR
Dreif@reifadr.com

[1] The parties agreed that the FAA applies to the transaction, so the court skipped that analysis.

[2] Even if there weren’t any value to the case, I would be including it just for the defendant’s name. .

The FAA Requires Marshal Service for Non-Resident Defendants

Section 9 of the Federal Arbitration Act sets out the procedure for confirming an arbitration award.  It also establishes the procedure for serving the application to confirm. “If the adverse party is a resident of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident, then the notice of the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other process of the court,” 9 U.S.C. § 9.  Geostabilization International, Inc., (“Geo”) obtained an approximately $138,000 arbitration award in its favor against Pure Construction Services, LLC.  When Geo sought to confirm the award, it used a private process server to serve its application.  Pure moved to dismiss for failure to make proper service. In Geostabilization Int’l, LLC v. Pure Constr. Servs., LLC, 2026 U.S. Dist. LEXIS 19697 (M.D. Tenn. Jan. 30, 2026), Judge Trauger quashes that service.  The parties agreed that Pure was a non-resident, which, the court holds, triggers the mandatory marshal service requirement.  However, Judge Trauger declines to dismiss the case outright, instead giving Geo another chance to properly serve Pure through the U.S. Marshals Service within 30 days; the court notes that, while the court must faithfully construe the statute, Pure did not show actual prejudice from the improper service. In an effort to conserve resources, Judge Trauger suggests the parties consider a waiver of service, instead of forcing the U.S. Marshals to effectuate service.

The takeaway? Do not assume that the FAA’s service requirements always mirror Federal Rule 4. Check the law in the applicable District to see whether marshal service is required – or better yet, request a waiver of service to save time and money for everyone involved.

Successor Institution Can Apply Original Arbitration Rules

In Baker Hughes Saudi Arabia Co. Ltd. v. Dynamic Industries International, LLC., 126 F 4^th 1073 (5^th Cir. 2025), the Court of Appeals considered whether the parties’ reference to the now-defunct Dubai International Financial Center London Court of International Arbitration (“DIFC-LCIA”) as an arbitral institution invalidated their arbitration clause.  Finding the venue provision to be severable, the Court remanded the matter to the District Court for further proceedings.  In Baker Hughes Saudi Arabia Co. Ltd. v. Dynamic Industries International, LLC, 2026 U.S. Dist. LEXIS 19714 (E.D. La. Jan. 30, 2026), Judge Guidry following that remand addresses what happens when the arbitral institution specified in a contract – here, the DIFC-LCIA – closes its doors.  He holds that the parties’ arbitration should proceed before the Dubai International Arbitration Centre (“DCIA”), a partial successor to the DIFC, but using the original DIFC-LCIA Rules the parties had chosen, rather than DIAC’s own rules. The court finds that this process reserves party autonomy while pragmatically addressing institutional unavailability. Baker Hughes had argued that only the LCIA could supervise the arbitration as contemplated by the DIFC-LCIA Rules, but Judge Guidry found this unpersuasive. He opines that the Fifth Circuit had already determined that DIAC’s rules were substantially similar to the DIFC-LCIA Rules and holds that he is bound by that finding. The  court stays the case pending arbitration.

The narrow issue of jurisdiction of these foreign institutions is only directly relevant to international arbitrators, but the lesson is broader.  Drafters should consider building fallback provisions into their arbitration agreements in case of  institutional changes.  While the major institutions in the U.S. – such as the American Arbitration Association, JAMS, and CPR – are unlikely to fold, there are more localized programs that might have a shorter lifespan.

Federal Common Law Provides Arbitrators with Judicial Immunity

In Lependorf v. Superior Court., 2026 U.S. Dist. LEXIS 19180 (D.N.J. Jan. 30, 2026), a dissatisfied pro se plaintiff sued both the arbitrator of her divorce case and the New Jersey courts.  Plaintiff alleged that the arbitrator was biased and failed to comply with disclosure requirements under New Jersey court rules.  Judge Kirsch dismisses the action as to the arbitrator, holding that he has federal common law immunity, analogous to judicial immunity, and that such immunity exists independently of state law, citing UAW v. Greyhound Lines, Inc, 701 F. 2d 1181 (6^th Cir. 1983) and Cahn v. International Ladies Garment Union, 311 F. 2d 113 (3^rd Cir. 1962).

Plaintiff sought to distinguish those immunity precedents by arguing that the arbitrator here exceeded his authority and, therefore, that immunity does not apply. Citing Stump v. Sparkman, 435 U.S. 349 (1978), the court construes an arbitrator’s “jurisdiction“ broadly for purposes of considering immunity and holds that the parties’ agreement gave this arbitrator authority to resolve the subject issues.[1]  Any alleged failures by the arbitrator to comply with certain rules – like filing disclosure forms on time – would not strip him of jurisdiction or the resulting immunity.  The court dismisses claims against the New Jersey judiciary defendants   on sovereign immunity grounds.

Arbitral immunity bars post-award litigation against the arbitrator personally. Lependorf reiterates the black letter law that parties dissatisfied with an arbitrator’s rulings face a steep climb, unless they follow statutory routes to vacatur. The limited grounds for setting aside an award under the FAA or state arbitration statutes remain the only avenue for challenging an arbitrator’s decisions or conduct during hearings.

Enjoy the next couple of days, as you gather the wings, chips, and beverages for the Super Bowl.

David A. Reif, FCIArb
Reif ADR
Dreif@reifadr.com

[1] The opinion does not quote the arbitration clause.  Counsel seeking to distinguish this case would do well to get the original record and see if the clause at issue here tracks the one which he or she is litigating.

District Court Authority to Invalidate Mid-Litigation Arbitration Agreements; the Scope of Delegation Provisions

In Avery v. TEKsystems, Inc., 2026 U.S. App. LEXIS 2091 (9th Cir. January 28, 2026)(Rawlinson and Koh, CJs, and Fitzwater, DJ, sitting by designation), the Ninth Circuit on Wednesday affirmed a district court’s denial of a motion to compel arbitration where the employer implemented a mandatory arbitration agreement over 22 months into class action litigation.  The panel and the court below found that the defendant’s communications were misleading and effectively converted the federal litigation from an opt-out class action into an opt-in proceeding.

Plaintiffs filed a putative class action against TEKsystems in January 2022, alleging the staffing agency misclassified its recruiters as exempt from California overtime laws. After discovery and class certification briefing closed, TEK rolled out a mandatory arbitration agreement on December 19, 2023 – during the holiday season and over twenty-two months into litigation.

TEK’s communications came in two emails on the same day. The first announced that the arbitration agreement would take effect January 1, 2024, with continued employment constituting acceptance. The email disparaged class actions as “wasteful,” “inefficient,” involving “exorbitant fees,” tending “to enrich only attorneys,” and requiring TEK to “ignore individual employee issues.” The second email informed putative class members they could opt out by January 9, 2024, but contained contradictory deadlines stating “January 9, 2023” in one place. Of 164 class members, 123 (77%) did not opt out. TEK moved to compel arbitration on June 10, 2024 – five days before the class notice period closed.

Writing for the panel, Judge Koh held that Rule 23(d) of the Federal Rules of Civil Procedure authorizes district courts to refuse enforcement of arbitration agreements threatening class action fairness. Following Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), the court explained that district courts have “the duty and the broad authority to exercise control over a class action” because of potential abuse. Rule 23(d) empowers courts to regulate notice and opt-out processes when party conduct threatens litigation fairness.

This judicial power, Judge Hoh opined, extends beyond merely prohibiting communications, observing that FRCP 23(d)’s power would be meaningless if it stopped when misleading communications resulted in agreements. The panel referenced the reasoning of the  Fourth, Sixth, and Eleventh Circuits. In Degidio v. Crazy Horse Saloon & Restaurant Inc., 880 F.3d 135 (4th Cir. 2018), the Fourth Circuit affirmed the District Court’s refusal to enforce arbitration agreements obtained through misleading communications more than a year after the case’s pendency. In Fox v. Saginaw County, Michigan, 35 F.4th 1042 (6th Cir. 2022), the Sixth Circuit held that FRCP 23(d) gives district courts broad authority to protect against coercive communications. In Billingsley v. Citi Trends, Inc., 560 F. App’x 914 (11th Cir. 2014), the Eleventh Circuit affirmed denial of a motion to compel where the rollout was “replete with deceit and designed to be intimidating and coercive.” The panel also cited its own decision in Dominguez v. Better Mortgage Corp., 88 F.4th 782 (9th Cir. 2023), where it affirmed orders nullifying employment and release agreements obtained through misleading communications.

TEK fundamentally subverted FRCP 23’s opt-out structure, Judge Koh opined. Under Rule 23, class members automatically remain in a certified class unless they affirmatively request exclusion. TEK’s agreement inverted this scheme; class members who did nothing automatically opted out of the litigation class and into an arbitration process.  To remain in the class, the court wrote, employees had to either quit or affirmatively opt out of arbitration, effectively converting the judicial proceeding from opt-out to opt-in status.

In addition to holding that the arbitration process subverts the process laid out in Rule 23, the panel agreed with the lower court that TEK’s communications were misleading in several respects.  The emails contained disparaging language apparently designed to dissuade participation in the class litigation. TEK implied class members would need to hire attorneys at “exorbitant fees,” without disclosing that consultation with plaintiffs’ counsel could be free. The communications gave contradictory instructions and inconsistent deadlines. The December 19 rollout with a thirteen-day response period limited employees’ ability to seek counsel because of the intervening holidays. TEK did not inform class members that certification had been briefed or provide the certification pleadings.

TEK argued that the FAA’s provision that arbitration agreements are valid and enforceable “save upon such grounds as exist at law or in equity for the revocation of a contract,” 9 U.S.C. § 2, trumps the application of FRCP 23(d) to deny arbitration.  The crux of  TEK’s contention was that Rule 23 is merely procedural and that the “grounds” for denying an arbitration must rest in state or federal substantive law.  The panel rejected this argument, citing Morgan v. Sundance, Inc., 596 U.S. 411 (2022), which held that courts cannot create arbitration-specific variants of procedural rules. Following Morgan, the panel ruled, FRCP 23(d) serves as an ordinary procedural rule which treats arbitration contracts like other contracts. “The federal policy is about treating arbitration contracts like all others, not about fostering arbitration,” Quoting Morgan, at 418.

TEK’s alternative argument – that a corrective notice would suffice – was also rejected as inadequate because class members had already entered the agreement based on misleading communications. Invalidating the agreement, the panel ruled, is necessary to restore the opt-out process as the default.

Although the agreement incorporated the JAMS rules, including a delegation provision, Judge Koh held that the district court properly ruled on enforceability, rather than sending it to the arbitrator. Citing Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010), the court reiterated the rubric that, when a party challenges the validity of the precise agreement to arbitrate itself, rather than the effect or scope thereof, the court, not the arbitrator, must consider the challenge. Because plaintiffs’ FRCP 23(d) challenge applied equally to both the delegation provision and underlying agreement, the panel agreed that the district court properly addressed the issue.  Query, though.  Does the court give enough weight to the general Matryoshka doll theory that an attack general attack on a contract does not constitute an adequate challenge to any particular provision thereof? Rather, the attack needs to be directed very specifically at the embedded provision which the party wishes to challenge.  Or is the court essentially saying that the Plaintiffs’ challenge here goes to the formation, rather than the effect, of the parties’ contract – an issue that always rests with the court?

The Ninth Circuit’s decision, along with the similar holdings from three other circuits, creates substantial precedent authorizing district courts to police arbitration agreements that interfere with the class action process.  Taken together, the decisions provide counsel who want to short-circuit class actions by adopting an arbitration provision with practical guidance as to how to pursue that goal.

First, arbitration agreements implemented while class litigation is pending cannot subvert Rule 23’s opt-out structure. Agreements that automatically bind class members to arbitration unless they take affirmative action, thus removing them from the litigating class, will face heightened scrutiny.

Second, communications must be accurate, complete, and not misleading. Key considerations include avoiding disparaging characterizations of class actions, clearly disclosing that class members can consult class counsel without cost, ensuring consistency in communications and deadlines, providing adequate time to consider whether to agree to arbitrate, and disclosing certification status.

Third, the FAA’s policy favoring arbitration does not override ordinary procedural rules. Courts may apply FRCP 23(d) to arbitration agreements as they would to any other contract threatening class action fairness.

Have a good weekend and stay warm.

David A. Reif, FCIArb
Reif ADR
Dreif@reifadr.com

Online Acquiescence to an Arbitration Provision – In Dahdah v. Rocket Mortgage, LLC, 2026 U.S. App. LEXIS 1881 (9^th Cir. January 26, 2026)(Gibbons, White, Murphy, CJs.), the Sixth Circuit issued an important decision addressing when online “hybrid” or “sign-in wrap” agreements create enforceable contracts to arbitrate under California law, as it reversed a district court’s denial of a motion to compel arbitration and held that the plaintiff had formed a binding agreement by clicking buttons on a mortgage referral website.

Michael Dahdah visited LowerMyBills.com three times between October 2020 and February 2021 seeking mortgage refinancing information. LowerMyBills, which shares a parent company with Rocket Mortgage (“Rocket”), operates a referral service matching consumers with lenders. During each visit, Dahdah proceeded through multiple webpages that collected his personal and property information. On the fourth and fifth pages of the process, immediately below green “Calculate” buttons, small text stated that, by clicking the button above, users would “agree” or “consent” to the hyperlinked Terms of Use, which included a mandatory arbitration provision covering “ALL CLAIMS, DISPUTES OR CONTROVERSIES” with LowerMyBills or its affiliates.

LowerMyBills matched him with Rocket Mortgage’s refinancing options, but, he did not pursue refinancing. However, in June 2022, Rocket allegedly called Dahdah at least eight times despite his number being on the Do Not Call registry.  Dahdah brought a class action against Rocket under the Telephone Consumer Protection Act (TCPA).  In response, Rocket moved to compel arbitration based on the LowerMyBills Terms of Use.

The district court denied the motion to compel, finding that Dahdah and Rocket had not formed a binding contract to arbitrate.  The lower court held that LowerMyBills’ website disclosure was insufficient to create a valid offer under California law. Rocket appealed directly under Section 16 of the Federal Arbitration Act, 9 U.S.C. § 16(a)(1)(A)-(B).

The Sixth Circuit reversed the district court’s order, holding that LowerMyBills and Dahdah had formed a binding arbitration agreement. Writing for a unanimous panel, Judge Murphy applied California contract law principles, opining that, under the Federal Arbitration Act, arbitration agreements are enforceable “save upon such grounds as exist at law or in equity for the revocation of any contract.” Contract formation under California law and the black letter principles we all learned in law school requires mutual assent demonstrated through a valid offer and acceptance, which is judged by an objective standard based on parties’ outward manifestations, rather than their subjective intent.

The court opines that, for online contracts, California law recognizes a spectrum of proposals. At one end, “clickwrap” and “scroll wrap” agreements that require users to click “I agree” after reviewing terms are generally enforceable. At the other end, “browsewrap” agreements that merely post terms on a website with no affirmative action required on the part of the site’s user are typically unenforceable. In between lie “hybrid” or “sign-in wrap” agreements where users must take some action (like clicking a button or creating an account) and the site’s language indicates this action manifests assent to hyperlinked terms.

The court puts LowerMyBill’s site into the hybrid category.  It, then, applies a “fact-intensive,” totality of the circumstances test which focuses on four key factors to determine if such a hybrid offer provides “reasonably conspicuous” notice:[1]

1. Page Design: Was the page “uncluttered” or filled with distracting elements? The court found LowerMyBills used a “simple design,” unlike the cluttered pages rejected in Berman v. Freedom Financial Network, LLC, 30 F. 4^th 849 (9^th Cir. 2022).
2. Proximity to Action Button: Was the offer placed near the button which users must click? The court emphasized that LowerMyBills placed its proposal “directly” “below the action button” on each page, with dynamic scrolling ensuring users always saw the offer on the same screen as the buttons. This resembled Oberstein v. Live Nation Enterprises, Inc., 60 F. 4^th 505 (9^th Cir. 2023), rather than Chabolla v. ClassPass, Inc., 129 F. 4^th 1147 (9^th Cir. 2025), where the offer was placed “on the periphery” below a second button users might not see.
3. Font and Color: Did the design draw attention to the proposal? While LowerMyBills used small font, the court found this comparable to Uber’s approved design, see Meyer v. Uber Techs., Inc., 868 F 3d 66 (2^nd Cir 2017). Critically, the hyperlinked “Terms of Use” appeared in “bright blue font” that contrasted with the white background, unlike the “tiny gray font” rejected in Berman.
4. Nature of Interaction: Would users expect contractual terms? The court concluded that users visiting a mortgage referral service would anticipate “an ongoing relationship” with LowerMyBills and affiliated lenders, not a “one-off transaction.” Users would reasonably expect that a free service comes with “contractual strings attached.”

Having found the link to contract terms sufficiently conspicuous, the court considered the rest of its analysis to be “straightforward.”  LowerMyBills told users they would accept the firm’s contract terms if they clicked the buttons. Dahdah admittedly clicked these buttons, which the court held constituted a “manifestation of assent to the terms” in the manner invited by LowerMyBills. The court rejected Dahdah’s argument that he lacked “actual knowledge” of the offer, emphasizing that California contract law applies an objective standard: if conduct would lead a reasonable person to believe acceptance occurred, the contract is enforceable regardless of subjective intent.

The court also addressed three other arguments. First, it rejected Dahdah’s claim that the arbitration provision was unenforceable due to missing procedural details, such as the designation of an arbitration organization, the number of arbitrators, and their selection method. The court held that the FAA’s gap-filling provisions in 9 U.S.C. § 5 supply such details when agreements, like LowerMyBills’, reference the FAA.

Second, the court held that the agreement clearly delegated “threshold arbitrability questions” – including whether the dispute falls within the arbitration clause’s scope – to the arbitrator rather than the court. The Terms stated that the arbitrator must resolve “the issue of arbitrability” and that “[a]ny controversy concerning whether a dispute is arbitrable shall be determined by the arbitrator and not by the court.” This delegation language required the court to send Dahdah’s argument about the temporal scope of the arbitration clause – whether calls over a year after website visits were covered – to the arbitrator.

Third, the court delegated to the arbitrator Dahdah’s contention that the parties’ agreement terminated after three months based on an FCC order addressing consent under the TCPA. The court held this was another threshold arbitrability question covered by the delegation clause.

In summary, hybrid agreements remain enforceable under California law when properly designed. Companies should ensure that: (1) pages are uncluttered without excessive visual distractions; (2) contractual language appears directly adjacent to the action button users must click; (3) hyperlinked terms use contrasting colors to stand out from surrounding text; and (4) the interaction suggests an ongoing relationship rather than a one-time visit. Nor does small font alone doom website agreements where other design elements draw sufficient attention to the terms; however, the typeface must not be so small as to be “barely legible to the naked eye,” the court’s view of the fatal flaw in Berman.

Finally, clear delegation clauses are critical if counsel wants to assure that threshold questions go to the arbitrator. Explicit language delegating arbitrability questions to the arbitrator, rather than an isolated reference to an institution’s rules, reduces the risk, which is more prevalent in recent case law, that a court might hold that an unsophisticated consumer would not understand that those rules turned jurisdictional questions over to the arbitrator and, therefore, refuse to delegate those questions.

Those of us in the Northeast have finally dug out of the snow; now we only face plunging temperatures.  As they used to say on “Hill Street Blues,” be careful out there.

David A. Reif, FCIArb

Reif ADR

Dreif@reifadr.com

[1] The opinion includes relevant screenshots from websites that were involved in many of the cases which it cites.  Other judges and counsel would do well to follow suit.

Delegation via Rule Incorporation

The court in which a party raises its right to compel arbitration decides whether the parties actually entered into a contract.  Likewise, it resolves other “threshold” or “gateway” issues, like unconscionability, unless the parties have “clearly and unmistakably” provided that those issues are resolved as part of the arbitration, see e.g. Patrick v. Running Warehouse, LLC, 94 F. 4^th 468 (9^th Cir. 2024).  The legal issue, therefore, is how does a court determine whether the parties have opted to delegate those often-crucial questions to the arbitrator.

One can start with the procedures adopted by the parties.  The rules of many, if not all, arbitral institutions provide that the arbitrator decides his or her own jurisdiction, see e.g. Commercial Rules, American Arbitration Association, Rule 7; JAMS Comprehensive Rules and Procedures, Rule 11.  Courts, including the Ninth Circuit in Brennan v. Opus Bank, 796 F. 3d 1125 (9^th Cir. 2015), have held that incorporation of such rules into the arbitration agreement – for example, by providing that the dispute will be resolved before the AAA – will generally move threshold questions to the arbitrator.

However –  what if one of the parties to the arbitration agreement is unfamiliar with contracts and legal process?  Has he or she, simply by entering into an agreement with a reference to rules which he or she may not understand, demonstrated the necessary intent to move an issue from judicial consideration.  Three cases from District Courts within the Ninth Circuit split on that question.

There Is No Delegation

In Jones v. Penney Opco, LLC, 2025 U.S. Dist. LEXIS 148484 (E.D. Cal. August 1, 2025), the plaintiff alleges that the defendant falsely claimed that it was selling products at a discount from normal retail prices. Defendant moved to compel arbitration based upon the terms and conditions allegedly incorporated into its website and through its rewards program.  Citing Patrick and Faucett v. Move, Inc., 2025 U.S. App. LEXIS 8850 (9^th Cir. April 15, 2025), the court opines that the Circuit has not resolved the issue.  Judge Drozd, however, holds that “incorporating the AAA rules into an agreement is not clear and unmistaken evidence to the intent to arbitrate arbitrability when one party is unsophisticated.” (Emphasis added, citations omitted).  The opinion does not have any real analysis as to how the court reaches this conclusion; Judge Drozd largely relies upon citations of his previous opinions, so it is important to read those cases if counsel wants to rely upon or challenge Jones.  However, the holding gives a broad scope to this exception to the general delegation rules and sets a very low bar for demonstrating unsophistication in a consumer case. Plaintiff filed a declaration that she is “an ordinary consumer” and “an unsophisticated layperson who is untrained in the law.” In the absence of a countering factual presentation from defendant, those blanket allegations were apparently enough to get the court over the hurdle of “sophistication.”

Schlueter-Beckner v. SimpliSafe, Inc., 2025 U.S. Dist. LEXIS 146568 (N.D. Cal. July 30, 2025)(Breyer, J.), joins Jones in rejecting the delegation of threshold issues. Like Jones, the plaintiff raised questions of false advertising. The terms and conditions allegedly incorporated into the defendant’s website invoked the AAA’s Consumer Rules. While citing to Brennan, Judge Breyer opines that the Court of Appeals “expressly limited that holding as ‘between sophisticated parties,’ leaving open the question of whether incorporation of the AAA rules is clear and unmistakable delegation to an unsophisticated party.” He recognizes that there is a split among opinions in the District, but finds that incorporating the AAA rules into “an already veiled length Terms of Service Agreement” does not rise to the clear and necessary intent to delegate this “’rather arcane’ arbitrability question.” To hold otherwise, the court would assume that plaintiff “navigated through eight webforms,” “clicked on the Terms of Service,” viewed a twenty-page agreement on his phone, “noticed the incorporation of the AAA rules,” located those rules, and found the delegation rule.  “Such a scenario is unreasonable for the average consumer with no legal experience.” The case is useful, not only as precedent for those challenging delegation, but as an important read for anyone faced with either side of the delegation issue.  Judge Breyer cites six decisions covering both sides of the question and, in a footnote, addresses the issue of whether excluding unsophisticated parties from the delegation rule would necessitate “impractical line-drawing.”

There Is Delegation

Ligeri v. Amazon.com Services, LLC, 2025 U.S. Dist. LEXIS 146352 (W.D. Wash. July 30, 2025)(Chun, J.), comes out on the other side of the question.  Plaintiff, who appeared pro se, sued Amazon for trademark infringement.[1]  The court assumes that plaintiff, although he signed a Business Services Agreement with Amazon, might not be sophisticated in contract terms. (Perhaps Ligeri’s citation to non-existent AI-generated case law influenced this conclusion). While recognizing that Brennan limited its holding to “the facts of the present case, which d[id] involve an arbitration agreement between sophisticated parties,” Judge Chun also cites to that portion of the appellate decision opining that its “holding does not foreclose the possibility that this rule could also apply to unsophisticated parties or to consumer contracts.” (brackets in Ligeri; citation omitted).  Citing to four cases in his District, Judge Chun holds that incorporation of the AAA’s rules is sufficient to delegate questions as to the scope of the arbitration clause, regardless of the parties’ legal knowledge.

To wrap up recent cases in the Ninth Circuit on delegation via rules incorporation, see Rubio v. Experian Information Solutions, Inc., 2025 U.S. Dist. LEXIS 147561 (E.D. Cal. July 30, 2025)(Sheriff, J.)(delegating arbitrability questions based on incorporation of the AAA rules).

In summary, the question of whether unsophisticated parties (whatever that term may mean) are bound by a rule-based delegation remains an open question.  But, let’s add to the complexity: assuming that a plaintiff’s knowledge of legal principles of delegation is relevant, should the court apply some objective standard or does there have to be a factual hearing as to each plaintiff’s subjective understanding?  And, if it is an individualized inquiry, what must plaintiff allege to get past the resolution of the question on a summary judgment-like basis?[2]  This one is an arbitration geek’s delight.

Enjoy the rest of the week.
David A. Reif, FCIArb
Reif ADR
Dreif@reifadr.com

[1] The case includes an analysis of the extent to which a decision in a prior arbitration precludes a party from subsequently relitigating the question elsewhere.  It is worth reading the case for that analysis alone.  Sorry to bury the lede, but I try to keep Highlights to three pages.

[2] For any law students looking for a topic for next year’s Note, consider the issue raised by these cases.  There is a good split of authority around the country, lots of opinions to consider, an interesting clash of policy questions, and a topic that would help the practicing bar.

Litigation Waiver

It is black letter law that, even if a party has the right to resolve a dispute through arbitration, it may waive that right by engaging in extensive litigation.  Both the Fifth Circuit and the Eastern District of Pennsylvania remind counsel who want to arbitrate to say so early, loudly, and often.

Litigating in the Face of “Potential” Arbitrability

Jones v. CVS Health Corp, 2025 U.S. Dist. LEXIS 144551 (E.D. Pa. July 29, 2025)(Younge, J.), arises from a putative class action alleging that defendants “conspired with select drug manufacturers to prevent Medicare beneficiaries from accessing cheaper generic versions of said manufacturers’ drugs.”  The plaintiffs filed the action on April 23, 2024.  Defendants, sometimes in conjunction with plaintiffs, requested various stays of discovery, including one which sought “a stay of discovery pending resolution of Defendants’ motion to dismiss . . . ”  On March 7, 2025, Defendants served Requests for Production and Interrogatories on Plaintiff Jones, requesting her membership ID number and other identifying information.  Defendants maintain that, based on that information, they learned for the first time that Jones enrolled for benefits under an employee program, rather than another program (“SilverScript”) which was addressed in the complaint.  They also became award that Jones signed up for an account on a CVS website through which she agreed to arbitration.  Defendants then filed a motion to compel.[1]  The court addresses whether, since the defendants did not receive definitive knowledge that Jones had signed an arbitration agreement until about a year into the litigation, their motion to compel was timely.

Judge Younge says “No,” and his opinion is a reminder to counsel that arbitration can be waived by litigating even if the moving party is not sure whether arbitration applies. Relying upon the Third Circuit’s opinion in White v. Samsung Electronics America, Inc., 61 F. 4^th 334 (3^rd Cir. 2023), the court holds that a party may waive arbitration if it fails to file a motion to compel when it “knew from the outset that there was a possibility that [plaintiff’s] claims were subject to an arbitration agreement.” (Emphasis added). Elsewhere, the court opines that defendants waived the arbitral alternative when they sought a resolution on the merits “knowing that arbitration was potentially available.” (Emphasis added).   Judge Younge particularly leans into on-going discovery in the case through which defendants could “ascertain the additional information that they needed to be certain that Jones’ claims were arbitrable.” In other words, definitive knowledge of the right to arbitrate a claim is not the triggering event; cautious counsel should move to compel as soon as they have any basis to believe that the claim asserted or the identity of the parties making the claim could invoke an arbitration clause.

Jones, along with White, is an important read to remind counsel of a basic principle – when it comes to arbitration, use it or lose it.  If you think that there is any set of facts under which a claim might be arbitrable and you want to avail yourself of that option, speak up right away.

Litigation of an Unrelated Claim Does Not Waive the Right to Arbitrate

Barnett v. American Express National Bank, 2025 U.S. App. LEXIS 19038 (5^th Cir. July 29, 2025)(Judges Southwick, Oldham and Ramirez, per curiam), addresses when litigation in one court might waive the right to arbitrate in a separate case.

Amex sued the Plaintiff, Michelle Barnett, in state court for her alleged failure to pay credit charges.  That case was dismissed.  Barnett then brought this action alleging violation of the Fair Credit Reporting Act.  Amex moved to compel arbitration pursuant to the terms of its credit card agreement; Barnett countered that, by suing her in state court, Defendant waived any arbitral rights.  The District Court denied Amex’s motion; the Court of Appeals here reverses and remands.  Quoting Forby v. One Technologies, LP, 13 F. 4^th 460, 465 (5^th Cir. 2021), the Court opines that “[f]or waiver purposes, a party only invokes the judicial process to the extent that it litigates a specific claim that it subsequently seeks to arbitrate.” (Emphasis in quoted opinion).  American Express’s state court suit for “a generic breach of contract claim” is not the same as the claims made in this FCRA action.  Waiver does not occur even when “both claims arise from the same facts. . . . Just because the two claims involved the same factual predicate – Barnetts’ debt – does not mean they are the same.”  In short, at least in the Fifth Circuit, there is no waiver unless the identical claim is asserted in both pieces of litigation.  Otherwise, sue away.

Timeliness of a Motion to Vacate under the FAA

Two cases on Tuesday are reminders to counsel of the importance of serving a motion to vacate within three months of the date of the arbitrator’s award, 9 U.S.C. § 12.

In Valentini v. StoneX Financial, Inc., 2025 U.S. Dist. LEXIS 144736 (S.D. Tex. July 29, 2025)(Hanks, J.), the arbitrators issued their award on April 22, 2024.  Plaintiffs, perhaps acting pro se, acted quickly by filing a petition to vacate on April 29, 2024 – a week after the decision.   However, they did not serve StoneX or its counsel until August 2, 2024 – over 102 days after the award. Therefore, the District Court denies the motion to vacate as being untimely.  Further, the court rejects the Valentinis’ attempt to end run the time limits by filing a declaratory judgment action seeking a declaration that the award should be vacated; “’Section 10 of the FAA provides the exclusive statutory grounds’ for vacatur of an arbitration award.” (Citation omitted; emphasis in opinion). Note – the court points out in a footnote that “[t]he Valentinis agree that the FAA controls.”  What if there were no such concession?  Could the parties, then, look to the time limits under any applicable state arbitration statute to determine the applicable vacatur period?

In Sheet Workers, Local 25 v. Jansons Associates, Inc., 2025 U.S. App. LEXIS 18942 (3^rd Cir. July 29. 2025)(Krause, J. for herself and Judges Matey and Phipps), treats the Plaintiff’s request to review a grievance award as a motion to vacate that award under the FAA, rather than as a separate action under Section 301 of the Fair Labor Management Relations Act.  Accordingly, the plaintiff had to serve the petition to vacate pursuant to FAA Section 12, and his motion – filed about nine months after the issuance of the award – was not timely.  While it is not the court’s focus, the case also highlights that responding to a petition to confirm an award with a request to vacate will not protect any challenge to the award, unless the vacatur request itself complies with the timing of FAA Section 12.

Since I’ve been away a while, let me restate a basic principle underlying ADR Highlights. I am a working arbitrator.  My goal in this blog is to highlight recent cases and lay out any practice tips that they might show.  I am not expressing an opinion as to whether the decision is right or wrong. My job as a neutral in cases before me is to decide them based on what counsel provides, so please don’t read anything into these summaries on where I might come out in a given case.

Have a good weekend.  It’s going to cool down here in the Northeast.

David Reif, FCIArb

Reif ADR

Dreif@reifadr.com

[1] The LEXIS print of the opinion states that the motion to compel arbitration was filed on “June 24, 2024,” but, in context, this seems to be a typo.

Delegation of the Availability of Class Arbitration; Direct Benefits Estoppel; Failure to Meet Time Limits in the Arbitral Rules

I am not even going to try to detail the procedural background of Sullivan v. Feldman, 2025 U.S. App. LEXIS 5637 (5^th Cir. March 11, 2025), in this limited space.  The Court describes the parties’ proceedings as “the Bleak House of arbitration.”[1]  The parties filed nine separate arbitrations, each with a different arbitrator.  Four of those proceedings went to award, with conflicting results; five of the proceedings were withdrawn or did not go forward before the District Court ruled.  The arbitrators in the four pending cases held a joint evidentiary hearing.  However, despite hearing the same evidence, the arbitrators reached startlingly different conclusions.  Three of them denied Claimants’ application for class certification, but one arbitrator allowed such relief. While all awarded damages against the some of the same respondents, the amount of those damages ranged from low of about $1.5 million to a high of roughly $89 million; the higher award came from the arbitrator who allowed class arbitration. One arbitrator held that an officer of one Respondent was liable, while three other arbitrators did not.  Despite the disparity among the awards, the District Court confirmed all four. This appeal ensured.

1. Delegation of the Availability of Class Arbitration – Applying doctrines regarding the delegation of threshold issues and the usual limited review of an arbitration award, the Court of Appeals affirms the lower court’s confirmation of the class award. In doing so, Judge Jones, writing for herself and Judges Smith and Ho, “reluctantly” follows Circuit authority in Work v. Intertek Resource Solutions, Inc. 102 F. 4^th 769 (5^th 2024). That panel held that the incorporation of the JAMS rule allowing the arbitrator to decide jurisdictional issues, including disputes as to the proper parties to the arbitration, delegated the classing question to the arbitrator. Characterizing Work as an “outlier,” the Sullivan panel opines that the precedent goes too far in holding that a general delegation of jurisdictional disputes to the arbitrator constitutes “clear and unmistakable evidence” that the parties intended to delegate this threshold question of arbitrability to the arbitral tribunal.  The court cites to Lamps Plus, Inc. v. Varela, 587 U.S. 176 (2019)(silence is not a basis for holding that the parties agreed to class certification); First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995)(clear and unmistakable evidence is required to hold that the parties agreed to class arbitration); and numerous other SCOTUS authorities.  In this case, the parties’ agreement invoked the AAA’s rules which, like those of JAMS, allow the arbitrator to decide his or her own authority.  Judge Jones cites to cases from outside the Fifth Circuit holding that incorporation of such institution rules does not provide that “clear and unmistakable” direction.  She also questions whether the pre-Lamp authorities upon which Work relied are still viable. Having decided that Circuit precedent requires it to uphold the trial court’s decision to delegate class arbitration issues to the arbitrator, the court adopts the usual deference standard and confirms the one award’s allowance of class arbitration.  However, in a lengthy footnote, the panel criticizes the method by which the arbitrator reached that decision, deeming it “in tension with required federal court practices, which protect the constitutional due process rights of defendants.”  The arbitrator’s procedure, Judge Jones opines, may have inadequately considered the predominance of common questions of fact or law, the commonality of those questions, and the effect of state law variations in this multi-state proceeding.  For anyone championing or opposing an arbitrator’s classing of a proceeding, footnote 2 of this opinion is invaluable in putting together a checklist for counsel’s position.
2. Untimely Award – The arbitration agreement provided that the proceeding was “to be concluded within four months. . . .” The arbitrators decided that the four-month provision was “inconsistent with due process” and unconscionable.  The arbitration provision invokes the AAA Commercial Rules.  Rule 7(a) thereof provides that the arbitrator decides his or her own jurisdiction. Relying SCOTUS‘s holding in Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013), that the only question for a reviewing court is whether the “arbitrator[s] (even arguably) interpreted the parties’ contract, not whether [they] got its meaning right or wrong,” the court rejects Respondents’ argument that the untimeliness voids the award. (Brackets in opinion).  However, arbitrators, be very, very careful in relying upon Sullivan to justify a late award absent party consent.  There are plenty of authorities out there holding that an untimely award must be vacated; they vary by state, so I’ll leave the research to you.  But, bottom line – do not get yourself into a jam; issue your award in a timely fashion, regardless of the all-nighters involved.
3. Direct Benefits Estoppel – One of the arbitrators held that Carlson, the president of Capstone Associated Services, one of the parties to the arbitrations, was subject to the arbitration provision and held him liable, even though he was not a signatory to the agreement which contained the arbitration clause. Under applicable Texas law, a non-signatory is bound by an agreement, including an arbitration agreement, if he or she receives invokes the benefits thereof, and Carlson did go forward in two of the arbitrations which were proceeding under the signatories’ agreement.  However, in each case he did so to object to his inclusion as a respondent and to assert defenses.  As Judge Jones opines, he did not “initiate arbitration to get the benefit of that contract.”  Rather, he sought a determination “that he could not be bound to arbitrate, or if he could be, he was innocent.”  Further, although the court does not find it necessary to reach the issue, it opines in dictum that it is “highly questionable” as to whether Carlson had adequate “notice” of the proceeding which found him liable for $100 million.  A state court had restrained the arbitrator in one case from proceeding against him.  Thereafter, the claimants withdrew him from that proceeding. When the arbitrator in that proceeding was replaced, the new arbitrator never named him any captions, but merely incorporated pleadings that predated the withdrawal

Since Carlson did not sign the agreement with the arbitration clause and there was no valid claim for direct-benefit estoppel, the panel vacates the award as to Carlson.

Remedy

So how to unwind the mess?  As if nine arbitrations were not enough, two parties had filed a tenth arbitration before a tenth arbitrator, seeking to resolve the conflict among the four awards.  However, the District Court had previously enjoined any further arbitrations.  After an emergency hearing, the District Judge ordered that Arbitration Ten should not go forward until the court issued an opinion on the propriety thereof.  Probably because he or she was awaiting this decision by the Court of Appeals, the District Judge had not acted on the motion since November 2023.  As part of its mandate, the Court of Appeals vacates the stay, presumably allowing the tenth arbitration to go forward.  However, the opinion closes with a wish.  “The parties remain free to arbitrate another day. For the sake of sanity, judicial efficiency and economics, this court hopes their disagreements will be finally resolved.”

A couple of thoughts.  First, I never second guess counsel’s judgments; I had to make too many hard decisions myself over the course of a trial lawyer’s career and you never know the strategic considerations at play.  However, I have to wonder why the claims were never consolidated into a single arbitration.  While advocates always want a presumably favorable arbitrator or judge for the specific issues which will be raised, this proliferation of proceedings seems doomed to raise extraneous issues.

Second, Judge Jones in her criticism of Work’s holding on the delegation of class arbitration decisions does everything except stamp in red “PLEASE EN BANC THIS CASE” across the front page of the opinion.  It will be interesting to see if the Feldman parties ask the entire Circuit to weigh in – an intriguing prospect since the Chief Judge was on the Work panel.[2]  Also, in light of the conflict between Work and the other Circuit courts to which Judge Jones cites and the prevalence of arbitration clauses delegating threshold questions through the incorporation of tribunal rules, will anyone seek cert. from SCOTUS on the question?   Watch this space.

There were two other significant Circuit decisions this week, both from the Fourth Circuit – Johnson v. Continental Finance Co., 2025 U.S. App. LEXIS 5610 (4^th Cir. March 11, 2025)(illusory contracts) and Dhruva v. Curiositystream, Inc., 2025 U.S. App. LEXIS 5502 (4^th Cir. March 10, 2025)(incorporation of an arbitration clause through a website screen).  Because of the importance of Sullivan, there’s not room to discuss those today without Highlights becoming too long.  More on them next issue.

Have a good weekend.

David A. Reif
Reif ADR
Dreif@reifadr.com
Reifadr.com

[1] Bleak House is Dickens’ novel about Jarndyce v. Jarndyce, which involved a testator’s conflicting wills and lasted so long that the only person with memory of the whole case was a clerk.

[2] Work was decided on May 4, 2024, by Chief Judge Richman and Judge Graves and Wilson.

Reopening a Dismissal; Whence Badgerow?

On March 3^rd, in his terrific Substack Post, One First – a must read for anyone interested in the Supreme Court – Professor Steven Vladeck refers to Waetzig v. Halliburton Energy Services, Inc., 2025 U.S. Lexis 868 (February 26, 2025), as a case that “only a Civil Procedure scholar could love.”  Well, Professor, fans of arbitration law are even geekier. For us, this case is really about the issue that the Supreme Court did not decide.

In a unanimous opinion, written by Justice Alito, the Court held that a voluntary dismissal under Fed R. Civ. P. 41(a) was a “final judgment” for purposes of reopening the case under Rule 60(b).  The latter rule allows the court to “relieve a party. . . from a final judgment, order or proceeding. . . .” Among the grounds for such relief are “mistake, inadvertence, surprise, or excusable neglect.”

Waetzig, a former employee, sued Halliburton, claiming that his termination violated the federal Age Discrimination Employment Act.  In response to Halliburton’s motion to compel arbitration, Waetzig agreed to arbitrate.  However, rather than moving to stay the case under Section 3 of the Federal Arbitration Act, he dismissed the action.  Since Halliburton had not yet filed a motion for summary judgment or an answer, the dismissal did not require any court action.  Also, since it was the first time that Plaintiff had dismissed his claims, the dismissal was without prejudice.

Waetzig lost the arbitration.  At that point, rather than filing a petition to vacate the award, he moved to reopen the initial action in order to challenge the arbitrator’s decision for an alleged failure to follow procedural mandates of the arbitration agreement.  Defendant argued that Rule 60(b) did not apply to voluntary dismissals. The District Court granted Rule 60(b) relief and vacated the arbitration award. The Tenth Circuit reversed, accepting Halliburton’s position on the scope of the rule.  This appeal ensued.

Justice Alito’s opinion is both a historical and, as expected in his rulings, a textual analysis of the relevant rules.  Professor Vladeck is right about that part of the opinion – only a Civil Procedure savant wants to wade through it.

For those in the arbitration world, though, the issue the court does not decide is going to be important to follow on remand.  Halliburton argued that, even if Rule 60(b) allowed a reopening, the District Court lacked subject matter jurisdiction to vacate the award.  The Supreme Court did not consider that issue, limiting its holding to the certified question of the applicability of Rule 60(b). “We leave it to the lower courts to address any subsequent jurisdictional questions on remand.”

The implications of that lower court decision will flesh out SCOTUS’s decision in Badgerow v. Walters, 596 U.S. 1 (2022).  In that case, the Supreme Court held that, while a District Court can look to the elements of the parties’ underlying dispute to determine whether it has jurisdiction to compel arbitration, it cannot do so in a dispute over whether to confirm or vacate an award.  In other words, if non-diverse parties dispute the plaintiff’s rights under a federal statute, such as a civil rights act, the Defendant may bring an action to compel arbitration, but neither party may bring an action to confirm or vacate an award in the court’s mandated arbitration resolving the same claims.

Now, throw SCOTUS’s holding last Term in Smith v. Spizzirri, 601 U.S. 472 (2024), into the mix.  The Supreme Court there held that a District Court that compels arbitration may only stay, not dismiss, the case, if either party asks for such a stay.  So, what happens in a case in which the District Court’s jurisdiction over the initial dispute arises, not from diversity, but from the existence of a federal question?  While it is clear that a party could not bring a new petition outside the existing case to confirm or vacate the arbitral award, may the District Court do so in the stayed case in which it ordered those parties to arbitrate?  The question has created a Circuit split.  Compare White v. Titlemax of Virginia, Inc., 2024 U.S. App. LEXIS 10593 (4^th Cir. May 1, 2024), and SmartSky Networks, Inc. v. DAR Wireless, LTD, 93 F. 4^th 175 (4^th Cir. 2024), with Kinsella v. Banker Hughes Oilfield Operations, LLC, 66 F. 4^th 1099 (7^th Cir. 2023).  With the stay mandate laid out Smith, this will become a recurring issue.  Hopefully, it ultimately works its way up the chain to SCOTUS

Watch this space.

Quick Hits

Arbitral Confidentiality Provisions and Substantive Unconscionability

In Stubbins v. Spring Valley Hospital Medical Center, 2025 U.S. Dist. LEXIS 39327 (D. Nev. March 4, 2025)(Youchah, M.J.), the Court addresses whether a provision in a form arbitration agreement which prohibits the parties from disclosing “the existence, content . . . [and] results of any arbitration” renders the case substantively unconscionable. (Brackets and ellipsis in the opinion).  The Magistrate Judge ultimately opines that the question is “too close to call,” but holds that the arbitration clause is not procedurally unconscionable and, therefore, enforceable under Nevada law.  The case is worth reading by drafters who are trying to keep a proceeding totally sub rosa.

Litigation Waiver

Two recent cases reached opposite results as to whether limited discovery constitutes a waiver of any right to arbitrate, Compare Parker v. Kearney School District, 2025 U.S. App. LEXIS 5322 (8^th Cir. March 7, 2025)(Shepherd, Arnold, and Erickson, C.J.s) with In re: Amitiza Antitrust Litigation, 2025 U.S. Dist. LEXIS 39957 (D. Mass. January 27, 2025)(Joun, J.).  The lesson remains the same – assert your client’s right to arbitrate at every conference, in every filing, and with every communication to opposing counsel.

Arbitration Clause Governs the Arbitration

Garland Symphony Orchestra Association, Inc. v. Dallas-Forth Worth Professional Musicians Association, 2025 U.S. Dist. LEXIS 41372 (N.D. Tex. March 7, 2025)(O’Connor, J.)(vacating award as to issues not submitted in arbitration agreement), and Center for Excellence in Higher Education, Inc. v. Accreditation Alliance of Career Schools and Colleges, 2025 U.S. Dist. LEXIS 40996 (E.D. Va. March 6, 2025)(Alston, J.)(confirming award where arbitrator refused to accept evidence outside items allowed under arbitration provision), are reminders that arbitration is a matter of contract.  Therefore, the arbitrator’s considerations are limited by the parties’ agreement.

Delegation; Incorporation of AAA Rules

In the third appeal from the District Court’s repeated denial of a motion to compel arbitration in Berkeley County School District v. Hub International Limited, the Fourth Circuit, again, reverses and remands, holding that an agreement which delegates to the tribunal questions of arbitrability refers the question of which of two different arbitration provisions applies, Berkeley, 2025 U.S. App. LEXIS 5367 (4^th Cir. March 7, 2025)(King, Gregory, Rushing, C.Js.).  The case also is a further indication that, while it has never held directly that the incorporation of the AAA’s Rules delegates arbitrability, the Circuit leans that way, see p. *3, fn. 2.

Enjoy the rest of your week and try to get outside.  Spring is coming to the Northeast U.S.

David A. Reif
Reif ADR
Dreif@reifadr.com
Reifadr.com

State Court Jurisdiction and the FAA’s “Transportation Worker” Exemption

Last Term SCOTUS held that the scope of the “transportation worker” exception to the coverage of the Federal Arbitration Act is based upon the employee’s duties, not the employer’s industry, Bissonnette v. LePage Bakeries Park St. LLC, 601 U.S. 246 (2024).  As a result, workers in a broad range of businesses are now clearly within the exception.

But does removal from the FAA always render such a worker’s arbitration clause unenforceable?  What about the applicability of state arbitration statutes, which may not exclude coverage of such employees?  LeRoy Lambert and Brian McEwing address the issue in a terrific article in the Tulane Maritime Law Journal, ARTICLE: Enforcement of Arbitration Agreements in Seafarer Employment Contracts: May State Law Arbitration Statutes Apply?, 46 Tulane Maritime Law Journal 55 (Winter, 2025), available on Lexis at ARTICLE: Enforcement of Arbitration Agreements in Seafarer Employment Contracts: May State Law Arbitration Statutes Apply?, 49 Tul. Mar. L. J. 55.   Although the article focuses on maritime law (both of the authors are life-long veterans of the industry), their discussion addresses in depth the case split in non-maritime cases over whether the FAA’s exclusion preempts state law coverage of the exempted class of workers.  It is an important read for anyone litigating issues related to or drafting arbitration clauses covering employees who might even tangentially touch the delivery of goods which have crossed state lines.  Hint to drafters – include in the arbitration clause a specific provision that, if the FAA does not apply, the enforcement of the agreement is governed by the arbitration laws of a specified state.

This is a valuable addition to the literature.  Thanks to the authors.

Choice of Law in Determining Arbitrability; Equitable Estoppel and the New York Convention

Continuing the maritime theme, Anderson v. MSC Cruises, S.A., 2025 U.S. Dist. LEXIS 20731 (S.D. Fla. February 5, 2025)(Strauss, M.J.), arises out of an injury suffered by seaman injured aboard a cruise ship.  While the ship was owned and operated by MSC Cruises, S.A., the employee, a salesperson in one of the shops, was under contract to Espit Ventures PTE; that contract included an arbitration clause.  As a result of his fall, Anderson commenced an arbitration against Espit.  However, rather than arbitrating against MSC, he brought this litigation.  MSC moved to compel arbitration pursuant to a provision of the Espit employment contract, relying on the doctrine of equitable estoppel.  The Magistrate Judge agrees that the doctrine applies and recommends that the District Judge grant the motion to compel.

That conclusion, though, buries the lede, which addresses choice of laws in the context of the New York Convention.  As a threshold matter, Judge Strauss concludes that “the Court should apply federal common law to threshold questions of arbitrability, which include whether MSC can compel arbitration through principles of equitable estoppel.”  In so holding, he rejects the parties’ various contentions for the application of Maltese law, which the employment contract invoked; Singaporean law, under which Espit was formed,; and Nicaraguan law, which is that of Anderson home country.  The court opines that the question of whether to apply federal common law or state principles in a case involving the New York Convention and arbitrability is one as to which “there is no binding case law from the Supreme Court or Eleventh Circuit. . . .”  After a lengthy analysis, Judge Strauss adopts Circuit Judge Tjoflat’s reasoning in his concurrence in Outokumpu Stainless USA, LLC v. Coverteam SAS, 2022 WL 2643936 (11^th Cir. July 8, 2022).  Therefore, opining that “applying either Maltese, Singaporean, or Nicaraguan law to the threshold question of arbitrability would ‘frustrate the uniform standards the [Convention] and Chapter 2 of the FAA were enacted to create,’” (citation omitted; brackets in opinion), the court concludes that it should apply federal common law. Applying those principles and using a standard equitable estoppel analysis, it holds, based upon the Plaintiff’s duties and the highly similar allegations in the demand for arbitration and the lawsuit, that Defendant may rely upon the arbitration clause.  The court compels arbitration.

The case specifically involves a seaman’s contract.  However, like the general principles laid out in the article referenced in the section above, it has broader implications.  Counsel should keep this opinion in his or her notebook for use in any case involving the New York Convention in which a party’s right to arbitrate is based on a claim of equitable estoppel.

Vacating for Manifest Disregard – the Test; Public Policy Vacatur

Froedtert South, Inc v. Stone, 2025 U.S. Dist. LEXIS 22275 (E.D. Wisc. February 7, 2025)(Stadtmueller, J.), arose from an arbitration against a physician who allegedly violated his employment agreement with the Petitioner.  The arbitrator found a breach, and the damage award included the cost of locum tenens physicians whom Froedtert hired to cover for Stone during his absences. The arbitrator did not offset the salary that Petitioner would have paid Stone if he did not resign before the end of his contract.  The parties respectively filed motions to compel and vacate. Stone argued that the arbitrator disregarded governing Wisconsin damages law and that the award violated the state’s public policy “against double recovery.”

One of the disputes among the Circuits is whether  “manifest disregard” of the law is still a viable basis for vacatur after SCOTUS’s decision in Hall Street Associates, L.L.C. v. Mattel, Inc, 607 U.S. 246(2008).  Another centers on differences in defining the standard to apply in such cases.  Judge Stadtmueller was faced with an even more surgical question – which of two possibly conflicting Seventh Circuit tests applies in reviewing the arbitrator’s decision making.  The Court first refers to Renard v. Ameriprise Financial Service, Inc., 778 F. 3d 563 (7^th Cir. 2015).  There, Judge Wood, writing for herself and Judges Easterbrook and Sykes, opined “that an arbitral award may be vacated under 9 U.S.C. § 10 ‘if “the arbitrator deliberately disregards what he knows to be the law,”’ also termed ‘manifest disregard of the law.’” (citations omitted).  On the other hand, he writes, in Hyatt Franchising, L.L.C. v. Shen Zhen New World 1, LLC., 876 F. 3d 900 (7^th Cir. 2017), Judge Easterbrook and Judges Rovner and Hamilton, stated that Section 10(a)(4) “does not make legal errors a ground on which a judge may refuse to enforce an [arbitration] award.” (Citation omitted; bracket in opinion). After a “catalog” of Seventh Circuit jurisprudence, the court concludes that Renard is “more of an exception to a line of cases construing the vacatur standard narrowly.”  That reading, the court opines “accords with the purpose of arbitration – ‘swift, inexpensive and conclusive resolution of disputes’ – which the Seventh Circuit has emphasized time and time again.” (Citation omitted).  Accordingly, the court holds that an arbitrator’s error of law does not provide a basis for vacating an award.

The public policy analysis is shorter, but gives a good roadmap for considering the issue.  Any such vacatur must be based on a public policy that is “well defined and dominant.” (Citation omitted).  Stone argued that it was “always against public policy to allow a party to secure the windfall of a double recovery.”  However, Judge Stadtmueller opines, while that argument “may be right as a normative matter,” Stone fails to cite specific, relevant cases or authority “establishing” a “well defined and dominant” public policy against double recovery “applicable in the circumstances of this case. “  Does requiring that degree of specificity effectively kill the doctrine?

Every litigator in the Seventh Circuit who faces or raises a “manifest disregard” post-award challenge needs this case at hand.  It is a compendium of Circuit authority on the issue.  Pick your side and you will find referenced cases supporting it.  Argue for a restricted view of “manifest disregard,” and you have Judge Stadtmueller’s case as authority.

Quick Hits –

EFFA

Ding v. Structure Therapeutics, Inc., 2025 U.S. Dist. LEXIS 21088 (N.D. Cal. February 5, 2025)(Corley, J.) –  Discrimination on the basis of gender constitutes “sexual harassment” for purposes of invalidating an arbitration clause where applicable state law says sexual harassment includes “treating the plaintiff less well than other employees based on her gender.”  The court rejects the contrary holding in Sing v. Meetup LLC, 2024 WL 3904799 (S.D.NY August 22, 2024).

“Binding Mediation”

In Burns v. Evergreen Design & Construction, LLC, 2025 U.S. App. LEXIS 2728 (6^th Cir. February 4, 2025), Circuit Judge Bush, writing for himself and Circuit Judges Batchelder and Bloomekatz, holds that there is no such thing as “binding mediation.” “Binding mediation is an oxymoron because the key attribute of mediation is that it is nonbinding.”  Interpreting the agreement against the drafter,  Evergreen, the court affirms the District Court’s refusal to compel arbitration. (I feel that there should be a line here comparing “binding mediation” to the non-existent Big Foot, but I can’t quite reach it.).

New AAA Construction Industry Rules

The American Arbitration association has adopted new rules governing construction disputes.  In FEATURE: In-Depth Look at the New AAA Construction Industry Arbitration Rules, 72 Louisiana Bar Journal 334 (February/March 2025), available on-line at https://www.lsba.org/documents/publications/BarJournal/Journal-Whole-Feb-2025.pdf, Iman Hyder-Eliz and Anthony DiLeo analyze those changes.

Depending on how busy the courts are, I hope to cover some journal articles and upcoming programs in the Friday edition.  Watch this space.

David A. Reif
Reif ADR
Dreif@reifadr.com
Reifadr.com