Justia Civil Procedure Opinion Summaries

A law firm sought to recover over $1.7 million in fees and costs for representing the Los Angeles County Sheriff, Alex Villanueva, and the Sheriff’s Department in litigation initiated by the County of Los Angeles. Due to a conflict of interest, the County’s Board of Supervisors offered Villanueva independent counsel, allowing him to select his attorney but reserving discretion over compensation. Villanueva chose the law firm, which entered into an engagement agreement with him. The County, however, sent its own retainer agreement to the firm, which the firm refused to sign. The firm continued its representation but was never paid. After the firm demanded arbitration under its engagement agreement, the County and related plaintiffs filed suit seeking a declaration that no valid agreement to arbitrate existed and an injunction against the arbitration.The Superior Court of Los Angeles County granted a preliminary injunction, then summary judgment for the County plaintiffs, finding the Sheriff lacked authority to enter into the engagement agreement. The court denied the law firm’s post-judgment motion for leave to file a cross-complaint, citing both untimeliness and bad faith. The firm then filed a separate lawsuit against the County and related defendants, asserting breach of contract and related claims. The trial court sustained the County’s demurrer, dismissing the complaint with prejudice on grounds that the claims were compulsory cross-claims in the earlier action and for failure to allege compliance with the Government Claims Act.The California Court of Appeal, Second Appellate District, Division Eight, affirmed both the judgment in the County’s action and the dismissal of the law firm’s separate lawsuit. The court held that the Sheriff did not have authority to retain counsel on his own; only the Board of Supervisors could contract for legal services. The law firm’s claims were barred as compulsory cross-claims and for failure to comply with the Government Claims Act. View "County of Los Angeles v. Quinn Emanuel Urquhart & Sullivan, LLP" on Justia Law

Puerto Rico Telephone Company (PRTC) sought to confirm an arbitration award against WorldNet Telecommunications in federal court under section 9 of the Federal Arbitration Act (FAA). PRTC relied on then-existing First Circuit precedent, which allowed federal courts to exercise subject-matter jurisdiction over such applications if the underlying dispute involved a federal question. After the district court dismissed PRTC’s action for lack of Article III standing, PRTC appealed.The United States District Court for the District of Puerto Rico dismissed the case, finding that PRTC had not shown the necessary injury-in-fact to establish standing under Article III of the Constitution. PRTC then appealed to the United States Court of Appeals for the First Circuit. While the appeal was pending, the United States Supreme Court decided Badgerow v. Walters, which held that federal courts lack subject-matter jurisdiction over applications to confirm or vacate arbitration awards under sections 9 and 10 of the FAA, except in circumstances not present in this case. PRTC requested that the First Circuit vacate the district court’s judgment and direct dismissal without prejudice for lack of subject-matter jurisdiction, so that PRTC could pursue relief in the Commonwealth courts. WorldNet argued that the First Circuit should instead affirm the district court’s dismissal on standing grounds.The United States Court of Appeals for the First Circuit held that, in light of Badgerow v. Walters, federal courts do not have subject-matter jurisdiction over PRTC’s application to confirm the arbitration award under section 9 of the FAA. The First Circuit vacated the district court’s judgment and remanded with instructions to dismiss the case without prejudice for lack of subject-matter jurisdiction. The court did not address the standing issue. View "Puerto Rico Telephone Co. v. Worldnet Telecommunications, LLC" on Justia Law

A group of plaintiffs, including a medical practice, individual physicians, a medical society, and two patients, brought various claims against a health insurer, alleging that the insurer interfered with doctor-patient relationships, denied or delayed coverage for medical services, and caused significant harm to patients. The claims included tortious interference with contractual rights, unfair competition, RICO violations, and emotional distress, with specific factual allegations that the insurer’s actions led to worsened medical outcomes for the patients involved.The Circuit Court of the Third Circuit reviewed the insurer’s motion to compel arbitration based on arbitration clauses in provider agreements and member handbooks. Instead of determining whether the claims were subject to arbitration, the circuit court focused on the alleged unconscionability of the contracts as a whole, finding them to be contracts of adhesion and unconscionable, and denied the motion to compel arbitration. The court also denied summary judgment as to one patient’s claims and did not stay the medical society’s claims pending arbitration.The Supreme Court of the State of Hawaiʻi reviewed the case and held that the circuit court erred by not following the required analytical framework for arbitrability. The Supreme Court vacated the lower court’s order in part, holding that claims arising under the Participating Physician Agreement must be referred to arbitration because the agreement delegated the question of arbitrability to the arbitrator. Claims under the Medicare and QUEST Agreements were also subject to arbitration, as the arbitration clauses were not shown to be substantively unconscionable. However, the Court held that the claims of one patient and the physician as a patient were not subject to mandatory arbitration, and another patient’s claims were not subject to a grievance and appeals clause. The case was remanded for further proceedings consistent with these holdings. View "Frederick A. Nitta, M.D., Inc. v. Hawaii Medical Service Association." on Justia Law

The founder and former CEO of a national pizza company brought suit against a public relations firm that had previously provided services to the company. The dispute arose after the plaintiff alleged that the firm leaked confidential and damaging information about him to the press, in violation of a nondisclosure agreement (NDA) that included an arbitration clause. The NDA was executed after the company requested the firm sign it, anticipating close work with the plaintiff during a period of reputational crisis. The relationship between the parties deteriorated following a conference call in which the plaintiff made controversial remarks, which were later reported in the media, leading to his resignation from the company’s board.The case was initially filed in state court and then removed to the United States District Court for the Western District of Kentucky. Over several years, the litigation involved multiple amended complaints, extensive discovery, and dispositive motions. The defendant did not move to compel arbitration until after the district court denied summary judgment on the NDA claim. The district court held a bench trial and found that the NDA was enforceable and contained a binding arbitration provision. However, the court concluded that the defendant had defaulted on its right to arbitrate by actively litigating the case for years before seeking arbitration, and thus denied the motion to compel arbitration.On appeal, the United States Court of Appeals for the Sixth Circuit determined it lacked jurisdiction to review the district court’s contract formation ruling but had jurisdiction to review the default determination. The Sixth Circuit affirmed the district court’s finding that the defendant defaulted on its arbitration rights by seeking a merits resolution in court before moving to compel arbitration. The court dismissed the appeal in part for lack of jurisdiction, otherwise affirmed the district court’s judgment, and denied the plaintiff’s request for sanctions. View "Schnatter v. 247 Group, LLC" on Justia Law

A dispute arose between two companies, one a contractor and the other a developer, over a construction project in Maui. The disagreement was submitted to binding arbitration, resulting in an award in favor of the developer. The developer sought to confirm the award in the Circuit Court of the First Circuit, but the contractor challenged the award, alleging the arbitrator was evidently partial due to undisclosed relationships. The circuit court initially confirmed the award, but on appeal, the Supreme Court of Hawai‘i remanded the case for an evidentiary hearing on the partiality claim. After the hearing, the circuit court found evident partiality, denied confirmation, vacated the award, and ordered a rehearing before a new arbitrator.Following this, the contractor moved for taxation of costs incurred on appeal, which the circuit court granted. The developer sought to appeal the costs order, but the circuit court denied an interlocutory appeal. A new arbitration was held, again resulting in an award for the developer, which was confirmed in a new special proceeding with a final judgment entered. The developer then appealed the earlier costs order from the first special proceeding.The Intermediate Court of Appeals (ICA) dismissed the appeal as untimely, reasoning that the circuit court’s order vacating the first arbitration award and ordering a rehearing was an appealable final order under Hawai‘i Revised Statutes (HRS) § 658A-28(a)(3), making the subsequent costs order also immediately appealable.The Supreme Court of Hawai‘i reviewed the case and held that an order vacating an arbitration award and directing a rehearing is not an appealable order under HRS § 658A-28(a). The court clarified that such orders lack finality, regardless of whether the rehearing is full or partial, and reaffirmed the majority rule previously adopted in State of Hawaii Organization of Police Officers (SHOPO) v. County of Kauai. The Supreme Court vacated the ICA’s dismissal and remanded the case for entry of a final judgment, so the merits of the appeal could be addressed. View "Nordic PCL Construction, Inc. v. LPIHGC, LLC" on Justia Law

In the 1950s, Goodrich Corporation built a vinyl-manufacturing complex in Calvert City, Kentucky, and used unlined ponds for hazardous waste disposal. In 1988, the EPA declared the site a Superfund site. Goodrich sold the complex to Westlake Vinyls, Inc. in the 1990s, agreeing to cover future cleanup costs. In 2000, PolyOne Corporation (now Avient Corporation) assumed Goodrich’s responsibilities. Disputes arose over cleanup costs, leading to a 2007 settlement agreement that included arbitration provisions for future cost allocations.The United States District Court for the Western District of Kentucky previously reviewed the case. Avient had twice sought arbitration under the agreement, first in 2010 and again in 2017. In 2018, Avient challenged the arbitration provisions' validity, but the district court held that Avient had waived this argument by initiating arbitration. The court enforced the arbitration award, and Avient did not challenge this decision. In 2022, Westlake demanded arbitration, and Avient again claimed the arbitration provisions were invalid. The district court granted summary judgment to Westlake, holding that Avient’s challenge was waived and barred by res judicata and judicial estoppel.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court’s judgment but on different grounds. The court held that the settlement agreement’s provision for de novo judicial review of arbitration awards was invalid under the Federal Arbitration Act, as established in Hall Street Associates, L.L.C. v. Mattel, Inc. However, the court found that this invalid provision could be severed from the agreement without affecting the economic and legal substance of the transactions contemplated by the parties. Therefore, the arbitration provisions remained valid and enforceable. The court affirmed the district court’s judgment. View "Avient Corp. v. Westlake Vinyls, Inc." on Justia Law

Rajesh Patel filed for bankruptcy in 2016, which triggered an automatic stay on all creditor actions against him. Despite this, Patel participated in an arbitration proceeding and lost. After a state court affirmed the arbitration award, Patel sought to stay the enforcement of the award in bankruptcy court, arguing that the arbitration violated the automatic stay. The bankruptcy court annulled the stay, finding that Patel had engaged in gamesmanship by participating in the arbitration without raising the stay and then attempting to use it to void the unfavorable outcome.The bankruptcy court's decision was appealed to the United States District Court for the Northern District of Georgia. The district court affirmed the bankruptcy court's annulment of the stay, rejecting Patel's argument that the annulment was contrary to the Supreme Court's decision in Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano. The district court found that Acevedo, which dealt with the jurisdiction of a district court after a case was removed to federal court, did not affect the bankruptcy court's statutory authority to annul the automatic stay for cause.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the lower courts' decisions. The Eleventh Circuit held that the bankruptcy court had the authority under 11 U.S.C. § 362(d)(1) to annul the automatic stay for cause. The court distinguished the case from Acevedo, noting that Acevedo addressed the removal jurisdiction of a district court and did not impact the bankruptcy court's power to annul a stay. The court also rejected Patel's procedural objections, finding that any error in the process was harmless as Patel had sufficient notice and opportunity to oppose the requested relief. View "Patel v. Patel" on Justia Law

A group of current and former employees of Cracker Barrel Old Country Store, Inc. alleged that the company violated the Fair Labor Standards Act (FLSA) regarding wages for tipped workers. They sought preliminary certification for a collective action to include all servers in states where Cracker Barrel attempts to take a tip credit over the last three years. Cracker Barrel objected, arguing that notice should not be sent to employees who are subject to arbitration agreements or to out-of-state employees with no ties to Arizona.The United States District Court for the District of Arizona granted the plaintiffs' motion for preliminary certification and approved notice to the proposed group, including employees who might have entered into arbitration agreements and out-of-state employees. The court decided to reserve judgment on the arbitration issue until the second stage of proceedings and concluded that nationwide notice was permissible based on the participation of one Arizona-based plaintiff.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that the district court did not abuse its discretion in following the two-step procedure for preliminary certification. It also held that where the existence and validity of an arbitration agreement are in dispute, the district court is not required to determine the arbitrability of absent employees' claims before authorizing notice. However, the Ninth Circuit joined other circuits in holding that the Supreme Court's decision in Bristol-Myers Squibb Co. v. Superior Court of California applies to FLSA collective actions in federal court. This means that for specific personal jurisdiction, the district court must assess whether each opt-in plaintiff's claim is sufficiently connected to the defendant's activities in the forum state. The court vacated the district court's order authorizing nationwide notice and remanded for further proceedings consistent with this opinion. View "HARRINGTON V. CRACKER BARREL OLD COUNTRY STORE, INC." on Justia Law

Michael Kosor, Jr., a homeowner in Southern Highlands, a Las Vegas residential common-interest community, sued the Southern Highlands Community Association (HOA) and its developer, Southern Highlands Development Corporation (SHDC), for declaratory and injunctive relief regarding the homeowners' right to elect the HOA's board of directors. Kosor claimed that the community had surpassed the 75% home-sale threshold, ending the declarant control period, yet SHDC continued to appoint three of the five board members, violating homeowners' voting rights. The HOA and SHDC disputed Kosor's interpretation and calculations.The Eighth Judicial District Court of Clark County denied Kosor's motion for a temporary restraining order, largely denied the HOA's and SHDC's motion to dismiss, and denied Kosor's motion for summary judgment. Kosor then sought to voluntarily dismiss the action without prejudice, but the court dismissed it with prejudice and awarded fees and costs to the HOA and SHDC. Kosor appealed but later withdrew his appeal, acknowledging that he could not reinstate it or raise the same issues again. Subsequently, the HOA and SHDC sought additional fees and costs incurred on appeal, prompting Kosor to file a motion under NRCP 60(b)(4), arguing that the district court lacked subject matter jurisdiction due to noncompliance with NRS 38.310's pre-suit ADR requirement.The Supreme Court of Nevada reviewed the case and held that NRS 38.310, which mandates pre-suit mediation or arbitration for certain HOA-related claims, is a procedural claim-processing rule, not a jurisdictional requirement. The court determined that the district court had jurisdiction despite the parties' noncompliance with NRS 38.310 and properly denied Kosor's motion to vacate its judgment and fee-award orders as jurisdictionally void. The Supreme Court of Nevada affirmed the district court's decision. View "KOSOR VS. S. HIGHLANDS CMTY. ASS'N" on Justia Law

Sadok Ferchichi and Martina Coronado were involved in a motor vehicle collision with Crystal Krueger, who was driving a vehicle owned by Whataburger Restaurants LLC. Ferchichi sued Krueger and Whataburger for negligence. During mediation, Whataburger's counsel revealed the existence of a surveillance video of the plaintiffs, which they refused to share outside of mediation. Ferchichi filed a motion to compel the video and for sanctions. Whataburger responded with a motion to dismiss the sanctions request under the Texas Citizens Participation Act (TCPA).The trial court denied Whataburger's TCPA motion, but the Fourth Court of Appeals reversed, holding that the motion for sanctions was a "legal action" under the TCPA and that Ferchichi failed to establish a prima facie case for the sanctions request. The court remanded the case to the trial court to award Whataburger its costs and attorney’s fees and to consider sanctions against Ferchichi.In a separate case, Haven at Thorpe Lane, a student-housing complex, was sued by students for fraud and deceptive trade practices. Haven filed a motion to compel discovery from two mothers of the plaintiffs, who had created a Facebook group criticizing Haven. The mothers filed a TCPA motion to dismiss Haven's motion to compel. The trial court denied the TCPA motion, but the Third Court of Appeals reversed, holding that the motion to compel was a "legal action" under the TCPA and that Haven failed to establish a prima facie case.The Supreme Court of Texas reviewed both cases and held that motions to compel and for sanctions are not "legal actions" under the TCPA. Therefore, the TCPA does not apply. The court reversed the judgments of the courts of appeals and remanded both cases to the respective trial courts for further proceedings. View "HAVEN AT THORPE LANE, LLC v. PATE" on Justia Law