Justia Civil Procedure Opinion Summaries

Appellant Rolland Weddell and nonparty Michael Stewart were former business partners. When disputes arose between the partners, they agreed to informally settle their disputes by presenting them to a panel of attorneys (Respondents). Respondents issued a decision resolving the parties’ disputes that was largely favorable to Stewart. Thereafter, Stewart filed suit against Appellant seeking a declaratory judgment that Respondents’ decision was valid and enforceable. Appellant proceeded to confess judgment. Appellant later filed this action against Respondents asserting causes of action stemming from Respondents’ conduct in the dispute-resolution process. Respondents moved to dismiss the complaint contending that dismissal was warranted on claim preclusion principles. The district court granted the motion, finding that the three factors for claim preclusion articulated by the Supreme Court in Five Star Capital Corp. v. Ruby had been satisfied. The Supreme Court affirmed after modifying the privity requirement established in Five Star to incorporate the principles of nonmutual claim preclusion, holding that because Respondents established that they should have been named as defendants in Stewart’s declaratory relief action and Appellant failed to provide a good reason for not doing so, claim preclusion applied in this case. View "Weddell v. Sharp" on Justia Law

Matthew Viscito, Mary Lynn Berntson, and Florence Properties, LLC (collectively "Viscito") appeal from a district court judgment of dismissal without prejudice, which awarded Kevin Christianson, Pace's Lodging Corporation, Mednational, LLC, Aurora Medical Park No. 2, LLC, and Jeff Sjoquist (collectively "Christianson") attorney's fees and costs. Viscito sued Christianson alleging a number of claims pertaining to an agreement the parties entered to build, own, and lease a hospital. Christianson moved to compel arbitration, contending the agreement required that Viscito's claims be resolved through arbitration. The district court granted the motion to compel arbitration and ordered the parties complete arbitration within six months from the date of the order. Viscito moved for an extension of time to complete arbitration. Christianson moved to dismiss with prejudice and requested an award of attorney's fees and costs. The district court held a hearing on the motions; at the conclusion, the district court ruled from the bench that the case be dismissed without prejudice and awarded Christianson reasonable attorney's fees and costs. The district court requested Christianson submit an itemized billing statement of its attorney's fees, so the court could determine the reasonableness of the fees. Christianson submitted an affidavit requesting $33,405.14, the full amount of fees and costs it had incurred defending the entire case, along with itemized billing statements documenting the work performed from July 6, 2012, to April 7, 2014, totaling the amount requested. The district court dismissed the case without prejudice and awarded Christianson $33,405.14 in attorney's fees and costs. Viscito appealed, arguing the district court abused its discretion in awarding Christianson all of its costs and attorney's fees incurred throughout the case because the court misinterpreted the rules authorizing sanctions. The Supreme Court agreed with Viscito, reversed and remanded the case for recalculation of the fees. View "Viscito v. Christianson" on Justia Law

Benihana America obtained a preliminary injunction in aid of arbitration of a dispute arising under its license agreement with Benihana of Tokyo, prohibiting Tokyo from: selling unauthorized food items at the restaurant it operates under the license agreement; using certain trademarks in connection with that restaurant in a manner not approved by the license agreement; and arguing to the arbitral panel, if it rules that Tokyo breached the license agreement, that Tokyo should be given additional time to cure any defaults. The Second Circuit affirmed with respect to the menu offering and trademark use injunctions. The court reasonably concluded that each of the relevant factors favored Benihana America. The court reversed the prohibition on arguing to the arbitral panel for an extended cure period. When a dispute is properly before an arbitrator, a court should not interfere with the arbitral process on the ground that, in its view of the merits, a particular remedy would not be warranted. Benihana America may challenge an arbitrator’s decision in court only after it has been issued. It may not subvert its agreement to arbitrate by obtaining an advance judicial determination that there are no grounds for the arbitrator to grant a particular remedy. View "Benihana, Inc. v. Benihana of Tokyo, LLC" on Justia Law

A multiemployer pension plan (the “Pension Fund”) commenced this action under 29 U.S.C. 1401(b)(2) by filing a complaint seeking to vacate or modify an arbitration order entered pursuant to section 1401(a)(1). The Pension Fund later filed an amended complaint that it argued related back to the filing date of the original complaint. The district court concluded that the Pension Fund could challenge the arbitration award only by filing a motion to vacate or modify, as provided in the Federal Arbitration Act. The court then treated the amended complaint as a motion and dismissed it, concluding that it was untimely under section 1401(a)(2) because a motion cannot “relate back” under Fed. R. Civ. P. 15. The Fourth Circuit reversed the district court’s order of dismissal and remanded for further proceedings as a civil action, holding (1) a party seeking to vacate or modify an arbitrator’s award under section 1401(b)(2) must commence an action in a district court by filing a complaint; and (2) the amended complaint in this case related back to the filing date of the original complaint, thus rendering it timely. View "Local Union 557 Pension Fund v. Penske Logistics LLC" on Justia Law

Alleging illegal tip pooling Conners filed a collective action against her former employer (a restaurant) under the Fair Labor Standards Act, 29 U.S.C. 216(b). The employer then implemented a new arbitration policy that requires all employment-related disputes between current employees and the employer to be resolved though individual arbitration. The policy purports to bind all current employees who did not opt out; each employee received an opt-out form. Citing public policy, the district court declared the policy unenforceable insofar as it could prevent current employees from joining this collective action. On interlocutory appeal, the Eighth Circuit vacated, holding that former employees like Conners lack standing under Article III of the United States Constitution to challenge the arbitration agreement, which applied only to current employees. View "Conners v. Gusano's Chicago Style Pizzeria" on Justia Law

The law firm of Leeds, Morelli & Brown, representing 587 plaintiffs with discrimination claims against their employer, Nextel Communications, agreed with Nextel to set up a dispute resolution process whereby all of the plaintiffs’ claims against Nextel would be resolved without litigation. After most of the cases were settled through that process, a group of Nextel employees sued on behalf of the entire class of the firm’s Nextel clients against both the law firm and Nextel, alleging breach of fiduciary duty, legal malpractice, and breach of contract. The Second Circuit vacated dismissal of the case. On remand the district court certified a class under FRCP(b)(3), applying New York law to all of the class members’ claims, even though the class members came from 27 different states, and holding that common issues predominated over any individual issues, even though prior state court litigation indicated that for Colorado class members, individual waivers of the law firm’s conflict of interest could have vitiated defendants’ liability. The Second Circuit vacated: the district court erred in its choice‐of‐law analysis, and a proper analysis makes clear that the individual issues in this case will overwhelm common issues. View "Johnson v. Nextel Communications Inc." on Justia Law

The Unions, representing employees in five Sheriff’s Department bargaining units, entered into collective bargaining agreements with the County of Los Angeles that contained grievance procedures for resolving complaints concerning the interpretation or application of the agreements. The grievance procedures consisted of progressive steps culminating in arbitration. The Unions filed class grievances seeking overtime pay for “donning and doffing” and related activities (putting on, taking off, and maintaining their uniforms and equipment) and “off-the-clock” supervisory activities by certain employees. The county denied the grievances; the Unions filed requests for class arbitration of the grievances, which the Los Angeles County Employee Relations Commission (ERCOM) granted. The County sought a declaratory judgment that ERCOM’s order granting class or consolidated arbitration violated the parties’ agreements. The trial court refused to compel such arbitrations, ruling that Code of Civil Procedure section 1281.2 gave it discretion, in the interest of judicial economy, to stay the arbitration while it resolved issues between the parties that were not subject to arbitration, which resolution might make arbitrations unnecessary. The court of appeal reversed, holding that all of the issues between the parties were subject to individual arbitrations. View "Ass'n for L.A. Deputy Sheriffs v. Cnty. of Los Angeles" on Justia Law

This appeal stemmed from five putative class actions filed against Wells Fargo and its predecessor, Wachovia Bank. At issue was whether Wells Fargo's waiver of its right to compel arbitration of the named plaintiffs' claims should be extended to preclude Wells Fargo from compelling arbitration of the unnamed putative class members' claims. The court concluded that because a class including the unnamed putative class members had not been certified, Article III's jurisdictional limitations precluded the district court from entertaining Wells Fargo's conditional motions to dismiss those members' claims as subject to arbitration; contrary to the position they take in this appeal, the named plaintiffs lack Article III standing to seek the court's affirmance of the district court's provision holding that if a class is certified, Wells Fargo will be estopped to assert its contractual rights to arbitration; and, therefore, the court vacated and remanded for further proceedings. View "Spears-Haymond v. Wells Fargo Bank" on Justia Law

Montano filed a putative class action against Wet Seal, alleging that it failed to offer all required meal and rest periods to its California non-exempt retail employees; failed to provide all regular and overtime pay when due or when employment terminated; and failed to provide accurate semi-monthly itemized wage statements, in violation of the Labor and Business and Professions Codes, Industrial Welfare Commission Wage Order No. 7, and Title 8 of the California Code of Regulations. She included a representative claim under the Private Attorneys General Act. Montano propounded discovery requests and Wet Seal responded with objections but no substantive information. Montano moved to compel discovery responses. Before the hearing, Wet Seal moved to compel arbitration of Montano’s individual claims and to stay the action pending completion of arbitration, based on a “Mutual Agreement to Arbitrate Claims." The trial court ultimately denied the motion for arbitration and granted the discovery motion. The court of appeal affirmed. View "Montano v. Wet Seal Retail, Inc." on Justia Law

Bower was hired by Inter-Con in 2007 and executed an arbitration agreement, covering claims for compensation and wages. In 2008, Bower executed a second arbitration agreement that added clauses prohibiting claims on behalf of a class or in a representative capacity and covering claims for breaks and rest periods. After his 2011 termination, Bower filed a putative class action, claiming failure to: provide meal and rest periods, pay wages, provide accurate itemized wage statements, pay wages upon termination, with claims under the Unfair Competition Act and the Private Attorneys General Act. Instead of moving to compel arbitration, Inter-Con answered, asserting, as an affirmative defense, that Bower’s claims were subject to arbitration. Inter-Con responded to discovery, but objected based on the arbitration agreement, and agreed to provide responses only to Bower in his individual capacity. Inter-Con did respond to an interrogatory concerning the number of class members employed during the class period and propounded its own discovery. Bower moved for leave to file an amended complaint to allege a broader class and additional theories and to compel further discovery responses. Inter-Con then moved to compel arbitration. The court held that “Defendant waived the right to arbitrate by propounding and responding to class discovery.” The court of appeal affirmed. View "Bower v. Inter-Con Sec. Sys., Inc." on Justia Law