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From the monthly archives: April, 2016

We are pleased to present below all posts archived in 'April, 2016'. If you still can't find what you are looking for, try using the search box.

Texas: Arbitration Agreement was not Unconscionable

In Bonded Builders Home Warranty Association of Texas, Inc. v. Smith, the Fifth District Court of Appeals (Dallas) reversed the trial court's denial of a motion to compel arbitration. In objecting to the motion to arbitrate, Smith asserted that the arbitration clause inserted in a warranty was unconscionable because "(1) it requires Plaintiffs to ask an arbitrator to award damages against a company that is sending business to the arbitration company; (2) the rules that govern the arbitration are unknown until a pre-approved arbitration company is selected;...and (3) to date, Plaintiffs are unable to access the pre-approved companies or their rules." The Fifth District Court of Appeals outlines the standard of review in denying a motion to compel arbitration, the legal standards applicable to a motion to compel arbitration, and Texas law relating to the substantive or procedural unconscionablilty of an arbitration agreement. Unconscionablilty in Texas "is not satisfied by speculation but by specific proof in ...

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Second Circuit: NFL Commissioner Properly Exercised Discretion when Arbitrating under CBA

In a 2-1 decision, the U.S. Second Circuit Court of Appeals held that NFL Commissioner Roger Goodell, serving as arbitrator, properly exercised his broad discretion under a collective bargaining agreement and his procedural rulings were properly grounded in the CBA, reversing the decision of the U.S. District Court for the Southern District of New York.

The Court of Appeals analyzes the award under the Labor Management Relations Act, and according to the Court "These standards do not require perfection in arbitration awards. Rather, they dictate that even if an arbitrator makes mistakes of fact or law, we may not disturb an award so long as he acted within the bounds of his bargained-for authority."

The appellate court's decision is here.

Texas: Court Abused Discretion in Ordering Mediation when Parties Agreed to Arbitrate

In In Re Frank A. Smith Sales, Inc. d/b/a Frank Smith Toyota, the Thirteenth District Court of Appeals held that mandamus was appropriate when a trial court ordered parties to mediation instead of ordering them to arbitration. In this employment-related matter, the employee handbook contained a dispute resolution procedure that included "binding arbitration of any legal dispute" between the employee and the employer. After the employee was terminated, she filed suit alleging discrimination, retaliation, and defamation. The employer filed a motion requesting arbitration and while that motion was set and heard, the district court did not rule on it. Instead, the district court ordered the parties to mediation. The Thirteenth District Court of Appeals held that the district court abused its discretion when it did not rule on the motion to compel arbitration for over a year and ordered the parties to mediation instead of ruling on the motion to compel arbitration. The Court of Appeals ordered to trial court to ...

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Fifth Circuit: Authority to Execute Arbitration Agreement

The Fifth Circuit Court of Appeals consolidated two cases that asked similar questions: what level of authority does one need under Mississippi law to execute an arbitration agreement. Both cases involved arbitration agreements relating to nursing homes.

The cases are: Gross v. GGNSC Southaven, LLC and Cotton v. GGNSC Batesville, LLC. In both instances, the trial court denied the nursing homes' motions to compel, reasoning that Mississippi law required an executed power of attorney, or some other "formal legal device" to bind a nursing home resident to confer authority on another to sign an arbitration agreement.

Making an "Erie guess," the Fifth Circuit Court of Appeals remanded the matters back to the district court for a factual finding of whether the son had the express authority to act on his mother's behalf, including executing an arbitration agreement on her behalf.

Thanks to Ronnie Hornberger for bringing these matters to our attention.

Arizona: Mediation Confidentiality and Attorney Malpractice

In Grubaugh v. Bolomo from the Arizona Court of Appeals, a client brought a legal malpractice case against her attorney for allegedly "substandard legal advice given...during a family court mediation." The Arizona Court of Appeals held that any communications "between or among [the client] and her attorney, or the mediator, as a part of the mediation processed are privileged" under state law. Because the privilege was not waived, the communications are neither discoverable nor admissible.

The Arizona mediation statute is located here. The Arizona Court of Appeals held that the statute did not provide as an exception to mediation confidentiality  attorney-client communications.  The Court also provided a summary of the public policy behind the mediation privilege  and the rights that the former husband had to mediation-related confidentiality, in addition to the now former wife.

Thanks to Ronnie Hornberger for bringing this case to our attention. 

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