Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Articles Posted in Arbitration & Mediation
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Metz appealed the district court's judgment vacating an arbitration award that held that interest rate assumptions for purposes of withdrawal from a multiemployer pension plan liability are those in effect on the last day of the year preceding the employer's withdrawal. The district court held, however, that section 4213 of the Employee Retirement Income Security Act (ERISA) does not require actuaries to calculate withdrawal liability based on interest rate assumptions used prior to an employer's withdrawal from a plan, and that interest rate assumptions must be affirmatively reached and may not roll over automatically from the preceding plan year. The Second Circuit vacated the district court's judgment, holding that interest rate assumptions for withdrawal liability purposes must be determined as of the last day of the year preceding the employer's withdrawal from a multiemployer pension plan. Furthermore, absent any change to the previous plan year's assumption made by the Measurement Date, the interest rate assumption in place from the previous plan year will roll over automatically. Accordingly, the court remanded with directions to enter judgment for Metz and to remand any remaining issues to the arbitrator. View "The National Retirement Fund v. Metz Culinary Management, Inc." on Justia Law

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The Second Circuit affirmed the district court's judgment compelling arbitration of grievances raised by airlines in a dispute with the collective bargaining representatives of their pilots. The court held that the district court properly granted the employers' motion for summary judgment and to compel arbitration. The court held that the management grievances did not involve a major dispute; rejected the Union's argument that the case raised issues of representation that would fall within the exclusive jurisdiction of the National Mediation Board; and held that the district court did not err in exercising jurisdiction over the dispute. The court also held that Atlas's motion to compel arbitration of its management grievance was timely. Finally, the court rejected the Union's three arguments with respect to the arbitrability of the employers' management grievances. In this case, Southern was entitled to file a management grievance with the Southern Board regarding the interpretation of Section 1.B.3 of the collective bargaining agreement (CBA); the district court correctly determined that it lacked authority to decide whether the merger provisions of the Atlas CBA were prompted by the announced operational merger of Atlas and Southern; and nothing in the process of interpreting the provisions of the two collective bargaining agreements purports to bind Atlas or Southern pilots to the terms of another existing CBA. View "Atlas Air, Inc. v. International Brotherhood of Teamsters" on Justia Law

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Plaintiffs, a group of current and former retail sales employees of Sterling Jewelers, filed suit alleging that they were paid less than their male counterparts, on account of their gender, in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. After an arbitrator certified a class of Sterling Jewelers employees that included employees who did not affirmatively opt in to the arbitration proceeding, the district court held that the arbitrator exceeded her authority in purporting to bind those absent class members to class arbitration. The Second Circuit reversed, holding that the arbitrator was within her authority in purporting to bind the absent class members to class proceedings because, by signing the operative arbitration agreement, the absent class members, no less than the parties, bargained for the arbitrator's construction of their agreement with respect to class arbitrability. The court remanded to the district court to consider, in the first instance, the issue of whether the arbitrator exceeded her authority in certifying an opt-out class. View "Jock v. Sterling Jewelers Inc." on Justia Law

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Plaintiff filed suit against Citigroup, alleging gender discrimination and whistleblower retaliation claims under several local, state, and federal statutes, including the Dodd‐Frank and Sarbanes‐Oxley Acts. The Second Circuit affirmed the district court's judgment and held that the district court appropriately compelled arbitration of all but plaintiffʹs Sarbanes‐Oxley claim, including her Dodd‐Frank whistleblower retaliation claim, because her claims fall within the scope of her employment arbitration agreement and because she failed to establish that they are precluded by law from arbitration. The court also held that plaintiff's Sarbanes‐Oxley claim was properly dismissed because the district court lacked subject matter jurisdiction over it inasmuch as plaintiff failed to exhaust her administrative remedies under the statute. View "Daly v. Citigroup Inc." on Justia Law

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Plaintiff appealed the district court's grant of Sallie Mae's motion to vacate an arbitration award based on the arbitrator's failure to apply a general release provision in a settlement agreement that barred all of plaintiff's claims. The Second Circuit held that the arbitrator ignored the unambiguous terms of the general release and concluded that the award of statutory damages for a subset of plaintiff's claims was irreconcilable with the arbitrator's determination that plaintiff was a member of the settlement class and that she received adequate notice of its terms; because the arbitrator failed to provide an explanation for these mutually exclusive determinations, the court was unable to ascertain whether the arbitrator adhered to applicable substantive law as required by the parties' arbitration agreement and whether the arbitral award was issued in manifest disregard of the law; and therefore the court vacated and remanded for clarification. View "Weiss v. Sallie Mae, Inc." on Justia Law

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After DAI denied defendant's application to purchase an existing Subway franchise, defendant filed suit alleging that DAI discriminated against him on the basis of race. DAI then filed this action seeking to compel defendant to arbitrate, but the district court denied DAI's motion to compel. The Second Circuit agreed with the district court that whether or not an agreement is supported by adequate consideration is a question about contract formation for the court, not the arbitrator, to decide. However, the court held that the promise to arbitrate in the Franchise Application was supported by adequate consideration. Accordingly, the court vacated the district court's judgment and remanded for further proceedings. View "Doctor's Associates, Inc. v. Alemayehu" on Justia Law

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The Second Circuit reversed the district court's denial of Attending's motion to compel arbitration in an action under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The court held that the arbitration clause mandated arbitration of the relevant claims and did not deny due process to Attending's employees. In this case, the union agreed to mandatory arbitration in the collective bargaining agreement on behalf of its members and the arbitration agreement here clearly and unmistakably encompassed the FLSA and NYLL claims. Furthermore, the challenged portion of the arbitration clause, which simply specified with whom arbitration will be conducted in accordance with established Supreme Court precedent, did not violate due process. View "Abdullayeva v. Attending Homecare Services, LLC" on Justia Law

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The Second Circuit affirmed the district court's confirmation of an arbitration award under 9 U.S.C. 9 for petitioners and other individuals. This case involved a dispute between two groups of the Bobov Hasidic Jewish community in Brooklyn that agreed to arbitration before a rabbinical tribunal. The tribunal ruled that petitioners owned the "Bobov" trademark, and the district court confirmed the ruling. The court held that district courts should "look through" a 9 U.S.C. 4 petition to the underlying controversy to determine whether subject matter jurisdiction exists to confirm the arbitration award pursuant to 9 U.S.C. 9. The court held that the district court properly looked through the arbitration petition here to the underlying controversy to determine that it had subject matter jurisdiction. In this case, the district court properly turned aside respondent's non-jurisdictional arguments, found the petition "effectively" unopposed and that no issue of material fact precluded confirmation, and did not err in confirming the award. View "Landau v. Rheinold" on Justia Law

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Plaintiffs filed suit alleging violations of Vermont and federal law when the terms of their loan agreements provided for interest rates well in excess of caps imposed by Vermont law. Plaintiffs sought an injunction against tribal officers in charge of Plain Green and an award of money damages against other defendants. The Second Circuit affirmed the district court's denial of defendants' motion to dismiss and motion to compel arbitration. The court held that tribal sovereign immunity did not bar this suit because plaintiffs may sue tribal officers under a theory analogous to Ex parte Young for prospective, injunctive relief based on violations of state and substantive federal law occurring off of tribal lands. The court also held that the arbitration clauses of the loan agreements were unenforceable and unconscionable. View "Gingras v. Think Finance, Inc." on Justia Law

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The Second Circuit affirmed the district court's denial of SquareTrade's motion to compel arbitration in a putative class action seeking to hold SquareTrade accountable for alleged violations of consumer protection laws. The court agreed with the district court and held that the arbitration provision did not become part of the contract because plaintiff did not have reasonable notice of and manifest his assent to it. In this case, the consumer was presented with several documents including the Pre-Sale T&C, the body of the subsequent email, and the Post-Sale T&C, none of them specifically identified as the "Service Contract" governing the purchase, and all containing different sets of terms. Furthermore, the prior course of dealing between the parties did not convince the court that plaintiff was on inquiry notice of the arbitration provision. View "Starke v. SquareTrade, Inc." on Justia Law