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

In an appeal from a district court ruling reducing an order of attachment in aid of arbitration. The district court had initially granted an ex parte order in favor of Petitioner, an Iraqi cell phone company (“Telecom”), attaching up to $100 million of the assets of Respondent, a Lebanese bank. Thereafter, the district court exercised its discretion and reduced the amount of the attachment to $3 million in part because of concerns the attachment would have an adverse impact on the Lebanese economy.Telecom appealed arguing that (1) it established a probability of success in the pending arbitration and was therefore entitled to an attachment of $100 million and (2) the district court lacked authority to consider extraordinary circumstances in reducing the attachment.The Second Circuit affirmed to the extent that the district court held that it had the discretion to consider extraordinary circumstances and that Telecom demonstrated a continuing need for the attachment, and to the extent that the district court attached $3 million; vacated to the extent the district court attached only $3 million based on the existence of extraordinary circumstances without considering how those circumstances might change given an attachment greater than $3 million but less than $42 million; and remanded as to (a) Telecom's probability of success, (b) the assessment of extraordinary circumstances, and (c) the amount of the attachment above $3 million. View "Iraq Telecom Ltd. v. IBL Bank S.A.L." on Justia Law

Esso Exploration and Production Nigeria Limited, (“Esso”) the Nigerian subsidiary of an international oil corporation, asked federal courts in the United States to enforce an arbitral award of $1.8 billion, plus interest, against the Nigerian National Petroleum Corporation (“NNPC”) that Nigerian courts have partially set aside. Courts in Nigeria previously set aside the Award in part. Nonetheless, Esso seeks enforcement of the entire Award under the New York Convention. NNPC urges dismissal of Esso’s suit for lack of personal jurisdiction and on the basis of forum non-conveniens, and it opposes the petition for enforcement on the merits.   The Second Circuit determined affirmed the district court’s rulings because its factual determinations were meticulous and its legal conclusions sound. The court held that NNPC has standing on cross-appeal to challenge the denial of its motion to dismiss, even though the district court ruled in its favor on the merits. NNPC has such standing because our partial vacatur on the merits revives the action against it, and it may face an adverse ruling on remand. On considering NNPC’s challenges to the district court’s denial of its motion to dismiss for want of personal jurisdiction and forum non-conveniens.   The court wrote that although the district court should have broadened its analysis under the Pemex standard, it ultimately agreed with its conclusion that U.S. courts owe the Nigerian judgments setting aside the Award comity.  The court concluded, however, that the district court went too far by refusing to enforce not only those parts of the Award that the Nigerian courts set aside but also those parts of the Award that remain viable under the Nigerian judgments. View "Esso Expl. and Prod. Nigeria Ltd. v. Nigerian Nat'l Petroleum Corp." on Justia Law

Plaintiff, sued her former employer, alleging a variety of employment law violations. Defendant moved to dismiss her suit and to compel arbitration. Defendant supported the motion by presenting an arbitration agreement bearing what appeared to be the worker’s electronic signature. In a sworn declaration, however, the worker categorically and specifically denied that the signature was hers. She also pointed to other circumstantial evidence as to its inauthenticity. The district court concluded that the worker’s evidence was insufficient to create a triable issue of fact, and so granted the restaurant’s motion.   The Second Circuit vacated the district court’s grant of Defendant’s motion to dismiss and to compel arbitration. The court held that the district court erred when it disregarded Plaintiff’s sworn declaration as “nothing more than a de facto extension of [her] pleadings.”The court explained that it resolves agreement-formation questions by applying the law of the state at issue. Here, under New York law, when moving to compel arbitration, “[t]he party seeking . . . arbitration bears an initial burden of demonstrating that an agreement to arbitrate was made.” As such, the burden shifted to Plaintiff, who needed to counter with at least “some evidence . . . to substantiate [her] denial” that an agreement had been made. Here, Plaintiff’s detailed accounting, under oath, is “some evidence” that she did not agree to arbitration. Thus, there is a triable issue of fact as to whether she ever received, or became aware of, Defendant’s arbitration agreements, regardless of whether she ultimately signed them. View "Barrows v. Brinker Restaurant Corporation" on Justia Law

Petitioner appealed the district court's order entered dismissing his petition to vacate an arbitration award. The Federal Arbitration Act ("FAA") requires that notice of a motion to vacate an arbitration award be served within three months of the date the arbitration award is filed or delivered. Counsel sent notice of the petition to vacate the arbitration award to Respondent late on the last day of the three-month period, but counsel did so by email. The district court granted Respondent’s motion to dismiss, concluding that service was improper and untimely. On appeal, Petitioner contended that service was proper because Respondent had agreed to email service in the underlying arbitration and that the consent carried over to the judicial proceedings to vacate the award.     The Second Circuit affirmed the district court’s ruling dismissing the petition and held that email service of a notice of a petition to vacate was ineffective under 9 U.S.C. Section 12 and Fed. R. Civ. P. 5. The court reasoned that Section 12 contains no exception to the three-month limitations period. Further, under Rule 5, a party may serve papers by email only if the person being served has "consented" to service by email "in writing."  Here, Petitioner’s counsel had not asked Respondent’s counsel for consent to email service, and Respondent’s counsel had not provided consent to email service in writing, as required by Rule 5. Further, AAA Employment Arbitration Rules and Mediation Procedures 38(a)-(b) does not contemplate email service. View "Dalla-Longa v. Magnetar Capital LLC" on Justia Law

Plaintiffs, who deliver baked goods in designated territories in Connecticut, brought an action on behalf of a putative class against the manufacturer of the baked goods that Plaintiffs deliver. The district court compelled arbitration pursuant to an arbitration agreement that is governed by the Federal Arbitration Act (“FAA”) and Connecticut law. Plaintiffs claimed that they are not subject to the FAA because Section 1 of the FAA excludes contracts with “seamen, railroad employees, [and] any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. Section 1. The exclusion is construed to cover “transportation workers.”   The Second Circuit affirmed the district court’s decision ordering arbitration and dismissing Plaintiff’s lawsuit against Defendant for unpaid or withheld wages, unpaid overtime wages, and unjust enrichment. The court held that Plaintiffs did not qualify as transportation workers.The court reasoned that though Plaintiffs spend appreciable parts of their working days moving goods from place to place by truck, the stores and restaurants are not buying the movement of the baked goods, so long as they arrive. The charges are for the baked goods themselves, and the movement of those goods is at most a component of the total price. The commerce is in breads, buns, rolls, and snack cakes--not transportation services. View "Bissonnette v. LePage Bakeries" on Justia Law

Plaintiff sued her employer, the Institute of International Education, for discrimination in violation of federal, state, and local, employment law. The district court referred the matter to New York’s mediation program and the parties reached an agreement to settle the case. The parties committed that agreement to writing, signed it, had their counsel sign it, and had the mediator sign it. The week after the mediation, Plaintiff contacted the district court seeking to revoke her acceptance of the mediation agreement and to continue the litigation. The Institute then moved to enforce the mediation agreement. The district court enforced the mediation agreement and entered judgment in favor of the Institute.   The Second Circuit affirmed the district court judgment. The court concluded that the mediation agreement bound the parties to its terms. The court reasoned that the case is not one in which the language of the agreement merely committed the parties to “work together in accordance with the terms and conditions outlined in” the agreement, which would be an agreement to continue negotiating. And while this language was pre-printed, the parties could have crossed it out if they did not intend to acknowledge that agreement on all issues had been reached or they could have added language in the handwritten portion of the mediation agreement reserving the right not to be bound by the mediation agreement’s terms until the final agreement was drafted. Further, the court found that Plaintiff was not under duress when she signed the mediation agreement. View "Murphy v. Inst. of Int'l Educ." on Justia Law

The Second Circuit dismissed plaintiff's appeal of the district court's judgment deeming his Federal Rule of Civil Procedure 41(a)(1)(A)(i) notice of dismissal without prejudice withdrawn and compelling arbitration. The court held that the district court properly retained jurisdiction following the notice of dismissal to conduct a Cheeks review of any possible settlement of plaintiff's Fair Labor Standards Act claims; and that the district court reasonably interpreted his request to continue the litigation as a withdrawal of the notice of dismissal, and, in its discretion, deemed it withdrawn. Therefore, plaintiff failed to take a timely appeal of the order deeming his notice of dismissal withdrawn, and the order to stay and compel arbitration is an unappealable interlocutory order. View "Samake v. Thunder Lube, Inc." on Justia Law

Plaintiff filed suit in the New York Supreme Court pursuant to New York Civil Practice Law and Rule 7515 (C.P.L.R. 7515), challenging arbitration of her sexual harassment, hostile work environment, and retaliation claims against Fox News and certain senior executives. C.P.L.R. 7515 prohibits mandatory arbitration clauses covering employment discrimination claims, "[e]xcept where inconsistent with federal law." After removal to federal court, the district court denied plaintiff's motion to remand to state court on the basis that the action necessarily raises an issue of federal law: whether her claim is preempted by the Federal Arbitration Act (FAA).The Second Circuit affirmed the district court's denial of plaintiff's motion, concluding that plaintiff's suit arises under federal law. The court applied the Grable-Gunn analysis and concluded that because section 7515 requires a threshold showing that the plaintiff's claim complies with the FAA, it necessarily raises a substantial federal issue that may be resolved in federal court without threatening the federal-state balance. View "Tantaros v. Fox News Network, LLC" on Justia Law

Petitioners appeal the district court's order denying their petition to set aside an arbitral award issued by an ad hoc arbitral tribunal constituted under a bilateral investment treaty between Mongolia and the People's Republic of China, and granting Mongolia's cross-petition to confirm the award. Petitioners also challenge the district court's rejection of their petition to compel arbitration on the merits.The Second Circuit affirmed the district court's judgment, rejecting the appeal and holding that petitioners were not entitled to de novo review of the arbitrability of their investment claims. While the bilateral investment treaty in this case does not contain a clear statement empowering arbitrators to decide issues of arbitrability, the court held that the parties nonetheless clearly and unmistakably agreed to submit questions of arbitrability to the arbitral tribunal in the course of the dispute between them. Therefore, the court concluded that the district court properly declined to determine independently the arbitrability of petitioners' investment claims; in reaching their decision on arbitrability, the arbitrators did not exceed their powers; and the court agreed with the district court's decision to confirm the award. View "Beijing Shougang Mining Investment Co., Ltd. v. Mongolia" on Justia Law

Anonymous plaintiffs filed a putative class action against The Trump Corporation, Donald J. Trump, and various members of his family, asserting claims for racketeering in violation of 18 U.S.C. 1962(c), conspiracy to conduct the affairs of a racketeering enterprise in violation of 18 U.S.C. 1962(d), dissemination of untrue and misleading public statements in violation of California law, unfair competition in violation of California law, unfair and deceptive trade practices in violation of Maryland and Pennsylvania law, common-law fraud, and common-law negligent misrepresentation. Plaintiffs contend that defendants fraudulently induced them to enter into business relationships with non-party appellant, ACN, by making a series of deceptive and misleading statements. The district court denied both defendants and ACN's motions to compel arbitration.The Second Circuit affirmed, concluding that (1) defendants may not compel plaintiffs to arbitrate their dispute on equitable estoppel grounds; and (2) the district court may not compel arbitration as to ACN's discovery dispute because the court lacked an independent basis for subject-matter jurisdiction over the parties' dispute. The court considered defendants and ACN's remaining arguments on appeal and concluded that they are without merit. View "Doe v. The Trump Corporation" on Justia Law