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

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

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

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

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

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

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

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

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

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

General Re entered into a Reinsurance Agreement with Lincoln, which allowed General Re to increase premiums only if the increase was founded on a “change in anticipated mortality.”. If General Re exercised that right, Lincoln could “recapture” its life insurance policies, rather than pay increased premiums. General Re increased the premiums. Lincoln elected to arbitrate the rate increase, as provided for in the Agreement. The arbitration panel found that there was a change in the anticipated mortality so that General Re was entitled to increase premiums. The Final Award stated that if Lincoln chose to exercise its right to recapture: “All premium and claim transactions paid by one party to the other following the effective date of the recapture … shall be unwound.” The Award directed the parties to work together in calculating the amounts, and that any disagreement over the calculations should be submitted to the panel, which retained jurisdiction as "necessary to resolve any dispute over the calculation and payment of the amounts awarded.” Lincoln later wrote to the arbitral panel, set forth the parties’ dispute regarding the language of the Final Award regarding Unearned Premiums, and requested that the panel settle the issue. General Re argued the arbitrators lacked authority to reconsider and fundamentally change the methodology ordered in the Award. The panel issued a "Clarification," stating that the Award contained “ambiguities” and that both parties were reading the Award inconsistently with the Agreement. The district court confirmed the Clarification. The Second Circuit affirmed. The doctrine of functus officio, which limits the power of arbitrators to alter an award once the arbitrators have decided the issue, did not bar the panel from clarifying how the parties were to calculate an ambiguous award. View "General Re Life Corp. v. Lincoln National Life Insurance" on Justia Law