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International Institute for Conflict Prevention and Resolution (CPR) Interviews Professor Angela Downes, Richard D. Faulkner, and Philip J. Loree Jr. about the Heckman v. Live Nation Entertainment Ninth Circuit Mass Arbitration Decision

November 13th, 2024 Appellate Practice, Applicability of Federal Arbitration Act, Application to Compel Arbitration, Arbitrability, Arbitrability | Clear and Unmistakable Rule, Arbitration Agreement Invalid, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Arbitration Provider Rules, Arbitration Providers, Challenging Arbitration Agreements, Class Action Arbitration, Class Action Waivers, Class Arbitration Waivers, Clear and Unmistakable Rule, CPR Alternatives, CPR Video Interviews, Delegation Agreements, FAA Chapter 1, FAA Section 2, FAA Section 4, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 2, Federal Arbitration Act Section 4, International Institute for Conflict Prevention and Resolution (CPR), Mass Arbitration, New Era ADR, Petition to Compel Arbitration, Philip J. Loree Jr., Practice and Procedure, Pre-Award Federal Arbitration Act Litigation, Professor Angela Downes, Professor Downes, Repeat Players, Richard D. Faulkner, Russ Bleemer, Section 2, Section 4, The Loree Law Firm, Unconscionability, United States Court of Appeals for the Ninth Circuit No Comments »

CPR Interview

Heckman

Do you want to learn more about the Heckman mass arbitration case?

As readers may know, over the last four years or so, our friend and colleague Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), has hosted presentations about significant arbitration-law developments (principally in the United States Supreme Court) that feature interviews of our friends and colleagues: Professor Angela Downes, University of North Texas-Dallas College of Law Professor of Practice and Assistant Director of Experiential Education; arbitrator, mediator, arbitration-law attorney, and former judge, Richard D. Faulkner; and yours truly, Loree Law Firm principal, Philip J. Loree Jr. (See, e.g., here, here, here, and here.) These interviews are posted on CPR’s YouTube channel, @CPRInstituteOnline.

On Monday, November 11, 2024, Russ interviewed Professor Downes, Rick and me about the Ninth Circuit’s recent mass-arbitration decision in Heckman v. Live Nation Entertainment, No. 23-55770, slip op. (9th Cir. Oct. 28, 2024). The video is here.

Heckman

The Heckman case centered around unusual mass-arbitration rules promulgated and administered by New Era ADR, which among many other things, included a broad delegation provision, which delegated to the arbitrator the authority to decide the validity of the parties’ arbitration agreement. The parties’ online ticket purchase agreement terms (the “Terms”) provided for arbitration pursuant to the New ERA Rules, which in the Heckman case meant New Era’s Rules for Expedited/Mass Arbitration proceedings.

Plaintiffs commenced in 2022 a putative class action against Live Nation Entertainment and Ticketmaster LLC, alleging that the companies violated the Sherman Act by engaging in anticompetitive practices. Those defendants  moved to compel arbitration, but the district court denied the motion, holding that the delegation clause and the arbitration agreement were procedurally and substantively unconscionable under California law.

Circuit Judge Lawrence VanDyke wrote a very interesting concurring opinion in Heckman in which he said he would have decided the case solely on the ground that the arbitration scheme violated the Discover Bank Rule, which was not preempted by the FAA because the scheme was not arbitration as envisioned by the FAA in 1925. This concurring opinion also discussed in some detail the conflict of interest that arises when arbitrators deciding arbitrability under a delegation clause conclude, or have reason to conclude, that an arbitration provider’s scheme—it’s business model—is unenforceable, pitting the arbitrator’s financial interest in continued employment against his or her neutral-decision-making interests.

Russ, Rick, Angela, and I discuss various aspects pertinent to the Heckman decision in the interview and identify issues that are likely to arise in future cases following the decision.
As always, we express our gratitude to Russ and CPR for hosting these interviews, and, along with Angela and Rick, look forward to contributing to future programs hosted by CPR.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094 or PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is principal of the Loree Law Firm, a New York attorney who focuses his practice on arbitration and associated litigation. A former BigLaw partner, he has nearly 35 years of experience representing a wide variety of corporate, other entity, and individual clients in matters arising under the Federal Arbitration Act, as well as in insurance or reinsurance-related and other commercial and business matters.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

 Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

Charles Bennett, Richard D. Faulkner, and Philip J. Loree Jr. Participate in Federalist Society Webinar Discussing SCOTUS’s 2023 Term Arbitration Decisions  

September 20th, 2024 and Podcasts, Arbitration Law, Arbitration Practice and Procedure, Charles Bennett, CPR Video Interviews, Events, FAA Chapter 1, Federal Arbitration Act Enforcement Litigation Procedure, Federal Courts, Federal Subject Matter Jurisdiction, International Institute for Conflict Prevention and Resolution (CPR), Loree and Faulkner Interviews, Practice and Procedure, Professor Angela Downes, Professor Downes, Richard D. Faulkner, Russ Bleemer, The Federalist Society, United States Supreme Court Comments Off on Charles Bennett, Richard D. Faulkner, and Philip J. Loree Jr. Participate in Federalist Society Webinar Discussing SCOTUS’s 2023 Term Arbitration Decisions  

Rick Faulkner, Chuck Bennett, and Phil Loree As readers may remember on May 29, 2024, our friend and colleague Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), interviewed our friends and colleagues—Professor Angela Downes, University of North Texas-Dallas College of Law Professor of Practice and Assistant Director of Experiential Education; arbitrator, mediator, arbitration-law attorney,  former judge, and overall arbitration guru, Richard D. Faulkner (“Rick Faulkner”); and yours truly, Loree Law Firm principal, Philip J. Loree Jr.— about the three arbitration cases the United States Supreme Court (“SCOTUS”) heard and decided this 2023 Term: (a) Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024); (b) Smith v. Spizzirri, 601 U.S. 472 (2024); and (c) Coinbase, Inc. v. Suski, 602 U.S. ___ (2024). (See here and here.) That interview was one of several that we have given to CPR concerning arbitration law developments. (See, e.g.,  here, here, and here.) All of them are posted on CPR’s YouTube channel, @CPRInstituteOnline.

On September 10, 2024, Rick Faulkner, whom regular readers should know well by now;  highly-skilled and successful trial lawyer (and former pro basketball player), Charles Bennett (“Chuck Bennett”); and the author, Philip J. Loree Jr., participated in a Federalist Society webinar entitled “Recent Supreme Court Decisions: Implications for the Business World.”  (See here.) The webinar was sponsored by the Federalist Society’s Litigation Practice Group, and hosted by Caroline Bryant, Associate Director, Practice Groups, The Federalist Society, who introduced the panel’s members and otherwise ensured that things ran smoothly.  Chuck Bennett’s, Rick Faulkner’s, and my own Federalist Society bios are here, here, and here.

As the Federalist Society aptly put it, “[t]he U.S. Supreme Court continues to shape arbitration law through a strict interpretation of the Federal Arbitration Act (FAA), with each term introducing new nuances.” (See here.) The webinar was designed to “explore Supreme Court decisions from the latest term and examine recent interpretations by federal appeals courts, focusing on their impact on arbitration practice.” (See here.)  It sought to “offer practical insights into the evolving landscape of arbitration law, updates for attorneys to ensure compliance with the latest legal developments, and strategies to optimize arbitration for clients currently using or considering arbitration.” (See here.)

Rick Faulkner, Chuck Bennett, and I discussed in detail the Bissonnette, Spizzirri, and Coinbase decisions, as well as “infinite arbitration clauses,” subject matter jurisdiction, and a recent highly publicized (but now voluntarily resolved) arbitration dispute concerning the Walt Disney Company. Chuck provided the unique perspective of a trial lawyer thoroughly versed in arbitration matters.

You can view the webinar here. That link also allows you to download it, or listen to it on Apple, Google, Spotify, or Amazon podcast platforms.

Chuck, Rick Faulkner, and I express our sincere gratitude to Caroline, the Federalist Society’s Litigation Group, and the Federalist Society itself, for sponsoring the program and giving us an opportunity to share with others some of our thoughts on arbitration-law matters, including the arbitration-law cases SCOTUS decided this year.

Please note that, as set forth in its website, “the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.” (See here.)

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094 or PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is principal of the Loree Law Firm, a New York attorney who focuses his practice on arbitration and associated litigation. A former BigLaw partner, he has nearly 35 years of experience representing a wide variety of corporate, other entity, and individual clients in matters arising under the Federal Arbitration Act, as well as in insurance or reinsurance-related and other matters.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

 Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

 

 

U.S. Supreme Court Decides Coinbase II and Promulgates a New Arbitrability Rule Applicable to Multiple, Conflicting Contracts

June 11th, 2024 Application to Compel Arbitration, Application to Stay Litigation, Arbitrability, Arbitrability | Clear and Unmistakable Rule, Arbitrability | Existence of Arbitration Agreement, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Challenging Arbitration Agreements, Clear and Unmistakable Rule, Enforcing Arbitration Agreements, Equal Footing Principle, Existence of Arbitration Agreement, FAA Chapter 1, FAA Section 2, Federal Arbitration Act Enforcement Litigation Procedure, First Options Reverse Presumption of Arbitrability, First Principle - Consent not Coercion, Forum Selection Agreements, Gateway Disputes, Gateway Questions, International Institute for Conflict Prevention and Resolution (CPR), Motion to Compel Arbitration, Professor Angela Downes, Richard D. Faulkner, Russ Bleemer, Section 2, Separability, Severability, Substantive Arbitrability, United States Court of Appeals for the Ninth Circuit, United States Supreme Court 1 Comment »

Introduction

 

Coinbase II - Dogecoin Photo

Coinbase, Inc. v. Suski, 602 U.S. ___ (2024) (“Coinbase II”), which the U.S. Supreme Court (“SCOTUS”) decided on May 23, 2024, was the last of the three arbitration-law cases SCOTUS heard and decided this 2023 Term. Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), recently interviewed University of North Texas-Dallas College of Law Professor Angela Downes; arbitrator, mediator, arbitration-law attorney, and former judge, Richard D. Faulkner; and the author about Coinbase II, and the other two cases, Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024), and Smith v. Spizzirri, 601 U.S. ___ (2024). (See posts here and interview here.) Russ also interviewed Angela, Rick, and the author about Coinbase II back when SCOTUS granted certiorari to hear it, an interview you can view here (see also post, here).

Coinbase II concerned the allocation of power between courts and arbitrators in a situation in which agreements with conflicting dispute-resolution provisions cover or appear to cover some or all of the same, disputed subject matter. The general principles and rules of arbitrability, as applied to the facts,  did not clearly answer the question of who gets to decide whether the parties’ merits dispute was arbitrable, and so the Court created a new rule of arbitrability: “where. . . parties have agreed to two contracts—one sending arbitrability disputes to arbitration and the other either explicitly or implicitly sending arbitrability disputes to the courts—a court must decide which contract governs.” Coinbase II, slip op. at 8. Applying the new rule to the facts, the Court concluded “that a court, not an arbitrator must decide whether the [Coinbase II] parties’ first agreement was superseded by their second.” Slip op. at 8.

Coinbase II: Background

Petitioner Coinbase, Inc. (“Coinbase”) is a cryptocurrency exchange platform Continue Reading »

International Institute for Conflict Prevention and Resolution (CPR) Interviews Professor Angela Downes, Richard D. Faulkner, and Philip J. Loree Jr. about the Three SCOTUS Cases Decided this Term and More  

June 3rd, 2024 Application to Stay Litigation, Arbitrability, Arbitrability | Clear and Unmistakable Rule, Arbitrability | Existence of Arbitration Agreement, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Clear and Unmistakable Rule, CPR Alternatives, CPR Video Interviews, Delegation Agreements, Exemption from FAA, Existence of Arbitration Agreement, FAA Chapter 1, FAA Section 1, FAA Section 2, FAA Section 3, FAA Transportation Worker Exemption, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 1, Federal Arbitration Act Section 2, Federal Arbitration Act Section 3, Federal Courts, Federal Subject Matter Jurisdiction, First Options Reverse Presumption of Arbitrability, First Principle - Consent not Coercion, Forum Selection Agreements, Loree and Faulkner Interviews, Professor Angela Downes, Questions of Arbitrability, Richard D. Faulkner, Russ Bleemer, Stay of Litigation, Stay of Litigation Pending Arbitration, United States Supreme Court 1 Comment »

CPR SCOTUS Wrap Up

As readers may know, over the last four years or so, our friend and colleague Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), has hosted presentations about significant arbitration-law developments (principally in the United States Supreme Court (“SCOTUS”)) that feature interviews of our friends and colleagues: Professor Angela Downes, University of North Texas-Dallas College of Law Professor of Practice and Assistant Director of Experiential Education; arbitrator, mediator, arbitration-law attorney, and former judge, Richard D. Faulkner; and yours truly, Loree Law Firm principal, Philip J. Loree Jr.  (See, e.g., here, here, and here.) These interviews are posted on CPR’s YouTube channel, @CPRInstituteOnline.

On Wednesday, May 29, 2024, Russ interviewed Professor Downes, Rick and me about the three arbitration cases SCOTUS heard and decided this 2023 Term: (a) Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. 246 (2024); (b) Smith v. Spizzirri, 601 U.S. ___ (2024); and (c) Coinbase, Inc. v. Suski, 602 U.S. ___ (2024). We also discussed what one might expect on the arbitration front from the 2024 SCOTUS Term, Samsung’s mass arbitration case pending in the Seventh Circuit, and recent, controversial arbitration awards rendered against a major U.S. retail pharmacy company and their implications. You can view that interview here.

As always, we express our gratitude to Russ and CPR for hosting these interviews, and, along with Angela and Rick, look forward to contributing to future programs hosted by CPR.

On a related matter,  CPR Alternatives recently published parts I and II of our article discussing and analyzing SmartSky Networks LLC v. DAG Wireless Ltd., ___ F.4th ___, No. 22-1253, slip op. (4th Cir. Feb. 13, 2024) (available at https://bit.ly/4aviBLS). That case has created a split in the circuits concerning whether a Court having the requisite subject matter jurisdiction to hear a federal question lawsuit on the merits, and thus the requisite subject matter jurisdiction to grant a Section 3 stay of litigation pending arbitration, can be deemed to have subject matter jurisdiction over a post-award application to confirm, vacate, or modify an award—or an application to appoint an arbitrator or enforce a Section 5  arbitral summons—in circumstances where, if the application were made in a standalone, independent action, the Court would not have had subject matter jurisdiction under Badgerow. Prior to Spizzirri, we wrote a number of articles concerning this sometimes-vexing issue. (See here, here, and here.)

Part I of the article is entitled Philip J. Loree Jr., The Fourth Circuit Weighs the Post-Badgerow Jurisdictional Anchor—and Finds It Won’t Set, 42 Alternatives 73 (May 2024), and was published in the May 2024 issue of Alternatives. Part II is entitled Philip J. Loree Jr., More on Independent Actions and the “Jurisdictional Anchor”: Where the Law on Award Enforcement May Be Going, 42 Alternatives 95 (June 2024), which was published in the June 2024 issue of Alternatives. We recently submitted to Alternatives a short, post-script article about how the Spizzirri case, which was not decided until after the other two articles had been submitted, might bear on SmartSky. We expect that article will be published in CPR Alternatives next issue.

Although CPR Alternatives is a subscription-only publication (available to CPR Members only), Russ has said that upon email request, CPR will provide, for fair use purposes only, a copy of each of these articles. You can make your  request by emailing Alternatives@cpradr.org.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, arbitration-related litigation, then please contact Philip J. Loree Jr., at (516) 941-6094 or PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is principal of the Loree Law Firm, a New York attorney who focuses his practice on arbitration and associated litigation. A former BigLaw partner, he has nearly 35 years of experience representing a wide variety of corporate, other entity, and individual clients in matters arising under the Federal Arbitration Act, as well as in insurance or reinsurance-related and other matters.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

 Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

 

Status of Arbitration-Law Cases Pending Before SCOTUS this Term

February 12th, 2024 Appellate Practice, Applicability of Federal Arbitration Act, Application to Appoint Arbitrator, Application to Compel Arbitration, Application to Enforce Arbitral Summons, Application to Stay Litigation, Arbitrability, Arbitrability | Clear and Unmistakable Rule, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, CPR Alternatives, CPR Speaks Blog of the CPR Institute, CPR Video Interviews, Delegation Agreements, Exemption from FAA, FAA Chapter 1, FAA Section 16, FAA Section 3, FAA Transportation Worker Exemption, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 3, Federal Question, Federal Subject Matter Jurisdiction, Practice and Procedure, Pre-Award Federal Arbitration Act Litigation, Professor Downes, Richard D. Faulkner, Russ Bleemer, Section 3 Stay of Litigation, Subject Matter Jurisdiction, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Second Circuit Comments Off on Status of Arbitration-Law Cases Pending Before SCOTUS this Term

Status of Arbitration Cases Pending Before SCOTUS this TermThere are three arbitration-law cases pending before the United States Supreme Court (“SCOTUS”) this October 2023 Term. SCOTUS will presumably decide all three cases by this June, 2024.

 

The Cases: Bissonnette

The first is  Bissonnette v. LePage Bakeries Park St., LLC, No. 23-51 (U.S.), a case that concerns the scope of Section 1 of the Federal Arbitration Act (“FAA”), which exempts from the FAA “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1 (the “Section 1 Exemption”). SCOTUS granted cert. in Bissonnette on September 29, 2023. As set forth in the question presented:

The First and Seventh Circuits have held that [the Section 1 Exemption] applies to any member of a class of workers that is engaged in foreign or interstate commerce in the same way as seamen and railroad employees-that is, any worker ‘actively engaged’ in the interstate transportation of goods. The Second and Eleventh Circuits have added an additional requirement: The worker’s employer must also be in the ‘transportation industry.’

The question presented is: To be exempt from the Federal Arbitration Act, must a class of workers that is actively engaged in interstate transportation also be employed by a company in the transportation industry?

(Bissonnette Question Presented Report)

We summarized the case briefly here and provided a link to an October 24, 2023 video conference in which our friend and colleague Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), interviewed Professor Angela Downes, University of North Texas-Dallas College of Law Professor of Practice and Assistant Director of Experiential Education; Richard D. Faulkner, arbitrator, mediator, arbitration-law attorney, and former judge; and yours truly, Loree Law Firm principal, Philip J. Loree Jr., about the case, its implications, and how SCOTUS might decide it. You can watch the video-conference interview here.

SCOTUS has set Bissonnette down for oral argument for Tuesday, February 20, 2024 (here). You can listen to SCOTUS arguments on C-Span or on the Court’s website.

The Cases: Coinbase, Inc. v. Suski (a/k/a “Coinbase II”)

The second case  is Coinbase, Inc. v. Suski, No. 23-3 (U.S.) (“Coinbase II”), a case that is related to Coinbase, Inc. v. Bielski, 143 S. Ct. 1915 (2023) (“Coinbase I”), which was decided on June 23, 2023, and discussed here. Coinbase II concerns the application of a delegation provision—an agreement to arbitrate arbitrability disputes—contained in  a contract (“Contract 1”) clearly and unmistakably requires the parties to submit to the arbitrator the question whether the Contract 1 arbitration agreement requires the parties to arbitrate disputes concerning a subsequent contract, Contract 2, even though Contract 2 does not provide for arbitration and requires the parties to submit all disputes concerning Contract 2 exclusively to litigation before the California courts. Is Contract 1’s delegation provision, as applied to the dispute over Contract 2, and in light of the parties’ agreement to litigate, not arbitrate,  disputes concerning Contract 2, clear and unmistakable, as required by SCOTUS precedent? Or, as put differently by the question presented: “Where parties enter into an arbitration agreement with a delegation clause, should an arbitrator or a court decide whether that arbitration agreement is narrowed by a later contract that is silent as to arbitration and delegation?”

SCOTUS granted certiorari in Coinbase II on November 3, 2023, and on November 10, 2023, CPR’s Bleemer interviewed Professor Downes, Faulkner, and Loree about the certiorari grant, what it means, and how the Court might rule on it. You can watch the video-conference interview here. Our blog post about the interview and cert. grant is here.

Oral argument in Coinbase II has been scheduled for February 28, 2024.

Smith v. Spizzirri

The third case is Smith v. Spizzirri, No. 22-1218, which concerns FAA Section 3’s stay-of-litigation-pending-arbitration provision. The Court granted certiorari on January 12, 2024.

FAA Section 3 provides that, once a court determines that a dispute must be arbitrated, the court “shall on application of one of the parties stay the trial of the action until” conclusion of the arbitration.  9 U.S.C. § 3 (emphasis added). Most circuits addressing the question have determined that a stay is mandatory if requested. The Ninth Circuit, and a few others, have held that, despite the statute’s mandatory text, courts retain discretion to dismiss an action where all disputes in the action are subject to arbitration.

The Ninth Circuit below held that it was bound to follow prior precedent concerning discretion to dismiss (rather than stay), even though it acknowledged that the statute’s “plain text” suggests otherwise. The Ninth Circuit acknowledged the circuit split and two judges, in an occurring opinion, encouraged “the Supreme Court to take up this question.” (See Question Presented Report.)

The question presented to SCOTUS is “[w]hether Section 3 of the FAA requires district courts to stay a lawsuit pending arbitration, or whether district courts have discretion to dismiss when all claims are subject to arbitration.” (See Question Presented Report.)

Oral argument has not yet been scheduled and merits briefs have not yet been filed.

The case is more noteworthy than may initially meet the eye. It has important implications concerning appealability. If an action is stayed, rather than dismissed, a granted motion to compel arbitration cannot be immediately appealed, see 9 U.S.C. § 16(b)(1),(2), (3) & (4); but if a motion to compel is granted, and the action is dismissed, then the right to appeal the denial begins to run immediately. 9 U.S.C. § 16(a)(3); Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 85-89 (2000). If a Section 3 stay is mandatory when requested, then there will presumably be fewer cases where courts compel arbitration and dismiss  (rather than stay) the underlying lawsuit, and therefore fewer cases where a grant of a motion to compel or denial of a motion to stay or enjoin arbitration is immediately appealable.

The subject matter jurisdiction implications of the case are equally significant. As we explained in a recent post, under Badgerow, a court’s federal-question subject matter jurisdiction can, for purposes of a motion to compel arbitration, be based on whether the underlying dispute would fall under the Court’s federal question jurisdiction.

But subject matter jurisdiction over a petition to confirm or vacate an award resulting from that arbitration cannot, after Badgerow, be based on such “look through” jurisdiction. An independent basis for subject matter jurisdiction must appear from the face of the petition and cannot be based on whether a court would have federal question jurisdiction over the underlying dispute.

As we explained in our Badgerow post, in cases where a Section 3 stay has been requested and granted, there may nevertheless be a so-called “jurisdictional anchor” on which subject matter jurisdiction over subsequent motions to confirm, vacate, or modify awards, to enforce arbitral subpoenas, or appoint arbitrators may be based. Under that jurisdictional anchor theory as long as the court stays the litigation, the court would retain its subject matter jurisdiction, and could exercise it to grant subsequent motions for FAA relief. While there remains a question whether the jurisdictional anchor theory survived Badgerow,  the theory makes sense, even under Badgerow, and is supported by pre-Badgerow case law. (See Badgerow Post.)

If the Court in Spizzirri rules that a motion to stay litigation pending arbitration must be granted if supported and requested, then it will presumably be easier for parties to assert subject matter jurisdiction based on a jurisdictional anchor theory.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, arbitration-related litigation, or the services that the Loree Law Firm offers, then please contact the author, Philip J. Loree Jr., at (516) 941-6094 or at PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. (bio, here) has more than 30 years of experience handling matters arising under the Federal Arbitration Act and in representing a wide variety of clients in arbitration, litigation, and arbitration-related-litigation. He is licensed to practice law in New York and before various federal district courts and circuit courts of appeals.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

 

International Institute for Conflict Prevention and Resolution (CPR) Interviews Professor Angela Downes, Richard D. Faulkner, and Philip J. Loree Jr. about the United States Supreme Court Certiorari Grant in FAA Section 1 Dispute: Bissonnette v. LePage Bakeries Park St., LLC  

November 21st, 2023 Applicability of Federal Arbitration Act, Arbitration Agreements, Arbitration Law, Arbitration Practice and Procedure, Exemption from FAA, FAA Chapter 1, FAA Section 1, Federal Arbitration Act Section 1, International Institute for Conflict Prevention and Resolution (CPR), Loree and Faulkner Interviews, Professor Downes, Richard D. Faulkner, Russ Bleemer, Section 1, Textualism, The Arbitration Law Forum, The Loree Law Firm, United States Court of Appeals for the Second Circuit, United States Supreme Court 1 Comment »

BissonnetteOn September 29, 2023, the United States Supreme Court (“SCOTUS”) granted certiorari in Bissonnette v. LePage Bakeries Park St., LLC, No. 23-51 (U.S.), a case that concerns the scope of Section 1 of the Federal Arbitration Act (“FAA”). Section 1 exempts from the FAA “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1.

A key question presented by the text of Section 1 is whether the contract is a “contract[] of employment” of a “class of workers engaged in foreign or interstate commerce.”  SCOTUS has decided three cases that have addressed that issue—or aspects of it—in one context or another.

In 2001, in Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), the Court decided that Section 1’s exemption applied not to all employment contracts, but only to contracts involving “transportation workers.”

In 2019, in New Prime Inc. v. Oliveira, 139 S. Ct. 532 (2019) (discussed here and here) the Court held that the term “contracts of employment” means “agreements to perform work,” irrespective of whether those agreements establish an employer-employee relationship or merely an “independent contractor” relationship.

Finally, on June 6, 2022, in Southwest Airlines Co. v. Saxon, 142 S. Ct. 1783 (2022) (discussed here) the U.S. Supreme Court (“SCOTUS”) held that certain ramp supervisors, who worked for Southwest Airlines, whose work frequently included assisting with the loading or unloading of baggage and other cargo on or off airplanes, were members of a “class of workers engaged in foreign or interstate commerce” for purposes of Section 1. (Southwest Airlines is discussed here.)

The question SCOTUS has taken up in Bissonnette is whether Section 1 includes an additional requirement—one not apparent from either the text of the FAA or any of the above three decisions – that the person performing the work be a member of the “transportation industry.”  The United States Court of Appeals for the Second Circuit determined that the answer was yes, and SCOTUS granted certiorari.

The reason that the question whether participation in the “transportation industry” is claimed to be relevant to the Section 1 FAA exemption is because the Bissonnette plaintiffs were commercial truck drivers who worked not for companies in the transportation industry but for ones in the baking industry—Flowers Food, Inc. and its two subsidiaries (the “Flowers Companies”). One or more of the Flowers Companies owns and sells “Wonder Bread.”

Each plaintiff had to form a corporation and enter in the name of that entity into a distribution agreement with one of the Flowers, Inc. subsidiaries. Those agreements provided the corporate entities with certain distribution rights in exchange for money. Each contained a mandatory, pre-dispute arbitration agreement.

The agreements required the plaintiffs to work forty hours per week minimum, driving vehicles to stores in their assigned territories within the State of Connecticut, transporting and delivering defendants’ baked goods (including Wonder Bread) and displaying them in the stores according to the defendants’ specifications.

The agreements subjected the plaintiffs to defendants’ policies and procedures, which regulated, among other things, the time, place, and manner of pickups, and required plaintiffs to report to the warehouse each day to upload data concerning their deliveries and pickups. Plaintiffs had to obtain and insure their own vehicles.

The district court held that the plaintiffs had to arbitrate their FLSA claims with the defendants, the Second Circuit affirmed for different reasons, and SCOTUS will decide the case this Term, which ends in June 2024.

We think it likely that SCOTUS will hold that Section 1’s FAA exemption for transportation workers is not conditioned on the workers being in the “transportation industry.” Provided a worker is within a class of transportation workers engaged in foreign or interstate commerce, then it should qualify for the Section 1 exemption from the FAA.

Aside from the lack of an FAA textual hook for such an argument (and other reasons outside the scope of this post), just last Term SCOTUS in Saxon, construing the text of Section 1, provided a straightforward test to determine who is exempted from the FAA. The Saxon Court provided an easy test to determine who falls within the scope of FAA Section 1’s exemption. The Court held that “any class of workers directly involved in transporting goods across state or international borders falls within § 1’s exemption.”  Saxon, 142 S. Ct at 1789.  Accordingly, as long as a worker is within a class of transportation workers engaged in foreign or interstate commerce, it will qualify for the Section 1 exemption.

The workers in Bissonnette are transportation workers because a large part of their work involves driving commercial trucks distributing Flowers’ goods to Flowers retailers in interstate commerce. Just as the Ramp Supervisors in Southwest Airlines were classified as “transportation workers” because they frequently loaded cargo on and off airplanes, so too, will SCOTUS probably rule that the plaintiffs in Bissonnette are “transportation workers” because they frequently drive trucks transporting goods in interstate commerce.

On October 24, 2023, our friend and colleague Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), interviewed our friends and colleagues, University of Professor Angela Downes, University of North Texas-Dallas College of Law Professor of Practice and Assistant Director of Experiential Education; arbitrator, mediator, arbitration-law attorney, and former judge,  Richard D. Faulkner; and yours truly, Loree Law Firm principal, Philip J. Loree Jr., about the Bissonnette certiorari grant, its implications and how SCOTUS might decide the case. You can watch the video-conference interview HERE.

Johnathan Baccay, a CPR Intern, and a second-year law school student, on September 29, 2023 wrote for CPR Speaks (CPR’s blog) an excellent article about Bissonnette, which CPR Speaks published.

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, arbitration-related litigation, then please contact Phil Loree Jr., at (516) 941-6094 or PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is a partner and founding member of the Loree Law Firm. He has more than 30 years of experience handling matters arising under the Federal Arbitration Act and in representing a wide variety of clients in arbitration, litigation, and arbitration-related litigation.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

 

 

International Institute for Conflict Prevention and Resolution (CPR) Interviews Professor Angela Downes, Richard D. Faulkner, and Philip J. Loree Jr. about the United States Supreme Court Certiorari Grant in Coinbase II Delegation Agreement Dispute

November 14th, 2023 Arbitrability, Arbitrability - Nonsignatories, Arbitrability | Clear and Unmistakable Rule, Arbitrability | Existence of Arbitration Agreement, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Authority of Arbitrators, Challenging Arbitration Agreements, Clear and Unmistakable Rule, Contract Interpretation, CPR Alternatives, CPR Speaks Blog of the CPR Institute, CPR Video Interviews, Delegation Agreements, Existence of Arbitration Agreement, FAA Chapter 1, FAA Section 2, Federal Arbitration Act Enforcement Litigation Procedure, Federal Arbitration Act Section 2, First Options Reverse Presumption of Arbitrability, First Principle - Consent not Coercion, Gateway Disputes, Gateway Questions, Presumption of Arbitrability, Questions of Arbitrability, Richard D. Faulkner, Russ Bleemer, Section 2, Separability, Small Business B-2-B Arbitration, The Loree Law Firm, United States Court of Appeals for the Ninth Circuit Comments Off on International Institute for Conflict Prevention and Resolution (CPR) Interviews Professor Angela Downes, Richard D. Faulkner, and Philip J. Loree Jr. about the United States Supreme Court Certiorari Grant in Coinbase II Delegation Agreement Dispute

CoinbaseOn November 3, 2023, the United States Supreme Court (“SCOTUS”) granted certiorari in Coinbase, Inc. v. Suski, No. 23-3 (U.S.) (“Coinbase II”), a case that is related to Coinbase, Inc. v. Bielski, 143 S. Ct. 1915 (2023) (“Coinbase I”), which was decided on June 23, 2023, and discussed here. Coinbase II involves an issue entirely different from Coinbase I: the application of a “delegation provision”—an agreement to arbitrate arbitrability disputes. That issue arises in a unique context: who decides whether a dispute concerning a later agreement is arbitrable when that later agreement, among other things, expressly submits all disputes concerning it to the exclusive jurisdiction of the California courts and not to arbitration? Is the delegation provision, as applied to this dispute over a subsequent contract, clear and unmistakable, as required by prior SCOTUS precedent?

On November 10, 2023, our friend and colleague Russ Bleemer, Editor of Alternatives to the High Cost of Litigation, Newsletter of the International Institute for Conflict Prevention and Resolution (CPR) (“CPR Alternatives”), interviewed our friends and colleagues, University of Professor Angela Downes, University of North Texas-Dallas College of Law Professor of Practice and Assistant Director of Experiential Education; arbitrator, mediator, arbitration-law attorney, and former judge,  Richard D. Faulkner; and yours truly, Loree Law Firm principal, Philip J. Loree Jr., about the recent certiorari grant, what it means, and how the Court might rule on it.

You can watch the video-conference interview HERE.

As we discuss in the interview Coinbase II promises to be an extremely interesting case, one which could (and perhaps should) result in a decision that the parties did not clearly and unmistakably agree to arbitrate an arbitrability dispute concerning a contract that: (a) was entered into some time after the contract containing the arbitration and delegation provisions; (b) expressly provides that any disputes concerning it must be decided in a judicial forum only; and (c) features as a party a person who is not a party to the arbitration and delegation provisions or any other aspect of the earlier contract.

Lee Williams, a CPR Intern, and a second-year law school student, wrote for CPR Speaks (CPR’s blog) an excellent article about Coinbase II, which CPR Speaks recently published, here. Among other things, the article explains the relationship between Coinbase II and other matters previously before SCOTUS, including the very similar Schein II matter. (For a discussion of Schein II, including a link to a CPR video, see here.)

The U.S. Supreme Court ultimately dismissed certiorari in that Schein II matter as improvidently granted, and as we briefly touch on in the interview, a similar fate might also befall Coinbase II. Perhaps more on that in another post, but for now, enjoy!

Contacting the Author

If you have any questions about this article, arbitration, arbitration-law, arbitration-related litigation, then please contact Phil Loree Jr., at (516) 941-6094 or at PJL1@LoreeLawFirm.com.

Philip J. Loree Jr. is a partner and founding member of the Loree Law Firm. He has more than 30 years of experience handling matters arising under the Federal Arbitration Act and in representing a wide variety of clients in arbitration, litigation, and arbitration-related litigation.

ATTORNEY ADVERTISING NOTICE: Prior results do not guarantee a similar outcome.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

 

SCOTUS Decides Coinbase, Ruling that District Court Proceedings on Merits Must be Stayed Pending Interlocutory Appeal of Order Denying Motion to Compel Arbitration

July 14th, 2023 Appellate Jurisdiction, Appellate Practice, Application to Compel Arbitration, Arbitrability, Arbitrability | Existence of Arbitration Agreement, Arbitration Practice and Procedure, Existence of Arbitration Agreement, FAA Chapter 1, FAA Section 16, Federal Arbitration Act Enforcement Litigation Procedure, Federal Courts, Federal Policy in Favor of Arbitration, International Institute for Conflict Prevention and Resolution (CPR), Loree and Faulkner Interviews, Richard D. Faulkner, Stay Pending Appeal, United States Court of Appeals for the Fifth Circuit, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Second Circuit, United States Court of Appeals for the Seventh Circuit, United States Supreme Court Comments Off on SCOTUS Decides Coinbase, Ruling that District Court Proceedings on Merits Must be Stayed Pending Interlocutory Appeal of Order Denying Motion to Compel Arbitration

Coinbase - Stay Pending Appeal

Introduction: Must District Courts Grant a Stay Pending Appeal of an Order Denying a Motion to Compel?  

Section 16(a) of the Federal Arbitration Act authorizes interlocutory appeals of orders denying motions to compel arbitration. 9 U.S.C. § 16(a)(1)(B) & (C). This is a “rare statutory exception to the usual [federal] rule that parties may not appeal before final judgment.”   Coinbase, Inc. v. Bielski, 599 U.S. ___, No. 22-105, slip op. at 3 (June 23, 2023).  It authorizes interlocutory “appeals of orders denying—but not of orders granting—motions to compel arbitration.” Slip op. at 3 (emphasis in original).

Where such an order is made in a pending litigation on the merits, and an interlocutory appeal is taken, should the trial court litigation on the merits be stayed pending appeal? On June 23, 2023, in Coinbase, the U.S. Supreme Court (“SCOTUS”) ruled 5-4 that the answer was yes: a “district court must stay its pre-trial and trial proceedings while the interlocutory appeal is ongoing.” Slip op. at 1.

Discussion

To Stay or Not to Stay: SCOTUS says the Griggs Principle Controls

The Court initially noted the text of Section 16 says nothing about whether a stay of litigation pending an appeal of a denial of a motion to compel is required. See slip op. at 3. That said, “Congress enacted § 16(a) against a clear background principle prescribed by” Court “precedents[,]” which the Court referred to as the “Griggs principle[:]” “[a]n appeal, including an interlocutory appeal, ‘divests the district court of its control over those aspects of the case involved in the appeal.’” Slip op. at 3 (quoting Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982)). Continue Reading »

Monster Energy Case: CPR Interviews Loree and Faulkner on U.S. Supreme Court’s Denial of Certiorari

June 30th, 2020 Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Arbitration Providers, Awards, Challenging Arbitration Awards, CPR Speaks Blog of the CPR Institute, Evident Partiality, FAA Chapter 1, Federal Arbitration Act Section 10, Grounds for Vacatur, International Institute for Conflict Prevention and Resolution (CPR), Loree & Loree, Loree and Faulkner Interviews, Small Business B-2-B Arbitration, United States Court of Appeals for the Ninth Circuit, United States Supreme Court, Vacate Award | Evident Partiality, Vacatur Comments Off on Monster Energy Case: CPR Interviews Loree and Faulkner on U.S. Supreme Court’s Denial of Certiorari
Monster Energy | Loree | Faulkner | Bleemer | CPR

On Monday, June 29, 2020 the International Institute of Conflict Protection and Resolution (“CPR”) interviewed Richard D. Faulkner, Esq. and Loree & Loree partner Philip J. Loree Jr. about the U.S. Supreme Court’s denial of certiorari in Monster Energy Co. v. City Beverages, LLC, 940 F.3d 1130 (9th Cir. 2019). To watch and listen to the video-conference interview, CLICK HERE.

On November 18, 2019 we reported on Monster Energy here. The Ninth Circuit addressed the question whether an award should be vacated for evident partiality if: (a) an arbitrator fails to disclose an ownership interest in an arbitration provider; and (b) the arbitration provider has a nontrivial, repeat-player relationship with a party.

The Court, in a 2-1 decision, held that an arbitrator who failed to disclose his ownership interest in an arbitration provider was guilty of evident partiality because the arbitration provider had a nontrivial business relationship with the repeat player party. The business relationship between the provider and the award proponent was nontrivial because the proponent’s form contracts designated the provider as the arbitration administrator, and over a five-year period, the provider had administered 97 arbitrations for the proponent.

Our good friend Russ Bleemer, Editor of CPR’s newsletter, Alternatives to the High Cost of Litigation, did a fantastic job conducting the interview. Heather Cameron, a second-year student at Fordham Law School, and a CPR Institute 2020 Summer Intern, wrote for CPR Speaks an excellent post about Monster Energy and the Supreme Court’s denial of certiorari, which you can read here. The video of the interview is embedded into that post.

A shout-out also to CPR’s Tania Zamorsky, who, among other things, is the blog master of CPR Speaks, and who coordinated the effort to share copies of the video on CPR’s social media outlets.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

Henry Schein Case: CPR Interviews Loree and Faulkner on Supreme Court’s Grant of Certiorari

June 24th, 2020 Arbitrability, Arbitration Agreements, Arbitration as a Matter of Consent, Arbitration Law, Arbitration Practice and Procedure, Arbitration Provider Rules, Arbitration Providers, Authority of Arbitrators, FAA Chapter 1, Federal Arbitration Act Section 2, International Institute for Conflict Prevention and Resolution (CPR), United States Court of Appeals for the Fifth Circuit, United States Supreme Court Comments Off on Henry Schein Case: CPR Interviews Loree and Faulkner on Supreme Court’s Grant of Certiorari
Henry Schein | Supreme Court | Cert. Granted
Steps and columns on the portico of the United States Supreme Court in Washington, DC.

On Monday, June 15, 2020 the International Institute of Conflict Protection and Resolution (“CPR”) interviewed our good friend and colleague Richard D. Faulkner and Loree & Loree partner Philip J. Loree Jr. about the U.S. Supreme Court’s grant of certiorari in Henry Schein Inc. v. Archer and White Sales Inc., No. 19-963. To watch and listen to the video-conference interview, CLICK HERE.

The petition for and grant of certiorari arose out of the Fifth Circuit’s remand decision from the United States Supreme Court’s decision in Henry Schein Inc. v. Archer & White Sales Inc., 139 S. Ct. 524 (2019) (available at ) (“Schein I”).

If you’ve been following our posts about the Schein I and the remand decision, Archer and White Sales Inc. v. Henry Schein Inc., 935 F.3d 274 (5th Cir. 2019) (available at ) (“Schein II”), then you know that the arbitration proponent, Henry Schein, Inc. (“Schein”), petitioned for rehearing en banc of Schein II in fall 2019. (See here, here, here, and here.) In October 2019, while the petition for rehearing en banc was pending, Philip J. Loree Jr. published in Alternatives an article entitled “Back to Scotus’s Schein: A Separability Analysis that Resolves the Problem with the Fifth Circuit Remand,” 37 Alternatives 131 (October 2019).

The Fifth Circuit denied the petition for rehearing en banc on December 6, 2019. But Schein, a Melville, N.Y.-based dental equipment distributor, filed on January 30, 2020 a petition for certiorari, which asked the U.S. Supreme Court to review the Fifth Circuit’s Schein II ruling.

The Petition asks the U.S. Supreme Court to determine “[w]hether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.” (Petition at I)

We wrote about the Petition in a post CPR Speaks, CPR’s blog, published on February 19, 2020, which was entitled “Schein Returns: Scotus’s Arbitration Remand Is Now Back at the Court.” And we also published in the April 2020 issue of CPR Alternatives an article about the Petition, which was entitled “Schein’s Remand Decision Goes Back to the Supreme Court. What’s Next?,” 38 Alternatives 54 (April 2020) (the “April 2020 Alternatives Article”). 

As noted in the April 2020 Alternatives Article, Schein’s filing of the petition for certiorari prompted Archer & White Sales Inc. (“Respondent” or “Archer & White”), a Plano, Texas, distributor, seller, and servicer of dental equipment, to file a conditional cross-petition (the “Cross Petition”), which in the event the Court granted the Petition asked the Court to determine “[w]hether the parties clearly and unmistakably agreed to arbitrate arbitrability by incorporating the AAA Rules into their contract.”

The Cross-Petition ultimately prompted Rick Faulkner and Phil Loree Jr. to co-author a two-part article for Alternatives entitled “Schein’s Remand Decision: Should Scotus Review the Provider Rule Incorporation-by-Reference Issue?” Part I was published in the May 2020 issue of Alternatives. Part II was published in the June 2020 issue.

The two-part article argued that, if the Court granted the Petition, it should also grant the Cross-Petition, and address the issue whether the parties, by agreeing to arbitrate “in accordance with” the American Arbitration Assocation’s Commercial Arbitration Rules, clearly and unmistakably agreed to arbitrate arbitrability issues.

But as it turned out, the Court granted the Petition, but denied the Cross-Petition, one of the issues addressed in the interview.

Our good friend Russ Bleemer, Editor of Alternatives, conducted the interview, and did a great job editing the articles Rick and I wrote about Schein for Alternatives. He also wrote for the CPR Speaks Blog an excellent summary of where things stand in light of the Court’s grant of the Petition. The video of the interview is embedded into that blog post. You can request copies of the articles Rick and Phil wrote about Schein by emailing CPR at alternatives@cpradr.org.  

We also shout-out CPR’s Tania Zamorsky, who, among other things, is the blog master of CPR Speaks, and who coordinated the effort to share copies of the video on CPR’s social media outlets.

Photo Acknowledgment

The photo featured in this post was licensed from Yay Images and is subject to copyright protection under applicable law.

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