Justia Class Action Opinion Summaries

In 2011, FSRO filed a Demand for Arbitration against Fantastic Sam's Franchise Corporation, on behalf of its members, who are franchisees, holding individual license agreements with Fantastic Sams. FSRO alleged that the Corporation had breached those license agreements. The Corporation filed a petition pursuant to the Federal Arbitration Act, 9 U.S.C. 4, to stay FSRO's arbitration and to compel FSRO members to arbitrate their claims individually. The district court allowed the petition as to license agreements that specifically prohibit class-arbitration. The decision in favor of the Corporation was not appealed. The court denied relief as to other agreements, which state: “Any controversy or claim arising out of or relating in any way to this Agreement or with regard to its formation, interpretation or breach shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association." The First Circuit affirmed. Whether the language permits group arbitration, as requested by FSRO, is a question for the arbitrators. View "Fantastic Sams Franchise Corp. v. FSRO Ass'n, Ltd." on Justia Law

This case arose when plaintiff filed a putative class action in Texas state court alleging that defendants had violated certain provisions of the Texas Education Code by soliciting students in Texas without the appropriate certifications. Defendants subsequently appealed the district court's confirmation of an arbitral award that required them to submit to class arbitration. They contended that the district court, not the arbitrator, should have decided whether the parties' agreement provided for class arbitration, and that the district court should have vacated the arbitrator's class arbitration award. Because the parties agreed that the arbitrator should decide the class arbitration issue, the court concluded that the district court correctly referred that issue to the arbitrator. The district court erred, however, in confirming the award because the arbitrator exceeded his powers. Therefore, the court reversed and remanded for further proceedings. View "Reed v. Florida Metro University, Inc., et al." on Justia Law

Plaintiff filed a putative class action against M&T Bank, alleging that it improperly charged its checking account customers overdraft fees. The district court denied M&T Bank's renewed motion to compel arbitration, finding that plaintiff's claims were not within the scope of the parties' arbitration agreement. The court held that, under the delegation provision, the decision of whether plaintiff's claims were within the scope of the arbitration agreement was a decision for an arbitrator, and the district court erred in making the decision itself. Further, the court believed that it was prudent for the district court to reconsider its unconscionability determination in light of AT&T Mobility LLC v. Conception, so the court did not reach whether the arbitration agreement was unconscionable. Accordingly, the court vacated and remanded. View "Given v. M&T Bank Corp, et al." on Justia Law

Plaintiffs, current and former customers of AT&T, filed a class action against AT&T, alleging unjust enrichment and and breach of contract. AT&T responded by seeking to enforce an arbitration agreement contained in its contracts with plaintiffs. The district court refused to enforce the arbitration agreement on state-law unconscionability grounds, relying primarily on the agreement's class-action waiver provision. The court reversed the district court's substantive unconscionability ruling where the FAA preempted the Washington state law invalidating the class-action waiver. The court remanded for further proceedings related to plaintiffs' procedural unconscionability claims for the district court to apply Washington choice-of-law rules. View "Coneff, et al. v. AT&T Corp, et al." on Justia Law

Plaintiffs brought this putative class action against KeyBank, alleging violations of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200, in connection with private student loans that KeyBank extended to plaintiffs. The court concluded that (1) the Federal Arbitration Act (FAA) 9 U.S.C. 1 et seq., preempted the Broughton-Cruz rule and (2) the arbitration clause in the parties' contracts must be enforced because it was not unconscionable. Therefore, the court did not reach the question, presented in Appeal No. 10-15934, whether the NBA and the regulations of the OCC preempted plaintiffs' UCL claims. Accordingly, in Interlocutory Appeal No. 09-16703, the court reversed the district court's denial of KeyBank's motion to compel arbitration, vacated the judgment, and remanded to the district court with instructions to enter an order staying the case and compelling arbitration. Because the disposition of that appeal rendered the district court's subsequent dismissal order a nullity, the court dismissed Appeal No. 10-15934 as moot. View "Kilgore, et al. v. Keybank, et al." on Justia Law

Borrower brought suit against a payday loan company (Company), arguing that its arbitration agreement containing a class waiver was unenforceable. The trial court found that Company's arbitration agreement was unconscionable and unenforceable because its class waiver deprived borrowers of a meaningful remedy. The Supreme Court reversed in light of AT&T Mobility LLC v. Concepcion, holding that that the trial court erred in finding that Company's arbitration agreement was unconscionable based on its class waiver and should have instead adjudicated whether the arbitration agreement was enforceable in light of Borrower's evidence relevant to her claims regarding ordinary state-law principles that govern contracts but that do no single out or disfavor arbitration. Remanded. View "Robinson v. Title Lenders, Inc." on Justia Law

Missouri Title Loans appealed from a judgment finding that a class arbitration waiver contained in its loan agreement, promissory note, and security agreement (agreement) was unenforceable. The Supreme Court affirmed the judgment insofar as it held that the arbitration waiver was unconscionable and reversed that part of the judgment ordering that the claim be submitted to an arbitrator to determine suitability for class arbitration, holding that the appropriate remedy was to strike the entire arbitration agreement. The U.S. Supreme Court vacated the Court's judgment and remanded for further consideration in light of AT&T Mobility, LLC. v. Concepcion. Applying Concepcion, the Supreme Court affirmed in part and reversed in part, holding (1) the presence and enforcement of the class arbitration waiver did not make the arbitration clause unconscionable; (2) the formation of the agreement was unconscionable; and (3) therefore, the appropriate remedy was revocation of the arbitration clause contained within the agreement. Remanded. View "Brewer v. Mo. Title Loans, Inc." on Justia Law

In 2005, during plaintiff's employment, defendant issued an employee handbook, including a provision that all employment-related disputes, whether initiated by an employee or by defendant, would be "resolved only by an arbitrator through final and binding arbitration," that disputes under the Fair Labor Standards Act were among those subject to the arbitration policy, that disputes cannot be brought as class actions or in representative capacities, and that the Federal Arbitration Act was its governing authority. Plaintiff signed a receipt that reiterated the arbitration policy. After his employment ended, plaintiff filed a class action, alleging violation of the FLSA by failing to adequately compensate him and other similarly-situated employees for overtime work. The district court denied a motion to stay proceedings and compel arbitration, finding that the provision was illusory because the employer retained the right to terminate or modify the provision at any time. The Fifth Circuit affirmed, noting that under the provision the company could make amendments almost instantaneously. View "Carey v. 24 Hour Fitness USA, Inc." on Justia Law

Plaintiff entered into a two-year wireless service agreement with First Cellular in 2005. The company was acquired by defendant, which began dismantling and reorganizing. Plaintiff initially agreed to defendant's terms, but later filed a class action, claiming breach of contract for rendering his phone and equipment useless and refusing to honor the features and prices of the First Cellular Agreement. He also claimed deceptive rade practices under Illinois law and civil conspiracy. The district court denied defendant's motion to compel arbitration. The Seventh Circuit reversed, finding that defendant's arbitration clause applies because part of the claims are based on services and products received under defendant's contract. Defendant's contract unambiguously covers any dispute "arising out of" or "relating to the services and equipment." If a contract provides for arbitration of some issues, any doubt concerning the scope of the arbitration clause is resolved in favor of arbitration as a matter of federal law, 9 U.S.C. 2. View "Gore v. Alltel Comm'cns, LLC" on Justia Law

Appellants brought various claims before Financial Industry Regulatory Authority (FINRA) arbitrators against Ameriprise, a financial-services company, for, inter alia, breach of fiduciary duty, breach of contract, fraud, and negligent misrepresentation related to the decline in value of various financial assets owned by appellants and managed by Ameriprise. Ameriprise answered appellants' FINRA complaint by asserting, principally, that appellants released their claims by operation of a settlement agreement in a class-action agreement suit that had proceeded between 2004 and 2007 in the United States District Court for the Southern District of New York. After FINRA arbitrators denied Ameriprise's motion to stay appellants' arbitration, Ameriprise moved in the district court, in which the class action had been litigated and settled, for an order to enforce the settlement agreement that would enjoin appellants from pressing any of their claims before FINRA arbitrators. The district court concluded that the class settlement barred all of appellants' arbitration claims and therefore granted Ameriprise's motion and ordered appellants to dismiss their FINRA complaint with prejudice. The court held that the district court had the power to enter such an order and that several of appellants' arbitration claims were barred by the 2007 class-action settlement. Therefore, the court affirmed in part. But because the court concluded that appellants' arbitration complaint plead claims that were not, and could not have been, released by the class settlement, the court vacated in part the district court's judgment, and remanded the case for the entry of an order permitting the non-Released claims to proceed in FINRA arbitration. The court dismissed as moot appellants' appeal from the district court's denial of their motion for reconsideration. View "In Re: American Express Finance Advisors Securities Litigation" on Justia Law