ARBITRATION-FEDERAL ARBITRATION ACT-SPECIAL PROCEDURAL RULES

May 24th, 2022 by Rieders Travis in Arbitration

Morgan v. Sundance, Inc., 2022 U.S. LEXIS 2514 (S. Ct. May 23, 2022) (Kagan, J.)  When a party who has agreed to arbitrate a dispute instead brings a lawsuit, the Federal Arbitration Act (FAA) entitles the defendant to file an application to stay the litigation. See 9 U. S. C. §3. But defendants do not always seek that relief right away. Sometimes, they engage in months, or even years, of litigation—filing motions to dismiss, answering complaints, and discussing settlement—before deciding they would fare better in arbitration. When that happens, the court faces a question: Has the defendant’s request to switch to arbitration come too late? Most Courts of Appeals have answered that question by applying a rule of waiver specific to the arbitration context. Usually, a federal court deciding whether a litigant has waived a right does not ask if its actions caused harm. But when the right concerns arbitration, courts have held, a finding of harm is essential: A party can waive its arbitration right by litigating only when its conduct has prejudiced the other side. That special rule, the courts say, derives from the FAA’s “policy favoring arbitration.”  We granted certiorari to…

ARBITRATION-BUSINESS DISPUTE-VOTING DEADLOCK RESOLUTION

May 16th, 2022 by Rieders Travis in Arbitration

Bennett v. Forker, Pa. No. 21-1006 (C.P. Lycoming April 5, 2022) (Linhardt, J.)  This opinion by Judge Linhardt finds that the dispute between the parties falls under the operating agreement arbitration provision and therefore must be arbitrated.  The question has to do with a disagreement between the parties as to how to run the business, however.  It was not specifically a voting deadlock, but the court found it fell within that type of dispute.  It is really a bit of a stretch.

Arbitration

July 23rd, 2019 by Rieders Travis in Arbitration

ARBITRATION-AGENCY-AGREEMENT TO ARBITRATE SC v. Merck Sharp & Dohme Corp., 2022 U.S. App. LEXIS 8500 (3rd Cir. March 21, 2022) (Hardiman, C.J.).  This case involved motion to compel arbitration.  Merck contended the District Court should have compelled Sugartown Pediatrics, etc., to arbitrate their claim that Merck’s vaccine bundling scheme was anticompetitive.  The Third Circuit agreed and reversed and remanded to the District Court to grant Merck’s motion to compel arbitration. At issue was whether, among other things, the pediatricians granted actual authority consent to the arbitration clauses on the pediatrician’s behalf.  The Third Circuit agreed that at least as to Schwartz Pediatrics, such authority was granted.  The Pennsylvania law is clear on agency control.  Here, Schwartz exercised control over PBG by circumscribing the PBG’s authority.  Schwartz made PBG its agent only for the limited purpose of vaccine purchases.  Schwartz simultaneously demonstrated its intent to create an agency relationship and exercise control over the scope of PBG’s agency by contract.  It was clear that the agent of the pediatricians had the right to agree to the arbitration clause.  For these reasons, Schwartz Pediatrics is bound to arbitrate because it granted actual…