Tag Archives: waiver

Sup. Ct. allows Class Action Arbitration under FAA

In Oxford Health Plans LLC v. Sutter, No. 12-125 (2013), the Supreme Court ruled that an arbitrator can require a class action arbitration.

The gist of the case is that Sutter, a pediatrician, had a fee-for-services contract, which required arbitration for all contractual disputes.  When Oxford failed to promptly pay him and other physicians, Sutter filed a class action in New Jersey.  After filing, the court compelled arbitration.  The arbitrator concluded that the contract called for class action arbitration.  Sutter appealed to higher courts, but these appeals were denied.

The Supreme Court explained its decision as follows.  First, the parties agreed to go to arbitration in their contract.  Second, an arbitrator looks at the contract, makes a decision based on the contractual language, and this decision is binding.  Thirdly, and most importantly, the Supreme Court explained that judicial review is limited to whether the arbitrator interpreted the contract, not whether the court agreed with the decision.  Consequently, because the arbitrator considered the contract, the arbitrator’s decision stands.  They only way to vacate an arbitral decision is when an arbitrator strayed from his task of interpreting the contract.  In other words, not when he performed his task poorly.

As a note: In prior decisions (Steelworkers Trilogy/Misco) in the labor context under the Labor Management Relations Act (LMRA), the Supreme Court had ruled that a contractual language had to explicitly allow class actions in the arbitration clause.  Here, the arbitration clause did not do so.

This raises the question of how the Federal Arbitration Act (FAA) reconciles with LMRA arbitrations when they are both present.  In this case, only the FAA was involved.

via Workplace Prof Blog: SCOTUS OKs Class Arbitration.

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Filed under Appellate, courts, employment, labor, legal decision, Supreme Court, union, waiver

Sup. Ct. March Calendar

Next month, the Supreme Court will be hearing high profile cases – including the gay marriage debate (California’s Proposition 8 and DOMA), as well as voter registration laws.  In addition, the Supreme Court will hear a variety of important issues, such as class arbitration waivers, generic pharmaceutical regulations, and reimbursement or payment under the Takings Clause.

The following are the oral arguments scheduled for March.

Monday March 18

Arizona v. Inter Tribal Council of Arizona:

  1. Whether the 9th Circuit erred in creating a new, heightened preemption test under Art. 1, Sec. 4, Cl. 1 of the U.S. Constitution (“the Elections Clause”) that is contrary to the Supreme Court’s authority and conflicts with other circuit court decisions; and
  2. Whether the 9th Circuit erred in holding that under that test the National Voter Registration Act preempts an Arizona law that requests persons who are registering to vote to show evidence that they are eligible to vote.

Bullock v. Bankchampaign

  1. What degree of misconduct by a trustee constitute “defalcation” under Sec. 523(a)(4) of the Bankruptcy Code that disqualifies the errant trustee’s resulting debt from a bankruptcy discharge, and whether it includes actions that result in no loss of trust property.

Tuesday March 19

Sebelius v. Cloer

  1. Whether a person whose petition under the National Vaccine Injury Compensation Program is dismissed as untimely may recover from the United States an award of attorney’s fees and costs.

Mutual Pharmaceutical Co. v. Bartlett

  1. Whether the 1st Circuit erred when it created a circuit split and held – in clear conflict with this Court’s decisions in PLIVA v. Mensing, Riegel v. Medtronic, and Cipollone v. Ligget Group – that federal law does not preempt state law design-defect claims targeting generic pharmaceutical products because the conceded conflict between such claims and the federal laws governing generic pharmaceutical design allegedly can be avoided if the makers of generic pharmaceuticals simply stop making their products.

Wednesday March 20

Horne v. Dept. of Agriculture

  1. Whether the 9th Circuit erred in holding, contrary to the decisions of 5 other circuit courts of appeals, that a party may not raise the Takings Clause as a defense to a “direct transfer of funds mandated by the Government,” E. Enterp. v. Apfel, but instead must pay the money and then bring a separate, later claim requesting reimbursement of the money under the Tucker Act in the Court of Federal Claims; and
  2. Whether the 9th Circuit erred in holding, contrary to the decision of the Federal Circuit, that it lacked jurisdiction over petitioner’s takings defense, even though petitioners, as “handlers” of raisin under the Raisin Marketing Order, as statutory required under 7 USC 608c(15) to exhaust all claims and defenses in administrative proceedings before the United States Department of Agriculture, with exclusive jurisdiction for review in federal district court.

Dan’s City Used Cars v. Pelkey

  1. Whether state statutory, common law negligence, and consumer protection act enforcement actions against two-motor carrier based on state law regulating the sale and disposal of a towed vehicle are related to a transportation service provided by the carrier and thus preempted by 49 USC 14501-c-1.

Monday March 25

Oxford Health Plans v. Sutter

  1. Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the 2nd and 3d Circuits have held) or exceeds those powers (as the 5th Circuit has held) by determining that parties affirmatively “agreed to authorize class arbitration,” Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract.

Federal Trade Commission v. Actavis

  1. Whether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the court below held), or instead are presumptively anticompetitive and unlawful (as the 3d Circuit has held).

Tuesday March 26

Hollingsworth v. Perry

  1. Whether the Equal Protection Clause of the Fourteenth Amendment prohibits the State of California from defining marriage as the union of a man and a woman; and
  2. Whether petitioners have standing under Art. III, Sec. 2 of the Constitution in this case.

Wednesday March 27

United States v. Windsor

  1. Whether Section 3 of the Defense Marriage Act (DOMA) violates the Fifth Amendment’s guarantee of equal protection of the laws as applied to persons of the same sex who are legally married under the laws of their State; 
  2. Whether the Executive Branch’s agreement with the court below that DOMA is unconstitutional deprives this Court of jurisdiction to decide this case; and
  3. Whether the Bipartisan Legal Advisory Group of the United States House of Representatives has Article III standing in this case.

via New March argument calendar : SCOTUSblog.

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Waiver of Attorney-Client Privilege

This is an illustrative case as to why attorneys want to take precautions when producing discovery.  The case is Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-CV-116, 2012 WL 3731483 /0S.D. Ohio Aug. 28, 2012).

In this case, the court held that privilege had been waived as to 347 pages of inadvertently produced emails where, among other things, Defendant failed to establish the reasonableness of the precautions taken to prevent the disclosure and “failed to take adequate measures to rectify or mitigate the damage of the disclosure.”

Here, Defendant did not stamp any documents as confidential.  Upon reviewing the documents at issue, the court held that those documents were covered under the attorney-client privilege.  However, the court found that the privilege had been waived.  The court highlighted the following facts:

  • Defendant’s lack of specificity as to who conducted the review and how the review was conducted.  The general assertion that multiple lawyers reviewed it was not enough.
  • Defendant failed to produce a privilege log during discovery;
  • 4.6% of the documents were inadvertently produced, which the Court found to be “relatively high.”

In sum, the Court opined:

After balancing the required factors, the Court concludes that Medex waived the attorney client privilege otherwise applicable to the 347 documents in the May 30 production.  To summarize, the Court finds that Medex did not take reasonable precautions to protect its privileged information, the number of documents disclosed is significant, no privilege log was provided at the time of disclosure, the contents of some of the documents may be relevant to the heart of the dispute, and Medex made insufficient attempts to mitigate its damage even after it learned of the disclosure.

via Inadvertent Production Results in Waiver of Attorney-Client Privilege as to 347 Pages of Emails : Electronic Discovery Law.

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Filed under attorneys, courts, discovery, electronic discovery, legal decision, sanctions, waiver

FMLA and State immunity

On March 20th, the Supreme Court issued it’s opinion in Coleman v. Md. Ct. App., holding that Congress lacked the power to abrogate state immunity from suits for damages for violations of the FMLA’s self-care provisions.

The FMLA creates a private right of action for equitable relief and damages “against any employer (including a public agency) in any Federal or State court.”  29 USC 2617(a)(2).  The FMLA states that an employee is entitled up to 12 weeks of unpaid leave per year for:

  • [“family-care provisions” (A), (B), and (C)] (A) the care of a newborn son or daughter; (B) the adoption or foster-care placement of a child; (C) the care of a spouse, son, daughter, or parent with a serious medical condition; and
  • [“self-care provision” (D)] (D) the employee’s own serious health condition when the condition interfere with the employee’s ability to perform at work.

The Coleman case deals with (D), dubbed the “self-care provision” by the Supreme Court.  The Supreme Court, written by Justice Kennedy, ruled that the waiver of States’ immunity was not present at the self-care provision because the legislature was not concerned with sex-based discrimination with respect to the self-care provision; unlike in the family-care provisions.  See, e.g., Nevada Dep’t of Human Resources v. Hibbs, 538 US 721 (2003) (upholding waiver of States’ immunity with respect to the family-care provision (C) because States had family-leave policies that differentiated on the basis of sex).

The Supreme Court relied on amicus curiae brief citing to the BLS which showed that when the FMLA was enacted, 95% of full-time state and local employees were covered by paid sick leave plans and 96% of such employees enjoyed short-term disability protection.  The Supreme Court concluded based on the record that men and women were out on medical leave approximately equally.  Citing H.R. Rep. No. 101-28, pt. 1, p. 15 (1989).  Further, the legislative history revealed a concern for economic burdens and not sex discrimination.  Citing S.R. Rep. No. 103-3, pp. 11-12 (1993); H.R. Rep. No. 101-28, p. 23 (1989).  Consequently, the Supreme Court dismissed the case on the grounds that the self-care provision was not directed at an identified pattern of gender-based discrimination and was not congruent and proportional to any pattern of sex-based discrimination.

The Supreme Court also shot down the argument that the self-care provision is a necessary adjunct to the family-care provisions.  Justice Kennedy highlighted that Congress made no findings or received any testimony that suggested that the availability of self-care leave equalized the expected amount of FMLA leave men and women will take.  Justice Kennedy pointed that there was no evidence that women took more leave than men, or that employers assumed that women would take more leave time than men.

Lastly, the Supreme Court rejected petitioner’s argument regarding the disparate impact effect the leave restrictions would have on women.  The Supreme Court noted that the provision must be directed at a pattern of constitutional violations.

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Al Franken unveils consumer rights bill in response to AT&T v. Concepion

Franken Debuts Consumer Rights Bill

WASHINGTON – Responding to a recent Supreme Court decision, DFL Sen. Al Franken today unveiled a bill to allow consumers to sue companies, even when they had already waived that right by signing a boilerplate contract.

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