Shearman & Sterling LLP | U.S. International Arbitration Digest

Welcome to the Shearman & Sterling US International Arbitration Digest

Shearman & Sterling’s US International Arbitration Digest (US IA Digest) provides a centralized resource for newly released decisions issued by US courts. The US IA Digest collects in one place important decisions on US international arbitration case law issued since January 1, 2016, compiled and organized into categories that are most relevant and useful to practitioners and other interested parties. The Digest will be updated on a rolling basis as new decisions are issued.

Newly Released Decisions
09/23/2016

Estate of Johnson Clark v. William Horwich, No. 12-17577 (9th Cir. Sept. 23, 2016)

Circuit court affirmed district court’s dismissal of a motion to compel arbitration since the FAA does not itself confer jurisdiction on federal district courts over actions to compel arbitration, nor create a federal cause of action giving rise to federal question jurisdiction under 28 USC § 1331.

09/23/2016

Imbruce v. American Arbitration Association, No. 1:15-CV-07508-NRB (S.D.N.Y. Sept. 23, 2016)

Court granted AAA’s motion to dismiss plaintiffs’ amended complaint based on AAA Rule R-52(D) and the doctrine of arbitral immunity.  Court held that AAA’s failure to collect a counterclaim fee prior to the issuance of the arbitrator’s damages award on that counterclaim is “sufficiently associated with the adjudicative phase of the arbitration to justify immunity.”  Court rejected plaintiffs’ “thinly veiled attempt to evade arbitral immunity” under the functus officio doctrine by basing their case on the alleged post-award collection of a fee by the AAA rather than the AAA’s failure to collect such fees prior to the issuance of the award.  Court also dismissed plaintiffs’ claims for a judgment declaring the AAA’s fee collection void, holding that this was an impermissible attempt to challenge the arbitral award that can only be brought in an action to vacate.

09/23/2016

Lift Equipment Certification Co., Inc. v. Lawrence Leasing Corp., No. 2:15-CV-01987-JAD-GWF (D. Nev. Sept. 23, 2016)

Court denied motion to modify or partially vacate arbitration award and granted in part and denied in part defendant’s counter motion to confirm and award attorney fees.  Court held that plaintiff failed to prove by clear and convincing evidence that the arbitrator “manifestly disregarded the law” or that the award was “arbitrary and capricious.”  Court declined to award defendant its legal fees since plaintiff’s claims were “far from frivolous – particularly given the arbitration award’s vagueness.”

09/23/2016

Montoya v. Comcast Corporation, No. 2:15-CV-02573-TLN-DB (E.D. Cal. Sept. 23, 2016)

Court granted defendant’s motion to compel arbitration, denied motion to dismiss as moot, and stayed action pending arbitration.  Court held that, even though plaintiffs were non-signatories to the arbitration agreement, plaintiffs were bound by it since they knowingly exploited defendant’s services and therefore accepted its contract terms, including the arbitration agreement.  The arbitration agreement was not procedurally unconscionable since it lacked a “surprise” element, nor was it substantively unconscionable under California law since it did not lead to “overly harsh” or “one-sided” results.  The dispute was also within the scope of arbitration provision.

09/23/2016

Flynn v. FCA US, d/b/a Chrysler Group and Harmon International Industries, No. 3:15-CV-00855-MJR-DGW (S.D. Ill. Sept. 23, 2016)

Court granted in part and denied in part motion to compel arbitration.  Court granted the motion in relation to certain claims covered under an arbitration agreement between Chrysler and two of the plaintiffs and stayed such claims pursuant to § 3 of the FAA until arbitration is complete.  Court held Chrysler did not waive its right to arbitrate by participating in the judicial process since, as soon as it discovered the arbitration agreement, it moved to compel arbitration.