Arbitration Award Vacated Because Arbitrator Hid Ownership Interest In Arbitration Service

Arbitration awards are rarely overturned. The standard to vacate an award is high, and judicial review of awards is often unexacting. So when a court overturns an award, it is usually worth a closer look. And one recent decision from the U.S. Court of Appeals for the Ninth Circuit, Monster Energy Company v. City Beverages , LLC, is definitely worth a closer look. In Monster, the court vacated an arbitration award based on the “evident partiality” of the arbitrator. The main evidence of the arbitrator’s “evident partiality” was his ownership interest in JAMS, a fact he did not disclose before the arbitration. At the risk of revealing my own ignorance, I did not know that JAMS is owned, at least in part, by some of the neutrals who mediate/arbitrate cases through JAMS. But it is, and after Monster, those owners should disclose that relationship to the parties before beginning an arbitration.

The defendant in Monster was a beer distributor. In 2006, it signed an agreement with plaintiff to be the exclusive distributor of plaintiff’s energy drinks for 20 years in a specific geographical territory. But the agreement contained an out for plaintiff – it could terminate the agreement without cause if it paid a severance fee to defendant in an amount agreed upon by the parties in the agreement. Eight years after signing the agreement, plaintiff exercised this clause, paid the severance fee, and terminated the agreement. Defendant objected, arguing that the termination violated Washington’s Franchise Investment Protection Act.

The agreement between the parties contained an arbitration provision, requiring that any dispute be resolved by JAMS Orange County. After plaintiff served its arbitration demand, JAMS provided the parties with a list of seven neutrals. The parties chose their arbitrator from this list. The chosen arbitrator then provided a disclosure statement, which included the following: “I practice with JAMS. Each JAMS neutral, including me, has an economic interest in the overall financial success of JAMS.” The arbitrator also disclosed that he had arbitrated one matter for plaintiff in the past five years, and that he had ruled against plaintiff in that case, which involved a dispute between plaintiff and another distributor.

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On Amateur Chihuahua Breeding And Bailments

by: Peter J. Gallagher (LinkedIn)

After reading the opening paragraph of the Appellate Division’s decision in Rivera v. Canseo, I was hooked. Here it is:

[Plaintiff] owns a female chihuahua. Defendant . . . owns a male Chihuahua. [Plaintiff] and [defendant] reached an oral agreement to have their dogs mate. [Plaintiff] was to obtain puppies from the mating and [defendant] was to receive consideration for the use of his dog.

Interesting facts, check. Awkward references to uncomfortable subjects reminiscent of 1950’s health class videos – “obtain puppies from the mating” – check. And what exactly does it mean to “receive consideration for the use of his dog”? Needless to say, I was hooked.

[As it turns out, the consideration question was never answered. Plaintiff claimed that defendant was to receive “the pick of the litter if the mating ultimately resulted in the birth of puppies,” while defendant claimed he was to receive $500, “regardless of whether [plaintiff’s] dog was impregnated.” Because “[t]he exact nature of [defendant’s] expected consideration [was] not material” to the court’s decision, however, the dispute was never resolved.]

In Rivera, after plaintiff and defendant agreed to have their Chihuahuas mate, plaintiff brought her dog to defendant’s home, along with a supply of the dog food to which her dog was accustomed. According to plaintiff, her dog was in good health when she left her at defendant’s home. Clearly a hopeless romantic, “[defendant] placed [plaintiff’s] dog and his dog in the basement together” and locked the door.

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Legal Writing Tip: Don’t start your brief by calling the trial judge “attractive, hard-working, brilliant, young, [and] politically well-connected.”

by: Peter J. Gallagher (LinkedIn)

This should probably be obvious, but apparently it wasn’t, at least to one California lawyer. So, in a published opinion, Briganti v. Chow, the California Court of Appeals included a “Note on Civility, Sexism, and Persuasive Brief Writing” to remind that attorney, and all of us, that this is not a good way to start a brief .

The dispute in Briganti was straightforward. Plaintiff sued defendant for allegedly defaming her in a Facebook post. Defendant moved to strike plaintiff’s complaint under California’s anti-SLAPP statute. (As an aside, only John Oliver could entertain and inform when talking about Anti-SLAPP statutes.) The trial court denied the motion in part and granted it in part. The Court of Appeals affirmed.

But the interesting part of the decision, and the sole reason the Court of Appeals chose to publish it, was its “concluding note on civility, sexism, and persuasive brief writing.”

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Attention Landlords: Another Quirk In New Jersey Landlord-Tenant Law That You Are Not Going To Like

by: Peter J. Gallagher (LinkedIn)

For the uninitiated landlord, New Jersey landlord-tenant court can be a bit of a shock. The deck seems insurmountably stacked in the tenant’s favor. And when a landlord acquires its property via foreclosure, the process is even more confusing. A recent trial court decision, UTS Bechman, LLC v. Woodard, is a good example of how confusing, and sometimes counter intuitive, landlord-tenant court can seem to a landlord.

In Bechman, tenant and her husband were involved in a contentious divorce. During and after the divorce, tenant leased the underlying property, which had been the marital home but was then in foreclosure, from her husband. The property was eventually sold at sheriff’s sale and plaintiff took title to the property. When it acquired the property, plaintiff posted a notice on the door identifying itself as the new owner and providing an address where rent should be paid.

Over the next four months, plaintiff never received rent from tenant, so it sued, seeking to evict her from the property. Seems simple enough, right? Nope.

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Plaintiff’s Slip And Fall Lawsuit Against Church Barred By Statute . . . And The Bible

by: Peter J. Gallagher (LinkedIn)

Winter is right around the corner. Unfortunately, that means snow is also just around the corner. But it also means that its time for another case about someone allegedly being injured after slipping and falling in the snow. The facts of these slip and fall cases often read like law school exam questions. I have written about several of them in the past, from the relatively straightforward (Just In Time For Summer, A New Decision On When You Are Required To Clear Snow From Your Property) to the more unique (Shortcut Across Bank Parking Lot Leads To A Slip And Fall, But No Liability For The Bank) to the even more unique (New Jersey Court Answers The Burning Question: Can I Sue The Owner Of An Abandoned Church If I Slip And Fall On The Sidewalk Outside The Church?). A recent decision from the Appellate Division, Castellano v. Garrett Enterprises, LLC, is the latest in this long line of interesting slip and fall cases.

In Castellano, plaintiff was ordered to participate in a 48-hour Intoxicated Driver Resource Center program as part of the disposition of his second drunk-driving conviction. The program was held at a local church. It snowed in the days leading up to plaintiff’s attendance, including the night before. On the night of the program, while plaintiff was walking around the premises, he slipped and fell. He sued the church, among others.

The church moved for summary judgment on charitable immunity grounds. The trial court granted the motion and the Appellate Division affirmed, relying, among other things, on the Gospel according to Mark.

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