Articles Posted in Arbitration & Mediation

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Two credit card holders defaulted on their accounts, and the issuing bank elected to litigate debt-collection actions. After courts entered default judgments against both card holders, the card holders filed new and separate suits alleging that the bank violated the Uniform Trade Practices and Consumer Protection Act (UTPA) during the earlier debt collection actions. The bank moved in each case to arbitrate the UTPA claims, and the superior court stayed the UTPA litigation and ordered arbitration. The issue presented for the Supreme Court's review was whether the bank waived its right to demand arbitration of the subsequent UTPA claims by litigating the debt-collection claims. Because the Court concluded that the two claims were not sufficiently closely related, it held that the bank did not waive its right to demand arbitration of the separate UTPA claims. But The Court also concluded that it was error for the superior court to interpret the arbitration agreement on the question of the availability of statewide injunctive relief: the interpretation of an arbitration agreement is in the first instance a matter for the arbitrator. View "Hudson v. Citibank (South Dakota) NA" on Justia Law

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Donald Olson and Aimee Moore met in 1995. Between 1995 and 2004 they had business and personal relationships. The business relationship began with Donald training Aimee to fly helicopters in exchange for Aimee’s work for Donald and his businesses. Eventually Aimee managed Donald’s businesses, and they agreed that she would receive a share of business profits. Aimee and Donald disputed the nature of their personal relationship: Aimee characterizes the relationship as a cohabative domestic partnership; Donald asserts the relationship was not a domestic partnership. Aimee terminated the personal relationship in July 2004. In December 2004 Aimee and Donald signed an agreement “related to the deferred compensation owed Aimee . . . for work performed during the period January 1996 through 2004.” In November 2005, after negotiating for more than a year, Aimee and Donald signed a final settlement agreement to end their business relationship. Aimee initiated arbitration against Donald, but not his businesses, in January 2012. Aimee alleged that Donald breached the agreement they had regarding her deferred compensation and certain aspects of managing the business. The matter was submitted to arbitration. The arbitrator ultimately agreed with Donald and his businesses, concluding that the parties’ personal relationship was not a domestic partnership and finding that Donald and the businesses had not materially breached the settlement agreement. The arbitrator ruled in Donald’s and the businesses’ favor and awarded them reasonable prevailing party costs and attorney’s fees. Aimee appealed the arbitrator's decision to the superior court, which affirmed the arbitrator's decision. She appealed to the Supreme Court, who in applying the deferential standards of review, affirmed the superior court's decision confirming the arbitration award. View "Moore v. Olson" on Justia Law

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The issues before the Supreme Court in this case arose from an attorney fee dispute arbitration conducted under the state Revised Uniform Arbitration Act. The two primary issues related to the appropriate standard of review when a party asserts an arbitration decision was procured by fraud and the possible application of non-statutory public policy grounds to vacate an arbitration award. The Alaska Supreme Court adopted the federal standard for reviewing claims where an arbitration decision was procured by fraud, and concluded the arbitration panel’s decision that there was no fraud was not reviewable. Furthermore, the Court concluded that on the facts found by the arbitration panel, there was no basis to vacate the arbitration decision on public policy grounds. View "McAlpine v. Priddle" on Justia Law

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An Alaska state trooper was discharged for having consensual sex with a domestic violence victim the morning after assisting in the arrest of the victim's husband. The Public Safety Employees Association (PSEA) filed a grievance under its collective bargaining agreement with the State. An arbitrator ordered that the trooper be reinstated with back pay after a three-day suspension, concluding that the State did not have just cause to discharge the trooper. The superior court upheld the arbitrator's order of back pay but decided that it could not enforce the ordered reinstatement because the Alaska Police Standards Council had by this point revoked the trooper's police certificate. The State appealed, arguing that the arbitrator committed gross error and that the order was unenforceable as a violation of public policy. The Supreme Court "generally will not disturb the results of a binding arbitration, even where [it] would reach a different conclusion were we to review the matter independently." The Court reasoned that because no statute, regulation, or written policy prohibited supervisors from engaging in progressive discipline of the trooper, in lieu of discharging him for his misconduct, the arbitrator's decision to impose discipline rather than uphold the termination did not violate any explicit, well-defined, and dominant public policy. Because the arbitrator's award was neither unenforceable nor grossly erroneous, the Court affirmed the superior court's decision to uphold the arbitration award in part. View "Alaska v. Public Safety Employees Association" on Justia Law

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The Aleut Corporation terminated its chief executive officer, Troy Johnson. He challenged the termination, and according to his employment contract, the matter was submitted to binding arbitration. That agreement contained a broad arbitration clause providing that "[a]ny and all disputes . . . arising out of, relating in any way to or in connection with this Agreement and/or Executive's employment with or termination of employment from the Company . . . shall be solely settled by an arbitration." The parties disputed whether the Corporation had violated the contract by terminating Johnson and whether Johnson's alleged breach of contract justified the termination. The arbitrator awarded damages to Johnson, finding the Corporation violated the contract. The Aleut Corporation petitioned the superior court to vacate the arbitrator's decision, claiming that the arbitrator had addressed an issue that was never submitted to arbitration and was thus not arbitrable. The superior court vacated the arbitration award, concluding that the arbitrator had exceeded his authority, and Johnson appealed. Because the dispute was arbitrable, the Supreme Court concluded that the arbitrator did not exceed his authority, and therefore reversed the superior court's decision to vacate the award. View "Johnson v. The Aleut Corporation" on Justia Law

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An Alaska state trooper was terminated in part due to dishonesty. The Public Safety Employees Association (PSEA) filed a grievance on behalf of the discharged trooper and then invoked arbitration. An arbitrator reinstated the trooper, ruling that the State did not have cause to terminate him. The superior court upheld the arbitrator's ruling. The State appealed to the Supreme Court, arguing that the arbitrator committed gross error and that the reinstatement of the trooper was unenforceable. Upon review of the arbitrator's decision and subsequent superior court ruling, the Supreme Court held that the arbitrator's award in this case was not enforceable as a violation of public policy: "the State should be free to heighten its enforcement of ethical standards. . . We are [. . . ] troubled by the arbitrator's suggestion that the State's past lenience toward minor dishonesty requires it to be permanently lenient." Because the arbitrator's award was neither unenforceable nor grossly erroneous, the Court affirmed the superior court and the arbitration decision. View "Alaska v. Public Safety Employees Association" on Justia Law