Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Appellant was associated with Appellee, Raymond James Financial Services, as a securities broker. After Appellee decided to terminate Appellant’s contract, Appellant brought an arbitration proceeding before the Financial Industry Regulatory Authority, alleging that he had been fired because of his sexual orientation and his status as a recovering alcoholic, in violation of Vermont law. After granting the parties’ request that Florida law be applied to the proceedings, an arbitration panel awarded Appellant $600,000 in back pay on his claim of discrimination based on disability. The district court vacated the award, concluding that the arbitrators lacked authority to grant the remedy because Appellant brought no claims under Florida law. The First Circuit reversed, holding that although the arbitration decision may have been incorrect as a matter of law, the arbitrators’ decision to impose liability on Appellee under Florida law did not willfully flout the governing law or otherwise exceed the bounds of the arbitrators’ authority to resolve the parties’ dispute. Remanded for entry of an order confirming the arbitration award. View "Raymond James Fin. Servs., Inc. v. Fenyk" on Justia Law

Russ Irwin brought an arbitration proceeding against Lyman Morse Boatbuilding, Inc. (LMB) of Maine and Cabot Lyman, the controlling owner of LMB, claiming damages related to the allegedly defective construction of a luxury yacht. After Northern Assurance Company of America, the insurer for LMB and Lyman, refused the insureds’ request for defense, LMB and Lyman filed this federal suit seeking to recover the costs and attorneys’ fees they incurred in the arbitration proceeding. The district court concluded that Northern Assurance had a duty to defend Lyman but did not have a duty to defend LMB. The First Circuit affirmed in part, reversed in part, and remanded for entry of judgment in favor of Northern Assurance, holding that, under Maine law, the insurer did not owe a duty to defend LMB or Lyman in the underlying arbitration proceeding. View "Lyman Morse Boatbuilding Inc. v. N. Assurance Co." on Justia Law

Plaintiff and Defendant entered into an asset purchase agreement (the Agreement) that contained a provision requiring submission of all disputes concerning the “validity, interpretation and enforcement” of the Agreement to an arbitrator for binding resolution. Plaintiff sued Defendant in federal district court, asserting claims for fraud and breach of contract arising out of the Agreement. Defendant answered the complaint, and the parties began discovery. Several months later, Plaintiff moved to stay proceedings pending arbitration. A magistrate judge denied the motion to stay on the ground that Plaintiff had waived its arbitral rights. The district judge summarily affirmed the denial of the stay. The First Circuit affirmed, holding that the district court did not err in concluding that Plaintiff, through its conduct, waived its right to demand arbitration. View "Joca-Roca Real Estate, LLC v. Brennan, Jr." on Justia Law

David Efron and his former wife, Madeleine Candelario-Del-Moral, were engaged in long-running litigation related to their high-stakes divorce. In 2006, a Puerto Rico court in which the divorce proceedings were pending issued an order attaching the funds held in Efron’s UBS Financial Services Inc. accounts. The court subsequently made a ruling that may or may not have vacated the attachment. UBS treated the attachment as void and dispersed the bulk of the funds. Candelario sued UBS in federal district court for negligently releasing the attached funds. Ultimately, at the district court’s suggestion, UBS and Candelario opted to undertake mediation. Thereafter, Efron moved to intervene as of right in the Candelario-UBS litigation. The district court denied the motion. The First Circuit Court of Appeals affirmed the denial of the motion and denied Candelario’s motion for appellate sanctions, holding (1) the Court had jurisdiction to hear and determine Efron’s interlocutory appeal; (2) the district court did not abuse its discretion in deeming Efron’s motion to intervene untimely and in refusing to grant it; and (3) although Efron’s case for intervention was weak, it was not frivolous. View "Candelario-Del-Moral v. Efron" on Justia Law

For twenty years, Defendants, various entities of OneBeacon American Insurance Company (collectively, “OneBeacon”), had a program known as Multiple Line Excess Cover (“MLEC Program”) under which OneBeacon entered into reinsurance contracts (“MLEC Agreements”) with various reinsurers. Employers Insurance Company of Wausau, National Casualty Company, and Swiss Reinsurance America Corporation (“Swiss Re”) participated as reinsurers in the MLEC Program. Some of the MLEC Agreements Wausau entered into with OneBeacon were practically identical to OneBeacon’s MLEC Agreements with Swiss Re. In 2007, OneBeacon demanded arbitration with Swiss Re seeking reinsurance recovery for losses arising out of claims against OneBeacon by policyholders. The arbitration panel decided in favor of Swiss Re. In 2012, OneBeacon demanded arbitration with Wausau and National Casualty for, according to Wausau, the same claims OneBeacon arbitrated and lost against Swiss Re. Wausau and National Casualty petitioned for a declaratory judgment that the prior arbitration award between OneBeacon and Swiss Re had preclusive effect on the arbitration pending between OneBeacon and Wausau. The district court denied the petition. The First Circuit Court of Appeals affirmed, holding that judicial confirmation of an arbitration award “does not warrant deviation from the general rule that the preclusive effect of a prior arbitration is a matter for the arbitrator to decide.” View "Nat'l Cas. Co. v. OneBeacon Am. Ins. Co." on Justia Law

When Plaintiff retained a Maine law firm to represent him in a legal action, he signed an attorney-client engagement letter that contained an arbitration provision. Plaintiff later sued the law firm and individual defendants (collectively, Defendants) for malpractice and violations of Maine's Unfair Trade Practices Act. Defendants moved to compel arbitration and dismiss the action. The district court granted the motion under the Federal Arbitration Act (FAA). Plaintiff appealed, arguing that the district court erred in enforcing the arbitration clause. The First Circuit Court of Appeals affirmed, holding that the district court did not err in granting the motion to compel arbitration and dismissed the action, as (1) Maine professional responsibility law for attorneys permits arbitration of legal malpractice claims so long as there is no prospective limitation on the law firm's liability; and (2) Maine law, like the FAA, is not hostile to the use of the arbitration forum, and Maine would enforce the arbitration of malpractice claims provision in this case. View "Bezio v. Draeger" on Justia Law

Verizon New England, Inc. ("Verizon") had a collective bargaining agreement (CBA) with Local 2327, International Brotherhood of Electrical Workers, AFL-CIO (the "Union") that was originally signed in 2003. When, in 2008, FairPoint Communications ("FairPoint") purchased Verizon's telecommunication operations in Vermont, New Hampshire, and Maine, FairPoint agreed to hire all former Verizon employees, represented by the Union, in those states. In 2010, the Union filed a grievance against FairPoint based on allegedly wrongful transfer of work. An arbitration panel entered an award against FairPoint, concluding that the facts constituted a wrongful conveyance. FairPoint filed suit in district court, arguing that the arbitral panel had exceeded its authority by wrongfully adding and subtracting terms from the CBA. The district court granted summary judgment in favor of the Union. Nonetheless, the district court denied costs and fees pursuant to Fed. R. Civ. P. 11. The First Circuit Court of Appeals affirmed, holding (1) no grounds existed on which to vacate the arbitral award; and (2) the district court did not abuse its discretion by denying costs and fees. View "N. New England Telephone Operations LLC v. Local 2327, Int'l Brotherhood of Elec. Workers, ALF-CIO" on Justia Law

Plaintiff was a teacher in the Manchester-Essex Regional School District until he was informed by the District Superintendent's intention to terminate his employment for inappropriate sexual conduct toward a student. Plaintiff sought review of the Superintendent's action. An arbitrator affirmed Plaintiff's dismissal. Plaintiff then filed suit in Massachusetts superior court challenging his dismissal and seeking to vacate the arbitrator's decision. Three weeks later, Plaintiff filed this complaint in federal court alleging state and federal law violations. The next day, Plaintiff amended his state-court complaint so it contained the exact same claims as his federal-court complaint. The state court rejected Plaintiff's claims and affirmed the arbitrator's decision. Later, the federal district court granted summary judgment against Plaintiff, finding that Plaintiff's claims were barred by res judicata. The First Circuit Court of Appeals affirmed, holding that none of the reasons presented by Plaintiff why res judicata did not bar his federal claims from adjudication in federal court were persuasive. View "Atwater v. Driscoll" on Justia Law

Defendant in this case was a franchisor and Plaintiffs were its franchisees. After Plaintiffs sued Defendant, the district court certified a class, excluding those franchisees whose agreements with Defendant contained clauses expressly requiring arbitration. While those franchisees pursued arbitration, the arbitrator imposed a stay of the arbitrations of ten of those franchisees. The district court later concluded that Defendant had violated an order requiring it to obtain judicial permission before making any motion to delay or prevent arbitration proceedings and sanctioned Defendant by admitting to the class the ten franchisees, relieving them of their obligations to arbitrate. Defendant then unsuccessfully filed a motion to reconsider the sanction and to stay the ten franchisees' judicial proceedings pending arbitration. The First Circuit Court of Appeals reversed, holding (1) the district court's determination that Defendant violated the order was an abuse of discretion; and (2) therefore, there was no basis for the sanction, and Defendant's motion to stay should have been granted. View "Awuah v. Coverall N. Am., Inc." on Justia Law

Plaintiff terminated Defendant from employment. Thereafter, Defendant began arbitration proceedings seeking severance compensation he felt was contractually due. After arbitration hearings had commenced, the hearings were postponed for two months due to a medical situation afflicting Plaintiff's counsel. During the recess, Plaintiff formally requested pre-hearing and hearing third-party subpoenas directed at Defendant's current employer. The tribunal denied the issuance of the subpoenas. After the arbitration hearings resumed, the tribunal found Defendant was entitled to compensation pursuant to the terms of his employment agreement dealing with his termination without cause. The tribunal also found Defendant was entitled to pre-award interest. Plaintiff subsequently sought vacatur of the award, which the trial court denied. The First Circuit Court of Appeals affirmed, holding (1) the arbitration tribunal did not engage in misconduct by denying the issuance of the pre-hearing and hearing subpoenas; and (2) the tribunal did not exceed its authority in awarding pre-award interest to Defendant. View "Doral Fin. Corp. v. Garcia-Velez" on Justia Law