Rare Florida Case Addresses Arbitrability

This year, a Florida district court of appeal chose to delve into what they saw as a "rather arcane" issue in arbitration of who decides whether a dispute is subject to a contract's arbitration provision: an arbitrator or a judge? There are many recent decisions from around the country deferring to the arbitrator. However, the majority explains the contract's provision in this case did not provide clear and unmistakable evidence that only the arbitrator could decide the issue of arbitrability. Unbeknownst to the renter of an Airbnb, the host had installed hidden cameras throughout the unit. Plaintiff alleged that Defendant secretly recorded the entire stay in the unit. For this violation of privacy, a lawsuit was filed in state court. Airbnb then filed a motion to compel arbitration. Airbnb argued the claims were subject to arbitration through Airbnb's Terms of Service, under which the renter agreed to be bound to pursuant to a "clickwrap" agreement. The arbitration provision contained fairly standard language such as "You acknowledge and agree that you and Airbnb are each waiving the right to a trial by jury." The court held that the clickwrap agreement's arbitration provision and the AAA rule it referenced that addresses an arbitrator's authority to decide arbitrability did not, in themselves, arise to "clear and unmistakable" evidence that the parties intended to remove the court's presumed authority to decide such questions. The evidence on what these parties may have agreed to about the "who decides" arbitrability question was considered ambiguous. Therefore, the trial court retained its presumed authority to decide the arbitrability dispute. A conflict with decisions from other districts was certified. See full opinion here-- https://tinyurl.com/y4oyxsgv

Special Master Orders Briefs in Water Wars

This week, the U.S. Supreme Court-appointed Special Master of the so-called Water Wars, Honorable Paul J. Kelly, Jr., set a January 31, 2019 deadline for initial briefs and a February 28, 2019 deadline for reply briefs. Judge Kelly denied Florida’s request for additional evidence-gathering in the case before he will make further findings regarding Florida's claim it suffered harm from the overconsumption of water by Georgia. He found additional discovery would only lengthen the proceedings, delay the outcome and increase litigation costs, citing a voluminous record in the case from unlimited discovery and lengthy prior trial. Florida still seeks the cap on consumption that would alleviate past damage allegedly caused by Georgia. Future proceedings will weigh Georgia’s claims that any limits on its water use would undermine its economy, including the growth of the Atlanta area and the state’s agriculture industry in southwestern Georgia. This blog has followed the Water Wars for years in other entries. Florida ultimately seeks to limit Georgia’s water consumption from the Apalachicola-Chattahoochee-Flint River Basin, including Lake Lanier, to 1992 levels and to get reparations for alleged economic and environmental harm to Apalachicola's oyster fisheries from drought. See more here-- https://bit.ly/2JSm4cj and here-- https://bit.ly/2FcOGP6

Arbitrator to Decide Trump Campaign Staffer Claim

Earlier this month, a New York Supreme Court judge decided a former campaign staffer‘s lawsuit regarding harassment could not be moved to private arbitration because her NDA didn’t specify that. Rather, it was merely an option and contained nothing about her job responsibilities, terms of her employment, salary, benefits, or her ability to pursue her own claim. Per the ruling, the state court observed the arbitration clause confined arbitration to "any dispute arising under or relating to this agreement." The state judge also decided it did not require arbitration for any "dispute between the parties" or even "any dispute arising out of plaintiff’s employment." In fact, the court did recognize an arbitrator's province in determining arbitrability, but said is was not even close call and was so clear on this specific, narrow clause as to be a question for the courts alone. Now, however, an arbitrator should have the first stab at deciding over the validity of an arbitration agreement according to a U.S. District in the Southern District of New York who ruled yesterday in a decision that appears to run counter to the state case. The new federal decision is reportedly in accordance with the prior state ruling, as it suggests that each turned on different wording of the separate complaints filed in the respective courts. The latest federal decision is certain to be presented as strong support for the appeal Trump’s legal team plans to file at the state court level. The employee sought to have the arbitration agreement declared unenforceable, saying it had been “weaponized” against her by the campaign. In his opinion and order, the federal judge said the terms of the NDA agreement she signed demands that her very argument about the agreement’s unenforceability must be determined by an arbitrator. The language of the arbitration states that any dispute "arising under or relating to" the agreement was subjected to the rules for commercial arbitration of the American Arbitration Association. Those rules state that the arbitrator has the power to rule on issues of his or her own jurisdiction, including the validity of the agreement itself. Interestingly, in noting the prior ruling at the state level, and specifically that the federal court was in no way bound by it, the judge quoted the state court critique of the language of the agreement failing to require any claims needing to be sent to arbitration, rather than any dispute under or related to the agreement. "Instead, the clause is much narrower: it allows defendant to choose whether to arbitrate any dispute that arises out of the agreement." In this, the federal judge found the claimant raised a "dispute that arises out of the agreement" --whether the agreement is enforceable, and further finding it follows that,"even on the state-court’s view of the arbitration clause, this dispute falls with the clause’s scope." As such, the federal case was dismissed, with neither party requesting to stay the case pending arbitration. See full story here-- https://bit.ly/2PTAHPh

Insight into Trump Stormy Settlement Agreement

This week, porn star Stormy Daniels was on CBS's 60 minutes and since her interview, the White House reportedly isn't saying much, including declining for weeks to say whether President Trump was party to a $130,000 hush-money payment his personal lawyer, Michael Cohen, made to Daniels on the eve of the 2016 election. Cohen obtained a temporary restraining order against Daniels from a private arbitrator, a retired judge, barring her from disclosing "confidential information" related to the nondisclosure agreement. A lawsuit was filed after a multiple reports alleging that Daniels and Trump had an affair beginning in July 2006 at a celebrity golf tournament and was paid money for her to keep quiet in October 2016. While Daniels initially denied the affair, her decision to file the lawsuit confirmed her part in the affair. She and her lawyer, Michael Avenatti, even included the text of the “hush agreement” as an exhibit attached to her complaint which, interestingly, uses pseudonyms for the parties and says they wish to avoid the lime, expense, and inconvenience of potential litigation, and to resolve any and all disputes and potential legal claims between them. The case was filed in L.A. Superior Court and then removed to federal court. The first controversy likely to be taken up by the judge is whether the dispute must be handled in arbitration, where Daniels is being pursued for allegedly breaching contract by making public statements about Trump. Also at issue, is who signed the agreement on behalf of whom. Although Trump hasn't formally moved yet to compel arbitration, the mere threat has prompted Avenatti to argue depositions of Trump and Cohen each are necessary in order to collect facts that bear directly on the formation of the hush agreement. See copy of initial pleadings, including agreement as exhibit linked at bottom of story here-- https://bit.ly/2GASrNK and more on federal court proceedings linked to this report-- https://bit.ly/2IdwotF