This article first appeared on the Securities Arbitration Alert Blog, here.
The Supreme Court was back in session on October 3. Here are some arbitration-centric cases worth knowing about, including two where Certiorari was just denied.
As the Court’s Term came to a close last June, Certiorari Petitions were pending in several matters involving arbitration. While SCOTUS disposed of some petitions during the summer, and two on October 3, a few are still pending. We offer a primer on those we’ve been following in the Alert, borrowing heavily from our past coverage.
Court Grants Cert., Reverses, and Remands Uber v. Gregg and Others in Light of Viking River
As our readers know, the Supreme Court on June 15 held 8-1 in Viking River Cruises, Inc. v. Moriana, No. 20-1573, pet. for reh’g den. (Aug. 22, 2022), that California’s Private Attorneys General Act (“PAGA”) was in part preempted by the Federal Arbitration Act (“FAA”), insofar as PAGA allowed employees to evade a bilateral predispute arbitration agreement. The lone dissenter was Justice Thomas, who held to his long-standing view that the FAA does not apply in state courts. That decision broke a logjam of pending Certiorari Petitions in cases involving PAGA and FAA preemption. The Court’s June 27 Order List states on page 1 as to Uber Technologies, Inc. v. Gregg, No. 21-453; Uber Technologies, Inc. v. Rosales, No. 21-526; Lyft, Inc. v. Seifu, No. 21-742; Schipt, Inc. v. Green, No. 21-1079; and Hanfy Technologies v. Pote, No. 21-1121:
“The petitions for writs of certiorari are granted. The judgments are vacated, and the cases are remanded to the Court of Appeal of California, Second Appellate District for further consideration in light of Viking River Cruises, Inc. v. Moriana, 596 U. S. ___ (2022).”
We reported in SAA 2022-02 (Jan. 20) that the parties in Gregg had agreed to hold up, pending the decision in Viking River, on the Certiorari Petition seeking review of Gregg v. Uber Technologies, Inc., No. B302925 (Cal. Ct. App. 2 2021), pet. for review den., No. S269000 (Cal. 2021). Specifically, Gregg filed a January 10 request to delay stating: “This case raises the question on which this Court granted certiorari on December 15, 2021, in Viking River Cruises v. Moriana, No. 20-1573, and the petition should be held pending the Court’s disposition of that case. Specifically, both cases present the question whether the Federal Arbitration Act (FAA) preempts the California Supreme Court’s holding in Iskanian v. CLS Transportation Los Angeles, LLC, 327 P.3d 129 (Cal. 2014), that the right to bring a representative action under California’s Private Attorneys General Act, or PAGA, cannot be waived in a private agreement, including an arbitration agreement.” And the January 2022 response from Uber was: “Petitioners agree with Respondent that the Court should hold this petition pending resolution of Viking River Cruises. See Pet. 22 n.1 (stating that if this Court grants certiorari in Viking River Cruises, ‘it should hold this petition until that action is resolved’).”
Our take: All decisions are vacated and remanded with instructions to reconsider in light of Viking River. Note that also pending is ForwardLine Financial, LLC, v. Ahlmann, No. 22-75. The July 22 Petition raises the same question and seeks the same outcome: “whether the intervening development of [the] holding in Viking River Cruises calls for the Court to grant the writ of certiorari, vacate the judgment, and remand the case for reconsideration ….” It was set for review at the Court’s September 28 conference.
New Cert. Petition Seeks Answer to Issue Left Open by SCOTUS in Southwest: Does FAA Section 1 Exempt Delivery Drivers?
Domino’s Pizza is asking the Supreme Court to determine whether the FAA section 1 exemption extends to delivery drivers. The Court left this issue open when it decided Southwest v. Saxon in June. To review, FAA section 1 exempts from the Act: “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The Court’s June 6 decision in Southwest Airlines Co. v. Saxon, No. 21-309, held unanimously that that the exemption of “workers engaged in foreign or interstate commerce” includes classes of workers who are part of the flow or stream of interstate commerce, and that there is no FAA requirement that these individuals actually cross state lines. The SCOTUS decision in Southwest was narrow, and specifically did not embrace the issue of FAA coverage of delivery drivers. A June 15 Certiorari Petition in Domino’s Pizza, LLC v. Carmona, No. 21-1572 presents this question:
“Whether drivers making solely in-state deliveries of goods ordered by in-state customers from an in-state warehouse are nevertheless a ‘class of workers engaged in foreign or interstate commerce’ for purposes of Section 1 of the Federal Arbitration Act simply because some of those goods crossed state lines before coming to rest at the warehouse?”
Our take: Whether it’s this case or another, we think the Court will take on this issue, both for delivery drivers and rideshare drivers for companies such as Uber or Lyft. The Petition was set for consideration at the Court’s September 28 conference.
Ukraine Fails to Get Certiorari on Applicability of Forum Non Conveniens to UN Convention Award Enforcement
We reported in the “Quick Takes” section of SAA 2022-02 (Jan. 20) on PAO Tatneft v. Ukraine, No. 20-7091(D.C. Cir. Dec. 28, 2021). There, a unanimous DC Circuit Panel had held: “Pao Tatneft (Tatneft), a Russian company, filed a petition in district court to confirm and enforce its [$112 million] arbitral award against Ukraine. The district court granted the petition, rejecting Ukraine’s arguments that the court should have declined to enforce the award under The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), June 10, 1958, 21 U.S.T. 2517, and should have dismissed the petition on the basis of forum non conveniens…. Under the forum non conveniens doctrine, a court may decline to exercise jurisdiction if it determines it is an inappropriate forum…. Ukraine argues that the parties should litigate this case in Ukraine, the locus of both the controversy and the major portion of the assets with which Ukraine would satisfy any judgment. But we have squarely held ‘that forum non conveniens is not available in proceedings to confirm a foreign arbitral award because only U.S. courts can attach foreign commercial assets found within the United States.” On July 1, Ukraine filed a Certiorari Petition presenting this question: “Whether the doctrine of forum non conveniens is available in proceedings to confirm a foreign arbitral award in the United States.” The Court on October 3 denied Certiorari.
Our take: The SCOTUS case is Ukraine v. PAO Tatneft, No. 22-19, and was considered at the Court’s September 28 conference. The Cert. denial is on page 43 of the October 3 Order List. This issue to us seemed one-off and we thought correctly that it would not draw the Court’s attention.
Scientology Rejected in Attempt at SCOTUS Review of PDAA Non-Enforcement
The Church of Scientology had sought SCOTUS review of California court rulings declining to enforce a predispute arbitration agreement with a congregant who had left the Church. We hate to say we told you so, but we told you so. First, a review:
“The trial court granted the motion to compel, and petitioners sought writ relief. We issued an order to show cause, and now grant the petition. Individuals have a First Amendment right to leave a religion. We hold that once petitioners had terminated their affiliation with the Church, they were not bound to its dispute resolution procedures to resolve the claims at issue here, which are based on alleged tortious conduct occurring after their separation from the Church and do not implicate resolution of ecclesiastical issues. We issue a writ directing the trial court to vacate its order compelling arbitration and instead to deny the motion.”
“This Court became the first in the nation to hold that ‘freely executed’ religious agreements cannot be enforced over the First Amendment objections of a party who claims to be a ‘non-believer.’ This holding adopts a distinct rule concerning the enforcement of religious arbitration agreements that discriminates against religions and violates the Federal Arbitration Act (‘FAA’). The Opinion contains numerous other unbriefed issues, mistakes of law, and misstatements of fact, all of which require rehearing” (emphasis in original).
We said in our editorial comment to # 17: “We suspect this won’t be the end of it, which means SCOTUS is the next stop.” Affirming our prediction, the Church on July 19 filed a Cert. Petition presenting this arbitration-related question: “Where a parishioner freely executes a religious arbitration agreement with her church, does the First Amendment prohibit enforcement of the agreement if the parishioner leaves the faith?” The Court denied Certiorari on October 3.
Our take: The SCOTUS case is Church of Scientology International v. Bixler, No. 22-60, and was considered at the Court’s September 28 conference. The Cert. denial is on page 43 of the October 3 Order List.”
We’re reasonably certain another Cert. grant is coming this Term. Time will certainly tell, but closing the loop on FAA section 1 coverage of delivery and rideshare drivers seems very likely.
(ed: *Stating the obvious, the Court seemed to have lined up the arbitration-involved Petitions for consideration at its September 28 conference. **There are other pending requests to review arbitration-related cases. Readers can find them on SCOTUSBlog at https://www.scotusblog.com/case-files/petitions-were-watching/
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