Published: July/August 2022
Author: Donna Greenspan Solomon

Badgerow v. Walters, 142 S. Ct. 1310 (2022).  Employee terminated as financial advisor sought in state court to vacate FINRA arbitration award.  After removal to federal court, the district court denied employee’s motion to remand and granted employer’s application to confirm award.  Employee appealed and the Fifth Circuit affirmed.  The US Supreme Court granted certiorari and a nearly unanimous court reversed on jurisdictional grounds.  The Court explained that 9 USC § 4 of the Federal Arbitration Act (“FAA”) instructs federal courts to “look through” a motion to compel arbitration to the underlying claims and controversy.  Conversely, sections 9 and 10, which pertain to motions to confirm or vacate an award, do not provide for this “look-through” approach to jurisdiction.

Garcia v. Church of Scientology Flag Serv. Org., Inc., 18-13452, 2021 WL 5074465, at *1 (11th Cir. Nov. 2, 2021).  In dispute between two former members of Church of Scientology and church entities, the district court compelled arbitration before a panel of Scientologist arbitrators and subsequently denied the former members’ motion to vacate the award.   The Eleventh Circuit affirmed, finding that the former Church members had “agreed to a method of arbitration with inherent partiality and cannot now seek to vacate that award based on that very partiality.”  Justice Rosenbaum dissented, stating:

If a party to the arbitration can create the rules . . . as the arbitration progresses, it enjoys an insurmountable advantage that effectively guarantees its victory.  That’s not an arbitration; it’s just plain arbitrary. .  . and we should not stamp it with the imprimatur of the federal courts.

Juarez v. Drivetime Car Sales Co., LLC, 21-11972-CC, 2021 WL 5984924, at *1 (11th Cir. Nov. 29, 2021).  Federal court does not allow for an appeal from interlocutory order compelling arbitration; compare with Fla. R. App. P. 9.130(3)(c)(iv) (allowing nonfinal review).

Airbnb, Inc. v. Doe, 47 Fla. L. Weekly S100 (Fla. Mar. 31, 2022).  Vacationing couple sued AirBnb and unit owner after learning that owner had secretly recorded their stay.  AirBnb moved to compel arbitration pursuant to the clickwrap agreement that the couple executed in creating their AirBnb account.  The trial court granted the motion but the Second District reversed.  The Supreme Court quashed, finding that where an agreement incorporates a set of arbitral rules, such as the AAA Rules, those rules become part of the agreement.  And where those rules specifically empower the arbitrator to resolve questions of arbitrability, incorporation of the rules is sufficient to clearly and unmistakably evidence the parties’ intent to empower an arbitrator to resolve questions of arbitrability.

Hayslip v. U.S. Home Corp., SC19-1371, 2022 WL 247073, at *1 (Fla. Jan. 27, 2022).  The Florida Supreme Court answered in the affirmative to the following rephrased certified question:

DOES A DEED COVENANT REQUIRING THE ARBITRATION OF ANY DISPUTE ARISING FROM A CONSTRUCTION DEFECT RUN WITH THE LAND, SUCH THAT IT IS BINDING UPON A SUBSEQUENT PURCHASER OF THE REAL ESTATE WHO WAS NOT A PARTY TO THE DEED?

Palm Court NH, L.L.C. v. Dowe, 47 Fla. L. Weekly D108 (Fla. 4th DCA Jan. 5, 2022). FAA, rather than Florida Arbitration Code (“FAC”), governed arbitration of wrongful death claim against nursing home where resident’s care was paid in part by Medicare, thus involving interstate commerce.

BREA 3-2 LLC v. Hagshama Florida 8 Sarasota, LLC, 327 So. 3d 926 (Fla. 3d DCA 2021).  A “narrow” agreement to arbitrate claims or controversies “arising out of” a contract limits arbitration to those claims with a direct relationship to the contract’s terms and provisions.  In contrast, a “broad” agreement to arbitrate claims or controversies “arising out of or relating to” the contract broadens the scope of arbitration to include claims having a “significant relationship” to the contract, whether founded in tort or contract law.

Lennar Homes, LLC v. Martinique at Oasis Neighborhood Ass’n, Inc., 332 So. 3d 1054 (Fla. 3d DCA 2021).  Homeowner association’s right to proceed in its representative capacity in dispute with developer required compliance with individual members’ agreements to arbitrate.

Gambrel v. Sampson, 330 So. 3d 114 (Fla. 2d DCA 2021).  Where parties agreed to nonbinding arbitration pursuant to section 44.103, Florida Statutes, trial court was required to enter judgment on arbitration award after no party requested trial de novo within statutory 20-day deadline, even though court found paralegal’s calendaring mistake was due to an “excusable and reasonable misunderstanding.”

Donna Greenspan Solomon was the first attorney certified by The Florida Bar as both Business Litigator and Appellate Specialist.  Donna is a Member of the National Academy of Distinguished Neutrals and serves as a Chair on AAA (Commercial Panel) and FINRA arbitrations.  She is also a Certified Circuit, Appellate, and Family Mediator and Florida Supreme Court Qualified Arbitrator.  Donna is also a Member of the Florida Supreme Court Committee on Standard Jury Instructions—Contract and Business Cases.  Donna can be reached at (561) 762-9932 or [email protected] or by visiting www.solomonappeals.com.