Fifth Circuit Declines to Weigh in on Split Re Authority to Issue Injunction Pending Arbitration

Per Janvey v. Alguire --- F.3d ----, 2011 WL 2937949 (5th Cir. July 22, 2011):

The circuit split concerns the power of a district court to issue an injunction while arbitration is pending. The Fifth Circuit acknowledged the circuit split in RGI, Inc. v. Tucker & Associates, Inc., 858 F.2d 227, 229 (5th Cir.1988), but did not enter the fray.^FN6 The Employee Defendants contend that once again we may avoid the fray and still decide the issue in their favor because both the Eighth Circuit, on one side of the split, and the Seventh Circuit, on the other side of the split, would not permit an injunction here. The Eighth Circuit held that “where the [Federal Arbitration Act (“FAA”) ] is applicable to the dispute between the parties and no qualifying language has been alleged, the district court errs in granting injunctive relief” because the judicial inquiry required to determine “the propriety of injunctive relief necessarily would inject the court into the merits of issues more appropriately left to the arbitrator.” Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Hovey, 726 F.2d 1286, 1292 (8th Cir.1984). The Seventh Circuit held that the district court may only issue injunctive relief that is effective only until the arbitration panel is able to address whether the equitable relief should remain in effect. See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Salvano, 999 F.2d 211, 215–16 (7th Cir.1993).

. . .

The RGI Court found that “[t]he crux of the problem [in the circuit split] is whether the commands of the [FAA] require that a federal court immediately divest itself of any power to act to maintain the status quo once it decides that the case before it is arbitrable.” RGI, 858 F.2d at 228–29 (emphasis added). Here, however, the district court has not yet decided whether the case is arbitrable and thus the circuit-split cases are not applicable.
. . .

FN7. Given that the facts at issue here do not require us to enter the circuit split, we reserve for another day the issues of whether a district court divests itself of the discretion to maintain the status quo once it decides the case before it is arbitrable and, if not, what the limits of that discretion may be.

U.S. Law Week Summarizes SCOTUS Civil Litigation Cases

U.S. Law Week (7/19/11) has published a summary analysis of the Supreme Court's civil litigation cases from this term. Here is an excerpt:

Court Reins in Class Actions

Wal-Mart Stores Inc. v. Dukes: Avoided employment discrimination “Armageddon” for national corporations by rejecting certification of largest class action in history.

AT&T Mobility LLC v. Concepcion: Allows companies to contract around the threat of consumer class actions by upholding an arbitration agreement containing a class action waiver.

Honorable Mention: PLIVA Inc. v. Mensing

Preemption, Immigration Cases Deliver Blow

Chamber of Commerce v. Whiting: Arizona may administer the “business death penalty” to employers who hire illegal immigrants.

Williamson v. Mazda Motor of America Inc.: By providing a choice in safety features, federal regulations do not automatically preempt state tort claims against manufacturers.

Honorable Mentions: Thompson v. North American Stainless LP; Kasten v. Saint-Gobain Performance Plastics Corp.

Cases Every Lawyer Should Study.

Wal-Mart Stores Inc. v. Dukes: By emphasizing commonality considerations under Rule 23(a), the opinion is terra nova for arguments over how much “glue” is needed to hold class actions together.

J. McIntyre Machinery Ltd. v. Nicastro: Plaintiffs’ lawyers must consider the decision when choosing the proper forum for product liability suits against foreign companies.

Honorable Mention: AT&T Mobility LLC v. Concepcion

More Questions Than Answers

J. McIntyre Machinery Ltd. v. Nicastro: The court's failure to definitively address the questions left open by Asahi will lead to more litigation and confusion over personal jurisdiction.

PLIVA Inc. v. Mensing: The decision could signal a turning point in the court's preemption jurisprudence that may cause lower courts to struggle with its application.

Honorable Mentions: Global-Tech Appliances Inc. v. SEB S.A.; Turner v. Rogers

Little Fanfare but Significant Impact

Sorrell v. IMS Health Inc.: In an area of commercial speech increasingly regulated by states, a bold First Amendment holding should be a warning to legislatures to tread lightly.

Stern v. Marshall: Despite “soap opera facts,” ruling could dramatically burden the dockets of state and federal district courts.

Prison Relief and Unanimity Shock Observers

Brown v. Plata: The court's endorsement of broad injunctive relief, particularly in the area of prison management, was out of character.

Honorable Mention: Unanimous holdings in Ashcroft v. al-Kidd, American Electric Power v. Connecticut, and Wal-Mart Stores Inc. v. Dukes (on the Rule 23(b)(2) issue), were unexpected.

Got Our Attention, But Earth Didn't Move

Microsoft Corp. v. i4i Limited Partnership: Although Microsoft asked the court to invalidate the long-established clear and convincing evidence standard for patent validity challenges, the court remained steadfast and left the current standard alone.

Flores-Villar v. United States: One of the two cases affirmed by an equally divided court, the decision illustrates the minimal impact Justice Elena Kagan's recusals had on the term.

Honorable Mentions: Snyder v. Phelps; Brown v. Entertainment Merchants Association