2013 WL 3976835
Supreme Court of The Virgin Is...2013Background
- Allen applied for employment with Wyatt V.I., Inc. and signed an arbitration clause covering all claims related to the contract and presence at the HOVENSA refinery.
- The dispute resolution provision provides arbitration under AAA’s National Rules for Employment Disputes and extends to Wyatt, HOVENSA, and related entities.
- Allen was injured in September 2004; he sued in Superior Court for negligence against HOVENSA in 2004.
- HOVENSA filed a motion to compel arbitration in 2006; the Superior Court determined FAA governed and ordered arbitration in 2007.
- Arbitration occurred in 2009 with an award denying damages; in 2010 the Superior Court confirmed the award and dismissed the case.
- Allen timely appealed the 2010 order affirming the arbitration award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of right to compel arbitration | Allen argues HOVENSA’s delay prejudiced him | HOVENSA asserts delay alone is insufficient prejudice | No waiver; no sufficient prejudice shown |
| Scope of the dispute resolution clause | Clause did not cover Allen’s tort claims | Clause covers claims arising from presence at the facility, including torts | Clause encompasses tort claims; scope verified |
| Conscionability of the arbitration clause | Terms are procedurally and substantively unconscionable (adhesion, costs, short limitations) | Adhesion alone not enough; substantial terms not unconscionable | Not unconscionable; substantively reasonable terms; six-month limitations deemed reasonable; cost provision mitigated by hardship option |
| FAA preemption and interstate nexus | FAA section 2 preempts VIWCA and local law | Interstate nexus required for FAA applicability; local contract here lacks nexus | Not necessary to decide; claim fails on other grounds; FAA preemption not determinative |
Key Cases Cited
- Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992) (prejudice as touchstone for waiver of arbitration right)
- Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207 (3d Cir. 2007) (prejudice must be shown; delay alone not enough)
- Palcko v. Airborne Express, Inc., 372 F.3d 588 (3d Cir. 2004) (prejudice issues; burden on party opposing arbitration)
- Faragalli v. PaineWebber, Inc., 61 F.3d 1063 (3d Cir. 1995) (delay and prejudice standards in waiver analysis)
- World Fresh Market v. P.D.C.M. Assocs., 2011 V.I. Supreme LEXIS 29 (V.I. Aug. 2011) (FAA provisions and local court applicability; distinction of substantive vs. procedural provisions)