Alabama Appellate Opinions Released June 21, 2019
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Alabama Appellate Opinions Released 
June 21, 2019
Alabama Supreme Court
Court Affirms Denial of Defendants’ Motion to Vacate Arbitrator’s Award Regarding Class Arbitration  

Alabama Psychiatric Services, P.C., and Managed Health Care Administration v. Lazenby et al. 

Former employees of Alabama Psychiatric Services, P.C. (“APS”), filed a class action against APS and Managed Health Care Administration, Inc. (“MHCA”), in the Jefferson Circuit Court alleging that APS had not paid them for unused vacation time after they lost their jobs when APS ceased operations. APS and MHCA filed a motion to compel arbitration in circuit court pursuant to an employment arbitration policy (“the policy”) that these employees had executed with APS. Because the policy did not expressly mention class arbitration, APS and MHCA asked for the circuit court to determine whether class arbitration was available. However, the circuit court concluded that this question was for the arbitrator to decide and granted the plaintiffs’ motion to compel arbitration.

This case proceeded to arbitration which was governed by the rules of the American Arbitration Association (“AAA”). Under Rule 3 of the AAA’s Supplementary Rules for Class Arbitration, a party may ask the arbitrator for a “clause construction award” determining whether class arbitration is even available as a threshold matter. The arbitrator determined class arbitration was available and issued the plaintiffs their requested clause-construction award (“the award”). APS and MHCA filed a motion to vacate the award which was denied by the circuit court. APS and MHCA appealed. 

On appeal, APS and MHCA argued two points before the Alabama Supreme Court. First, they argued that the circuit court erred by failing to apply a de novo standard of review. APS and MHCA contended that the question of whether class arbitration was available was a “question of arbitrability,” which is decided by the court and not the arbitrator. However, the Court focused its analysis on whether or not the parties had contractually agreed to submit the question to the arbitrator. The Court noted that the parties disputed this issue and that the circuit court resolved this issue when it concluded that whether class arbitration was available in this case was for the arbitrator to decide. Because APS and MHCA failed to appeal the circuit court’s order and argued that the parties never agreed to submit this question to the arbitrator, the Court held that further judicial review of this issue was precluded.

Second, APS and MHCA argued that the arbitrator exceeded his powers by concluding that class arbitration was available and contended that the award should be vacated under §10(a)(4) of the Federal Arbitration Act (the “FAA”). The Court noted that because the policy lacked an express reference to class arbitration, it was necessary that the arbitrator interpret the policy to reach a decision. According to the Court, this was all that was required of the arbitrator and whether the arbitrator correctly interpreted the policy was beyond the scope of its review pursuant to §10(a)(4) of the FAA. Thus, the Alabama Supreme Court affirmed.
Alabama Court of Civil Appeals
Court Denies Workers’ Compensation Claimant’s Petition for Writ of Mandamus for Review of Discovery Order

Ex parte Randy Farley 

In this workers’ compensation case, Randy Farley filed a Complaint in the Etowah Circuit Court against his employer, Transport America, Inc. (“Transport America”). A discovery issue arose when Transport America requested that Farley execute releases for it to obtain his Social Security disability records and earning records, Alabama Department of Internal Revenue records, and Alabama Department of Labor records concerning workers’ compensation and employment benefits. Farley refused and argued that no provision of the Alabama Rules of Civil Procedure required execution of these records. Transport America filed a motion to compel.

The circuit court entered a discovery order stating that, “[i]f [Farley] is alleging a non-scheduled injury and/or a vocational loss, then he is to sign said releases for [Transport America]. However, if [Farley] is alleging a scheduled injury, then [Farley] is not required to sign said releases.” It was undisputed that Farley alleged an injury not scheduled under the Workers’ Compensation Act and vocational loss. Farley filed a petition for a writ of mandamus with the Alabama Court of Civil Appeals challenging the circuit court’s order.

Farley argued the trial court is not permitted to enter an order compelling a party to execute a release of documents to the opposing party. Farley further argued requiring him to execute the releases would result in an overly broad release of information. In response, Transport America contended that the matter was not appropriate for review based on the Alabama Supreme Court’s holding in Ex parte Ocwen Federal Bank , FSB , 872 So. 2d 810 (Ala. 2003) that discovery orders could no longer be reviewed by Alabama’s appellate courts by way of a petition for writ of mandamus, provided that no exceptions apply. These exceptions include: (1) when a privilege is disregarded . . .; (2) when a discovery order compels the production of patently irrelevant or duplicative documents, such as to clearly constitute harassment or impose a burden on the producing party far out of proportion to any benefit that may obtain to the requesting party . . .; (3) when the trial court either imposes sanctions effectively precluding a decision on the merits or denies discovery going to a party’s entire action or defense so that, in either event, the outcome has been all but determined, and the petitioner would be merely going through the motions of a trial to obtain an appeal; or (4) when the trial court impermissibly prevents the petitioner from making a record on the discovery issue so that the appellate court cannot review the effect of the trial court’s alleged error. The Court agreed with Transport America and emphasized that the petitioner carried the burden to demonstrate the existence of facts warranting the review by way of a petition for a writ of mandamus of the circuit court’s order which authorized discovery of relevant information. Because Farley did not address any of the exceptions set out in Ocwen and thus failed to carry his burden, the Court denied his petition. 
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