Pre-Paid Legal Services v. Cahill

Pre-Paid Legal Services, Inc., d.b.a. LegalShield, sued its former employee Todd Cahill, claiming Cahill had breached his contract, unlawfully misappropriated Pre-Paid’s trade secrets, and tortiously interfered with contract and business relations. Cahill removed the case from state to federal court based on diversity jurisdiction, and moved to stay the district court proceedings under the Federal Arbitration Act (“FAA”) so the parties could pursue arbitration. Thereafter the district court stayed litigation pending arbitration. Cahill failed to pay his share of the arbitration fees, and the arbitrators terminated arbitration proceedings. Pre-Paid moved the district court to lift the stay and resume with litigation. The court granted the motion, adopting a magistrate judge’s report and recommendation. Finding that the district court did not err in lifting the stay under 9 U.S.C. Section 3 of the FAA because the arbitration "ha[d] been had in accordance with the terms of the agreement” and Cahill was “in default in proceeding with such arbitration," the Tenth Circuit affirmed the district court's ruling. View "Pre-Paid Legal Services v. Cahill" on Justia Law