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Friday, February 13, 2015

Religious Arbitration

Arbitration's Counter-Narrative: The Religious Arbitration Paradigm by Pepperdine Law Professor Michael Helfand argues that religious arbitration "holds the hope of unlocking the transformative potential of arbitration, enabling parties to employ arbitration not simply as an expedient venue for resolving disputes, but as an alternative forum that can breathe life into mutually shared values." That is because in religious arbitration parties "select religious authorities to resolve disputes in accordance with religious law. And, as a result, these forms of arbitration are embraced not solely as a utilitarian mechanism to resolve a dispute, but because they enable parties to resolve a dispute in accordance with shared religious principles and values."

I agree and see this as an example, a particularly powerful example, of privatizing law, i.e., parties opting out of the law provided by government and using privately-created law. I have written that this privatizing potential of arbitration is widespread and believe it occurs outside just religious arbitration.

Wednesday, January 7, 2015

New Mexico Court Declines to Enforce Consumer Arbitration Clause

The New Mexico Court of Appeals decision is linked and praised by Paul Bland of Public Justice who points out that the arbitration clause carved-out (for litigation, rather than arbitration) claims likely to be brought by the business drafting the clause.

Saturday, November 22, 2014

Are Adhesive Arbitration Agreements are "Corporate America's Oily Trick"?

Salon Magazine says yes.  I take a more positive view of them.  Salon says:

These hidden forced arbitration clauses lurk behind many of the most brutal injustices facing consumers and workers.  For example, a court in Texas recently held that a woman who washed dishes at a fast food restaurant could not sue in court for damages from personal injuries she sustained on the job.  The problem had nothing to do with her argument that she’d been treated unfairly; the problem was that her employee handbook had contained a forced arbitration agreement that dictated that her claims were to be decided by a private arbitrator.

This sort of thing makes me wonder: (1) Could she bring her claim in arbitration or does "could not sue in court" mean for some reason "could not bring her claim at all"? (2) If she could bring her claim in arbitration, did she, and to what result?

Friday, November 21, 2014

15 State Attorney Generals Criticize "Mandatory" Consumer Arbitration

“Mandatory pre-dispute arbitration is procedurally unfair to consumers, and jeopardizes one of the fundamental rights of Americans; the right to be heard and seek judicial redress for our claims,” the Attorneys General wrote to Consumer Financial Protection Bureau Director Richard Cordray, himself a former Ohio Attorney General. “These contractual requirements are neither voluntary nor readily understandable for most consumers.  Often consumers do not recognize the significance of these provisions, if they are aware of them at all. “

The following states’ AGs signed onto the letter: California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts New Mexico, New York, Oregon, Rhode Island, Vermont and Washington. 
Any Republicans among them?

Tuesday, October 21, 2014

Precedent and Lawmaking in International Arbitration

International Arbitrators as Lawmakers by Rahim Moloo and Brian King.

The abstract:

Arbitration scholars and practitioners have, for many years, spilled much ink debating the role of arbitrators as lawmakers. The debate has tended to center on two questions involving the role of precedent. First, should arbitrators treat prior arbitral decisions as a form of precedent, and, if so, to what degree should they rely on them? Second, to what extent should arbitrators view themselves as precedent-makers: Is their role limited to deciding strictly the dispute that is before them, or should they take into account the potential impact of their decision on future awards? Coloring the debate on both questions have been concerns about the implications of the answers for the legitimacy of the international arbitration "regime" as a whole.

The debate has assumed more urgency in certain fields of international arbitration, such as investment treaty arbitration, where the recent availability of an abundance of public awards has spurred much interest within the international legal community. As discussed in this article, this development is unsurprising given that the publicity of awards is, in itself, one of the critical prerequisites to the possibility of viewing arbitrators as lawmakers.

While this Article will touch upon some of the issues highlighted above, its focus is different. We begin from the standpoint that regardless of whether, normatively speaking, one believes that arbitrators should perform a lawmaking function, the fact is that they do. Arbitrators regularly cite to prior awards, appear to consider themselves cabined by them to some extent, and demonstrate concern about the impact that the awards they render may have on the development of the law. Parties, for their part, pepper their pleadings with references to past awards where they are available, seeking to convince the panel to follow or distinguish what tribunals have done before. Given the reality on the ground, it seems appropriate to shift the inquiry from the whether to the when and the what. What kind of law do arbitrators make, and when do they do so? Is the process of arbitral lawmaking legitimate, and are all awards created equal as far as precedential value is concerned? These are the questions that this Article seeks to address.

Saturday, October 18, 2014

Oil & Gas Investment Arbitrations

The Environment, Energy and Natural Resources Center of the University of Houston Law Center invitation to a conference October 31, 2014:

The oil & gas industry is one of the key feeders of transnational disputes. As a sector, the oil & gas industry is responsible by far for the most significant element by volume and claim value in investment arbitrations. This traditional role of the oil & gas industry as the bellwether of international disputes will only continue to grow in light of growing resource needs. This potential is reflected in the significant increase in oil & gas investments over the last 10 years. This conference addresses the cutting edge issues faced by the industry in the current market and political conditions focusing on the next wave of significant disputes faced by the industry. Discussion of these developments will provide counsel with insight into the current positions of leading players in the field.

Wednesday, October 15, 2014

Inherent and Implied Powers of Arbitrators

Loyola Chicago Law Professor Margaret L. Moses writes in her abstract:     

The powers of arbitrators are generally based on the provisions of an arbitration clause agreed to by the parties to an arbitration, including any arbitral rules chosen to govern the arbitration. However, because these short clauses cannot set forth every kind of power that an arbitrator may need in the course of an arbitration, he may have to call on inherent or implied powers. This article sets forth a framework for understanding what is meant by inherent powers and implied powers of arbitrators. The distinction is important, but many commentators and courts use the terms interchangeably. Basically implied powers are those that can be implied or discerned from a textual provision, either in the clause adopted by the parties, or in the arbitral rules chosen by the parties, or in the applicable arbitration law. Inherent powers are those that an arbitrator may need to call on when novel situations occur for which there is no specific rule or authority. In all cases, but particularly with respect to inherent powers, an arbitrator must act with caution not to overstep proper authority and thereby endanger the enforcement of an arbitral award.

Tuesday, October 14, 2014

Correcting a Flaw in the Arbitration Fairness Act

Correcting a Flaw in the Arbitration Fairness Act by Loyola Law Professor Imre Szalai. in the Journal of Dispute Resolution:

The Introduction:

The proposed Arbitration Fairness Act of 2013 will ban courts from enforcing
arbitration agreements in the employment and consumer contexts. This law will
protect America's employees and consumers by keeping the courthouse door open
to critical civil rights, employment, and consumer protection litigation. However,
the proposed Arbitration Fairness Act suffers from a subtle flaw: it is uncertain
whether the law will apply to the states. This flaw, which arises from one of the
greatest constitutional errors the Supreme Court has ever made, must be corrected
in order to provide the broadest protection to millions of American employees and
consumers, and to prevent years of needless litigation and confusion.

Sunday, October 5, 2014

New California Arbitration Statute on Consumer Arbitration Organizations

Robin E. Largent of the California Labor & Employment Law Blog writes:

in an effort to decrease the attractiveness of arbitration as a forum for dispute resolution, Governor Brown signed into law AB 802, which requires major arbitration providers such as JAMS and AAA to publish at least quarterly on their websites (beginning in January 2015) detailed information concerning arbitrations they have handled, including (1) the name of any non-consumer party involved in the arbitration (i.e. the name of the employer), (2) the nature of the dispute (e.g. employment), (3) where the non-consumer party is an employer, whether the employer was the initiating or responding party, (4) the annual wage (in a range) earned by the involved employee, (5) the amount of the claim, which party prevailed, and the amount of any award, including attorneys’ fees, (6) whether the employee was represented by an attorney and, if so, the name of the attorney and the law firm, (7) the name of the arbitrator and the amount of the arbitrator’s fees, and (8) the total number of times the employer previously has been a party in arbitration or mediation before the dispute resolution provider.  This new law has the obvious (and likely intended) effect of destroying the usual benefit of privacy that arbitration and mediation provide.

Former Labor Secretary Robert Reich Against Adhesive Arbitration

Former Labor Secretary Robert Reich is against arbitration clauses in adhesion contracts, which he calls "forced arbitration."  His video is sponsored by Alliance for Justice whose website provides no authority for its potentially-misleading assertions like "one study found that arbitrators rule for companies over consumers 94 percent of the time."

Friday, October 3, 2014

Precedent in Labor and Employment Arbitration

The Use and Abuse of Precedent in Labor and Employment Arbitration, 52 U. Louisville L. Rev. 431 (2014), by Michigan Law Professor Theodore J. St. Antoine.

The abstract:

Today I believe that the vast majority of arbitrators and advocates would agree that precedent has a salutary role to play in the arbitral process. The situation is different, of course, from the function of precedent or stare decisis (translated by a fabled country lawyer as “the mistake stands!”) in the judicial system. There, the hierarchy of courts calls for lower courts to treat as binding the decisions rendered by higher courts. And to maintain the benefits of uniformity, predictability, and stability in the legal system, even the superior courts are reluctant to overturn their own precedent except for some compelling reason.

Sunday, September 28, 2014

Arbitration Clauses in Military Servicemembers Credit Agreements

The New York Times reports:

The changes, which are being proposed by the Defense Department, would strengthen protections for military members by vastly expanding the kinds of credit covered by the law’s interest rate cap. The proposal also requires that creditors enhance their disclosures to military members, mandating that the lenders tell military members that they should first try to find alternatives to the costly forms of credit.
Creditors could also no longer require service members to agree to arbitration, a concession that would strip borrowers of their rights to fight in court.

Friday, September 26, 2014

When Can Courts Substitute Arbitration Organizations?

The Abstract:      

Section Five of the Federal Arbitration Act (“FAA”) allows courts to appoint a replacement arbitration forum when the designated arbitration forum is unavailable. However, it is unclear how far the power to replace extends, with the Seventh Circuit in 2013 deepening a current circuit split involving the Section Five replacement power. The Third, Fifth, and Eleventh Circuits recognize the integral part rule, which does not allow a court to appoint a replacement arbitration forum if the designation of the forum in the contract is considered integral. The Seventh Circuit is the lone circuit that has rejected the integral part rule in its entirety, and allows the appointment of a replacement arbitration forum no matter the contract. Furthermore, of the circuits that recognize the integral part rule, only the Fifth Circuit has applied the rule in a way that recognizes an arbitration forum designation as integral. This Note recommends that the Supreme Court adopt the integral part rule, and the application of the rule that finds arbitration forum designations integral to a contract. Such action by the Supreme Court would be justified by traditional contract principles and the congressional intent of the FAA.

"The hermetically-sealed vault of private arbitration"

Cardozo Law Professor Myriam E. Gilles writes:

Companies, anxious to avoid any and all exposure to class actions are highly motivated to insert confidential, one-on-one arbitration mandates into the standard-form agreements that, over these same thirty years, have come to govern their relationships with employees, consumers, direct purchasers, and all manner of counterparties. As a result, all disputes under these agreements – whether they would have otherwise been brought as class or individual claims – will now be shunted into the hermetically-sealed vault of private arbitration, where there is no public, transparent decision-making process, much less stare decisis or common law development.

Her paper is entitled "The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement"

Arbitration Clauses and Other Online Contract Terms

Interesting and well written article, Notice, Assent, and Form in a 140 Character World, by Widener University Law Professor Juliet M. Moringiello

She writes

From the earliest days of internet contracting disputes, courts and scholars used the terms “clickwrap” and “browsewrap” to describe the different types of electronically presented terms, with clickwrap referring to terms to which party could accept only by clicking a web site button and browsewrap denoting terms for which no click was required and which often provided that a web site user accepted them merely by browsing the web site....
The recent opinion in Tompkins v. 23andMe, Inc., Case No. 5:13-CV-05682-LHK, N.D. Cal., June 25, 2014. illustrates both the doctrinal confusion that can result from adherence to a electronic contracting lexicon that is limited to the terms “clickwrap” and “browsewrap” and the tendency of courts to hold that so long as there is notice of the notice of contract terms, a contract will be formed when the web site user takes the requested acceptance action. The dispute involved a personal genetics company that provided individuals with a genome profile developed from a DNA sample. Numerous customers of 23andMe filed class action complaints against the company alleging various false advertising and consumer protection claims, and the company moved to compel arbitration, citing the plaintiffs’ agreement to arbitrate.