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Monday, April 14, 2014

First Circuit Interprets Arbitration Clause Broadly

As Jeremy Telman reports at Contracts Prof Blog, the First Circuit recently interpreted a Verizon arbitration clause broadly to encompass claims that the district court thought could be litigated.  In Grand Wireless, Inc. v. Verizon Wireless, Inc. the First Circuit also held that Verizon's employee could compel arbitration of claims against her: " "Verizon and Grand certainly wished to have their disputes settled by arbitration. Since Verizon could operate only through the actions of its employees, it would have made little sense to have agreed to arbitrate if the employees could be sued separately without regard to the arbitration clause."  

Wednesday, April 9, 2014

AT&T v. Concepcion: The Problem of a False Majority

Article by John Marshall Law Professor Lisa Tripp and Evan Hanson concludes "Concepcion should viewed as having created no rule of law outside its specific facts and should, ... be treated as not having a majority opinion for precedential purposes."

"waiting for Congress to address the quagmire of mandatory consumer arbitration"

"waiting for Congress to address the quagmire of mandatory consumer arbitration"

a phrase from Michelle L. Caton, Form over fairness: how the Supreme Court's misreading of the Federal Arbitration Act has left consumers in a lurch, 21 Geo. Mason L. Rev. 497-529 (2014), which notes "Of the 139 bills introduced into Congress between 1995 and 2010 that sought to restrict or eliminate various uses of mandatory arbitration, only five were eventually passed into law."


Tuesday, April 8, 2014

California Court Strikes Down Class Waiver Arbitration Clause

California Court of Appeal finds a way around Concepcion and declines to enforce class waiver clause in   Imburgia v. DIRECTV, Inc., B239361 (2nd Dist. Div. 1 April 7, 2014).  As the valuable blog, California Mediation and Arbitration summarizes, "Concepcion does not necessarily invalidate all class action waivers.  The objective of the FAA is to carry out the intent of the parties, and contract interpretation may lead to the conclusion that the parties intended to proceed under state law rules that allow for the invalidation of class action waivers."

Sunday, April 6, 2014

Collective Actions and Joinder of Parties in Arbitration

"Collective Actions and Joinder of Parties in Arbitration: Implications of DR Horton and Concepcion"

by UC Irvine Law Professor Catherine Fisk

Berkeley Journal of Employment and Labor Law, Vol. 35, No. 1, 2014, Forthcoming

Professor Fisk argues that employment agreements "to arbitrate individually are unenforceable under the National Labor Relations Act and the Norris LaGuardia Act."  She argues that such agreements are not covered by the Supreme Court’s reasoning in Concepcion and Italian Colors to the extent they prohibit joinder of fewer parties than would be required to bring a large class action and, therefore, remain protected by labor law.

Professor Fisk's article criticizes the Fifth Circuit’s Horton case and questions the practical wisdom of agreements requiring employees to pursue claims only as individuals. "State and federal courts universally allow liberal joinder of plaintiffs and defendants because it is more efficient and avoids some truly thorny issues about the preclusive effect of judgments."

Do Arbitration Organizations Comply with California Disclosure Laws?

Carolyn Said writes in the San Francisco Chronicle that while "a decade-old California law already requires arbitration companies to post data on their cases online. The problem is that many don't do it. A UC Hastings study found that only half post any data, and it's short of what's required."

"The vast majority of California consumer arbitrations, about 95 percent, are done by JAMS (formerly Judicial Arbitration and Mediation Services), the American Arbitration Association or Kaiser's independent administrator, and all of these organizations comply with the disclosure law," said Donne Brownsey, a lobbyist for the California arbitration industry.
"JAMS is compliant with California's consumer arbitration disclosure requirements," the organization's general counsel, John Walsh, said in a statement.

Saturday, April 5, 2014

Eleventh Circuit Enforces Class Waiver Clauses in Employment Arbitration Agreements

NLRB v. Courts

Class Action Waivers

While the NLRB says such clauses are unenforceable, courts disagree--including the now the Eleventh Circuit in Walthour v. Chipio Windshield Repair, LLC, 2014 WL 1099286 (11th Cir., March 21, 2014),

Thursday, April 3, 2014

Wednesday, April 2, 2014

The NLRB v. The Courts: Class Actions v. Arbitration

The NLRB holds for class actions

The National Labor Relations Board holds that individual employment agreements may not prevent employees from engaging in protected concerted activity in both union and nonunion environments.

The Board ruled in D.R. Horton that individual, as opposed to collectively bargained, arbitration agreements that are a condition of employment, may not bar collective action through both arbitral and judicial forums.

In contrast, most courts enforce arbitration agreements that foreclose class actions.

See for example, the Fifth Circuit.

This article "The NLRB v. The Courts: Showdown Over the Right to Collective Action in Workplace Disputes" by Boston College Professors Stephanie M. Greene & Christine Neylon O'Brien sides with the NLRB’s interpretation.   American Business Law Journal, Vol. 51, No. 4, 2014

Sunday, March 30, 2014

Mass Arbitration and Democratic Legitimacy

Mass Arbitration and Democratic Legitimacy 

This very well written article by UC Davis Law Professor David Horton reviews Margaret Jane Radin’s "dazzling new book, Boilerplate."

Horton's Essay argues that Radin’s democratic degradation thesis is particularly compelling in the context of consumer and employment arbitration.

Wednesday, March 26, 2014

Allegation that Companies Breach Promises to Pay Consumers' Arbitration Fees

Arbitration Fees: Do Companies Breach Duty to Pay Them?

Via Art Hinshaw at ADR Prof, and Jean Sternlight of UNLV writes that Public Justice's Paul Bland (here) argues that although many companies promise to pay arbitration fees incurred by their customers and employees, "quite a few fail to pay those fees on the rare occasion when someone actually brings a claim against them in arbitration.  The post further discusses how the AAA has begun to send letters to such companies demanding that they stop using the AAA name in company documents. Bland identifies car dealers as a common culprit,"

Saturday, March 22, 2014

California's Ethics Standards for Neutral Arbitrators in Contractual Arbitration

California's Ethics Standards for Neutral Arbitrators in Contractual Arbitration

California's Ethics Standards for Neutral Arbitrators in Contractual Arbitration are important because our largest state is a leader in arbitration and these are both rules of ethics and rules of law.  They are made rules of law by California Code of Civil Procedure section 1281.85.

California's Ethics Standards for Neutral Arbitrators in Contractual Arbitration have recently been amended.

Thursday, March 20, 2014

Consumer Arbitration by Bruce Wardhaugh

Thoughtful new article, Unveiling Fairness for the Consumer: The Law, Economics and Justice of Expanded Arbitration, by Dr. Bruce Wardhaugh of Queen's University, Belfast.  I appreciate the extent to which he addresses my own articles, particularly Paying the Price of Process: Judicial Regulation of Consumer Arbitration Agreements

Bruce Wardhaugh writes "some argue that pre-dispute agreements in consumer (and employment) matters are consumer welfare enhancing: they decrease the costs of doing business, which is then passed on to the consumer. This Article examines these latter claims from both an economic and normative perspective. The economic analysis of these arguments shows that their assumptions do not hold. Rather than being productive of consumer surplus, the use of arbitration is likely to have the opposite effect. The industries from which the recent Supreme Court cases originated not only do not exhibit the industrial structure assumed by the proponents of expanded arbitration, but are also industries which exhibit features that facilitate consumer welfare reducing collusion."


Friday, March 14, 2014

The Problem with Class Arbitration

"The Problem with Class Arbitration" is an article by Neil Troum, an adjunct professor at Temple University's Beasley School of Law.  He makes what seems to me a powerful point:

"The current state of the law is: where the parties have consented to class arbitration, an arbitrator can enter a class award that a court will confirm and that will have the same res judicata effect as a class action judgment in court. There is a problem with this. The problem is not the incompatibility of the class action's traits with those of the arbitral realm, however--which is how a majority of the Supreme Court currently sees things. It is instead that an arbitrator possesses what power he has only with the consent of the parties whose claim he will resolve. As a result, a class arbitration judgment should not be deemed to have preclusive effect on absent (i.e., nonconsenting) class members, like a class judgment issued from a court. This is not the law, however."

Wednesday, March 5, 2014

Supreme Court Decides Investment Arbitration Case

Today, the Supreme Court decided BG v. Argentina, in which an arbitration panel awarded BG $185 million in damages.

The basic issue is who—court or arbitrator—bears primary responsibility for interpreting and applying an investment treaty provision providing for arbitration 18 months after litigation in Argentina’s courts.

The Supreme Court today holds that investment treaties should in some respects be treated like ordinary contracts.  "A treaty is a contract between nations, and its interpretation normally is a matter of determining the parties’ intent. Where, as here, a federal court is asked to interpret that intent pursuant to a motion to vacate or confirm an award made under the Federal Arbitration Act, it should normally apply the presumptions supplied by American law."

The relevant presumptions are those the Supreme Court articulated, primarily in its Howsam decision:

In an ordinary contract, the parties determine whether a particular matter is primarily for arbitrators or for courts to decide.  If the contract is silent on the matter of who is to decide a "threshold" question about arbitration, courts determine the parties’ intent using presumptions. That is, courts presume that the parties intended courts to decide disputes about "arbitrability," e.g., Howsam v. Dean Witter Reynolds, Inc., 537 U. S. 79, 84, and arbitrators to decide disputes about the meaning and application of procedural preconditions for the use of arbitration, see id., at 86, including, e.g., claims of "waiver, delay, or a like defense to arbitrability,"  and the satisfaction of, e.g., " ‘time limits, notice, laches, [or] estoppel,’ " Howsam, 537 U. S., at 85. The [treaty] provision at issue is of the procedural variety.