tag:blogger.com,1999:blog-49633572477204232072024-03-18T19:58:29.833-07:00Arbitration by Stephen WareA blog about Arbitration law, by Stephen Ware, a law professor at KU, in Lawrence, Kansas.Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.comBlogger250125tag:blogger.com,1999:blog-4963357247720423207.post-33930155001893057882024-01-10T10:45:00.000-08:002024-01-10T10:45:47.843-08:00Mass Arbitration in 7th Circuit: Wallrich v. Samsung<p>The Seventh Circuit will soon hear argument in a mass
arbitration case which has attracted amicus briefs from leading organizations
on each side of civil justice issues, including the U.S. <a href="https://www.aba.com/-/media/documents/extranet/banking-docket/11212023-wallrich-v-samsung-amicus-brief.pdf?rev=acc2988d474947b09457a3bb3be0b6f3">Chamber
of Commerce</a> and the plaintiffs’ trial lawyers organization, the <a href="https://www.justice.org/resources/research/wallrich-v-samsung">American
Association for Justice</a>. The <a href="https://www.reuters.com/legal/litigation/us-court-blocks-order-requiring-samsung-front-millions-arbitration-fees-2023-11-09/">case</a>
is Wallrich et al v. Samsung Electronics America, Inc. et al.</p>
<p class="MsoNormal">Mass arbitration was plaintiffs’ lawyers’ response to
courts’ enforcement of agreements requiring individual arbitration instead of
class actions. As arbitration organizations’ rules tend to require lower filing
fees of individual claimants than responding businesses, those businesses have
balked at the fees of mass individual arbitration. For instance, Amazon <a href="https://www.wsj.com/articles/amazon-faced-75-000-arbitration-demands-now-it-says-fine-sue-us-11622547000">removed</a>
arbitration from its terms of service in 2021 “after plaintiffs’ lawyers
flooded Amazon with more than 75,000 individual arbitration demands on behalf
of Echo users. That move triggered a bill for tens of millions of dollars in
filing fees.”</p>
<p class="MsoNormal">Other companies have tried to reduce the fees of mass
arbitration, such as by switching arbitration organizations. For instance,
Damini Mohan <a href="https://arbitrate.com/the-business-response-to-the-rise-in-mass-arbitrations/">reports</a>
that “In 2020, Doordash changed its arbitration provider from AAA to
ADRServices, Inc., which has a lower filing fee due to thousands of delivery
workers initiating mass arbitration.”</p>
<p class="MsoNormal">Another approach is batching. For instance, Samsung’s new
arbitration <a href="https://www.samsung.com/us/support/legal/LGL10000282/#dispute-resolution-agreement">agreement</a>
provides:<o:p></o:p></p>
<p class="MsoNormal">“Both the counsel for the claimant and the counsel for
Samsung must each pick 25 claims to go through individual arbitration,” all
before the same arbitrator. <span style="mso-spacerun: yes;"> </span>After these
25 arbitrations, “the parties will engage in global mediation for all the
remaining claims.” Then, if claims remain unresolved, counsel for each side
pick 50 more claims for individual arbitration, all before the same arbitrator
(although a different arbitrator from the first 25.) And so on.</p>
<p class="MsoNormal">As Mohan writes, “From a business perspective, multi-staged
batch arbitration helps manage mass arbitration more efficiently by reducing
the upfront costs and distributing them more evenly over a period of time.” And
from a business perspective, perhaps settling most of the cases after paying
fees to arbitrate only a small portion of them.</p>
<p class="MsoNormal">Samsung’s new arbitration agreement appeared after the
Wallrich case now before the Seventh Circuit.</p>
<p class="MsoNormal">In Wallrich, Samsung device users alleging violations of the
Illinois’ Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1, et seq.,
filed 50,000 individual arbitration demands before the American Arbitration
Association (AAA) in 2022. The AAA invoiced the consumers for their share of
the initial arbitration administration fees, which the consumers paid. However,
Samsung notified the AAA that it would not pay its share of the assessed
initial administrative fees for the Illinois claimants because it found the
claimant list included discrepancies such as deceased claimants and claimants
who were not Illinois residents. Samsung agreed to pay the fees for fourteen consumers
now living in California, citing California Code of Civil Procedure § 1281 et
seq., which provides for sanctions in event of nonpayment.</p>
<p class="MsoNormal">Consumers filed a petition to compel arbitration in the U.S.
District Court for the Northern District of Illinois, where Judge Harry D.
Leinenweber ruled for the consumers—compelling arbitration and ordering Samsung
to pay over $4 million in AAA fees.</p>
<p class="MsoNormal">The district court <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/mypmgbmwapr/frankel-samsungmassarb--labatonopinion.pdf">found</a>
(p.22) that Samsung and the petitioners formed arbitration agreements because “To
find that each Petitioner residing in this District is a Samsung customer, the
Court must accept the word of over 30,000 individuals, some of whom may have
been recruited to this action by obscure social media ads.”</p>
<p class="MsoNormal">In contrast, Samsung’s <a href="https://storage.courtlistener.com/recap/gov.uscourts.ca7.49965/gov.uscourts.ca7.49965.34.0_2.pdf">brief</a>
to the Seventh Circuit says the district court erred in thinking it “‘must
accept’ the unverified and unattested ‘word of over 30,000 individuals.’”
Samsung’s brief says, “no Appellee swore under penalty of perjury that the
petition’s allegations or its attachments were true. . . Appellees thus failed
to convert the petition and its attachments into evidence.” Samsung’s brief
says, “Appellees have not submitted any evidence that each one of them owns a
Samsung device”</p>
<p class="MsoNormal">On the other hand, petitioner’s <a href="https://storage.courtlistener.com/recap/gov.uscourts.ca7.49965/gov.uscourts.ca7.49965.51.0.pdf">brief</a>
to the Seventh Circuit says of the standard to compel arbitration that “courts ‘have
analogized the standard to that required of a party opposing summary judgment’”,
where “Sworn testimony is not the only basis on which summary judgment may be
granted.” Facts may be supported by a broad range of “materials in the record,”
including “depositions, documents, electronically stored information,
affidavits or declarations, stipulations … , admissions, interrogatory answers,
or other materials.” Fed. R. Civ. P. 56(c)(1)(A).</p>
<p class="MsoNormal">The district court said:</p>
<p class="MsoNormal" style="margin-left: .5in;">Samsung has a customer list,
against which they could compare the list of Petitioners. Samsung raised
concerns about specific names to the AAA, which in<o:p></o:p></p>
<p class="MsoNormal" style="margin-left: .5in;">turn asked Petitioners to correct
their list. Petitioners did so, and the record does not show that Samsung has
raised specific concerns since. Samsung’s current rejection that all
Petitioners are customers is merely “denying facts,” and this is not enough.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p>Samsung’s brief replies that whether it had a customer “list
is irrelevant because <i>Appellees</i> bore the initial burden of proof, which
they did not carry.” In addition, Samsung’s brief says it “does not have a
comprehensive ‘customer list.’” Petitioner’s brief refers to “Samsung’s failure
to identify a single claimant—out of tens of thousands—who didn’t show up in
its records” and Samsung’s “refus[al] to provide information entirely within
its possession” both of which seem to continue asserting that the burden is on
Samsung.</p>
<p class="MsoNormal">The district court’s holding that Samsung and the
petitioners formed arbitration agreements was also based on the district
court’s finding that “The AAA has already reviewed Petitioners’ arbitration
agreements and determined that they met the filing requirements.” Addressing
this, Samsung’s brief to the Seventh Circuit says:</p>
<p class="MsoNormal" style="margin-left: .5in;">the AAA’s filing-requirement
determination says nothing about whether the parties agreed to arbitrate,
because the AAA does not require claimants to establish at filing that they are
bound by an arbitration agreement. It instead requires claimants to simply
attach an arbitration agreement to their demand without proof that they are
bound by it.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p>And Samsung correctly points out that “whether the parties
agreed to arbitrate at all is a question for the court (and, if necessary, a
jury), not the arbitrator.” However, petitioner’s brief says the record shows</p>
<p class="MsoNormal" style="margin-left: .5in;">(a) each claimant had filed a
demand for arbitration stating that they are the owner of a Samsung device,
along with significant amounts of identifying information; (b) this information
was subject to official and adversarial vetting, in which both the AAA and
Samsung raised issues that the claimants addressed;<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p>Having found that the petitioners formed arbitration
agreements with Samsung, the district court went on to hold that Samsung’s
refusal to pay the AAA’s fees for each individual claimant constitutes a breach
of the arbitration agreement, so the court’s order compelling arbitration also
ordered Samsung to pay those fees. In contrast, Samsung’s appellate brief says
“the (alleged) arbitration agreements” “provide that administrative filing fees
‘shall be determined according to AAA rules,’” which Samsung reads as “the
arbitration agreements expressly commit[ting] administrative-fee issues to the
AAA.” Samsung says, “the AAA, applying its own rules, decided that Samsung was
not required to pay fees and closed the cases given the nonpayment by either
party.” On the other hand, petitioner’s brief says the AAA “the AAA determined that the company was ‘responsible for payment of the initial
administrative filing</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal">fees totaling $4,125,000.00’” and “the AAA [closed] the arbitrations
‘due to non-payment of filing fees by the business.’” So, the “record cannot be
squared with Samsung’s assertion that the AAA ‘decided that Samsung was not
required to pay fees.’”</p>
<p class="MsoNormal">Interestingly, the district court notes that Samsung has not
argued inability to pay, “but the Court has not been convinced that Petitioners
are able to lend over $4,000,000 while the dispute pends.” And petitioners’
appellate brief says the cases Samsung cites are distinguishable because they “involved
parties that could no longer afford their fees, which courts have consistently
distinguished from a willful refusal to pay.”</p>
<p class="MsoNormal">While Samsung argues that “administrative fees are
quintessential ‘procedural’ matters for arbitral bodies, not courts, to
decide,” the district court did “not see filing fees as procedural in this
case” because “The fees are bound up in the right to arbitrate that the ADR
tribunal governs.” This procedural/substantive distinction may be crucial under
the Supreme Court’s decision in <i>Howsam v. Dean Witter Reynolds, Inc., </i>537
U.S. 79 (2002), which said, “issues of substantive arbitrability . . . are for
a court to decide and issues of procedural arbitrability, i.e., whether
prerequisites such as time limits, notice, laches, estoppel, and other
conditions precedent to an obligation to arbitrate have been met, are for the
arbitrators to decide.”<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000001110.658252863821154 -130.52926760000003 67.278720536178838 -60.216767600000011tag:blogger.com,1999:blog-4963357247720423207.post-49463784280954913202023-03-18T12:53:00.003-07:002023-03-18T13:13:12.560-07:00Arbitration Appeals Before SCT in Coinbase v. Bielski<p>The Supreme Court will hear argument this Tuesday March 21 in <a href="https://www.scotusblog.com/case-files/cases/coinbase-inc-v-bielski/" target="_blank">Coinbase, Inc. v. Bielski</a>, in which the issue centers on appeals of district court rulings denying motions to compel arbitration.<b style="text-align: center;"><o:p> </o:p></b></p><p>
</p><p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">The Federal Arbitration Act generally
enforces arbitration agreements, and it does so not with the usual remedy for
breach of contract, which is money damages, but with a stronger remedy—specific
performance. The Federal Arbitration Act does this by instructing district
courts to grant motions to stay litigation and compel arbitration of claims the
parties agreed to arbitrate.<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-themecolor: text1;">[1]</span></span><!--[endif]--></span></span></a> <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">In further support of arbitration is the
Federal Arbitration Act’s appeals structure. FAA § 16 makes immediately
appealable district court orders denying motions to compel arbitration,<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-themecolor: text1;">[2]</span></span><!--[endif]--></span></span></a> but not orders
granting them.</span><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn3" name="_ftnref3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="color: black; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text1;"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1;">[3]</span></span><!--[endif]--></span></span></span></a><span style="color: black; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text1;"> </span><span style="color: black; mso-themecolor: text1;">So, if the
district court rules <u>for</u> arbitration, the parties go to arbitration,
instead of appealing the district court’s pro-arbitration ruling to the circuit
court. But if the district court rules <u>against</u> arbitration, then the
party seeking arbitration is entitled to an interlocutory appeal to ask the
circuit court to reverse the district court’s anti-arbitration ruling, and thus
to compel arbitration. So, the party seeking arbitration can get the dispute to
arbitration by winning at <u>either</u> district or appellate court, but the
party opposing arbitration has to win at <u>both</u> courts if the
pro-arbitration side appeals.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">All that is established by statute, while
the question in this Supreme Court case, <i>Coinbase, Inc. v. Bielski</i>, is
narrower. It’s a question about <u>staying</u> the district court pending
appeal. If the district court rules against arbitration and the party seeking
arbitration exercises its right to an interlocutory appeal, may the district
court proceed on other issues in the case while that appeal about arbitration
is pending; or is the district court automatically stayed with respect to the
entire case pending appeal? That’s the question the Supreme Court has set for argument
on March 21.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">In this case,<i> Coinbase, Inc. v.
Bielski</i>, the plaintiff </span><span style="background: white; color: black; mso-fareast-font-family: "Times New Roman";">Bielski sued Coinbase for violations of the
Electronic Funds Transfer Act.<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn4" name="_ftnref4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="background: white; color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">[4]</span></span><!--[endif]--></span></span></a></span><span style="color: black; mso-fareast-font-family: "Times New Roman";"> </span><span style="color: black; mso-themecolor: text1;">Coinbase then moved to stay the
litigation and compel arbitration pursuant to the arbitration clause in the
Coinbase User Agreement that Bielski had signed. However, the district court
denied Coinbase’s motion to compel arbitration because the district court held
that the arbitration agreement was unconscionable.<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn5" name="_ftnref5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-themecolor: text1;">[5]</span></span><!--[endif]--></span></span></a> </span><span style="mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></p>
<p style="text-indent: 0.5in;"><span style="color: black;">Coinbase filed an
interlocutory appeal to the Ninth Circuit requesting a stay of the district
court proceedings pending that appeal, and </span><span style="color: black; mso-themecolor: text1;">Coinbase asked the district court to stay its proceedings
pending the resolution of that appeal. The district court denied Coinbase’s
motion for a stay pending appeal because, it said, Bielski “would suffer if
forced to wait for a remedy” on Bielski’s underlying suit about the Funds
Transfer Act.<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn6" name="_ftnref6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1;">[6]</span></span><!--[endif]--></span></span></a></span><span style="background: white; color: black;"><o:p></o:p></span></p>
<p style="text-indent: 0.5in;"><span style="color: black;">The Ninth Circuit also refused
Coinbase’s request for a stay of the district court pending appeal,<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn7" name="_ftnref7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">[7]</span></span><!--[endif]--></span></span></a>
so Coinbase petitioned the Supreme Court. Coinbase asks the Supreme Court to
decide whether </span><span style="color: black; mso-themecolor: text1;">“</span>a non-frivolous
appeal of the denial of a motion to compel arbitration oust[s] a district
court’s jurisdiction to proceed with litigation pending appeal.<span style="color: black; mso-themecolor: text1;">”<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn8" name="_ftnref8" style="mso-footnote-id: ftn8;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1;">[8]</span></span><!--[endif]--></span></span></a>
Or as Bielski puts it, the question before the Supreme Court is whether “an
interlocutory appeal of a denial of a motion to compel arbitration … require[s]
an automatic stay of all district court proceedings pending appeal?”<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn9" name="_ftnref9" style="mso-footnote-id: ftn9;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1;">[9]</span></span><!--[endif]--></span></span></a><o:p></o:p></span></p>
<p style="margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt; margin: 12pt 0in 0in; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">The federal
circuit courts have split on this question, with the Second and Fifth Circuits
joining the Ninth. These three circuits hold that an appeal of the district
court’s refusal to compel arbitration does <u>not</u> automatically stay the
district court pending appeal. <o:p></o:p></span></p>
<p style="margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt; margin: 12pt 0in 0in; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">But most
circuits hold to the contrary. T<span style="background: white;">he Third,
Fourth, Seventh, Tenth, Eleventh, and D.C. Circuits hold that</span></span>
appeal of a district court’s refusal to compel arbitration <u>does</u> divest
the district court of jurisdiction pending appeal. <o:p></o:p></p>
<p style="margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt; margin: 12pt 0in 0in; text-indent: 0.5in;"><span style="background: white; color: black;">When we look
at the two sides of this circuit split, we can see it arising in the 1990s in a
pretty familiar way, which is the progressive or anti-arbitration position is first
taken by the Ninth Circuit out on the Left Coast, while the conservative or pro-arbitration
position is first taken by the Seventh Circuit in an opinion by Judge Frank
Easterbrook—who by the way was my Civil Procedure professor at the University
of Chicago.</span><span style="color: black; mso-themecolor: text1;"><o:p></o:p></span></p>
<p style="margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt; margin: 12pt 0in 0in; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">Part of the
context for this circuit split is the <span style="background: white;">general
rule in federal court that “[t]he filing of a notice of appeal . . . divests
the district court of its control over those aspects of the case involved in
the appeal.” That’s a quote from the Supreme Court’s 1982 decision in<span class="apple-converted-space"> </span></span><i><span style="border: 1pt none windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">Griggs v. Provident Consumer
Discount Co.<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn10" name="_ftnref10" style="mso-footnote-id: ftn10;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b style="mso-bidi-font-weight: normal;"><span style="border: 1pt none windowtext; color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-border-alt: none windowtext 0in; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1; padding: 0in;">[10]</span></b></span><!--[endif]--></span></span></a></span></i> So, in
that <i>Griggs</i> framework, the question in this <i>Coinbase</i> case is
whether appeal of a denied motion to compel arbitration divests the district
court of the non-arbitration merits of the case (about </span><span style="background: white; color: black;">the Funds Transfer Act) </span><span style="color: black; mso-themecolor: text1;">while the circuit court is deciding
whether to affirm or reverse the district court’s refusal to compel
arbitration. <o:p></o:p></span></p>
<p style="margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt; margin: 12pt 0in 0in; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">In one
sense, the alleged violation of the Funds Transfer Act is not involved in the
appeal because the appeal is just about whether to enforce the arbitration
agreement. But in another sense, <u>any</u> litigation of the </span><span style="background: white; color: black;">Funds Transfer Act claim or any other
claim, even just taking a deposition or other discovery, would be the district
court exercising control over aspects of the case involved in the appeal—because
<u>everything</u> in litigation is involved in the appeal of whether the case
will be resolved by litigation or arbitration. For example, maybe arbitration
will have narrower discovery than litigation would, so an arbitrator would not
order a deposition that the district court would order.<br clear="all" style="break-before: page; mso-special-character: line-break; page-break-before: always;" />
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="background: white; color: black; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text1;">The Ninth Circuit takes the first of those views. It said
not everything involved in the case is involved in the appeal of refusing to
compel arbitration, and the contrary rule urged by [defendants] would allow a
defendant to stall a trial simply by bringing a frivolous motion to compel
arbitration.”<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn11" name="_ftnref11" style="mso-footnote-id: ftn11;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="background: white; color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1;">[11]</span></span><!--[endif]--></span></span></a>
The Ninth Circuit said,<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 0in; margin-left: .5in; margin-right: .5in; margin-top: 12.0pt; margin: 12pt 0.5in 0in;"><span style="background: white; color: black; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text1;">The system
created by the Federal Arbitration Act allows the district court to evaluate
the merits of [a motion for arbitration], and if, for instance, the court finds
that the motion presents a substantial question, to stay the proceedings
pending an appeal from its refusal to compel arbitration.<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn12" name="_ftnref12" style="mso-footnote-id: ftn12;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="background: white; color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US; mso-themecolor: text1;">[12]</span></span><!--[endif]--></span></span></a></span><span style="background: white; color: black; mso-themecolor: text1;"> </span><span style="background: white; color: black; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text1;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom: 0in; margin-left: 0in; margin-right: .5in; margin-top: 12.0pt; margin: 12pt 0.5in 0in 0in;"><span style="background: white; color: black; mso-fareast-font-family: "Times New Roman"; mso-themecolor: text1;">In other
words, the Ninth Circuit says, whether to stay pending appeal is a proper
subject for the exercise of discretion by the trial court.</span><span style="background: white; color: black; mso-themecolor: text1;"> <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt;"><span style="color: black; mso-themecolor: text1;">In contrast, most circuit courts to have considered the
issue hold that a nonfrivolous appeal from a district court order denying
arbitration automatically divests the district court of jurisdiction of the
case pending appeal. <span style="background: white;">In other words, the
interlocutory appeal stays litigation in district court until the Court of Appeals
resolves the appeal.<o:p></o:p></span></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="background: white; color: black; mso-themecolor: text1;">This view traces back
at least to Judge Easterbrook’s 1997 opinion, which says </span><span style="color: black; mso-themecolor: text1;">that denying such a stay would "largely
defeat[] the point of the appeal."<a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftn13" name="_ftnref13" style="mso-footnote-id: ftn13;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-family: "Times New Roman",serif; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-themecolor: text1;">[13]</span></span><!--[endif]--></span></span></a> Which
is to decide if the case will be litigated or arbitrated--before incurring the
costs of starting the litigation or arbitration. As the Eleventh Circuit said
in support of this view, whether the case will be litigated or arbitrated is a
“threshold issue” that should be resolved first. Or as the Tenth Circuit said,
also in support of this Easterbrook view, failing to grant a stay pending
appeal would deny the defendant’s "legal entitlement to avoidance of
litigation" if it turns out the defendant had that entitlement to
arbitrate, which we won’t know until the circuit court rules.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">So, we can see the issue in this <i>Coinbase</i>
case as a policy question of which kind of errors should courts make. Should
courts make plaintiffs wait to litigate until after an appeal that affirms the
district court’s ruling that the plaintiff has a right to litigate rather than
arbitrate? Or should courts make defendants litigate until an appeal reverses
the district court’s erroneous ruling that the plaintiff has to litigate
instead of arbitrate?<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">As to statutory text, Bielski’s brief
in the Supreme Court points out that if Congress enacting FAA § 16 had wanted
to require a stay pending appeal, it could have done so. It knew how to do so,
because FAA § 3 expressly requires stays of litigation pending arbitration, so
“Congress's silence regarding stays in Section 16 is deafening,” Bielski’s
brief says.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">In contrast, Coinbase’s brief says “in
enacting this [FAA § 16] text, Congress legislated against the backdrop of the
divestiture rule,” that <i>Griggs</i> rule I mentioned earlier, which provides
that district courts are divested of authority to proceed with matters
implicated by the appeal. Congress's creation of an immediate arbitrability
appeal right ensured that district courts would be divested of authority to
proceed to the merits while the appeal proceeds.” And Coinbase quotes Judge
Easterbrook’s opinion for the Seventh Circuit, saying the “divestiture rule ‘is
fundamental to a hierarchical judiciary.’ It ‘fosters judicial economy’ and
guards against ‘confusion and inefficiency that would result if two courts’
purported to exercise jurisdiction over related matters simultaneously.”<o:p></o:p></span></p><p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;"><span style="color: black; mso-themecolor: text1;">Thanks to Shane Creason for excellent research assistance.</span></p><p class="MsoNormal" style="margin-top: 12pt; text-indent: 0.5in;">Greg Stohr of Bloomberg News discusses the <a href="https://www.bloomberglaw.com/bloomberglawnews/exp/eyJjdHh0IjoiQVROVyIsImlkIjoiMDAwMDAxODYtZWVjZC1kN2EzLWE5ZTctZmVmZjMxMjMwMDAyIiwic2lnIjoiUHBST3VRUDNlL1ZTa0VsYm9UL2hMWmpoUGFrPSIsInRpbWUiOiIxNjc5MTQxMjE0IiwidXVpZCI6InFSUTJkUHFlZEgzN2NsK1p2MllBMWc9PWwzV3VTZkszTEVLbENhenNXYTR2b0E9PSIsInYiOiIxIn0=?bwid=00000186-eecd-d7a3-a9e7-feff31230002&cti=LSCH&emc=bblnw_nl%3A28&et=NEWSLETTER&isAlert=false&item=body-link&qid=7435236&region=text-section&source=newsletter&uc=1320027947&udvType=Alert&usertype=External" target="_blank">crypto side</a> of this case.</p>
<div style="mso-element: footnote-list;"><!--[if !supportFootnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="ftn1" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[1]</span></span><!--[endif]--></span></span></a> 9
U.S.C. §§ 3, 4.<o:p></o:p></p>
</div>
<div id="ftn2" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></span></a> 9
U.S.C. § 16(a)(1)(A) (B) (stating that “[a]n appeal may be taken from . . . an
order . . . refusing a stay of any action under section 3 of this title” and an
order “denying a petition under section 4 of this title to order arbitration to
proceed.”); id. § 16(a)(1)(C) (stating that “[a]n appeal may be taken from . .
. an order . . . denying an application under section 206 of this title to compel
[international] arbitration”);<o:p></o:p></p>
</div>
<div id="ftn3" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref3" name="_ftn3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></span></a> 9
U.S.C. § 16(b) (denying interlocutory appeals of “an interlocutory order . . .
granting a stay of any action under section 3 [or] . . . directing arbitration
to proceed under section 4 of this title.”)<o:p></o:p></p>
</div>
<div id="ftn4" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref4" name="_ftn4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[4]</span></span><!--[endif]--></span></span></a>
Bielski v. Coinbase, Inc., No. C 21-07478 WHA, 2022 WL 1062049, at *1 (N.D.
Cal. Apr. 8, 2022).<o:p></o:p></p>
</div>
<div id="ftn5" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref5" name="_ftn5" style="mso-footnote-id: ftn5;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[5]</span></span><!--[endif]--></span></span></a>
More specifically, the district court said the arbitration agreement’s
delegation clause and “unilaterality” throughout the arbitration provisions
permeated the whole with unconscionability. Id. at 6-7. Consequently, the court
concluded that it could not sever the unconscionable terms and denied
Coinbase’s motion. Id. at 7-8.<o:p></o:p></p>
</div>
<div id="ftn6" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref6" name="_ftn6" style="mso-footnote-id: ftn6;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[6]</span></span><!--[endif]--></span></span></a> Joint
Petition for Writ of Certiorari, <span style="color: black; mso-fareast-font-family: "Times New Roman";">Coinbase, Inc., Petitioner, v. Abraham Bielski, Respondent;
Coinbase, Inc., Petitioner, v. David Suski, et al., Respondents., 2022 WL
3107708 (U.S.), </span>8 (“district court recognized ‘that reasonable minds may
differ over’ its refusal to compel arbitration, but it nonetheless decided that
a stay was unwarranted because ‘Coinbase is a large company,’ while ‘Bielski is
a single individual,’ and he ‘would suffer if forced to wait for a remedy.’”)<o:p></o:p></p>
</div>
<div id="ftn7" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref7" name="_ftn7" style="mso-footnote-id: ftn7;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[7]</span></span><!--[endif]--></span></span></a>
Bielski v. Coinbase, Inc., No. 22-15566, 2022 WL 3095991, at *1 (9th Cir. July
11, 2022); See also Suski v. Coinbase, Inc., No. 22-15209, 2022 WL 3099846, at
*1 (9th Cir. May 27, 2022).<o:p></o:p></p>
</div>
<div id="ftn8" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref8" name="_ftn8" style="mso-footnote-id: ftn8;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[8]</span></span><!--[endif]--></span></span></a> Joint
Petition for Writ of Certiorari, <span style="color: black; mso-fareast-font-family: "Times New Roman";">Coinbase, Inc., Petitioner, v. Abraham Bielski, Respondent;
Coinbase, Inc., Petitioner, v. David Suski, et al., Respondents., 2022 WL
3107708 (U.S.), cert. granted, </span>143 S. Ct. 521 (2022).<o:p></o:p></p>
</div>
<div id="ftn9" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref9" name="_ftn9" style="mso-footnote-id: ftn9;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[9]</span></span><!--[endif]--></span></span></a>
Brief for Respondent Abraham Bielski. https://www.supremecourt.gov/DocketPDF/22/22-105/255161/20230221122108808_22-105%20bs.pdf<o:p></o:p></p>
</div>
<div id="ftn10" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref10" name="_ftn10" style="mso-footnote-id: ftn10;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[10]</span></span><!--[endif]--></span></span></a>
459 U.S. 56, 58 (1982).<o:p></o:p></p>
</div>
<div id="ftn11" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref11" name="_ftn11" style="mso-footnote-id: ftn11;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[11]</span></span><!--[endif]--></span></span></a> Britton v. Co-op Banking Grp., 916 F.2d 1405, 1412 (9th Cir. 1990) <o:p></o:p></p>
</div>
<div id="ftn12" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref12" name="_ftn12" style="mso-footnote-id: ftn12;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[12]</span></span><!--[endif]--></span></span></a>
Id. (citations omitted).<o:p></o:p></p>
</div>
<div id="ftn13" style="mso-element: footnote;">
<p class="MsoFootnoteText"><a href="file:///D:/schol/ADR%20article%20ideas/Coinbase%20arb%20appeal%20case/Coinbase%20Summary%202023%20March%2018.docx#_ftnref13" name="_ftn13" style="mso-footnote-id: ftn13;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: "Times New Roman",serif; font-size: 10pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[13]</span></span><!--[endif]--></span></span></a> Bradford-Scott Data Corp. v. Physician Comput. Network, Inc., 128 F.3d 504, 505(7th Cir. 1997).<o:p></o:p></p>
</div>
</div><br /><p></p>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS, USA38.9716689 -95.2352501-11.509898859871377 -165.5477501 89.453236659871379 -24.922750100000002tag:blogger.com,1999:blog-4963357247720423207.post-36067579378174911212022-03-14T13:07:00.008-07:002022-03-14T13:09:00.949-07:00Arbitration of Cases Involving Sexual Assault or Sexual Harassment Claims<p> </p><p class="MsoNormal">On March 3, 2022, President Biden signed into law the <a href="https://www.congress.gov/bill/117th-congress/house-bill/4445/text">Ending
Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021</a> (the
“Act”) amending the Federal Arbitration Act (“FAA”) to allow employees alleging
claims of sexual assault and sexual harassment to bring such claims in federal,
state, or tribal court regardless of whether they signed an arbitration
agreement with their employer. The Act applies retroactively to arbitration agreements formed before the Act was passed, as it applies “with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.” </p>
<p class="MsoNormal">The Act may apply to claims other than sexual harassment or
assault claims if those other claims are brought by the employee in the same case
in which the employee brings the sexual harassment or assault claims. Section
402 of the Act governs not just sexual misconduct claims, but cases that relate
to such disputes. “[N]o predispute arbitration agreement or predispute
joint-action waiver shall be valid or enforceable with respect to a <i>case </i>which
. . . <i>relates to</i> the sexual assault <i>dispute</i> or the sexual
harassment <i>dispute</i>.” This suggests courts should not sever the sexual
misconduct claims, while sending other claims to arbitration. </p>
<p class="MsoNormal">The bill’s wording will encourage workers to add claims of
sexual assault to avoid having their cases sent to arbitration, said Ohio State
law professor Sarah Rudolph Cole, according to <a href="https://news.bloomberglaw.com/daily-labor-report/court-battles-loom-over-metoo-arbitration-bills-unclear-scope">Bloomberg
Law</a>.</p>
<p class="MsoNormal">The Act also bypasses <a href="http://stephenwarekukansasarbitration.blogspot.com/search/label/delegation%20clause">delegation
clauses</a>, and perhaps the <a href="http://stephenwarekukansasarbitration.blogspot.com/search/label/separability%20doctrine">separability
doctrine</a>, by providing “The applicability of this chapter to an agreement
to arbitrate and the validity and enforceability of an agreement to which this
chapter applies shall be determined by a court, rather than an arbitrator,
irrespective of whether the party resisting arbitration challenges the
arbitration agreement specifically or in conjunction with other terms of the
contract containing such agreement, and irrespective of whether the agreement purports
to delegate such determinations to an arbitrator.”</p><p class="MsoNormal"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-83621355084979358782021-11-28T12:54:00.003-08:002021-11-28T12:54:48.292-08:00Arbitration with Lawyers as Debtors and their Cases as Collateral (Litigation Finance)<p>Arbitration and Secured Transactions two of your favorite things? </p><p>No? Well as a lawyer, you might want to understand them, anyhow.</p><p>Litigation finance for plaintiffs' lawyers sometimes involves the lawyer granting the financier a security interest in the lawyer's cut of judgments and settlements the lawyer's cases win. The contracts can be tricky, though. For instance, a <a href="https://www.bloomberglaw.com/bloomberglawnews/exp/eyJjdHh0IjoiQlVOVyIsImlkIjoiMDAwMDAxN2MtY2E0ZS1kOTFhLWEzZmUtY2U0ZjRlOTYwMDAxIiwic2lnIjoiTEk1ZGFiVzlIaHJnaTduai9XL0ZFREowSUlrPSIsInRpbWUiOiIxNjM3MTc2Mjc4IiwidXVpZCI6IjJDMXZzcnVPRWt2eDJCOXJsS3N0aHc9PTZqYnZQODJxeVlMNjBWRXdBRUxTMFE9PSIsInYiOiIxIn0=?bwid=0000017c-ca4e-d91a-a3fe-ce4f4e960001&cti=LSCH&emc=bblnw_nl%3A1&et=NEWSLETTER&isAlert=false&item=body-link&qid=7203605&region=text-section&source=newsletter&uc=1320027947&udvType=Alert&usertype=External" target="_blank">report</a> for Bloomberg Law examined contracts with high interest rates, usually around 18% to 22%, that might be illegal (usurious) if the financier had recourse against the debtor/lawyer, but the contracts are non-recourse, which means the financer can only seek repayment from its collateral--the lawyer's cut of judgments and settlements.</p><p>However, in some of these contracts "a default converts the deal to a recourse loan—triggering repayment whether the underlying cases win or lose."</p><p>Moreover, some of these agreements may define the collateral very broadly. As Bloomberg writes, "Many of these contracts include a list of specific cases that it says are subject to the terms of the agreement. Yet many of the same contracts elsewhere appear to contradict that concept, saying the firm will provide 'all cases as collateral' including all fees the firm 'now is or may hereafter become entitled to receive.'” </p><p>Secured Transactions students will recognize this as an after-acquired property clause--routine in financing inventory and accounts.</p><p>And many of these contracts have arbitration clauses. Why would financiers want to bring these breach of contract (or "debt collection") actions in arbitration rather than litigation? After winning a judgment, they'll still have to go to court to confirm and enforce the judgment.</p>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS, USA38.9716689 -95.235250110.661433015197577 -130.39150278220902 67.281904784802421 -60.078997417790987tag:blogger.com,1999:blog-4963357247720423207.post-58149704309086026632021-08-17T09:58:00.003-07:002021-08-17T09:58:56.819-07:00Rules for Mass Individual Arbitrations<p> Arbitration agreements precluding class actions or classwide arbitrations have become common since the Supreme Court's <a href="https://www.scotusblog.com/case-files/cases/att-mobility-v-concepcion/" target="_blank">Concepcion</a> case. This has led some enterprising plaintiffs' lawyers to file many virtually identical arbitration cases on behalf of a group of consumers or employees.</p><p>The American Arbitration Association now has <a href="https://www.adr.org/consumer/multiple-case-filing" target="_blank">rules</a> to address such multiple case filings.</p><p>The International Institute for Conflict Prevention & Resolution (CPR) also has <a href="https://www.cpradr.org/resource-center/rules/pdfs/ERMCP-2021.pdf" target="_blank">rules</a> for such mass employment claims.</p>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS, USA38.9716689 -95.235250110.661435063821152 -130.3915001 67.281902736178836 -60.0790001tag:blogger.com,1999:blog-4963357247720423207.post-920032135388937682020-10-16T12:40:00.003-07:002020-10-17T15:44:37.556-07:00Arbitration and Replevin in Secured Credit Agreements<div>Security agreements--in which Debtor grants Creditor a security interest in goods as collateral--often include arbitration clauses, which can lead to interesting clashes between arbitration and the important creditor's remedy of replevin. When Debtor defaults, Creditor can get a court to issue a Writ of Replevin instructing the sheriff to take the collateral from Debtor and give possession of it to Creditor so Creditor may then hold a foreclosure sale of it. Suppose though, that Debtor appears in court and argues that the court may not issue a writ of replevin because the security agreement requires arbitration of disputes and Debtor asserts the existence of a dispute with Creditor--such as a dispute about the amount of money Debtor owes or whether Creditor is acting in a commercially reasonable manner.</div><div><br /></div><div>Creditors typically want a writ of replevin quickly and will not want such a writ delayed by having to arbitrate something first. So Creditor may rely on an old case like Lease Plan Fleet Corp. v. Johnson Transp., Inc., 67 Misc. 2d 822, 823, 324 N.Y.S.2d 928, 929–30 (Sup. Ct. 1971), which stated: “After the vehicles are replevied the replevin action may be stayed pending the determination of the arbitrator. It has been held that an agreement to arbitrate will not preclude a party to the agreement from obtaining a warrant of attachment. Similarly, the agreement to arbitrate should not preclude the petitioner from replevying the leased vehicles pursuant to CPLR 7102.”</div><div><br /></div><div>Or Creditor may have drafted the security agreement to carve-out replevin actions from the agreement to arbitrate. For instance the following clause might be interpreted to include not just Creditor's self-help repossession, but also a replevin action:</div><div><br /></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px;"><div style="text-align: left;">“Dispute” does not include any repossession of the Vehicle upon Your default and any exercise of the power of sale of the Vehicle under this Contract or any individual action by You to prevent Us from using any such remedy, so long as such individual action does not involve a request for monetary relief of any kind. </div></blockquote><div><br /></div><div>Gillette v. Serv. Intelligence LLC, No. 19-C-275, 2019 WL 5268570, at *1 (E.D. Wis. Oct. 17, 2019). </div><div><br /></div><div>Such a carve-out was enforced in Hamilton v. Ford Motor Credit Co., 99 Ark.App. 124 (Ct. App.</div><div> 2007), which affirmed a trial court's grant of replevin and denial of the debtor's motion to compel arbitration:</div><div><br /></div><blockquote style="border: none; margin: 0px 0px 0px 40px; padding: 0px; text-align: left;"><div><div>The trial court did not err when it denied the Hamiltons’ request to arbitrate the issue of replevin. This is true because the arbitration clause specifically, and unambiguously, provides that FMC does not give up the ‘‘[r]ight to enforce the security interest in the vehicle, whether by repossession or through a court of law.’’ In its replevin request, FMC is simply enforcing its security interest in the vehicle by seeking to repossess the vehicle.</div></div></blockquote><div><br /></div><div>But even if the arbitration agreement carves out replevin actions, Debtor may still be able to prevent a writ of replevin until arbitration occurs. That is because many creditors--perhaps unknowingly--draft arbitration agreements sending to arbitrators the question whether an arbitrable dispute exists. Creditors do this when they agree to arbitrate under the <a href="https://www.adr.org/Rules" target="_blank">Commercial Rules</a> of the American Arbitration Association or similar rules of <a href="https://www.jamsadr.com/rules-comprehensive-arbitration/" target="_blank">JAMS</a>. </div><div> </div><div><div>See, e.g., Contec Corp. v. Remote Solution, Co., 398 F.3d 205, 208 (2d Cir.2005) (“[W]hen . . . parties explicitly incorporate rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties’ intent to delegate such issues to an arbitrator.”); Citifinancial, Inc. v. Newton, 359 F.Supp.2d 545, 549–52 (S.D.Miss.2005) (holding that by agreeing to be bound by procedural rules of AAA, including rule giving arbitrator power to rule on his or her own jurisdiction, defendant agreed to arbitrate questions of jurisdiction before arbitrator); Sleeper Farms v. Agway, Inc., 211 F.Supp.2d 197, 200–03 (D.Me.2002)(since the AAA rules constitute “a clear and unmistakable delegation of scope-determining authority to an arbitrator,” the court “refers this dispute” to the arbitrator “to determine * * * what issues * * * are covered by the arbitration clause.”)</div><div><br /></div><div>See also JAMS Comprehensive Arbitration Rules and Procedures, Rule 11(c) (“Jurisdictional and arbitrability disputes, including disputes over the formation, existence, validity, interpretation or scope of the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration, shall be submitted to and ruled on by the Arbitrator. The Arbitrator has the authority to determine jurisdiction and arbitrability issues as a preliminary matter.”), available at http://www.jamsadr.com/rules-comprehensive-arbitration/#Rule 11; Monex Deposit Co. v. Gilliam, 616 F.Supp.2d 1023, 1025 (C.D.Cal.2009) (granting motion to compel arbitration and noting that agreement “incorporates JAMS Rules providing that the arbitrator decides scope and validity disputes with respect to particular claims.”); Greenspan v. Ladt, LLC, 111 Cal.Rptr.3d 468, 494–95 (Ct.App.2010)(“LADT interprets the concluding language of Rule 11(c) to mean the arbitrator makes an initial decision on arbitrability, and, later, the courts independently make the final decision. Not so. For one thing, LADT’s interpretation would conflict with JAMS Rule 11(a), which provides that “[t]he resolution of the issue by the Arbitrator shall be final.” * * * [T]he arbitrator decides arbitrability issues at the outset, and his decision is final.”)</div></div><div><div><br /></div><div>These holdings are perhaps strengthened by the Supreme Court's unanimous 2019 opinion in <a href="https://www.supremecourt.gov/opinions/18pdf/17-1272_7l48.pdf" target="_blank">Henry Schein, Inc. v. Archer & White Sales, Inc.</a>, which held that if an arbitration agreement (or the rules it incorporates) sends to arbitrators (rather than judges) the issue of which disputes the parties agreed to arbitrate, then a court cannot refuse to enforce that agreement by finding "wholly groundless" the argument that the particular dispute is covered by the arbitration agreement.</div><div><br /></div><div>Thanks to terrific Secured Transactions <a href="https://www.wklegaledu.com/lopucki-sectransactions9" target="_blank">casebook</a> authors <a href="https://law.ucla.edu/faculty/faculty-profiles/lynn-m-lopucki" target="_blank">Lynn LoPucki</a> and <a href="https://law.illinois.edu/faculty-research/faculty-profiles/robert-m-lawless/" target="_blank">Bob Lawless</a> for getting me to think about these issues, on which my thoughts are still evolving.</div></div><div><div><br /></div><div><br /></div><div> </div></div>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000001110.658252863821154 -130.52926760000003 67.278720536178838 -60.216767600000011tag:blogger.com,1999:blog-4963357247720423207.post-47726453179432408232020-07-05T11:43:00.000-07:002020-07-05T11:43:08.761-07:00Supreme Court of Canada Refuses to Enforce Uber Contract Requiring Arbitration in Holland<br />
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<span style="background: white; color: #201f1e; font-family: "Times New Roman", serif;">A Canadian Uber driver, Heller,
brought a <a href="https://www.canlii.org/en/on/onsc/doc/2018/2018onsc718/2018onsc718.html#_ftn38">class
action</a> against Uber, actually several Uber entities, alleging violations of
Canada’s </span><a href="https://www.canlii.org/en/on/laws/stat/so-2000-c-41/latest/so-2000-c-41.html"><span style="background: white; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Employment Standards Act</span></a><span style="background: white; color: #201f1e; font-family: "Times New Roman", serif;">. According to the motion judge in the </span><span style="background: white; font-family: "Times New Roman", serif;">Ontario Superior Court
of Justice</span><span style="background: white; color: #201f1e; font-family: "Times New Roman", serif;">, Uber “[d]rivers in Ontario
do not enter into contracts with Uber Technologies Inc. [incorporated in
Delaware] or Uber Canada Inc. The Drivers rather create an internet account and
a contractual relationship with Uber B.V. and with Rasier Operations B.V. and,
or Uber Portier B.V.” Each of those Uber entities is incorporated under the
laws of the Netherlands. Uber’s form contract for drivers says it shall be governed
by the laws of the Netherlands, and that any dispute not resolved in mediation:</span></div>
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<span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">“shall
be exclusively and finally resolved by arbitration under the Rules of
Arbitration of the International Chamber of Commerce (“ICC Arbitration Rules”)
…. The Place of the arbitration shall be Amsterdam, The Netherlands.”<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">The motion judge granted Uber’s
motion to stay the class proceedings in favor of arbitration in the Netherlands,
relying on Canada’s </span><a href="https://www.canlii.org/en/on/laws/stat/so-2017-c-2-sch-5/latest/so-2017-c-2-sch-5.html"><i><span style="background: white; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">International Commercial Arbitration Act</span></i></a><span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">, which implements the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (<a href="http://www.newyorkconvention.org/english">New York Convention</a>). <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">The </span><span style="background: white; color: black; font-family: "Times New Roman",serif; mso-color-alt: windowtext; mso-fareast-font-family: "Times New Roman";">Court of Appeal of
Ontario</span><span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";"> <a href="https://www.canlii.org/en/on/onca/doc/2019/2019onca1/2019onca1.html">set
aside</a> the lower court’s order, and allowed Heller to litigate, rather than
arbitrate, the class action. The Court of Appeal emphasized that the ICC’s “up-front
administrative/filing-related costs for a driver to participate in the
mediation-arbitration process in the Netherlands prescribed in the Arbitration
Clause is US$14,500. As an UberEATS driver, the appellant earns about $20,800-$31,200
per year, before taxes and expenses.” The Court of Appeal held that the
arbitration agreement “constitutes a contracting out of the </span><a href="https://www.canlii.org/en/on/laws/stat/so-2000-c-41/latest/so-2000-c-41.html"><span style="background: white; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Employment Standards Act</span></a><span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";"> “ which permits a driver to make a complaint the Ministry of
Labour regarding the actions of Uber and their possible violation of the
requirements of the ESA.” The arbitration agreement “deprives [the driver] of
the right to have an ESO investigate his complaint.” The Court of Appeal noted
that the driver “has not, in fact, chosen to make a complaint under the ESA but
rather has commenced this proposed class action”, but held that this did not
under the court’s conclusion that the arbitration agreement impermissibly
contracted out of the ESA.<o:p></o:p></span></div>
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<span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">As an independent ground for denying
enforcement to the </span><span style="color: black; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">arbitration clause, the
Court of Appeal held the clause unconscionable.</span><span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">The </span><a href="https://www.canlii.org/en/ca/scc/doc/2020/2020scc16/2020scc16.html"><span style="background: white; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Supreme Court of Canada</span></a><span style="background: white; color: #201f1e; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";"> agreed with the Court of Appeal that the </span><span style="color: black; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">arbitration clause is unenforceable: “This is an arbitration
agreement that makes it impossible for one party to arbitrate. It is a classic
case of unconscionability.” The Supreme Court’s opinion contains a lengthy
discussion of the unconscionability doctrine, featuring some differences of opinion
among the justices. <o:p></o:p></span></div>
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<span style="color: black; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Earlier Canadian cases include </span><a href="https://www.canlii.org/en/ca/scc/doc/2007/2007scc34/2007scc34.html"><i><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Dell
Computer Corp. v. Union des consommateurs</span></i><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">, [2007] 2
S.C.R. 801</span></a><span style="color: black; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">, and </span><a href="https://www.canlii.org/en/ca/scc/doc/2011/2011scc15/2011scc15.html"><i><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">Seidel
v. TELUS Communications Inc.</span></i><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">, [2011] 1 S.C.R. 531</span></a><span style="color: black; font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";">.<span style="mso-spacerun: yes;"> </span></span><span style="font-family: "Times New Roman",serif; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000001138.7710052 -95.6957411 39.1659682 -95.050294100000016tag:blogger.com,1999:blog-4963357247720423207.post-54482183073660194642020-06-16T14:42:00.000-07:002020-06-16T14:42:22.646-07:00Supreme Court Permits Non-signatory to Enforce International Commercial Arbitration Agreement<br />
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The US Supreme Court recently permitted a party that did
not sign an arbitration agreement to enforce it in<i> </i><a href="https://www.supremecourt.gov/opinions/19pdf/18-1048_8ok0.pdf"><i>GE
Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC</i></a>.</div>
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With contracts including arbitration clauses, ThyssenKrupp
hired F.L. Industries to perform construction on ThyssenKrupp’s Alabama steel
plant. F.L. Industries then subcontracted with GE Energy to provide motors for
the project. Later, ThyssenKrupp sold the plant to Outokumpu Stainless USA, LLC.
Outokumpu alleged breach by GE Energy because the motors failed. Outokumpu and
its insurers sued GE Energy in Alabama state court.<o:p></o:p></div>
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GE Energy removed the case to federal court under 9
U.S.C. § 205, which allows removal if a case “relates to an arbitration
agreement . . . falling under the Convention” on the Recognition and
Enforcement of Foreign Arbitral Awards, aka the New York Convention.<o:p></o:p></div>
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GE Energy then moved to dismiss the case and compel
arbitration, relying on the arbitration clauses in ThyssenKrupp’s contracts
with F. L. Industries. The district court granted the motion, but the Eleventh
Circuit reversed, holding that the New York Convention only requires courts to
enforce an arbitration agreement if asked to do so by the parties that actually
signed the agreement, but GE Energy (a nonsignatory) was not such a party. The
Eleventh Circuit stated: “GE Energy is undeniably not a signatory to the
Contracts . . . [p]rivate parties<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">—here Outokumpu and Fives—cannot contract around
the Convention’s requirement that the parties <i>actually sign </i>an agreement
to arbitrate their disputes in order to compel arbitration. Accordingly, we
hold that, to compel arbitration, the Convention requires that the arbitration
agreement be signed by the parties before the Court or their privities.” 902
F.3d 1316, 1326 (11th Cir. 2018) (citations omitted). </span><o:p></o:p></div>
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The US Supreme Court rejected the Eleventh Circuit’s interpretation
of the New York Convention, and unanimously held that the Convention does not conflict
with domestic equitable estoppel doctrines that sometimes permit the
enforcement of arbitration agreements by non-signatories. The Supreme
Court held that these domestic state-law principles apply to an international
arbitration agreement under the domestic (Chapter 1) portion of the Federal
Arbitration Act because Chapter 1 applies to actions that are governed by the
Convention as long as Chapter 1 does not conflict with the Convention. The
Court concluded that Chapter 1’s allowance of equitable estoppel did not
conflict with the Convention because the Convention is silent on enforcement by
a non-signatory. A wide variety of courts have interpreted FAA Chapter 1 to
allow enforcement of arbitration agreements through various state-law <span style="mso-spacerun: yes;"> </span>principles like “assumption, piercing the
corporate veil, alter ego . . .” In <i><a href="https://supreme.justia.com/cases/federal/us/556/624/">Arthur Andersen LLP
v. Carlisle</a></i>, the Supreme Court held Chapter 1 allows “a nonsignatory to
rely on state-law equitable estoppel doctrines to enforce an arbitration
agreement.” 556 U.S. 624, 631<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;">–</span>32 (2009). Equitable estoppel “allows
a nonsignatory to a written agreement containing an arbitration clause to
compel arbitration where a signatory to the written agreement must rely on the
terms of that agreement in asserting its claims against the non-signatory.” <o:p></o:p></div>
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Justice Thomas’s opinion for the Court in GE Energy
reasoned that the New York Convention’s silence on these doctrines for
non-signatories to enforce arbitration agreements is dispositive because
nothing in the Convention can be read to otherwise prohibit the application of these
domestic doctrines. The Court went on to find that nothing in the Convention
suggests that it prevents contracting states from applying domestic law that
permits non-signatories to enforce arbitration agreements in additional
circumstances. <o:p></o:p></div>
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The Supreme Court remanded the issue of whether GE Energy
could enforce the arbitration clauses under principles of equitable estoppel or
which body of law governs that interpretation to the Court of Appeals.<o:p></o:p></div>
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Further commentary on this <i>GE Energy Power </i>case is
available in <a href="https://www.natlawreview.com/article/scotus-resolves-circuit-court-split-whether-non-parties-can-use-equitable-estoppel">The
National Law Review</a><span class="MsoHyperlink"><span style="text-decoration: none; text-underline: none;">, </span></span><a href="https://www.americanbar.org/groups/public_education/publications/preview_home/volume/47/issue-4/article-7/">The
American Bar Association</a><span class="MsoHyperlink"><span style="text-decoration: none; text-underline: none;">, </span></span><a href="https://willamette.edu/law/resources/journals/wlo/scotuscg/2019/06/ge-energy-power-conversion-france-sas,-corp.,-v.-stainless-usa,-llc.,-et-al.html">Willamette
University College of Law</a><span class="MsoHyperlink"><span style="text-decoration: none; text-underline: none;">, </span></span><a href="https://www.jurist.org/news/2020/06/supreme-court-rules-non-signatories-can-enforce-arbitration-agreements/">Jurist</a><span class="MsoHyperlink"><span style="text-decoration: none; text-underline: none;">,</span></span>
<a href="https://www.jdsupra.com/legalnews/u-s-supreme-court-rules-that-equitable-74527/">JD
Supra</a>, and <a href="https://www.lexology.com/library/detail.aspx?g=d9718bfa-8230-42b9-a756-1b51f45334a0&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=SVAMC+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2020-06-15&utm_term=">Lexology</a>.
<o:p></o:p></div>
<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000001138.7710052 -95.6957411 39.1659682 -95.050294100000016tag:blogger.com,1999:blog-4963357247720423207.post-76051896471365013142020-02-12T14:56:00.000-08:002020-02-12T14:56:07.225-08:00Symposium on Labor and Employment Arbitration<div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiofoFV6dQvn3hQUSS5Y5AlhTHIHJgw6_BNQDHHYYqLoCfQdnJ5oKniEQnB69C0qWoj-e-6W4OE0l8Fkyak9FeRH4ETn0Kf_PzLcKSsUkdBpbez_ykxBJiv2v-sZ3xyA6FCJGkz9EQoJeU/s1600/Arbitration_symposium_2020_Antoine_Ware_Bales.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1067" data-original-width="1600" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiofoFV6dQvn3hQUSS5Y5AlhTHIHJgw6_BNQDHHYYqLoCfQdnJ5oKniEQnB69C0qWoj-e-6W4OE0l8Fkyak9FeRH4ETn0Kf_PzLcKSsUkdBpbez_ykxBJiv2v-sZ3xyA6FCJGkz9EQoJeU/s320/Arbitration_symposium_2020_Antoine_Ware_Bales.jpg" width="320" /></a></div>
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Jaime Fell and everyone at #PennStateLaw organized this symposium as well as any I’ve seen. I learned a ton from Mark Gough’s data, and the abilities of each of the other speakers--Jill Gross, Rick Bales, and Ted St. Antoine—to draw on their experiences in the trenches of arbitration as well as their broader perspectives as prolific scholars.<br />
<br />
9:30 AM — Professor <a href="https://www.law.umich.edu/FacultyBio/Pages/FacultyBio.aspx?FacID=tstanton" target="_blank">Theodore J. St. Antoine</a>'s Presentation on "Making Arbitration a Fair and Accessible Remedial Process"<br />
<br />
10:00 AM — Professor Stephen Ware's Presentation on "Labor Arbitration's Differences"<br />
<br />
10:30 AM — Professor <a href="https://law.onu.edu/faculty_staff/profiles/richard_bales" target="_blank">Richard Bales</a>' Presentation on "What Makes a 'Reasoned' Arbitration Award?"<br />
<br />
11:15 AM — Lunch<br />
<br />
12:00 PM — Professor <a href="https://law.pace.edu/faculty/jill-gross" target="_blank">Jill I. Gross</a>' Presentation on "The Final Frontier: Are Class Action Waivers in Arbitration Clauses in Broker-Dealer Employment Agreements Enforceable?"<br />
<br />
12:30 PM — Professor <a href="https://ler.la.psu.edu/people/mdg228" target="_blank">Mark Gough</a>'s Presentation on "Employment Disputes in Mandatory Arbitration and Civil Litigation: Comparing Outcomes and Stakeholder Perceptions."Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Carlisle, PA 17013, USA40.2010241 -77.20027449999997840.152512099999996 -77.280955499999976 40.2495361 -77.119593499999979tag:blogger.com,1999:blog-4963357247720423207.post-1777603307827386302020-01-21T18:25:00.001-08:002020-01-21T18:25:46.787-08:00My New Arbitration BookHot off the presses, a thoroughly updated Arbitration casebook by <a href="http://law.ku.edu/faculty/stephen-ware" target="_blank">Stephen Ware</a> and <a href="https://law.utexas.edu/faculty/alan-s-rau/" target="_blank">Alan Scott Rau</a>:<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0RVpaKPKLr2ULETKLqvWuhQqkgN2KPwkNYWdSH9w9M3lZ_yc6GeiS7aFrp4nOYOBzx74wWKyTkvbnUnRwhDQfPIZsJu50Ue7F8UVWdoy-CVY2aOBj8IUeSGrZP-Br9KM9QAzb41H_ql4/s1600/Stephen+Ware+%2526+Alan+Rau+-+Arbitration+Casebook+4th+ed+2020.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1200" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0RVpaKPKLr2ULETKLqvWuhQqkgN2KPwkNYWdSH9w9M3lZ_yc6GeiS7aFrp4nOYOBzx74wWKyTkvbnUnRwhDQfPIZsJu50Ue7F8UVWdoy-CVY2aOBj8IUeSGrZP-Br9KM9QAzb41H_ql4/s320/Stephen+Ware+%2526+Alan+Rau+-+Arbitration+Casebook+4th+ed+2020.jpg" width="240" /></a></div>
<br />
Available from <a href="https://www.amazon.com/Arbitration-Coursebook-Stephen-J-Ware/dp/1683283503/ref=sr_1_1?keywords=ware+%26+rau+arbitration&qid=1579652928&sr=8-1&fbclid=IwAR0th43rEpxYCK0R5NaFlPYKKfF7RaFSX99JX6ti9pvmvwJ8ZzFVQkUGykM" target="_blank">Amazon</a>, this book discusses arbitration law and practice clearly and reliably, with engaging context ranging from partisan political battles to a Justin Bieber tweet. Balanced and comprehensive, the book covers major types of arbitration in the United States―commercial (including securities and trade associations), labor, employment, consumer, insurance, medical, and religious―as well as important types of international arbitration, such as commercial, maritime, investment, and sports. A carefully constructed teaching tool, Arbitration intersperses contemporary disputes―involving Uber’s app, Donald Trump’s confidentiality agreement, Jay-Z’s impact on arbitrator diversity, and the relationship between gender and biology―among:<br />
<br />
<ul>
<li>All the major Supreme Court cases from 1953 through 2019;</li>
<li>Current case law on evolving topics, such as delegation clauses, contracts formed by clicking links on cell phones, and substitutes for the class actions limited by Concepcion;</li>
<li>The full text of the Federal Arbitration Act, New York Convention, and Panama Convention;</li>
<li>Chapters divided into short, coherent sections suitable for a single class session; and</li>
<li>“Questions to Review and Synthesize” after the reading for each class session.</li>
</ul>
Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031tag:blogger.com,1999:blog-4963357247720423207.post-39680177508553842322019-12-22T16:45:00.001-08:002019-12-22T16:45:19.819-08:00PBS Video on Employment Arbitration<br />
This PBS <a href="https://www.pbs.org/video/retro-report-on-pbs-season-1-episode-1-clip-how-forced-arbitration-tipped-scales/" target="_blank">documentary</a> provocatively entitled "How Forced Arbitration Tipped the Scales" traces employment arbitration controversies from Wall Street in the 1990's to the #MeToo era. Appearances by lawyers Cliff Palefsky and Alan Kaplinsky.Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-61505403148346200592019-12-03T03:18:00.000-08:002019-12-03T03:18:42.110-08:00Harvard Law Seminar on "Forced Arbitration" The instructor, <a href="http://guptawessler.com/people/deepak-gupta/" target="_blank">Deepak Gupta</a>, is a principal at Gupta Wessler PLLC, an appellate boutique in Washington, DC, and a former Senior Counsel at the Consumer Financial Protection Bureau. "He has represented consumers, workers, and small merchants in key cases on forced arbitration before the U.S. Supreme Court, including <a href="https://www.supremecourt.gov/opinions/10pdf/09-893.pdf" target="_blank">AT&T Mobility v. Concepcion</a> and American Express v. Italian Colors" according to the Harvard course <a href="https://hls.harvard.edu/academics/curriculum/catalog/default.aspx?o=75350&utm_source=Master+Audience&utm_campaign=7be682f184-EMAIL_CAMPAIGN_2019_12_03_03_45&utm_medium=email&utm_term=0_2701d78df1-7be682f184-222123353" target="_blank">description</a>.<br />
<br />
For my arguments against the phrase "forced arbitration", see p.43 of <a href="https://www.hnlr.org/wp-content/uploads/sites/22/HNLR-Ware.pdf" target="_blank">The Centrist Case for Enforcing Adhesive Arbitration Agreements</a>, 23 Harvard Negotiation Law Review 29 (2017)Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031tag:blogger.com,1999:blog-4963357247720423207.post-7263289442265968422019-09-26T06:01:00.002-07:002019-09-26T06:01:47.779-07:00House Passes Bill to Ban Consumer and Employment Pre-Dispute Arbitration Agreements<br />
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The U.S. House of Representatives <a href="https://www.washingtonpost.com/politics/courts_law/house-votes-to-end-forced-arbitration-in-business-disputes/2019/09/20/0ffa66e0-dbbf-11e9-a1a5-162b8a9c9ca2_story.html" target="_blank">approved</a> the Forced Arbitration Injustice
Repeal (FAIR) Act, 225-186, last Friday, September 20, 2019. The FAIR Act
would amend the Federal Arbitration Act to state that “no predispute
arbitration agreement or predispute joint-action waiver shall be valid or
enforceable with respect to an employment dispute, consumer dispute, or civil
rights dispute.” In effect, this act bans adhesive arbitration agreements in many employment and consumer transactions. The act would also invalidate similar current arbitration agreements for
disputes that arise after the law goes into effect. <o:p></o:p></div>
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The White House has issued a
<a href="https://www.fastcompany.com/90407170/fair-act-house-votes-to-end-forced-arbitration-and-allow-you-to-actually-sue-companies" target="_blank">statement opposing</a> the passage of the FAIR Act. Alan Kaplinsky <a href="https://www.consumerfinancemonitor.com/2019/09/23/house-passes-bill-to-ban-mandatory-arbitration-agreements-white-house-threatens-veto/" target="_blank">writes</a> "The Senate currently consists of 51 Republicans, 47 Democrats, and 2 independents who caucus with the Democrats. Given that there are at least two Republican Senators who would likely support the FAIR Act (Senators Graham and Kennedy), there could be enough votes in the Senate to pass the FAIR Act. For that reason, it is comforting to know that President Trump would veto the FAIR Act. Should he do so, it is very doubtful that there would be enough votes in the Senate to override the veto."</div>
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<o:p>Opposition to the FAIR Act by <a href="https://www.iwf.org/about/jennifer-braceras" target="_blank">Jennifer Braceras</a> in </o:p><a href="https://thehill.com/opinion/judiciary/462850-ending-arbitration-might-help-trial-lawyers-but-wont-help-employees" target="_blank">The Hill</a>. Support for it in <a href="https://www.huffpost.com/entry/house-votes-to-ban-forced-arbitration_n_5d83dbb2e4b070d468c995e5" target="_blank">HuffPo</a> and <a href="https://www.vox.com/identities/2019/9/20/20872195/forced-mandatory-arbitration-bill-fair-act" target="_blank">Vox</a></div>
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<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031tag:blogger.com,1999:blog-4963357247720423207.post-69505432412569187092019-08-04T08:10:00.001-07:002019-08-04T08:10:54.444-07:00Employee Remaining on the Job is Assent to Arbitration Agreement<br />
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The California Court of Appeals in <a href="https://www.manatt.com/Manatt/media/Documents/Articles/Diaz-v-Sohnen-Enterprises.pdf"><i>Diaz v. Sohnen Enterprises, Inc</i></a><i>.</i> overturned a district court decision
denying a motion to compel arbitration agreement.</div>
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<o:p></o:p></div>
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Sohnen Enterprises held a meeting at which it informed
employees that it was introducing a new arbitration agreement. Sohnen told
employees that if they chose not to sign the new agreement but continued to
work then that would mean they accepted the arbitration agreement. Erika Diaz
refused to sign the arbitration agreement but continued to work for Sohnen from
December 2 to 23. She then had her lawyer send her employer a letter saying
that she planned to keep working but did not accept the arbitration agreement.
After bringing a workplace discrimination case, Diaz challenged the employer’s motion
to compel arguing that she never assented to the new agreement. The court of
appeals, over a dissent, disagreed saying that her decision to continue work
was an implied assent to the agreement. By the time her lawyer sent a letter
Diaz was already bound. <o:p></o:p></div>
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<div class="MsoNormal">
<a href="https://www.natlawreview.com/article/employee-must-arbitrate-employment-dispute-once-employer-declares-continued">National
Law Review</a> and <a href="https://www.manatt.com/Insights/Newsletters/Employment-Law/Continued-Employment-Means-Arbitration-Acceptance">Manatt</a>
discuss the case. <o:p></o:p></div>
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<br /><br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS, USA38.9716689 -95.2352501000000338.7741544 -95.557973600000025 39.169183399999994 -94.912526600000035tag:blogger.com,1999:blog-4963357247720423207.post-18490571617230831632019-07-23T19:12:00.000-07:002019-07-23T19:12:07.778-07:00Delegation Clauses in Arbitration Agreements<br />
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<o:p>The Missouri Supreme Court analyzed delegation clauses in </o:p><a href="https://cases.justia.com/missouri/supreme-court/2019-sc96985.pdf?ts=1558461763">State
ex rel. Newberry v. Jackson</a>, 2019 WL 2181859 (May 21, 2019). Employees bringing a workplace
discrimination claim challenged the delegation provision in an arbitration
agreement contained in an employment contract. The employment contact at issue here incorporated
the AAA rules, which delegate decisions about enforceability to the arbitrator. The US Supreme Court's decision in <i>Rent-A-Center</i> held that delegation clauses are severable from arbitration clauses much as Prima Paint long ago held that an arbitration agreement is a
separate component of a contract and, therefore, to avoid a motion to compel a
party needs to challenge the arbitration agreement and not just contract as a
whole. The Missouri Supreme Court says that a delegation clause in an
arbitration agreement is similar and must be specifically challenged to avoid
delegation to the arbitrator. The Court also found that no such specific
challenge was made in this case. </div>
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<o:p></o:p></div>
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<a href="https://www.arbitrationnation.com/missouri-reminds-us-just-how-small-the-bullseye-is-for-challenging-a-delegation-clause/#page=1">Arbitration
Nation</a> goes into more depth on the decision and the issue of
separability/delegation as a whole. <o:p></o:p></div>
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<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031tag:blogger.com,1999:blog-4963357247720423207.post-81082562671232578602019-06-08T14:19:00.000-07:002019-06-08T14:19:53.862-07:00Family Law Arbitration Around the World<a href="https://academic.oup.com/lawfam/article/30/1/1/2413045" target="_blank">It’s Arbitration, But Not As We Know It: Reflections on Family Law Dispute Resolution</a>, by<br />
<a href="https://www.cardiff.ac.uk/people/view/478878-kennett-wendy" target="_blank">Wendy Kennett</a>, compares family law arbitration in many different countries.<br />
<br />
H/t to Professor <a href="http://law.missouri.edu/about/people/strong/" target="_blank">S.I. Strong</a>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com1tag:blogger.com,1999:blog-4963357247720423207.post-61761345088178332562019-05-21T19:08:00.002-07:002019-05-21T19:08:52.261-07:00Statutes of Limitation (and Repose) May not Apply in Arbitration"A statute of repose, as opposed to a statute of limitation, with a few exceptions, means that no matter when the claimed defect is 'discovered,' the claim is barred if not brought within a specific period of time after substantial completion", <a href="https://www.jdsupra.com/legalnews/say-what-statutes-of-repose-limitation-59531/" target="_blank">explain </a>lawyers with Bradley Arant. In contrast, statutes of limitations generally don't start running until the plaintiff discovered, or should have discovered, the facts supporting the claim.<br />
<br />
The lawyers <a href="https://www.jdsupra.com/legalnews/say-what-statutes-of-repose-limitation-59531/" target="_blank">say</a> a recent arbitration panel ruled that Tennessee's four-year statute of repose did not apply in arbitration, and that other arbitrators and courts have ruled similarly about various states time bars.Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-87952767083316506172019-05-21T18:51:00.001-07:002019-05-21T18:51:51.870-07:00Did Arbitration Save Uber $80 Million?Did Uber's payout to its drivers fall by $80 million due to an enforceable arbitration clause? That's the impression given by <a href="https://www.latimes.com/la-bio-johana-bhuiyan-staff.html#nt=byline" target="_blank">Johana Bhuiyan</a> in the <a href="https://www.latimes.com/business/la-fi-uber-drivers-settlement-20190312-story.html" target="_blank">LA Times</a>:<br />
<br />
<span style="font-size: x-small;">"Uber agreed to pay $20 million to settle lawsuits challenging the classification of drivers as independent contractors, rather than employees owed the benefits of traditional employment.</span><br />
<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">The payout is a far cry from the $100 million Uber had agreed to pay to settle the suit in 2016, after a San Francisco judge granted 385,000 drivers in California and Massachusetts class-action status. Eventually, a judge determined $100 million was not sufficient given the original class size.</span><br />
<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">But an appeals court ruling found Uber’s mandatory arbitration agreements — which obligate workers to settle their claims with the company one-on-one — were largely valid and enforceable.</span><br />
<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">That ruling, and Uber’s decision in May to maintain its policy of upholding its arbitration clause in cases unrelated to sexual misconduct, ultimately reduced the class to about 13,600 drivers, who had either opted not to agree to mandatory arbitration or drove for Uber before the company implemented such a policy."</span><br />
<br />
Shannon Liss-Riordan, the plaintiffs' lawyer representing drivers, is <a href="https://www.wbur.org/news/2019/05/20/shannon-liss-riordan-senate-challenge-ed-markey-2020-primary" target="_blank">running</a> for U.S. Senate in a primary challenge to Massachusetts Democrat Ed Markey.<br />
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Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-41255171813784010862019-05-21T18:32:00.001-07:002019-05-21T18:32:21.078-07:00Consumer Arbitration Radvocate and Data on AAA Consumer Arbitrations<a href="https://myradvocate.com/" target="_blank">Radvocate</a> says it "is not a lawyer or a law firm. Radvocate is a service that automates companies' dispute resolution processes to help you bring consumer arbitrations." Alison Frankel at Reuters <a href="https://www.reuters.com/article/us-otc-arbitrationdata/consumer-arbitration-is-on-the-rise-but-numbers-are-still-puny-idUSKCN1S62NI" target="_blank">describes</a> Radvocate as a "legal tech startup" while citing its analysis of American Arb. Ass'n (AAA) data on the number of consumer arbitrations.<br />
<br />
Frankel <a href="https://www.reuters.com/article/us-otc-arbitrationdata/consumer-arbitration-is-on-the-rise-but-numbers-are-still-puny-idUSKCN1S62NI" target="_blank">writes</a> that a "mere 895 consumer arbitrations were resolved by AAA in the first quarter of 2019" but "That’s the third-highest quarterly number since 2016." Frankel continues: "the company that resolved the most arbitration claims in the first quarter of 2019 was AT&T, which, together with its subsidiary DirecTV, completed 111 consumer arbitrations in the timeframe. Citibank resolved 44 cases; Credit One, 40; and Comcast, 36."<br />
<br />
HT <a href="https://www.linkedin.com/in/thomas-c-witherspoon-03514a45/" target="_blank">Tom Witherspoon</a><br />
<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-34274396545378264082019-05-21T17:55:00.002-07:002019-05-21T17:55:44.522-07:00Partisan Divide in SCT Arbitration CasesThe partisan divide in Supreme Court arbitration cases continued this spring with <a href="http://bit.ly/2GxwFbC" target="_blank">Lamps Plus Inc. v. Varela</a>, No. 17-988 (April 24), in which the 5 justices appointed by Republican presidents comprised the majority and the 4 justices appointed by Democratic presidents dissented. When the SCT agreed to take the case last year, <a href="http://stephenwarekukansasarbitration.blogspot.com/2018/07/supreme-court-to-decide-class.html" target="_blank">I wrote</a> "The US Chamber of Commerce wants the Ninth Circuit reversed... Public Citizen predictably opposes the Chamber on this case."<br />
<br />
The Ninth Circuit had affirmed interpreting the arbitration agreement to authorize class arbitration, by distinguishing Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 55 U.S. 662 (2010), which held that an agreement's silence on class arbitration was not enough to authorize it. In Lamps Plus, the Ninth Circuit found agreement to class arbitration in contract language stating that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings” and a description of the substantive claims subject to arbitration.<br />
<br />
But Chief Justice Roberts' majority opinion ruled this contract language merely ambiguous and thus “cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration.”<br />
<br />
Justice Ginsburg's dissent said “mandatory individual arbitration continues to thwart ‘effective access to justice’ for those encountering diverse violations of their legal rights.”<br />
<br />
Interestingly, Justice Thomas, who ordinarily opposes FAA preemption of state law, wrote a separate concurrence nevertheless joining his fellow conservatives in finding such preemption here.<br />
<br />
Lots of good commentary on the case linked by Edith Roberts at <a href="https://www.scotusblog.com/2019/04/thursday-round-up-473/" target="_blank">SCOTUSblog</a><br />
<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-51684713828462567422019-04-25T12:35:00.002-07:002019-04-25T12:35:27.145-07:00American Arbitration Association Contrasted with Trade Association ArbitrationCommercial arbitration's different types -- such as the contrast between the AAA and trade associations -- are discussed in my recent article: Stephen J. Ware, <a href="https://scholarship.law.missouri.edu/jdr/vol2019/iss1/5/" target="_blank">Private Ordering and Commercial Arbitration: Lasting Lessons from Mentschikoff</a>, 2019 J. Disp. Resol. (2019).<br />
<br />
It revisits the classic work of Soia Mentschikoff who detailed a<br />
thoroughgoing form of private ordering in trade association arbitration that<br />
privatizes all three of:<br />
<br />
(1) lawmaking (through arbitrators applying industry trade rules rather than<br />
governmental law, and through the precedential effect of arbitrators’ reasoned<br />
awards);<br />
(2) adjudication (through arbitration procedures quite different from courts’<br />
rules of procedure and evidence); and<br />
(3) enforcement of the adjudicator’s decision (through private sanctions<br />
culminating in expulsion from the association).<br />
<br />
By contrast, she shows that the general commercial arbitration typical of the<br />
AAA often includes only the second of these three forms of privatization.<br />
<br />
A <a href="http://www.disputingblog.com/private-ordering-and-commercial-arbitration-lasting-lessons-from-mentschikoff/" target="_blank">summary</a> from Beth Graham at DisputingBlog.Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031tag:blogger.com,1999:blog-4963357247720423207.post-41039577323238095222019-04-08T15:38:00.001-07:002019-04-08T15:38:44.599-07:0011th Circuit Denies Motion to Compel Arbitration of Telephone Consumer Protection Act Claim<br />
<div class="MsoNormal">
In <span class="MsoHyperlink"><a href="http://media.ca11.uscourts.gov/opinions/unpub/files/201715343.pdf">Gamble
v. New England Auto Finance, Inc.</a></span> the Eleventh Circuit Court of
Appeals held that a loan agreement’s arbitration clause did not cover the
plaintiff’s Telephone Consumer Protection Act (TCPA) claim. Plaintiff Gamble and
New England Auto Finance, Inc. (“NEAF”) formed the auto loan agreement which
requires arbitration of disputes that “arise[] from or relate[] to this
Agreement or the Motor Vehicle securing this Agreement.” After the loan was
paid off, NEAF began sending Gamble text messages and persisted even after
Gamble requested NEAF stop, so Gamble brought a TCPA claim. <o:p></o:p></div>
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The Court refused to grant NEAF’s motion to compel
arbitration because “Gamble’s TCPA claim ...arises not from the Loan Agreement
or any breach of it, but from post-agreement conduct that allegedly violates a
separate, distinct federal law.” The Eleventh Circuit pointed out that Gamble
could bring a TCPA claim even if no agreement at all existed between Gamble and
NEAF. Since Gamble paid off the loan and the texts did not arise from or relate
to anything contained in the loan agreement the scope of the arbitration
provision did not include Gamble’s claim. <o:p></o:p></div>
<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0tag:blogger.com,1999:blog-4963357247720423207.post-77499670896934158422019-04-02T13:13:00.000-07:002019-04-02T13:13:38.452-07:00Today's #Arbitration Hearing before the Senate Judiciary Committee<br />
<a href="https://www.judiciary.senate.gov/meetings/arbitration-in-america" target="_blank">Video</a> of the hearing with the following witnesses:<br />
<br />
Mr. Kevin Ziober<br />
Navy Reservist<br />
Newport Beach , CA<br />
<br />
Professor Myriam Gilles<br />
Professor Of Law<br />
Benjamin N. Cardozo School Of Law<br />
Yeshiva University<br />
New York, NY<br />
<br />
Mr. Alan S. Kaplinsky<br />
Partner<br />
Ballard Spahr LLP<br />
Philadelphia , PA<br />
<br />
Mr. F. Paul Bland, Jr.<br />
Executive Director<br />
Public Justice<br />
Washington , DC<br />
<br />
Mr. Alan Carlson<br />
Italian Colors Restaurant<br />
Oakland , CA<br />
<br />
Mr. Victor E. Schwartz<br />
Co-Chair, Public Policy Practice Group<br />
Shook, Hardy, & Bacon LLP<br />
Washington , DC<br />
<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com0Lawrence, KS 66045, USA38.9499492 -95.265831838.9252532 -95.3061723 38.9746452 -95.2254913tag:blogger.com,1999:blog-4963357247720423207.post-65809247253386464972019-03-31T15:49:00.000-07:002019-03-31T15:49:32.700-07:00Kentucky Revives Enforceability of Employment ArbitrationKentucky's governor recently signed a <a href="https://www.jacksonlewis.com/publication/new-kentucky-law-employers-may-make-arbitration-mandatory-condition-employment-or-continued-employment" target="_blank">bill</a> enabling employers to require an employee or person seeking employment to execute an agreement for arbitration as a condition or precondition of employment. This legislation overrules the Kentucky Supreme Court decision in<span style="text-indent: 0.5in;"> </span><i style="text-indent: 0.5in;"><a href="https://law.justia.com/cases/kentucky/supreme-court/2018/2017-sc-000277-dg.html" target="_blank">Northern Kentucky Area Development District v. Danielle Snyder</a></i><span style="text-indent: 0.5in;"> which </span><span style="text-indent: 0.5in;">relied on a Kentucky statute forbidding any “employer
[from requiring] as a condition or precondition of employment that any employee
or person seeking employment waive, arbitrate, or otherwise diminish any
existing or future claim, right, or benefit to which the employee or person
seeking employment would otherwise be entitled.” KSA 336.700(2). </span><span style="text-indent: 0.5in;">The Kentucky Supreme Court ruled the Federal Arbitration Act (FAA)
did not preempt the Kentucky statute because, instead of targeting arbitration
specifically, the KSA 336.700(2) “is a law
that prohibits employers from firing or failing to hire on the condition that
the employee or prospective employee waive all existing rights that employee
would otherwise have against the employer.”</span>Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com1Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031tag:blogger.com,1999:blog-4963357247720423207.post-28056869244722187172019-03-17T13:33:00.001-07:002019-03-17T13:33:05.123-07:00Missouri Supreme Court Enforces Arbitration Agreement in At-Will Employment<br />
<div class="MsoNormal">
An at-will employee argued that his promise to arbitrate was
not supported by consideration. <span class="MsoHyperlink"><a href="https://www.courts.mo.gov/file/SC/Opinion_SC97018.pdf">Soars v. Easter
Seals Midwest</a></span>, 563 S.W.3d 111 (Mo. 2018). While both lower courts agreed
with the employee and thus refused to compel arbitration, the Missouri Supreme
Court reversed because the agreement “includes a delegation clause, identical
to the one upheld in Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010),
providing:<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in;">
The Arbitrator, and not any
federal, state, or local court or agency, shall have<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in;">
exclusive authority to resolve any
dispute relating to the interpretation,<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in;">
applicability, enforceability or
formation of this Agreement including, but<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in;">
not limited to any claim that all
or any part of this Agreement is void or<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: .5in;">
voidable.”<o:p></o:p></div>
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“For [employee] to properly contest the validity of [this]
delegation provision, he must have challenged the delegation provision
specifically,” according to the Missouri Supreme Court. “The delegation
provision is supported by adequate consideration because the provision, severed
from the rest of the Agreement and considered by itself, is a bilateral
contract supported by consideration.” So the court held that it was for the
arbitrator to consider the employee’s other arguments.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
In contrast, two dissenters “believe the arbitration
agreement in this case is not enforceable because it lacked legal consideration
due to Soars’ at-will employment status.”<o:p></o:p></div>
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<br /></div>
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Lisa Larkin of Baker Sterchi Cowden & Rice LLC <span class="MsoHyperlink"><a href="https://www.bscr-law.com/?t=40&an=88949&format=xml&stylesheet=blog&p=5258#page=1">covers</a></span>
the case with more details. <o:p></o:p></div>
<br />Stephen Warehttp://www.blogger.com/profile/05262563545969388756noreply@blogger.com4Lawrence, KS 66049, USA38.9684867 -95.37301760000002638.7710052 -95.695741100000021 39.1659682 -95.050294100000031