The University of Missouri School of Law Center for the Study of Dispute Resolution is holding an Alternative Dispute Resolution and the Rule of Law symposium today in cooperation with the ABA Section of Dispute Resolution and the Missouri Center for the Study of Conflict, Law & the Media. The symposium is the first of its kind to examine the relationship between the Alternative Dispute Resolution and the Rule of Law: On the face of it, the Rule of Law and Alternative Dispute Resolution seem fundamentally at odds. The Rule of Law, after all, compels the use of formal rules to decide disputes. ADR, on the other hand, calls for the resolution of disputes through processes that do not depend upon the application of formal rules, such as negotiation and mediation. The two could not seem to be farther apart. But a closer look suggests that ADR and the Rule of Law are not mutually exclusive. Judicial and administrative dispute resolution programs are common throughout the state and federal courts and governments. Increasingly, too, ADR processes such as town halls, study circles, and citizen juries, are being used to facilitate community dialogue on a wide range of public issues, from neighborhood blight to national health care. Moreover, many of our most established ADR processes – arbitration, mediation, even negotiation – are dependent upon the law to secure such crucial functions as enforcement, confidentiality, and legitimacy. To date, little consideration has been given to such questions. It is time, now, to have that discussion. Domestically, judicial and administrative ADR programs have become institutionalized, but serious questions about their legitimacy remain. Internationally, promotion of the Rule of Law remains a hallmark of U.S. foreign policy, but implementation remains a challenge in the face of traditions of graft, corruption and violence. Can ADR help? Papers and presentations from the symposium include: Internalizing the Rule of Law through Transitional Justice and ADR by Michal Alberstein, Law Faculty, Bar-Ilan University (Israel) Designing Governance to Produce the Rule of Law: Collaborating with the Public and Stakeholders by Lisa Blomgren Bingham, Keller-Runden Professor of Public Service, University of Indiana at Bloomington Access to Justice: Lessons from the Field by William Davis, Co-Founder, DPK Consulting (San Francisco) From Noise to Music: Using the Multi-Door Courthouse in an Integrative Conflict Management System to Promote Inclusion and Rule of Law in Latin America by Mariana Hernandez-Crespo, Associate Professor of Law, St. Thomas School of Law Alternative Dispute Resolution and the Rule of Law in Development Cooperation by Ambassador James Michel, former Counsel, U.S. Aid for International Development A Deliberative Look at ADR and the Rule of Law by Dr. Peter Muhlberger, Research Professor, Texas Tech University College of Mass Communications How ADR Can Foster the Rule of Law: Beyond the Fundamental Tension by Richard C. Reuben, James Lewis Parks Professor of Law, University of Missouri School of Law A brochure for the symposium may be viewed here and the agenda is available here. UPDATE: A webcast of the symposium may be viewed here. We welcome your thoughts on the relationship between ADR and the rule of law. Technorati Tags: law, ADR, mediation, arbitration
Continue reading...A recent news story published in The AM Law Daily highlights an interesting arbitration case from the Second Circuit. The case involves a young attorney named Joshua Fensterstock who, after graduating with over $100,000 in student loans in 2003, consolidated his student loans in 2006 with Education Finance Partners (EFP), a student loan company serviced by Affiliated Computer Services (ACS). By August 2007, Fensterstock noticed that his loan balance was increasing rather than decreasing despite making regular payments. He contacted ACS and was told that unless he made his payments exactly on the 14th of each month, his payment was not applied to the principal amount, but solely to the interest. Fensterstock filed suit seeking class status, alleging fraudulent and deceptive practices and challenging a class-wide arbitration waiver contained in the agreement. Although EFP’s counsel argued that Fensterstock had the capacity and responsibility to read and understand the terms of the loan contract he was signing since he was an attorney, the Second Circuit was not persuaded. In Fensterstock v. Education Finance Partners, 611 F.3d 124 (2d Cir. 2010), the Second Circuit held that the class action waiver and class-wide arbitration waiver clauses were unconscionable and unenforceable under California law, the relevant law under the agreement’s choice of law provisions. The Court based the holding on its reading of California unconscionability law which allows a court to find that a contract clause offered on a take-it-or-leave-it basis to a much weaker party is oppressive and, as such, supports a minimal showing of procedural unconscionability. Further, despite his status as a practicing attorney who advises clients in financial matters, the court saw nothing in his education, expertise, or experience prior to the contract to provide Fensterstock with a meaningful opportunity to negotiate the class waiver and class-wide arbitration waiver clauses out of the loan agreement. EFP’s counsel filed a petition for a rehearing on the grounds that the Federal Arbitration Act (FAA) preempts California law in this matter, but EFP believes the Second Circuit may wait until the U.S. Supreme Court renders an opinion in AT&T Mobility, LLC v. Concepcion, 09-893. In AT&T Mobility, set for argument on November 9, 2010, the Supreme Court will decide if the FAA preempts the states from conditioning the enforcement of an arbitration agreement on the availability of certain procedures even if those procedures are not necessary to vindicate a party’s claims in a specific dispute. Although certiorari was granted out of the Ninth Circuit, AT&T Mobility is particularly relevant to the Fensterstock case because it also involves underlying issues of California contract law and a class-wide arbitration waiver. You can read the full news story here. Disputing has recently blogged about the AT&T Mobility, LLC v. Concepcion case here and here. Technorati Tags: law, ADR, arbitration
Continue reading...Mark Trachtenberg and Christina Crozier from the Houston office of Haynes & Boone, L.L.P. recently published an interesting and useful article entitled “Arbitration-Related Litigation in Texas,” (29 Corporate Counsel Rev. 1 (2010)). The article discusses the effect of governing law on arbitration-related litigation, pre-arbitration litigation and post-arbitration litigation in the State of Texas. Here is an excerpt: Congress intended for arbitration to be a faster, less expensive alternative to litigation. Businesses frequently include arbitration clauses in their contracts in an attempt to avoid the time and costs associated with the traditional court system. But judging from the steady stream of arbitration-related decisions emanating from state and federal courts in recent years, even the most “air-tight” arbitration clause cannot guarantee that disputes will be resolved without judicial intervention. Courts typically deal with arbitration-related disputes in two circumstances. First, when a party to a contract with an arbitration clause resists arbitrating a dispute, the contracting parties often litigate the enforceability and scope of the arbitration clause before any arbitration proceeding begins (referred to herein as “pre-arbitration litigation”). Second, after an arbitration panel renders its decision and issues an award, parties frequently turn to the courts in an effort to confirm, modify, or vacate the arbitral award (referred to herein as “post-arbitration litigation”). This paper provides a comprehensive overview of arbitration-related litigation in Texas and offers guidance for handling an arbitration-related dispute in the court system… The full article may be read here. Technorati Tags: law, ADR, arbitration
Continue reading...The Beaumont Court of Appeals has held that an arbitration agreement in an employment contract was valid and enforceable despite that the agreement included biblical scripture aspects and the parties failed to seek biblically based meditation prior to submitting their dispute to arbitration. In The Woodlands Christian Academy v. Weibust, 09-10-00010-CV, (Tex. App. – Beaumont, October 7, 2010), Monica Weibust brought claims against her former employer for constructive discharge, harassment, retaliation and employment discrimination against the Woodlands Christian Academy (Woodlands) under the Texas Labor Code. Woodlands sought to compel arbitration pursuant to an arbitration clause contained in an employment contract which existed between Weibust and Woodlands. The trial court denied arbitration. In response to the parties’ disagreement regarding whether Texas or Federal law controlled the arbitration agreement, the court found that it was subject to the Texas Arbitration Act (TAA). Weibust argued the arbitration agreement was invalid in several ways. First, she argued that the contract was null and void because it was untimely executed. To support this argument, she pointed to a provision in the contract which stated that the contract was null and void if not executed by March 28, 2008. Despite that the contract was actually executed nearly one month after the date outlined in the contract, the court held that the contract was valid based on the parties’ mutual execution at the later date and Weibust’s subsequent employment during the 2008-2009 academic year. Weibust next argued that Woodlands waived its right to seek arbitration by “taking substantial action inconsistent with the right to arbitrate.” According to the agreement, the parties mutually agreed to seek “[b]iblically based meditation” prior to submitting any dispute to arbitration as the initial dispute resolution mechanism. Because Weibust did not request the trial court to order mediation and provided no evidence to support her contention that she was prejudiced by Woodlands refusal to mediate, the Beaumont court concluded that the failure to mediate did not “nullify the right to arbitration under the contract.” Weibust also argued that Woodlands waived its right to compel arbitration by engaging in “extensive discovery prior to its arbitration request.” While the court noted that established Texas law prevents a party from unfairly switching between litigation and arbitration, it further noted that engaging in minimal discovery and court proceedings does not conclusively waive a right to arbitrate. After considering the totality of circumstances, the court held that Woodlands did not waive its right to arbitrate. In support of this holding, the court noted that there was minimal discovery conducted, no briefs on the merits were filed and there was no evidence in the record that any interrogatories or depositions had occurred. Additionally, Woodlands’ motion to arbitrate was filed well in advance of the date set for trial. Weibust argued the arbitration agreement was not enforceable by alleging that the “biblical scripture” aspects of the agreement rendered it beyond the scope of lawful and adequate judicial review and rendered it unconscionable in that it purported to preempt her rights under state and federal law in favor of biblical principles. The court declined “Weibust’s invitation to find that judicial review would be meaningless,” and noted that courts have authority to review and vacate arbitration decisions in a variety of circumstances under the TAA. Similarly, despite language in the agreement which asserted that “the Holy Scriptures (the Bible) shall be the supreme authority governing every aspect of the conciliation process,” other provisions expressly stated that the arbitration agreement’s preference for using “Holy Scriptures” did not apply in circumstances where state and federal law were preemptive. Weibust next alleged a fee-splitting provision in the arbitration agreement rendered it unconscionable. The court responded by stating her argument was “speculative at this stage,” considering that an arbitrator has discretion to alter the equal distribution of fees if necessary or financially burdensome to a party. Finally, Weibust’s argument that the unequal bargaining power which existed between herself and Woodlands at the time the contract was executed rendered the arbitration agreement unconscionable was unpersuasive to the court. The Beaumont court reversed the trial court’s order denying arbitration and remanded the case with instructions to compel arbitration. Technorati Tags: law, ADR, mediation, arbitration
Continue reading...Disputing is published by Karl Bayer, a dispute resolution expert based in Austin, Texas. Articles published on Disputing aim to provide original insight and commentary around issues related to arbitration, mediation and the alternative dispute resolution industry.
To learn more about Karl and his team, or to schedule a mediation or arbitration with Karl’s live scheduling calendar, visit www.karlbayer.com.
Disputing is published by Karl Bayer, a dispute resolution expert based in Austin, Texas. Articles published on Disputing aim to provide original insight and commentary around issues related to arbitration, mediation and the alternative dispute resolution industry.
To learn more about Karl and his team, or to schedule a mediation or arbitration with Karl’s live scheduling calendar, visit www.karlbayer.com.