By Alan Scott Rau One really needs a few days to absorb the importance of cases like this—I know instant punditry is increasingly de rigueur, but I’m quite uneasy with it. Anyway, with that caveat, one could say the following: The doctrinal importance of the case seems swamped by the overwhelming reality that arbitration, at least in adhesion contracts, has become something of a political football: Apparently “to decide that classwide arbitration is permitted” is not within the province of arbitrators without some explicit authorization (Stolt-Nielsen), but “to decide that an arbitration clause is unconscionable” is not within the province of courts, as long as the parties have incorporated a boilerplate AAA clause. (Rent-A-Center). It doesn’t take much of an infusion of Legal Realism to see that the conservative proclivities of the 5-justice majority, and the interests of drafting businesses, are in both cases driving the engine. On the purely doctrinal point, I think Scalia, surprisingly, has the best of the argument. (I say “surprisingly,” because Justices Stevens and Breyer have over the years been by far the most sensible and knowledgeable justices on arbitration matters). Justice Stevens, astonishingly, goes so far as to doubt the validity of the Prima Paint “separability” doctrine, a cornerstone of arbitration learning—calling it “erroneous” and “fantastic” and a mere “pleading standard.” Rent-A-Center is not, of course, about separability at all, but it is about the First Options case: With nothing in the contract, the question of the “unconscionability” of the arbitration clause—here, unconscionability because of “one sidedness,” and because of “limitations on discovery”—would indeed be a matter for the court; however, First Options suggests that this question can be delegated to the arbitrators, and the Court holds that that’s exactly what happened here. Now, it’s not coherent to suggest that everything can be delegated to the arbitrators—it’s meaningless to suggest that a contract could delegate to the arbitrators the power to decide whether an arbitration clause is valid over the objection that one of the parties was insane, or that the arbitration clause was induced by a gun to the head. The “delegation” there is faulty. But that’s not this case, and I see no logical impediment to the parties delegating to the arbitrators the power to decide whether the one-sided operation of the clause is enforceable. The fault line then, the key to the Scalia opinion —-which follows from the previous paragraph—is Scalia’s distinction between “the very existence of an agreement, the very existence of consent,” on the one hand, and the ” validity of that consent” on the other. He holds that this is a matter for the arbitrator because the former question is not implicated. This is a distinction which is the key also to Scalia’s opinion in the Cardegna case. I have written about this—it seems a rather fine distinction—but as long as the parties could entrust the arbitrators with this decision, First Options would seem satisfied. Alan Scott Rau is the Burg Family Professor of Law at The University of Texas at Austin School of Law. He received his BA and LLB from Harvard University. Professor Rau teaches and writes in the areas of Contracts and Alternative Dispute Resolution (particularly Arbitration). He is co-author of Processes of Dispute Resolution: The Role of Lawyers (3rd ed., 2002); ADR and Arbitration: Statutes and Commentary (West, 1998), and Cases and Materials on Contracts (West, 2nd ed. 1992), and the author of several articles, including most recently “The Arbitrability Question Itself” (American Review of International Arbitration, 1999); “La Contractualisation de l’Arbitrage: Le Modele Americain” (Revue de l’Arbitrage, 2001), and “All You Need to Know About Separability in Seventeen Simple Propositions” (American Review of International Arbitration, 2003). He serves on the Commercial and International Panels of the American Arbitration Association, and has been a visiting faculty member at the University of Toronto, China University of Political Science and Law in Beijing, Willamette University College of Law, the University of Geneva; and the Universities of Paris-I and Paris-II. Some of Professor Rau’s scholarly papers may be downloaded at the Social Science Research Network. Technorati Tags: law, ADR, arbitration
Continue reading...By Kent B. Scott and Cody W. Wilson How Do We Get the Mediator to See It Our Way? The client who asks this question has not understood the mediation process. This client erroneously believes that it must persuade the mediator that it has the best case. Thus, the client must be reminded that the mediator does not decide the dispute, so persuading the mediator is not the goal. The goal is to persuade the decision maker for the adversary that it is in both side’s interest to enter into mutually agreeable settlement. It is important to educate the mediator about the dispute but the reason for doing so is not so the mediator can reach a decision on the merits. It is to enable the mediator to engage in “reality testing” with each side so that they recognize that there are good reasons to settle, and to serve as an an effective intermediary in the dispute, conveying information and offers back and forth between the parties. When and Where Should We Mediate? Mediation can take place at any time before litigation is commenced or if already commenced, before the jury reaches a verdict, a judge hands down a ruling, or an arbitrator renders an award. When to mediate will vary with each case. The chemistry of each case will dictate the answer. The main danger is in mediating too soon. So it is important to keep in mind the elements of a successful mediation to make sure they are in place before beginning the mediation. As to where to mediate, the location is usually determined by the mediator and the parties. If the mediation is administered by the AAA, the case administrator and the mediator will work with the parties to determine the place and date for the mediation. Part VI of this series will discuss how to get the mediation started. Stay tuned. [Ed. note: the contents of this post were first published on a different form in the May/July 2008 Edition of the AAA Dispute Resolution Journal.] Kent B. Scott is a shareholder in the law firm of Babcock Scott & Babcock in Salt Lake City whose practice focuses on the prevention and resolution of construction disputes. As a mediator and arbitrator, Mr. Scott currently serves on the AAA’s panel of mediators and the AAA’s Large Complex Construction Case Panel. He also serves on the arbitration and mediation panels for the U.S. District Courts (District of Utah), State District Court (Utah) and Utah Dispute Resolution. Mr. Scott is a founding member of the Dispute Resolution Section of the Utah Bar and a Trustee for the Utah Council on Conflict Resolution. Cody W. Wilson is an associate in the law firm of Babcock Scott & Babcock, concentrating his practice in the area of construction law, is licensed in all courts in the State of Utah, the U.S. District Court of Utah, the 10th Circuit Court of Appeals, the U.S. Court of Federal Claims and is a member of the ABA Forum on the Construction Industry. They can be reached at kent@babcockscott.com and cody@babcockscott.com.
Continue reading...[UPDATE: The U.S. Supreme Court decided Rent-a-Center v. Jackson today. Find a link to the opinion here. Commentary about the case to follow. Stay tuned.] A new arbitration-related petition has been filed recently before the U.S. Supreme The case comes from the Court of Appeals for the Fifth Circuit. On December 17, 2009, the Fifth Circuit granted the motion to dismiss the case without any opinion. In Zurich American Insurance Company v. Pioneer Natural Resources USA, Inc., No 09-1305, the question presented is: Whether, in a case removed under the Convention on the Recognition and Enforcement of Arbitral Awards, 9 U.S.C. § 205, an order denying a motion to compel arbitration and remanding to state court is appealable under the Federal Arbitration Act’s express right of interlocutory appeal from such denials, 9 U.S.C. § 16(a)(1)(C), notwithstanding 28 U.S.C. § 1447(d). Petition for certiorari (from Scotus Blog) Other Cases Pending: Rent-a-Center v. Jackson (read more here) AT&T Mobility v. Concepcion (read more here) Stay tuned. Technorati Tags: ADR, law, arbitration
Continue reading...By Holly Hayes The Agency for Healthcare Research and Quality (AHRQ) announced that seven demonstration grants for the Medical Liability Reform and Patient Safety initiative have been funded for a total amount of $19.7 million. Thirteen planning grants have also been funded for a total amount of $3.5 million. The grants support the implementation and evaluation of evidence-based patient safety and medical liability projects. The seven demonstration grants include models that meet one or more of the medical liability reform and patient safety initiative goals, including: “Reducing preventable harms. Informing injured patients promptly, and making efforts to provide prompt compensation. Promoting early disclosures and settlement, through a court-directed alternative dispute resolution model.” Examples of some of the demonstration grants include: Timothy McDonald, M.D., J.D., University of Illinois at Chicago, IL, $2,998,083 The project is designed to fill the evidence gap regarding the impact on patient safety and litigation rates of programs that feature improved communication with patients, transparency, disclosure of adverse events, early offers of compensation, and learning from mistakes. It will evaluate the impact on Medical Liability Reform and Patient Safety outcomes of extending an existing disclosure program from an academic hospital setting to diverse hospitals in the greater Chicago area. Stanley Davis, M.D., Fairview Health Services, Minneapolis, MN, $2,982,690 The objective of this project is to improve perinatal (the period prior to and just after birth) patient safety and demonstrate the relationship between improved patient safety and a reduction in the number of malpractice claims. The project will implement and evaluate the use of perinatal best practices in 16 hospitals to assess the impact on patient safety and the level of malpractice activity. This initiative builds on the institution’s prior efforts as part of a nationwide collaborative to eliminate preventable perinatal harm. Eric Thomas, M.D., M.P.H., University of Texas Health Science Center, Houston, TX, $1,796,575 The project will review the use of a disclosure and compensation model, which informs injured patients and families promptly and makes efforts to provide prompt compensation. It will identify best practices for using disclosure to improve patient safety, and disseminate best practices to serve patients’ needs and improve safety for subsequent patients. The project will investigate disclosure and compensation in the UT system over a three-year period, identify best practices for using disclosure to improve patient safety, and disseminate best practices with a focus on incorporating patient and family input into efforts to understand why errors occur. Thomas Gallagher, M.D., University of Washington, Seattle, WA, $2,972,209 The project creates a statewide initiative involving communication training for health care workers and a collaboration between hospitals and a malpractice insurer to improve adverse event analysis, disclosure, and compensation. The goal is to enhance the culture of health care communication in order to improve patient safety and decrease medical malpractice liability. Alice Bonner, M.S., APRN, BC, Massachusetts State Department of Public Health, Boston, MA, $2,912,566 The project proposes to engage clinicians, patients, malpractice insurers, and the State public health agency to ensure more timely resolution of medical errors that occur in outpatient practices and improve communication in all aspects of care. The project will identify key areas contributing to ambulatory medical errors and malpractice suits in order to redesign systems and care processes to prevent, minimize, and mitigate such errors in a group of Massachusetts primary care practices. The project will also transform communication culture, processes, and outcomes in these practices so that they are more patient and family-centered, particularly with respect to proactively seeking out, handling, and learning from patients’ safety experiences, concerns, and complaints. The full list of demonstration grants is available here and the planning grants are here. Let us hear your comments regarding these demonstration and planning grants. Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at: holly@karlbayer.com.
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.