ABC News reported that Tracy Barker, former employee of Halliburton/ KBR has won a $2.93 million arbitration award. Ms. Barker claims that she was sexually assaulted by a U.S. State Department employee in Iraq in 2005. Read more about this case here, here, and here. Technorati Tags: arbitration, ADR, law,
Continue reading...By Holly Hayes As noted in a previous post (available here) Texas House Bill 2256, signed into law on June 19, 2009, provides a procedure for mediation of out-of-network health benefit claim disputes. The law gives patients the option to mediate when they are ‘balance-billed’ by their insurance company for services provided by out-of-network facility-based physicians like radiologists, pathologists, and neonatologists. ‘Balance billing’ occurs when a physician bills a patient for the difference between what the physician charges for a service and what an insurer pays the physician for that service. When a physician is not in-network for an insurer, there is no contracted payment rate that the physician has agreed to accept from the insurer so the insurer can pay what is deemed appropriate and the patient is billed for the difference. At the federal level, H.R. 3962, the “Affordable Health Care for America Act” is currently being considered in Congress. The bill defines ‘cost sharing’ (see bottom of page 9) and specifically excludes “premiums, balance billing amounts for non-network providers, or spending for non-covered services.” Although the bill says that out-of-pocket payments are capped for an individual at $5,000 or $10,000 for a family, out-of-network balance billing amounts are not included in those caps. Find out more at the The Wall Street Journal Health Blog (here). Look for an analysis of how other states are approaching ‘balance billing’ in a future post. Technorati Tags: Healthcare, ADR, law, mediation 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...As the United States Court of Appeals for the Fifth Circuit decides more “manifest disregard” of the law cases, we thought that you might be interested in reading our guest-post published at the Loree Reinsurance and Arbitration Law Forum earlier this year. Check it out! Hall Street Meets S. Maestri Place: What Standards of Review will the Fifth Circuit Apply to Arbitration Awards Under FAA Section 10(a)(4) after Citigroup? By Victoria VanBuren May 4, 2009 I. Introduction I am delighted to be invited to guest-blog today by Philip J. Loree Jr. of the Loree Reinsurance and Arbitration Law Forum. I was thrilled that Phil jumped right on it when I suggested that we should guest-post on each others blogs in the near future. Phil did an outstanding job discussing the Arbitration Fairness Act of 2009 (read the post here) last week as a guest-blogger at Disputing. He suggested that I explore the topic of “manifest disregard” of the law in light of the United States Supreme Court decision Hall Street Associates, LLC v. Mattel, Inc. 128 S.Ct. 1396 (2008) and the Fifth Circuit ruling in Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349 (5th Cir. 2009). So, after conquering some initial, mild trepidation about my first guest-blogging experience, here I am. II. Discussion: Hall Street and Citigroup In Hall Street, the Supreme Court concluded that the Sections 10 and 11 provide the exclusive bases for vacatur and modification of arbitration awards under the Federal Arbitration Act (”FAA”). Under Section 10, the grounds to vacate an arbitration award are: (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. 9 U.S.C. § 10(a). The Court stated that “manifest disregard” of the law was not an independent ground for vacating awards. The Court, however, observed that in the past it may have used the term “manifest disregard” to refer collectively to all FAA Section 10 grounds, or as a “shorthand” for situations where the arbitrators were “guilty of misconduct” under Section 10(a)(3), or “exceeded their powers” under Section 10 (a)(4). Over the past year, the circuit courts have differed over whether the “manifest disregard” doctrine survives the Supreme Court’s holding in Hall Street. Recently, in Citigroup, it was the Fifth Circuit’s turn to decide the doctrine’s fate. There, Debra Bacon discovered that her husband had made five fund withdrawals from her Citigroup Individual Retirement account without her authorization. Bacon notified Citigroup as soon as she discovered what happened, but this notification was seven months after her husband had withdrawn $50,000, and five months after her husband had withdrawn another $150,000. Bacon filed for divorce. Citigroup refused to reimburse Bacon, and in 2004, she submitted her claim to an arbitration panel as required by her contract with Citigroup. The panel ordered Citigroup to pay Bacon $256,000 ($218,000 in damages and $38,000 in attorneys’ fees). Citigroup petitioned to vacate the award claiming that the arbitration panel had “manifestly disregarded” the law. The United States District Court for the Southern District of Texas vacated the award on the ground that the arbitration panel “manifestly disregarded” the law. According to the District Court: Bacon was not harmed by the fund withdrawals because her husband used the money for their benefit and subsequently promised to pay her back; Bacon’s claims were barred by Texas law, which permits such claims only if the customer reports unauthorized transactions within thirty days of the withdrawal; and Texas law requires apportionment among liable parties, which in this case, includes Bacon’s husband. The District Court said that although Citigroup “briefed and argued the requirements of Texas’s law on [bank] accounts, the panel ignored its contents obdurately.” The court concluded that “[a] lawless award must be vacated.” When the District Court decided the case (Aug. 2, 2007), Hall Street had not been decided. On appeal, the Fifth Circuit, citing Hall Street, held that Sections 10 and 11 provide the exclusive grounds for vacatur and modification of arbitral awards. Citing case law within the Fifth Circuit, the Court observed that the Fifth Circuit was “among the very last [of the circuit courts] to adopt manifest disregard,” and added that case law reflected that the narrow doctrine had a “standard difficult to satisfy.” The Court also stated that “the term itself, as a term of legal art, is no longer useful in actions to vacate arbitration awards.” The court ultimately ruled that “to the extent that manifest disregard of the law constitutes a nonstatutory ground for vacatur, it is no longer a basis for vacating awards under the FAA.” III. Manifest Disregard in the Fifth Circuit: The Future In Citigroup, the Fifth Circuit rejected “manifest disregard” as an independent, nonstatutory ground for setting aside an award. Nevertheless, the court remanded the case to the District Court to determine whether vacatur is available under any of the FAA statutory grounds. While “manifest disregard” is no longer an independent ground for vacatur in the Fifth Circuit, Citigroup may be able to use Section 10(a)(4) of the FAA as an alternative basis for relief. The court in Brabham v. A.G. Edwards & Sons, Inc., 376 F.3d 377 (5th Cir. 2004) clarified that the “essence of the agreement” test — under which an arbitration decision can be vacated if it does not draw its essence from the contract — is not a separate nonstatutory ground for vacatur but is part of Section 10(a)(4) of the FAA. Citigroup may have a legitimate argument that the arbitrators “exceeded their powers” […]
Continue reading...In United Forming, Inc. v. Faulknerusa, LP, No. 09-50073 (5th Cir. Oct. 27, 2009), FaulknerUSA, LP (Faulkner) is the general contractor at a construction project; United Forming, Inc. (United) is a sub-contractor; and Continental Casualty, Co. (Continental) is the surety of their agreement. After a dispute over United’s work, the parties submitted their claims to arbitration before an American Arbitration Association (AAA) panel. The panel ruled for United and Continental. However, when United filed to confirm the award, Faulkner moved to vacate it. The district court ruled for United and Faulkner now appeals. The Fifth Circuit, citing Hall Street v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), highlighted that “[o]n a motion to vacate an award brought under the Federal Arbitration Act (“FAA”), the FAA sets forth the exclusive grounds for vacatur.” Then, the court addressed the three arguments raised by Faulkner. First, Faulkner claims that one of the arbitrators failed to make proper pre-arbitration disclosure of conflicts. The court, citing Positive Software Solutions, Inc., v. New Century Mortgage Corp., 476 F.3d 278, 281-85 (5th Cir. 2007) (a decision which discussed circumstances in which nondisclosure is “evident partiality” under the FAA) concluded that in the present case, the undisclosed information was a “speculative impression of bias” and not a “significant compromising relationship.” Next, the court considered Faulkner’s second claim that two of the arbitrators had “actual bias.” The court stated that ‘evident partiality’ under the FAA means ‘bias’ that is ‘clearly evident in the decision makers’ and concluded that Faulkner failed to meet its burden. Finally, the court explained that it did not need to reach Faulkner’s third claim that the AAA panel’s award was so contrary to the law that it constitutes “misconduct” or misbehavior” because the court concluded that “such a situation is not presented here.” Accordingly, the court affirmed the confirmation of the award and denied Faulkner’s motion to vacate. Technorati Tags: arbitration, ADR, law, Fifth Circuit
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.