On January 30th, 2009, the Second Circuit refused to enforce an arbitration clause contained in American Express Co. merchants’ agreement. In Re: American Express Merchants’ Litigation, No. 06-1871 (2d Cir. 2009). The clause would prevent merchants who accept the card from bringing class-action antitrust claims against American Express. Like the Texas Supreme Court in In re Poly-America, L.P., the Second Circuit cited section 2 of the FAA, which provides that an agreement to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” However, here the court stressed that it did not rely on findings of unconscionability under state law, but instead, it based its holding on vindication of statutoty rights analysis. For further commentary, see ADR Prof Blog, Morrison Foerster, and Marc J. Goldstein.
Continue reading...Despite a strong challenge, court upheld arbitral award. The U.S. District Court for the Southern District of Texas denied a motion to vacate an arbitral award and held that the arbitration panel did not “manifestly disregard” the law. Dealer Computer Services, Inc. v. Hammonasset Ford Lincoln-Mercury, Inc., Case No. 08-1865 (USDC S.D. Tex. Dec. 22, 2008). In 1993, Computer agreed to provide services for Ford’s dealership software system. The contract included, among other things, an arbitration clause and the parties agreed that Michigan’s law would govern the contract. In 2006, a breach of contract dispute arose and Ford filed an arbitration demand. The arbitration panel concluded that Computer had breached the contract and Ford was awarded $297,567.59 in damages, which included attorney fees of $120,327. Computer moved to vacate the award. The district court explained that, under FAA’s section 10(a)(4), a court may vacate an award if the arbitrators exceed their authority or manifestly disregard the law. However, a court “will not vacate an award simply because the arbitrator applied the law incorrectly; rather, the arbitrator must be aware of a governing legal principle and choose to ignore it.” Although Michigan courts would usually not allow attorney’s fees as costs, the court upheld the arbitration panel’s award of attorney fees to Computer and held that the panel did not manifestly disregard the law. See also Reinsurance Focus for recent cases citing the doctrine of Manifest Disregard for the Law.
Continue reading...We recently hit an important milestone. Our blog, Disputing, has been cited in a law review article. The article is titled: Fifth Circuit Survey: Alternative Dispute Resolution, written by Donald R. Philbin Jr. and Audrey Lynn Maness, 40 Tex. Tech L. Rev. 445 (2008). As its title suggests, it provides a summary of noteworthy Fifth Circuit decisions and arbitration trend analysis. The blog posts cited by the article are: Fifth Circuit Rules on Cost as a Basis for Not Arbitrating Fifth Circuit Hands Down Positive Software Opinion Fifth Circuit Confirms Arbitral Award Third COA Refuses to Compel Arbitration A big thank you to Donald R. Philbin Jr. and Audrey Lynn Maness from the Disputing blog team.
Continue reading...At Disputing, we have discussed before the issue of arbitrating with your client. Following ABA’s Opinion 02-425 which permits attorneys to include arbitration of fee and malpractice disputes in retainer agreements, the Professional Ethics Committee for the State Bar of Texas has issued Opinion No. 586. This opinion resolves the question of binding arbitration clauses in lawyer-client engagement agreements under the Texas Disciplinary rules of Professional Responsibility Conduct. Our own Karl Bayer will be a speaker at the TexasBarCLE Webcast Arbitration of Attorney/Client Disputes. We invite you to watch this webcast on Feb 18, 2009 from 10:00 am to 11:30 am. Here is more information.
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.