Mark your calendars! our blog contributor professor S.I. Strong, will be hosting the live Webcast AT&T Mobility v. Conception: What It Means for Class Actions and Arbitration on June 1, 2011 at 12:30 pm – 1:30 pm EDT. Here is the course description: Taught by Elyse D. Echtman, Jennifer L. Young and S.I. Strong, this session provides insights on Concepcion from both the plaintiffs’ and the defendants’ bar, as well as the views of one of the nation’s leading scholars on class arbitration. Attending this seminar will help you gain a practical and theoretical view of the Supreme Court’s latest decision on arbitration and suggest what you can do to prepare yourself and your clients for the future in this rapidly changing area of law. More information is here. To register, click here. Technorati Tags: law, ADR, arbitration
Continue reading...By Brett Goodman Under the Texas ADR Act, by either the motion of the court or a party, a pending dispute may be referred to mediation except when that dispute is subject to the Federal Arbitration Act. In this referral, an “impartial third party” must be appointed to mediate. To qualify for an appointment as an impartial third party, a person must have completed a minimum of forty hours of training in dispute resolution techniques in a course conducted by an alternative dispute resolution system or other dispute resolution organization approved by the court making the appointment. See Tex. Civ. Prac. & Rem. Code Ann. § 154. The trial court has discretion in deciding that mediation is appropriate for the case and may consider several factors in the decision, including: the nature of the dispute, the complexity of the issues, the number of parties, the extent of past settlement discussions, the posture of the parties, whether there had been sufficient discovery to permit an accurate case evaluation, the status of the case on the docket, and whether a referral would be appropriate at that particular time. Walton v. Canon, Short & Gaston, 23 S.W.3d 143, 150 (Tex. App. 2000). The Decker decision laid out a number of the considerations that come along with the trial court’s discretion. Decker v. Lindsay, 824 SW2nd 247, 250 (Tex. App.-Houston [1st District] 1992, no writ) The court may compel parties to attend mediation, but that is the furthest extent of its authority in that it cannot force a resolution to materialize from this mediation. Only when a party objects to mediation with a reasonable basis for doing so can a court be stripped of its power to refer a dispute to mediation, so a court can compel mediation without issue if it finds a party will not have a reasonable basis for objection. Using the Decker framework along with the factors of use to a trial court in referring a dispute to mediation, courts on a case by case basis have made a fairly predictable determination of whether or not mediation is appropriate with a trend that the court’s discretion is broad. See In re Magallon, 09-07-438CV, 2007 WL 2962934 (Tex. App. Oct. 11, 2007) Although a trial court ordered mediation to be in good faith in In re Magallon, if a trial court does find mediation appropriate, both parties are compelled to attend. The court of appeals could not say that the trail court abused its discretion in finding the party who did not appear at mediation in contempt and neither party made an objection. Regardless of a dispute over the referral to mediation, the referral compels the parties to attend pursuant to the trial court’s discretion. After the issue of compelling parties to meet in mediation has been resolved, it is true that a trial court may only compel the parties to meet but not more. Decker, 824 S.W.2d at 250. Thus, the court did say the judge in Decker overstepped the authority of a trial court by requiring not just that the parties meet, but that they negotiate in good faith and attempt to reach a settlement. Doing more than just compelling the parties to meet would not comport with the Texas ADR Act. Also, a court may, in its discretion, decide that mediation would not be of benefit to the parties and thus not refer the case to mediation. Walton, 23 S.W. 3d at 150. Where a law firm brought suit against a former client for failure to pay legal dues, the client demanded mediation, claiming that it is required unless the trial court determines it inappropriate. Although the trial court did not make a determination of inappropriateness, there was a dispute over who would be the mediator. The court declared, “We may reasonably infer that the trial court found that referral for [mediation] would not have benefited the parties and would only have served as a delay.” In Texas, a trial court may refer a case to mediation at its discretion, but it is not forced to when it would find mediation would not be of benefit in the situation. Technorati Tags: law, ADR, arbitration Brett Goodman is a summer intern at Karl Bayer, Dispute Resolution Expert. Brett is a J.D. candidate at The University of Texas School of Law. He holds degrees in Finance, Mathematics, and Spanish from Southern Methodist University.
Continue reading...The team at Karl Bayer, Dispute Resolution Expert is pleased to announce that we will be joined this summer by two law students: Renee Kolar. Renee is a J.D. candidate at The University of Texas School of Law. She holds an undergraduate degree in translation (Spanish, French, English) from a French University. Her experience living abroad and studying translation taught her that often times misunderstandings between people arise not just from their language differences, but also from the absence of a shared cultural background. This experience put Renée in a position to facilitate communication between two cultures, sharing with the French and Spanish her unique perspective of the United States, often times in contrast to what they had learned from television and movies. In doing so, she also learned a lot more about her own culture. Brett Goodman. Brett grew up in the Dallas, Texas, area, where he continued to live through his undergraduate time at Southern Methodist University. After four years at SMU, Brett graduated with a degree each in finance, mathematics, and Spanish, but was still left with a bit of uncertainty. Thinking back to his college coursework, he realized that he most enjoyed the analytical and critical thinking skills required of him from his business law course. He decided law school was the next step, and as a die-hard Texan at heart, he matriculated into The University of Texas School of Law immediately post-graduation. You will soon read their posts at Disputing. Please join us in welcoming them by leaving a message in the reply box below. Technorati Tags: law, ADR, arbitration
Continue reading...By S.I. Strong Interestingly, it is the dissent, rather than the majority, that takes Stolt-Nielsen’s lesson of intent fully into account. Thus, Justice Breyer states that earlier Supreme Court precedent “cautioned against thinking that Congress’ primary objective was to guarantee . . . particular procedural advantages. Rather, that primary objective [of the FAA] was to secure the ‘enforcement’ of agreements to arbitrate.” AT&T, 131 S.Ct. at 1758 (Breyer, J., dissenting). Justice Scalia sidesteps the issue of intent to a large degree because he does not consider class arbitration to be “arbitration.” Instead, he replaces a discussion of intent with a litany of attributes that he finds to be inconsistent with his definition of arbitration, claiming that these characteristics could not have been in the contemplation of the parties at the time of contracting because the various elements (formality of proceedings, amount in dispute, etc.) are allegedly so atypical of arbitration. Justice Scalia, unfortunately, is factually incorrect on this point. As discussed in the First Principles article coming out in the Harvard NLR, many of the attributes that Justice Scalia finds most disturbing are already common features in multiparty arbitration, a point that is also made by Justice Breyer. See id. at 1758-60 (Breyer, J., dissenting). Furthermore, class arbitration has been in existence for approximately thirty years and cannot come as a surprise to the parties. See id. at 1758 (Breyer, J., dissenting) (noting that “class arbitration is consistent with the use of arbitration” and “is a form of arbitration that is well known in California and followed elsewhere”). This is not to say that concerns such as the ones expressed by Justice Scalia have never been raised. However, they are perhaps more reflective of the kind of vestigial judicial hostility to arbitration that was recently condemned by the Supreme Court in 14 Penn Plaza LLC v. Pyett, 129 S.Ct. 1456, 1470-72 (2009). Furthermore, many of the majority’s specific worries were addressed in the mid-1980s, when Mitsubishi rejected the view that “antitrust issues, prone to complication, require sophisticated legal and economic analysis, and thus are ‘ill-adapted to strengths of the arbitral process, i.e., expedition, minimal requirements of written rationale, simplicity, resort to basic concepts of common sense and simple equity.’” Mitsubishi Motors, 473 U.S. at 633 (noting also that “potential complexity alone does not persuade us that an arbitral tribunal could not properly handle an antitrust matter”); see also id. at 626-27 (stating “we are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals inhibited the development of arbitration as an alternative means of dispute resolution” (quoted also in Pyett, 129 S.Ct. at 1470)) Justice Scalia also indicated that he found it “at the very least odd to think that an arbitrator would be entrusted with ensuring that third parties’ due process rights are satisfied.” AT&T, 131 S.Ct. 1752. However, the Supreme Court has had several opportunities to strike class arbitration as being inherently improper and has refused to do so on every occasion. See Stolt-Nielsen, 130 S.Ct. at 1768-69, 1774-75 (suggesting no problems with class arbitration arise in cases of express consent and dealing only with issues involving silence or ambiguity regarding class treatment); Green Tree Financial Corporation v. Bazzle, 539 U.S. 444, 454-55 (2003) (Stevens, J., concurring) (stating the “Supreme Court of South Carolina has held as a matter of state law that class-action arbitrations are permissible if not prohibited by the applicable arbitration agreement, and that the agreement between these parties is silent on the issue. There is nothing in the Federal Arbitration Act that precludes either of these determinations by the Supreme Court of South Carolina”) (citations omitted); see also id. at 452-53 (Breyer, J.) (stating “the relevant question here is what kind of arbitration proceeding the parties agreed to. That question does not concern a state statute or judicial procedures. It concerns contract interpretation and arbitration procedures. Arbitrators are well situated to answer that question”) (citation omitted; emphasis in original); Southland Corp. v. Keating, 465 U.S. 1, 9, 17 (1984) (declining to address the class arbitration issue under federal law). Thus the suggestion that there is something inappropriate or odd about class arbitration is contrary to U.S. law and policy. Indeed, the Supreme Court itself has stated that courts that agree to allow certain complex claims to go to arbitration pursuant to the parties’ express agreement cannot later claim that those matters are “inherently insusceptible to resolution by arbitration.” See Mitsubishi, 473 U.S. at 633. Since the Supreme Court has indicated that it has no problems with class arbitration in cases involving explicit consent, it cannot object to the procedure as a general matter now. In some ways, the immediate effect of AT&T Mobility is quite easy to predict: corporations will increase the use of class waivers in certain types of arbitration agreements. However, these efforts will not eliminate class arbitration, nor will they limit litigation in this area of law. To the contrary, more suits will likely end up in court as parties test the outer boundaries of permissible waivers. Furthermore, a recent decision out of the Second Circuit suggests that class waivers may still be struck on grounds other than unconscionability. See In re American Express Merchants’ Litigation, 634 F.3d 187, 194, 199 (2d Cir. 2011) (stating that “Stolt-Nielsen states that parties cannot be forced to engage in a class arbitration absent a contractual agreement to do so. It does not follow, as Amex urges, that a contractual clause barring class arbitration is per se enforceable” and concluding that the waiver was void for public policy as a matter of federal law). This suggests that future class arbitrations may still arise after a waiver has been struck. There will also likely be additional class arbitrations in cases where parties have failed to adopt a waiver. Thus, the business community’s perceived victory in AT&T may be narrower and more short-lived than might appear at first glance. For example, in addition to the limitations within […]
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.