S.I Strong, Associate Professor of Law and Senior Fellow, Center for the Study of Dispute Resolution at the University of Missouri recently authored Does Class Arbitration ‘Change the Nature’ of Arbitration? Stolt-Nielsen and First Principles, Harvard Negotiation Law Review, Forthcoming; University of Missouri School of Law Legal Studies Research Paper No. 2011-07. In the article, Professor Strong discusses how class arbitration differs from other forms of multiparty arbitration. Here is the Abstract: In Stolt-Nielsen S.A. v. AnimalFeeds International Corp., the United States Supreme Court stated that class arbitration “changes the nature of arbitration.” Certainly class proceedings do not resemble the traditional view of arbitration as a swift, simple and pragmatic bilateral procedure with few witnesses, documents or formalities, but do these types of large-scale disputes violate the fundamental nature of the arbitral procedure? This article answers that question by considering the jurisprudential nature of arbitration and determining whether and to what extent class arbitration fails to meet the standards necessary for a process to qualify as “arbitration.” During the course of the discussion, the article analyzes the ways in which class arbitration differs from other forms of multiparty arbitration and investigates whether a form of “quasi-arbitration” is in the process of developing as a means of responding to the demands of class proceedings. The article may be downloaded here (without charge) from Social Science Research Network. Other papers by Professor Strong are available here. Technorati Tags: ADR, law, arbitration

A public hearing was held yesterday on a collaborative healthcare bill currently before the 82nd Texas Legislature which would establish a Texas Institute of Health Care Quality and Efficiency. SB 8, which seeks “to improve health care quality, accountability, and cost containment in this state by encouraging health care provider collaboration, effective health care delivery models, and coordination of health care services,” was referred to the Health & Human Services Committee on February 17th. The bill’s author, Senator Jane Nelson, is also the Chair of the Senate Committee on Health and Human Services. The full text of the bill is available here. You may download audio and video of public hearings before the Committee on the Health and Human Services Committee’s website. You may also monitor this and other bills as they move through the Texas Legislature here. The last day of the regular Texas legislative session will be Monday, May 30, 2011. Disputing previously discussed SB 8 here and here. Technorati Tags: Healthcare, Texas Legislation ?

The Corpus Christi Court of Appeals has held it lacked jurisdiction to hear an interlocutory appeal from a trial court’s order which compelled arbitration and also refused to grant a writ of mandamus because a party failed to show an appellate remedy would be inadequate. In Circle Zebra Fabricators, Ltd. v. Americas Welding Corp., No. 13-10-00591-CV, (Tex. App. – Corpus Christi, March 17, 2011), Circle Zebra by and through Circle Zebra Management, L.L.C. (“Circle Zebra”) entered into a Master Service Agreement (MSA) to provide certified welders for work at Keppel Amfels, Inc.’s shipyard located in Brownsville, Texas. In order to meet its obligations under the contract, Circle Zebra purchased equipment, obtained necessary insurance and hired approximately 100 welders. Circle Zebra’s resulting investment totaled more than $1,000,000. After Circle Zebra’s welders began performing work at Keppel Amfels shipyard, Keppel Amfels requested that Circle Zebra meet with Jorge Manuel Garcia and representatives of Americas Welding Corporation (“Americas Welding”) for the stated purpose of expanding the available workforce by hiring Mexican Nationals. Circle Zebra refused to hire Americas Welding personnel and instead filed suit against Americas Welding, Keppel Amfels, Garcia, and Circle Zebra’s “chief foreman manager” Raul Castillo, Sr. alleging tortious interference, breach of contract and breach of fiduciary duty. Circle Zebra alleged that Castillo, Americas Welding, Garcia, and Keppel Amfels conspired “to convert Circle Zebra’s equipment and personnel to their use.” Keppel Amfels filed a motion to compel arbitration based on an arbitration clause contained in the parties’ MSA. Non-signatories Americas Welding, Garcia and Castillo also filed a joint motion to compel arbitration. The trial court granted both Keppel Amfels’ and the non-signatories’ motions and stayed the trial court proceedings pending the results of arbitration. Circle Zebra appealed the order compelling arbitration and sought a writ of mandamus from the Corpus Christi Court of Appeals. In the Court of Appeals, Keppel Amfels filed a motion to dismiss for lack of jurisdiction because the orders compelling arbitration were interlocutory and not subject to appeal. The court agreed and granted Keppel Amfels’ motion. According to the court, an order which compels arbitration and stays court proceedings is not subject to interlocutory appeal under either Texas or federal arbitration laws. In support of Circle Zebra’s writ of mandamus, the company argued that an appeal following arbitration would be inadequate because the alleged conspiracy had put it “out of business” and its cause of action did not arise from the MSA. Additionally, Circle Zebra argued the parties’ agreement explicitly stated it did not confer benefits on third parties or provide rights to third parties to enforce its provisions. Because Circle Zebra only addressed the issue of the adequacy of remedy by appeal in a motion to amend its petition after oral argument occurred, the Corpus Christi Court held, we deny Circle Zebra’s motion to supplement or amend its petition for writ of mandamus to discourage the practice of waiting until after oral argument to raise and address an issue which must be established as a necessary part of the petition for writ of mandamus. According to the court, Circle Zebra also failed to meet its burden to prove the inadequacy of its appellate remedy as a matter of law. The Court of Appeals stated, Delay and expense, standing alone, generally do not render appeal after a final judgment to be an inadequate remedy, and this is particularly true in the instant case because it is, at least in part, based on a contractual dispute, and a “party that prevails on a contractual claim can recover its fees and expenses, even if they were incurred in collateral proceedings like arbitration.” Despite that the court dismissed Circle Zebra’s appeal for lack of jurisdiction and denied its petition for a writ of mandamus, it noted that Circle Zebra’s right to appeal the trial court’s order after arbitration was held was preserved. Additionally, the court’s ability to vacate or modify any arbitration award under the Texas or Federal Arbitration Act was also preserved. Technorati Tags: arbitration, ADR, law

On February 18, 2011, The Northern District of Texas issued a Temporary Restraining Order (TRO) enjoining multiple arbitration proceedings before the Financial Industry Regulatory Authority (FINRA) in Billitteri v. Securities America Inc., et al., No. 3:09-CV-01568-F and related cases, (N.D. Tex., February 18, 2011). In the case, a group of representative plaintiffs in a class action lawsuit jointly filed a Motion for Preliminary Approval of a partial class action settlement with settling defendants from the financial services industry. The representative plaintiffs also filed a Motion for a Temporary Restraining Order to enjoin three scheduled FINRA arbitration proceedings because the plaintiffs in the arbitration proceedings were also members of the proposed class. The representative plaintiffs cited the All Writs Act, 28 U.S.C. § 1651(a), and claimed that allowing the scheduled FINRA arbitrations to proceed would require the settling defendants to expend monies needed for the proposed settlement on defending the arbitrations. The case made the news because the Northern District of Texas issued a TRO to preserve the status quo while the court considered whether to approve the proposed settlement. The court also noted that it would consider the appropriateness of using the All Writs Act to enjoin arbitration proceedings when it decided the parties’ Motion for Preliminary Approval. (Read more here.) Last week, Judge Royal Furgeson denied the parties’ proposed settlement and lifted the TRO: Because the terms of the proposed settlement would involve the enjoining of a number of FINRA arbitrations brought by individual investors against Securities America, the Court set a hearing and briefing schedule for March 18, 2011, the earliest possible date for such a hearing to occur. The Court considered the oral arguments and briefs of all of the parties. In accordance with the Court’s Order from the bench at the conclusion of the hearing, it is the opinion of the Court that the Representative Plaintiff’s Motion should be DENIED. As part of this decision, it is ORDERED the Temporary Restraining Order issued on February 18, 2011 (Billitteri Docket No. 210, Toomey Docket No. 75, McCoy Docket No. 132) and extended on March 7, 2011 (Billitteri Docket No. 290, Toomey Docket No. 89, McCoy Docket No. 179), which temporarily stayed several FINRA arbitrations against Defendant Securities America while the instant Motion was pending, is hereby LIFTED. (N.D. Tex., March 21, 2011, 2011 WL 1033647) The short order and opinion did not go into further detail. Judge Furgeson stated, however, the “Court shall issue a further order in the near future further explaining the Court’s reasoning in making its decision.” Disputing will definitely be keeping an eye out for the Northern District’s forthcoming opinion. You may also read more about the case here. Technorati Tags: arbitration, FINRA, News, securities arbitration