Today is the final day of the American College of Healthcare Executives’ (ACHE) 2011 Congress on Healthcare Leadership. This year, the Chicago, Illinois event offered attendees “more than 100 educational seminars, special programs, networking events and professional development possibilities.” This morning, Disputing’s own Karl Bayer and Holly Hayes will present “Introducing Conflict Resolution Strategies in Health Care” at 9 am in the State Ballroom of the Palmer House Hilton. You may follow ACHE Congress events on Twitter @ACHECongress. You can also follow Karl on Twitter @karlbayer. More information on the 2011 ACHE Congress is available here. Disputing previously blogged about the event here. Technorati Tags: Healthcare, Mediation
Continue reading...The Southern District of Texas has denied an ex parte emergency application for a temporary restraining order which sought to enjoin a pending foreign arbitration proceeding because the party seeking the order failed to meet its burden under Rule 65 of the Federal Rules of Civil Procedure. In S&T Oil Equipment and Machinery, LTD v. Juridica Investments Ltd., No. H-11-0542 (S.D. Tex., March 10, 2011), S&T Oil entered into an investment contract with Juridica Investments Limited (“JIL”) under which JIL would provide S&T Oil with partial funding for the costs and fees arising from an arbitration proceeding between S&T Oil and the Romanian government. The arbitration was held before the International Centre for the Settlement of Investment Disputes in Washington, D.C. between 2007 and 2009, during which S&T Oil was represented by King & Spalding. The investment agreement between JIL and S&T Oil required all disputes between the parties be arbitrated and further mandated that any arbitration proceedings must be held in Guernesy, Channel Islands, where JIL was incorporated. Additionally, the agreement stated all arbitrations were to be conducted through the London Court of International Arbitration (“LCIA”). JIL initiated arbitration proceedings against S&T Oil on December 22, 2010. S&T Oil sought to enjoin the arbitration by filing an ex parte emergency application for a temporary restraining order in the Southern District of Texas. Before the court, S&T Oil alleged the arbitration clause in the parties’ investment agreement was unenforceable under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards as implemented through 9 U.S.C. §§ 201-208, procured by fraud and substantially and procedurally unconscionable under Texas law. According to S&T Oil, the arbitration agreement was substantively unconscionable for three reasons: It would be significantly more expensive to arbitrate before the LCIA in Guernsey; JIL had the ability to influence the selection of arbitrators through a shared board member with the LCIA, which presented an undisclosed conflict of interest and fraudulent inducement in the formation of the agreement; and Holding the arbitration in Guernsey would deprive S&T Oil of its day in court. S&T Oil also argued procedural unconscionability on the basis that its counsel, King & Spalding, acted in its own interest when it advised S&T Oil to enter into the funding investment agreement with JIL. According to the court, because S&T Oil merely presented LCIA’s schedule of arbitration costs and a comparison of air travel costs, but did not provide an estimate of the total costs of arbitration, the company failed to demonstrate the expense of arbitration before the LCIA in Guernsey would be materially greater than federal litigation in Houston. Additionally, no estimate regarding the expense of domestic litigation was offered. The court also stated travel costs were not necessarily implicated in the matter because the arbitration provision at issue provided for alternatives to in-person hearings. Next, S&T Oil asserted that a non-disclosed conflict of interest existed since one of JIL’s non-executive Board of Directors was also a member of the Board of Directors for LCIA. LCIA’s board members are responsible for appointing the LCIA Court which then appoints arbitrators to specific proceedings. JIL responded by presenting an affidavit which stated the board member in question was never a board member of LCIA and had no influence on the selection and appointment of arbitrators. According to the Southern District, S&T Oil failed to meet the evidentiary burden necessary to refute the affidavit. The court then refused to find substantive unconscionability despite a requirement that the arbitration be conducted in Guernsey because both parties were sophisticated commercial entities and the arbitration provision was prominent within the larger investment agreement. Finally, the court dismissed S&T Oil’s procedural unconscionability argument because the company also retained independent counsel unaffiliated with King & Spalding to review the agreement with JIL. S&T Oil’s independent legal counsel reviewed the agreement and informed S&T Oil that the arbitration clause was likely enforceable. Because S&T Oil failed to establish any of the four elements necessary pursuant to Rule 65, the Southern District of Texas denied the company’s motion for an emergency temporary restraining order. Technorati Tags: arbitration, ADR, law
Continue reading...Nancy Welsh, Professor of Law at the Pennsylvania State University Dickinson School of Law recently authored an interesting article entitled, “Integrating ‘Alternative’ Dispute Resolution into Bankruptcy: As Simple (and Pure) as Motherhood and Apple Pie?” Nevada Law Journal, Vol. 11, April 2011; The Pennsylvania State University Legal Studies Research Paper No. 6-2011; Conflict Resolution and the Economic Crisis, Symposium Issue. In her article, Professor Welsh advocates for greater use of alternative dispute resolution mechanisms in both bankruptcy and foreclosure matters. Additionally, she argues for increased education and regulation of attorneys with regard to alternative dispute resolution. Here is the abstract: Today, there can be little doubt that “alternative” dispute resolution is anything but alternative. Nonetheless, many judges, lawyers (and law students) do not truly understand the dispute resolution processes that are available and how they should be used. In the shadow of the current economic crisis, this lack of knowledge is likely to have negative consequences, particularly in those areas of practice such as bankruptcy and foreclosure in which clients, lawyers, regulators, and courts work under pressure, often with inadequate time and financial resources to permit careful analysis of procedural options. Potential negative effects can include: (1) impairment of a lawyer’s ability to provide her clients with competent advice regarding the appropriate application of these procedures; (2) impairment of a lawyer’s ability to suggest new dispute resolution hybrids that are both creative and implementable; (3) inappropriate use of dispute resolution procedures, adversely affecting clients, third party beneficiaries/victims, sponsoring institutions, and the integrity of dispute resolution as a field; (4) inadequate regulation, monitoring, and use of dispute resolution procedures; (5) the temptation of some lawyers, clients, and institutions to make intentionally inappropriate and even unethical use of dispute resolution procedures; and (6) new, and sometimes entirely unnecessary, satellite litigation arising out of the use of dispute resolution procedures. Meanwhile, the current ethics rules for lawyers, which are based largely on the American Bar Association’s Model Rules of Professional Conduct and are supposed to provide some sort of an ethical and professional brake upon “sharp practices” by lawyers, are either so ambiguous or so insufficient in their treatment of “non-adjudicative” dispute resolution procedures that they may invite bad behavior by clever clients or their lawyers. This Article tells two tales – one hypothetical, the other the real story that inspired the hypothetical – that illustrate many of the negative effects described supra. While now is the time to advocate for the increased use of dispute resolution procedures in bankruptcy and foreclosure matters, now is also the time to demand more stringent education and regulation of lawyers to assist them in making sufficiently knowledgeable, skillful and ethical use of “alternative” dispute resolution procedures, especially in the court-connected context. Law schools, meanwhile, play an essential role in educating students regarding existing dispute resolution procedures and their application, but law schools are much more likely to incorporate such material into their curricula if bar exams test for future lawyers’ knowledge and thoughtful application of these procedures. Last, the Model Rules of Professional Conduct and states’ ethics rules for lawyers should be updated to respond to the many ethical ambiguities that currently haunt non-adjudicative court-connected dispute resolution. The article may be downloaded here (without charge) from Social Science Research Network. What are your thoughts? Technorati Tags: ADR, law, mediation, arbitration
Continue reading...The Dallas Court of Appeals has held that a trial court properly rejected a party’s motion to seal an arbitration award as part of an enforcement petition despite the existence of a confidentiality agreement between the parties. In McAfee v. Weiss, 05-09-01102-CV (Tex. App. – Dallas, March 16, 2011), Kevin M. Weiss filed a petition to confirm an arbitration award against McAfee in state court. Weiss, a former president at McAfee, Inc. was terminated in 2006. As a result of termination of Weiss’ employment, Weiss and McAfee engaged in an arbitration proceeding. McAfee and Weiss agreed to enter into a protective order which allowed parties to mark exhibits and testimony for the arbitration as “Confidential” or “Attorneys’ Eyes Only.” Additionally, counsel for Weiss assured a number of witnesses that their testimony would remain confidential. The arbitrator ultimately ruled in Weiss’ favor and issued an award that was supported by numerous citations to witness testimony and documentary exhibits. In June 2009, Weiss filed a petition to confirm the award and attached a copy of the arbitral award to his petition. McAfee filed a motion to seal both the petition and the award and requested a temporary sealing order. The trial court issued a temporary order, and a full hearing was held on August 24, 2009. After the hearing, the judge issued a memorandum order which stated McAfee failed to meet its burden under Texas Rules of Civil Procedure 76a. The temporary sealing order remained in effect, however, until McAfee and Weiss agreed to certain redactions in the award. Next, Weiss “filed a proposed redacted arbitration award” after the parties failed to agree on necessary redactions. After another hearing, a final order denying McAfee’s motion for a sealing order, vacating the temporary sealing order and confirming the arbitration award was issued. Finally, the trial court ordered that the redacted version of the award as submitted by Weiss be substituted into the court record. After determining that the Dallas Court of Appeals had jurisdiction to hear the appeal, the court considered whether the trial court abused its discretion when it denied McAfee’s motion to seal the petition and award. McAfee argued the trial court erred because arbitration awards are not “court records” within the definition of Texas Rules of Civil Procedure 76a. The court concluded that McAfee failed to preserve the issue on appeal on procedural grounds, but also rejected it on the merits. Looking at the plain language of the rule, the court concluded that an arbitration award submitted by a party in connection with a matter before the court is clearly a court record within the meaning of Rule 76a. Additionally, McAfee’s argument that the confidentially agreement between the parties and enforced by the arbitrator exempted the award from the definition was not persuasive because the facts did not fit one of the specific exceptions defined by the rule. Next, the Dallas Court held McAfee failed to meet the requirements to overcome the presumption that court records should be open to the public: We have found no cases recognizing a party’s general interest in a confidentiality agreement – even an agreement reinforced by an arbitrator’s rules and orders – as a specific, serious, and substantial interest within the meaning of 76a(1). The relevant case law indicates that the interest relied on must be more specific than that. Because an arbitration award submitted by a party in connection with a matter before the court is a court record within the meaning of Rule 76a and McAfee failed to offer evidence of a specific, serious and substantial interest which required sealing the award, the Dallas Court of Appeals affirmed the trial court. Technorati Tags: ADR, law, arbitration
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.