Last week, a second round of mediation was ordered in Cull and Cull v. Perry Homes. The ten-year-old dispute has already been the subject of an arbitration, a trial and a court-ordered mediation. Briefly, here are the facts of the case: In 1996, the Culls purchased a house from builder Perry Homes. After problems with the foundation and construction caused the appraised value of their house to plummet from more than $233,000 to $41,000 in only a few years, the Culls filed suit against both the builder and a home warranty company for shoddy construction. Only days before trial, however, the Culls moved to compel arbitration. The case was submitted to arbitration 14 months after the lawsuit was filed. After approximately one year of arbitration, the Culls were awarded $800,000 in damages. Perry Homes appealed the judgment to the Supreme Court of Texas in Perry Homes, et al. v. Robert E. Cull and S. Jane Cull. (Our discussion of the case may be read here.) In a headline grabbing twist, the Supreme Court vacated the arbitration award and sent the case back to the trial court. On March 1, 2010, a Fort Worth jury awarded the Culls approximately $58 million in Cull and Cull v. Perry Homes, et al. In mid-March, the trial court ordered the parties to mediation in an attempt to prevent appeals, but the mediation failed and no settlement was reached. After mediation, the court heard additional arguments regarding the jury award. In April, Disputing updated you on the case here. On November 24, 2010, a state district judge in Tarrant County ordered another round of mediation to be completed by December 29th stating, “The parties need to exhaust all efforts to finally settle this long-running dispute.” The judge also declared if no resolution can be reached, he will issue a ruling. Counsel for the Culls responded “I’m going to be surprised if it settles.” The date for mediation has not yet been set. You may read more about the recent mediation order here. Stay tuned to Disputing for continued updates on this most unusual of cases. Technorati Tags: law, ADR, arbitration, mediation
Continue reading...Voting is currently underway in the fourth annual ABA Journal Blawg 100. The Blawg 100 is compiled by the staff of the ABA Journal and as they state, it “is largely a favorites’ list.” Readers are invited to vote for up to 12 of their favorite blawgs from among the top 100 in each of 12 categories. The categories include: Court Watch Law Biz News Law Prof Plus Torts In Labor IP Law Criminal Justice IMHO Niche For Fun Legal Tech Blawgs must be listed in the ABA Journal’s Blawg Directory in order to be considered. More information about the nominees can be found here. Registration with ABAJournal.com is required in order to vote. Voting ends at close of business on December 30th and winners will be announced in January. According to the Blawg 100’s Frequently Asked Questions, short Blawg Amici testimonials from fans of particular blogs will also be sought by the ABA Journal in 2011. You may comment on the ABA Journal staff picks or nominate your favorite blawg here. Technorati Tags: law
Continue reading...The Corpus Christi Court of Appeals has affirmed an arbitration award stemming from an irrevocable family settlement agreement. In In re Cantu, No. 13-08-00708-CV, (Tex. App. — Corpus Christi, November 18, 2010), several disputes arose between the seven children of an elderly widow regarding her care and custody and the disposition of her estate. Following a court-ordered mediation, all seven of the widow’s children entered into an irrevocable family settlement agreement. The agreement contained an arbitration provision which stated the mediator would act as an arbitrator in the event “of any dispute regarding the interpretation and implementation of” the agreement. After a dispute arose, a trial court compelled arbitration. During the arbitration, “Appellants did not submit proposals, comments, or responses to the arbitrator regarding the issues subject to arbitration and did not personally appear at the arbitration, although they were represented by counsel at the hearing.” After “the arbitrator issued an eighteen page arbitration award, including extensive factual and legal conclusions, which generally collected and divided the estate,” the trial court confirmed the arbitration award. On appeal, appellants argued the arbitration award was invalid “because the arbitrator exceeded his powers and the award was obtained by undue means.” The Court of Appeals rejected this argument because it was previously addressed by the court in In re Cantu, (Tex. App. — Corpus Christi 2009), and “no new or additional facts, legal analysis, or argument that would change the disposition of this issue,” were presented. Appellants next argued: (1) the award should be vacated because the arbitrator exceeded his authority by enforcing contractual provisions that are prohibited by law; and (2) the award should be vacated because the arbitrator exceeded his authority by issuing an award that violates public policy. In addressing appellants’ first argument, the Appeals Court cited to Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008): In 2008, the United States Supreme Court held that the Federal Arbitration Act’s statutory grounds for vacating an arbitration award are the exclusive means to vacate an award, thus foreclosing any contractual ground for vacatur of an arbitration award. After the Corpus Christi court stated the applicability of common law vacatur was not determinative in the case at hand, the court addressed “appellants’ second issue, that is, whether the arbitrator exceeded his authority, without deciding whether the common law doctrines referenced therein remain applicable.” According to the court: Because of the breadth of the arbitration agreement, we conclude that the arbitrator was authorized to determine that the property rights at issue herein arose out of or were related to the agreement or involved a common question of law or fact. The court went on to hold that the arbitration agreement could not be overturned on public policy grounds. Finally, the Court of Appeals held the arbitrator did not abuse his discretion when he denied appellants’ request to continue the arbitration despite that writs of attachment had issued and appellants were under threat of arrest because: In requesting that the arbitrator continue the hearing, appellants did not argue that their presence and testimony at the arbitration was material, they made no offering of what testimony or evidence they planned to present, and they did not show that any such evidence could not be procured by means other than their attendance at arbitration. Further, as stated by the arbitrator, appellants had the opportunity to present testimony at the arbitration by affidavits, but failed to avail themselves of that opportunity. The Corpus Christi Court of Appeals affirmed the judgment of the trial court. Technorati Tags: law, ADR, arbitration
Continue reading...Part II.A: Section 2 Express Preemption – Textual Analysis by Philip J. Loree Jr. I. Introduction Part I of this series (here) was published the day before the United States Supreme Court heard oral argument in AT&T Mobility, LLC v. Concepcion, No. 09-893 (blogged here, here, here and here). Now that the argument has taken place, and we have had a chance to review the transcript (here), and listen to the audio (here), it’s time to begin delving into the express and implied preemption issues discussed at the argument, and considering the extent to which, if at all, Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 559 U.S. ___, 130 S. Ct. 1758 (2010), bears on their resolution. Both Disputing and the Loree Reinsurance and Arbitration Law Forum recently posted their preliminary post-argument analyses (see here and here). I believe the argument was basically a toss-up, and that it mainly confirmed what I already knew or had surmised: This is a very difficult case, and the eight Justices who asked questions appear to be divided along ideological lines. I expected no less in light of the 5-3 and 5-4 split decisions in Stolt-Nielsen and Rent-A-Center West v. Jackson, 561 U.S. ___, 130 S. Ct. 2772 (2010). I was, however, quite impressed by how prepared and engaged the Court was, and was particularly impressed by the excellent job both counsel did in presenting their clients’ cases. (Andrew J. Pincus of the Washington, DC office of Mayer Brown LLP represented Petitioner AT&T Mobility, LLC and Deepak Gupta of the Public Citizen Litigation Group in Washington, DC represented Respondents, the Concepcions.) Of the eight Justices who asked questions, the four more liberal ones (Associate Justices Ruth Bader Ginsburg, Stephen G. Breyer, Sonia M. Sotomayor and Elena Kagan) appear to be leaning in favor of finding that Section 2 of the Federal Arbitration Act does not preempt the Discover Bank rule, while the four more conservative ones (Chief Justice John G. Roberts, Jr. and Associate Justices Antonin G. Scalia, Anthony M. Kennedy, and Samuel J. Alito, Jr.) appear to be leaning the other way. That said, Justices Ginsburg and Breyer asked the Concepcions’ counsel some tough questions, while Justices Scalia and Kennedy asked AT&T Mobility’s counsel some equally tough ones. The argument shed no meaningful light on what Associate Justice Clarence Thomas makes of this case. That came as no surprise; Justice Thomas only rarely questions counsel at oral argument, and that is undeniably his prerogative as a Supreme Court Justice. He joined in the Stolt-Nielsen and Rent-A-Center majority opinions, but those cases, unlike this one, did not directly concern the preemptive scope of the Federal Arbitration Act. Justice Thomas may well hold the deciding vote, but where he’ll ultimately cast it, nobody (at least outside the Supreme Court) knows or can predict with any reasonable degree of certainty. It is difficult to analyze this complex case without a fairly comprehensive understanding of the legal landscape against which the Court will rule. A number of commentators predict a victory for the Concepcions, but to the extent these commentators’ analyses and arguments are based on legal sources – as opposed to public policy, ideological preference, or perceptions about certain Justices’ ideological preferences — they are mainly based on oral argument questions. Those are certainly important sources of clues concerning the likely outcome, but hardly the most persuasive or reliable ones. The Court’s prior interpretations of Section 2’s savings clause are obviously relevant as they place in context what transpired at the argument, and may well presage how the Court will interpret the savings clause in this case. Accordingly, this Part II.A , and the upcoming Part II.B., will discuss the general principles of express preemption under Section 2, and how they bear on the question before the Court. Part II.A will focus on a textual approach to construction, and Part II.B on a purposive one. Both approaches, as we shall see, favor AT&T Mobility’s position. II. Express Preemption under Section 2 of the Federal Arbitration Act Section 2 of the Federal Arbitration Act declares that arbitration agreements within its scope “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Section 2 establishes federal law governing the enforceability of arbitration agreements that is applicable in both state and federal courts. Southland Corp. v. Keating, 465 U.S. 1, 16 (1984): “[in] enacting § 2 of the federal Act, Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.” Southland, 465 U.S. at 10. The “central or primary purpose” of this federal substantive law “is to ensure that private agreements to arbitrate are enforced according to their terms.” See Stolt-Nielsen, 130 S. Ct. at 1773 (quotations and citations omitted). This “broad principle of enforceability” is limited in two respects only: 1. The arbitration “provisions” “must be part of a written maritime contract or a contract ‘evidencing a transaction involving commerce;’” and 2. “such clauses may be revoked upon [state-law] ‘grounds as exist in law and equity for the revocation of any contract.’” Southland, 465 at 10-11 (quoting 9 U.S.C. §§ 1 & 2). There is no dispute that AT&T Mobility’s arbitration agreement is “part of a. . . contract ‘evidencing a transaction involving commerce.’” The dispute is whether the Discover Bank rule is one for the “revocation of any contract” within the meaning of the savings clause. To answer that question, the Court will need to consider, among other things, whether “any contract,” as used in the savings clause, was intended to mean “all contracts” or “contracts of whatever kind” — or whether it means “some contracts that are not agreements to arbitrate;” “contracts of the type containing the arbitration agreement;” or “dispute resolution contracts.” III. A Textual Construction of Section 2’s Savings Clause Justices Scalia and Thomas are […]
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.