Today, the Second Circuit decided ReliaStar Life Ins. Co, of N.Y. v. EMC Nat’l Life Co., No. 07-0828 (2nd Cir. Apr. 9, 2009). The court held that inclusion in an arbitration agreement of a broad statement that each party will bear the expenses of its own arbitrator and attorney’s fees does not deprive the arbitration panel of authority to award those expenses as a sanction against a party whom the panel determines failed to arbitrate in “good faith.” The court explained that an arbitrators’ finding of bad faith gives rise to an exception to the general rule that each party bears their own expenses. Thus, the arbitration panel did not exceed its authority in awarding attorney’s and arbitrator’s fees. Technorati Tags: arbitration, ADR, law, Second Circuit, attorney’s fees, arbitrator’s fees
Continue reading...As the U.S. Supreme Court and consumer studies on arbitration praise the benefits of arbitration, the 111st Congress is advancing a bill that would ban arbitration in consumer mortgage contracts. H.R. 1728 proposed by Rep. Miller (D- NC), titled the “Mortgage Reform and Anti-Predatory Lending Act of 2009,” would Amend the Truth in Lending Act of 1968. The bill provides, among other things, that “[n]o residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer, other than a reverse mortgage may include terms which require arbitration of any other nonjudicial procedure as the method for resolving any controversy.” Status: Referred to the house Committee on Financial Services on 03/26/2009. See related posts: Plaintiffs Bar Pushes Capitol Hill Agenda (Mar. 31, 2009) by David Ingram, Legal Times. Conversations about Studies Regarding Arbitration (Apr. 1, 2009), National Arbitration Forum Blog. Consumers Won More than Half of Arbitrations Studied (Mar. 12, 2009) by Debra Cassens Weiss, ABA Journal. Technorati Tags: arbitration, ADR, law, legislation, consumer, Mortgage Reform and Anti-Predatory Lending Act of 2009, Truth in Lending Act of 1968
Continue reading...In Nat’l Resort Mgmt v. Cortez, No. 08-10805 (5th Cir. Mar. 31, 2009), the Fifth Circuit cited Hall Street v. Mattel and Citigroup v. Bacon, stating that “the number of grounds for challenging an arbitration award has been substantially reduced.” The two-paragraph unpublished opinion affirmed the lower court’s ruling. The court added that “given the deference accorded to arbitration awards, there is no flaw in this proceedings that would justify upsetting the result” and further stated that “counsel for the movants is warned that such attacks on the integrity of an arbiter should not be leveled without sufficient grounds.” Related posts: Fifth Circuit: Life After Hall Street (Mar. 17, 2009) Dead? Alive? Matter of Opinion? (Dec. 4, 2008) Rau Responds (Jun. 9, 2008) Rau Gives Souter a C-minus (Jun. 5, 2008) Glen Wilkerson on Hall Street v. Mattel (Apr. 19, 2008) No Longer Can You Craft Your Own Arbitral Standard of Review (Mar. 26, 2008) Technorati Tags: arbitration, ADR, law, FAA, manifest disregard of the law, Citigroup Global Markets, Hall Street, Supreme Court, National Resort Management
Continue reading...Last Friday, we wrote about the latest U.S. Supreme Court case related to arbitration. As we re-read the lengthy opinion, one of the issues that caught our attention was the composition of the parties (fully described here) and the potential for conflicts of interest. As Justice Stevens‘ dissenting opinion points out, the majority noted “the problem of entrusting a union with certain arbitration decisions given the potential conflict between the collective interest and the interests of an individual employee seeking to assert his rights.” Both opinions comment extensively on Congressional intent, reaching different results. Justice Thomas, writing for the majority, explains that Congress has accounted for the conflict in several ways and provides a list of alternative avenues available to union members. Justice Stevens, on the contrary, concluded that the holding of 14 Penn Plaza departs from Congressional intent and case law precedent. The decision on 14 Penn Plaza might prompt Congress to pass “The Arbitration Fairness Act” (H.R. 1020) blogged here . This bill would ban mandatory arbitration of consumer and employment disputes. Can this opinion be added to the “series of United States Supreme Court decisions [that] have changed the meaning of the Act [FAA]” that H.R. 1020 is trying to address? See also a Wall Street Journal article here, Professor Ross Runkel’s analysis here, a Legal Times article here, and commentary from the ADR Prof Blog here. Technorati Tags: arbitration, ADR, law, U.S. Supreme Court, ADE waiver, Age Discrimination in Employment Act of 1967, National Labor Relations Act of 1935, 14 Penn Plaza LLC v. Pyett
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.