We recently blogged with Rick Freeman about the important distinctions between consumer (“take it or leave it”) arbitration agreements and agreements to arbitrate between sophisticated commercial parties. We’ve just skimmed HB 3091 (link is to .pdf file), which if passed would severely restrict or outlaw the widespread use of arbitration agreements in consumer contracts in Texas. We will, of course, keep our eye on this. However, at first blush I would think it would be pre-empted by the FAA almost all the time as a practical matter, given that many contracts, like credit card contracts, involve interstate commerce so far as FAA v. TAA analysis is concerned. Remember that the TAA (Texas Arbitration Act) currently more or less prohibits the arbitration of personal injury cases, but that courts have held this prohibition is pre-empted by the FAA in cases involving interstate commerce. I would think the same preemption would apply in a dispute between a Texas consumer and a credit card company over a supposed agreement to arbitrate. The bill is interesting in and of itself, however, in that its existence reflects a growing backlash against the myriad arbitration clauses most of us have agreed to without even really realizing it. Representative Stephen Frost from East Texas authored the bill. We’ll keep you posted. Technorati Tags: arbitration, ADR, law, politics
Continue reading...While we’re on the subject of arguments one can use to try to prevent the confirmation of an arbitral award, we note that the Texas Supreme Court will hear oral argument in the Perry Homes case tomorrow. For more on the case see this article, or this one, or this one from a more mainstream source (the Dallas Morning News). The argument will supposedly be webcast, but when I tried to find specifics on the internet the Court’s website seemed to be down (which I suppose does not bode well for the webcast). Technorati Tags: arbitration, ADR, Texas Supreme Court, law
Continue reading...Earlier this week, the Fifth Circuit handed down an opinion holding that personal jurisdiction did not exist (link is to .pdf) as to several Russian companies that had been sued by a Texan company for allegedly breaching an agreement to produce natural gas from the Yuzhno-Russkoye gas field. Since the contract was executed in Russia and performance would have taken place in Russia, the Court affirmed a trial court ruling that no personal jurisdiction existed against the Russian defendants. Why do we care about this? Well, because it’s Spring Break and there’s not much else going on in the world of Texas arbitrability law. Also, the contract in question contained an arbitration clause requiring arbitration in Russia pursuant to Russian law, a fact the Court noted in its personal jurisdiction analysis. The Russians, of course, had also moved to compel arbitration, but since their plea to the jurisdiction was granted the Court did not reach the arbitration point. Moncrief Oil Int’l, Inc. v. OAO Gazprom, et al., ___ F.3d. ___ (5th Cir. 2007) (Cause No. 06-10552)
Continue reading...A couple weeks ago, we talked about the basic un-appealability of arbitral awards, and the idea that any potential alternative rule must be pursued at the front-end: parties can contract for some sort of appellate review of an arbitral award, but if it’s not in the arbitration clause there is nothing beyond what the FAA or the TAA (in Texas) allows, plus extremely limited non-statutory grounds for challenging confirmation of awards. Which is to say, for the most part, that arbitral awards are not appealable. We should have mentioned, of course, that while drafting some sort of appellate review into an arbitration clause is (we think) allowable in Texas and the Fifth Circuit, it is not possible everywhere. On Monday, the ICM’s blog posted a great memo laying out the different approaches taken by various federal circuits on this issue. Amazing how timing works out some times. Finally, I would note that we’ve written a fairly detailed CLE paper on this very subject, which is linked-to in our prior post on this topic (I’m not linking again because a whole section of the prior paper was rendered obsolete by the Positive Software en banc opinion). We’ve updated the paper once, but it’s due for another update, which should happen in the next couple weeks as Karl gets ready for a CLE talk in Corpus Christi. Once we finish the updated paper I’ll post a link. Technorati Tags: arbitration, ADR, law
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.