In Walmart Fee Fight, Ninth Circuit Balks at ‘Non-Appealable’ Arbitration
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Two Bay Area plaintiff lawyers have won an arbitration battle but lost a bitter $28 million fee war.
The U.S. Court of Appeals for the Ninth Circuit ruled Tuesday that Carolyn Burton and Robert Mills may challenge the allocation of legal fees in multidistrict litigation against Walmart, even though they had previously agreed to “non-appealable” arbitration.
“Permitting parties to contractually eliminate all judicial review of arbitration awards would not only run counter to the text” of the Federal Arbitration Act, Judge Milan Smith Jr. wrote in In re Wal-Mart, “but would also frustrate Congress’s attempt to ensure a minimum level of due process for parties to an arbitration.”
But exercising that judicial review, the Ninth Circuit rejected the attorneys’ fiercely contested claims that arbitrator Layn Phillips colluded with Frederick Furth and another plaintiffs attorney to get more Walmart mediation work, and then stiffed Burton and Mills on fees to punish them for refusing to play ball.
“There are mounds of allegations and claims and excoriations,” Smith observed at oral argument Oct. 8. “You’ve said some horrible things about him.”
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