Arbitration
Fifth Circuit Reverses in Part N.D. of Texas’ Order Compelling Arbitration in Health Plan Sales Dispute
November 6, 2014
The United States Court of Appeals for the Fifth Circuit has reversed portions of a district court’s order compelling arbitration in a contract dispute. In Sharpe v. AmeriPlan Corp., No. 13-10922, (5th Cir., October 16, 2014), four independent business owners (“IBOs”) sold health plans and recruited other IBOs through a network for AmeriPlan Corporation. Under the company’s sales plan, the IBOs became sales directors who were entitled to collect residual income for life based on the sales...
November 6, 2014
The United States Court of Appeals for the Fifth Circuit has reversed portions of a district court’s order compelling arbitration in a contract dispute. In Sharpe v. AmeriPlan Corp., No. 13-10922, (5th Cir., October 16, 2014), four independent business owners (“IBOs”) sold health plans and recruited other IBOs through a network for AmeriPlan Corporation. Under the company’s sales plan, the IBOs became sales directors who were entitled to collect residual income for life based on the sales...
“Agreements” to Arbitrate: How Stands First Options?
November 5, 2014
As recently as 1995, the Supreme Court observed, in First Options of Chicago v. Kaplan, that arbitration was a creature of contract: “[A] party who has not agreed to arbitrate will normally have a right to a court’s decision about the merits of its dispute.” Yet what constitutes an agreement to arbitrate seems to be very much in play since First Options was decided. In that case, owners of an investment company were held to have agreed to arbitrate disputes involving that company, but were...
November 5, 2014
As recently as 1995, the Supreme Court observed, in First Options of Chicago v. Kaplan, that arbitration was a creature of contract: “[A] party who has not agreed to arbitrate will normally have a right to a court’s decision about the merits of its dispute.” Yet what constitutes an agreement to arbitrate seems to be very much in play since First Options was decided. In that case, owners of an investment company were held to have agreed to arbitrate disputes involving that company, but were...
Arbitration and the Contract Exchange
November 5, 2014
Andrew A. Schwartz, Associate Professor of Law at the University of Colorado Law School, has published Arbitration and the Contract Exchange, Ohio State Journal on Dispute Resolution, Vol. 29, No. 2, 2014; U of Colorado Law Legal Studies Research Paper No. 14-7. In his paper, Professor Schwartz examines why arbitration is the most appropriate method for resolving consumer contract-exchange disputes. Here is the abstract: A contract exchange, defined as an organized marketplace for the creation...
November 5, 2014
Andrew A. Schwartz, Associate Professor of Law at the University of Colorado Law School, has published Arbitration and the Contract Exchange, Ohio State Journal on Dispute Resolution, Vol. 29, No. 2, 2014; U of Colorado Law Legal Studies Research Paper No. 14-7. In his paper, Professor Schwartz examines why arbitration is the most appropriate method for resolving consumer contract-exchange disputes. Here is the abstract: A contract exchange, defined as an organized marketplace for the creation...
“Harmonizing” Contract Language Leads Two Circuit Courts To Deny Arbitration
November 5, 2014
Two parties recently convinced federal circuit courts that the language of their arbitration agreements was not sufficient to compel arbitration of their disputes. Both cases turned on how courts “harmonize” language from different parts of an agreement or from multiple agreements. The decision from the Eighth Circuit was a pretty easy one. The parties’ contract required them to mediate any dispute. Then it said: “if the dispute is not resolved through mediation, the parties may submit...
November 5, 2014
Two parties recently convinced federal circuit courts that the language of their arbitration agreements was not sufficient to compel arbitration of their disputes. Both cases turned on how courts “harmonize” language from different parts of an agreement or from multiple agreements. The decision from the Eighth Circuit was a pretty easy one. The parties’ contract required them to mediate any dispute. Then it said: “if the dispute is not resolved through mediation, the parties may submit...
Northern District of Texas Orders Patent Royalty Dispute to Arbitration
November 4, 2014
The Northern District of Texas in Dallas has ordered a patent royalty dispute to arbitration. In Sazy v. DePuy Spine, LLC, No. 3:13-CV-4379-L (N. D. Tex., Sept. 18, 2014), a Texas physician entered into a Product Development Agreement (“PDA”) with several related corporations (“DePuy”) in early 2002. The agreement contained a Supplementary Agreement that outlined the circumstances under which the doctor could earn royalties if the proposed surgical mesh product became sold commercially. The PDA also...
November 4, 2014
The Northern District of Texas in Dallas has ordered a patent royalty dispute to arbitration. In Sazy v. DePuy Spine, LLC, No. 3:13-CV-4379-L (N. D. Tex., Sept. 18, 2014), a Texas physician entered into a Product Development Agreement (“PDA”) with several related corporations (“DePuy”) in early 2002. The agreement contained a Supplementary Agreement that outlined the circumstances under which the doctor could earn royalties if the proposed surgical mesh product became sold commercially. The PDA also...
Amarillo COA Holds Arbitration is Required in Construction Fee Dispute
November 3, 2014
Texas’ Seventh District Court of Appeals in Amarillo has reversed a district court’s decision to deny arbitration in a construction fee dispute. In Journeyman Const. Inc. v. Scottco Mechanical Contractors, Inc., No. 07-13-00393-CV, (Tex. App. – Amarillo, Sept. 26, 2014), a general contractor, Journeyman, entered into a number of subcontracting agreements related to the restoration of the Potter County Courthouse. Each identical subcontract included an alternative dispute resolution provision....
November 3, 2014
Texas’ Seventh District Court of Appeals in Amarillo has reversed a district court’s decision to deny arbitration in a construction fee dispute. In Journeyman Const. Inc. v. Scottco Mechanical Contractors, Inc., No. 07-13-00393-CV, (Tex. App. – Amarillo, Sept. 26, 2014), a general contractor, Journeyman, entered into a number of subcontracting agreements related to the restoration of the Potter County Courthouse. Each identical subcontract included an alternative dispute resolution provision....
Rule Revisions From 5 Top Global Arbitral Institutions
November 3, 2014
"Arbitration is an increasingly popular choice for commercial dispute resolution within the international business community" write Kiera Gans and Amy Billing with Corporate Counsel. Gans and Billing note that, while arbitration is popular, it is receiving some criticism that it's not meeting is goal of an expeditious and cost-effective technique. Arbitral institutions, in response to the criticism, have changed some of their rules as outlined in Corporate Counsel's article . Gans and Billing also...
November 3, 2014
"Arbitration is an increasingly popular choice for commercial dispute resolution within the international business community" write Kiera Gans and Amy Billing with Corporate Counsel. Gans and Billing note that, while arbitration is popular, it is receiving some criticism that it's not meeting is goal of an expeditious and cost-effective technique. Arbitral institutions, in response to the criticism, have changed some of their rules as outlined in Corporate Counsel's article . Gans and Billing also...
Minnesota Supreme Court Finds AAA Rules Give Arbitrator Power To Issue Sanctions Over $600 Million
October 31, 2014
The Minnesota Supreme Court today unanimously confirmed an arbitration award of over $600 million in punitive sanctions. Seagate Technology, LLC v. Western Digital Corp., (Minn. Oct. 8, 2014). Although the appellant argued the arbitrator exceeded his authority by severely sanctioning appellant for fabricating evidence, the court concluded that the parties’ agreement gave the arbitrator power to impose the sanctions. In contrast to the two recent state court decisions vacating arbitration awards,...
October 31, 2014
The Minnesota Supreme Court today unanimously confirmed an arbitration award of over $600 million in punitive sanctions. Seagate Technology, LLC v. Western Digital Corp., (Minn. Oct. 8, 2014). Although the appellant argued the arbitrator exceeded his authority by severely sanctioning appellant for fabricating evidence, the court concluded that the parties’ agreement gave the arbitrator power to impose the sanctions. In contrast to the two recent state court decisions vacating arbitration awards,...
Inherent Powers of Arbitrators to Deal with Ethical Issues
October 31, 2014
Margaret L. Moses, Professor of Law and Director of the International Law and Practice Program at Loyola University Chicago School of Law has authored Inherent Powers of Arbitrators to Deal with Ethical Issues, Forthcoming in the Fordham Papers 2014, Ed. Arthur Rovine; Loyola University Chicago School of Law Research Paper No. 2014-01. In her publication, Professor Moses examines the reasons an arbitrator may need to exercise his or her intrinsic powers to address ethical issues raised during the arbitral...
October 31, 2014
Margaret L. Moses, Professor of Law and Director of the International Law and Practice Program at Loyola University Chicago School of Law has authored Inherent Powers of Arbitrators to Deal with Ethical Issues, Forthcoming in the Fordham Papers 2014, Ed. Arthur Rovine; Loyola University Chicago School of Law Research Paper No. 2014-01. In her publication, Professor Moses examines the reasons an arbitrator may need to exercise his or her intrinsic powers to address ethical issues raised during the arbitral...
Second Federal Circuit Court Refuses To Enforce Arbitration By South Dakota Tribe
October 30, 2014
Using a different analysis, but reaching the same result as a recent decision from the Seventh Circuit, the Eleventh Circuit agreed that a defendant could not compel arbitration of consumer claims before the Cheyenne River Sioux Tribal Nation in South Dakota. Inetianbor v. CashCall, __ F.3d__, 2014 WL 4922225 (11th Cir. Oct. 2, 2014). The Eleventh Circuit found that arbitral forum was integral to the parties’ agreement, but unavailable, and therefore the dispute could remain in federal court. The...
October 30, 2014
Using a different analysis, but reaching the same result as a recent decision from the Seventh Circuit, the Eleventh Circuit agreed that a defendant could not compel arbitration of consumer claims before the Cheyenne River Sioux Tribal Nation in South Dakota. Inetianbor v. CashCall, __ F.3d__, 2014 WL 4922225 (11th Cir. Oct. 2, 2014). The Eleventh Circuit found that arbitral forum was integral to the parties’ agreement, but unavailable, and therefore the dispute could remain in federal court. The...
