Arbitration
Sanctions Against Parties Challenging Arbitration Awards
March 19, 2013
Continuing the recent trend in US Federal courts to push back against frivolous challenges to arbitration awards, the US 7th Circuit Court of Appeals yesterday reminded challengers about the “high risk of sanctions” against parties bringing judicial challenges to arbitration awards. The Court did not in fact award sanctions in the case. The Court did, however, give effect to a “cost-shifting” provision in the distributorship agreement at issue to compel the losing party to reimburse the successful...
March 19, 2013
Continuing the recent trend in US Federal courts to push back against frivolous challenges to arbitration awards, the US 7th Circuit Court of Appeals yesterday reminded challengers about the “high risk of sanctions” against parties bringing judicial challenges to arbitration awards. The Court did not in fact award sanctions in the case. The Court did, however, give effect to a “cost-shifting” provision in the distributorship agreement at issue to compel the losing party to reimburse the successful...
Why is Privatized Procedure so Rare?
March 19, 2013
Increasingly we hear that civil procedure lurks in the shadow of private law. Scholars suggest that the civil rules are mere defaults, applying if the parties fail to contract around them. When judges confront terms modifying court procedures — a trend said to be explosive — they seem all-too-willing to surrender to the inevitable logic of private and efficient private ordering. How concerned should we be? This Article casts a wide net to find examples of private contracts governing procedure,...
March 19, 2013
Increasingly we hear that civil procedure lurks in the shadow of private law. Scholars suggest that the civil rules are mere defaults, applying if the parties fail to contract around them. When judges confront terms modifying court procedures — a trend said to be explosive — they seem all-too-willing to surrender to the inevitable logic of private and efficient private ordering. How concerned should we be? This Article casts a wide net to find examples of private contracts governing procedure,...
Costly Litigation and Optimal Damages
March 18, 2013
A basic principle of law is that damages paid by a liable party should equal the harm caused by that party. However, this principle is not correct when account is taken of litigation costs, because they too are part of the social costs associated with an injury. In this article we examine the influence of litigation costs on the optimal level of damages, assuming that litigation costs rise with the level of damages.
March 18, 2013
A basic principle of law is that damages paid by a liable party should equal the harm caused by that party. However, this principle is not correct when account is taken of litigation costs, because they too are part of the social costs associated with an injury. In this article we examine the influence of litigation costs on the optimal level of damages, assuming that litigation costs rise with the level of damages.
Court Compels Arbitration of Signatory While Staying Proceeding Against Nonsignatories
March 18, 2013
Security Life Insurance Company was the successor to certain reinsurance agreements covering underlying life insurance risks. Pursuant to the agreements, the reinsurers created a trust in order to fund the required reserves. The trustee, INA Trust FSB, and the reinsurers thereafter allegedly created a new trust, transferred funds from the previous trust to one of the reinsurers, and/or its principal, but did not name Security Life as a beneficiary under the new trust, as allegedly required under...
March 18, 2013
Security Life Insurance Company was the successor to certain reinsurance agreements covering underlying life insurance risks. Pursuant to the agreements, the reinsurers created a trust in order to fund the required reserves. The trustee, INA Trust FSB, and the reinsurers thereafter allegedly created a new trust, transferred funds from the previous trust to one of the reinsurers, and/or its principal, but did not name Security Life as a beneficiary under the new trust, as allegedly required under...
Fifth Circuit: Courts Lack Jurisdiction Over Foreign Arbitration Awards
March 15, 2013
The Fifth Circuit affirms that a Court may dismiss a petition to confirm a foreign arbitration award for lack of personal jurisdiction under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Court’s opinion discusses recent Supreme Court precedent that clarifies that foreign entities that are neither present nor have property in the United States are nevertheless entitled to due process protections to challenge the exercise of personal jurisdiction...
March 15, 2013
The Fifth Circuit affirms that a Court may dismiss a petition to confirm a foreign arbitration award for lack of personal jurisdiction under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Court’s opinion discusses recent Supreme Court precedent that clarifies that foreign entities that are neither present nor have property in the United States are nevertheless entitled to due process protections to challenge the exercise of personal jurisdiction...
“Cheeky” Maryland Rule, Requiring Mutuality In Arbitration Agreements, Not Preempted Under Concepcion
March 15, 2013
In most cases, if this blog mentions Concepcion, it means that a court has found a state statute or line of decisions is preempted by the FAA. A Maryland rule, however, recently ran the Concepcion gauntlet and survived. See Noohi v. Toll Bros., Inc., __ F.3d __, 2013 WL 680690 (4th Cir. Feb. 26, 2013). The Maryland rule in question is that arbitration provisions must be supported by consideration independent of the underlying contract, “namely, mutual obligation,” and stems from...
March 15, 2013
In most cases, if this blog mentions Concepcion, it means that a court has found a state statute or line of decisions is preempted by the FAA. A Maryland rule, however, recently ran the Concepcion gauntlet and survived. See Noohi v. Toll Bros., Inc., __ F.3d __, 2013 WL 680690 (4th Cir. Feb. 26, 2013). The Maryland rule in question is that arbitration provisions must be supported by consideration independent of the underlying contract, “namely, mutual obligation,” and stems from...
Arbitration and Access to Justice: Economic Analysis
March 14, 2013
Mandatory arbitration clauses in consumer contracts are widely regarded as problematic because they limit consumer’s access to judicial forums, to fair procedures, and potentially to any kind of remedy. But rather than looking at consumers as a group, I examine which sub groups of consumers are affected by this limitation more than others. I argue that in most circumstances, access to courts benefits the elite, not the weak. It is a species of open-access policy that has an unintended regressive...
March 14, 2013
Mandatory arbitration clauses in consumer contracts are widely regarded as problematic because they limit consumer’s access to judicial forums, to fair procedures, and potentially to any kind of remedy. But rather than looking at consumers as a group, I examine which sub groups of consumers are affected by this limitation more than others. I argue that in most circumstances, access to courts benefits the elite, not the weak. It is a species of open-access policy that has an unintended regressive...
Fort Worth Appeals Court Holds Insurance Company is Estopped from Forcing Arbitration
March 14, 2013
In an interlocutory appeal, Texas’ 2nd District Appeals Court has affirmed a trial court’s order denying arbitration. In New Hampshire Insurance Co. v. Magellan Reinsurance Company Ltd., No. 02-12-00196-CV (Tex.App.–Fort Worth, 2013), New Hampshire Insurance and Magellan Reinsurance Company entered into a reinsurance agreement where a trust account was set up to perfect payment. As part of the reinsurance agreement, the two companies agreed to arbitrate all disputes related to the interpretation...
March 14, 2013
In an interlocutory appeal, Texas’ 2nd District Appeals Court has affirmed a trial court’s order denying arbitration. In New Hampshire Insurance Co. v. Magellan Reinsurance Company Ltd., No. 02-12-00196-CV (Tex.App.–Fort Worth, 2013), New Hampshire Insurance and Magellan Reinsurance Company entered into a reinsurance agreement where a trust account was set up to perfect payment. As part of the reinsurance agreement, the two companies agreed to arbitrate all disputes related to the interpretation...
Non-Signatories Lose In Two Federal Circuits When Trying To Enforce Arbitration
March 14, 2013
Two federal circuit courts recently reversed district court decisions allowing non-signatories to compel arbitration. The analysis emphasizes that for a defendant to prove equitable estoppel compels arbitration, the plaintiff’s legal claims must be closely related to the contract containing the arbitration clause. Retail grocers asserted antitrust claims against wholesalers in In re Wholesale Grocery Products Antitrust Litig., ___ F.3d __, 2013 WL 514758 (8th Cir. Feb. 13, 2013). The plaintiffs...
March 14, 2013
Two federal circuit courts recently reversed district court decisions allowing non-signatories to compel arbitration. The analysis emphasizes that for a defendant to prove equitable estoppel compels arbitration, the plaintiff’s legal claims must be closely related to the contract containing the arbitration clause. Retail grocers asserted antitrust claims against wholesalers in In re Wholesale Grocery Products Antitrust Litig., ___ F.3d __, 2013 WL 514758 (8th Cir. Feb. 13, 2013). The plaintiffs...
Recent Supreme Court Arbitration Rulings Affect Employment Class Action Arbitrations
March 13, 2013
Professor Kristen Blankley (University of Nebraska College of Law) has posted Recent Supreme Court Arbitration Rulings Affect Employment and Class Action Arbitrations on SSN. It is a short article discussing recent class action arbitration and employment arbitration cases. You may download the article (for free) here.
March 13, 2013
Professor Kristen Blankley (University of Nebraska College of Law) has posted Recent Supreme Court Arbitration Rulings Affect Employment and Class Action Arbitrations on SSN. It is a short article discussing recent class action arbitration and employment arbitration cases. You may download the article (for free) here.
