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Arbitration
SCOTUS Hears Oral Argument in Arbitration Class Action Waiver Case
March 13, 2013
The Supreme Court of the United States yesterday heard oral argument in American Express Co. v. Italian Colors Restaurant (Case No. 12-133), in which the Court will decide the following issue: Whether the Federal Arbitration Act permits courts, invoking the federal substantive law of arbitrability, to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim. The Second Circuit's opinion in In re American Express III 667 F.3d 204 (2d Cir....
March 13, 2013
The Supreme Court of the United States yesterday heard oral argument in American Express Co. v. Italian Colors Restaurant (Case No. 12-133), in which the Court will decide the following issue: Whether the Federal Arbitration Act permits courts, invoking the federal substantive law of arbitrability, to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim. The Second Circuit's opinion in In re American Express III 667 F.3d 204 (2d Cir....
Proper Standard for Invalidating Arbitration Agreements Based on Prohibitive Costs
March 12, 2013
Richard A. Bales & Mark B. Gerano, Determining the Proper Standard for Invalidating Arbitration Agreements Based on High Prohibitive Costs: A Discussion on the Varying Applications of the Case-by-Case Rule, 14 Transactions: Tenn. J. Bus. L. 57 (2012). Arbitration is a common means of resolving commercial disputes. Although arbitration is an attractive alternative to litigation, arbitration can be disadvantageous to a potential plaintiff because of high costs. The United States Supreme Court...
March 12, 2013
Richard A. Bales & Mark B. Gerano, Determining the Proper Standard for Invalidating Arbitration Agreements Based on High Prohibitive Costs: A Discussion on the Varying Applications of the Case-by-Case Rule, 14 Transactions: Tenn. J. Bus. L. 57 (2012). Arbitration is a common means of resolving commercial disputes. Although arbitration is an attractive alternative to litigation, arbitration can be disadvantageous to a potential plaintiff because of high costs. The United States Supreme Court...
AAA Offers Online Clause-Drafting Tool
March 11, 2013
It has long been broadly agreed that the most effective target for education and training in ADR is the lawyers who draft the deals. Drafting a dispute resolution clause as an elegant risk allocation is surely the Holy Grail of commercial deals. Model clauses are promulgated by many ADR organizations, but inept and hoary arbitration and forum selection provisions continue to be cut-and-pasted, to the dismay of litigators and the chagrin of their clients, who realize too late, once the train has hit them,...
March 11, 2013
It has long been broadly agreed that the most effective target for education and training in ADR is the lawyers who draft the deals. Drafting a dispute resolution clause as an elegant risk allocation is surely the Holy Grail of commercial deals. Model clauses are promulgated by many ADR organizations, but inept and hoary arbitration and forum selection provisions continue to be cut-and-pasted, to the dismay of litigators and the chagrin of their clients, who realize too late, once the train has hit them,...
Former Client Disputes Arbitration Decision Awarding $3M in Attorney Fees
March 11, 2013
On January 29th, a unique case was filed in Dallas County. In Parallel Networks, Inc. v. Jenner & Block, LLP, a former client of the law firm filed a motion to vacate an arbitral award of $3 million in attorney fees. In the case, Jenner & Block represented Parallel Networks on a contingency fee basis in a lawsuit against Oracle. After losing a motion for summary judgment, the law firm reportedly determined that Parallel Networks was unlikely to win a large financial award and withdrew...
March 11, 2013
On January 29th, a unique case was filed in Dallas County. In Parallel Networks, Inc. v. Jenner & Block, LLP, a former client of the law firm filed a motion to vacate an arbitral award of $3 million in attorney fees. In the case, Jenner & Block represented Parallel Networks on a contingency fee basis in a lawsuit against Oracle. After losing a motion for summary judgment, the law firm reportedly determined that Parallel Networks was unlikely to win a large financial award and withdrew...
New Patent Dispute Protocol from CPR Institute
March 8, 2013
CPR’s Patent Mediation Task Force released its Effective Practices Protocol today endorsing the use of alternative dispute...
March 8, 2013
CPR’s Patent Mediation Task Force released its Effective Practices Protocol today endorsing the use of alternative dispute...
Mass. Securities Regulator Urges SEC to Reduce Mandatory Arbitration
March 6, 2013
The 2010 Dodd-Frank Act empowered the SEC to study the use of mandatory arbitration in the securities industry and consider whether to ban regulated firms from imposing mandatory arbitration on customers. To date, the SEC has not launched any such study, presumably because Dodd-Frank was loaded with so many regulatory mandates to the SEC that the agency has not had time or the resources to pursue non-mandatory rule-making. Both broker-dealers (B-Ds) and investment advisers (IAs) – financial...
March 6, 2013
The 2010 Dodd-Frank Act empowered the SEC to study the use of mandatory arbitration in the securities industry and consider whether to ban regulated firms from imposing mandatory arbitration on customers. To date, the SEC has not launched any such study, presumably because Dodd-Frank was loaded with so many regulatory mandates to the SEC that the agency has not had time or the resources to pursue non-mandatory rule-making. Both broker-dealers (B-Ds) and investment advisers (IAs) – financial...
Cost-Prohibitive State Law Claims Compelled While Federal Claims Stay In Court?
March 6, 2013
A recent decision from a federal district court in Tennessee raises a discrepancy in how the courts treat arbitration agreements that hinder a plaintiff’s state law and federal law claims. Cases under the FAA state that arbitration agreements cannot be enforced if enforcement means plaintiffs will not be able to effectively vindicate their federal statutory rights (as the DOJ argued recently). But what happens if plaintiffs cannot effective vindicate their rights under state statutes in arbitration? ...
March 6, 2013
A recent decision from a federal district court in Tennessee raises a discrepancy in how the courts treat arbitration agreements that hinder a plaintiff’s state law and federal law claims. Cases under the FAA state that arbitration agreements cannot be enforced if enforcement means plaintiffs will not be able to effectively vindicate their federal statutory rights (as the DOJ argued recently). But what happens if plaintiffs cannot effective vindicate their rights under state statutes in arbitration? ...
Prius Owners Put the Brakes On Arbitration With Non-Signatory Toyota
March 5, 2013
The Ninth Circuit ruled this week that a class of car owners could pursue their court claims against the manufacturer, Toyota, for product defects and false advertising, despite the existence of an arbitration agreement in each of the owners’ purchase agreements with the car dealerships. The court held that Toyota had not proven either of the types of equitable estoppel that would allow it, as a non-signatory to the purchase agreements, to enforce the agreements’ arbitration clause. Kramer...
March 5, 2013
The Ninth Circuit ruled this week that a class of car owners could pursue their court claims against the manufacturer, Toyota, for product defects and false advertising, despite the existence of an arbitration agreement in each of the owners’ purchase agreements with the car dealerships. The court held that Toyota had not proven either of the types of equitable estoppel that would allow it, as a non-signatory to the purchase agreements, to enforce the agreements’ arbitration clause. Kramer...
U.S. Supreme Court Seems Poised to Compel Arbitration — Again
March 5, 2013
SCOTUSblog has linked to the transcript from yesterday's oral arguments in American Express Co. v. Italian Colors Restaurants. SCOTUSblog, as always, has full materials on the case here. The issue in the case is: Whether the Federal Arbitration Act permits courts, invoking the “federal substantive law of arbitrability,” to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim. The plaintiffs in the case are merchants who claim...
March 5, 2013
SCOTUSblog has linked to the transcript from yesterday's oral arguments in American Express Co. v. Italian Colors Restaurants. SCOTUSblog, as always, has full materials on the case here. The issue in the case is: Whether the Federal Arbitration Act permits courts, invoking the “federal substantive law of arbitrability,” to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim. The plaintiffs in the case are merchants who claim...
FINRA Panel Concludes FAA Preempts Enforcement Class Action Waiver Barring Rules
March 4, 2013
FINRA’s Office of Hearing Officers issued its decision today in Dep’t of Enforcement v. Charles Schwab & Co, an enforcement action in which FINRA alleged that Schwab’s class action and joinder waiver language in its customer agreement violated FINRA rules that preserved the judicial class action remedy for investors and empowered arbitrators to consolidate non-class though similar claims. For more details about the background and the facts of the enforcement action, see my previous...
March 4, 2013
FINRA’s Office of Hearing Officers issued its decision today in Dep’t of Enforcement v. Charles Schwab & Co, an enforcement action in which FINRA alleged that Schwab’s class action and joinder waiver language in its customer agreement violated FINRA rules that preserved the judicial class action remedy for investors and empowered arbitrators to consolidate non-class though similar claims. For more details about the background and the facts of the enforcement action, see my previous...
