Arbitration
The Private Jury Trial of a Business Case
August 7, 2015
In 21 years as a federal district judge handling hundreds of jury trials, I became convinced that they are an excellent way to decide a broad range of cases. Criminal cases and many tort cases—turning on issues of common experience—are usually cited as paradigmatic examples. But there are others too. First, of course, when the issue involves what is reasonable or unreasonable, the decision reflecting the viewpoints of six, eight, or 12 laypeople inevitably adds a dimension and perspective...
August 7, 2015
In 21 years as a federal district judge handling hundreds of jury trials, I became convinced that they are an excellent way to decide a broad range of cases. Criminal cases and many tort cases—turning on issues of common experience—are usually cited as paradigmatic examples. But there are others too. First, of course, when the issue involves what is reasonable or unreasonable, the decision reflecting the viewpoints of six, eight, or 12 laypeople inevitably adds a dimension and perspective...
California Appellate Court Affirms Order Denying Motion to Compel Arbitration
August 4, 2015
In Pinela v. Neiman Marcus Group, Inc. (6/29/15) --- Cal.App.4th ---, the plaintiffs brought a class and PAGA representative action alleging a number of wage and hour violations. The trial court granted the defendant's motion to compel arbitration, except as to the PAGA claims. The trial court later reconsidered and denied the motion, holding that the arbitration agreement was illusory, The Court of Appeal affirmed, holding as follows: Under Code of Civil Procedure section 1008, a trial court...
August 4, 2015
In Pinela v. Neiman Marcus Group, Inc. (6/29/15) --- Cal.App.4th ---, the plaintiffs brought a class and PAGA representative action alleging a number of wage and hour violations. The trial court granted the defendant's motion to compel arbitration, except as to the PAGA claims. The trial court later reconsidered and denied the motion, holding that the arbitration agreement was illusory, The Court of Appeal affirmed, holding as follows: Under Code of Civil Procedure section 1008, a trial court...
Agreement to Arbitrate Upheld after LLC Converted to Corporation
July 29, 2015
An arbitration clause in a limited liability company (LLC) agreement controls in a dispute involving a shareholder, despite the fact that the LLC had converted to a corporation that did not have a similar dispute resolution mechanism in its incorporation documents. 3850 & 3860 Colonial Blvd., LLC v. Griffin. Section leaders consider the Delaware case an interesting decision because of the court’s strict contractual reading of an LLC agreement requiring arbitration and ignoring a defendant’s alleged...
July 29, 2015
An arbitration clause in a limited liability company (LLC) agreement controls in a dispute involving a shareholder, despite the fact that the LLC had converted to a corporation that did not have a similar dispute resolution mechanism in its incorporation documents. 3850 & 3860 Colonial Blvd., LLC v. Griffin. Section leaders consider the Delaware case an interesting decision because of the court’s strict contractual reading of an LLC agreement requiring arbitration and ignoring a defendant’s alleged...
Uber Arbitration Agreement Unconscionable
July 29, 2015
We used to count on Britney Spears as the leading source for blog fodder. Move aside Britney. Uber just passed you by. We have two new Uber stories just in California alone. First, last week the District Court for the Northern District of California issued its opinion in Mohamed v. Uber Technologies. Paul Mollica of the Employment Law Blog called that decision a "blockbuster," because it ruled Uber's arbitration agreement with its drivers unconscionable and therefore unenforceable. The opinion...
July 29, 2015
We used to count on Britney Spears as the leading source for blog fodder. Move aside Britney. Uber just passed you by. We have two new Uber stories just in California alone. First, last week the District Court for the Northern District of California issued its opinion in Mohamed v. Uber Technologies. Paul Mollica of the Employment Law Blog called that decision a "blockbuster," because it ruled Uber's arbitration agreement with its drivers unconscionable and therefore unenforceable. The opinion...
Defendant’s Failure To Pay Arbitration Fees Cannot Stymie Claims Against It
July 28, 2015
Usually, when faced with a respondent who refuses to pay its share of the arbitration fees, a claimant simply pays both sides’ fees, so that the arbitration can proceed. A new case out of the Tenth Circuit answers the question: what happens if it does not pay both sides’ fees? Pre-Paid Legal Services, Inc. v. Cahill, __ F.3d__, 2015 WL 3372136 (10th Cir. May 26, 2015). Somewhat surprisingly, the answer is that the claimant can choose to litigate its case in court, where there are no fees. Pre-Paid...
July 28, 2015
Usually, when faced with a respondent who refuses to pay its share of the arbitration fees, a claimant simply pays both sides’ fees, so that the arbitration can proceed. A new case out of the Tenth Circuit answers the question: what happens if it does not pay both sides’ fees? Pre-Paid Legal Services, Inc. v. Cahill, __ F.3d__, 2015 WL 3372136 (10th Cir. May 26, 2015). Somewhat surprisingly, the answer is that the claimant can choose to litigate its case in court, where there are no fees. Pre-Paid...
Texas High Court OKs Attorney/Client Arbitration Clause
July 24, 2015
The ethics of lawyers signing up clients with contracts that make sure fee disputes never reach a jury is certainly debatable, but such arbitration clauses are not "unconscionable," according to a recent ruling by the Texas Supreme Court. The decision reverses and remands a decision by Corpus Christi's 13th Court of Appeals denying a motion to compel arbitration sought by the firm Royston, Rayzor, Vickery & Williams. The intermediate appellate court found it "unconscionable" to sign up a client...
July 24, 2015
The ethics of lawyers signing up clients with contracts that make sure fee disputes never reach a jury is certainly debatable, but such arbitration clauses are not "unconscionable," according to a recent ruling by the Texas Supreme Court. The decision reverses and remands a decision by Corpus Christi's 13th Court of Appeals denying a motion to compel arbitration sought by the firm Royston, Rayzor, Vickery & Williams. The intermediate appellate court found it "unconscionable" to sign up a client...
SCOTUS to Hear Appeal on Enforceability of Arbitration in CA
July 22, 2015
The United States Supreme Court has granted DIRECTV’s petition for Writ of Certiorari and will hear the following question presented: Whether the California Court of Appeal erred by holding, in direct conflict with the Ninth Circuit, that a reference to state law in an arbitration agreement governed by the Federal Arbitration Act requires the application of state law preempted by the Federal Arbitration Act. As reported here previously, DIRECTV had moved to dismiss or stay a class action litigation...
July 22, 2015
The United States Supreme Court has granted DIRECTV’s petition for Writ of Certiorari and will hear the following question presented: Whether the California Court of Appeal erred by holding, in direct conflict with the Ninth Circuit, that a reference to state law in an arbitration agreement governed by the Federal Arbitration Act requires the application of state law preempted by the Federal Arbitration Act. As reported here previously, DIRECTV had moved to dismiss or stay a class action litigation...
Arbitration: The Underused Alternative for Oil and Gas Disputes
July 21, 2015
Arbitration clauses are a staple in international energy contracts and oil and gas cases are the largest category of cases filed with ICSID, the World Bank's arbitration division (26 percent of recent cases filed, 39 percent counting other energy cases). Likewise, oil and gas cases frequently come before panels of all major international arbitration institutions. Yet the oil and gas industry too often avoids arbitration. Two widely used oil and gas form contracts—the AAPL Joint Operating Agreement...
July 21, 2015
Arbitration clauses are a staple in international energy contracts and oil and gas cases are the largest category of cases filed with ICSID, the World Bank's arbitration division (26 percent of recent cases filed, 39 percent counting other energy cases). Likewise, oil and gas cases frequently come before panels of all major international arbitration institutions. Yet the oil and gas industry too often avoids arbitration. Two widely used oil and gas form contracts—the AAPL Joint Operating Agreement...
Can a Court Order a Party Not to Request an Arbitration Remedy the Arbitrator May Not Grant?
July 20, 2015
In appropriate circumstances, Courts can vacate under Federal Arbitration Act Section 10(a)(4) an award that does not draw its essence from the parties’ agreement but instead was based on the arbitrators’ own notions of economic justice. In Benihana, Inc. v. Benihana of Tokyo, LLC, ___ F.3d ___, No. 14-841, slip op. (2d Cir. April 28, 2015), the U.S. Court of Appeals for the Second Circuit was faced with a different issue: whether before an award was made a court can enjoin a party from asking...
July 20, 2015
In appropriate circumstances, Courts can vacate under Federal Arbitration Act Section 10(a)(4) an award that does not draw its essence from the parties’ agreement but instead was based on the arbitrators’ own notions of economic justice. In Benihana, Inc. v. Benihana of Tokyo, LLC, ___ F.3d ___, No. 14-841, slip op. (2d Cir. April 28, 2015), the U.S. Court of Appeals for the Second Circuit was faced with a different issue: whether before an award was made a court can enjoin a party from asking...
Arbitration, I Presume?
July 17, 2015
TRC Environmental Corporation, the contractor on a project to decommission a power plant, sued LVI Facilities Services for breach of its subcontract with TRC. The subcontract said that “All disputes arising under the Contract Documents will be resolved in accordance with the terms of the Project Agreement”; otherwise, they would be arbitrated. The Project Agreement spelled out various ADR processes but did not require arbitration. In affirming the rejection of LVI’s motion to compel arbitration,...
July 17, 2015
TRC Environmental Corporation, the contractor on a project to decommission a power plant, sued LVI Facilities Services for breach of its subcontract with TRC. The subcontract said that “All disputes arising under the Contract Documents will be resolved in accordance with the terms of the Project Agreement”; otherwise, they would be arbitrated. The Project Agreement spelled out various ADR processes but did not require arbitration. In affirming the rejection of LVI’s motion to compel arbitration,...
