A comprehensive weekly ADR overview from the National Arbitration Forum |
Week of June 23, 2006 |
| IN THIS ISSUE |
Fifth Circuit Treats Two Cases as One to Prevent Delay in Arbitration In dismissing an appeal for lack of jurisdiction, the Fifth Circuit Court of Appeals treated two cases as one based on federal policy favoring arbitration.
In a Clash of the Titan Fund, Seventh Circuit Reminds Litigants that the FAA Permits Only Limited Judicial Review of Arbitrator Misjudgment The Seventh Circuit Court of Appeals upheld an arbitration award where lack of evidence was the sole basis for challenging the award, explaining that the Federal Arbitration Act instead limits judicial review to improper arbitrator conduct enumerated in the FAA or violative of the parties’ agreement.
Class Waiver in Telephone Customer Service Agreement Not Unconscionable In Rivera v. AT & T Corp., 420 F.Supp.2d 1312 (S.D. Fla., Feb. 23, 2006), the District of Florida compelled arbitration of a dispute between AT & T and Rivera, an AT & T telephone customer. Rivera, along with others similarly situated, claimed that AT & T had erroneously charged its customers for “uncompleted” telephone calls to Cuba. Due to the relatively small size of the individual claims, the aggrieved customers filed a lawsuit against AT & T as a putative class.
The Filing of a Motion to Dismiss in Court Does not Waive the Right to Arbitrate A party that files a 12(b)(6) motion before a motion to compel arbitration does not waive the right to arbitrate, as it does not result in substantial prejudice to the opposing party, according to the Southern District Court of New York.
Under the FAA, District Court May Determine Issues of Arbitrability Even if it is Outside the District Where Arbitration is to Occur In denying a motion to dismiss for improper venue, a United States District Court in the Western District of Tennessee held that the Federal Arbitration Act (“FAA”) permits district courts to determine issues of arbitrability even if they are outside the district where arbitration is to occur.
The New Santana Band’s Employee Handbook on Binding Arbitration Hits More Than One Wrong Note According to a California Court of Appeal, the Binding Arbitration section found in the New Santana Band’s Employee Handbook contained three unlawful provisions: a time restriction that limits employee’s public rights, arbitration cost-sharing, and a unilateral waiver.
Connecticut Supreme Court Says Parties Can Create Body of Arbitration Precedent Through Contractual Language The Connecticut Supreme Court refused to vacate an award involving the interpretation of a contract provision that had been interpreted differently in an earlier arbitration, holding that an arbitrator is free to apply or reject the doctrine of claim preclusion unless the parties agree otherwise.
Trial Court Cannot Substitute Its Judgment for an Arbitrator’s The Georgia Court of Appeals held that a trial court erred in modifying an arbitration award because the trial court improperly reviewed the sufficiency of the evidence supporting the award.
Iowa Court Confirms Arbitration Award Despite Lack of Participation by Losing Party The Iowa Court of Appeals held that there was no statutory basis for denying confirmation of an arbitration award even though the losing party did not participate in any of the proceedings.
North Carolina Court Enforces Class Waiver Clause in Arbitration Agreement, Reaching the Same Conclusion as Many Other Courts The North Carolina Court of Appeals found that an arbitration agreement containing a class action waiver was fair because there was no evidence that the waiver rendered the agreement unconscionable. Noting that the Fourth Circuit had already “explicitly rejected” plaintiff’s argument, the Court found that the plaintiff’s ability to recover attorney’s fees and costs defeated any unconscionability argument.
North Carolina Court Rejects Consumer’s “Apples to Oranges” Argument About the Costs of Arbitration Compared to Litigation The North Carolina Court of Appeals rejected a consumer’s argument that an arbitration clause was void because the costs of arbitration were too high. The Court found that the argument examined the wrong costs and advanced only the worst case scenario for the consumer.
Lemon Law Arbitration Board Exceeds Powers in Awarding Purchase Agreement Price In DaimlerChrysler Corp. v. Victoria, No. 2005-357, 2006 WL 1626989 (N.H., June 14, 2006), the Supreme Court of New Hampshire held that a lemon law arbitration board exceeded its powers in determining a value to be awarded to a consumer, based on a defective automobile.
Employee Assented to Arbitration Agreement by Signing Acknowledgment Form and Initialing Arbitration Policy The Ohio Court of Appeals enforced an arbitration agreement in an employee handbook because the employee assented to the agreement by signing an acknowledgment form and writing her initials next to the arbitration policy.
Arbitrators Have No Authority to Alter the Statutory Scope of Discovery Absent Party Agreement An arbitrator does not have authority to grant more discovery than is allowed by statute if the parties’ agreement is silent as to the scope of discovery, according to the Wisconsin Supreme Court.
Federal HR 5273 (Introduced 05/02/2006) Network Neutrality Act proposed to promote open broadband networks and innovation, foster electronic commerce, and safeguard consumer access to online content and services. The act enables the Federal Communications Commission to refer related disputes to arbitration or mediation or other means to resolve them.
Hawaii SB3072 (Introduced 01/25/2006) Signed by Governor 06/15/06 In disputes over the amount of a charge or the correct fee or procedure code to be used under the workers' compensation supplemental medical fee schedule, the insurer shall: (1) Pay all undisputed charges within thirty days; and (2) Negotiate in good faith with the provider on the disputed charges for a period up to sixty days after the insurer has received reasonable proof of the fact and amount of benefits accrued. If the provider and the insurer are unable to resolve the dispute, after a period of sixty days, the provider, insurer, or claimant may submit the dispute to the commissioner, arbitration, or court of competent jurisdiction.
Illinois HB4829 (Introduced 01/18/2006) Signed by Governor 6/15/06 Amends the Illinois Human Rights Act to provide that the failure of the Department of Human Rights to complete its investigation of a charge alleging a violation of the Real Estate Transactions Article within 100 days after the proper filing of the charge is not jurisdictional. The bill also states that the complainant and respondent may agree to voluntarily submit such disputes to mediation without waiving any rights that are otherwise available to either party and without incurring any obligation to accept the result of the mediation process. Nothing occurring in mediation shall be disclosed by the Department or admissible in evidence in any subsequent proceeding unless the complainant and the respondent agree in writing that such disclosure be made.
Ohio SB185 (Introduced 09/22/2005) Signed by Governor 06/19/2006 Establishes new consumer protections relative to certain mortgage loans and provides a consumer who is harmed by a violation of these provisions with all the rights, actions and remedies available under the Consumer Sales Practices Act. States that any unconscionable arbitration clause, unconscionable clause requiring the consumer to pay the supplier's attorney's fees, or unconscionable liquidated damages clause included in a mortgage loan contract is unenforceable. The text of the bill as passed can be found HERE.
Mississippi Reg 10419 (Proposed 05/25/2006) Establishes temporary rules for the Temporary Special Mediation Program for Personal Lines Residential Insurance Claims resulting from Hurricane Katrina.
Oklahoma Reg14069 OAC 365:40-5-44 (Proposed 12/22/2005) Effective 07/14/2006 Deletes reference to arbitration agreements in HMO contracts, because those agreements are invalid in HMO contracts pursuant to the 1993 decision of the Oklahoma Supreme Court.
TEXAS REG 9959 (Proposed 06/07/2006) Reviews the rules concerning Dispute Resolution-- General Provisions. CITATION: 28 TAC 2.140.140.1, -.5. COMMENT DEADLINE: 07/17/2006.
TEXAS REG 9960 (Proposed 06/07/2006) Reviews the rules concerning Dispute Resolution, Arbitration. CITATION: 28 TAC 2.144.144.1 -.16. COMMENT DEADLINE: 07/17/2006.
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