Sunday, September 30, 2018

SCOTUS of Just 8 Consider Arbitrability

This week, a U.S. Supreme Court of just eight justices will hear New Prime Inc. v. Oliveira including the matter of whether a dispute over applicability of the Federal Arbitration Act's (FAA) Section 1 exemption is an arbitrability issue that must be resolved in arbitration pursuant to a valid delegation clause. Importantly, this case may resolve whether such applicability of the FAA is a question for the arbitrator or the judge. Several of the Supreme Court’s recent cases suggest that an arbitrator’s authority includes not only resolving of the dispute, but also determining the extent to which any particular dispute falls within our authority as arbitrators. Interestingly, retired Justice Kennedy was one of five justices commonly in the majority when arbitration cases were decided by a 5-4 vote. An even panel of justices must now decide how activity in this case, which involves an exception from the FAA for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce," will be determined. The underlying facts concern individuals who drive the trucks carrying goods consigned to trucking companies documenting drivers as independent contractors rather than employees. For example, if that exception does not apply, then long-haul truck drivers are back in the conventional domain of the FAA. The actual text of the FAA, however, does not exempt all transportation “employees.” Rather, it exempts “contracts of employment” of transportation employees. Oral argument is scheduled October 3rd. See more here-- and and

Wednesday, September 26, 2018

Mediation Law Changes Coming to Cali

Interestingly, a new California law that will take effect next year requires mediation participants to essentially sign an informed consent. Revised Evidence Code section 1129 will require a lawyer to make sure their client understands the implications of California's legal protections for mediation communications, before the client agrees to mediate. If the client has already agreed to mediation before seeking counsel, say by signing a contract with a mediation clause, consultation will be still required as soon as possible after engaging counsel. A Mediation Disclosure Notification and Acknowledgment is to be signed essentially outlining that communications, negotiations, or settlement offers in the course of a mediation must remain confidential. The ADR Section of The Florida Bar was recently considering the outstanding issue (currently in the hands of the ADR Rules & Policy Committee of The Supreme Court of Florida) of mediators possibly being required to be certified to mediate court connected cases in Florida. In that discussion, those advocating against are confusing self-determination in choosing a mediator with self-determination of the actual outcome of a settlement. During this debate, we wondered aloud whether such conversations regarding the process take place often enough with counsel in the detail required here, or whether the elements of an opening found in our certified mediator rules suffice. The new law smartly includes language that mediator’s report, opinion, recommendation, or finding about what occurred in a mediation may not be submitted to or considered by a court or another adjudicative body. This would alleviate a problem, though infrequent, of subpoenaing mediators to court in enforcement actions which certainly compromises our neutrality and mostly results in our being excused from such proceedings. See full article from here-- and amended statutory language here--

Tuesday, September 18, 2018

Half of Uber MDL to Arbitrate

A federal judge tossed half of the lawsuits concerning Uber's data breach after finding claimants were aware they signed arbitration agreements upon registering to use the app. Uber sought to compel arbitration in consumer class actions filed over the breach, which compromised the personal information of 57 million drivers and riders. This month, the presiding U.S. District Judge, Philip Gutierrez of California, granted such motions in separate orders in seven cases while seven other cases remain. The trial court relied on the U.S. Court of Appeal for the Second Circuit’s decision last year in Meyer v. Uber, finding a “reasonable user” of a smartphone would understand the process of agreeing to Uber’s terms of service. Of course, plaintiffs disagree with that holding and its reasoning. The judge wants further hearings to address whether there is going to be an MDL after this whole process of weeding out arbitrable cases is over with, or not. He noted, however, that all the cases are nationwide class actions that could go forward as a consolidated complaint, but that plaintiffs' lawyers are debating who should lead that action. Uber announced hackers breached its app in 2016 and also admitted paying them $100,000 to destroy the information in 2017. Last spring, the U.S. Judicial Panel on Multidistrict Litigation sent the class actions to this judge, whose first action was to decide Uber’s arbitration motions. Plaintiffs lawyers argued that data breaches fell outside the scope of Uber’s agreement. The current judge was not persuaded and instead found that an arbitrator must decide that issue. He cited the U.S. Court of Appeals for the Ninth Circuit’s 2016 decision in Mohammed v. Uber, which had a “nearly identical Uber delegation provision.” Plaintiffs also cited this summer's decision by the U.S. Court of Appeals for the First Circuit in Cullinane v. Uber and U.S. District Judge Richard Seeborg’s decision last year in Metter v. Uber, both finding Uber’s arbitration agreement unconscionable because a pop-up keyboard obscured text. But Judge Gutierrez found those cases, unlike the Second Circuit’s Meyer case, involved different devices or different versions of Uber’s app, stating he agreed with defendants "that the Cullinane decision departs dramatically both from what other courts have found regarding Uber’s registration process, and from the overall legal landscape regarding assent to online agreements." The court found rather that "Clickable buttons come in all shapes and sizes.” It is clear there is a split of authority in these cases likely to continue affecting arbitrability. See full story here--

Friday, August 31, 2018

Arbitrator to Decide Trump Campaign Staffer Claim

Earlier this month, a New York Supreme Court judge decided a former campaign staffer‘s lawsuit regarding harassment could not be moved to private arbitration because her NDA didn’t specify that. Rather, it was merely an option and contained nothing about her job responsibilities, terms of her employment, salary, benefits, or her ability to pursue her own claim. Per the ruling, the state court observed the arbitration clause confined arbitration to "any dispute arising under or relating to this agreement." The state judge also decided it did not require arbitration for any "dispute between the parties" or even "any dispute arising out of plaintiff’s employment." In fact, the court did recognize an arbitrator's province in determining arbitrability, but said is was not even close call and was so clear on this specific, narrow clause as to be a question for the courts alone. Now, however, an arbitrator should have the first stab at deciding over the validity of an arbitration agreement according to a U.S. District in the Southern District of New York who ruled yesterday in a decision that appears to run counter to the state case. The new federal decision is reportedly in accordance with the prior state ruling, as it suggests that each turned on different wording of the separate complaints filed in the respective courts. The latest federal decision is certain to be presented as strong support for the appeal Trump’s legal team plans to file at the state court level. The employee sought to have the arbitration agreement declared unenforceable, saying it had been “weaponized” against her by the campaign. In his opinion and order, the federal judge said the terms of the NDA agreement she signed demands that her very argument about the agreement’s unenforceability must be determined by an arbitrator. The language of the arbitration states that any dispute "arising under or relating to" the agreement was subjected to the rules for commercial arbitration of the American Arbitration Association. Those rules state that the arbitrator has the power to rule on issues of his or her own jurisdiction, including the validity of the agreement itself. Interestingly, in noting the prior ruling at the state level, and specifically that the federal court was in no way bound by it, the judge quoted the state court critique of the language of the agreement failing to require any claims needing to be sent to arbitration, rather than any dispute under or related to the agreement. "Instead, the clause is much narrower: it allows defendant to choose whether to arbitrate any dispute that arises out of the agreement." In this, the federal judge found the claimant raised a "dispute that arises out of the agreement" --whether the agreement is enforceable, and further finding it follows that,"even on the state-court’s view of the arbitration clause, this dispute falls with the clause’s scope." As such, the federal case was dismissed, with neither party requesting to stay the case pending arbitration. See full story here--

Monday, August 20, 2018

State Judge: Arbitration not required by Trump NDA

Last week, former White House official Omarosa Manigault Newman made the rounds on national news shows about her new book and her firing which raised the question of whether she violated a signed a non-disclosure agreement (NDA) regarding her time in the Trump Administration. Meanwhile, an order in a New York lawsuit brought by another staffer during the campaign points to how Trump's future motion to compel arbitration claims may be decided. A state judge ruled Friday that another former campaign staffer‘s lawsuit regarding harassment could not be moved to private arbitration because her NDA didn’t specify that. Rather, it was merely an option and contained nothing about her job responsibilities, terms of her employment, salary, benefits, or her ability to pursue her own claim. Per the ruling, the court observed the arbitration clause confined arbitration to "any dispute arising under or relating to this agreement." The judge also decided it did not require arbitration for "any dispute between the parties" or even "any dispute arising out of plaintiff’s employment." Interestingly, the court did recognize an arbitrator's province in determining arbitrability, but said is was not even close call and was so clear on this specific, narrow clause as to be a question for the courts alone. Reportedly, Manigault Newman claims President Donald Trump is trying to silence her after his campaign filed an arbitration, claiming she violated her own non-disclosure agreement. See full news stories here-- and and court order here--

Friday, August 10, 2018

SCOTUS Subs Special Master in Water Wars

This week, the U.S. Supreme Court suddenly substituted a court-appointed Special Master after recently rejecting his ruling recommending Florida had not proven its case “by clear and convincing evidence” that imposing a cap on Georgia’s water use would benefit Florida water systems and remanding because he “applied too strict a standard” in rejecting Florida’s claim. The rejected recommended ruling in the decades-long Water Wars case favored Georgia and was just sent back to Special Master, Ralph I. Lancaster, Jr., of Maine who presided over and tried the original jurisdiction case back in 2016. Now, the Court has discharged him, swapping for Special Master Honorable Paul J. Kelly, Jr., a Senior Judge on the U.S. Court of Appeals for the Tenth Circuit from New Mexico, to make further findings regarding Florida's claim it suffered harm from the overconsumption of water by Georgia. Florida still seeks the cap on consumption that would alleviate past damage allegedly caused by Georgia. Traditionally, states as parties pay legal fees of lawyers acting as special masters, though reportedly the high court foots the bill for some administrative and clerical costs. According to the court’s docket, the 88-year-old Lancaster was paid almost a half-million dollars between 2014 and 2017. By contrast, senior judges who become special masters are on the government payroll, relieving the states of having to pay special masters’ fees. Future proceedings will weigh Georgia’s claims that any limits on its water use would undermine its economy, including the growth of the Atlanta area and the state’s agriculture industry in southwestern Georgia. This blog has followed the Water Wars for years in other entries. Florida ultimately seeks to limit Georgia’s water consumption from the Apalachicola-Chattahoochee-Flint River Basin, including Lake Lanier, to 1992 levels and to get reparations for alleged economic and environmental harm to Apalachicola's oyster fisheries from drought. See news story here-- and SCOTUS Order here--

Tuesday, July 31, 2018

New WIPO ADR Guide for IP Cases

The Arbitration and Mediation Center (AMC) of WIPO, the World Intellectual Property Organization, just released an updated guide providing an overview of Alternative Dispute Resolution (ADR) processes for intellectual property disputes. Since intellectual property portfolios became an essential part of business value, businesses started looking at more efficient methods to settle disputes than litigation. WIPO's AMC was created almost 25 years ago, recognizing a growing ADR trend where international parties informally gathered to settle disputes without litigation. The new WIPO guide is designed to provide an overview of ADR processes without purporting in any way to be authoritative or prescriptive. Chapter One of the guide offers background information concerning the early use and rise of ADR around the world, followed in Chapter Two by a description of potential advantages of ADR for intellectual property disputes. Chapter Three explains in more detail the different ADR procedures that may be used in intellectual property disputes, while Chapter Four outlines some practical considerations that may be relevant for IPOs and courts that wish to institutionalize such ADR procedures. For the substantive and procedural implementation of such procedures, the guide identifies as a core element the interface with existing regulations. The guide reminds litigants that ADR processes can deliver outcomes that provide a certain and conclusive resolution to disputes. This finality is a clear advantage for ADR, as the complexities of intellectual property litigation can make outcomes uncertain. Legal judgments can be overturned on appeal and jurors that often lack technical expertise may make incorrect decisions. See more here--