Friday, November 30, 2018

TRO issued in Jay-Z AAA Arbitration

An injunction was issued this week by a New York judge in favor of Jay-Z on the grounds that the lack of African-American arbitrators provided by the American Arbitration Association (AAA) impeded his right to equal opportunity under the law. Judge Saliann Scarpulla issued a temporary restraining order, pushing arbitration back to next month at the earliest. The dispute involves Iconix, which acquired Rocawear in 2007, and sued the rapper last year for allegedly breaching their 2007 contract by using the Roc Nation logo on a new line of baseball caps. A countersuit argues that the contract applied only to Rocawear and not Roc Nation, at which point both parties entered AAA arbitration. Jay-Z claims AAA found only three potential African-American arbitrators, out of the hundreds it uses, for his case, and one already represented Iconix in related litigation. To begin the process, the AAA typically provides parties with a list of potential arbitrators from which they must eliminate names until they arrive at one. Reportedly, Jay-Z maintains that white arbitrators exhibit “unconscious bias” towards black defendants, and that the AAA’s lack of racial diversity consequently “deprives litigants of colour of a meaningful opportunity to have their claims heard by a panel of arbitrators reflecting their backgrounds and life experience.” His lawyers claim arbitration procedures in place by the AAA “deprive black litigants...of the equal protection of the laws, equal access to public accommodations, and mislead consumers into believing that they will receive a fair and impartial adjudication.” Although the ruling may not stop the proceeding altogether, it could set an important precedent for addressing diversity in neutral selection. See full news stories here-- https://bit.ly/2RpXHpr and https://nbcnews.to/2KIkQkm

Wednesday, November 28, 2018

Tomorrow in Orlando: Closing the Gap

Join me tomorrow at the Orange County Bar Association as I moderate a seasoned panel on strategies to bridge gaps causing impasses. I will present panel members with complex fact patterns and describe the specific situations in which the negotiations have stalled and then ask what techniques they would utilize to move the negotiations forward. This will be an engaging program and will feature some of our firm's best mediators. The attendee list is an impressive one as well, with many veteran trial lawyers and even a few mediators, as well as a United States Magistrate Judge from the Middle District of Florida. This program is eligible for 1.5 hours of CLE credit from The Florida Bar. We also plan to meet afterwards in Downtown's North Quarter for an ADR Committee reception at Reyes, just across the street on Orange Avenue. Please come in the event you cannot make the afternoon seminar!

Saturday, November 10, 2018

Special Master Orders Briefs in Water Wars

This week, the U.S. Supreme Court-appointed Special Master of the so-called Water Wars, Honorable Paul J. Kelly, Jr., set a January 31, 2019 deadline for initial briefs and a February 28, 2019 deadline for reply briefs. Judge Kelly denied Florida’s request for additional evidence-gathering in the case before he will make further findings regarding Florida's claim it suffered harm from the overconsumption of water by Georgia. He found additional discovery would only lengthen the proceedings, delay the outcome and increase litigation costs, citing a voluminous record in the case from unlimited discovery and lengthy prior trial. Florida still seeks the cap on consumption that would alleviate past damage allegedly caused by Georgia. 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 more here-- https://bit.ly/2JSm4cj and here-- https://bit.ly/2FcOGP6

Monday, October 29, 2018

More Arbitration Argument Before SCOTUS

Today, the U.S. Supreme Court (SCOTUS) has oral arguments in two arbitration cases. In the first matter, Henry Schein, Inc. v. Archer & White Sales, Inc., the justices consider if a judge or an arbitrator should decide if a particular dispute should be resolved in arbitration rather than in court. In the second case, Lamps Plus Inc. v. Varela, the issue is whether the Federal Arbitration Act (FAA) precludes state law interpretation of arbitration contracts allowing for class arbitration and who decides whether a particular dispute should be decided in arbitration rather than a court. SCOTUS has already recognized that arbitrators decide issues of arbitrability if the parties clearly and unmistakably agree the arbitrator can assess whether any particular dispute is sufficiently related to the contract to warrant arbitration. Apparently, the U.S. Court of Appeals for the 5th Circuit will not send a case to the arbitrator decide the question of arbitrability, even if the parties have agreed that the arbitrator should decide such questions, if the court finds the claim of arbitrability wholly groundless. The contract in the first case mentioned above provided for arbitration of any dispute arising under or related to the contract, except for actions seeking injunctive relief. The complaint sought damages for Sherman Act violations, as well as injunctive relief. The defendants sought arbitration, arguing the thrust of the complaint was to seek damages, and that injunctive relief could issue after the arbitrator ruled on the merits. Lower courts refused to send the matter to arbitration, finding the request for arbitration groundless because of the inclusion in the complaint of a count for injunctive relief. Because SCOTUS already decided parties can delegate issues of arbitrability to an arbitrator in precedents that do not include exceptions for cases in which courts regard the request for arbitration as groundless, a reversal is likely given recent trends in favor of arbitration. The second case hinges on whether the U.S. Court of Appeals for the 9th Circuit correctly held that an employer did consent to class arbitration when it included language in the arbitration contract that committed the parties to use arbitration in lieu of any and all lawsuits or other civil legal proceedings. This case too may find itself going back, but on procedural grounds as the FAA dictates that an appeal may not be taken from an interlocutory order directing arbitration to proceed. See more here-- https://bit.ly/2AzcN6e and https://bit.ly/2JodgdX and https://bit.ly/2w5K2O8

Saturday, October 20, 2018

SCOTUS Kicks Arbitration Case

This month, the U.S. Supreme Court kicked a Kindred Healthcare arbitration case, declining to review the case for a second time. Last year, the High Court sided with Kindred in Kindred Nursing Ctrs. LP v. Clark, which related to whether an arbitration agreement signed by a Power Of Attorney (POA) is enforceable if not granted explicit permission to sign such a document in the POA. Kindred petitioned for certiorari this time arguing the Kentucky Supreme Court failed to adhere to the decision in its favor. The long term care provider asserted the state refused to honor the Justices’ interpretation of the Federal Arbitration Act (FAA). The state court declined to honor the arbitration agreement signed by power of attorney, without the nursing home resident giving express authority to sign away the right to a trial. The nursing home relied on two provisions in the power of attorney, one giving power to demand or collect money and institute legal proceedings, and another giving the power to make contracts “in relation to both real and personal property.” The court found that the arbitration agreement “was not the enforcement…of something then due or to become due” “nor was it the making of a contract…pertaining to” property. As a result, “that aspect of the Extendicare decision remains undisturbed.” The case rejected by the Supreme Court was one of three others consolidated under Clark, and was bounced back to Kentucky. Interestingly, the Kentucky high court just became the first state to find employers may not require employees to sign arbitration agreements as a condition of their employment, indicating a hostility toward FAA preemption and the arbitration process that may bleed over into this area of law as well. See more here-- https://bit.ly/2S2Wzsx and https://bit.ly/2R28ju1

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-- https://bit.ly/2OZyZec and https://bit.ly/2HVjWiB and https://bit.ly/2OteZDM

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 Mediate.com here-- https://bit.ly/2QYWh5v and amended statutory language here-- https://bit.ly/2p4ozPq