Friday, April 29, 2011

Federal Arbitration Act Preempts State Law Limitations

This week in AT&T MOBILITY LLC v. CONCEPCION ET UX. the U.S. Supreme Court held that the Federal Arbitration Act (FAA) preempts state contract law limitations on the enforceability of arbitration agreements.

Justice Scalia authored a 5-4 opinion on April 27, 2011 in which the Court ruled that California's classification in consumer contracts of collective-arbitration waivers as unconscionable is preempted by the FAA. According to the Court, nothing in the FAA suggests an intent to preserve state rules standing as an obstacle to the accomplishment of the FAA’s objectives. As a result, businesses may continue enforcing individual arbitration agreements in contracts with employees, consumers and others. This opinion upholds enforceability of arbitration provisions and class action waivers in employment and consumer contracts.

The couple who filed a class action against AT&T for various violations of California’s consumer protection statutes challenged arbitration pursuant to a wireless service contract containing express class action waiver. The U.S. District Court and the Ninth Circuit Court of Appeals held that the class action waiver was unconscionable because it was contained within a contract of adhesion, involved small amounts of damages and bilked large numbers of consumers out of small amounts of money. However, the Supreme Court reversed, opining that states may not place conditions upon the enforceability of arbitration.

Monday, April 25, 2011

Business Litigation "Pre-nups" and E-discovery Mediations

Mediators assist clients in pre-suit negotiations involving complex litigation all the time, but the focus at that juncture in a case is usually on damages and avoiding expenses that will be encountered if actual court litigation ensues. Attorneys who understand the importance of limiting downstream litigation costs should consider alternatives to what I call Mutually Assured Destruction, or pushing the nuclear E-Discovery button in a litigation where perhaps the amount in controversy does not justify the great expense of full-blown data discovery of this nature. Litigation "pre-nups" can include an E-discovery component, confidentially resolving issues of scope with binding agreements-- as well as mediation on the substantive issues-- before resorting to actual litigation. Legal authors in this field, Alison O'Neal Skinner and Mary Mack, have recently advocated taking advantage of these processes early in a case and believe a confidential exchange of proposals on how to create a workable E-discovery plan increases the chances of reaching mutual solutions. ( So next time you are thinking about/encountering the scorched earth discovery plan, try this approach first!

Tuesday, April 19, 2011

While one pair attempts to settle, the other wants deal undone

As discussed, NFL players and owners today resume talks (pending a ruling from Judge Nelson on the lockout) after being together for longer than nine hours last Thursday in the Minneapolis courtroom chambers of federal Magistrate Judge Arthur J. Boylan. The mediation recessed Friday after more than four hours. The hiatus in talks followed reports that last week's talks were "tough" and included a large amount of "fence-mending" and even "homework" for the participants...

On the other hand, the Olympic rowers and would-be Facebook creators, the "Winklevi" are seeking a rehearing en banc to undo their $65 million (now worth $200M) settlement with Facebook, after being told no by a three judge appellate panel in San Francisco...

In either case, there must be some finality to the litigation so the parties can move on! Hopefully, for football fans, continued mediation is successful and for fans of the self-determination process, the prior Facebook settlement agreement is upheld in the absence coercion or fraud.

Friday, April 15, 2011

NFL Players, League giving ADR another try to reach end zone

Mediation resumes in NFL, players dispute

Meeting again to negotiate and sworn to secrecy about specifics of the court-ordered mediation, neither the league nor players provided much insight about where they're at in their dispute over the division of $9 billion in the sports business. As mentioned in my prior post on this case, Judge Nelson is a stickler for settling difficult cases and the court has indicated it wants to continue with everyone talking...

Tuesday, April 12, 2011

Sometimes an apology is all that is needed

Former Talking Heads lead singer David Byrne's federal lawsuit in the Middle District against former Governor of Florida and U.S. Senate candidate Charlie Crist for use of the hit song "Road to Nowhere" in the 2010 campaign was resolved with a simple You Tube apology. I spoke with attorney for Gov. Crist, Brian Moes last year about the allegations which included copyright infringement. I also spoke with Gov. Crist last month about the importance of early mediation and stressed the impact of the high profile decision makers getting together in the room, without the posturing of lawyers, to settle their differences. This case was also being used to expose a larger practice of artists' intellectual property rights being trampled upon during political campaign season by both inexperienced and veteran advertising organizations in media spending. In the end, a potentially valuable claim went away with a message to would-be violators and a humble apology seen at the link below.