Florida Loses Water Wars

After rejecting a now deceased Special Master's ruling in favor of Florida and remanding to a new Special Master to make further findings regarding Florida's claim it suffered harm from the overconsumption of water by Georgia, the U.S. Supreme Court this week received a recommendation not to grant Florida’s request for a decree equitably apportioning the waters of the Apalachicola-Chattahoochee-Flint River Basin. The Special Master found the evidence did not show harm to Florida caused by Georgia and that Georgia’s water use is reasonable. Additionally, the evidence did not show that the benefits of apportionment would substantially outweigh the potential harms. Florida asked for oral argument that took place last month, where it asserted the first Special Master found that Georgia’s upstream water use was unreasonable and that the Supreme Court already rejected an additional finding that nothing could be done because the U.S. Army Corps of Engineers (which manages the reservoirs in the river system) is not a party to the case. Florida sought a cap on consumption that would alleviate past damage allegedly caused by Georgia. Georgia maintained any limits on its water use would undermine its economy, including the growth of the Atlanta area and the state’s agriculture industry. Florida wanted to limit Georgia’s water consumption from the basin, including Lake Lanier, to 1992 levels and to get reparations for alleged economic and environmental harm to Apalachicola's oyster fisheries from drought. Georgia claimed Florida failed to prove harm to aquatic species. This blog has followed the Water Wars for years in several other entries and it now appears this will be the ultimate conclusion in this case of original jurisdiction, absent further action and a presumed adoption of findings by SCOTUS. See more in very detailed report here-- https://bit.ly/2PhTcP5

Water Wars Persist

Last summer, the U.S. Supreme Court substituted a court-appointed Special Master (since deceased) after 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 favored Georgia. In the year after swapping for Special Master Honorable Paul J. Kelly, Jr., a Senior Judge on the U.S. Court of Appeals for the Tenth Circuit, to make further findings regarding Florida's claim it suffered harm from the overconsumption of water by Georgia, not much has transpired. This past spring, Florida submitted a motion for oral argument which remains pending. Florida asserts the first Special Master found that Georgia’s upstream water use was unreasonable and that the Supreme Court already rejected an additional finding that nothing could be done because the U.S. Army Corps of Engineers, which manages the reservoirs in the river system, is not a party to the case. Florida seeks a cap on consumption that would alleviate past damage allegedly caused by Georgia. Georgia’s still claims 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. Florida wants 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. Georgia maintains Florida has failed to prove harm to the aquatic species. This blog has followed the Water Wars for years in other entries. Hopefully, a resolution will occur this year. See more detail in docket here-- https://bit.ly/32i39AN

SCOTUS: Arbitrability is for Arbitrator not Court

This week, in what happened to be Justice Kavanaugh's first opinion on the U.S. Supreme Court, an arbitration ruling in a case centered on whether courts can prevent arbitrators from deciding if an issue can be arbitrated at all. Many parties prefer to arbitrate claims because the process is sometimes cheaper and faster than traditional litigation in court which also carries a greater risk of large damages awards by juries. This case arose in a contract dispute between a dental equipment distributor and a manufacturer. Their contract provided that disputes arising from the agreement would be resolved in arbitration, except in instances where one party sought an injunction. The Supreme Court found unanimously in Henry Schein, Inc. v. Archer & White Sales, Inc., that under the Federal Arbitration Act (FAA), a lower court must enforce an arbitration agreement that requires the arbitrator to decide whether a dispute should be decided in arbitration, regardless of the court’s view of the merits of the request for arbitration. When a contract allows arbitrators to decide whether a dispute can be resolved through arbitration, “a court may not override the contract." The holding states the “wholly groundless” exception to arbitrability is inconsistent with the FAA and Court precedent. Under the Act, arbitration is a matter of contract, and courts must enforce arbitration contracts according to their terms. The Supreme Court has long held that the FAA allows the parties to a contract to decide whether an arbitration agreement will extend to those gateway questions, explaining that courts must compel arbitration of the gateway questions whenever the agreement includes “clear and unmistakable evidence” that the parties delegated the decision of those questions to the arbitrator. See stories here-- https://bit.ly/2FqySH1 and https://fxn.ws/2M2c41x and opinion here-- https://bit.ly/2CXAgPw

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

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-- https://bit.ly/2vBQeKZ and SCOTUS Order here-- https://bit.ly/2B6Q9nI

Divided Supreme Court Considers Workplace Arbitration

This week, the Supreme Court attempted to determine how far companies can go in insisting that disputes be resolved in individual arbitrations, rather than in court. The Court considered whether to give employers a powerful tool to bar class actions over workplace issues. The decision on this matter could affect some 25 million employment contracts according to the New York Times. A ruling in favor of employers, Justice Breyer said, could cut out “the entire heart of the New Deal” and undo an understanding of labor relations since the administration of FDR. Earlier cases ruled that companies doing business with consumers may require arbitration and forbid class actions in their contracts. Arbitration clauses with class-action waivers are commonplace in contracts for things like smartphones, credit cards, rental cars and nursing homes. Prior arbitration decisions have been closely divided, with conservative members in the majority. The justices now consider whether they should use a different approach for employment contracts. The answer depends on the interaction of two federal laws: the Federal Arbitration Act, which favors arbitration and the National Labor Relations Act, which protects workers’ rights to engage in “concerted activities.” Workers seeking to sue their employers for overtime pay and the like say the second law prohibits arbitration clauses that require class-action waivers. Reportedly, Justice Kennedy seemed ready to side with employers. Justice Gorsuch asked no questions. Justice Ginsburg said arbitration law was concerned with agreements between merchants of relatively equal bargaining power. The employment contracts at issue in the case, she said, have been forced on workers with "no true liberty of contract." In an unusual fashion, many cases were consolidated for a single oral argument and lawyers for the federal government actually appeared on both sides. Some justices suggested that workers could band together in a limited sense by hiring the same lawyer and filing individual arbitration cases. Justice Kagan suggested that was not good enough. See full article here-- http://nyti.ms/2yTgLUa Watch for decisions in: Epic Systems Corporation v. Lewis, No. 16-285, Ernst & Young v. Morris, No. 16-300 and National Labor Relations Board v. Murphy Oil USA, No. 16-307 which will be available this term here-- http://bit.ly/2yuxv7k

Post-Trial Mediation Ordered For Water Wars

Attorneys for Florida and Georgia tried the decades-long Water Wars case between them before a U.S. Supreme Court assigned Special Master late last year. A ruling was expected following the filing of post-trial briefs of each state. Florida 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. The dispute focuses on the river basin which drains almost 20,000 square miles in western Georgia, eastern Alabama and the Florida Panhandle. The Chattahoochee and Flint rivers meet at the Georgia-Florida border to form the Apalachicola, which flows into the bay and the Gulf of Mexico beyond. Maine resident and Special Master, Ralph I. Lancaster, Jr., previously advised the states to settle out of court rather than live with a costly decision he has stressed neither will like. The states already mediated the case with a mediator whose name was strangely kept secret by an order. Except to hear progress reports, Master Lancaster wanted no part of the mediation process, but now has ordered the parties back to a post-trial mediation this month. Florida still seeks a cap on consumption that would alleviate past damage allegedly caused by Georgia. The Special master has encouraged the sides meet in a good faith effort to reach a framework for settlement of this equitable apportionment proceeding. He cites a precedent for controversies between states, quoting a 1942 case for the proposition that "The Supreme Court has 'often expressed' its 'preference' that, where possible, states settle their controversies by ‘mutual accommodation and agreement.’” Counsel for the states are to submit a confidential memorandum to him by January 26, 2017,“setting forth a summary of the parties’ settlement efforts.” See article here-- http://bit.ly/2iVDc3K and docket with case management order here-- http://bit.ly/2aMQVJH

Secret Water Wars Mediator

A Special Master whose ruling could influence an eventual U.S. Supreme Court decision to turn down Georgia’s water spigot has set a trial in his home state of Maine, where attorneys for Georgia and Florida agreed to begin arguments on Halloween. In the meantime, each side stated they continue to pursue settlement of the federal lawsuit Florida filed under the Supreme Court's original jurisdiction, seeking to push Georgia’s water consumption from the Apalachicola-Chattahoochee-Flint River Basin including Lake Lanier, back to 1992 levels and to get reparations for alleged economic and environmental harm to Apalachicola's oyster fisheries from drought. Ralph I. Lancaster, Jr., the 86-year-old veteran Supreme Court appointee, has repeatedly advised the states to settle out of court rather than live with a costly decision he stresses neither will like. The states chose a nationally known mediator whose name, oddly enough, has been kept secret by Master Lancaster’s order. Recent status reports filed by the attorneys indicate meetings between the mediator and high level state officials were continuing before trial. The parties reportedly participated in multiple one-on-one telephonic discussions with the mediator; exchanged further confidential mediation proposals; and met face-to-face in Atlanta with the mediator. Except to hear progress reports, Master Lancaster wants no part of the mediation process. He denied Florida’s suggestion to talk with the mediator, saying “'I have no intention of invading (the process) or influencing or discussing with the mediator anything that's going on.'" See news item here-- http://bit.ly/2apC4l5 and docket here-- http://bit.ly/2aMQVJH

Water Wars

A settlement in an ongoing 25-year water war between Florida and Georgia has not yet been attained, but a move towards compromise was just announced. Special master, Ralph Lancaster, who was previously appointed by the U.S. Supreme Court to help resolve the dispute, said he was delighted to see both the word ‘settlement’ and the word ‘mediator’ in recent status reports, indicating a move to the formal ADR process of mediation. Lancaster already urged attorneys for each state to settle the water wars case amongst themselves, rather than risk an unsatisfactory outcome for all involved. Georgia's Governor set aside $20 million for the latest legal battle pitting Florida’s ailing oyster industry against Georgia’s right to use Chattahoochee River water across metro Atlanta. Florida states that Georgia’s overconsumption of water in the Apalachicola-Chattahoochee-Flint River Basin, which includes Lake Lanier, is creating economic hardship, particularly on the oyster industry in the Florida Panhandle region's Apalachicola Bay. Georgia also seeks to maintain full use of the Flint River and its tributaries for farmers in southwest Georgia. The rivers join at the Florida border, becoming the Apalachicola River. Crucial to Florida's seafood folks is a fresh water-salt water balance for oysters to survive in the Apalachicola Bay. While there's been no material progress on a global settlement since last summer, Georgia now reportedly believes the best way to advance the process is "to engage a mediator acceptable to both sides who can create a framework for formal in-person discussions and periodic exchanges of information specifically directed to settlement.” Florida apparently welcomed the suggestion, along with the special master. See news stories here-- http://on-ajc.com/1NcbBY7 and http://bit.ly/213eZsn

Class Arbitration?

Recently, because of a split of authority, the U.S. Supreme Court heard argument on whether an arbitrator exceeded his powers under the Federal Arbitration Act in determining parties agreed to authorize class arbitration using broad contractual language. Justices apparently expressed an unwillingness to create a special standard for reviewing class arbitration decisions for this particular result. Cases like Stolt-Nielsen and Concepcion established a presumption of no consent to class arbitration without a clear meeting of the minds. However, the Court repeatedly gives a highly deferential standard of review to decisions by arbitrators, preventing most inquiries into the merits of an arbitrator’s award. There are generally very limited grounds for vacating an arbitration award. To argue the arbitrator exceeded his power requires manifest disregard of the law or clearly governing legal principle. Still, the Court appeared skeptical of the capability of arbitrators to handle class actions, even questioning incentive. In this case, the class involved some 20,000 doctors. Inquiries into arbitrator compensation and experience went unanswered, since that information is non-public. Congress passed the Federal Arbitration Act in 1925 to encourage litigants to settle disputes without resorting to litigation. Should the Court rule for business here, arbitration of class actions could squelch these cases before they become high stakes gambles. See docket- Oxford Health Plans v. Sutter http://www.supremecourt.gov/Search.aspx?FileName=/docketfiles/12-135.htm and discussion here- http://bit.ly/121VC1l and article here- http://onforb.es/14lln2A