Dispute Resolution and Arbitration Commons^™

Dangers Of Deference To Form Arbitration Provisions, Amy J. Schmitz

Faculty Publications

This Article is part of my larger project exploring what I call "contracting culture," which borrows from legal realism and relational contract theory by considering contextual factors such as negotiators' relations, understandings, and values. As part of this project, I am pursuing various threads, including empirical studies of how contracting realities impact arbitration. In this Article, however, I focus on how these realities in business to consumer contracts combine with the Federal Arbitration Act and formulaic contract law to foster dangerous deference to form arbitration provisions. The Article then invites procedural reforms and offers suggestions for regulations aimed to temper …

Application Of Due Process To Arbitration Awards Of Punitive Damages - Where Is The State Action, The, Charles Smith

Journal of Dispute Resolution

This article will analyze why the position of the courts-no state action-is correct. Specifically, this article will take the position that the policy of finality traditionally found in arbitration law must trump any constitutional inquiries. This is because arbitration is ultimately based on the parties' agreement, which inevitably recites that the arbitrator's decision shall be final and, in any event, this finality is generally implied.

Arbitration By Accident: The Consequence Of Unintentionally Meeting The Clear And Unmistakable Evidence Standard, Mark A. Mulchek

Journal of Dispute Resolution

A fundamental principle of arbitration law is that parties may only be compelled to submit an issue to arbitration if they agreed to do so. The question of when an arbitrator, instead of a district court, can decide the arbitrability of an issue has been taken up by the courts in recent years. In First Options of Chicago, Inc. v. Kaplan, the Supreme Court stated that an arbitrator may decide questions of arbitrability only when the parties have "clearly and unmistakably" agreed to defer such questions to an arbitrator. Since First Options, the lower courts have attempted to define when …

Only The Rich Can Afford A Remedy: The Unconscionable Enforcement Of Arbitration Provisions Against The Indigent, Ryan M. Turley

Journal of Dispute Resolution

In Overstreet v. Contigroup Cos., Inc.,2 the Fifth Circuit Court of Appeals held that neither economic disadvantage nor undisclosed arbitration fees may form the basis for striking down an arbitration provision on the grounds of unconscionability.3 While the Supreme Court and the Federal Arbitration Act (FAA) expressly authorize the use of the doctrine of unconscionability to invalidate arbitration provisions, courts are sharply divided on its proper application. 4 The difficult juxtaposition of the Supreme Court's interpretation of the FAA as a "liberal federal policy favoring arbitration" and the traditional application of unconscionability as a means of policing unfair contracts has …

Vacatur Of Arbitration Awards: The Poor Loser Problem Or Loser Pays?, Stanley A. Leasure

University of Arkansas at Little Rock Law Review

In B. L. Harbert International, LLC. v. Hercules Steel Co., decided in February 2006, the Eleventh Circuit Court of Appeals took the opportunity to express its "exasperation" with the growing tendency of losing parties in arbitration disputes to take a "never-say-die attitude" in the pursuit of vacatur of arbitral decisions "without any real legal basis for doing so" and its concern for the concomitant threat to the underlying purposes of the Federal Arbitration Act (FAA).

Applying the Harbert "any real legal basis" requirement raises several concerns that can be assuaged only by courts' commitment to focus on balancing following two …

Misjudging: Implications For Dispute Resolution, Donna Shestowsky

Nevada Law Journal

No abstract provided.

Equitable Estoppel And The Compulsion Of Arbitration, Alexandra A. Hui

Vanderbilt Law Review

Freedom of contract is a longstanding principle deeply rooted in American jurisprudence, protected by the Contract Clause and by the Due Process Clauses of the Fifth and Fourteenth Amendments.' Because of the legal system's high regard for freedom of contract, parties are free to negotiate virtually all issues, thus creating rights and limiting duties and obligations to one another.

In exercising this freedom to contract, parties often negotiate an arbitration clause. These clauses, also referred to as "predispute arbitration agreements," are contractual provisions agreed to in advance of any dispute that require a party to submit any and all future …

The Secret To Success: An Examination Of New York State Mediation Related Litigation, Andrew N. Weisberg

Fordham Urban Law Journal

This Comment examines the difficulties in using alternative dispute resolution, specifically mediation, to settle disputes between parties. While mediation is meant to lighten the courts' caseload, it occasionally results in post-settlement issues concerning the mediated agreement, leaving the court to determine whether the agreement should be enforced. This Comment examines such enforcement issues, specifically how often enforcement issues arise and the typical grounds on which parties rely to vacate or modify mediated agreements. It discusses the research conducted on New York State cases decided between 1/1/2004 and 10/31/2006 and describes research conducted by Hamline University School of Law Professors James …

Mcmahon Turns Twenty: The Regulation Of Fairness In Securities Arbitration, Jill I. Gross

Elisabeth Haub School of Law Faculty Publications

I believe that current regulation of securities arbitration does ensure that it is fair to investors. Part II of this Commentary explores the various sources of law, including the FAA, which could require fairness in securities arbitration. It revisits the first critical assumption of the McMahon Court, that the FAA's provisions for post-award judicial review protect investors from an unfair arbitration process. This Part demonstrates that, while the FAA does require “fundamental fairness” in arbitration, courts loosely construe that requirement and find most arbitration proceedings meet it easily. Part IIII of this Commentary explores SEC oversight of securities arbitration, particularly …

Does International Arbitration Need A Mandatory Rules Method?, Alexander K.A. Greenawalt

Elisabeth Haub School of Law Faculty Publications

The role of mandatory rules in international arbitration remains a persistent source of debate. The basic problem is a straightforward one: contractual arbitration arises as a matter of the parties’ consent, but the resolution of contractual disputes can implicate mandatory rules of law that are not waivable and are typically designed to protect broader public rights. The literature has often presented the issue in terms of conflict between the authority of the state and the party-derived authority of the arbitrator. Asserting an independent public duty to protect national mandatory laws as well as the enforceability of arbitral awards, some writers …

Foreign Direct Investment, Investment Treaty Arbitration, And The Rule Of Law, Susan Franck

Scholarly Articles in Law Reviews & Journals

In the last decade, there has been a surge in the number of multi-lateral and bilateral investment treaties governments have signed; meanwhile there have been dramatic increases in the amount of foreign direct investment (FDI); and, more recently, the number of claims brought under investment treaties has spiked. This Article examines the relationship amongst these factors and is the first to review the emerging empirical economic literature investigating whether investment treaties achieve their goal of promoting FDI. The Article then specifically evaluates the impact that the procedural right to arbitrate investment claims plays in the process of promoting FDI and …

Keeping Arbitrations From Becoming Kangaroo Courts, Jeffrey W. Stempel

Scholarly Works

Arbitration has grown rapidly during the past 20 years. Particularly notable and problematic is the rapid onset of new or mass arbitration that has resulted from the judiciary's modern favorable attitude toward enforcement of arbitration clauses, even those imposed upon consumers, employees, small vendors, and debtors as part of a standardized contract of adhesion. In a separate article (See "Mandating Minimum Quality in Mass Arbitration," 76 U. Cin. L. Rev. (forthcoming 2007)), I present a more comprehensive list of what I regard as the necessary steps that must be taken to insure minimally acceptable quality and fairness in mass arbitration. …

In Defense Of Mandatory Arbitration (If Imposed On The Company), Jean R. Sternlight

Scholarly Works

Having spent much of her academic life battling companies' mandatory imposition of binding arbitration on consumers and employees, the author now switches gears. This Article contemplates whether mandatory binding arbitration is acceptable if imposed by the government on companies (governmental mandatory arbitration) rather than by companies on their employees and consumers (private mandatory arbitration). Specifically, the Article considers the possibility of statutes that would provide little guys (consumers and employees) with an opportunity to take their disputes to binding arbitration rather than litigation. If the little guys chose arbitration over litigation, post-dispute, companies would have to agree to such arbitration, …

El Desarrollo Del Arbitraje Comercial Internacional: Sofisticacion O Complejdad, Horacio A. Grigera Naón

Scholarly Articles in Law Reviews & Journals

No abstract provided.

The Arrival Of The "Have-Nots" In International Arbitration, Catherine A. Rogers

Faculty Scholarship

Much has been written about the have-nots in domestic litigation and domestic arbitration, with an apparent assumption that their fate was mainly a domestic affair. In recent years, however, internet commerce has brought consumers to the international market, an increasingly globalized workforce has generated a class of international employees, and the link between international trade and human rights has revealed a host of victims. The arrival of these 'have-nots' in international arbitration means that previously latent questions about international arbitration's integrity as a system and role as a mechanism for transnational regulatory governance have been brought to the fore.

Using …

Resisting Equal Footing: Did The Wisconsin Supreme Court Disguise An Assault On Arbitration, Peter Wilder

Journal of Dispute Resolution

It is well settled that state courts may apply state contract principles when determining if an arbitration clause is enforceable; however, states are prohibited from enforcing laws that treat arbitration agreements differently than other contracts. Placing arbitration agreements on an equal footing with other contracts results from judicial preference for arbitration. When a court overreaches to find an arbitration agreement to be procedurally and substantively unconscionable, the overreaching may stem from the court's erroneous preference for adjudication over arbitration. The issue becomes more apparent when the court had the option to enforce the agreement without the unconscionable provision, yet chose …

An Empirical Analysis Of Investment Treaty Awards, Susan Franck

Scholarly Articles in Law Reviews & Journals

I. INTRODUCTION

Earlier speakers offered insights about investment law and its implications for the future of domestic administrative law and international law. To bring us full circle, I will discuss where we are today so that we can consider where we want development law to be tomorrow. In pursuit of that goal, I offer empirical data related to investment treaty arbitration. My goal today is to focus on three claims about investment treaty arbitration and consider the data's potential implications.

Faa And The Userra: Pro-Arbitration Policies Can Undermine Federal Protection Of Military Personnel, Laura Bettenhausen

Journal of Dispute Resolution

According to the United States Supreme Court, statutory claims may be the subject of an arbitration agreement contained in an individual employment contract. In Garrett v. Circuit City Stores, Inc., the United States Court of Appeals for the Fifth Circuit analyzed whether claims brought under the Uniformed Services Employment and Reemployment Rights Act (USERRA) are subject to arbitration under the Federal Arbitration Act (FAA). The applicability of the FAA to employment contracts is an integral part of the analysis in this case. To determine whether arbitration is an appropriate forum for the plaintiff's claim, discussion of both the structure and …

The Flight From Arbitration: An Empirical Study Of Ex Ante Arbitration Clauses In Publicly-Held Companies’ Contracts, Theodore Eisenberg, Geoffrey Miller

ExpressO

We study a data set of 2,858 contracts contained as exhibits in Form 8-K filings by reporting corporations over a six month period in 2002 for twelve types of contracts and a seven month period in 2002 for merger contracts. Because 8-K filings are required only for material events, these contracts likely are carefully negotiated by sophisticated parties who are well-informed about the contract terms. These contracts, therefore, provide evidence of efficient ex ante solutions to contracting problems. The vast majority of contracts did not require arbitration. Only about 11 percent of the contracts included binding arbitration clauses. The rate …

Shaffer's Footnote 36, Arístides Díaz-Perosa

West Virginia Law Review

No abstract provided.

No Do-Overs For Parties Who Agree To Limit Review Of An Arbitrator's Decision, Patrick Gill

Journal of Dispute Resolution

Under the FAA, review of arbitration awards is limited to specific circumstances. However, in many instances, these default rules can be modified by contractual provisions including increasing or decreasing the level of review of arbitration awards. Although a broader scope of review is contrary to the main purposes of arbitration, courts have held that a contractual provision expanding judicial review is permissible. Furthermore, in some limited circumstances, courts have held that a contractual limitation on judicial review is permitted by the FAA where the restriction is clearly manifested in the contract and the process will not become unfair as a …

New Judicial Hostility To Arbitration: Federal Preemption, Contract Unconscionability, And Agreements To Arbitrate, The, Steven J. Burton

Journal of Dispute Resolution

Part I of this Article sketches the basics of arbitration law and practice, and traces the development of the federal policy favoring arbitration, to establish a basis for evaluating contemporary judicial decisions. Part II examines the justification for the policy favoring arbitration and the reasons contracting parties may prefer arbitration. Part III evaluates the reasons courts give for finding arbitration agreements in employment and consumer contexts unconscionable, and therefore, unenforceable. The conclusion is that many courts make many clearly erroneous decisions, including decisions that are unconstitutional because they are preempted.

Courts Have The Final Say: Does The Doctrine Of Manifest Disregard Promote Lawful Arbitral Awards Or Disguise Unlawful Judicial Review, Lindsay Biesterfeld

Journal of Dispute Resolution

In exchange for a speedy, economical dispute resolution process, parties that submit to binding arbitration assume the risk that an arbitrator might misapply the law. United States Supreme Court precedent and federal law favor agreements to arbitrate by limiting judicial review of arbitral awards and requiring courts to "rigorously enforce arbitration agreements." These judicial constraints support the arbitral goals of efficiency and finality by reducing the risk that arbitral awards will be vacated on appeal. To balance the risk that arbitrators may abuse this standard of review, courts have supplemented restricted judicial review with a doctrine that allows an arbitral …

The New Judicial Hostility To Arbitration: Unconscionability And Agreements To Arbitrate, Steven J. Burton

ExpressO

Many, many contract disputes are now being settled by arbitration instead of litigation. The United States Supreme Court strongly favors the enforcement of agreements to arbitrate that fall within the Federal Arbitration Act. This Article shows that many lower courts, however, are using the contract unconscionability doctrine to refuse enforcement of agreements to arbitrate. It argues (1) that many such lower court decisions should be pre-empted by the Federal Arbitration Act, and (2) that lower courts should give due weight to the federal policy favoring arbitration when deciding whether to enforce an agreement to arbitrate.

Final Offer Arbitration In The New Era Of Major League Baseball, Spencer B. Gordon

ExpressO

This article provides a comprehensive analysis of the economic, athletic, and social impact of final offer salary arbitration in Major League Baseball (“MLB”). The article delves into the motivations, fluctuations, and evolution of the player-owner relationship and free agency. The commentary then focuses on the distinguishing features and intricacies of final offer arbitration. Although salary arbitration in the context of Major League Baseball is a topic oft discussed in the law review setting, the analysis rarely reaches the level exhibited in this article. Moreover, most articles on the subject were written between 1996 and 2000 when the 1994 players’ strike …

Circumventing The Supremacy Clause? Understanding The Constitutional Implications Of The United States' Treatment Of Treaty Obligations Through An Analysis Of The New York Convention, Amber A. Ward

San Diego International Law Journal

The United States participation in treaties and other international agreements is becoming more necessary and an increasingly prevalent occurrence as a result of globalization. The rapid pace of technological innovation and more effective means of transportation have caused our world to shrink, making countries even more interconnected. The corresponding explosion of international business and commercial transactions has resulted in high levels of risk and uncertainty due to a complex mix of laws, monetary factors, politics and cultures that vary across countries. For global players, it has become essential to have international agreements that can mitigate the risks inherent in international …

Reforming Udrp Arbitration: The Suggestions To Eliminate Potential Inefficiency, Soohye Cho

Cornell Law School Inter-University Graduate Student Conference Papers

Even though the Internet has become an integral part of daily life, resolving legal disputes via Internet still remains in the development stage. The legal framework for regulating such Online Dispute Resolution (ODR) has not been established since the Virtual Magistrate Project offered the early ODR program began in 1995. Still, resolving disputes through Internet has been increasing dramatically, especially in the area of Domain Name Disputes. After the Internet Corporation for Assigned Names and Numbers (ICANN) adopted the Uniform Domain Name Dispute Resolution Policy (UDRP) in 1999 , this procedure has been regarded as the most successful ODR to …

Arbitration Costs And Contingent Fee Contracts, Christopher R. Drahozal

Vanderbilt Law Review

A common criticism of arbitration is that its upfront costs (arbitrators' fees and administrative costs) may preclude consumers and employees from asserting their claims. Some commentators have argued further that arbitration costs undercut the benefits to consumers and employees of contingent fee contracts, which permit the claimants to defer payment of attorneys' fees and litigation expenses until they prevail in the case (and if they do not prevail, avoid such costs altogether). This paper argues that this criticism has it exactly backwards. Rather than arbitration costs interfering with the workings of contingent fee contracts, the contingent fee mechanism provides a …

Imrei Chayim V. Wisel, Yigal Mersel (Registrar)

Translated Opinions

The District Court annulled an arbitration award.  A party wishes to appeal that decision in this Court.  Section 38 of the Arbitration Law, 5728-1968 (hereinafter: the arbitration law) determines that a decision made pursuant to that law can be appealed by permission.  The party argues before the Registrar of the Court that the appeal should be heard, despite that, as an appeal as of right, since section 17 of Basic Law: Judicature (hereinafter: the basic law) determines that "a judgment of a court of the first instance can be appealed as of right, excepting a judgment of the Supreme Court", …

Confidentiality In Arbitration: Beyond The Myth, Richard C. Reuben

Faculty Publications

Many people assume that arbitration is private and confidential. But is that assumption accurate? This article is the first to explore that question in the important context of whether arbitration communications can be discovered and admitted into evidence in other legal proceedings - a question that is just beginning to show up in the cases. It first surveys the federal and state statutory and case law, finding that arbitration communications in fact are generally discoverable and admissible. It then considers the normative desirability of discovering and admitting arbitration communications evidence, concluding that the free discovery and admissibility of arbitration communications …