An article published on the Pepper Hamilton website considers the instance of an appeal of an arbitration award that involved the successful appeal by All-Pro Quarterback Tom Brady and the NFL Players Association of Brady’s four-game suspension based on accusations of complicity in a scheme to gain an unfair competitive advantage in an NFL playoff game.

Richard W. Foltz, Jr. and James M. Kwartnik, Jr. discuss whether members of the construction industry contemplating review of arbitration awards can draw any lessons from the Brady matter.

Based on the discussion of the case, “there are a few takeaways from this case for construction matters,” the write. “Most importantly, a party should not rely on the opinion as establishing expectations for review of arbitration awards.  It appears to be the zenith of aggressive appellate review, and unlikely to be closely followed in situations where it could be factually distinguished.”

Read the article.

Some contracts, including insurance and reinsurance contracts, include provisions providing that the successful party’s damage award will include all costs of the suit or arbitration, including attorney fees, writes Larry P. Schiffer in Squire Patton Boggs’ Insurance and Reinsurance Law Blog.

“This type of clause modifies the traditional default American Rule of costs and fees, in which each litigant pays its own attorney fees, win or lose,” he explains. “What happens when this type of contract clause bumps up against the Federal Arbitration Act (‘FAA’) and the ability of a party to petition a court to seek to vacate an arbitration award? Is the prevailing party entitled to costs and attorney fees defending the vacatur proceeding?”

He describes a recent ruling in the 2nd U.S. Circuit Court of Appeals, in which the court was asked to review a district court order confirming an arbitration award and awarding costs and attorney fees to the prevailing party.

Read the article.

Employers are advised to follow developments in the legislature and government agencies to curtail the use of arbitration agreements, writes James G. Ryan on the website of Cullen and Dykman LLP.

“Employers should also monitor decisions issued from federal agencies such as the NLRB and stay current with laws involving arbitration agreements in order to ensure compliance with both state and federal law,” according to the article.

The article also discusses a bill introduced by U.S. Senator Patrick Leahy, titled “Restoring Statutory Rights and Interests of the States Act of 2016,” that would limit the use of arbitration agreements in civil rights cases, employment disputes, and other lawsuits.

Read the article.

Courts have generally categorized online agreements into two types: “clickwrap” agreements and “browsewrap” agreements, write Joshua R. Stein and J. Alexander Lawrence of Morrison & Foerster LLP in an article posted on Lexology.com.

The explain:

Clickwrap agreements—which require a user to check a box or click an icon to signify agreement with the terms—are usually enforceable under U.S. law, even where the terms appear in a separate hyperlinked webpage but where language accompanying the box or icon indicates that checking the box or clicking the icon indicates assent to such terms.

On the other hand, browsewrap agreements—where the terms are passively presented to users in a hyperlink somewhere on a webpage, often at the very bottom of the page in small font—are often unenforceable because it often cannot be proved the user knew the terms existed or even was aware of the hyperlink.

They describe a case in which a signed contract did not include an arbitration clause, but instead included an Internet link to terms and conditions that included arbitration conditions.

Read the article.

The trial law firm Gardner Haas PLLC has added experienced commercial litigator Jeremy Camp as a partner.

Camp joins Gardner Haas from Dallas’ Brewer Attorneys & Counselors, formerly Bickel & Brewer, where Gardner Haas’ co-founders Michael Gardner and Eric Haas previously practiced. Camp’s litigation and arbitration practice focuses on a variety of complex commercial matters, including merger and acquisition-related disputes, business torts, hospitality law and environmental litigation.

“Jeremy has extensive litigation and arbitration experience and his forward-thinking philosophy aligns with ours,” says Gardner. “He’s an extremely talented lawyer and we are excited he is joining our team.”

Camp has tried several notable cases before judges and juries, including obtaining a take-nothing judgment in federal court for his client, 3M Co., in a dispute concerning the sale of an $854 million business.

“I have great respect for Michael and Eric and share their vision of solving clients’ problems through exceptional work at a value that the big firms can’t match,” says Camp. “I look forward to adding to the depth of Gardner Haas.”

Camp received his law degree, magna cum laude, from Southern Methodist University Dedman School of Law in 2009. He received a Bachelor of Science from the University of Texas at Austin in 2006.

Most questions of arbitrability can be resolved on motion, using a summary judgment-like standard, writes Liz Kramer in Stinson Leonard Street’s ArbitrationNation.com. “However, just like summary judgment, if there are genuine disputes of material fact about whether a claim must be arbitrated — like competing evidence about whether the parties ever formed an arbitration agreement — those should be determined by a trial.  That is the lesson of three recent cases from the Third Circuit, the Ninth Circuit, and the Supreme Court of Alabama.”

She writes that the very existence of an arbitration agreement can be hotly disputed. “For contract negotiators, that means it is critical to obtain (and retain) a signed copy of the final agreement including the arbitration clause. For advocates trying to enforce agreements, that means it is critical to recognize when to give up on motion practice and ask for a trial on the issue, so that you don’t waste years on appeal, only to get sent back to square one.”

Read the article.

Myanna Dellinger of the University of South Dakota School of Law has posted a discussion of a recent case in which a judge faulted Uber with presenting its drivers with a contract that was “likely, frankly, to engender confusion.”

Dellinger wrote about the case in the ContractsProf Blog.

The underlying case is a class action lawsuit against Uber for allegedly misclassifying its drivers as “independent contractors” instead of regular “employees.”

“Whether this is an example of deliberate strong-arming or intimidating the drivers into not joining the lawsuit or simply unusually poor contract drafting may never be known. Judge Chen did, however, order Uber to stop communicating with drivers covered by the class action suit and barred the company from imposing the new contract on those drivers,” Delinger writes.

Read the article.

William (Bill) Regan has joined Hogan Lovells’ New York office as partner in the Litigation and Arbitration practice group.

Regan represents banks, issuers, and senior executives in securities class actions and banking litigation matters. He also advises clients on regulatory matters, including investigations and enforcement proceedings brought by the Securities and Exchange Commission and the Commodity Futures Trading Commission.

“Bill brings skills, energy, and experience that will contribute to the growth of our financial institutions and securities litigation offerings,” said Dennis Tracey, Head of Litigation for the Americas. “The addition of Bill to our practice is part of an ongoing growth trend in the demands of our global client base for strong U.S. securities and financial services expertise.”

“New York is a key jurisdiction for our clients in the securities sector, and the addition of Bill highlights our investment in strong talent” said Oliver Armas, Managing Partner of the firm’s New York office. “He will help us serve non-U.S. firms that trade on U.S. exchanges which require local counsel in New York as well as their own jurisdictions.”

Regan earned his J.D. from the George Washington University Law School, and his B.A. from Hofstra University.

A couple of words here or there in a contract can make a huge difference, particularly when those words relate to what happens if there is a breach or some other dispute between the parties, writes Shep Davidson in Burns & Levinson’s blog, The In-House Advisor.

He discusses the case of Family Endowment Partners, L.P. v. Sutow.

That case involved a lawsuit that resulted in a $48 million award to the plaintiffs in a ruling issued by an arbitrator. Part of the award included triple damages. Davidson explains how some simple changes in the contract could have avoided much of the defendant’s loss.

Read the article.

The typical reinsurance contract arbitration involves a tri-partite panel of arbitrators, with each party appointing an arbitrator and a separate process governing appointment of the third arbitrator (known as “the umpire”),” according to a white paper published by Sidley Austin LLP and available on Lexology.com.

Most arbitrations run smoothly, the paper says, but “arbitrators should be ready for the exceptional case, which can be occasioned by another arbitrator or counsel. The remedy for rogue behavior may rest within the panel, or it may require judicial intervention. Judicial relief can be hard to come by, given the procedural and substantive hurdles to be cleared; but the truly egregious case has a way of catching a court’s attention.”

The article examines some examples of panel breakdown and how they have been addressed.

Read the white paper.

The U.S. Supreme Court has reversed a California appellate court’s refusal to enforce an arbitration provision in a contract, concluding that the court’s decision is incompatible with the Federal Arbitration Act and prior Supreme Court precedent, reports John G. Papianou of Montgomery McCracken Walker & Rhoads LLP.

DirecTV, Inc. v. Imburgia involved two DirecTV customers who sued the company in California state court, claiming early termination fees in their service agreements violated California law, Papianou wrote in an article published by Lexology.com. DirecTV cited a provision in the service agreement that called for binding individual arbitration of all disputes between DirecTV and its customers. The trial court denied the request and DirecTV appealed.

He wrote that the message is clear: arbitration agreements that waive class actions or class arbitration are enforceable. And state-court judges must enforce them.

Read the article.

Consumer Financial Protection Bureau determined that pre-dispute arbitration clauses harm consumers by forcing them to sign or click away their right to pursue future remedies in a court of law, reports Julie Goldsmith Reiser is a partner at Cohen Milstein Sellers & Toll PLLC in an article published by Bloomberg BNA.

Consumers “undervalue the importance of mandatory arbitration clauses even in the rare instances where consumers might be able to opt out.” she writes. “CFPB correctly concluded that binding individual customers to mandatory arbitration before a dispute arises, rather than encouraging its voluntary use, is harmful to public interest and consumer protection.”

She details the CFPB’s study and results and examines a critique offered by the Mercatus Center.

Read the article.

The Consumer Financial Protection Bureau (CFPB) announced that it is exploring a rulemaking to eliminate the use of certain arbitration agreements in consumer contracts that block consumers from participating in class-action lawsuits, report Bill Mayberry and Jodie Herrmann Lawson of McGuireWoods. They write that, if the new rule is enacted, it will impact companies that fall within the CFPB’s broad interpretation of businesses that provide financial products and services for consumer purposes.

“The announcement comes on the heels of the CFPB’s publication of a three-year study on arbitration that concluded that consumers generally are better served through litigation. According to CFPB Director Richard Cordray, arbitration clauses amount to ‘a free pass to sidestep the court and avoid accountability for wrongdoing,” they write.

The article is on the firm’s Subject to Inquiry blog.

Read the article.

Common law judicial doctrines in almost every state discourage and restrict arbitration agreements covering personal injury or death claims, write Manton G. Grier and Marcus A. Manos of Nexsen Pruet. They see this point particularly regarding admission contracts to nursing homes or assisted-living facilities, which have superior bargaining power and may offer services on a “take it or leave it” basis.  The Federal Arbitration Act (FAA), on the other hand, encourages arbitration of claims.

“Because the arbitration laws stack the deck against a facility, there is no foolproof way to draft an arbitration agreement; what may be found enforceable by one judge may be found unenforceable by another,” they write. “With so many defenses available to plaintiffs, a bullet-proof agreement just doesn’t exist.  Nevertheless, there are five ways a facility can improve the odds that a court will enforce the agreement.”

Read the article.

Two recent cases confirm that incorporation of AAA Rules into an arbitration agreement evidences an intent to allow the arbitrator to determine what issues are arbitrable — including arbitration, reports The National Law Review.

“The question of whether parties to a dispute have agreed to arbitration is often termed a “gateway” issue to be decided by a court, unless the parties agree otherwise,” the story says. “Both the Commercial and Construction Arbitration Rules of the American Arbitration Association expressly grant to the arbitrator “the power to rule on his or her jurisdiction.”

In one of the cases, Fremont Cmty. Digester, L.L.C. v. Demaria Bldg. Co., Inc., 2015 WL 3917635 (Mich. Ct. App. June 25, 2015), the court noted that the AAA Rules authorize the arbitrator to decide matters relating to jurisdiction. “The Court of Appeals affirmed, defining the central issues as whether the new claims were within the scope of the letter agreement, recognizing that contract interpretation is an issue for the arbitrator,” according to the Review story.

Read the article.

A generation ago, mediation of construction disputes was unusual, writes Bruce W. Ficken in Pepper Hamilton’s Constructlaw blog. Today, it is rare that a construction claim goes to trial without some effort at mediation first. Indeed, a substantial percentage of construction contracts require mediation as a precondition to filing suit or demanded arbitration.

“Still, as pervasive as mediation has become, misperceptions about mediation persist among the contractor population generally.

“What does a mediator decide? Who controls the proceedings? Is there such a thing as binding mediation? How confidential is confidential during and after a mediation?”

The author addresses those questions in the article.

Read the article.

After a trial court and intermediate appellate court had ruled that an arbitration clause in a consumer contract was unconscionable, the California Supreme Court reversed in a recent ruling, finding the clause was enforceable in Sanchez v. Valencia Holding Co., LLC, reports Liz Kramer in Stinson Leonard Street’s Arbitration Nation.

She wrote: “[T]he court found that because the buyer could not negotiate the provisions of the sales contract, he had established ‘some degree of procedural unconscionability.’ (The buyer did not have to prove he tried to negotiate the arbitration clause.)  The court could then address the buyer’s claims of substantive unconscionability.”

“This decision puts California squarely in the mainstream on the unconscionability of arbitration agreements,” she continued. “It also offers very useful guidance for California courts (or those applying California contract law) facing future arguments about the unconscionability of arbitration clauses.”

Read the article.

The 5th U.S. Circuit Court of Appeals, ruling in a vacatur of arbitral award case, found that an arbitrator exceeded his authority in a multiple-party, multiple-contract AAA arbitration by acting in accordance with one arbitration agreement, but contrary to the arbitrator appointment and forum selection clauses in other arbitration agreements involving an intervening party.

Baker & McKenzie associate Eileen Theresa Flynn, writing in an article posted on Lexology, wrote about PoolRe Ins. Corp. v. Organizational Strategies, Inc.

“Reviewing the vacatur de novo, the Fifth Circuit agreed that Ramos acted contrary to the express provisions of the PoolRe arbitration agreements and affirmed the vacatur decision,” Flynn wrote.

Read the article.

Pillsbury Winthrop Shaw Pittman has posted an article about the American Arbitration Association’s revised Construction Industry Arbitration Rules and Mediation Procedures which became effective July 1, 2015.

George Haley, John Heisse, Clark Thiel and Robert Thum write that, although some changes are relatively modest, others expand the powers of the arbitrator and may alter traditional assumptions underlying the selection of arbitration as a dispute resolution process for construction projects.

“For example, the Rules now provide a procedure for emergency relief that may result in more mid-project disputes being taken to arbitration or court, as the new Rule R-39 provides a party can seek emergency relief from either the AAA or a court, without violating the agreement to arbitrate,” they write.

Read the article.

Seyfarth Shaw reports on a contract case in which a California court found that an arbitration agreement between Texas-based Neiman Marcus and a California-based employee was unconscionable because the agreement designated Texas law as the law to apply.

“Many companies doing business in California have implemented arbitration agreements for resolving disputes with their employees,” the article says. “Companies headquartered in states other than California often prefer to use the law of their own state as the law to govern their contracts. In the context of arbitration, a valid choice of law can tell the arbitrator what law to apply.”

The case is Pinela v. Neiman Marcus Group, Inc.

“This holding should cause non-California employers pause prior to implementing an arbitration agreement that chooses a law other than California’s for disputes involving California employees,” the article says.

Read the article.