Arbitration remains under national klieg lights. It has “become a wide-ranging surrogate for civil litigation” in a wider variety of contracts than at any time in our nation‟s history. This increased use has revealed stress fractures and drawn criticism. Congress has reacted, too: A party to a recent Fifth Circuit case was the impetus for the Franken Amendment, even though she ultimately won the right to take most of her claims to court. Other bills seek to exclude entire classes of claims (consumer, employee, franchise, and civil rights) from arbitration and to redraw the procedural line between decisions made by a court and decisions left to the arbitrator when the parties so provide. Arbitration is also being criticized in business circles for becoming “arbigation.”

But change has not awaited policy shifts, raising more questions about whether blunt legislative changes are necessary when commercial and judicial scalpels appear to be working. Pressure release valves, like unconscionability challenges, have been growing in popularity and use despite repeated petitions for writs of certiorari seeking to level geographic differences. That may change. The U.S. Supreme Court recently granted certiorari in a Ninth Circuit case to decide whether courts or arbitrators should decide unconscionability challenges to arbitration agreements when the parties clearly and unmistakably assign that gateway decision to the arbitrator. While major U.S. corporations expected overall disputes to increase in these tough economic times, one study indicates that corporations prefer to resolve their domestic disputes in litigation. This preference is already permeating standard contracts. The American Institute of Architects‟ widely used template for building contracts has changed arbitration from the default procedure to a mere party option. Even those that have not modified their standard contracts have focused on early case assessment, mediation, and tailored arbitration. While mediation is frequently used, and may be the current default procedure, it was not controversial enough to generate a Fifth Circuit opinion during this survey period. “In the current „toolbox‟ of approaches to conflict, mediation is the equivalent of a multi-functional Swiss-Army knife.” But lest anyone overstate the demise of commercial arbitration, the American Arbitration Association reports business arbitration to be relatively stable.10 And other studies show that it is still viewed as less costly and quicker than litigation.

The article may be downloaded (for free) here.

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The AAA Handbook on Mediation assembles from the Dispute Resolution Journal - the flagship publication of the American Arbitration Association – and other sources, the leading professional writing in areas in which mediation is likely to apply. The Handbook on Mediation is succinct, comprehensive and a practical introduction to the use of mediation in various fields, written by leading practitioners and scholars. It provides essential orientation and is a “must” for anyone with an interest in the field of mediation.

The Handbook contains recent important articles written by authors who are recognized specialists in the area, often the authors have both national and international reputations. The contributions cover a wide array of topics that are of substantial interest in mediation and provide analytically thorough, professional, and practical answers to problems that have emerged in the field.

The articles were selected from an extensive body of writings and, in the main, represent world-class assessments of mediation practice and procedure. The articles provide the reader with comprehensive and accurate information, lucid evaluations, and an indication of future developments. They not only acquaint, but also ground the reader in the field of mediation.

Find out more here.

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Here is the abstract:

In our “Westphalian” regime of international arbitration, conflict and competition between national jurisdictions, with overlapping and yet plausible claims to supervise the process, become inevitable. The conventional starting point for any discussion – the fulcrum around which the entire arbitral enterprise pivots – has been the supposed dichotomy between the state of the “seat” – where the arbitration finds its juridical “home,” and whose jurisdiction over the process is therefore “primary” – and all other states whose jurisdiction must therefore be deemed only “secondary.” Both legislation and Convention envisage an exclusive role for the former in setting the process in motion – for example, by appointing the arbitrators – and above all in monitoring compliance with the agreement – for example, by annulling or vacating the resulting award.

That the “seat” is the privileged starting point with respect to any allocation of judicial authority has traditionally been a simple reflection of the power of any sovereign over acts taking place within its “territory”; an alternative and perhaps more robust explanation would be somewhat more “contractualist,” giving priority to the parties’ exercise of autonomy in the very act of selecting the place of arbitration – and to the intuition that, by extension, they have presumptively chosen to subject themselves both to a certain body of “arbitration law,” and to the supervisory jurisdiction of the courts charged with applying that law.

I begin by canvassing the various fact patterns in which the traditional allocation of international competence on the basis of “primary” and “secondary” jurisdiction might possibly be thought useful: It has become, for example, the heuristic of choice to test the extraterritorial effect of an award, in circumstances where the agreement of the parties has subjected the arbitral process to a particular legal system whose own courts have found it lacking in legitimacy. All this is much controverted, but generally well understood.

The inevitable problem, though, is that none of this is a universal solvent – the world can after all be understood and patterned and divided up in all sorts of ways. What may have begun as a rough attempt to allocate responsibility over the unfolding of the process, has often been unthinkingly applied to all sorts of new and unexpected and inappropriate contexts.

Where, for example, a party has asked a court to enjoin an arbitration against him that has been threatened or initiated – perhaps on the fundamental ground that he has never even given his assent – American courts will increasingly hold that, whatever power they might have to enjoin a “local” arbitration, it would be “inconsistent with the purpose of the New York Convention” to enjoin arbitral proceedings in a state of “secondary jurisdiction” – and thus they “lack jurisdiction” to do so. Where a party has claimed that a foreign award has been obtained by bribery and corruption, and wishes to institute a “collateral attack” in this country through a RICO action, it may equally be held that the court lacks “subject matter jurisdiction” to reassess an award rendered in a state of “primary jurisdiction”; “under the framework of the New York Convention, the proper method of obtaining this relief is by moving to set aside or modify the award in a court of primary jurisdiction.”

American courts thus seem curiously mesmerized, when asked to deploy familiar procedural devices in aid of their nationals, by a rhetoric invented for quite different purposes. What purports in cases like these to be a commendable solicitude for the needs of international arbitration, takes the form of an abdication of any decision making power whatever, in favor of the courts of the seat. To invoke a putative lack of “power” based upon absolute prohibitions that supposedly emanate from the Convention seems a crude and clumsy and overbroad and irresponsible way of responding; even a legal system quite committed, for example, to the proposition that attempts to evade the arbitral process are likely to be quite without merit – or for that matter to the proposition that international neutrals cannot possibly be corrupt – need not shrink, on the prophylactic grounds of lack of jurisdiction, from testing any challenges.

You may download the full article (for free) here.  Links to other scholarly papers by Professor Rau are here.

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By VICKI SMITH

Hundreds of southern West Virginia residents who claim Massey Energy Co. poisoned their wells and made them sick by pumping coal slurry underground will get their day in court next year — and a chance to settle the case this fall.

A mass litigation panel handling the long-delayed lawsuit against Virginia-based Massey and subsidiary Rawl Sales & Processing set a trial date of Aug. 1, 2011, in Wheeling, warning the dozens of attorneys involved to clear their schedules for two months. The five-judge panel also announced it will hold a mediation day Nov. 15 in Charleston, when two of the judges will try to broker a settlement that Massey, the plaintiffs and dozens of insurance company lawyers can live with.

“We’re going to have a dual track here. We’re not going to slow down,” said Judge Alan Moats, who chairs the panel. “We’re going to go full speed ahead in both directions.”

While Moats and Judge Derek Swope will handle the mediation, Ohio County Circuit Judge James Mazzone will start preparing for trial with the help of Judges John Hutchinson and Jay Hoke.

Read the rest of the story here.

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An August American Medical Association (AMA) survey of 5,825 physicians illustrates a need for medical liability state and federal reforms. Survey responses indicated:

42.2% of physicians were sued, with 22.4% sued twice or more. Rates varied by specialty, but general surgeons and obstetrician-gynecologists were most likely to be sued (69.2%). Family physicians and general internists had similar rates (38.9% and 34%). Pediatricians and psychiatrists were sued the least.

Physicians who had an ownership interest in a practice were at greater risk, with 47.5% reporting being sued, compared with 33.4% for those with no ownership interest.

The majority of lawsuits never made it to the courtroom, according to 2008 data from the Physician Insurers Assn. of America, a trade group representing liability insurance companies owned or operated by physicians, hospitals and other health care professionals.

Sixty-five percent were dropped, dismissed or withdrawn. About one in four claims was settled, and 4.5% were decided by alternative dispute mechanism. Of the 5% that went to trial, defendants won in 90% of cases, the PIAA said.

But fighting a claim is costly. Defense against a claim averaged $22,163 for suits dropped, dismissed or withdrawn, and more than $100,000 for cases that went to trial, according to PIAA data.

The frequency of medical liability lawsuits documented in the report illustrates the need for reforms at the state and federal levels, said AMA Immediate Past President J. James Rohack, MD.

“Even though the vast majority of claims are dropped or decided in favor of physicians, the understandable fear of meritless lawsuits can influence what specialty of medicine physicians practice, where they practice and when they retire,” Dr. Rohack said in a statement. “This litigious climate hurts patients’ access to physician care at a time when the nation is working to reduce unnecessary health care costs.”

In June, The Agency for Healthcare Research and Quality (AHRQ) announced that seven demonstration grants for the Medical Liability Reform and Patient Safety initiative have been funded for a total amount of $19.7 million. Thirteen planning grants have also been funded for a total amount of $3.5 million. The grants support the implementation and evaluation of evidence-based patient safety and medical liability projects. See more here.

The seven demonstration grants include models that meet one or more of the medical liability reform and patient safety initiative goals, including: “Reducing preventable harms. Informing injured patients promptly, and making efforts to provide prompt compensation. Promoting early disclosures and settlement, through a court-directed alternative dispute resolution model.”

Dr. Rohack said the AMA will continue to push for reforms, including tort reform that has proven effective in Texas. “‘We’re committed to lowering health care costs to make it affordable to all Americans, and ending defensive medicine is a big part of that,’” he said.

We welcome your comments on the use of ADR in medical liability lawsuits.

Holly Hayes is a mediator at Karl Bayer, Dispute Resolution Expert where she focuses on mediation of health care disputes. Holly holds a B.A. from Southern Methodist University and a Masters in Health Administration from Duke University. She can be reached at holly@karlbayer.com.

Washington (Platts)–20Aug2010/540 pm EDT/2140 GMT

US mine safety regulators plan to revert to a speedier mediation process during a 90-day test period starting later this month in an effort to reduce the number of citations appealed by operators.

The Mine Safety and Health Administration said Friday it plans to alter “safety and health conferences” so that mine operators can informally dispute citations before filing a formal appeal with the agency’s administrative review board.

The pilot program will be tested starting August 31 at a pair of eastern coal mine district offices and one metal/non-metal office.

The agency is considering reinstituting a conferencing system that was eliminated in 2007 partly in response to criticism that too many citations were being thrown out in a manner too friendly to the industry.

A possible return and revision of the conferencing system represents a rare area of agreement between the Obama administration and the mining industry, which praised the plan.

“We were pleased to hear that MSHA is considering revising its current safety conference procedure,” Tony Bumbico, vice president of safety for Arch Coal, said through a spokeswoman. “If approached objectively by all parties, the new conference guidelines have the potential to resolve legitimate disputes early in the process which would be to everyone’s benefit.”

The National Mining Association, which has been pushing for a return to the old conferencing system, also lauded the plan.

MSHA is seeking ways to reduce a backlog of 89,000 cases before the Federal Mine Safety and Health Review Commission, which a subject of congressional scrutiny both before and after April’s deadly Upper Big Branch blast. The death of 29 workers in the accident only added to the scrutiny.

According to FMSHRC data, the number of cases filed during the 12 months ending October 1, 2008 more than doubled from the previous year to 8,900. The commission is on pace to set another record this year, with more than 9,100 cases filed through August 14, compared with 9,200 for the entire fiscal 2009.

“It is clear that the current conferencing structure is not working,” MSHA Administrator Joe Main said in a statement. “By resolving factual disputes before a violation is contested, these citations will not be added to the enormous backlog of cases that have bogged down the judicial system.”

The United Mine Workers of America and other safety advocates were leery of the program and its potential for departing from a multi-step process put in place last year.

“If it’s exactly the same way as it was before — and that’s not clear — then that represents a step backward,” said union spokesman Phil Smith. “We don’t see it as making any progress, because the way it was before…gave the operators too many bites of the apple.” The new pilot program will allow both mine operators and miner representatives to participate in the conferences. Main said he hoped the program will make the agency’s enforcement more efficient.

The program will start at three district offices: Coal District 2 in Mt. Pleasant, Pennsylvania; Coal District 6 in Pikeville, Kentucky, and the Metal/Nonmetal Southeast District in Birmingham, Alabama.

–Peter Gartrell, peter_gartrell@platts.com

A federal court in Kentucky held recently that a physician and hospital must arbitrate their contract dispute and enjoined the physician from proceeding with his state court action against the hospital.

Greenview Hospital, Inc. and Dr. Eric Wooten entered into a purported contract on October 8, 2010. Several months later, Wooten sued Greenview asking a state court to find the arbitration provision of the purported contract void, to enforce the contract, and to award damages for breach.

Wooten also alleged the contract was void as against public policy and was unconscionable.

Greenview subsequently filed the instant action in federal district court seeking to compel arbitration and enjoin Wooten from pursuing his state court action.

Wooten moved to dismiss, or alternatively, to stay the proceedings because of the pending state court action.

The U.S. District court for the Western District of Kentucky found the balance of factors “strongly counsels against staying the case,” citing in particular “the nature of the significant federal rights at issue”—i.e., the Federal Arbitration Act (FAA) and the Anti-Injunction Act.

Greenview argued the court should grant its motion to compel arbitration and enjoin Wooten from proceeding with his state court action.

According to Wooten, however, the contract’s choice-of-law provision required the application of Kentucky law. Because the arbitration agreement was unenforceable under Kentucky law, the court could not compel arbitration, Wooten contended.

Rejecting Wooten’s argument, the court noted Supreme Court precedent finding a general choice-of-law provision does not override an arbitration clause. See Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995).

Examining the instant contract, the court found as in Mastrobuono, “the choice of law provision covers the rights and duties of the parties, while the arbitration clause covers arbitration, neither [clause] intrudes upon the other.”

Thus, “[w]hile Kentucky law may otherwise govern the contract between the parties, it does not govern the arbitration clause or make it unenforceable,” the court held.

The court went on to find arbitration should be compelled. Wooten did not dispute the existence of an agreement to arbitrate or that the claims raised by both parties were within the scope of that agreement.

The court also enjoined Wooten from proceeding with his state court action, finding such action was not barred by the Anti-Injunction Act and “would serve to protect or effectuate this Court’s judgment.”

Greenview Hosp., Inc. v. Wooten, No. 1:10-cv-00085-TBR (W.D. Ky. July 15, 2010).

Read the full issue here. Find out more about the American Health Lawyers Association here.

We are happy to share with you that our blog Disputing turns five today!

Disputing was originally conceived by Karl Bayer and Rob Hargrove as a forum for discussion of legal developments as they happen.

We have come a long way since our very first blog post:

• Three Law Review Articles have cited Disputing (here, here and here).
• Disputing was mentioned by the Wall Street Journal for covering consumer arbitration clauses and the “Arbitration Fairness Day.”
• Disputing has also been cited by several CLE presentations in Texas.
• Disputing‘s blogmaster was invited to guest-blog at the Loree Reinsurance and Arbitration Law Forum and at Peter Vogel‘s Internet, Information Technology, & e-Discovery Blog (post available here).
• The Supreme Court of Texas Blog feeds Disputing‘s case summaries of decisions rendered by the Texas Supreme Court.
• Diane Levin, blogmaster of the award-winning Mediation Channel blog, has named Disputing as One of the Five ADR Blogs to Add to your Reading List.
• Disputing is listed on the French Arbitration Database-La Base de Données sur le Droit de l’Arbitrage Interne et International.
• Disputing has teamed up with Don Philbin’s ADR Highlight Reel and the Loree Reinsurance and Arbitration Law Forum to create the Commercial and Industry Arbitration and Mediation Group on LinkedIn.
• Disputing is also featured at Michael VanDervort’s ADR, Conflict Resolution and Exchange LinkedIn Group.
• Disputing is a mediate.com Featured Blog (read our posts here and here).
• Disputing is listed as a resource at the University of Oregon’s Master’s Degree Program In Conflict and Dispute Resolution program.

We also have been honored to host commentaries and guest-posts by the following friends of this blog:

• Audrey L. Maness
• Don Philbin
• F. Peter Phillips
• Glen M. Wilkerson
• Honorable W. Royal Furgeson, Jr.
• James M. Gaitis
• Jane Reister Conard
• John C. Fleming
• John DeGroote
• Kent B. Scott
• Peter S. Vogel
• Philip J. Loree, Jr.
• Professor Alan Scott Rau
• Professor Peter Friedman
• Professor S.I. Strong
• Professor Thomas J. Stipanowich
• Richard Webb
• Rick Freeman

We would like you to celebrate with us by leaving a reply on this post!

The Disputing team,

Karl Bayer, Alyson Chaky, Holly Hayes & Victoria VanBuren

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You may download the protocols here.

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The lessons to employers and others is clear. The agreement to arbitrate should contain two separate clauses, which should be made clearly independent.

The first clause should contain the agreement to arbitrate the underlying disputes, such as all claims arising out of or related to the employment, including but not limited to claims arising in tort or contract, claims for discrimination under federal, state or local law, claims for defamation, claims for or related to wages, including claims for unpaid wages, overtime and unlawful deductions from wages. (We leave to one side for now the issue of class action waivers or class arbitrations more generally.)

The second clause should contain the agreement to arbitrate all disputes relating to the interpretation, applicability, enforceability or formation of the agreement generally or the agreement to arbitrate, including, but not limited to any claim that all or part of the agreement generally or the agreement to arbitrate is void or voidable for any reason, including but limited to that it is a contract of adhesion, fails for lack of consideration, is procedurally or substantively unconscionable or is void as against public policy.

Read the full article here.

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