Let’s say your client gets sued in court, the parties have an arbitration agreement, and you want to compel arbitration right away and not mess around with any other court proceedings. You already know you can make a motion to compel instead of an Answer, but you are stuck on this: what do you
Litigation vs. Arbitration
Defendant's Failure To Pay Arbitration Fees Cannot Stymie Claims Against It
Usually, when faced with a respondent who refuses to pay its share of the arbitration fees, a claimant simply pays both sides’ fees, so that the arbitration can proceed. A new case out of the Tenth Circuit answers the question: what happens if it does not pay both sides’ fees? Pre-Paid Legal Services, Inc. v.
Fifth Circuit Finds Parties Can Authorize Arbitrators By Their Conduct
The Fifth Circuit un-vacated an arbitration award last week, holding the district court had wrongly concluded that the court was the proper decision-maker on contract formation. Although courts are presumptively authorized to decide whether an arbitration agreement exists, the Fifth Circuit found the parties altered that presumption by “submitting, briefing, and generally disputing that issue…
When Can A Party Recover Attorneys' Fees Incurred Confirming An Arbitration Award?
If you won your arbitration, it is vexing to have to spend many thousands more in attorneys’ fees opposing a motion to vacate the arbitration award. (That is especially true if you signed up for arbitration thinking it was faster and avoided appeals.) But, can you ask the court to award you the attorneys’ fees…
Three State Courts Hold Timeliness Of Claim Is Issue For Arbitrator
In March, the highest courts of Montana, Texas, and Wisconsin all held that, when parties have a valid arbitration agreement, the issue of whether an arbitration demand was timely is presumptively for the arbitrator to decide. That principle of law has been established under the FAA at least since the Howsam decision in 2002 (and…
SCOTUS Will Hear Arbitration Case in October Term
Just as I was beginning to worry that arbitration had fallen out of favor at the nation’s highest court… today the Supreme Court announced that it will hear the case of DIRECTV, Inc. v. Imburgia during its October Term, an appeal from a California Court of Appeals. In DIRECTV, a case pitting Kirkland &…
Eighth Circuit Finds Former Employees Lack Standing To Challenge Employer's New Arbitration Policy
What’s one way to derail a potentially large collective action about Fair Labor Standards Act violations? To implement a new arbitration policy within days, thereby ensuring that your current employees cannot join the court case. At least, that was the successful tactic used by a Chicago restaurant recently.
In Conners v. Gusano’s Chicago Style Pizzeria, …
Beyond the Headlines Part II: What The New CFPB Report Teaches Us About Arbitration v. Litigation
In my last post, I shared some of the highlights from the first half of the new CFPB Arbitration Study. This post covers the second half of the report, with juicy information gleaned from CFPB’s analysis of almost 2,000 actual consumer arbitrations and its comparison of those results to actual consumer court actions.
Arbitration…
Beyond the Headlines Part I: What The New CFPB Report Teaches Us About Arbitration Clauses
The Consumer Financial Protection Bureau released an “Arbitration Study” exceeding 700 pages to Congress this week. You have likely heard the headlines – most commentators assume that the CFPB will use the study to support an effort to restrict or regulate the use of “pre-dispute” arbitration in financial transactions. But, let’s not get ahead of…
Who Decides Whether New Claims Are Precluded By Old Arbitration? An Arbitrator, Says 2d Circuit
We all know that the doctrines of issue preclusion (collateral estoppel) and claim preclusion (res judicata) apply with equal force to both arbitration awards and court orders. But, if your adversary brings new claims that you believe have already been determined in arbitration, where do you go to shut down those new claims — court…