In a new case that reminds federal judges everywhere to sing “I’ve got the power!” like C&C Music Factory, the Fifth Circuit reiterates that federal courts can stay related state court actions if necessary to “protect or effectuate” an order compelling arbitration.  American Family Life Assurance Co. of Columbus v. Biles, __ F.3d __, 2013 WL 1809766 (5th Cir. April 30, 2013).

The underlying facts of the case highlight a tragically dysfunctional family.  An adult homosexual man named his partner as a beneficiary of his life insurance, but when the insurer in fact distributed money to the decedent’s life partner, the decedent’s mother and siblings sued the partner, the insurer, and the insurance agent in state court, alleging that they all conspired to fraudulently obtain life insurance “with the intent to end the decedent’s life and collect the policy’s death benefits.”

The insurance policy had an arbitration clause, but the angry family members refused to arbitrate.  That led the insurer, Aflac, to file a federal court action to compel arbitration.  After multiple motions and expert affidavits about whether the decedent’s signature on the policy was a forgery, the district court compelled arbitration and enjoined the angry family from continuing their state court action.  The angry family appealed on multiple grounds.

The Fifth Circuit affirmed the district court.  With respect to the federal court’s ability to effectively shut down the state court action, the court said two things.  First, there was no reason for the federal court to abstain under the Colorado River doctrine, largely because the two cases were not “parallel” and no exceptional circumstances were present that favored abstention.  Second, the court rejected the idea that the result violated the Anti-Injunction Act, which generally prohibits federal courts from staying proceedings in state court.  The Fifth Circuit found that the district court’s injunction against the state court proceeding fell within a recognized exception to the Anti-Injunction Act, for injunctions necessary to “protect or effectuate [] order[s] compelling arbitration.”

In a dispute over whether an arbitrator has authority to grant a video game developer and publisher a perpetual license in the intellectual property as a remedy for the developer’s fraud and breaches of contract, the Fifth Circuit found that the arbitrator’s creative award must be upheld under the Federal Arbitration Act, and set forth new guidance for courts confronting similar issues.  Timegate Studios, Inc. v. Southpeak Interactive, LLC, __ F.3d __, 2013 WL 1437710 (5th Cir. April 9, 2013).

The developer and publisher had a 35-page contract setting out the terms of their work to create “Section 8,” a “futuristic military-style video game” (not one about affordable housing).  The contract called for arbitration.  It also gave the developer exclusive ownership of the game’s intellectual property, with the publisher only having a license to market, publish and distribute the game.  It prohibited the publisher from preparing “derivative works.”

The game bombed.  Soon, the parties found themselves in arbitration over their cross-claims for breach of contract, fraud, and copyright infringement.  The arbitrator found that the developer had committed multiple breaches of the contract and had fraudulently misrepresented critical information.  It awarded the publisher over $7 million.  However, because the arbitrator found the monetary remedy would not fully compensate the publisher, it also “amended” the contract to give both parties a perpetual license for the game’s intellectual property, without any obligation to pay future royalties and without any restrictions on creating sequels, “add-ons” or competing products.

The district court vacated the arbitrator’s award, finding the arbitrator “exceeded [his] powers” within the meaning of Section 10(a)(4) of the FAA.  The district court focused on the “perpetual license” granted to both parties, and found that was not a remedy authorized by the contract.

The Fifth Circuit reversed the district court and reinstated the arbitration award.  Notably, the Fifth Circuit cited a case it issued almost 20 years ago for the proposition that “the arbitrator’s selection of a particular remedy is given even more deference than his reading of the underlying contract.”  That remedy can be vacated only if the remedy is not “a logical means of furthering the aims of the contract.”  In this case, the Fifth Circuit found the perpetual license furthered the general aims of the parties’ contract.  In particular, because their relationship had become so contentious that future collaboration on sequels and licensing was impossible, the court found the arbitrator’s solution fit “the fundamental goal of the Agreement: mutual access to financial benefits derived from their joint creation and distribution of Section 8.”  The court did remind readers that there are other limits on creative arbitration remedies.  An arbitrator may not decide an issue that the contract reserves for another decision maker or removes from anyone’s discretion.

There are two key take home points from this case.  First, for advocates trying to challenge an arbitration award, this case shows that attacking the remedy provided may be the most difficult basis for vacating an award under Section 10.  And second, for drafters of arbitration clauses, think carefully about whether there are some remedies you want to exclude from the arbitrator’s authority and do that explicitly in the arbitration clause.

 

More than one year ago, a three-judge panel of the Ninth Circuit determined that California case law, which precluded arbitration of claims asking for public injunctive relief, was preempted by the Federal Arbitration Act.  Upon rehearing the case en banc, the Court backpedaled.  Kilgore v. KeyBank Nat’l Assoc., __ F.3d __, 2013 WL 1458876 (9th Cir. April 11, 2013).  Ten judges of that Circuit concluded that the California case law simply did not apply to the plaintiffs’ claims, so there was no reason to reach the preemption question.  One judge dissented.

This case involves a class of 120 sympathetic students of a failed flight school, who claim the bank affiliated with the school, which loaned money to the students, violated the California Unfair Competition Law.  All the promissory notes signed by the students contained an arbitration clause that covered their claims and barred anything other than individual arbitrations.  The students asked the court to enjoin the bank from reporting non-payment to credit agencies, from enforcing the notes, and from disbursing any loan proceeds in the future if the consumer credit contract did not comply with FTC regulations.

The bank moved to compel arbitration and the district court denied the motion.  On appeal, a three judge panel of the Ninth Circuit reversed, finding that the FAA preempted California’s Broughton-Cruz rule.  The Broughton-Cruz rule had been developed by the California Supreme Court based on its recognition that the FAA was in conflict with California statutes authorizing public injunctive relief.  Under that rule, claims for monetary relief are subject to arbitration, but claims brought under California statutes that seek injunctive relief for the general public are not subject to arbitration.

When eleven members of the Ninth Circuit reheard the case, however, they left the Broughton-Cruz rule intact.  They were able to dodge the entire preemption analysis by concluding that the injunctions sought by these plaintiffs did not affect enough people to be considered public injunctive relief to trigger the Broughton-Cruz rule.  The majority found the injunction primarily benefited the 120 putative class members.  The majority also concluded that the arbitration agreement was not unconscionable under California law.  As a result, it reversed the district court and remanded with instructions to compel arbitration.

One judge, however, felt strongly that the district court should be affirmed.  The lone dissenter did not analyze the Broughton-Cruz rule, but instead concluded the arbitration agreement was unconscionable under general California law.

Kilgore is significant because it revives the Broughton-Cruz rule.  For everyone else, Kilgore is significant because it shows how skittish courts are about applying Concepcion’s preemption analysis.

 

The Fourth Circuit issued a bold new arbitration decision last week, sending a putative class of shuttle drivers to arbitration while expanding its application of SCOTUS’ Concepcion decision beyond cases involving federal preemption of state arbitration law.  Muriithi v. Shuttle Express, Inc., __ F.3d __, 2013 WL 1287859 (4th Cir. 2013).

Muriithi was a driver for an airport shuttle service who signed a franchise agreement containing an arbitration clause.  The franchise agreement required arbitration of “any controversy arising out of this Agreement,” required that arbitration proceed “on an individual basis only,” and required each party to bear half the “fees and costs of the arbitrator.”  Muriithi later brought employment claims as a representative of a putative class of drivers, arguing they should have been treated as employees entitled to minimum wage and overtime pay instead of labeled as franchisees.

Shuttle Express moved to compel arbitration.  The district court denied the motion, finding the arbitration clause was unconscionable, because plaintiffs could not effectively vindicate their statutory rights due to the class action waiver and fee-splitting provision (and a one year statute of limitation).

The Fourth Circuit reversed the district court, and ordered it to compel arbitration of the drivers’ claims.  The Fourth Circuit could have accomplished that in a fairly simple fashion – by finding that Muriithi did not meet his burden to prove the costs of arbitration would be prohibitive (under the same line of decisions at issue in the AmEx case currently pending before SCOTUS) because he did not present evidence about relevant arbitration fees or the value of his employment claims.  [It could not have hurt that Shuttle Express volunteered during oral argument to pay all arbitration costs if the court compelled arbitration.]

Instead, the Fourth Circuit did that, and then also went out of its way to discuss arguments about whether Concepcion had any application to the case.  The driver argued it did not, because he was not arguing for the application of any state common law that precludes class action waivers in arbitration.  The court disagreed, finding Concepcion applies to any unconscionability argument directed to waivers of class arbitration.  “[T]he Supreme Court’s holding was not merely an assertion of federal preemption, but also plainly prohibited application of the general contract defense of unconscionability to invalidate an otherwise valid arbitration agreement under these circumstances.”

That is a bold statement from the Fourth Circuit, not only because the question presented and ultimate holding in Concepcion were both specific to federal preemption, but also because it adopts the position of the Petitioner in the AmEx case, before SCOTUS has even issued a ruling.

One of the very few ways to show evident partiality by an arbitrator is to show the arbitrator had financial ties to a party or witness in the proceeding, another is to show the arbitrator prejudiced a party by reversing a procedural or evidentiary ruling during the hearing.  The Sixth Circuit found a Michigan arbitrator committed both transgressions, and affirmed the district court’s decision to vacate the resulting arbitration award.  Thomas Kinkade Co. v. White, __ F.3d __, 2013 WL 1296238 (6th Cir. April 2, 2013).

The dispute being arbitrated was between the popular artist Thomas Kinkade and the Whites, who had agreed to be dealers of Kinkade’s artwork.  The Whites started the arbitration in 2002.  There was a panel of three arbitrators to decide the dispute.  Each party chose an arbitrator, and together those arbitrators chose Mark Kowalsky as the third member.  The panel did not issue a “Final Award” until 2009 (and Kinkade’s chosen arbitrator dissented).  The award gave more than $1.4 million to the Whites, including significant attorneys’ fees and costs.

Both the district court and Sixth Circuit found more than enough evidence to establish that “a reasonable person would have to conclude that [Mr. Kowalsky] was partial to one party to the arbitration,” and had “improper motives.”  Based on that conclusion, the courts vacated the arbitration award.  The primary issue was that five years into the arbitration proceedings, after closing arguments in the hearing but before the award, Kowalsky’s law firm took on two significant new matters from the Whites and their appointed arbitrator.  Kowalsky informed the parties of these new financial ties between his firm and the Whites, and Kinkade objected, but the AAA denied Kinkade’s request to disqualify Kowalsky.

A second basis for concluding Kowalsky was partial was the way he handled the Whites’ burden of proving their damages.  During discovery, the Whites had never produced documents about the financial performance of their galleries.  After the hearing was concluded without the Whites offering any proof of damages, instead of ruling against them, Kowalsky gave the Whites two additional opportunities to back up their damage calculations.  On the second occasion, the Whites produced 8,800 new pages of financial records.  Kinkade objected to the new documents, but Kowalsky accepted them into evidence.  Later, after the panel majority’s “Interim Award” indicated that it had denied the Whites’ request for attorneys’ fees, Kowalsky invited the parties to apply for fees and costs, and a majority of the panel added attorneys’ fees, costs, and prejudgment interest to the Whites’ interim award.

While the sheer egregiousness of the arbitrator’s actions is compelling, and the “celebrity” aspect of this case adds good color, what I find most interesting is how the Sixth Circuit analyzes the disclosure issue.  The Whites argued that Kowalsky had disclosed the financial ties between his firm and the other parties and arbitrators (and the AAA refused to disqualify Kowalsky), as if transparency alone made him neutral.  To that argument, the Sixth Circuit notes that “the harm was done” as soon as the disclosure was made, because the disclosure placed Kinkade in a lose-lose situation.  “If [he] object[s], [he] run[s] the risk of offending the neutral; if [he doesn’t] object, [he] appear[s] to condone a clear conflict.”  However, other courts have acted as if disclosure alone can right all wrongs, even in the face of similar arguments regarding the lose-lose situation parties are faced with if an arbitrator discloses a significant connection after his her appointment.   (Those courts may assume that disclosure is the solution, because parties will then make an informed choice about objecting and arbitral fora like the AAA will disqualify as appropriate.)  It may be time to analyze parties’ actions in reaction to disclosures made before the arbitrator’s appointment differently than those disclosures made after the arbitrator’s appointment.

 

All the cool kids are talking about class arbitration lately. . .  There are the two cases pending before SCOTUS, and now the Second Circuit confirms its place in the “in crowd” with a decision forcing a class of employees into arbitration in Parisi v. Goldman, Sachs & Co., __ F.3d __, 2013 WL 1149751 (2d Cir. Mar. 21, 2013).

In Parisi, three female former employees alleged gender discrimination by Goldman, Sachs and sought to proceed as a class action in court.  The plaintiffs acknowledged having an arbitration agreement covering matters relating to their employment.  However, they opposed Goldman’s motion to compel arbitration by arguing their arbitration agreement was invalid because it waived their statutory right under Title VII to pursue a “pattern-or-practice” claim of discrimination.  (Interestingly, this whole case turns on the availability of class arbitration, but the quoted arbitration agreement does not explicitly preclude class arbitration.  The plaintiffs apparently never argued that their arbitration agreement can be interpreted as authorizing class arbitrations, so the assumption underlying this opinion is that class arbitration is unavailable to these plaintiffs.)

The plaintiffs won at the district court, with that court concluding that because plaintiffs could not proceed as a class in arbitration, they could not pursue a Title VII pattern-or-practice claim, and therefore the arbitration agreement impermissibly waived the plaintiffs’ statutory rights.  The Second Circuit disagreed and reversed.  In short, the appellate court found there is “no substantive statutory right to pursue a pattern-or-practice claim.”  Citing earlier decisions of both the Second and Fifth Circuits, the court summarized that “‘pattern-or-practice’ simply refers to a method of proof and does not constitute a ‘freestanding cause of action.'”  Therefore, plaintiffs could be compelled to arbitrate — even on an individual basis — without waiving any of their substantive statutory rights.

In the course of its decision, the court identified only two circumstances “in which motions to compel arbitration must be denied because arbitration would prevent plaintiffs from vindicating their statutory rights.” First, as in AmEx, that can happen when the costs of arbitration effectively preclude the plaintiffs from prosecuting their statutory rights.  And second, that can happen when the arbitration agreement “interfere[s] with the recovery of statutorily authorized damages.”  In other words, if a statute authorizes treble or punitive damages, the arbitration clause cannot bar those types of damages.

This is another case that appears to have been caught in Stolt-Nielsen‘s cross-hairs.  The plaintiffs here devised their strategy, and filed their complaint, before Stolt-Nielsen was issued and significantly altered the framework for arguing class arbitration issues.  In any case, this decision clarifies that alleging a pattern-or-practice of discrimination will not allow a plaintiff to keep its claims in court instead of arbitration, and also clarifies the current state of the law on when arbitration can be avoided because it does not adequately protect statutory rights.  Of course, the state of the law may shift again in the coming months when the Supreme Court decides AmEx.

 

While the oral argument before the United States Supreme Court in Sutter today was ostensibly about whether to affirm an arbitrator’s decision that the parties’ contract authorized class arbitration, the decision really turns on how the Court will review all arbitration decisions.  (Transcript here.)  Multiple Justices expressed an unwillingness to create a special standard for reviewing arbitrator decisions involving class arbitration.  (Info on the underlying case here.)

Appellant’s counsel tried valiantly to express some standard of review that fit within the Court’s past jurisprudence, but also allowed for vacatur of this particular result.  In response to questions like “how wrong does an arbitrator’s decision have to be to become an issue of law?” (from Justice Sotomayor), counsel advocated that Stolt-Nielsen and Concepcion established a “presumption” that there is no consent to class arbitration without a “very clear statement of a meeting of the parties’ minds.”  However, Justice Kagan quickly noted that the Court had never suggested such a presumption in either of those cases.  Appellant’s counsel later advocated for a slightly different formulation: a reviewing court may vacate the arbitrator’s decision to allow class  arbitration if the contractual language “leaves no room for a conclusion that the parties agreed to” arbitrate on a classwide basis.  Justice Kennedy, who often casts a deciding vote in close cases,  expressed skepticism about whether the Court’s repeated and highly deferential standard of review for decisions by arbitrators allowed any kind of inquiry into the merits of the arbitrator’s contractual analysis.

Respondent’s counsel, of course, emphasized the very limited grounds for vacating an arbitration award.  He noted that Appellant argues the arbitrator “exceeded his power,” but because Appellant consented to giving the arbitrator authority to determine whether the arbitration could proceed as a class, the only way the arbitrator could have exceeded his power was by basing his award on something other than an interpretation of the contract.  This led to a series of amusing hypotheticals in which Justice Breyer asked Respondent’s counsel to assume that an arbitrator made her decision based on consulting a “magic 8-ball” (Justice Scalia pretended not to know the reference) and then asked whether that would constitute “manifest disregard” of the law or otherwise serve as grounds for vacating the award.  Justice Breyer’s questions hint that the Court may give “manifest disregard of the law” new life as a separate basis for vacating arbitration awards, and that the Court is looking for a backstop beyond just the four bases in the FAA for parties to rely on if arbitrators get the law or facts really, really wrong.

Curiously, from a Court that has vigorously enforced arbitration agreements for all types of cases, the Justices appeared skeptical of arbitrators’ capability to handle class actions, and questioned whether arbitrators were wrongly incentivized.  Justices asked how the arbitrator was compensated in this case, whether he was experienced, how many class actions were handled in arbitration (neither side could answer, since that information is not public), and whether an arbitrator would be incentivized by his own fees to create a class action after seeing a case like Sutter drag on for eleven years.  To that, Respondent’s counsel gave a good soundbite: “if we trust arbitrators to handle such important issues as civil rights issues and other very important matters [], we have to expect that they will follow the precepts of this Court and the FAA as to what constitutes grounds for class arbitration.”

 

In an opinion released yesterday, the Seventh Circuit schooled appellant’s counsel first on the application of the New York Convention and Panama Convention, then on the high standard of review it applies to commercial arbitration awards, and finally expressed profound disappointment with the frequency of motions to vacate arbitration awards.  “Attempts to obtain judicial review of an arbitrator’s decision undermine the integrity of the arbitral process.”  Johnson Controls, Inc. v. Edman Controls, Inc., __ F.3d __, 2013 WL 1098411 (7th Cir. Mar. 18, 2013).  No doubt hoping to reduce that frequency, the court warned that “challenges to commercial arbitral awards bear a high risk of sanctions.”

In this case, Johnson Controls contracted with an exclusive distributor in Panama.  The contract called for arbitration of any disputes and provided that the prevailing party was entitled to recover its attorneys’ fees and costs.  Johnson Controls started directly competing with the distributor in Panama, so the distributor demanded arbitration and won.  After finding for the distributor on claims of tortious interference and breach of good faith and fair dealing, the arbitrator awarded the distributor over $733,000 in damages, plus almost $300,000 in attorneys’ fees and costs.

Not kindly, the court noted “losers sometimes cannot resist the urge to try for a second bite at the apple.  That is what has happened here.”  Johnson Controls moved to vacate the arbitral award and its motion was denied by the district court.  Substantively, it made two primary arguments.  It argued that the arbitrator “exceeded its power” within the meaning of Section 10(a)(4) of the Federal Arbitration Act in two respects: 1) by awarding damages to the distributor, even though the distributor had planned to sell through two subsidiaries; and 2) by awarding attorneys’ fees in a contingent fee case without using the lodestar approach.  The district court and appellate court found the arbitrator acted within its power, because the distributor itself was injured by the breach (and the arbitrator properly refused to address separate claims by the subsidiaries), and because the lodestar method is not required in the Seventh Circuit when attorneys’ fees are shifted by contract.

The court also went out of its way to provide three kernels of wisdom to counsel in appeals from arbitrations.  First, it noted that the distributor is incorporated in the British Virgin Islands, and therefore any attack on the arbitration award “almost certainly falls under either the New York or the Panama Convention,” which have slightly different grounds for vacating awards.  (Counsel for both parties had argued under Chapter 1 of the FAA.)  Second, it emphasized that, at least in the Seventh Circuit, “even ‘manifest disregard of the law is not a ground on which a court may reject an arbitrator’s award.'”  (Not all circuits agree, see this summary post.)

Third and finally, the Seventh Circuit hinted that it will be liberal in its use of sanctions for parties who try to vacate arbitration awards without a strong basis.  It complained that “[b]ecause of Johnson’s appeal, [the distributor] has been deprived not only of the value of the distributorship it expected to have for Panama, but also part of the value of the arbitration to which both parties agreed.”  That sentence follows the explicit warning that, while the court did not award sanctions on this appeal because there was already a fee-shifting clause, “challenges to commercial arbitral awards bear a high risk of sanctions.”

Don’t say I didn’t warn you.

 

The Third Circuit refused to vacate an arbitrator’s award, despite allegations that she failed to disclose contributions the defendant’s parent company had made to her judicial campaign and failed to disclose that she co-taught a seminar with in-house counsel for the defendant’s parent company.  Freeman v. Pittsburgh Glass Works, LLC, __ F.3d __, 2013 WL 811884 (3d Cir. March 6, 2013).  In short, the court concluded that these contacts were not enough to make a reasonable person conclude the arbitrator was partial to the defendant.

In order to reach that conclusion, the Third Circuit first had to revisit the standard it would use for determining whether there was “evident partiality” sufficient to vacate an arbitration award under Section 10(a)(2) of the Federal Arbitration Act.  The court had not addressed the issue for almost 20 years, but stuck with its inital formulation: “An arbitrator is evidentially partial only if a reasonable person would have to conclude that she was partial to one side. []  The conclusion of bias must be ineluctable, the favorable treatment unilateral.”

The appellant, an employee who lost his age discrimination claim in arbitration, argued that the arbitrator was partial based on two facts.  First, about four years before the arbitration, the arbitrator was running in a judicial election and received $4,500 in campaign funds from the employer’s parent company.  The court found the campaign contributions did not establish evident partiality because: they were a matter of public record that does not require additional disclosure, the contribution from the parent company amounted to less than one percent of the total campaign contributions, and the law firm representing the employee had contributed more than five times that amount to the arbitrator during the same campaign.  (In other words, if contributions were the issue, the bias should have been in the employee’s favor.)  In addition, multiple state court decisions from around the country had concluded that it would “impose too great a burden on the system” if every contribution to a judicial campaign could forever disqualify the candidate from serving as an arbitrator for that donor or a related entity.

The employee’s second complaint was that the arbitrator had co-taught a seminar with the employment counsel for the parent company.  There was a dispute about whether the arbitrator had disclosed that fact, but the court said even if she had not disclosed it, the teaching relationship was not “powerfully suggestive of bias.”  The court affirmed the district court’s denial of the employee’s motion to vacate the arbitration award.

Putting aside disclosures, what is the real lesson to take from this case?  Preserve your arguments!!  The employee did not raise any issues about the arbitrator’s partiality during the course of the arbitration, even though it probably knew or should have known about the judicial contributions and co-teaching.  Normally, that would give rise to a solid claim that the employee had waived any claim of partiality.  However, in this case, because the employer did not make the waiver claim before the district court, and tried to raise it for the first time at the Third Circuit, the appellate court found the employer waived its waiver defense.  The court explained “the doctrine of appellate waiver is not somehow exempt from itself.”

A new article is out with more detail about how opinions among counsel for Fortune 1000 companies have changed over the last 15 years with respect to arbitration and mediation.  (I posted initial info here last spring.)

By comparing results of a 1997 survey of Fortune 1,000 corporate counsel with results of a 2011 survey of Fortune 1,000 corporate counsel, Professors Thomas Stipanowich and J. Ryan Lamare conclude that “[b]inding arbitration … reached its tipping point: while some longstanding concerns about arbitration processes have lessened, fewer major companies are relying on arbitration to resolve many kinds of disputes … and are evenly divided regarding its future use.”

In particular, the number of companies using arbitration to resolve disputes in the following areas dropped over that 15 year period: commercial, employment, environmental, intellectual property, personal injury, real estate and construction.  In some areas, the drop was significant.  In 1997, for example, 85% of companies had arbitrated a commercial or contract dispute in the past three years.  In 2011, that figure dropped to 62%.  In 1997, 62% of companies had recently arbitrated an employment dispute, and in 2011 that figure was about 39%.

The authors note that “the statistics meaningfully signal very different trends in mediation and arbitration.  Mediation usage is expanding and arbitration usage contracting in most conflict settings.  Key exceptions to the downward trend for arbitration are consumer disputes and products liability cases, which probably reflect expanded use of binding arbitration agreements in standardized contracts for consumer goods and services.”

Even if the companies had not recently used arbitration, would they use it in the future?  In 1997, 71% of counsel thought their company was likely or very likely to use arbitration in the future.  By 2011, only about 50% of counsel saw arbitration of corporate disputes in their future.

Why are corporate counsel less enamored with arbitration?  Data from the 2011 survey suggests that “leading concerns included: the difficulty of appeal, the concern that arbitrators may not follow the law, the perception that arbitrators tend to compromise, lack of confidence in neutrals, and, increasingly, high costs.”