Happy Thanksgiving from Arbitration Nation! 

There are no new and exciting cases to talk about,* so I am reverting to the Thanksgiving staple — talking about what I am thankful for.  And, I am thankful for all of you!  Starting this blog has been one of the highlights of my professional year.  Not only has Arbitration Nation gotten an impressive number of visitors in its first three months, but it has been featured as a “contributor” on other websites about dispute resolution, and has prompted fascinating emails from many of you (forwarding me articles and journals, or telling the tales of your own arbitration or your litigation over arbitration). 

For those of you who just can’t get enough information about dispute resolution, here are some other blogs and websites you may want to check out**:

http://www.adrtimes.com/ (variety of articles and resources on conflict resolution, mediation and arbitration)

http://kluwerarbitrationblog.com/ (focus is international arbitration) 

http://www.adr.org/sp.asp?id=29502 (the AAA’s newsletter)

http://www.karlbayer.com/blog/ (“Disputing”)

http://www.adrtoolbox.com/ (“ADR toolbox” — has a “blog roll” of interesting articles in the header)

* But there are always un-exciting cases to talk about.  For example, the Federal Circuit does not consider arbitration proceedings privileged, and therefore held that a third-party can discover information about a completed arbitration (Kimberly-Clark Worldwide, Inc. v. First Quality Baby Products, LLC, 2011 WL 5529821 (Fed. Cir. Nov. 15, 2011)), and the highest court in New York will not vacate an arbitration just because the arbitrator’s son is a member of Congress who has taken positions on issues relevant to the arbitration (U.S. Electronics, Inc. v. Sirius Satellite Radio, Inc., 2011 WL 5526016 (N.Y. Nov. 15, 2011)).

** If you know of a great arbitration website that I did not include, please email me about it!   (My email is on the “our bloggers” tab.)

Enjoy your holiday!

The Second Circuit just held that a federal court has the power to enjoin an ongoing arbitration.  In re Am. Express Fin. Advisors Sec. Litig., ___ F.3d ___, 2011 WL 5222784  (2nd Cir. 2011).  While many litigants would no doubt like a federal court to enjoin their arbitrations — especially when arbitrators refuse to dismiss frivolous claims — application of this case’s holding is limited to a very unique set of facts. 

In the American Express case, a couple filed a FINRA arbitration against Ameriprise, alleging multiple claims relating to Ameriprise’s management of their assets.  Ameriprise notified the arbitrators that the couple was part of a class action that had been settled, and because they had never opted out of the class, they were bound by the settlement agreement’s release of their claims.  The arbitrators did not blink and ordered that the arbitration should proceed full speed ahead. 

Ameriprise then took the unusual step of asking the Southern District of New York, which retained jurisdiction of any disputes over the class action settlement, to enjoin the arbitration.  And the district court took the unusual step of granting that injunction and ordering the couple to dismiss their arbitration claims.

The Second Circuit affirmed much of the trial court’s decision.  The court framed the dispute between the parties as one of arbitrability, and therefore appropriate for the court (not an arbitrator) to decide.  That was because “the Class Settlement revoked Ameriprise’s consent to arbitrate certain claims. The question therefore is not whether those claims had been settled, thus precluding arbitration, but whether there was a surviving agreement, following the settlement, to arbitrate those claims at all.”  Furthermore, the Second Circuit placed emphasis on the fact that the trial court had specifically retained jurisdiction over all matters relating to the Class Settlement.  

Interestingly, neither party had briefed or argued the court’s power to enjoin an arbitration, a power that  the FAA does not specifically grant to federal courts.  Having considered the issue sua sponte, the Second Circuit concluded that the district court possessed “the authority to order the cessation of an arbitration by parties within its jurisdiction where such authority is necessary in order for a court to enforce the terms of the parties’ own agreement.”  

Can this decision be used by parties in future arbitrations who may be frustrated by an arbitration panel’s refusal to dismiss claims that are time-barred or otherwise subject to a strong legal defense?  Probably only if the legal defense can be said to call into question the validity of the agreement to arbitrate.  And even then I imagine courts would be skittish.   

 

Despite the Supreme Court’s best efforts, some myths of arbitration law just will not die.  In yesterday’s per curiam decision of the Supreme Court, the Justices tried to put a stake through the heart of a common myth: that a party may successfully avoid a motion to compel arbitration by arguing that not all claims and/or not all parties fall within the scope of the arbitration agreement.  KPMG LLP v. Cocchi, __ U.S. __, 2011 WL 5299457 (Nov. 7, 2011).  Surely you have seen this in your cases, the non-moving party usually invokes the phrase “piecemeal litigation,” i.e. “if I am forced to arbitrate, it will result in expensive and duplicative piecemeal litigation.”  SCOTUS is tired of this argument.

 In Cocchi, 19 investors in what turned out to be a Ponzi scheme brought four claims against the auditor, KPMG, in state court in Florida.  (Florida is the same state whose refusal to compel arbitration got smacked down in 2006’s Buckeye Check Cashing v. Cardegna decision.)  KPMG moved to compel arbitration based on provisions of its contract with its client, the alleged Ponzi schemer.  The contract stated that “[a]ny dispute or claim arising out of or relating to … the services provided [by KPMG] … (including any dispute or claim involving any person or entity for whose benefit the services in question are or were provided) shall be resolved” either by mediation or arbitration.

The Florida trial court and appellate court denied KPMG’s motion to compel arbitration.  Because KPMG was relying on its contract with the Ponzi schemer, and had not contracted with the investors, the Florida courts noted that the arbitration provisions could only be enforced if the claims were “derivative.”  After analyzing two of the four claims and finding that they were direct, the Florida courts denied the motion to compel arbitration. 

The Supreme Court vacated the Florida appellate decision and remanded the case for consideration of all four claims.  If any of those claims are derivative, the Court directed, the investors must be compelled to arbitrate the derivative claim(s) against KPMG.  It took the occasion to remind us all that: “when a complaint contains both arbitrable and nonarbitrable claims, the Act requires courts to ‘compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums.'”

 

Two recent decisions illustrate how individuals that did not sign a contract can be bound by that contract’s arbitration provisions. 

In the first, Blaustein v. Huete, 2011 WL 5103759 (5th Cir. Oct. 26, 2011), an individual member of an LLC, Huete, argued he should not be bound by the arbitration clause between the LLC and its attorneys.  Huete was suing the attorneys for legal malpractice and negligence, stemming from an allegedly botched patent application.  However, the law firm’s agreement with the LLC, which Huete had signed on behalf of the LLC, called for arbitration.  The law firm moved to compel arbitration.  The Fifth Circuit held that while Huete was not directly bound by the agreement (he only signed in his representative capacity), he was bound under the doctrine of “direct benefits estoppel.”  (Couldn’t anyone come up with a better name for that theory?  It doesn’t exactly roll off the tongue.) 

The concept of direct benefits estoppel is this: if the non-signatory used the contract to its benefit, it can’t later turn its back on the contract’s arbitration clause.  In particular, at least the Third and Fifth Circuits say that if a non-signatory has either 1) knowingly obtained direct benefits from the contract or 2) sought to enforce the contract, the non-signatory is bound by an arbitration clause in the contract.  In this case, the Court found Huete had obtained benefits from the agreement with the attorneys as a member of the LLC (research, drafting, filing, advice), and noted that Huete’s claims were related to the attorney-client relationship which was formed by the agreement between the firm and the LLC.  The law firm was successful in compelling Huete to arbitration.

In the second case, Lemon Drop Properties, LLC v. Pass Marianne, LLC, ___ So.3d ___, 2011 WL 5027140 (Oct. 20, 2011), the Supreme Court of Mississippi allowed a non-signatory to compel arbitration.  In that case, a condo buyer sued the developer and contractor alleging defective construction.    Although there was an arbitration agreement in the agreement between the buyer and developer, the developer waived its right to arbitrate by participating in the court case for “two-hundred-and-fifty-two (252) days,” without  invoking the arbitration provision.  The non-signatory issue arose after the buyer amended its complaint to name the real estate agent as a defendant.  The real estate agent argued that it was entitled to enforce the arbitration agreement in the developer’s agreement, as an agent of the developer.  The court easily agreed, but then had to address whether the developer’s waiver of its right to arbitrate was imputed to the real estate agent.  Citing recent decisions from a Texas state court and a California federal court, the Mississippi Supreme Court held that a “principal’s waiver of its right to arbitrate [does] not operate as a waiver of the agent’s right to arbitrate under the same agreement.”  Two Justices dissented from the portion of the opinion.

These cases serve as a good reminder that employees and agents are frequently bound by the same arbitration agreements that bind their employers and principals (but not necessarily by any waivers by those employers or principals).

Just in time to participate in Arbitration Nation’s (unplanned) series on legislative nullification of arbitration agreements,  the Ninth Circuit Court of Appeals ruled last week that the Carmack Amendment nullifies pre-dispute arbitration agreements in interstate shipment contracts.  Smallwood v. Allied Van Lines, Inc., ___ F.3d ___, 2011 WL 4927404 (9th Cir. 2011).  The Ninth Circuit affirmed the district court’s denial of defendant’s motion to compel arbitration.

At issue in Smallwood was whether an individual who had hired a moving company could pursue his tort and contract claims against the moving company in federal court, or whether the arbitration clause in the contract between the individual and the moving company was enforceable.  (The facts of this case read like a movie synopsis– the individual wanted his firearms put into storage in the United States, but the shipper mistakenly sent the firearms to the individual’s new residence in the United Arab Emirates.  This caused the UAE to arrest the man, put him in prison, “trick[] him into pleading guilty to smuggling firearms,” and begin deportation proceedings against him.) 

Both the district court and the Ninth Circuit held that the Carmack Amendment, a federal law that governs the terms of contracts for interstate shipment by train or truck, precluded the arbitration clause in the moving contract.  The Court noted that the Carmack Amendment is intended to protect shippers “from being forced to submit to foreign arbitration as a condition of contracting with a carrier of household goods.”   The statute provides that a shipper can bring a civil action in a U.S. district court where the carrier operates or where the damage occurred.  49 U.S.C. 14706(d)(1)-(2).  Furthermore, the statute explicitly prohibits a carrier from requiring a shipper to agree to arbitrate before a dispute arises.  The combination of statutory language in those sections was sufficient to convince the Ninth Circuit that Congress intended the Carmack Amendment, which was amended multiple times after the Federal Arbitration Act was passed, to create an exception to the FAA.  Therefore, the arbitration clause in the contract was unenforceable and the plaintiff may proceed in federal court.

Minnesota Senator Al Franken, among others, responded to the Supreme Court’s Concepcion decision  by introducing a bill called the Arbitration Fairness Act of 2011 (S.987, also in the House as H.R. 1873) last May, which would legislatively nullify arbitration provisions in various types of agreements.  The Senate Judiciary Committee heard two hours of testimony on the bill last Thursday (Oct. 13), from speakers including Minnesota’s Attorney General (in support of the legislation), a representative of the Chamber of Commerce (opposing the legislation), an emergency room doctor (who supports the legislation and told the committee of her bad experience arbitrating a discrimination claim), a member of the non-profit Public Justice (in favor of the legislation) and a law professor (also opposing the legislation).  The remarks of each speaker are available here.

Senator Franken opened the hearing with this comment: “Personally, I’m troubled that our private arbitration system is, at least in part, eclipsing the United States Supreme Court, the highest court in the land. Perhaps today’s hearing can help us determine whether there is a sound middle ground -one where we use arbitration to the fullest fair extent, but allow our Supreme Court to fulfill its role as the true final arbiter.”

If passed, the Arbitration Fairness Act would invalidate any contractual arbitration clause that requires arbitration of an employment dispute (other than those with labor unions), consumer dispute, a claim involving constitutional rights, or a statutory discrimination claim.  The bill specifies that any dispute over whether the Arbitration Fairness Act applied would be decided by a court, even if the litigant did not raise a challenge to the arbitration provision itself (contrary to the Prima Paint decision and its progeny).   The Senate Judiciary Committee will continue to take some testimony and comments about the Act until October 20, and then the Chair will decide whether the Act will go any further.

 A similar bill was introduced in 2009 (Arbitration Fairness Act of 2009) in the U.S. House and Senate.  The 2009 bill was slightly different than the 2011 legislation: instead of invalidating arbitration clauses covering constitutional or discrimination claims, the 2009 version invalidated arbitration agreements in franchise disputes.  However, despite its 126 co-sponsors in the House and Senate, and the more liberal composition of the Congress at that time, the Arbitration Fairness Act of 2009 did not gain any traction and never made it out of its respective committees.  Unless there is significant public reaction to the Concepcion v. AT&T Mobility decision that persuades Congress to make this bill a priority for both parties, the Arbitration Fairness Act of 2011 is also unlikely to be passed.  But it may continue to raise legislative awareness of the policy issues raised by the U.S. Supreme Court’s recent rulings on arbitration.

The lawyers who sought to disqualify their opposing counsel during a pending arbitration must have been giddy when they drew Judge Shira Scheindlin of the Southern District of New York as their judge.  Judge Scheindlin, who is famously tough on unscrupulous lawyers, did not disappoint.  She went out of her way to exercise jurisdiction over the motion and disqualified  attorneys who had received improper communications from the arbitrator in Northwestern Nat’l Ins. Co. v. Insco, Ltd., 2011 WL 4552997 (S.D.N.Y. Oct. 3, 2011).

At issue in Insco was the communication between the defendant’s lawyer and the arbitrator the defendant had appointed.  The arbitration agreement called for each party to appoint one non-neutral arbitrator, and then for a third neutral arbitrator to be chosen by lottery.  At the outset, the parties and arbitrators agreed that each party could communicate ex parte with their appointed arbitrator, but there could be no ex parte communication about pending motions after they were fully briefed. 

One year into the arbitration proceedings, the arbitrator appointed by the defendant shared 130 e-mails with the defendant’s counsel (ostensibly because he was concerned about another arbitrator’s bias).  The e-mails included many private emails that had been exchanged solely among the arbitrators during their deliberations over various motions.   The arbitrator who had turned over the e-mails then resigned, another arbitrator was appointed, and the panel noted that the resigned arbitrator’s actions were “highly inappropriate” but that the panel would proceed to the hearing and would decide the case on the merits.   After the plaintiff’s summary judgment motion was denied, it asked the federal court to disqualify the defendant’s counsel from representing defendant any further in the arbitration, based on its actions in obtaining the private emails and failing to timely disclose their contents. 

Judge Scheindlin disqualified the defendant’s attorneys, finding they had engaged in “serious violation[s] of arbitral guildelines, as well as ethical rules.”  The Judge further found that the ethical violations could taint the arbitration hearing itself, because the private e-mails “relate[d] to actual and ongoing disputes in the arbitration” — indeed the e-mails included drafts of orders and the neutral arbitrator’s views on a number of pending issues.  The Judge noted that: “Allowing parties to obtain confidential panel deliberations would provide an unfair advantage in the legal proceedings and have a chilling effect on the ability of arbitrators to communicate freely.”

The case is unusual in large part because the Court was willing to hear this mid-arbitration motion.  In general, the FAA only allows courts to consider any arguments as to the arbitration after the final award is issued.  For example, a non-party to an arbitration agreement recentlly brought a petition to federal court, seeking to overturn an arbitrator’s decision to join that non-party to the arbitration proceeding.  The court dismissed the action, noting that Section 10 of the Federal Arbitration Act only authorizes a court to review the fairness of the arbition proceeding after a final award.  Northland Truss Sys., Inc. v. Henning Constr. Co., LLC, ___ F. Supp. 2d ___, 2011 WL 3915538, at *4 (S. D. Iowa Sept. 2011). 

In Insco, however, the court relied on New York precedent finding attorney discipline is beyond the jurisdiction of arbitrators and can only be decided by courts.   The court also noted that the arbitration panel had refused to consider any sanctions as a result of the e-mail disclosure.   The court included some choice quotes from the panel, like “I avoid that whole circumstance because I go forward in life.  I don’t go backward.”  Those glib quotes from the panel may well have influence the court’s decision to intercede before the final award. 

If New York law applies in an arbitration, there is now a new basis to seek court intervention during an arbitration gone very, very wrong: the unethical conduct of lawyers that may taint the hearing.  In fact, the argument may hold water under the law of other jurisdictions as well.  A Connecticut court has also been willing to consider a motion to disqualify a lawyer in the middle of an arbitration proceeding.  City of Bridgeport v. Kasper Group, Inc., 2002 WL 1008244 (Conn. Sup. Ct. 2002) (denying motion to disqualify, after noting that was an issue for the courts).  Furthermore, Judge Scheindlin’s high regard as a jurist will make most courts take a mid-arbitration motion for attorney disqualification seriously going forward.

Since the last post dealt with legislative overrides of arbitration agreements, this one will expand on that theme with a preview of an upcoming Supreme Court case.  In CompuCredit Corp. v. Greenwood, to be heard on October 11, the Supreme Court will decide whether Congress intended to prohibit arbitration of claims brought under a statute that regulates companies who offer to improve a consumer’s credit rating.

In this case, consumers brought claims under the Credit Repair Organizations Act against the marketer of a credit card that advertised its ability to “rebuild poor credit.”   Although the credit card contract had arbitration provisions, the federal district court denied the defendant’s motion to compel arbitration and the Ninth Circuit Court of Appeals affirmed.  Both courts concluded that the language of the CROA showed Congress intended to prohibit arbitration of those claims.  The Ninth Circuit opinion opened colorfully with a Lewis Carroll quote:

This appeal presents the question, inter alia, as to whether the word “sue,” as used in the Credit Repair Organization Act (“CROA”), means “arbitrate.” Or, perhaps the question is, as Alice put it: “whether you can make words mean so many different things?” We conclude that Congress meant what it said in using the term “sue,” and that it did not mean “arbitrate.”  

615 F.3d 1204 (9th Cir. 2010). 

At issue is how specific Congress must be in order to preclude arbitration of specific statutory claims.  In this case, the question comes down to whether or not three provisions of the CROA show Congress intended to allow claims under the statute to proceed exclusively in court.  In the first provision, the statute mandates that credit repair companies advise consumers that “You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.”  Second, the statute authorizes civil suits: “Any person who fails to comply with any provision of [the CROA] with respect to any other person shall be liable to such person” for damages.  Third, the statute nullifies any contractual waiver of its protections: “Any waiver by any consumer of any protection provided by or any right of the consumer under” the CROA “shall be treated as void.”  The consumers successfully argued that the arbitration provision was a “waiver” of their “right to sue” under the statute, and therefore void.

The appellant has some good things going for it: Why would the Supreme Court accept this case if not to reverse?  And, to quote the appellant’s brief: “The FAA’s presumption favoring arbitration is so strong that, in the past 25 years, this Court has not once denied enforcement of an agreement to arbitrate a federal statutory claim.” On the other hand, to rule for the appellant, the Court would have to find the plain meaning of a “right to sue” encompasses both arbitration and filing a lawsuit in court.  That seems a bit like President Clinton arguing about the meaning of the word “is.”  Still, I would put my money on a reversal.

Here are other interesting discussions of the case and the third parties who are weighing in:

http://www.scotusblog.com/?p=128935

http://www.afj.org/connect-with-the-issues/the-corporate-court/compucredit-v-greenwood.html

http://www.cpradr.org/Resources/ALLCPRArticles/tabid/265/ID/716/Arbitration-The-CompuCredit-Corp-v-Greenwood-Weigh-In-Amicus-in-the-Cert-Grant-May-27.aspx

The Federal Trade Commission has long construed the Magnuson-Moss Warranty Act, a.k.a the “federal lemon law,” as barring binding arbitration provisions that consumers are asked to sign upon purchasing a product.  In fact, the FTC issued a rule that prohibits courts from enforcing binding arbitration clauses in written warranty agreements covered by the statute.  In 2002, both the Fifth Circuit and Eleventh Circuits rejected the FTC’s rule, and enforced arbitration clauses within warranties.  In a new opinion, the Ninth Circuit sided with the FTC, and against the Fifth and Eleventh Circuits. 

In Kolev v. Euromotors West/The Auto Gallery, __ F.3d __, 2011 WL 4359905 (9th Cir. Sept. 20, 2011), a dissatisfied buyer of a used Porsche brought multiple warranty claims against the dealership and manufacturer.   The sales contract contained a mandatory arbitration provision and the dealership successfully compelled arbitration.  (The order compelling arbitration could not be appealed under the FAA, nor under the usual “final judgment” rules because the district court action was stayed against Porsche during the arbitration.)  The arbitrator largely sided with the dealership.  After the arbitration award was confirmed by the district court, the Ninth Circuit reviewed and reversed the district court’s order granting the motion to compel arbitration.  In other words, after both sides had spent time and money conducting the entire arbitration, the Ninth Circuit decided that the Porsche plaintiff should not have had to arbitrate in the first place.

In the Kolev opinion, two doctrines duke it out.  On one hand, the doctrine of deference to federal agencies that are authorized to implement statutes (Chevron) weighed heavily in favor of enforcing the FTC’s prohibition on arbitration of warranty claims.  On the other hand, the “liberal federal policy favoring arbitration agreements” under the FAA weighed in favor of enforcing the warranty arbitration clause.  The doctrine of deference to agencies prevailed, however, because Congress does have the right to override the FAA’s “liberal federal policy,” and the court applied statutory interpretation rules to find Congress (and the FTC) had sufficiently overridden the FAA’s mandate to enforce arbitration agreements. 

This case is interesting not only because it may give consumers leverage to get out of arbitration provisions, but also because it may remind members of Congress they can effectively “override” the FAA.  While large-scale overhauls of the FAA are currently unlikely to garner enough support to pass, a sufficient number of members may find it palatable to legislatively prohibit the arbitration of claims arising under particular statutes.

Last week the Eleventh Circuit interpreted the scope of the arbitration agreement within a plaintiff’s employment contract to exclude civil claims stemming from her sexual assault by fellow employees.  In doing so, the court may have signaled a discomfort with sending civil claims based on criminal conduct to arbitration. 

In Doe v. Princess Cruise Lines, Ltd., 2011 WL 4425288 (11th Cir. Sep. 23, 2011), the court held that the agreement to arbitrate “any and all disputes, claims or controversies whatsoever . . . relating to or in any way arising out of or connected with the Crew Agreement, these terms, or services performed for the [cruise ship]” was not broad enough to encompass an employee’s claims of false imprisonment, intentional infliction of emotional distress, spoliation of evidence, and invasion of privacy relating to her sexual assault. 

The plaintiff employee, a server on a cruise ship, had been drugged and sexually assaulted by other employees, and she alleged the cruise ship had repeatedly refused to let her off the ship for medical care, had humiliated her publicly, and had destroyed evidence of the crimes against her.  She brought ten claims against her employer, and the employer moved to compel arbitration.  The Florida district court found all ten claims fell outside the scope of the parties’ arbitration agreement and denied the employer’s motion to compel arbitration. 

The Eleventh Circuit disagreed, in part.  It held that five of the plaintiff’s claims fell within the scope of the arbitration agreement, because they “ar[o]se directly from her undisputed status as a ‘seaman,'” and therefore were sufficiently “related to” her employment as a “seaman.”  Those five claims were based on federal statutes that apply only to “seamen” or on common law rules that apply only to seamen. 

However, the Eleventh Circuit found the remaining five claims in the plaintiff’s complaint were outside the scope of the arbitration agreement.  In analyzing whether the claims of false imprisonment, intentional infliction of emotional distress, spoliation, etc., were related to or connected with her employment, the court repeatedly looked at whether those same claims could be brought be a non-employee.  It reasoned that the “cruise line could have engaged in that tortious conduct even in the absence of any contractual or employment relationship with” the plaintiff.”  Similarly “a passenger could have brought these same five claims against the cruise line based on virtually the same alleged facts.” 

There are at least two interesting points about this decision.  The first is a drafting point: if parties intend to arbitrate disputes like this one, the arbitration agreement needs to be broader.  Similarly, if a plaintiff wants to avoid arbitration under an employment contract, it may not want to assert claims that depend on its status as an employee.

A second point relates to this court’s apparent discomfort with sending these claims to arbitration.  The court acknowledged it could find only one case on point (Jones v. Halliburton, 583 F.3d 228 (5th Cir. 2009), which found similar claims fell outside the scope of the arbitration agreement in an employment contract).  Despite the paucity of authority, and despite language in the arbitration agreement that could have been interpreted to cover all the plaintiff’s claims, the Eleventh Circuit decided, without dissent, that the plaintiff did not have to arbitate all her claims. 

Reading between the lines, the court may have been concerned about whether proper justice could be done in arbitration.  The court was obviously disturbed by the facts in the case–the opinion describes the allegations at length, and goes out of its way to point out the disconnect between the employer’s public statements regarding how it values its employees and the employer’s alleged behavior toward the plaintiff.  The court may have been motivated, in part, by its desire to ensure that the defendant’s actions remained public and that the plaintiff’s claims be heard by a decision-maker who is arguably more accustomed than an arbitrator to dealing with claims of violence and criminal conduct.  

This case may be part of a growing trend to keep entire categories of claims (negligence in nursing homes, sexual assault, Magnuson-Moss warranty claims) out of arbitration altogether, based on public policy concerns.