What Should Clients and Their Lawyers Learn from Deflategate?

Posted By Stephen D. Rosenberg In Arbitration , Arbitration of Coverage Disputes , Percentage Players Die Broke Too: Notes on Litigation and Trial Tactics
Permalink | print this article

Honestly, I couldn’t really care one whit about the little locker room stare down between Roger Goodell and Tom Brady. Its just sports. A spinning teacher of mine once looked out at the class the day after a playoff or Super Bowl loss by the Patriots (I forget which) and said, in the middle of a sprint: “Guess what, Brady’s still a multimillionaire married to a super model.” Sort of sums up my feelings about the whole thing right there.

I do get, though, why so many people care, but what is more interesting to me are the remarkable lessons for lawyers buried in the judicial ruling and the decisions that led up to it, and I don’t mean for a second the question of whether or not Brady really cheated or whether the league could prove he had cheated. Litigators with experience with arbitration and the Federal Arbitration Act always knew, even if – like me – they didn’t bother to follow the case as it weaved along on its merry, monotonous way, that the judicial decision would be about process and the rules of arbitration, not in any way about whether Brady cheated or not. And really, its better that way, isn’t it? Who, really, cares whether a professional athlete pushes the boundaries a little bit in a way that doesn’t physically hurt anyone? We are not talking, after all, about East German sports authorities doping up athletes, or even baseball players voluntarily – but illegally – taking PEDs. We are talking simply about manipulating a ball. Face it: sports was more fun when batters corked bats and pitchers scuffed the ball, and no one called in the lawyers over it. Back then, legal proceedings were saved for things that warranted it and were actually important, like the reserve clause and whether baseball players were legally entitled to free agency or were instead bound, like indentured servants, to the first team that signed them. But I understand that times change and with them, peoples’ priorities and sense of perspective.

But when I said there were real and important lessons for lawyers buried in the decision and its prelude, I meant it. They flow from the errors by the NFL and its lawyers that are the basis for the Court’s ruling. Judge Berman found that a number of clear errors in the process required overturning the suspension, primarily that Brady was not on notice of the potential severe penalties for the conduct in question, that the NFL relied on inapplicable standards, and that the NFL withheld relevant evidence by refusing to allow NFL General Counsel Jeff Pash to testify as to his role in the creation of the evidence – the Wells Report – used to hang the accused.

As I said, these are procedural failings on which the judge overturned the sanction, and don’t even address the question at all of whether Brady did anything wrong. But in these procedural failings are a number of lessons about arbitration and, in a broader sense, the proper role of a lawyer in advising a client.

First, as errors go, those identified by Judge Berman in his ruling would have been obvious in advance to any lawyer experienced in arbitration. As a general rule, you can’t go to court after an arbitration concludes and ask the court to change the outcome by rearguing the merits. Instead, you have to convince the court that the arbitration proceeding itself was so flawed that reversal is needed, either because the procedures used were flawed, the arbitrator was biased, the ruling was so far afield that it reflects a failure by the arbitrator to follow applicable law, or the party that lost at arbitration was deprived of a fair opportunity to present that party’s case. The errors identified by Judge Berman in his ruling, and on which his ruling turned, fall soundly into these categories; if anything, the errors were such a perfect fit for the narrow grounds available for overturning an arbitration ruling that Brady’s legal team essentially went into the court proceedings with a loaded deck.

And Brady’s legal team, led by Jeffrey Kessler at Winston & Strawn, had to have always known this. They had to have known that they were holding a straight flush, or bringing a gun to a knife fight (pick your own cliché). And they wisely advised their client accordingly, by all appearances. Brady and his team clearly understood they held winning cards, and that, unless the NFL buckled in settlement, they should let the judicial process run its course. And that is lesson number one for lawyers and people who hire them: the lawyers need to know the case, the relevant law and the facts well enough to make those kind of calls, and have the experience and expertise to wisely counsel their clients in that regard. If not, what exactly is a client paying for?

The other lessons come from the flip side, which is the NFL’s sound defeat. How could the NFL’s lawyers not have seen the same thing, and understood that the arbitration proceedings had been so flawed that they would have trouble convincing a court to affirm the arbitration rulings? Did they not know? I find that hard to believe. I understand that hindsight is 20/20, and I completely understand the fog of war that can make it hard for lawyers, in the middle of litigating a case, to see clearly every crook and turn of a case in advance. But here, the NFL’s experienced lawyers had to have identified these problems and known that they posed a risk for their client. And although I have no idea what the actual dynamic was that led to the NFL still riding off to Little Big Horn under those circumstances, I have certainly been at this business long enough to identify the possible causes and the lessons they teach. Since the NFL's lawyers had to have recognized the risks, the question becomes whether they firmly and clearly advised Goodell and the NFL about them. If they did, then the loss is on the client, who is certainly free to decide to move forward with litigation despite knowing about those risks. But the more worrisome question, given the dynamic between lawyers and very prominent clients, is whether the NFL was told firmly and clearly of the risk they were running, or whether their lawyers were instead unwilling to speak that truth to power. Lawyers don’t want to lose clients, especially prominent ones like the NFL. A lawyer gains all sorts of benefits from a client like that, ranging from the financial gain of the billings of that client, to the marketing kick of having a client like that on their roster, to the ego boost of representing such a client. But – and I emphasize that I have no idea what actually happened here – that dynamic can make outside counsel afraid to tell such a client that the client or its case, like the emperor in the famous story, has no clothes.

And in this risk – which as I say, I don’t know whether or not it played a role here – is the lesson for lawyers and, again, the people who hire them. Clients aren’t served, and lawyers aren’t doing their job, in that circumstance. Clients do not benefit from lawyers who are so beholden to them that they won’t tell them the truth, and lawyers are not living up to their obligations if they are afraid to tell the client the truth. Certain relationships require brutal honesty to work well, and the lawyer/client relationship – in both directions – is one of them.

And this then brings into focus a particular facet of Judge Berman’s ruling that really troubles me, both in terms of arbitration tactics and the decision making of those involved here, which is the Court’s focus on the fact that the NFL’s general counsel edited the Wells report (which is, at heart, essentially the prosecutorial findings on which the sanction against the accused rested) but was not required to testify in the arbitration. I am not going to pass judgment here on whether or not the general counsel, Pash, should have been required to testify or whether, instead, the arbitrator could have properly denied a request for his testimony. As I said, hindsight is 20/20 and, from this vantage point, after Judge Berman has spoken, it is easy to say that the arbitrator erred by denying a request for Pash’s testimony. In the course of a particular arbitration, however, there are valid arguments both ways as to whether testimony of a particular witness should be allowed, and I am not certain it is fair to say that, in real time during the arbitration, the answer to that question was always clear.

What I am concerned about, though, is the very fact that the NFL’s general counsel involved himself in this way in the development of the evidence and findings against Brady, i.e., of the Wells report itself. Why in the world would you allow such a senior executive, the legal centerpiece of a major corporation, to insert himself into the process in that way? Pash and his legal department had to have understood that they were putting him in harm’s way, and making him a potential witness in the arbitration. Worse yet, they had to have – or if not should have – seen that this would create the dynamic where either he would have to testify or the arbitrator would be put in the position of precluding his testimony, thereby creating grounds for having the arbitration ruling overturned by a court (as in fact happened). Everyone involved here is too experienced not to have seen this risk from a mile away – as trial lawyers like to say, this was no one’s first rodeo (this is a cliché lawyers at trials usually resort to so as to reassure the trial judge that the lawyers can be trusted to work something out among themselves without the judge’s involvement). So how was this allowed to occur? Was Pash’s team of lawyers afraid to speak truth to power and tell him to keep his distance, whether those were the lawyers in his own department or instead the NFL’s outside lawyers? Or did Goodell, essentially the CEO of a huge corporation, want him involved in that way and his general counsel didn’t want to tell him no?

There is a cliché relevant to both representing corporations as outside counsel and to being an in-house lawyer, which concerns the fear – sometimes legitimate – of business folk that the lawyers just say no about everything they want to do, rather than telling them how to do what they want to do. As I mentioned, this is sometimes a legitimate concern that non-lawyers have about their lawyers, whether outside counsel or resident in the corporation itself. But it is also true that there are times when lawyers – again whether in-house or outside counsel – have to say no, and have to advise their clients that what they want to do is a bad idea. I have no idea how Pash, an extraordinarily senior officer of a multi-billion dollar corporation, ended up in the middle of this mess as, of all things, a fact witness, but it should never have happened. Somewhere along the line, someone abdicated their responsibility of just plain saying no, it’s a bad idea.

AAA Arbitrations Now Include an Appeal Process for Complex Commercial Disputes

Posted By Stephen D. Rosenberg In Arbitration
Permalink | print this article

Years of experience litigating in the federal courts on the one hand, and arbitrating before the AAA on the other, have left me skeptical of the idea that arbitration is somehow preferable to the courts for resolving complex business disputes. My own experience is that, for those types of cases, arbitration is often not less expensive, seldom faster, and less likely to result in an accurate result (if you define accurate as a result roughly within the bell curve of possible results that an objective observer might forecast for a case). I discussed these issues in detail here, here and here in the past.

One of the bigger concerns I have discussed in the past is the risk of parties just assuming that arbitration is a better forum for a complex business dispute, rather than carefully considering in advance whether or not it is the better forum for their particular dispute and, even more importantly, for the factual and legal arguments they intend to advance. One of the important points I have discussed in the past is that a company and its counsel should carefully consider whether the strength of their position lies in legal arguments or instead in factual ones before electing arbitration, because it is a mistake to forego appellate review when your best arguments are legal. Arbitration panels themselves too frequently get the law wrong or reach incorrect results in cases where a complex or novel legal issue is outcome determinative, for a number of reasons, including an inherent tendency (for a number of reasons) to be more fact driven in their decision making than law driven. As those of you who practice in this area already know, appellate review of arbitration rulings by the courts is extremely limited and unlikely to overturn an award based simply on a glaring error in legal analysis by the arbitration panel, even though that is exactly the type of situation in which an appeals court would freely overrule a trial judge.

Now, the AAA is offering an appellate stage for complex commercial arbitrations, which will go far, at least on paper, towards addressing this problem. While it may not be preferable to going to court and having full appellate review by a federal circuit bench or state supreme court, it will at least allow the parties the opportunity to brief, address and possibly remedy legal errors by an arbitration panel. The devil, of course, will be in the details, but this is a promising step towards making the promise of arbitration – faster and less expensive but accurate dispute resolution – align with the reality.

Empirical Proof of What I Always Thought (And Said): The Benefits of Litigation over Arbitration

Posted By Stephen D. Rosenberg In Arbitration , Coverage Litigation , Percentage Players Die Broke Too: Notes on Litigation and Trial Tactics
Permalink | print this article

This is great. I have lost count of how many times I have explained my view that arbitration is not, by definition, preferable to litigation for resolving disputes, and that instead, in each and every given case, a party should think carefully about which dispute resolution forum is preferable. I have written and spoken on the idea that, initially, company decision makers should put aside the assumption that arbitration will save money, because it generally does not. There are more controls on the litigation process than are built into the arbitration process and, as a result, if one side or another is interested in bogging down the process in excessive discovery, motion practice, or other efforts, they can more easily run up the costs in an arbitration than they can in litigation. Arbitration, as a result, is only less expensive if both parties set out in good faith to make it that way. If one party sees a tactical benefit in doing otherwise, though, the dynamics of arbitration make it far too easy to turn arbitration into an expensive, time consuming, seemingly never ending event. Judges, as a general rule, won’t allow this to the same extent in court.

Second, there are tactical considerations in deciding between arbitration and litigation, which have to do with the strength of a party’s case, and whether that strength is based on legal arguments or instead on facts. It is my view that a case based on legal theories is better prosecuted in court, for at least two reasons. First, motions to dismiss and summary judgment are effective avenues in that forum to have the court rule, relatively early on, as to the strength of those legal defenses. Arbitration panels are, for various reasons, more often inclined to hold all such issues over for the final hearing, eliminating the possibility of an early outcome without having to engage in a full evidentiary hearing on the evidence. In my experience, the only real consistent exception to this dynamic in arbitrations is when the arbitration panel is chaired by a well-regarded retired judge, who may be inclined to incorporate more of the courtroom structure into the arbitration process. Second, in a case built on legal theories, it is always better to have a second chance to press that theory if it is rejected the first time around, which litigation allows by means of appeal. Arbitration generally doesn’t allow that, as state arbitration acts and the Federal Arbitration Act generally impose very limited rights of appeal from arbitration rulings.

In this excellent article in Inside Counsel, authors Alan Dabdoub and Trey Cox provide empirical support for these views, which have, until now, been based simply on my own years of arbitrating and litigating cases, and of observing the difference between the two. The authors use a comparative study of 19 different cases, about half in arbitration and about half in litigation, to demonstrate that litigation, and not arbitration, can often be the faster and less expensive path for resolving disputes. It is well worth a read.

An Emerging Consensus on Arbitrating Complex Commercial Disputes?

Posted By Stephen D. Rosenberg In Arbitration , Arbitration of Coverage Disputes
Permalink | print this article

Well, I have written extensively on my skepticism about commercial arbitration as a tool for solving commercial disputes, and my belief that the courtroom is a better forum for most complex cases. It would take a lot of links to cover my past discussion of the pros and cons of this type of dispute resolution, and my reasons for thinking it a far weaker forum for a dispute between corporate entities than the courthouse. If you click on the category “Arbitration of Coverage Disputes” or the category “Arbitration” over on the left side, however, you will quickly find my past discussions of this topic. If you don’t want to do that, however, you could read this article here, which nicely sums up the same calculus that underlies my earlier posts on the efficacy, and sometimes lack thereof, of commercial arbitration.

Legal Rights That Are Protected In Courts, May Well Be Lost In An Arbitration

Posted By Stephen D. Rosenberg In Arbitration , Arbitration of Coverage Disputes
Permalink | print this article
I haven’t commented in the past on this, because there was too much else going on directly on point with ERISA. However, as many of you may know, the Supreme Court issued an opinion a week or two back in essence concluding that parties may not contract between themselves to allow a court to review an arbitration award beyond the limited review provided for under the Federal Arbitration Act. As I have discussed on this blog more times than I care to remember, commercial arbitration suffers from a number of problems, and I have suggested in the past that commercial entities who want to arbitrate should take preemptive steps to solve those problems at the time they agree to arbitrate. Probably the biggest barrier to arbitration serving as a forum for complicated commercial disputes is that the Federal Arbitration Act effectively provides no substantive oversight of an arbitration ruling, making the arbitrator’s ruling the final decision, and only allows judicial review for the purpose of addressing any serious procedural errors during the course of an arbitration. Commercial entities have been well advised in the past to try to negotiate around this problem, to leave some type of judicial review in place that will provide oversight of an arbitration panel that is akin to what a federal appeals court provides to a trial court. The Supreme Court’s opinion effectively deprives parties who wish to arbitrate from agreeing to allow such a review by a federal court, making arbitration a forum that, quite simply, isn’t appropriate for a party that wants to maintain rights of appeal should the original decision maker - whether an arbitration panel, a trial judge or a jury - err significantly on either the particular law or the application of that law to the facts proven in the case.

Frankly, from a substantive real world approach, it’s the wrong decision. Arbitration can work for commercial entities, but not in a cookie cutter manner and only if they can negotiate around the problem of limited judicial review. The Supreme Court’s ruling precludes contractually remedying that problem. As a hypothetical question for a federal courts class, it might be the right answer; in the real world, it certainly isn’t. Indeed, I have commented in the past on empirical and anecdotal evidence that commercial entities are losing interest in resolving complicated business disputes by arbitration, and this ruling isn’t going to reverse, or even slow, that trend.

What’s the occasion for this soliloquy? This article right here, out of Texas Lawyer, which hits these notes right on the head (I like a good mixed metaphor on a Monday).

Let My People Go, or Something Like That: Granting Parties Greater Freedom to Construct an Arbitration Regime

Posted By Stephen D. Rosenberg In Arbitration
Permalink | print this article
There was an interesting post yesterday on the Wall Street Journal Law Blog - which by its topics provides a nice little overview of the zeitgeist of the legal world at any given moment - on arbitration as an alternative to litigation. The post discusses a column from the Financial Times supporting the growth of arbitration in the face of consideration by the Supreme Court of a case concerning just how much freedom parties have in constructing the format of the arbitration under the Federal Arbitration Act. The column itself is here. What’s interesting to me about all of this is that at the same time business media of this nature is singing the praises of arbitration, the lawyers for much of that business community don’t much like it as a tool for resolving complicated disputes, as I have discussed in a number of posts, including - most recently  - here. Is there a disjunct over the question of the efficacy of arbitration between the business communities and their lawyers, including their in-house lawyers, who are tending not to favor arbitration for their own disputes? Or is there only a disjunct between the media who cover that issue and the business community and its lawyers?

Incidentally, the Supreme Court case involving arbitration concerns the extent to which the parties can structure their rights and remedies in that process in the face of the Federal Arbitration Act, including the extent to which they can appeal an arbitrator’s ruling in the court system. As a frequent commentator on arbitration and one who regularly represents parties in arbitration, I have no doubt that expanding the power of the parties in such a manner can only improve arbitration, at least of commercial cases involving parties of roughly equal bargaining power.

Electronic Discovery and the Calculus of Arbitration

Posted By Stephen D. Rosenberg In Arbitration , Arbitration of Coverage Disputes , Electronic Discovery
Permalink | print this article
I have written before about electronic discovery and the amendments to the federal rules governing that discovery, and my theme has often been that the courts need to develop a jurisprudence concerning electronic discovery that carefully weighs the expense of the discovery versus the need for it before granting extensive (and expensive) electronic discovery. In this article here, DLA Piper partner Browning Marean points out that the expense of electronic discovery can often be so burdensome that it forces settlement without regard to the merits of a case; as he puts it in a very clever turn of phrase, “the possibility of extortion by discovery is too real a prospect.” I have said it before and I will say it again: we are at the opening phases of the development of the law of evidence and discovery in this area, and the courts need to establish a body of precedent governing this type of discovery that prevents electronic discovery from having this effect.

At the same time, I have discussed as well on this blog the consensus that arbitration is a poor forum for most complex cases and is often not an improvement - in terms of costs, efficiency or outcome - over litigation. The electronic discovery amendments to the federal rules may be in the process of changing that. Unburdened by the federal rules themselves or the developing case law concerning electronic discovery, an arbitration panel is free to fashion much narrower electronic discovery and to impose much stricter controls over it than courts are currently tending to impose,
all on the thesis that a large part of an arbitration panel’s job is to effectuate arbitration’s promise of cost effective dispute resolution. As a result, as electronic discovery costs go up in federal court, the comparative cost advantage of arbitration - which has been disappearing over the years - increases, possibly changing the calculus for litigants over whether or not to agree to arbitration.

More on the Question of When to Arbitrate and When to Instead Litigate

Posted By Stephen D. Rosenberg In Arbitration
Permalink | print this article
Pretty much since I started writing this blog I have talked about how, in my experience, commercial arbitration is not a panacea and often is not a better forum than litigation for resolving disputes. My main point has always been that it depends on the particular dispute and on the details of a party’s position, including the strengths and weaknesses of that party’s case. Since beginning my run of comments on that theme, there has been no shortage of pieces in major media outlets basically saying the same thing, some of which I have linked to on occasion here on this blog.

I particularly like this latest one on the subject, however, by Jo Ann Shotwell Kaplan, the general counsel of the New England Legal Foundation, and thought I would pass it along. The article reports on a seminar the foundation hosted on the subject of commercial arbitration as a forum for deciding business disputes. One of the things that makes it worthwhile reading on a subject that has otherwise been well plowed elsewhere is the strength of the panel discussing the issue, and the article’s ability to capture some of the more subtle considerations in determining whether arbitration, or instead the courtroom, is the way to proceed. As an example, I particularly appreciated the point raised by one of the panelists, counsel to a major consumer products company, that arbitration is best used in the context of recurring disputes between the same players because in those instances the parties are motivated to make the best use of the system, but that arbitration is simply a failure when applied to one and done disputes that are subject to arbitration only because of a pre-dispute mandatory arbitration clause.

The second thing I liked about the article was a point it made which I simply have not seen made anywhere else, which in this world of media saturation is a rare occurrence. The article discusses the views of one arbitration expert that commercial arbitration, whatever its merits may be when resolving other types of disputes, is actually preferable to litigation with regard to international disputes, for two reasons. The first is that using arbitration puts the parties on the same playing field, removing from the equation the differences between the different legal systems applicable in the different countries where the businesses involved in the dispute are domiciled. The second, and almost stunning reason, is that commercial arbitration rulings out of this country are often more respected in other countries’ court systems than are court verdicts. The panelist, a Boston University Law School professor: 

explained that a U.S. arbitration award has more international currency than a decision of the U.S. Supreme Court. Apparently other countries don’t think too much of our system of jury trials in civil cases and runaway punitive damage awards. They have agreed to enforce our arbitration awards, but not our court judgments.

ERISA and Same Sex Marriage

Posted By Stephen D. Rosenberg In Arbitration , Employee Benefit Plans , Health Insurance , Preemption
Permalink | print this article

Here’s a great story out of Boston, by means of the Workplace Prof, that touches on several obsessions of this blog - ERISA, the federal arbitration act, and court review of arbitration awards. As the Prof explains in this post here, a federal judge for the District of Massachusetts is seeking amicus briefs related to whether or not the court should affirm or instead vacate an arbitrator’s finding that an employer could limit ERISA governed health insurance benefits provided to employees’ spouses only to spouses of the opposite sex. The arbitrator had determined that the benefits were collectively bargained for and that the limitation was appropriate under the collective bargaining agreement.

Now, presumably, the matter is before the District Court here on a motion by the losing party in the arbitration to vacate the award, given that the court is asking for amicus to address the question of whether the arbitration award and the employee benefit plan approved of by the arbitrator violate a clear Massachusetts public policy, given the state’s protection of same sex marriages. The court is inquiring as well into the question of whether that public policy, if it can trump the arbitrator’s award and thereby justify setting aside the arbitration award, is itself trumped by ERISA preemption, with the result, presumably, that the benefits offered by the employer have to be left as is.

There aren’t many states where this issue could really come into play, one would think, although I don’t know how many other states other than Massachusetts allow gay marriage, and thus can have employee spouses who are not of the same sex. Beyond that, the court’s response shows a serious involvement by the court in the question of whether an arbitration award was proper, which I have argued before in this blog is the appropriate approach of a court presented with a challenge to an arbitration award. While one might say the court is really reaching out quite far to address this issue, more than one would normally expect from a district court judge, I will take that any day over the situation I have noted in other posts on this blog, where judges sometimes seems to simply reflexively approve arbitration awards, or at least start with some sort of barely rebuttable presumption that the award should be upheld, both of which are approaches that I do not believe are justified under the Federal Arbitration Act. In addition, it is not particularly out of the norm in this particular federal district to reach out for help from the legal and business community in this way in this type of a case, as I can recall other judges in this district requesting amicus briefs on difficult questions involving the interplay of ERISA and federal or state anti-discrimination laws. Moreover, other judges, as discussed in this post of mine from a little while back, in this district are likewise continuing to struggle with the impact of ERISA on employers as they try to figure out how to structure their employee benefits when it comes to spouses, partners and other dependents, in this brave new world we live in here in the Commonwealth of Massachusetts.

Incidentally, the underlying arbitration award is one that I discussed here, in this post, some time ago, in case you want to know more about the underlying controversy.

Why You Should Hire a Lawyer With A Black Belt in Commercial Arbitration

Posted By Stephen D. Rosenberg In Arbitration , Coverage Litigation
Permalink | print this article
You know, the term martial arts is really just an umbrella for a whole range of more particular styles of physical combat, and the diversity is actually kind of fascinating. What does this have to do with anything? Well, I was reminded of this by this post from the Adjunct Law Prof on a ruling by the Virginia state supreme court concerning the grounds on which one can challenge an arbitration ruling when the arbitration is governed by the Virginia state arbitration act. Litigation is much like martial arts, in the sense that we subsume within that phrase a lot of areas that actually have their own specific quirks, and for which experience in one area may not necessarily transfer to success in another. Commercial arbitration, as the Adjunct Law Prof’s post reflects, is one such area. States have their own arbitration acts, unique to their states, and the federal system has its federal arbitration act, which is what most people talk of when discussing the law of arbitration. But the outcome of an arbitration can vary depending, as that post shows, on which particular arbitration act governs an arbitration. The Adjunct Law Prof’s post explains that the outcome in Virginia under that state’s arbitration act would be different under both New York law and in the federal system.

And thus among the black arts of arbitrating cases is knowing when, and how, to maneuver around various state arbitration acts and the federal arbitration act, and knowing how to get the best act for your case to be applicable. And subtleties like that are why it is important to hire a lawyer skilled and experienced with arbitration, rather than to just assume that litigation is litigation, and that a different set of skills is not necessary for the subset of litigation known as commercial arbitration.

Commercial Arbitration and the Federal Arbitration Act

Posted By Stephen D. Rosenberg In Arbitration , Arbitration of Coverage Disputes , Coverage Litigation
Permalink | print this article
Very few things can still reduce me to an adolescent rumble of uttering very, very, very cool, and it is particularly remarkable when something in the practice of law has that effect. These three posts, from Workplace Prof, Adjunct Law Prof Blog, and SCOTUSBLOG had that effect on me when I came in to them on my desktop this morning. They all discuss the fact that the Supreme Court has accepted a case presenting the question of whether parties to arbitration agreements can contract around the Federal Arbitration Act and change the extent of judicial review of an arbitrator’s ruling. As I have discussed in a number of posts in the past, I am one of many people who have a healthy skepticism about commercial arbitration, and one of my many concerns with the format has to do with the extremely limited judicial review of arbitration decisions, even ones that are obviously and fundamentally flawed. I discussed this point in some detail here. For those clients who are interested in arbitrating, I often counsel close analysis of the pluses and minuses of doing so, and in particular I recommend attention to the arbitration agreement itself with the idea of adding into it particular protections or litigation tools that would otherwise be missing from the process. Now, it looks like the Supreme Court will be addressing the question of to what extent parties can actually do this. As I said, very, very cool, at least to those of us with a long standing interest in the pros and cons of arbitration, and how to improve it by private agreement.