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Upcoming Events
| | View the American Arbitration University Course Calendar
CLICK HERE!
April 3-6, 2013
American Bar Association
15th Annual Section of Dispute Resolution Spring Conference
Chicago, IL
Oct. 19 - 20, 2012 Health Law Arbitration Training
Hamline University School of Business
1600 Utica Avenue South
Minneapolis, MN 55416
For more information, CLICK HERE!
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2012: FINRA Year in Review
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WASHINGTON - The Financial Industry Regulatory Authority (FINRA) marked 2012 with significant accomplishments in detecting fraudulent activity, implementing cross-market surveillance, increased transparency of securities markets and fulfilling its regulatory mandate to protect investors, assessing $68 million in fines, ordering a record $34 million in restitution to harmed customers and taking measures to ensure market integrity.
Richard Ketchum, FINRA's Chairman and CEO, said, "FINRA fulfilled its role as the first line of defense for investors through a comprehensive and aggressive enforcement program, supported by a realigned and more risk-based examination program and the provision, for the first time, of cross-market surveillance programs that more effectively detected electronic manipulative trading. Protecting investors and helping to ensure the integrity of the nation's financial markets is at the heart of what we do every day."
To View Complete Article Click Here Notice 12-30 Click Here |
DOJ message to SCOTUS: do not enforce arbitration agreements that invalidate federal statutory rights
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On January 29, the U.S. Dept. of Justice filed an amicus brief supporting respondents in AmEx III, arguing that to enforce the class arbitration waiver would be to create a large loophole for important federal laws. The Solicitor General has also asked to argue at the  hearing on February 27. To my knowledge, DOJ has never previously weighed in on an arbitration case before the U.S. Supreme Court.
The issue in AmEx is whether American Express can enforce its arbitration agreement, which precludes any class or consolidated actions, against a class of plaintiffs who allege antitrust violations. The Second Circuit has held, on remand and on reconsideration, that American Express cannot enforce that arbitration agreement. The court held that the plaintiffs proved it was not economically feasible to pursue their cases on an individual basis and therefore precluding a class action meant precluding the enforcement of their antitrust rights, which is sufficient to invalidate the arbitration agreement under Green Tree Financial Corp. v. Randolph, 531 U.S. 79 (2000).
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Good news from the Eastern District of New York for class action waivers
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Last week, the U.S. District Court for the Eastern District of New York upheld a class action waiver in an employment arbitration agreement, sending the plaintiffs' FLSA collective action claims to arbitration on an individualized basis. The plaintiffs, former sales representatives for United HealthCare, claimed that the class action waiver was unenforceable for several reasons. First, the plaintiffs claimed that participating in a collective action under the FLSA is a statutory right that cannot be waived. The court disagreed, finding that nothing in the FLSA or its legislative history establishes that the right to participate in a collective action is a non-waivable right. To the contrary, the court reasoned that because an employee is required to file a consent form in order to participate in a collective action under the FLSA, an employee certainly has the power to waive their participation in such an action. The plaintiffs next attempted to rely upon the Second Circuit's opinion in In re American Express Merchants' Litigation, 667 F.3d 204 (2d Cir. 2012), which found a class action waiver to be unenforceable because the practical effect of enforcing the waiver in that case would have precluded the plaintiffs from bringing their claims. The court also rejected this argument, noting that the Second Circuit made clear that class action waivers are not per se unenforceable, and finding that the plaintiffs in this case failed to show that arbitrating their FLSA claims on an individual basis would have been cost prohibitive. Lastly, the court rejected the plaintiffs' argument, under the NLRB's D.R. Horton decision, that class action waivers violate employees' rights to engage in concerted activity. The court instead agreed with the Eighth Circuit's recent decision in Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. Jan. 7, 2013), which rejected the NLRB's rationale in D.R. Horton and held that class waivers are enforceable in relation to claims brought under the FLSA.
For more information, Click Here! |
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Illinois Appellate Court rules that parties may not seek judicial review of discovery ruling until arbitration ends
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An Illinois appellate court ruled that parties to arbitration may not obtain judicial review of discovery rulings until the arbitration has concluded. Klehr v. Illinois Farmers Ins. Co., 2013 WL 240539 (Ill. App. Ct. Jan. 22, 2013).
During arbitration between an injured passenger and her automobile insurance carrier, a dispute arose as to whether certain discovery requests were permissible. The arbitrators ruled in favor of the insurer and ordered the production of the documents. Thereafter, the policyholder filed a declaratory judgment action in state court seeking a ruling that the discovery was not allowed. The circuit court dismissed the complaint for lack of subject matter jurisdiction, reasoning that because the arbitration was not complete, the court lacked jurisdiction to review the interlocutory discovery order. The appellate court affirmed on different grounds.
The appellate court upheld the dismissal of the complaint on the grounds that the discovery dispute was not ripe for adjudication. Applying the Uniform Arbitration Act, the appellate court ruled that "this is precisely the type of dispute that the drafters intended to be reviewed by the courts only at the conclusion of arbitration as part of a motion to vacate the award."
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Amex seeks Supreme Court review of class arbitration waiver decision
|  American Express Co. ("AMEX") filed a petition for certiorari on July 30, 2012 after a Second Circuit panel ruled for the third time that the company could not enforce an arbitration agreement containing a class action waiver against a putative class of merchants who pursued antitrust claims. American Express Co. v. Italian Colors Restaurant, No. 12-133. The Second Circuit had held that the class action waiver contained in AMEX's Card Acceptance Agreement-which tied the acceptance of its credit card to its higher-rate charge card-was unenforceable because it "would effectively preclude any action seeking to vindicate the statutory rights asserted by the plaintiffs," whose antitrust claims would not be economically rational to pursue individually. The Second Circuit had based its holding on an affidavit from plaintiffs' expert showing that the several hundred thousand dollars of costs would far exceed the $5,000 anticipated recovery for each plaintiff. The Circuit, though divided, declined to hear the case en banc. (See our blog posts from April 4 and June 5, 2012.)
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Court severs invalid forum selection clause and compels arbitration
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When a forum selection clause is invalid because the forum  organization that was designated does not exist, the forum selection clause may be severed from the rest of the arbitration agreement and arbitration can be compelled. Control Screening LLC v. Technological Application and Prod. Co., 687 F.3d 163 (3d Cir. 2012). The parties' mutual mistake as to the non-existent forum rendered the forum selection clause null and void; as a result, the arbitration agreement was treated as if it did not select a forum. Pursuant to Section 4 of the Federal Arbitration Act, a district court is empowered to compel arbitration only within its own district; accordingly, the new forum for the arbitration was required to be in the forum in which the petition to compel arbitration was filed.
To See full article on Lexology, Click here
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In an effort to recognize the specialization in the ADR community, we are creating 3 separate newsletters broadly covering these areas: Mediation - Arbitration - International ADR.
A newsletter focused in one of those areas will be sent out bi-monthly. In order for you to subscribe to as many types of newsletters that fit your particular practice/interests, please click on the Update Profile/Email Address link at the bottom of this email. From there you will be able to select which newsletters you wish to receive or if you would like to opt out all together.
Thank you for reading my newsletter, and as always, if you have any questions on any of the articles listed, do not hesitate to contact me.
Sincerely,
Thomas Valenti
Attorney, Arbitrator (ACIArb), Mediator
Thomas P. Valenti, P.C.
300 N. LaSalle St., Suite 4925
Chicago, IL 60654-3406
T: 312-803-0472
F: 888-667-2485
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