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Arbitration- Schmitz- Lyman

Arbitration- Schmitz- Lyman - 1 Do you have a contract to...

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1. Do you have a contract to arbitrate? - Do you have a contract o Offer o Acceptance o Consideration - Who decides whether this is even an agreement to arbitrate? o Is there even a question of arbitrability? - Is it contract to arbitrate o Does this qualify as arbitration? Look at terms of K, not law. o FAA? Is there a writing? Is this interstate commerce? 2. Is it governed by FAA and/or UAA - FAA o Does not cover labor ARB o Does not cover court ordered ARB o Does not cover transportation workers o Does not cover automobile franchises - 2002 Agreements with manufacturer Can still have post-dispute agreements to ARB though o Split of authority over whether it covers nonbinding ARB - UAA o Adopted on a state-by-state basis 3. What are the terms of the contract? - What is actually written o How broad is the K? - What rules are incorporated by reference 4. What contract defenses apply? - Is a party in default? - Other K defenses? 5. Is there a conflict between the FAA and the contract terms? - FAA – empowers CT to o Enforces agreements through compelling o Enforces awards - Is there a conflict between FAA and controlling state law? o Procedural or substantive? 6. Enforcing the K in fed CT? - SMJ? Diversity & amount? Fed Q? - PJ? - Venue? Only if FAA applies 1
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Arbitration v. Litigation - Arbitration o Arbitration is not a state action – Cremin v Merrill Lynch No constitutional protections o No rule making o Must go to court to get enforcement o Must go to court to compel arbitration o Concerns about fairness Arbs may be trying to appear fair Trying to get hired again o Repeat player bias BUT, competition among arbitrators could lead to more fairness o And, may be worth the companies time to pay for something Rather than lose goodwill AND, if companies with ARB agreements were perceived as unfair, companies might drop ARBs to attracted customers o BUT, seems like a secret agreement not to do so Cartel – no competition to drive down prices o Plus, consumers are not well informed Stronger parties could coerce weaker parties into signing ARB agreements No appeal Distrust of arbitrators OLD RULE – revocability doctrine could revoke at any time before award NEW RULE – FAA § 2 – valid, irrevocable, enforceable o Benefits – mostly for corporate ∆ Privacy Does this help repeat players b/c not bound by precedent? Efficiency Less money for lawyers, depositions, discovery o Could make products cheaper or wages higher Or, could just make companies more profitable Speed Lower damage awards Repeat player bias Deters frivolous suits High fees/cost to bring case to ARB compared to courts No discovery Can harm ∏ b/c ∆ may have evidence Expertise of arb in field CTs are generalists Limited appeals Usually no class relief Protects a favorable relationship - Litigation o Rule making o Dispute resolution o Self-enforcing 2
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Is it arbitration? -
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Arbitration- Schmitz- Lyman - 1 Do you have a contract to...

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