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In a previous post, we addressed what may happen when a defendant in federal litigation seeks to compel arbitration under Ch. 1 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 4, but the applicable arbitration agreement specifies a place of arbitration that is outside the geographic jurisdiction of the federal court.  (See https://www.mintz.com/insights-center/viewpoints/2017-07-spectre-haunts-motions-compel-arbitration-venue.)  But what approaches are available to a defendant when a plaintiff files suit in a state court, the claim is subject to an arbitration agreement, and the agreed place of arbitration is in a different state? 
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The Hong Kong International Arbitration Centre (“HKIAC”) has promulgated a new set of Administered Arbitration Rules (“AAR”), effective November 1, 2018.  Among those rules are Articles 27-30 concerning the HKIAC’s powers to join additional parties in an arbitration, to consolidate arbitrations, to consolidate related claims in a single arbitration, and to coordinate related unconsolidated arbitral proceedings.  Those powers, which the HKIAC can exercise without the consents of the parties to any bilateral arbitration agreement, are not trivial; among other things, they arguably institutionalize pathways to collective or opt-in class arbitration proceedings.
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The Seventh Circuit Court of Appeals has joined five other Circuits in determining, unremarkably, that class or collective arbitrability is a gateway question that is presumptively for the court to decide.  It then apparently ignored the issue of whether the parties delegated such arbitrability questions to an arbitrator.  See Herrington v. Waterstone Mortgage Corp., No. 17-3609 (7th Cir. Oct. 22, 2018).  (Yet we may infer from the Court’s decision that incorporation by reference in an arbitration agreement of the Employment Arbitration Rules of the American Arbitration Association does not constitute a clear and unmistakable manifestation of the parties’ intent to delegate the class/collective arbitrability question to an arbitrator.)
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The Eleventh Circuit Court of Appeals held recently that it could not compel arbitration demanded by a non-signatory to an arbitration agreement when the New York Convention applied.  See Outokumpu Stainless USA, LLC v. Converteam SAS (c/k/a GE Energy Power Conversion France SAS, Corp., No. 17-10944, 2018 WL 4122807 (11th Cir. Aug. 30, 2018).
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The U.S. Supreme Court has pointed out consistently in recent years that the relatively new construct of “class arbitration” is very different from your uncle’s classic bilateral arbitration. (“Class arbitration” signifies the utilization of a class action protocol (Fed. R. Civ. P. 23) in an arbitration proceeding.) One might expect, therefore, that the adjudication of issues concerning the one would differ from the adjudication of the same issues concerning the other. Delegation of the arbitrability question is one such issue. Have the lower federal courts adopted such a view? Count the Eleventh Circuit Court of Appeals as another that has decided against it, and that whether the “class arbitrability” issue has been delegated to an arbitrator should be adjudicated using the same criteria as are applied to that issue with respect to bilateral arbitration.
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In an unusual decision in an unusual case—a dispute between sovereigns—a U.S. appellate court recently vacated a domestic arbitration award on grounds other than those provided in Section 10 of the Federal Arbitration Act (“FAA”). In Citizen Potawatomi Nation v. Oklahoma, 881 F.3d 1226 (10th Cir. 2018), the appellate court vacated the award because the parties’ agreement to arbitrate was deemed unenforceable. While the outcome of that case is, in considerable part, fact-specific, it involves issues having broader applicability.
In our sister blog, ADR: Advice from the Trenches, Gil Samberg explains the Sixth Circuit’s ruling, applying the Supreme Court’s reasoning in the recent Epic Systemscase, that the “collective action” provision of the FLSA does not render a collective action waiver in an arbitration agreement unenforceable.
When the Supreme Court ruled recently that the “concerted activities” provision of the National Labor Relations Act (“NLRA”) did not make a contractual waiver of “class arbitration” unenforceable, it provided an extensive analysis that included comments regarding the interaction of the Federal Arbitration Act (“FAA”), the NLRA, and the Fair Labor Standards Act (“FLSA”).
The Federal Arbitration Act (“FAA”) reflects a strong federal policy in favor of arbitration.  In extraordinary cases, however, a dispute that otherwise would be arbitrable under the FAA could be rendered non-arbitrable by the operation of another federal statute.  The
After granting a motion to compel arbitration, should a court operating under the FAA stay or dismiss the pending judicial proceeding?  While the federal circuit courts are split on the question, the better rule seems to be that after granting a defendant’s motion to compel arbitration, FAA §4 (9 U.S.C. §4), the court should stay the judicial proceeding pending the arbitration.
Who may determine whether “class arbitration” has been authorized by the parties to an arbitration agreement — a court, an arbitrator, either? Considering the nature of “class arbitration,” is this a special case of the arbitrability delegation issue, or is this issue sui generis?
Third-party litigation and arbitration funding is increasingly being utilized in the United States. Are the corresponding financing costs recoverable in arbitrations?
The U.S. Supreme Court has ruled that “class arbitration” may be permitted if an arbitration agreement authorizes it, Stolt-Nielsen v. AnimalFeeds Int’l Corp., 559 U.S. 662, 684 (2010), and that state contract law governs the interpretation of the parties’ arbitration agreement. A proposal: that an agreement to permit class arbitration must be “clear and unmistakable” to be enforceable.
“Gateway” arbitration issues, including the validity, enforceability, and scope of an arbitration agreement, are presumptively to be decided by a court, rather than by an arbitrator.
The majority of a divided (5-4) SCOTUS recently held that a waiver of “class arbitration” in agreed terms of employment is indeed enforceable. In doing so, the Court advanced the legal analysis of “class arbitration” that was begun several years ago by Justice Antonin Scalia, confirmed that arbitration is fundamentally a creature of contract, and concluded, among other things, that the NLRA was not in conflict with and did not override or displace the FAA.
Lest we forget, many are the arbitrations that are subject to state arbitration law rather than the Federal Arbitration Act (“FAA”). And one should never underestimate the differences between those regimes. For example, under the FAA, the grounds for vacatur of an award are few and narrowly construed.
Arbitration is a creature of contract, and an arbitrator’s powers are in effect defined by the parties’ arbitration agreement. Paradoxically, although an arbitration agreement can be written (double-spaced) on one side of a cocktail napkin, in some cases it may grant greater authority to an arbitrator than a judge has.
The cost of arbitration, including attorneys’ fees, can be substantial, commensurate with the matters in dispute. Your desire to settle a dispute that is going to arbitration is often as or more substantial. But sometimes your adversary is not willing to settle at your very rational number.
In a proceeding under the Federal Arbitration Act (“FAA”) to determine if a dispute must be arbitrated, a federal district court performs a more limited function than in a plenary civil action.
On April 30, 2018, the U.S. Supreme Court granted certiorari to review an unpublished Ninth Circuit decision in Varela v. Lamps Plus, Inc., No. 16-56085 (9th Cir. Aug. 3, 2017). See Lamps Plus, Inc. v. Varela (No. 17-988, U.S. Sup.).
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