Current Events

CPR Asks Supreme Court to Consider Another Foreign Tribunal Evidence Case

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The International Institute for Conflict Prevention and Resolution has asked the U.S. Supreme Court to hear a case on the extent of a law allowing U.S. federal courts to grant requests from foreign tribunals for discovery on U.S. persons as defined under the statute.  

The question in AlixPartners LLP, et al. v. The Fund for Protection of Investors’ Rights in Foreign States, No. 21-518, is whether the law on international tribunals applies to arbitration panel requests.

It’s the second Supreme Court amicus request by CPR in 2021.

CPR didn’t take a position in its Monday amicus filing, but instead asked the Court to hear the matter and clear up a federal circuit split over whether overseas arbitration tribunals may obtain requests for discovery under the law as, say, a foreign court can do.

The reach of 28 U.S.C § 1728 has become a hot topic in federal appellate courts over the past two years.  It was thought to be nearing a conclusion when the nation’s top Court granted cert on the issue in Servotronics Inc. v. Rolls-Royce PLC, et al., No. 20-794.

But while the parties waited for the October Court argument date, they also proceeded in arbitration.  After a July award by a London tribunal, the Court granted the parties’ request to dismiss the case in September, and it was removed from the docket. For more on Servotronics’ details and history, see Bryanna Rainwater, “Case Dismissed: Supreme Court Lightens Its Arbitration Load as Servotronics Is Removed from 2021-22 Docket,” CPR Speaks (Sept. 8) (available here).

CPR last January also had filed an amicus brief, linked at the CPR Speaks post, urging the Court to accept Servotronics. That brief also can be found at the Court’s docket page here.

CPR’s motion for leave to file the AlixPartners amicus brief, as well as the brief itself, is posted on the Supreme Court’s docket page for the case, linked above, and can be accessed directly here. The matter is expected to be considered by the Court at a conference before year end.

Attorneys at Cincinnati’s Graydon Head & Ritchey LLP prepared and filed the brief on CPR’s behalf.  The counsel of record on the filing is John B. Pinney, and the attorneys on the brief are Roula Allouch and John C. Greiner.

For coverage of CPR’s Alixpartners amicus filing argument, see Victoria McKenzie, “Arbitration Group Urges High Court To Define ‘Tribunal,’” Law360 (Nov. 9, 2021) (available here).

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Florida’s Top Court Takes on ‘Who Decides?’ in Airbnb Arbitration Case

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By Arjan Bir Singh Sodhi

Wednesday’s Florida Supreme Court argument presented a foundational issue on the adoption of arbitration proceedings—more on the question of who decides whether a case is arbitrated, based on the incorporation into a consumer contract of a set of arbitration rules.

The Nov. 3 argument, in Airbnb v. Doe, No. SC 20-1167, explores whether contract provisions are “clear and unmistakable”—the case law standard—in allowing the arbitration tribunal to determine its jurisdiction, and in allowing an assessment of the evidence from the contract that the parties agreed to arbitrate arbitrability.

Both federal and Florida cases back Airbnb, the best-known accommodations rental app, in finding that by incorporating a set of contract rules—in the case, the American Arbitration Association Commercial Arbitration Rules—the parties are agreeing to have an arbitration tribunal decide whether a case is to be arbitrated. 

But a Florida appeals court bucked the trend, and in a detailed opinion, found that the click-thru web interface didn’t provide adequate notice to the app users that they were agreeing to arbitration via a link to the rules which stated the arbitrability provision.

In the case, an anonymous Texas couple filed a complaint against Airbnb and the condominium owner who had listed the Florida property on the Airbnb platform. The complaint includes intrusion against the condo owner, and constructive intrusion against Airbnb. The plaintiff rented the condo for three days in 2016 and later learned that the owner had installed hidden cameras and recorded the couple without their knowledge.

The Does filed their complaint in the Manatee County, Fla., circuit court. Airbnb moved to compel to settle the dispute through an arbitration proceeding. Airbnb claimed that the Does are bound to an arbitration proceeding under the signed terms and conditions when they accepted the app’s click-wrap agreement—that is, the legal contract in the Airbnb online software in which the customer indicates acceptance by typing in yes, or selecting a particular icon or link before they may use the service.

The click-wrap agreement included a dispute resolution clause stating that the parties must arbitrate under the rules of the American Arbitration Association, with a link to the rules.  The rules contain the provision that the determination of whether the case is arbitrable goes to the arbitrator, not a court.

The Manatee County Circuit Court granted Airbnb’s motion to compel the arbitration. But Florida’s Second District Court of Appeal reversed. John Doe & Jane Doe v. Natt & Airbnb Inc., 299 So. 3d 599 (Fla. 2d DCA 2020) (available at https://bit.ly/3BPYPcu). The appellate court held that reference does not clearly and unmistakably suppress the court’s power to decide the arbitrability. The decision noted that the click-wrap agreement is not clear enough on the issue of who should decide the jurisdiction of the arbitration proceedings.  It stated that the reference “was broad, nonspecific, and cursory: the clickwrap agreement simply identified the entirety of a body of procedural rules. The agreement did not quote or specify any particular provision or rule.  . . .”

The appeals court also held that AAA Commercial Arbitration Rule 7 on arbitrability is not an exclusive power for the arbitrator.

Oral Argument

At Wednesday’s oral argument, Joel S. Perwin, who heads his eponymous Miami law firm, argued on behalf of petitioner Airbnb that the click-wrap clause covered everything, including the arbitrator’s resolution of deciding the arbitrability.

Justice Carlos G. Muñiz asked Perwin to clarify whether parties who accept the contract are expected to understand caselaw and legal language—whether they should understand that the courts have deemed such agreements referring to rule to be a “clear and unmistakable” indication that arbitrability goes to the tribunal.  

Perwin replied that he does not expect the parties to read the case law. “I would never suggest that,” he said. But he quickly added that the parties “are required to read the [contract] language.” He cited the “overwhelming weight of the authority” to indicate that the incorporation of the rules is accepted and customary.

Perwin addressed the parties’ sophistication, which was an argument that the Does made against the effectiveness of the click-wrap agreement.  He said the Does introduced no evidence that they were not sophisticated, and added that the parties’ sophistication level is not even a relevant factor in the matter.  

He said that in applying an objective test—Is the contract clear and unambiguous?–as to whether the agreement applies doesn’t depend on an analysis of the parties’ sophistication. “This language is clear and unambiguous as a matter of law,” he said.

* * *

Thomas Seider, an attorney in the Tampa, Fla., office of Brannock Humphries & Berman, arguing on behalf of the respondents, the Does, opened by noting that arbitration is a matter of consent. He said the question is whether the respondents gave their consent to the arbitration proceedings.

Justice Ricky Polston strongly suggested that while looking at federal law, the AAA rules, and the incorporation by reference of the rules into the contract, that the rules indeed are a part of the contract.

Justice Polston asked why, in reading AAA Rule 7, it wasn’t clear and unmistakable that that arbitrators have the ability to decide the jurisdiction. Focusing on the contract language, Seider argued that the Does only needed to read the rules if they needed to know, for example, about how the arbitration would be conducted, or the costs, not the “condition precedent” question of whether the case was subject to arbitration.

Justice John D. Couriel was skeptical. “The trouble with the argument is that none of this is in the contract,” he said.  Seider replied that if the consumer gets to the rule, then the party would understand that the arbitrator decides.  But even then, Seider noted, the language itself was “permissive but not mandatory.”

Couriel pressed Seider on the language.  Seider said that the AAA Rule 7 language—”The arbitrator shall have the power to rule on his or her own jurisdiction”—did not exclude a decision by a court on arbitrability.

Justice Alan Lawson asked about the agreement language and whether it satisfied the “clear and unmistakable” standard for a delegation, which derives from First Options of Chicago Inc. v. Kaplan, 514 U.S. 938 (1995 (available at http://bit.ly/2WEXGnF). He said it is “basic contract interpretation,” and “you apply the basic rules” on whether the contract reflects what the parties agreed to—in this instance, whether there was a “clear and unmistakable” parties’ agreement on the arbitrator deciding arbitrability. He asked “whether the rules count” in determining what the parties agreed to under the contract.

Seider agreed that the rules count in reading the contract, and Lawson asked whether the rules’ language is clear and unmistakable evidence. Lawson said that in analyzing the contract, look at the whole agreement, leaving the rules to return to the first part of the contract, “the more conspicuous part”: The first page which incorporates the AAA rules.  With that, said Lawson, “it just seems pretty straightforward” that the parties agreed to arbitrate.

Seider said that “the clear and unmistakable standard is not supposed to require these inferential leaps” with cross-referenced rules, which he said are recognized by the U.S. Supreme Court as arcane.  He said people do not understand the concept of arbitrability.

Justice Jorge Labarga was more sympathetic to the respondents’ argument.  He said that consent must be waived for arbitration, adding, “And what I’m hearing here today is that the agreement–they can attach as many attachments as they want to online, you can have 100,000 pages, and in there, in a footnote, someplace they can say, ‘Oh, by the way the arbitrator gets to decide whether this goes to arbitration or not,’ and that is OK as long . . . as it is a part of the text of the package.”

Seider quickly agreed that burying provisions in the agreement will become the norm. Justice Lawson asked about the need for conspicuous language, and Seider conceded that First Options doesn’t discuss that point in defining “clear and unmistakable.”

Justice Couriel asked Seider to clarify if there is a clear statement in the contract on how it will affect people’s rights, and how Airbnb encourages parties to read terms and conditions carefully. He asked if the advisory was “over and above” the First Options requirements.

Seider agreed that Airbnb advises parties to read the terms and conditions. He countered that reading and understanding about 60 pages of procedures and rules are hard to understand and is not clear and unmistakable.

Justice Polston wasn’t convinced, noting that the rules “were there.” Seider said they were, but again stressed that a court arbitrability determination was not excluded by AAA Rule 7.

Justice Carlos G. Muñiz asked Tom Seider to clarify why previous case law has been overwhelmingly against the petitioners. Seider said that early decisions didn’t thoroughly analyze the question of arbitrability. He pointed out a lack of discussion on how contract language can be clear and unmistakable. “The analytical foundation of these cases really isn’t there,” concluded Seider.

* * *

Airbnb attorney Joel Perwin rebutted, noting five points:

1. Every case is decided on its own merits and facts.  

2. The test for clear and unmistakable is a matter of federal law. Justice Polston pushed back and agreed that arbitrability is a federal concept, but strongly noted that contract review is state law.  

3. Party sophistication is not an issue because “clear and unmistakable” is an objective test. There is no evidence to prove that the Does are not sophisticated enough to understand the click-wrap agreement, Perwin emphasized, but regardless, it is an objective test.

4. Addressing Tom Seider’s argument that Rule 7 is permissive, Perwin noted that the language is clear enough for anyone reading it to understand that the arbitrator has “the power” to decide the matter. That is why the courts have said that when arbitrators are designated to get the power under the contract and nothing is said about the courts, it means the arbitrators have the power to decide alone.

5. The statute and contract should not be interpreted to be unreliable on arbitrability. In the past, courts have been clear on these issues.

* * *

The Nov. 4 oral arguments in Airbnb v. Doe, which were televised and streamed on several web outlets including Facebook, are archived on YouTube at https://bit.ly/3EJ0rqa.  The full Florida Supreme Court docket on the case, with links to documents, is available at https://bit.ly/3GYoZxe.

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The author, a CPR 2021 Fall Intern, is an LLM candidate at the Straus Institute for Dispute Resolution, at Malibu, Calif.’s Pepperdine University Caruso School of Law.

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Increased Mobile Health Triggers Increased FTC Enforcement, and Points to a Need for Dispute Prevention Efforts

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By Janice L. Sperow

The pandemic changed how we work, how we shop, how we communicate, and how we “meet.” It changed our world’s “normal.”

Most significantly, it changed the healthcare industry, but not only with new vaccines and protocols. It revolutionized the way we maintain our health and wellness, as healthcare app development now shapes the future of medicine.

That, in turn, provides an opportunity for a new application for alternative dispute resolution—specifically, a recent Federal Trade Commission statement puts health-care industry managers on notice that they should institute dispute prevention steps and protocols to avoid potentially costly civil penalties as their products face closer federal scrutiny.

Spurred by rapid significant advances in mobile technology, artificial intelligence, and the internet of things, medical apps have accelerated at an unprecedented rate. Even before the pandemic’s uptick in the use of healthcare mobility tools, the Physicians Practice medical publication conducted a mobile health survey in 2018 and found that more than 75% of respondents used some form of mobile health solutions on a weekly basis.

Since the pandemic, the use of mobile applications in healthcare, MedTech (see www.medtech.org), and eHealth has skyrocketed. A $21.3 billion market in 2017, the global mobile health market is anticipated to reach $151 billion by 2025. See, e.g., Grand View Research, mHealth Apps Market Size, Share & Trends Analysis Report By Type (Fitness, Medical), By Region (North America, APAC, Europe, MEA, Latin America), And Segment Forecasts, 2021–2028 (February 2021) (available at https://bit.ly/2Zqo5bR).

The U.S Food and Drug Administration defines a health app as mobile software that diagnoses, tracks, or treats disease. A wellness app uses mobile software to enhance or track overall user health. They can and do address every facet of life impacting wellness from mental, physical, social, environmental, nutritional, behavioral, to even spiritual factors.

In response to the market’s growth, the Federal Trade Commission issued its “Statement of the Commission on Breaches by Health Apps and Other Connected Devices” (Sept. 15) (available at https://bit.ly/3bgLv63).  The statement stresses the FTC’s commitment to protecting private medical and health information inputted into these apps and devices, and explains the FTC’s Health Breach Notification Rule in more detail. (The Rule is available at https://bit.ly/3nFzkpk.) The Statement unequivocally declares the Rule’s scope and the FTC’s intention to enforce the rule.

The FTC’s Health Breach Notification Rule has been in effect since 2009, when the American Recovery and Reinvestment Act of 2009 (text at https://bit.ly/3pGHtMy) became effective. The Rule addresses the security of personal health records, or PHR, defined to include an electronic record of identifiable health information on an individual that can be drawn from multiple sources and that is managed, shared, and controlled by or primarily for the individual. See 16 C.F.R. § 318.2(d).

“PHR identifiable health information” includes “individually identifiable health information,” as defined in section 1171(6) of the Social Security Act. See 42 U.S.C. 1320d-6. It also includes individual information provided by or on behalf of the individual that actually identifies or reasonably can be used to identify the individual. See 16 C.F.R. § 318.2(e) (“reasonable basis to believe that the information can be used to identify the individual”).

The Rule applies to (1) vendors of personal health records; (2) PHR-related entities that interact with vendors of PHRs or HIPAA-covered entities by offering products or services through their sites; (3) PHR-related entities that access information from or send information to a PHR; (4) PHR-related entities that process unsecured PHR identifiable health information as part of providing their services; and (5) third-party service providers for PHRs vendors.

The Rule does not apply to HIPAA-covered entities or any other entity to the extent that it engages in activities as a business associate of a HIPAA-covered entity.

Under the Rule, vendors of PHRs and PHR related entities must report a “breach of security” involving PHRs to the FTC, the consumers, and in some cases to the media. Service providers that process information for PHR vendors and PHR related entities also have a duty to notify their business customers of a security breach.

Typically, these service providers handle data storage or billing as a third-party provider. The Rule defines a “breach of security” as the acquisition of unsecured, PHR identifiable health information without the individual’s authorization.

Upon discovering a security breach, the entity must notify the required recipients within 60 days; but it must alert the FTC within 10 business days if the breach involves more than 500 individuals. Noncomplying entities face civil penalties of $43,792 per violation per day.

Rule Clarification

The FTC’s new Statement clarifies the Rule’s scope and application. It explains that the Rule covers PHRs vendors that contain individually identifiable health information created or received by health care providers. The Statement then specifies that health app and connected-device developers qualify as “health care providers” under the Rule because they “furnish health care services or supplies.”

Consequently, the Rule’s protections encompass any personally identifiable information developers create or receive that relates to the past, present, or future physical or mental condition of an individual; the provision of healthcare to an individual; or the past, present, or future payment for healthcare to an individual.

The Statement also emphasized that an electronic health record must draw information from multiple sources and be managed, shared, or controlled by or primarily for the individual before the FTC will consider it to be a PHR under the Rule.

The Statement, however, interprets multiple sources liberally to include other non-health related information. An electronic health record can draw information “from multiple sources” in the context of a health app, for example, through a combination of consumer inputs and application programming interfaces.

Hence, the Rule would apply to an app if it collects information directly from consumers and can technically draw information through an application programming interface that enables syncing with a consumer’s fitness tracker or phone, even if only one source provided the health information. For example, the Rule would cover a blood sugar monitoring app that collects health information only from the user’s blood sugar levels if it then uses non-health information from the user’s phone, such as date, time, or percentage figures.

The Statement also warns entities that the Rule does not limit a “breach of security” to cybersecurity intrusions, illegal behavior, or ill-intentioned activities. Rather, any unauthorized access will trigger the Rule’s notification duties, much like under HIPAA. Thus, a health app developer faces a reportable breach of security if it accidentally discloses private health information to a third party without the individual’s consent.

Rule Enforcement Change

In addition to clarifying the Rule’s scope, the FTC’s new Statement also signaled an enforcement sea change. Even though the Rule was enacted more than a decade ago, the FTC has not enforced it once since 2009.

The FTC admitted that it has not used the Rule. The Statement cautioned, however, that the FTC considers the Rule’s notification duties critical now in light of the surge in health apps and connected devices. The Statement explicitly declares the FTC’s intent to notify entities of their continuing obligation to publicize breaches under the Rule.

The Statement’s message is unequivocal: the FTC will enforce the Rule and its notice requirements from now on.

A Dispute Prevention Opportunity

Instead of being in a “more bad news” category, healthcare managers should file the FTC’s Statement as a new opportunity to prevent future disputes. The FTC Statement serves as a warning, affording the healthcare industry some time to implement strategies to protect itself from class actions, mass claims arbitration, and other costly disputes. By taking the warning seriously, the industry can assess and then minimize its risk.

The bottom line: Healthcare and wellness app developers should assess the Rule’s application to their services and the adequacy of their current security measures in order to prevent triggering the Rule’s notification provisions or even the possibility of a noncompliance finding.

And then they can breathe a sigh of relief if the current measures adequately protect the business, or implement new measures now to upgrade them until they do. Either way, the FTC handed the healthcare industry an opportunity to prevent costly future risk.

* * *

The author is a full-time neutral, arbitrator, mediator, dispute prevention facilitator, and Hearing Officer specializing in mass claims, healthcare, technology, employment, and all commercial matters. She works on domestic and international matters, and is based in La Mesa, Calif.

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The Law on Evidence for Foreign Arbitrations Returns to the Supreme Court

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By Bryanna Rainwater

The question of whether a foreign or international tribunal includes arbitration panels for the purposes of providing evidence under a federal court order is back before the U.S. Supreme Court. The case is being briefed and is expected to be added for a conference in which the Court’s members will decide whether to hear the case.

The issue had been set as one of the first tasks for the Court in the opening week of the new 2021-2022 term, earlier this month.

 But in September, the Court dismissed the case at the parties’ request, and the issue about the reach of 28 U.S.C. §1782—”Assistance to foreign and international tribunals and to litigants before such tribunals”–disappeared from the court’s docket.

The latest case, ZF Automotive US, Inc., v. Luxshare, Ltd., Docket No. 21-401, filed Sept. 10, presents the identical question as the dismissed case, with one key difference. The issue presented is:

Whether 28 U.S.C. § 1782(a), which permits litigants to invoke the authority of United States courts to render assistance in gathering evidence for use in “a foreign or international tribunal,” encompasses private commercial arbitral tribunals, as the U.S. Courts of Appeals for the 4th and 6th Circuits have held, or excludes such tribunals, as the U.S. Courts of Appeals for the 2nd, 5th and 7th Circuits have held.

The difference in the new version of the case, according to the petitioners, is that it is a “live controversy” and therefore “free from a potential jurisdictional hurdle” that plagued Servotronics, Inc. v. Rolls-Royce PLC, No. 20-794, the case that was dismissed by the nation’s top Court on Sept. 29.

The hurdle referred to by the ZF Automotive petitioners, a Michigan auto parts manufacturer and a subsidiary of Germany’s ZF Friedrichshafen AG, and two executives associated with the company, is Servotronics’ mootness, because the discovery in the case was no longer needed in the face of the arbitration proceedings and the award. (The cert petition is available here.)

Servotronics had sought to end the Circuit split about the interpretation of the meaning “foreign international tribunal.” The Fourth and Sixth U.S. Circuit Courts of Appeals have held that 28 U.S.C. § 1782 encompasses private commercial arbitrable tribunals, as noted in the new ZF Automotive petition and its question presented, while the Second, Fifth, and Seventh Circuits have gone with a more limited approach which does not consider these private arbitrable tribunals to fit within the meaning of  the statute and, therefore, have denied discovery requests.

Servotronics was scheduled for oral argument on Oct. 5, the second day of the Court’s term, but removed from the calendar after the arbitration in the case was conducted in the spring, and the parties moved to dismiss the case in the wake of a July award.

For more on the Servotronics case dismissal and the case history, see Bryanna Rainwater, “Case Dismissed: Supreme Court Lightens Its Arbitration Load as Servotronics Is Removed from 2021-22 Docket,” CPR Speaks (Sept. 8) (available here).

The ZF Automotive petitioners urge the Court to clear up the circuit split and decide the true interpretative meaning of §1782. They argue that Servotronics amicus briefs warn that without resolving the §1782 issue for private international tribunals, there could be a disincentive for parties from entering into international contractual agreements.

Respondent Luxshare, a Hong Kong limited liability company, bought ZF AG’s Global Body Control Systems business in August 2017. During this transaction, the parties signed a Master Purchase Agreement which provides that disputes are to be governed under German law. The petitioners noted that Luxshare waited to file a §1782 application for discovery for more than two years after the transaction’s closing in pursuit of the purchaser’s fraud allegations.

Because the arbitration agreement specified that the DIS—that is, the German Arbitration Institute–would provide the panel to arbitrate the issues between the parties, the petitioner argues that the panel does not satisfy the requirement of being a “tribunal” within the meaning of §1782.

Luxshare filed the original claim in Michigan’s federal Eastern U.S. District Court under §1728 to seek discovery—documents and testimony–from ZF Automotive US and the officers before the arbitration. U.S. Magistrate Judge Anthony P. Patti granted the discovery in a limited scope, and ZF Automotive US’s subsequent motion to stay was denied by the district court.

Arguing that the interpretation of the Sixth Circuit—which oversees Michigan cases–is mistaken, the petitioners cite legal scholars, the Court’s own precedent and dictionary definitions to support their proposition that §1728(a) “includes only governmental or intergovernmental adjudicative bodies, and excludes private arbitrators that have no sovereign authority.”

In its reply brief, Luxshare counters that the case is a poor vehicle to examine the statute. “[T]he question presented may not be dispositive of this case, and may not even be necessary to resolve this case,” the reply notes, because even if the foreign tribunal definition included the DIS arbitration panel, their adversaries maintain that there are case-specific reasons for vacating discovery in the case. (The reply brief in opposition to certiorari is available here.)

Moreover, the reply notes that, like Servotronics, the case is likely to become moot before the Court can rule due to the unlikelihood of the petitioners agreeing to extend the time for arbitration.

In fact, the petitioners filed an Oct. 15 application for a Supreme Court stay on discovery to avoid the mootness issue with Associate Justice Brett Kavanaugh, who is the Court’s justice for the Sixth Circuit. (Available here.)

In a response filed yesterday, Luxshare contended that the ZF Automotive petitioners had not met the standards to grant a stay, and added that the stay would injure the company because it “will deny Luxshare the basic right to have its fraud claims against ZF US adjudicated based on the evidence.” 

Luxshare also wrote in its reply that the Court should deny the stay “for the additional reason that it would disserve the public interest, by both frustrating Congress’s purpose in enacting § 1782(a) and permitting fraud to go unremedied.”

An order had not been issued as of this post.

In addition:  ZF Automotive is no longer alone before the Court on § 1782.  The Luxshare brief advocating that the Court deny the cert petition points out that AlixPartners, LLC v. Fund for Protection of Investor Rights in Foreign States, No. 21-518, covers the same turf.  The Oct. 5 petition (available here) for certiorari asks, similarly, “Whether an ad hoc arbitration to resolve a commercial dispute between two parties is a ‘foreign or international tribunal’ under 28 U.S.C. § 1782(a) where the arbitral panel does not exercise any governmental or quasi-governmental authority.”

* * *

The author, a second-year student at Brooklyn Law School, is a 2021 CPR Fall Intern. Alternatives editor Russ Bleemer contributed to this post.

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CPR Releases Update to Employment-Related Mass Claims Protocol

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The International Institute for Conflict Prevention and Resolution (CPR), working with a diverse task force of leaders in employment law and alternative dispute resolution (ADR), has launched an updated version of its Employment-Related Mass Claims Protocol (the “Protocol”). The Task Force included leading counsel from the plaintiff’s bar, in-house employment counsel, corporate defense attorneys and neutrals (arbitrators and mediators).

The original Protocol was launched in November 2019.  It was reviewed by U.S. District Court Judge Edward M. Chen, of the U.S. District Court for the Northern District of California, in November 2020, in McGrath v. DoorDash, Inc., No. 19-cv-05279 (N.D. Cal. Nov. 5, 2020), who found that “the terms of the Mass-Claims Protocol appear fair.”  Working together over the past 10 months, the Task Force sought to make improvements and further enhance the Protocol. 

An initial set of revisions by the Task Force was released in April 2021, and incorporated CPR’s then newly-launched Administered Employment Arbitration Rules as well as other clarifying changes. See CPR Speaks, April 14, 2021.  Since then, the Task Force has continued to work together to develop the current version of the Protocol, which includes a novel approach to selecting neutrals that will enhance both efficiency and diversity.  The updated version also provides greater detail in describing the mediation process and other procedures.

The procedure outlined in the Protocol applies where it has been incorporated into an agreement between the parties, either before or after a dispute arises, and where there are 30 or more similar cases filed with CPR against one company.

The procedure requires fast track arbitration of randomly selected test cases while proceedings in the other cases are paused. The awards from those cases are anonymized and provided to a mediator to work with the parties and their counsel in trying to identify a global framework for resolving the remaining cases.  If the mediation is successful, each person who brought an arbitration will be presented with an opportunity to settle their case according to the global framework or to proceed with their arbitration. If the mediation fails to identify a global framework, then any of the parties may opt out of the arbitration process and go to court.

Distinguishing features of the Protocol include:

  • Requiring within the Protocol itself that certain due process protections be afforded to employees or others who file cases.
  • A novel fee structure that does not require the company to pay all filing fees up front but instead collects an upfront initiation fee followed by fees paid as each case is addressed.
  • Consistent with CPR’s Diversity Commitment, nominating a diverse pool of arbitrators from which the parties will choose the arbitrators who ultimately will resolve their cases.
  • Innovative mechanisms to encourage all parties to reach a faster resolution of their cases, providing parties with the opportunity and incentives to reach a global framework for resolving all of their cases before proceeding with more arbitrations.

In keeping with its commitment to the parties, CPR sets forth the procedures in detail so that the parties may understand what is expected of them and are provided a practical pathway toward resolution. CPR is also willing to work with the parties on agreed-upon variations to these procedures.

“It has been a privilege to work with and be guided by the experiences and perspectives of this Task Force,” noted Allen Waxman, President & CEO of CPR, adding, “With the benefit of the members’ input, the Protocol offers an innovative procedure for employers and their employees or contractors to resolve their disputes when many arise at once – providing the parties with more options toward finding a resolution.”

Jahan Sagafi, partner of Outten & Golden, Task Force Co-Chair, and a lawyer who frequently represents workers in employment disputes, stated that “while I am very concerned about Supreme Court precedent allowing employers to force workers to submit to individual arbitration, given those realities, CPR’s Protocol provides a fair process to resolve those claims efficiently.  CPR should be commended for considering a variety of perspectives from the Task Force in completing the Protocol.”

“CPR’s Protocol represents a valuable contribution toward the resolution of many similar employment claims,” commented Task Force Co-Chair Aaron Warshaw, a partner in Ogletree, Deakins, Nash, Smoak & Stewart, a law firm that represents management and companies in labor disputes, “The Protocol is an important option for companies putting in place arbitration programs and one that should be seriously considered.”

“CPR has consistently been a leader in offering innovative ways to resolve disputes,” observed the Honorable Timothy K. Lewis, Task Force member, arbitrator and a retired judge on the U.S. District Court and Third U.S. Circuit Court of Appeals, adding, “The Protocol is another such offering for the complex challenges posed by the filing of a mass of cases. Its procedures reflect careful considerations to foster resolution in a fair and efficient fashion. In addition, the Protocol’s commitment to greater diversity in the pool of candidates who will be selected to arbitrate cases is also a meaningful step in addressing the lack of diversity and inclusion in the field of ADR.”

For more information, see the File a Case or Employment Disputes sections of CPR’s website, or contact Helena Tavares Erickson at herickson@cpradr.org.  Also review Frequently Asked Questions for the Protocol.

ABOUT CPR

Established in 1977, CPR is an independent nonprofit organization that promotes the prevention and resolution of conflict to better enable purpose.

The CPR Institute drives a global prevention and dispute resolution culture through the thought leadership of its diverse member companies, leading mediators and arbitrators, law firms, individual practitioners, and academics. It convenes committees to share best practices and develop innovative tools. It connects thought leaders through global, regional, and smaller events. It publishes a monthly journal on related topics and advocates for expanding the capacity for dispute prevention and resolution globally through a variety of initiatives.

CPR Dispute Resolution provides leading edge dispute management services – mediation, arbitration, early neutral evaluation, dispute review boards and others – as well as training and education. It is uniquely positioned to resolve disputes by leveraging the resources generated by the leaders who participate in the CPR Institute.  It has deep experience in dispute management, a deep bench on its global Panel of Distinguished Neutrals, and deep expertise across a variety of subject areas.

Visit cpradr.org to learn more.

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Next at the Supreme Court: Badgerow’s Attempt to Reevaluate FAA Jurisdiction

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By Bryanna Rainwater

The U.S. Supreme Court has set the oral argument for Nov. 2 in Badgerow v. Walters, No. 20-1143, now the sole remaining arbitration case on the docket for the new term beginning next month.

The issue the nation’s top Court will examine is whether federal courts have subject-matter jurisdiction to confirm or vacate an arbitration award under Sections 9 and 10 of the Federal Arbitration Act when the only basis for jurisdiction is a dispute regarding a federal question.

Section 9 deals with confirming an award, and Section 10 provides the limited grounds that can overturn an award and thereby defeat a move to confirm.

Last week, the Court removed the first arbitration case it had taken for the term from its argument schedule and dismissed the case after a party request.  The case, Servotronics Inc. v. Rolls-Royce PLC, et al., Docket No. 20-794, would have examined the parameters of the discretion granted to district courts under 28 U.S.C. §1782(a) to render assistance in gathering evidence for use in “a foreign or international tribunal” by determining whether the statute includes private commercial arbitral tribunals.

For more details on the dismissal on this blog, see Bryanna Rainwater, “Case Dismissed: Supreme Court Lightens Its Arbitration Load as Servotronics Is Removed from 2021-22 Docket,” CPR Speaks (Sept. 8) (available at https://bit.ly/39oFdAx).

The Fifth U.S. Circuit Court of Appeals in Badgerow affirmed the district court’s decision that exercised subject-matter jurisdiction over the plaintiff’s petition to vacate an arbitral award stemming from an employment dispute, denying remand of the issue. Badgerow v. Walters, 975 F.3d 469 (5th Cir. Sept. 15, 2020) (available at https://bit.ly/394xUh3).

Petitioner Denise Badgerow–a former employee of REJ Properties Inc., a Louisiana-based financial services firm that was a unit of Ameriprise Financial Services Inc.–signed an agreement to arbitrate any employment disputes with Ameriprise and any of its affiliates.

She was terminated and initiated arbitration against company officials alleging gender discrimination and other Title VII and equal pay claims before a Financial Industry Regulatory Authority panel. Ameriprise successfully moved to compel arbitration in a separate federal suit and Badgerow added a declaratory judgment claim against Ameriprise to the FINRA arbitration. 

Badgerow sought damages against the REJ principals for tortious interference of contract for a violation of Louisiana’s “whistleblower” law. Id. at 471. The FINRA panel dismissed all of Badgerow’s claims against the principals and Ameriprise with prejudice.

In May 2019, Badgerow brought a new Louisiana state court action to vacate the FINRA award that dismissed her complaints, alleging fraud by the principals against the FINRA arbitrators. The principals removed the case to Louisiana’s Eastern U.S. District Court. Badgerow filed a motion to remand, asserting the lack of federal subject-matter jurisdiction.

The district court held that there was federal subject matter jurisdiction, and Badgerow appealed the denial of her motion to remand to state court.

The Fifth Circuit relied upon the approach in Vaden v. Discover Bank, in which the Supreme Court adopted the “look through” approach to determining federal jurisdiction in actions that compel arbitration under FAA Section 4. Vaden v. Discover Bank, 556 U.S. 49 (2009) (available at https://bit.ly/3Ca42MA). Under this approach, a federal court should “look through” the Federal Arbitration Act claims to the “substantive controversy” to determine if they could have been brought in federal court.

Badgerow disagreed with the district court’s four-step analysis for conveying federal jurisdiction in her case because she did not include Ameriprise in her state-court action, but the district court rejected this argument, holding, “’Badgerow cannot deprive the Court of subject matter jurisdiction over an action to vacate the award by stripping off a single state law claim.’” Id. at 474 (quoting the district court opinion).

The Fifth Circuit noted that a close reading of Vaden vindicated the district court’s reasoning. Since Vaden’s rule is “if, save for” the arbitration agreement, a claim could be held in federal court, then there is federal jurisdiction.

The Fifth Circuit agreed that this analysis does not fail in an action to vacate the award by “stripping off a single state law claim.” Id. The court decided that since Badgerow’s claims “all arose from the same common nucleus of operative fact” that “the district court correctly found that the federal claim against Ameriprise in the FINRA arbitration proceeding meant that there was federal subject-matter jurisdiction over the removed petition to vacate the FINRA arbitration dismissal award.” Id.

The case now stands before the Supreme Court, which granted cert on May 17.

In her petition, Badgerow lays out the clear question of “whether Vaden’s ‘look through’ approach applies to motions to enforce or vacate arbitration awards under [FAA] Sections 9 and 10.”

The petitioner noted that there is disagreement among district judges regarding the Vaden analysis as it relates to FAA enforcement of arbitral awards, and that the Fifth Circuit itself divided 2-1 on the Vaden look-through approach for motions to confirm in a case addressed while Badgerow was pending. Quezada v. Bechtel OG & C Constr. Servs. Inc., 946 F.3d 837 (5th Cir. 2020) (available at https://bit.ly/3lrMZ1X).

The cert petition says that the divisiveness between the courts and the confusion surrounding the FAA language are reasons to question the Fifth Circuit’s decision in asking the Supreme Court to clarify whether Vaden’s approach to federal jurisdiction extends from FAA Section 4 to Sections 9 and 10.

While the steady stream of Supreme Court arbitration cases has generated a concurrent steady stream of regularly appearing parties as amicus curiae, oddly, at this writing, less than two months ahead of arguments, no friend-of-the-court briefs have been filed either on the successful cert petition or the case itself. The case documents, including the party briefs and any future amicus filings, can be found on the Supreme Court docket page at https://bit.ly/3zfSqps.

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The author, a second-year student at Brooklyn Law School, is a 2021 CPR Fall Intern.

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‘Understanding’ Mediator Gary Friedman on His Adventure in Politics

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By Mylene Chan

Earlier this month, Gary Friedman, co-founder of the Center for Understanding in Conflict, of Santa Rosa, Calif., conducted a video breakfast roundtable titled “Inside Out: Confessions of a Mediator in Politics,” hosted by the Association for Conflict Resolution-Greater New York Chapter and the City University of New York Dispute Resolution Center at John Jay College.

Friedman’s talk focused on events described in a Politico article, “‘I Got Obama’d’: A California conflict-resolution guru entered politics thinking he could fix it. Instead, it brought a punishing counterattack.” The May 1 article, an excerpt from “High Conflict,” a book by Amanda Ripley published in June by Simon & Schuster (see https://bit.ly/3yT3ee0), can be found at https://politi.co/3iOX9tf.

The excerpt and book recount Friedman’s political term “on his local Community Services District Board of Directors, a five-member council in charge of area roads and water management,” in Muir Beach, Calif., from 2016 to 2021.

Friedman’s brief political life exemplifies that even experienced mediators can be easily pulled into an adversarial mode, away from peace-making. But, according to Friedman, if one refocuses, the Understanding Model of mediation, which Friedman developed with his Center for Understanding in Conflict partner Jack Himmelstein, can help resolve conflicts.

For more than 40 years, Friedman has lived in Muir Beach, which is governed by the five-member board.  Hoping to bring “reinvigorate democracy” in his hometown, according to the book excerpt, Friedman ran for office in 2015 and was elected. 

Unfortunately, during Friedman’s governance as board president, he violated principles of his Understanding Model. Friedman explained in his talk that he was blinded by power and the conflicts that were directly targeted him. As a result, he said his litigator inner-self emerged–he was a trial lawyer before turning to mediation–and he became defensive, combative, and aggressive.

Friedman said he ended up creating more polarization and alienated his community in what he coined his “period of derangement.”

Understanding, according to Friedman, is an underused power that has the potential to help people make better solutions. The loop of understanding, however, does not work if it is disingenuous. Friedman intimated that while governing in his village, he used understanding as lip service so that he could soften others in attempts to convince them that they were wrong. 

Friedman said that his Understanding Model is based on putting the responsibility on the disputants–not the professional–to solve the problem. This means believing in people and giving them power because ultimately it is the disputants who know best about what solutions will work.

But when Friedman acted as the board president, he said he took power from his constituents instead of giving power. Friedman did not believe in the people’s ability to solve problems themselves; Friedman said he felt he knew best.

Mediators practicing the Understanding Model are expected to proceed with the disputants by agreement on how to work together. By contrast, when Friedman was in charge, he explained that he made numerous unilateral decisions that angered his constituents or fellow board members.

For example, he eliminated the tradition of having snacks and socializing time at board meetings.  Even when constituents vehemently objected, he limited each person to three minutes of speaking time and prohibited anyone from raising issues not on the agenda.

Furthermore, in a town of just 250 people, Friedman established 23 subcommittees that were poorly attended. Friedman’s critics complained that he was arrogant, power hungry, and Napoleon-like.

Two years into a five-year term, Friedman was removed as board president. He said about himself, “I felt actually humiliated by my behavior . . . and how I became untethered.”  When Friedman saw how far he had fallen from his own ideals, he said he started to probe internally what was truly important to him and why.  He said his mediator “inner-self”–which depends on self-awareness–re-emerged.

Realizing that what he wanted was to help his neighbors understand each other and to make conflicts useful, Friedman began voting for his opposition intentionally to undo the conflicts he created.  He also blurred the lines between the old board members and his allies on the new board through voting on both sides. Most important, he said, he made efforts to genuinely connect and understand his constituents, one by one.

Before Friedman stepped down from the board, he reconciled with his community and accomplished some political agendas he set out to do initially.  Roads were repaired, the water rate was raised, and the tone of the meetings improved.

At the roundtable, Friedman noted that the Politico book excerpt has gotten a lot of attention. “I’ve been hearing from thousands of people that came out of the woodwork all over the world . . . and I think that my failure as a politician is really meant to encourage all of us, because I not only failed but I survived the failure.”

In the end, Friedman said he repaired the conflicts he created using the Understanding Model.

The Aug. 5 ACR/John Jay breakfast roundtable is available on video at https://bit.ly/3sku9Na. For another view of the event, see John Lande, “More on Gary Friedman’s Not-So-Excellent Adventure in Politics,” Indisputably.org (Aug. 8) (available at https://bit.ly/3k1EsSC).  

For more on the Understanding Model, see Mylene Chan, “Highlights from the June Session of the Harvard Law School Program on Negotiation ‘Mediating Disputes’ Training,” CPR Speaks (June 24) (available at https://bit.ly/37SaTx2).

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The author, an LLM candidate at Pepperdine University Caruso School of Law’s Straus Institute for Dispute Resolution, in Malibu, Calif., is a 2021 CPR Summer Intern.

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Highlights from Last Month’s Harvard Program on Negotiation’s Advanced Mediation Workshop on Mediating Complex Disputes

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By Mylene Chan

The Harvard Law School Program on Negotiation conducted its Advanced Mediation Workshop: Mediating Complex Disputes from July 26-30. Forty-eight participants from diverse mediation practices around the world gathered to attend the July sessions taught by faculty members David Hoffman, Lawrence Susskind, Susan Podziba, Samuel Dinnar, and Audrey Lee.

The program was divided into two parts: (1) a focus on two-party complex mediations with potential court filings, and (2) a focus on multiparty, multi-issue public dispute mediation.  

During the first two days, the faculty addressed the main features of two-party complex mediations, such as ethics, breaking impasses, the use of caucuses versus joint sessions, implicit bias, and the art of co-mediation. Many of the concepts are laid out in “Mediation: A Practice Guide for Mediators, Lawyers, and Other Professionals,” by David A. Hoffman and other contributors (Massachusetts Continuing Legal Education, 2013).

The mediation strategy and process design espoused by this faculty is structured on Roger Fisher’s interest-based model, as outlined in the classic “Getting to Yes: Negotiating Agreement Without Giving In,” by Roger Fisher, William Ury, and Bruce Patton (Penguin Books 2011 (originally published in 1981)). The basic principles call for separating people from the problem and shifting from interests from positions. 

Their theory is also heavily influenced by the framework of the core concerns explored in “Beyond Reason: Using Emotions as You Negotiate,” by Roger Fisher and Daniel Shapiro (Penguin Books 2005). Core concerns–or emotional interests–are human wants that underlie every negotiation. They include autonomy, appreciation, affiliation, status, and role.

Faculty member Audrey Lee explained that exploring disputants’ core concerns allows mediators to shift the focus to disputants’ real interests and to promote better understanding, thus facilitating agreement.

During the first two days, the workshop participants practiced co-mediating in two cases involving commercial contracts, intellectual property, and employment disputes.  Many participants commented that they had never co-mediated, and that they tended to be more driven by positions than interests.  Some added that they struggled to be creative in devising ways to expand the pie, noting that they had to turn off their combative litigator instincts and the urge to render advice and advocate.

The program then transitioned from two-party matters to multiparty, multi-issue public disputes. Lawrence Susskind, a leader in the development of public dispute mediation, introduced these complex public disputes, explaining that their form and substance shift.  The number of parties can range from as few as 30 to beyond 100, many of whom may be unfamiliar with professional facilitation, and with more parties potentially joining over the course of the dispute resolution process.

An additional challenge, Susskind explained, is that the parties may represent stakeholder groups without full empowerment to speak on the groups’ behalf.

Also, the agenda is likely to keep changing because very often parties continue to reshape or argue about it.

Furthermore, scientific and technical uncertainty and disagreement abound.  Examples of these amorphous dispute resolution settings are global treaty negotiations, budgetary negotiations, environmental policy disputes, and public dialogues on issues such as police conduct. A deeper exploration of these issues can be found in “Breaking Robert’s Rules: The New Way to Run Your Meeting, Build Consensus and Get Results,” by Lawrence E. Susskind and Jeffrey L. Cruikshank (Oxford University Press 2006).

Susan Podziba then elaborated on the process she uses in mediating these complex cases. She has worked with the United Nations and individual national governments to resolve intractable disputes with widespread and long-lasting ramifications. She said she begins with an assessment by reading all the publicly available information, followed by discussions with people who have lived through the conflict.

In many cases, parties have not been identified, and therefore, Podziba said she starts by talking to the parties who are obvious, and from those conversations identifying additional parties that should be participating.

Once the first phase is concluded,  Podziba develops the process design, aimed at enabling diverse groups to work together to resolve a complex conflict. The process design typically includes constructing five basic building blocks: (1) the product (the form of agreement such as joint statements or MOUs) that will result from the negotiations; (2) the complementary goals that need to be achieved before agreement can be reached; (3) outreach to and consultations with outside experts; (4) trusted information (that is, information from objective sources that can correct biases); and (5) ground rules and logistics relating to the negotiation session itself.  For more details, see “Civic Fusion: Mediating Polarized Public Disputes,” by Susan L. Podziba (ABA Publishing 2012).

The faculty prepared three complex public policy dispute mediation role-play sessions for the class. The first one concerned the reconstruction of the World Trade Center after 9/11, involving many public parties such as the New York state government, New York City, and the families of the deceased. Many participants who played the role of the families said that they felt the emotions.

After the day concluded, the faculty arranged for a guided group screening of a training video co-produced by CPR, publisher of CPR Speaks, and Harvard PON on the World Trade Center reconstruction. Details are available on Lawrence Susskind’s website, here.

The workshop participants also mediated the ethical dilemmas surrounding water shutoffs in older U.S. cities. Susskind said that his Massachusetts Institute of Technology research team–he is MIT’s Ford Professor of Urban and Environmental Planning–has mapped where U.S. local governments have shut off water supplies. 

After the role-play, many participants inquired about how to gain experience in public policy mediation. Susskind responded that public policy mediators are paid at an hourly rate and discussed the Consensus Building Institute, an international public policy mediation center Susskind founded in 1993.

On the final day of the workshop, Susan Podziba introduced the conflict over the construction of the Thirty Meter Telescope on sacred lands on Mauna Kea in Hawaii–a massive conflict involving foreign countries and many academic institutions.  After the simulation, many participants reflected on Podziba’s systematic process design and said that they will incorporate such a design into their mediation practice.

David Hoffman, who is credited with bringing collaborative law to the commercial sector via the firm he founded, the Boston Law Collaborative, ended by urging the attendees to consider being peacemakers:

[T]he opportunities to impact out there in the world exist in every one of those cases, when you think about the infinite dimensions of the human heart, and the opportunity we have when we enter the sacred space of people’s conflicts to heal those wounded hearts.  We have a mandate for mediation on a very deep and grand scale.

This Harvard workshop offered veteran mediators an opportunity to have experts critique their trade and to gain exposure to some of the cutting-edge theories and practices of mediation taught at Harvard Law School and its Program on Negotiation. 

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The author, an LLM candidate at Pepperdine University Caruso School of Law’s Straus Institute for Dispute Resolution, in Malibu, Calif., is a 2021 CPR Summer Intern. She participated in the Harvard program detailed in this post.

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UNCITRAL Completes a New Mediation Framework, Based on the Singapore Convention

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By Mylene Chan

Earlier this month, the United Nations Commission on International Trade Law adopted the UNCITRAL Mediation Rules, the UNCITRAL Notes on Mediation, and the Guide to Enactment and Use of the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation. 

Judith Knieper, Legal Officer at the UNCITRAL Secretariat, at a side forum on investor-state mediation, commented that these texts complete UNCITRAL’s mediation framework, with the milestone 2018 Singapore Convention on international settlement agreements as a pillar. 

Starting in 1980, UNCITRAL began to develop a mediation framework, which now includes the following:

  • UNCITRAL Conciliation Rules (1980) (updated in 2021).
  • UNCITRAL Model Law on International Commercial Conciliation (2002) (amended in 2018).
  • UNCITRAL Guide to Enactment and Use of the 2002 Model Law (2002) (replaced in 2021).
  • UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation (2018) (amending the 2002 Model Law). See page 2 of UNCITRAL Working Document 1073 here.
  • The United Nations Convention on International Settlement Agreements Resulting from Mediation (2018), commonly known as the “Singapore Convention.”
  • UNCITRAL Mediation Rules (2021) (updating the 1980 Conciliation Rules)
  • UNCITRAL Notes on Mediation (2021).
  • Guide to Enactment and Use of the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation (2021) (replacing the 2002 Guide) (available in the Working Document linked above). 

These texts provide a means for the harmonization of laws, procedural rules, and enforcement mechanisms for international mediation. The most significant tool for international commercial dispute resolution is the Singapore Convention, which enables enforcement of mediated settlement agreements among its signatories.

As a result of the adoption of the Singapore Convention, international businesses now have an effective alternative to litigation and arbitration in resolving cross-border disputes.  Judith Knieper said that 54 states had signed the Singapore Convention, and she said she hoped that more will join as many states are currently engaged in the ratification process.

The UNCITRAL Secretariat has invited CPR to participate as an observer delegation to its Working Group II deliberations, and solicited its comments on the drafts to facilitate finalizing the texts. The UNCITRAL Working Group II is composed of UNCITRAL’s 60-member states and has been developing work focused on mediation, arbitration, and dispute settlement. 

During UNCITRAL’s recent 54th session, which ran from June 28 and concluded July 16, and was held in person in Vienna, Working Group II introduced a number of updated provisions aimed at taking into account recent mediation trends and developments, including court-ordered mediation. See page 2 UNCITRAL Working Document 1074 here. UNCITRAL incorporated Working Group II’s revisions as part of the newly adopted UNCITRAL Mediation Rules.

Major updates in the UNCITRAL Mediation Rules include the following:

  • Clarify that the rules apply to mediation regardless of the process’s origin, including an agreement between the parties, an investment treaty, a court order, or a mandatory statutory provision.
  • Introduce a definition of mediation.
  • Stipulate that in a case of conflict, mandatory provisions in the applicable international instrument, court order, or law will prevail.
  • Specify that mediation commences when the disputants agree to engage in the mediation.
  • Require disclosure of circumstances regarding impartiality or independence.
  • Permit use of alternative means of communication during the mediation and of remote consultations.
  • Provide that information shared by parties with the mediator is confidential unless parties express otherwise.
  • Update the provisions governing the preparation of settlement agreements to take into account UNCITRAL’s legal framework, including the recently adopted Singapore Convention.  
  • Address the interaction between mediation and other proceedings.
  • Provide for exclusion of liability for mediators.
  • Encourage gender and geographical diversity in selection of mediators.
  • Specify that parties and the mediator should agree upfront on the methods of assessing mediation costs, with multiparty mediations shared on a pro rata basis.

UNCITRAL is expected to publish the UNCITRAL Mediation Rules and the UNCITRAL Notes on Mediation together later this year, according to a statement at the end of the session.

UNCITRAL’s work on mediation will continue with the drafting of rules and guidelines relating to investor-state mediation and with work exploring educational best practices, according to an official’s comments in a side forum, which is a lunch-hour roundtable in which UNCITRAL officials discussed topics related to UNCITRAL’s work.

Benjamin N. Cardozo School of Law Prof. Lela Love, who is chair of the International Advisory Board on Mediation for the Office of Ombudsman for the United Nations Funds and Programmes, commented about the developments reported here:

All this remarkable focus on mediation—and activity around it—heralds a new era for the dispute resolution process that ideally promotes enhanced understanding, dialogue and creative problem solving.  This may be a renaissance time for mediation—one that is very welcome in the divided and polarized time we inhabit.

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The author, an LLM candidate at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, has covered UNCITRAL’s 54th Session proceedings as a 2021 CPR Summer Intern.

‘Oncoming Tsunami’: With CDC Eviction Moratorium Ending July 31, Will ADR Programs Come to the Rescue of Tenants, Landlords, and Courts?

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By Mylene Chan

The Covid-19 pandemic has had a number of negative economic effects, and one of the most significant is the exposure of renters across the United States to increased eviction risks.

And mediation, in turn, has been a significant response.

According to Princeton University’s eviction tracking system–monitoring five states and 29 cities in the United States–landlords have filed about 386,000 evictions during the pandemic, including an estimated 6,250 filed last week.

In response, governments at the federal, state, and local levels have developed short-term eviction moratoriums and similar measures to help renters keep their homes. But in the long run, eviction proceedings are likely to rise.

Federal, state, and local governments have adopted a variety of temporary emergency measures aimed at helping renters. For example, in September 2020, the U.S. Department of Housing and Urban Development and the Centers for Disease Control issued a nationwide moratorium on evictions. See the Federal Register announcement, since extended, here.  

This moratorium was challenged by real estate groups, but a U.S. Supreme Court ruling this week allowed it to remain in effect through the end of the month. Alabama Association of Realtors, et al. v. Department of Health and Human Services, et al., No. 20A169 (June 29); see also analysis at Amy Howe, “Divided court leaves eviction ban in place,” Scotusblog (June 29) (available at https://bit.ly/3xhd74c).  

In addition, Congress allocated $46 billion in rental assistance to struggling renters through the American Rescue Plan Act of 2021 and the December 2020 Covid-19 relief package; much of the relief funding, however, has yet to reach struggling renters. See, e.g., “Emergency Rental Assistance through the Coronavirus Relief Fund,” Congressional Research Service (June 8) (available at https://bit.ly/3Ak9vjX).  See also Kristian Hernández, “As CDC’s Eviction Moratorium Ends, States Prepare for Flood of Cases,” Pew Stateline (June 22) (available at https://bit.ly/3AqTHw2).

Several states and cities–such as Maryland, New York, Vermont, Hawaii, Philadelphia and Washington, D.C.–have adopted eviction bans or limitations. These moratoriums have sharply reduced eviction filings during the extent of the pandemic. 

But eviction restrictions will not remain in place indefinitely. After being extended several times, the federal moratorium is scheduled to expire on July 31. (See the CDC press release on the extension at https://bit.ly/3684qNN.) State and local eviction protections are also expected to end at some point this year. As a result, states and cities are preparing for a potential wave of eviction actions in their housing courts once moratoriums lift.

Some states and local governments have attempted to modify eviction procedures to make the process less burdensome on renters. For example, Maine passed a bill instructing landlords to explain the eviction process, options for legal assistance and rent relief, and eviction notices. Nevada and Illinois each adopted a law requiring courts to seal records of evictions relating to defaults during the pandemic.

One possible solution that could help both the courts and renters adapt to the expected rise in evictions is alternative dispute resolution. These programs aren’t new.  But recently, interest has been heightened due to the pandemic, and many U.S. jurisdictions have turned to ADR eviction programs to encourage tenants and landlords to negotiate.

According to the Urban Institute, as of April, there were 38 ADR eviction diversion and prevention programs nationwide. Mark Treskon, Solomon Greene, Olivia Fiol & Anne Junod, “Eviction Prevention and Diversion Programs,” Urban Institute Housing Research Crisis Collaborative (April 2021) (available at https://urbn.is/3qI9C4j).

The states with programs include California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, Ohio, Oregon, Pennsylvania, Tennessee, Texas, and Washington. See https://bit.ly/3xdHMPP, collected by Chicago’s Resolutions Systems Institute.

ADR eviction programs have been successful in several jurisdictions over the past few years. One example is a St. Paul, Minn., housing clinic. Colleen Ebinger & Elizabeth Clysdale, “Justice Served, Housing Preserved: The Ramsey County Housing Court Model,” 41:3 Mitchell Hamline L.J. of Pub. Policy & Practice: Article 10 (2020) (available at https://bit.ly/2V1DaON).

In July 2018, the Ramsey County court—covering part of the Minneapolis-St. Paul area–launched a housing clinic with the target of reducing eviction by 50%  in five years. Eighteen months after implementation, eviction judgments declined, settlements rose, the court trial calendar lightened and expungements doubled.

Another successful eviction mediation program was developed by the Washington University School of Law Civil Rights & Mediation Clinic and the Metropolitan St. Louis Equal Housing and Opportunity Council in St. Louis in 2012. Karen Tokarz, Samuel Hoff Stragand, Michael Geigerman & Wolf Smith, “Addressing the Eviction Crisis and Housing Instability Through Mediation,” 63 Washington U. J. of Law & Policy 243 (available at https://bit.ly/3694AEG).  

In the St. Louis Mediation Project, professional mediators and students provide free mediation services for landlord-tenant cases. In 2018, 71% of pro se landlord-tenant cases mediated by the project resulted in a settlement. More than half of these agreements resulted in a dismissal of eviction proceedings.

There is some evidence that even many landlords support ADR in the eviction context. Last month, the American Bar Association and the Harvard Negotiation & Mediation Clinical Program published a report identifying nationwide best practices to divert eviction filings and enhance housing stability. See “Designing for Housing Stability: Best Practices for Court-Based and Court-Adjacent Eviction Prevention and/or Diversion Programs” (available at https://bit.ly/3yn3FN7).

This research revealed that stakeholders generally supported eviction prevention efforts during the pandemic. More than 70% of the landlords surveyed were willing to discuss tenant non-payment outside of court. 

Report author Deanna Parrish, Clinical Instructor and Lecturer at Harvard Law School’s Dispute Systems Design Clinic, wrote in an e-mail:

Effective eviction prevention and/or diversion programs use a multi-sector and holistic approach to provide parties with a combination of legal representation, quality mediation, cash or rental assistance, and self-help or supportive services. Investing in eviction prevention and/or diversion programs is not just urgent, it is doable. These programs enjoy wide support across landlords, court staff, and tenants. Over 81% of property owners surveyed reported being less likely to pursue eviction if their tenant had access to rental or cash assistance.Court staff and judicial stakeholders reported eviction diversion programs as essential to helping lighten what they described as an “oncoming tsunami” of eviction filings once the CDC moratorium lifts. Tenant advocates have long been calling for legal representation and easily accessible rental and cash assistance, among other interventions, to help increase housing stability. Legislatures and courts should act swiftly to formalize eviction prevention. Doing so would be nothing short of a lifeline for millions of Americans, landlords and tenants alike.

As the Covid-19 pandemic winds down and emergency measures are lifted, alternative dispute resolution eviction programs may soften the blow to tenants as eviction moratoriums end. Although these ADR programs are in the early stages of adoption, there are promising signs that they might help the U.S. economy’s housing segment return to normalcy without significant housing disruptions.

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The author, an LLM candidate, at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, is a 2021 CPR Summer Intern.

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