#CPRAM22 Highlights: Hot Topics/Initiatives in ADR

By Andrew Ling

Lucila Hemmingsen, a partner in the New York office of King & Spalding practicing international commercial and investment arbitration and public international law, moderated a third-day CPR Annual Meeting panel on cutting-edge topics in ADR. The panel focused on arbitration cases pending before the U.S. Supreme Court, new arbitration legislation, an initiative to reduce arbitration’s carbon footprint, and diversity in ADR.

Hemmingsen was joined at the March 4 online #CPRAM22 session by three panelists:

  • Angela Downes, who is assistant director of experiential education and professor of practice law at University of North Texas Dallas College of Law;
  • Benjamin Graham, an associate at Williams & Connolly, in Washington, D.C., who focuses on complex commercial litigation and international arbitration. He has represented sovereign states and multinational corporations in investment-treaty disputes before ICSID and commercial disputes before leading arbitral institutions, and
  • Rachel Gupta, a mediator and arbitrator with her own New York City-based ADR practice, Gupta Dispute Resolutions. She is a mediator for state and federal court ADR panels and is an arbitrator and panelist for CPR, the American Arbitration Association, and FINRA.

Graham and Downes began the discussion by reviewing arbitration cases pending before the U.S. Supreme Court. Downes highlighted Henry Schein Inc. v. Archer and White Sales Inc., No. 19-963, in which the question concerned whether a delegation provision in an arbitration agreement constitutes clear and unmistakable evidence that the parties intend the arbitral tribunal to decide questions of arbitrability.

Traditionally, courts are presumed to decide whether a dispute is subject to arbitration, phrased as the “question of arbitrability.” But in recent Supreme Court decisions, the Court has looked at the parties’ agreement and allowed the arbitral tribunal to decide questions of arbitrability if there is clear and unmistakable evidence indicating parties’ intent to delegate the authority to arbitrators.

Panelist Angela Downes said she views the fundamental Henry Schein issue as the drafting of the arbitration agreement, noting that disputes often arise when the agreement or provision lacks clarity. She pointed out that the case, which was dismissed a month after the oral arguments in January 2021 in a one-line opinion in which the Court said that it had “improvidently granted” review in the case, leave the status of delegation agreement still unsettled enough for potential future litigation.

Rachel Gupta then led the discussion on recent legislation on arbitration, focusing on H.R. 4445, titled Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.

The panel discussed the Congressional backdrop to the bill, which was signed into by President Biden on March 3, the day before the panel discussion. In many employment contracts, employees have been bound by arbitration agreements and prohibited from bringing sexual harassment claims to a court. Arbitration proceedings are generally confidential, and the amount of an arbitral award tends to be lower than the damages rendered by a court. And when parties settle the dispute, employees are usually required to sign non-disclosure agreements. As a result, victims of sexual harassment are often silenced.

There are four amendments to the Federal Arbitration Act. First, it does not categorically ban arbitration agreements between employers and employees, but it allows plaintiffs to bring sexual harassment claims to courts. Second, plaintiffs have the option to bring the case individually or on behalf of a class, even if the employer’s arbitration agreement prohibits class arbitration. Third, FAA applicability will be decided by a federal court, not the arbitral tribunal. Finally, the amendments are retroactive.

Gupta pointed out that the bill does not address non-disclosure agreements. Angela Downes said she believed the omission was intended as a compromise to gain bipartisan support for the bill. In addition, many lawmakers and sexual harassment victims view binding arbitration agreements as the cause of the “broken system,” not the non-disclosure agreements.

The new law, the panel suggested, could drastically change employment arbitration practices. As Rachel Gupta commented, it will be interesting to observe if lawmakers intend to make similar amendments to other areas of arbitration, such as consumer class arbitration.

On reducing arbitration’s carbon footprint, Gupta first discussed the Campaign for Greener Arbitrations, founded by U.K. arbitrator Lucy Greenwood in 2019. The Campaign developed a set of Green Protocols to reduce the environmental impact of international arbitrations, such as using electronic correspondence and organizing virtual conferences.

Moderator Hemmingsen shared several changes in international arbitration practice: sending iPads to arbitrators instead of papers; reducing in-person meetings, and using advanced technology to take construction-site photos instead of traveling. She also predicted that more conferences and hearings would be held virtually.

The panel concluded by discussing diversity and inclusion among arbitrators and mediators. There have been several initiatives on appointing diverse neutrals and offering training and networking opportunities, such as the Ray Corollary Initiative, the JAMS Diversity Fellowship Program, New York Diversity and Inclusion Neutral Directory, the ADR Inclusion Network, and the Equal Representation in Arbitration pledge. Many arbitral institutions have taken action to place more women in arbitration panels. And CPR incorporated a “Young Lawyer” Rule in its Administered, Non-Administered and International Arbitration Rules to increase opportunities for junior lawyers to take a more active role in arbitration hearings (see Rule 12.5 in the rules available at https://www.cpradr.org/resource-center/rules/arbitration).

The panelists agreed that promoting diversity among arbitrators and mediators must be a concerted effort from ADR providers, arbitrators, law firms, and clients. Progress in diversity and inclusion is needed to grow the profession and benefit the next generation of ADR practitioners.

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The author, a third-year law student at the University of Texas School of Law, in Austin, Texas, is a CPR 2022 Spring Intern.

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The Latest #SCOTUS #Arbitration: Process ‘Preference’; Int’l #Discovery; Federal Courts’ Arb #Jurisdiction

CPR presents on YouTube linked and embedded above a new discussion on the current U.S. Supreme Court hot arbitration topics.  

The discussion is moderated by Russ Bleemer, editor of Alternatives to the High Cost of Litigation (http://altnewsletter.com, and for CPR members at www.cpradr.org/news-publications/alternatives) (@altnewsletter)), who is joined by Angela Downes, Assistant Director of Experiential Education and Professor of Practice Law at the University of North Texas-Dallas College of Law; independent Dallas attorney-arbitrator Richard Faulkner, and arbitration advocate Philip J. Loree Jr., who heads the Loree Law Firm in New York (@PhilLoreeJr). 

Here are the matters discussed, and links on this CPR Speaks blog to details on the cases and potential cases along with resources including links to lower court opinions and briefs.

  1. Morgan v. Sundance Inc., No. 21-328, an employment case on the extent to which a federal court may defer to an arbitration agreement, which the nation’s top Court agreed to hear last week. For details, see Mark Kantor, “U.S. Supreme Court Adds an Arbitration Issue: Is Proof of Prejudice Needed to Defeat a Motion to Compel?” CPR Speaks (Nov. 15) (available here).
  2. The Court has scheduled two cases involving the reach of 28 U.S.C § 1782 for a Dec. 3 conference that will determine whether it should hear the matters or let lower court opinions stand.  The cases examine whether the statute, which authorizes “any interested person” in a proceeding before a “foreign or international tribunal” to ask for and receive discovery from a person in the United States, covers international arbitration tribunals. The cases, AlixPartners LLP v. The Fund for Protection of Investors’ Rights in Foreign States, No. 21-518, and ZF Automotive US Inc. v. Luxshare Ltd., No. 21-401, are discussed at Bryanna Rainwater, “The Law on Evidence for Foreign Arbitrations Returns to the Supreme Court,” CPR Speaks (Oct. 22, 202) (available here).  CPR has filed an amicus brief asking the Supreme Court to accept and decide the AlixPartners case; the NYC-based nonprofit which publishes this blog did not take a position in the case.  The details on the filing can be found at “CPR Asks Supreme Court to Consider Another Foreign Tribunal Evidence Case,” CPR Speaks (Nov. 12) (available here) (containing information and links to CPR’s previous amicus brief in Servotronics v. Rolls Royce PLC, No. 20-794, another Section 1782 case that the Supreme Court dismissed in September and removed from the Court’s October argument calendar).
  3. Badgerow v. Walters, No. 20-1143, an employment discrimination case that dives into the jurisdiction of federal courts under Federal Arbitration Act sections on enforcing and overturning arbitration awards.  The case was most recently discussed on CPR Speaks at Russ Bleemer, “Supreme Court Hears Badgerow, and Leans to Allowing Federal Courts to Broadly Decide on Arbitration Awards and Challenges,” CPR Speaks (Nov 2) (available here).

The video embedded above can be found on YouTube at https://www.youtube.com/watch?v=Sw8ps4vtTfs.

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Let’s Schein Again!

The International Institute for Conflict Prevention and Resolution presents a CPR Speaks blog discussion of the 1/25/2021 U.S. Supreme Court per curiam decision dismissing Henry Schein Inc. v. Archer and White Sales Inc., No. 19-963, and a same-day order declining to hear Piersing v. Domino’s Pizza Franchising LLC, No. 20-695. Alternatives to the High Cost of Litigation Editor Russ Bleemer hosts Prof. Angela Downes, University of North Texas-Dallas College of Law, and arbitrator-advocates contributors Richard Faulkner, also of Dallas, and Philip J. Loree Jr. in New York.

By Russ Bleemer

The panel returns to CPR Speaks and YouTube to analyze the Monday Henry Schein dismissal–a one-line decision–just a month after the Court heard oral arguments on the issue of how a contract carve-out removing injunctions from arbitration affects the delegation of the entire matter to arbitration.

In fact, the Dec. 8, 2020, Henry Schein oral argument repeatedly turned to an issue in the rejected Piersing case on the effectiveness of the incorporation by reference of arbitration rules in designating an arbitration tribunal to decide whether a case is arbitrated, rather than a court deciding whether the matter is to be arbitrated. A cross-petition by Archer and White asking for review of the incorporation by reference of the arbitration contract’s American Arbitration Association rules was declined by the Supreme Court the same day it agreed to hear the carve-out issue last June.

Our panel discussed these issues after the oral argument on this blog.  See “Schein II: Argument in Review,” CPR Speaks (Dec. 9) (available at http://bit.ly/2VXfyIa) (in which the panelists also discuss their work on an amicus brief in the case, a subject that arose in this post’s video).

You can see today’s per curiam decision on the Supreme Court’s website here.

Monday’s Henry Schein dismissal ends a long period of Supreme Court litigation in the case that also included a 2019 U.S. Supreme Court decision. For now, the case returns to the Fifth Circuit for proceedings on whether the parties properly intended to arbitrate the case.

Details on the Supreme Court’s Monday cert denial in Piersing v. Domino’s Pizza Franchising LLC, No. 20-695, are available on CPR Speaks here.

For more analysis on the Henry Schein dismissal, see Ronald Mann, “Justices dismiss arbitrability dispute,” Scotusblog (Jan. 25, 2021) (available at http://bit.ly/2Yh9U4O), in which the Columbia University professor and Scotusblog analyst concludes that

it seems likely that the justices ultimately decided that they couldn’t sensibly say anything about this matter without addressing the question of whether the contract called for arbitration of the gateway question. Because they had declined to call for briefs on that question, it did not make sense to address it here. A logical course of action, then, was to dismiss the matter from the docket, providing a rare victory for a party opposing arbitration.

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The author edits Alternatives for the CPR Institute.