Arbitration Flashcards
What is the makeup of a typical arbitrator?
Subject matter expertise in dispute, older, white, male
What are private dispute organizations?
organizations that will help connect arbitrators with potential clients, space in which to hold their arbitrations, rules
for conducting their arbitrations, as well as billing services for collecting their fees. Arbitrators are selected to serve on the organizations roster/list of available arbitrators
What is the oldest arbitration organization
The AAA- American Arbitration Association
How is an arbitrator chosen?
The parties choose them
How are the rules of evidence in arbitration?
They are very relaxed and may not even apply
Do arbitrators need to give written opinions?
No, only in limited circumstances when arbitration is a substitute for the law
How do courts review decisions by arbitrators?
They view them very deferentially and will almost always say they are enforceable
Advantages or disadvantages of arbitration?
1. Expertise of selected arbitrators?
2. Speed and expense
3. Accessibility
4. Regulation/credentialing of arbitrators?
5. Regulation/credentialing of arbitral organizations?
6. Transparency regarding arbitration decisions,
practices? (incentives/ethics?)
- A
- A
- A
- D
- D
- D
Are there written transcripts and post-hearing briefs in Arbitration?
If the parties request it
What are some similar things that make arbitration look like a trial?
Attorneys may represent clients, witnesses are sworn, evidence is presented, witnesses are cross examined, written awards
What does the FAA section 10 state?
allows a court to vacate an award where there was corruption or a misconduct, partiality, or an arbitrator exceeded the scope of his/her authority, but these basis for challenges are very narrow because courts want to enforce these awards that parties agreed to
What does the FAA section 2 state in summary?
Section 2 ensures that written agreements to arbitrate disputes are valid and enforceable in the same way as other contracts, except in cases where such agreements are deemed unenforceable by law (e.g., if they are found to be unconscionable or void due to fraud).
Scope of Applicability: It applies to contracts involving interstate commerce or maritime transactions, which means the FAA can be invoked in a wide variety of contractual relationships that cross state or national boundaries.
What was the main takeaway from Wilko v. Swan?
a statute could invalidate arbitration agreements in securities contracts, even if those contracts included an arbitration clause.
What is the main takeaway from Gilmer v. Interstate Johnson Lane Corp?
H]aving made the bargain to arbitrate, the party
should be held to it unless Congress itself has said that statute clarifies that its disputes are not subject to arbitration. Federal policy now favors arbitration
What was the holding in Gilmer?
Gilmer failed to meet his burden to show
that Congress, in enacting the ADEA, intended to
preclude arbitration of [ADEA] claims under the
[FAA] .
What is the Pyett clause?
The Pyett clause refers to a specific type of arbitration agreement included in collective bargaining agreements (CBAs), named after the 14 Penn Plaza LLC v. Pyett decision. It is a clause in a union contract that requires employees to arbitrate certain disputes, including discrimination claims, rather than pursuing them through the courts
What is the main takeaway from Rogers v. Vladeck?
The main takeaway from Rogers v. Vladeck is that arbitration agreements can be enforceable in employment disputes, even when they involve claims like those under the FLSA, as long as the agreement is valid and the parties have agreed to arbitrate.
What is Stempel’s proposal?
Stempel has proposed that courts should engage in full judicial review of arbitration agreements, particularly those that are newly introduced or part of mandatory employment contracts. This would include ensuring that arbitration clauses are fair, transparent, and understood by employees, especially in situations where one party (usually the employer) has more bargaining power than the other.
What did EFASASHA do?
It amended the FAA to end forced arbitration of statutory federal
employment discrimination claims based upon sexual
assault and sexual harassment
What is mass arbitration?
It is where plaintiffs’ firms file arbitration demands
on behalf of individual claimants subject to mandatory
arbitration agreements that prohibit class actions
The FAA can stay proceedings and compel the parties to arbitrate if ______ and _______
a valid written agreement to arbitrate exists
dispute falls within the scope of the agreement
What is the seperability doctrine?
a legal principle in arbitration that states that arbitration provisions are separate from the rest of a contract, so they can still be found enforceable even if the rest of the contract is found to be invalid
What are the five defenses to arbitration?
Unconsciounability
Duress
mistake
lack of capacity
fraud
What are the procedural unconscious defenses to arbitration?
1) Oppression through unequal bargaining positions
2) surprise through hidden terms common in adhesion contracts drafted by the party of superior bargaining strength
What are the substantive unconscious defenses to arbitration?
Harsh or one-sided results that shock the conscious
1) Lack of mutuality
2) Cost of arbitration
3) Forum selection clause- forcing someone to go do the arbitration in somewhere very far away (paris)
4) Confidentiality provision
What is a lack of mutuality?
one party is not bound to the same terms or responsibilities as the other.
What is a confidentiality provision?
part of a contract that requires one or more parties to keep certain information private and not disclose it to unauthorized third parties.
What happens if there is only one bad line of an arbitration agreement?
The court may strike out that one provision and keep the rest, but if there are several the court may call the whole thing unconscionable
arbitration is just another way of enforcing statutory rights as long as …….
the weaker party is effectively able to vindicate their rights
The arbitral proceeding must not get in the way
from enforcing statutory “special” rights or
remedies
Congress did not clearly prohibit arbitration in a statute
What are the four statutory grounds for vacatur?
9 US CODE SECTION 10
1) the award was procured by corruption, fraud, or undue means
2) partiality
3) misconduct by the arbitrators
4) arbitrators exceeded their powers
What is the standard for vacancy by fraud and what are its four elements?
the standard is high
1) clear and convincing evidence
2) materially relate to an issue in the arbitration
3) neither have been brought to the attention of the arbitrator and handled by them
4) or have been discoverable upon the exercise of due diligence prior to the arbitration
What is active partiality?
Actions by the
arbitrator
indicating that he
is predisposed on
favor or against
one of the parties
What is passive partiality?
Circumstances surrounding
the arbitrator that may give
rise to inferences of
partiality, even where there
is no demonstration of
active partiality
i.e. relationship with
one of the parties
What is the definition of misconduct?
misbehavior “so prejudiced the rights of a party that it
denies the party a fundamentally fair hearing
What are three examples of an arbitrator exceeding their powers?
not following the rules the parties laid out for him/her, bringing up unrelated issues, or bringing in third parties
What types of errors are not grounds for vacating an award?
errors of law or fact, and a serious misconstruction of the contract
What are the four non-statutory grounds for vacating an award?
1) manifest disregard for the law
2) the award is contrary to public policy
3) the essence test (labor arbitration)
4) the award is arbitrary and capricious or irrational
What does manifest disregard for the law mean?
Arbitrator’s award contradicted clearly controlling law
Arbitrator’s knew what the law was and deliberately
disregarded it
What does contrary to public policy mean?
Public policy at issue must be a clearly defined, dominant, and is
to be ascertained by reference to the law and legal precedents and
not from general considerations of supposed public interest
What is the essence test?
A test used in labor arbitration that asks whether the arbitrator’s decision is based on the “essence” or core intent of the contract, as opposed to a mere interpretation or application that deviates from the agreement’s true purpose.
What was the overall holding in Sobel v. Hertz?
Arbitrators are not required to explain their reasoning of a decision unless Congress specifically tells them to
Can arbitrators award punitive damages?
Arbitrators can award punitive damages unless the state law specifically prevents them from doing so (state arbitration law that the parties themselves incorporated)
What two situations do class actions and arbitration defenses arise?
A party with superior bargaining power imposes a
waiver coupled with an arbitration clause
parties are precluded by contract from bringing a class action,
so they seek to arbitrate their claim on a class wide basis.
Under what grounds can consumers and employees challenge their waivers?
If the waivers are unconsciouable or they make it impossible for them to properly vindicate their statutory rights
what do most arbitration clauses say about class arbitration proceedings?
Most arbitration clauses are silent on this issue
What are the seven key elements of an arbitration agreement?
1) Look at where the consent is
2) Look at the scope of the disputes, what kind of disputes can fall under this agreement (ambiguity will be sent to the arbitrator to decide)
3) Institution and rules (procedural law)
4) Seat of arbitration
5) Language
6) Method of appointment
7) Choice of law
In international arbitration, the law of what country applies?
The law of the country where the arbitration takes place. The FAA requires parties to find their arguments in contract law
What is one big difference of enforcement of international arbitration vs domestic arbitration?
international awards will not be enforced if they are contrary to the public policy of that country (may vary by country)
What is the UNICTRAL model law?
provide a universally acceptable set of principles that can guide national arbitration laws. It is intended to facilitate international trade and nvestment by ensuring that international arbitration is efficient, neutral, and enforceable
What are the two goals of the NY convention?
To compel parties to arbitrate and enforce arbitral awards
