The story becomes more complicated when Citigroup and the individual broker sought to challenge the award in state court on the grounds of manifest disregard of law, and bias because two of the arbitrators failed to make required disclosures. It turns out the parties appeared to have settled their dispute before the arbitration was commenced. This the court seizes on without addressing the arbitrator disclosure issue.
State and Federal courts – even in California – seem to have gotten the U.S. Supreme Court’s memo that the Federal Arbitration Act (“FAA”) generally preempts state laws that impinge on arbitration. Two recent cases underscore that trend, but also show that, at least in California, there are limits to FAA preemption, where a party asserts that the arbitration clause is unconscionable.
Not to kick a statute when it’s down, but if you think the Patient Protection and Affordable Care Act (a/k/a “Obamacare”) is having a few technical difficulties now, just wait a few years. Those who follow my blog posts know I just love predicting the future. Why? Because, while you can certainly disagree with me, you can’t definitively say I’m wrong unless you claim to be a visitor from the future.
So what’s the other tech problem looming in the future for Obamacare? A little-noticed part of the Act requires that health insurers establish external review of claims decisions.
Several times over the past few months, I’ve discussed in this blog court decisions underscoring my belief that more and more state courts now “get it” on Federal Arbitration Act preemption of state laws impinging on arbitration. Two recent decisions by state supreme courts underscore this now undeniable trend. Washington and Crop Insurance The first…
One of the major complaints about consumer arbitration is the hassle and expense of a consumer going on a road trip to attend the arbitration hearing to seek a recovery. A recent Second Circuit decision underscored this problem, and prompted me to write this blog post. In Duran v. The Hass Group, L.L.C., no. 12-3568-cv…
Federal Courts on Frivolous Motions to Vacate Arbitration Awards: “I’m as Mad as Hell and I’m Not Going to Take this Anymore!” The other night, I stumbled upon the classic movie, “Network,” starring Faye Dunaway and Peter Finch. At a pivotal juncture in the movie, the increasingly unhinged Finch urges viewers to open their…
Before we know it, a new hockey season will be upon us. In that spirit, I report on a Federal Arbitration Act “preemption hat trick” that was completed August 12th by the Supreme Judicial Court of Massachusetts’ decision in McInnes v. LPL Financial, Inc., SJC-11356. For those not familiar with hockey, a “hat trick” occurs…
Earlier this month, the U.S. Court of Appeals for the Ninth Circuit held that the Federal Arbitration Act preempts a Montana rule of law that invalidated take-it-or-leave-it form contracts that deviated from the “reasonable expectations” of the parties. In Mortenson v. Bresnan Communications, LLC, the court reversed a district court decision refusing to enforce a predispute arbitration agreement found in an internet service provider’s form contact.
In early May, bills were introduced in the House and Senate , attempting to breathe new life into the concept of a federal Arbitration Fairness Act (“AFA”). The bills would amend the Federal Arbitration Act (“FAA”) by adding a new chapter invalidating predispute arbitration agreements (“PDAAs”) for consumer, investor, employment, or civil rights claims. The proposed legislation is similar to prior failed efforts to similarly amend the FAA going back at least to 2005.
This article analyzes the AFA of 2013 and concludes that, while a well- intended effort to address a legitimate concern – PDAAs imposed via an adhesion contract by dominant parties on weaker parties like consumers and employees – it in fact is a potentially dangerous overreaction that could end up harming those it intends to protect. The article closes with the author’s recommendation for a better way to address these concerns.