While trial lawyers attempt to abolish every-day businesspeople’s right to arbitrate, they continue to use arbitration with their own clients. The Texas Supreme Court, in a December 14 opinion, recently defended John O’Quinn’s right to arbitrate with his clients; the Wolfgang Demino blog has details. (Other clients have had more success against O’Quinn in arbitration.) Note that the Arbitration Fairness Act, the trial bar’s effort to deprive consumers of the choice of predispute arbitration clauses, doesn’t apply to attorney-client relationships. Earlier.
Posts Tagged ‘arbitration’
The war on arbitration: Jamie Leigh Jones, Tracy Barker, & “Halliburton” V
A commenter complains about our most recent post, and I respond:
Jamie Leigh Jones, Tracy Barker, & “Halliburton” IV
Bizarro-Overlawyered, the Huffington Post, Alternet, and others on the Left continue to bang this drum with completely false accounts of the law and facts in their campaign to deprive consumers of the choice of mandatory arbitration: “The notion that sexual assault cannot be tried as a criminal matter but has to be arbitrated in secret arbitration and treated as a labor dispute is simply beyond belief.”
Beyond belief indeed. Let’s count the lies of commission and omission:
- Whether a private civil claim against Halliburton or KBR is required to be arbitrated has nothing to do with whether the Department of Justice decides to criminally prosecute for sexual assault. The DOJ can try this as a criminal matter, but have chosen not to. That may be a scandal on its own, but not one having to do with arbitration clauses.
- The arbitration clause does not prohibit Barker from bringing civil suit against her alleged rapist (and, indeed, her case continues in the proper federal district court venue).
- The arbitration clause does not require the arbitration to be “secret.” (By the way, in December, I wrote to Jamie Leigh Jones’s attorney, Todd Kelly, and offered to publicize his arbitration briefs documenting Jones’s original summary judgment claims before he tried a second bite at the apple in court. Still no response over six weeks later.) The arbitration is only as secret as the participants want it to be.
- And, oh, by the way, for all the claims that one can’t get justice in arbitration? Today the New York Times reports that two women who claimed sexual assault, Mary Beth Kineston and Pamela Jones, won their arbitration cases against KBR. If they’d brought civil suits, they’d still be litigating. Yet somehow, not once in all the months of controversy on the issue did any news reporter mention this non-trivial fact as the slurs against arbitration were repeated over and over.
Let’s not confuse issues. Sexual assault and rape are criminal acts, and should be prosecuted criminally. To the extent KBR was responsible for the very plausible allegations of creating an environment of sexual harassment by its employees and failing to respond to hostile environment claims, they should be civilly liable in the forum contractually agreed to. But either of these issues has nothing to do with the third issue, the availability of mandatory arbitration as an option in contracts.
Earlier: Jamie Leigh Jones (Dec. 12-16), Jamie Leigh Jones (Dec. 20), Jamie Leigh Jones (Dec. 21); see also Overlawyered’s arbitration section.
Arbitration for me, but not for thee
The Civil Justice Association of California says it so well, we might as well just quote them:
“Fee arbitration offers cheaper, faster alternative to litigation.” Where did that headline run? Give up? In the California Bar Journal, the “Official Publication of the State Bar of California! The story beneath it praises fee arbitration between lawyers and clients, saying that arbitrators are reporting that their work “gives people immediate results, unlike protracted litigation.”
The Bar’s presiding arbitrator, Arne Werchick, is quoted as saying: “It’s a neutral program that gives everyone a fair shake.”
We hope Mr. Werchick, who was president of the trial lawyers association in 1980, sends copies of the article to personal injury and other plaintiffs’ lawyers in Sacramento and Washington. They are once again firing up their endless campaign to block people’s constitutional right to contract to settle future disputes by arbitration rather than going to court.
Separately, ABC News parrots the trial-lawyer line with misleading coverage of another arbitration involving Tracy Barker: they falsely report that Barker’s lawsuit was “killed” (when it will in fact be heard in the forum that Barker contractually agreed to litigate in), that the proceedings will be “secret” (when Barker has the right to publicize them the same way she can publicize a trial), and waits until deep into the story to acknowledge that the arbitration clause does not prohibit the employee from bringing litigation against her alleged rapist. Where’s John Stossel and “Give Me A Break” when you need him?
For more on the litigation lobby’s battle against arbitration, see the Overlawyered arbitration section.
February 5 roundup
- John Ritter’s family has already received $14 million in settlements, seeking $67 million more in medical malpractice litigation for ER failure to diagnose rare heart condition. Dr. R.W. Donnell thinks they’re wrong. [LA Times; USA Today; Kevin MD; Turkewitz; Overlawyered Sep. 2004]
- Speaking of the celebrity bonus in litigation: as M.E. e-mailed me, “Cheek rides again”; Wesley Snipes acquitted of tax felonies, though convicted of misdemeanors, and still on the hook for $17 million in taxes plus penalties. [NY Times; earlier]
- California AG Jerry Brown continuing bogus carbon dioxide “public nuisance” lawsuit against automakers [Stirling & Sandefur @ Investor’s Business Daily; earlier]
- Words-only criminal obscenity prosecution. [WSJ Law Blog (and farewell to Peter Lattman)]
- In the category of gambits we’re sympathetic to, but are unlikely to succeed: East Texas burger restaurant tries mandatory-arbitration-by-posted-window-notice [TortsProf]
- Mikal Watts puff piece [Corpus Christi Caller-Times]
Richard Neely and arbitration (and the godless bloodsuckers?)
In 2006, former West Virginia judge and justice Richard Neely wrote an article called “Arbitration and the Godless Bloodsuckers” (reprinted at the anti-consumer Consumerist) making a sensational claim: he had served as an arbitrator for the National Arbitration Forum, but because of his rulings denying attorneys’ fees, had been blacklisted from further arbitration proceedings because the “godless bloodsucker” banks (no, really, those are his words) had decided he was an “unacceptable” arbitrator. As part of the litigation lobby’s war on consumer choice in seeking legislation to force consumers to litigate even if they wish the opportunity for lower prices through agreeing to mandatory binding arbitration (see the Overlawyered section on arbitration), the claims have been repeated on multiple occasions, in Congressional testimony, in newspaper and magazine articles, in blogs, and even in the Overlawyered comments. Turns out, according to a response made by the National Arbitration Forum, that Judge Neely has made some claims that weren’t true:
- Contrary to Neely’s claims, he was never “struck” from any case by any party.
- At least under NAF rules, a party cannot unilaterally select an arbitrator: the two sides must agree, or, in the alternative, each select an arbitrator who will in turn mutually agree upon a third arbitrator. (Code of Procedure Rule 21.) Parties can strike an arbitrator for bias—for example, perhaps one of the arbitrators has announced that a class of parties are “godless bloodsuckers.” But this right applies equally to consumers and merchants.
- Neely claimed incorrectly that a party defaulting could be liable for more than they would under the civil justice system. But arbitration participants have more procedural protections in the case of default than those operating in the civil justice system–there is no “default” in arbitration. Rather, the arbitrator has to decide the case on the merits, even without the participation of the customer. Given the fact that the vast majority of debt collections in court are resolved by default, the typical consumer comes out far ahead in arbitration.
- Neely proposed a reform that arbitrators be required to disclose conflicts of interest. But arbitrators are already required to disclose such conflicts.
Read the whole thing. Neely (who ruled on the merits 100% of the time for banks against their customers in the two debt collection cases he decided) was apparently so upset by his experience that he signed a new agreement with NAF after the events he claims to describe transpired. One wonders: has the plaintiffs’ bar retained Neely as a consultant on the issue, and he decided he could make more money bad-mouthing arbitration than as an arbitrator? One will never know—unless Neely discloses his conflicts of interest.
Richard Neely’s previous claim to fame was stating, while Chief Justice of the West Virginia Supreme Court, “As long as I am allowed to redistribute wealth from out-of-state companies to in-state plaintiffs, I shall continue to do so.” He’s had somewhat less success doing so as a plaintiffs’ attorney (June 2002).
War is peace, freedom is slavery, and trial lawyer earmarks are “consumer-friendly”
The Consumerist blog is supposed to be a pro-consumer blog, but it’s amazing how often their political agenda is really a trial-lawyer agenda that hurts consumers. Many of the 2007 bills Carey Greenberg highlights as consumer-friendly are quite the opposite:
- H.R. 3010: Arbitration Fairness Act of 2007
What It Does: Raises costs to and reduces choices for consumers and lowers employee wages by forcing consumers and employees to pass up the benefits of mandatory arbitration, whether they wish to or not. More at Overlawyered, and on SSRN.
Status: Hearings held in both the House and Senate. Likely to be vetoed if passed.
Jamie Leigh Jones & “Halliburton” III
Stephanie Mencimer jumps on the Jamie Leigh Jones bandwagon against arbitration (Dec. 12, Dec. 20) and carefully makes a misleading case:
Employment lawyer Cathy Ventrell-Monsees testified before Congress in October that AAA data show that between January 2003 and March 31, 2007, of the 39 Halliburton cases that went all the way to a decision, Halliburton won 32, a win rate of 82 percent. Plaintiffs in employment litigation face a high bar in court trials as well, but even so, that figure is very high. Employers win about 64 percent of all employment cases at trial in federal court and about half in state court, according to data from the Justice Department’s Bureau of Justice Statistics (BJS).
The problem here is that this is apples and oranges: the 32 arbitration cases include cases that are dismissed on summary judgment, whereas the employment discrimination trials (which constitute well under 10% of all employment discrimination claims brought in court) necessarily omit the decisions where the plaintiffs lost on summary judgment. Moreover, it excludes the 96% of cases submitted to ADR that do not result in a full-fledged arbitration because the employee received a favorable result in mediation. (And that’s before we get to the fact that an arbitration decision is final, while the BJS statistics have no follow-up to see what happens on appeal to those larger plaintiff victories.) As multiple studies show, the typical employment plaintiff does far better in arbitration than in court, for far less expense.
Mencimer also repeats the canard that arbitration is problematic because it is “secretive,” though her ability to retell the case of Jamie Jones refutes that. I also note that earlier this week, I sent a request to Jones’s attorney, Todd Kelly, for a copy of her arbitration filings. (Recall that Jones moved for summary judgment in the arbitration, and only filed in court after helping to choose an arbitrator and spending fifteen months of discovery litigating the arbitration.) He hasn’t responded. If Jones’s arbitration is secret, it’s because she has chosen to make it so.
Jamie Leigh Jones hearing on the Hill
As I suspected, the Jamie Leigh Jones testimony on the Hill quickly devolved away from the Department of Justice’s alleged failures in investigating a rape (the ostensible reason for the hearing) to the completely unrelated issue of her arbitration agreement with KBR and her attempt to conflate KBR with Halliburton, something welcomed by the litigation-lobby blogs that did the same thing. (KBR wasn’t invited to send a representative to the hearing.) Jones misrepresented the arbitration as “secret,” though the arbitration proceeding is just as public as a court proceeding to the extent either party wishes it to be. To that end, I invite Ms. Jones to send me the summary judgment briefs from her pending arbitration proceeding against KBR that led her attorneys to file a second action in court making new allegations against Halliburton, and I will happily post them and provide free publicity analyzing them. From the KBR briefs:
Jones has admitted that she is a party to an arbitration agreement and has invoked and
benefited from the terms of the DRP by participating in a pending arbitration proceeding
involving the same claims. She made a demand for arbitration more than a year before filing this lawsuit, participated in the selection of an arbitrator, exchanged discovery and even moved for summary judgment.
For more on arbitration, see Mark de Bernardo’s testimony and Overlawyered’s arbitration section.
“I can see why people want to be lawyers. Once you’ve got someone under your licensing power, you can make them do anything…”
An actual license agreement nicely satirizing clickwrap licenses. Not that there’s anything wrong with clickwrap licenses, though the California courts, as is their wont, are adding legal uncertainty to the game.