Ancillary Judicial Proceedings

Litigators in the U.S. often take for granted the ease with which they can obtain discovery from non-parties in our federal and state courts. One might assume that the “presumption in favor of arbitrability” embodied in the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (“FAA”), would have been implemented with, among other things, a statutory grant of subpoena power to arbitrators that is virtually coextensive with that of a federal district court.  No so, however.  And depending on the place of arbitration, a party’s ability to compel document production from a non-party, much less to depose that witness, prior to a hearing, may be very limited indeed.  Problems and issues abound.

Continue Reading Document Discovery From Non-Parties in Commercial Arbitration: Availability and Practical Considerations

What makes an on-line arbitration agreement binding against a website user? In Meyer v. Uber Technologies, Inc., 2017 U.S. App. LEXIS 15497 (2d Cir. Aug. 17, 2017), the U.S. Court of Appeals for the Second Circuit issued a second decision on this issue, providing additional elucidation following its 2016 decision in Nicosia v. Amazon, Inc. 834 F.3d 220 (2d Cir. Aug. 24, 2016).The Nicosia and Meyer cases each involved an on-line agreement with a user who claimed not to have read the company’s terms and conditions, including an arbitration clause. In Meyer, Uber’s agreement to arbitrate was held to be enforceable against the user; in Nicosia, Amazon’s was not—at least on the record before the Court of Appeals.

Continue Reading On-line Arbitration Agreements: A Tale of Two “Click Wraps”

When is “silence” in an arbitration clause concerning class arbitration not “Stolt-Nielsen silence”? And what is the difference between a “claim” and a “procedure”? The Ninth Circuit seemingly took hair-splitting to a new level in conceiving the former question, and apparently suffered some uncertainty regarding the latter, when it issued its memorandum decision in Varela v. Lamps Plus, Inc., No. 16-56085 (Aug. 3, 2017).

Continue Reading Class Arbitration: Contractual “Crickets” Are Sufficient for Ninth Circuit to Determine That Class Arbitration Is Permitted, Distinguishing Stolt-Nielsen

Published in Law 360 (July 28, 2017)

In a recent series of articles, we asked whether “class arbitration” — meaning the utilization of a Fed. R. Civ. P. 23 class action protocol in an arbitration proceeding — is ultimately viable. Given the nature of arbitration, we suggested that it arguably is not. We noted that the United States Supreme Court and various Courts of Appeal had examined several related procedural questions, but that they had not gotten to the core issues that would ultimately determine the viability of a class arbitration award.

Continue Reading Is “Class Arbitration” an Oxymoron — a Shoe Drops in the Second Circuit

Do you ever have days when you are not your most eloquent self, the words come out in a jumble, or they are just not precisely what you intended? So do trial judges.  But appeals courts seem to understand.

Thus, in Davis v. Fenton, Nos. 16-2121, 16-2165 (7th Cir. May 26, 2017), the 7th Circuit Court of Appeals decided, among other things, that when a suit is “administratively dismissed without prejudice” by a District Court “subject to full reinstatement upon the completion of [a] required arbitration,” that just means that it was “stayed pending arbitration.”  Consequently, an appellant got no traction with an argument that he had correctly commenced a proceeding in state court to challenge the eventual arbitral award, and the federal District Court lacked subject matter jurisdiction when it subsequently confirmed the award in question.  Wait, did that come out right?

Continue Reading Keeping the Lights On For Your Ancillary Proceeding in Federal Court: When “Dismissed Without Prejudice” Means “Stayed”

When a claimant who is party to an arbitration agreement initiates litigation of arbitrable claims, the defendant in that case typically expects to be able to move successfully to compel arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 4. In cases where the litigation is commenced in a federal district court whose geographical jurisdiction includes the agreed place or “situs” of arbitration, that expectation is likely valid.  However, if the litigation is commenced in a district other than one in which the parties agreed to arbitrate their disputes, the federal court may not only be unable to enforce the contractual provision regarding the “place” of arbitration, but it may be unable to compel arbitration altogether.  The courts are divided on the issue.

Continue Reading The Spectre That Haunts Motions to Compel Arbitration: Venue

Forum non conveniens is one of several judicial abstention doctrines, applied from time to time by U.S. courts, that permit a court to dismiss (without prejudice) a plenary action in its discretion.  In a forum non conveniens case, the court’s jurisdiction is not in question, but the relative legal “inconvenience” of having the matter heard in that court, as opposed to another court of competent jurisdiction, is deemed sufficient for the U.S. court to abstain from exercising its authority.  A defendant seeking abstention on forum non conveniens grounds typically is required to establish that an adequate alternative forum is available, and that a balancing of interests strongly favors dismissal by the U.S. court in favor of that other forum.  

But can – or should – such a court-made doctrine properly be a defense in a non-plenary proceeding brought by an arbitration awardee seeking enforcement vis-à-vis assets in the United States?  Could a court outside the U.S. grant that remedy instead?  And in any case, do the applicable international conventions afford U.S. courts the latitude to enforce arbitral awards in their discretion?

Continue Reading Enforcement of International Arbitral Awards in the U.S. – Could a Court Abstain Due To “Inconvenience”?

For nearly thirty years, federal and state appellate courts have been split on the issue of whether the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, November 15, 1965 (“Hague Service Convention” or “Convention”), permits service of process by mail. In Water Splash, Inc. v. Menon, 197 L. Ed. 2d 826, 830 (2017), the Supreme Court resolved that issue, holding that the Convention does not prohibit such service.

Continue Reading Supreme Court Holds That the Hague Service Convention Does Not Prohibit Service of Process Abroad by Mail

The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq., does not contain an express preemption provision, nor was it intended to be the exclusive codified arbitration law in all circumstances.  However, the United States Supreme Court has repeatedly taught that where the FAA applies, it is deemed to supersede state laws that are inconsistent with its provisions and purposes.  Yet recent decisions by the highest courts of North Carolina and New Hampshire provide examples of continued efforts by state courts to chip away at the preemptive effect of the FAA concerning the interpretation and enforcement of arbitration agreements and the confirmation or vacatur of arbitral awards.

Continue Reading State Supreme Courts Continue to Try to Chip Away at FAA Preemption; The United States Supreme Court Is Not Amused

In most countries, it is uncontroversial that a court sitting at the situs of an arbitration has jurisdiction to adjudicate a petition to confirm or vacate or modify an award issued in that arbitration. In the United States federal courts, however, the mix of issues concerning subject matter jurisdiction and personal jurisdiction, respectively, has made for bewilderment galore.

Continue Reading Only in America: The Controversy Concerning Federal Jurisdiction Over Motions to Confirm, Vacate, or Modify Arbitral Awards