Civ
Pro 2 Notes
Arbitration
Here’s
another form of ADR. The distinguishing
characteristics of arbitration are that a decision is made by decision-makers
in arbitration, whereas that action is not the end result of processes such as
mediation and settlement. The arbitrator
decides the dispute and issues an
oral or written decision. The main
reason people use arbitration is because the parties can decides the rules of
the game. They can make up their own
procedure, rules, and substantive law.
They can be as similar or dissimilar to “real” law as you want. Many arbitration agreements restrict or
forbid discovery, pre-trial motions, knowing who is arbitrating the dispute, and
the application of the rules of evidence.
Arbitration is also usually faster, cheaper and more confidential than litigation.
What
happens when courts get involved at looking at arbitration decisions? There are two places that this happens. Courts ask at the front end: when is it
appropriate for a court to enforce an arbitration clause? When should they stop a lawsuit that has
started from going forward or compel a party to go to arbitration? At the back end, when will a court review and
possibly undo an arbitration award?
Floss v. Ryan’s
Family Steak Houses, Inc.
There
are lots of cases against the steakhouse!
What were the facts here? Floss is
suing under the Fair Labor Standards Act.
Floss didn’t want arbitration, but wanted to go to court instead. Ryan’s insisted on going to arbitration. There’s also an
The
Sixth Circuit asks whether EDSI is suitable for the resolution of statutory
claims. What made EDSI suspect to the Sixth
Circuit? How they appoint the arbitrators
is a concern: one of the arbitrators is a manager of a company that has an arbitration
agreement with EDSI! They’re worried
about bias. The other two arbitrators
are an employee and a lawyer, judge or “other professional”. So the court is worried about this. The court is also worried about a bias due to
EDSI’s financial relationship with Ryan’s.
Their business depends on getting and keeping business clients. Also, the employee had to pay for half of the
costs of the arbitration. In court, the
costs would be based upon who won. But
ultimately, the court decides that the contract is invalid: there’s no consideration
because the terms are “fatally indefinite”.