Arbitration Quiz 2

an adhesion contract between a consumer and a company with superior bargaining power (which included an arbitration clause waiving class actions) is unenforceable

overruled discover bank rule, scalia's holding persists today, class actions defeat purposes of arbitration

class actions aren't covered in FAA, so states should decide this issue

FAA allows parties to choose what law governs its arbitration provisions, but parties can't use discover bank rule

under FAA, parties might choose to have portions of their contract governed by the law of Tibet, the law of pre-revolutionary Russia, or (as is relevant here) the discover bank rule, irrespective of the USSC invalidation of the rule in concepcion

pro-consumer advocates counterattacked

tougher regulations on financial institutions, helping with 2008 housing crisis

helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives

created by congress in dodd frank act, title X gives CFPB authority over financial products

allows cfpb to conduct study/report for congress, concerning use of agreements providing for arbitration of any future dispute between covered persons and consumers in connection with the offering or providing of consumer financial products or services

(1) cfpb's structure is unconstitutional because cfpb is an independent agency whose chair could (prior to the decision) only be removed by the president for cause, and (2) Trump elected and less sympathetic to regulatory reform

released final rule, barring use by banks and other financial institutions of class action waivers in their arbitration agreements

aaa, jams, and cpr don't permit claim dismissal for faulty pleading

no

failure to file a response to a claim is deemed to be a general denial

party may file a counterclaim as part of its notice of defense, counterclaim must include a statement of the general nature of the respondent's defense

party filing a counterclaim must give notice to the other party of its counterclaim, including short statement of its factual basis

counterclaim can be filed at any time after notice of filing, must include a statement setting forth the nature of the counterclaim

arbitration is like making your own courthouse because parties can pick their own judges, whereas in court, parties get randomly assigned a judge

(1) arbitration doesn't have discovery, and (2) once arbitration allows discovery, we might as well be in litigation

(1) arbitration clauses, (2) procedural orders, and (3) institutional rules

arbitrator (not judge)

conference history, discovery deadlines, types of discovery allowable, places for discovery, motion rules, submissions to arbitrator, and testimony and transcripts

agreement between parties, regarding discovery

in past, discovery was rare, but today, discovery is expanded

arbitrators must disclose to parties any dealings that might create an impression of possible bias

here, since arbitrator panel's decision was unanimous in favor of prime contractor, no harm, no foul

(1) clause, (2) expertise, (3) panel procedure, and (4) institutional rules

(1) careful with qualifications, (2) 2-pick-1 arbitration panel procedure, and (3) side with institutional rules

always err on side of disclosure because non disclosure equals evident partiality

evident partiality requires vacating an award, if an arbitrator refuses to disclose facts which might, to an objective observer, create a reasonable impression of the arbitrator's impartiality

how to reverse an arbitration decision (focus on timing)

(1) mandate and consensus issue, and (2) public/private nature issue

faa section 7

allows arbitrator to compel the giving of evidence by third parties, requires testimony and document production, gives US district court authority to compel attendance or punish for contempt

nothing in FAA section 7 related to "when" arbitrator can compel third party discovery (pre-hearing or during hearing)

employees with mandatory arbitration contracts can't collectively sue their employers because arbitration agreements can only be invalidated with general contract defenses, not federal laws (like NLRA)

inhibiting workers' rights to collectively sue their employers for workplace problems will push back labor rights back nearly a century because NLRA was created to neutralize uneven bargaining power between employers and employees

class action arbitration waivers that employees are forced to sign are like "yellow dog contracts" (AKA contracts between workers and employers in which worker agrees not to remain in or join a union)

(1) parties can name a particular arbitrator, (2) parties can specify the expertise of the arbitrator, (3) parties can specify a three-arbitrator arbitration panel, (4) parties can agree on institutional rules