Analysis Cases In Arbitration - Research Paper Example

?Analysis Cases in Arbitration Table of Contents Introduction 3 Thesis ment 3 Case Italian Colors Restaurant v. American Express Travel Related Services Co. 4 Summary 4 Judgement Given 5 Critical Evaluation of the Case 5 Case 2: Coneff v. AT & T Corp 8 Summary 8 Judgement Given 8 Critical Evaluation of the Case 10 Conclusion 13 References 15 Introduction Arbitration can be considered as one of the Alternative Dispute Resolution (ADR) techniques. It is a legal method for resolving the conflicts outside the court. The parties to conflict tend to communicate regarding the issue to one or more parties concerned. The decision made by these parties helps in the resolution of the disputes to a considerable extent. It is considered to be a technique where the evidences are reviewed by a third party to the case ventured for a hearing and thus inflict a decision that tends to be lawfully binding for both the sides. It is worthy of stating that arbitration is generally utilised for resolving the commercial disputes, basically in the case of transactions related with international commerce. Arbitration is normally employed in the context of consumer as well as employment matters which may be necessitated by terms of employment as well as commercial contracts. Furthermore, arbitration can be either mandatory or may as well be voluntary. The third party concerns who are supposed to resolve the dispute lack personal interest in the disputes that helps him / her to render impartial judgement. However, arbitration cannot be termed similar to judicial proceedings, alternative dispute resolutions, expert determinations and mediations (WIPO, “Arbitration”). Thesis Statement The main objective of the study has been to summarise the case studies (Italian Colors Restaurant v. American Express Related Services CO and Coneff V. AT&T Crop). It will further try to analyse the two cases and thus identify the best decision in both the cases. The study will also endeavour to offer recommendations through which the matter could have been resolved effectively. Case 1: Italian Colors Restaurant v. American Express Travel Related Services Co. Summary The U.S. Court of Appeals had declined to reassess the decision made by the en banc on February 1, 2012 in the case of Italian Colors Restaurant v. American Express Travel Related Services Co. Owing to this reason, the Supreme Court of the United States, is quite likely to be requested to revisit the issue related to class action waivers in the arbitration agreement by the US Court of Appeals. Dispute arose because of the fact that the Second Circuit denied to offer an en banc rehearing. The chief judge as well as four other judges asserted that the case must be reheard which led to splits among the judges grounded on the protest that the Ninth Circuit was not being followed. In Italian Colors, it can be observed that the Second Circuit panel did not impose the class action waiver in relation to American Express arbitration agreement considering that it would prevent the claimant from impeaching its federal antitrust claims. In complaint the Plaintiff claimed that the merchant contract disobeyed the Sherman Act. The merchant contract comprised of the arbitration provision that needed all claims that arose from agreement to be decided by means of arbitration. The Second Circuit on remand will face the concern of whether class-action waivers in case of arbitration agreements are unconscionable just because they prevent disputes from being resolved by ways of class proceedings. In an order list that was published within a week after the decision, it was found that the Supreme Court provided a writ of certiorari and thus evacuated and remanded the case of American Express v. Italian Colors Restaurant. The court further ordered the Second Circuit to reassess its decision in relation to the unenforceability of class-action waiver in light of the Stolt-Nielsen opinion (Consumer Financial Service Group, “Second Circuit Splits with Ninth Circuit on Enforcement of Class Action Waivers”). Judgement Given In relation to Italian Colors, it was concluded by a panel of three judges that Concepcion was not refused to enforce the class action waiver since the Plaintiff had demonstrated that for prosecuting its claim it would be necessary to hire an expert in solving the case similar to the case of Italian Colors Restaurant v. American Express Travel Related Services Co. It also stated that the expert’s fees would be higher in comparison to the Plaintiff’s potential revival. Furthermore, it mentioned that the expert fee was difficult to recover under the Sherman Act albeit the Plaintiff succeeds in the individual arbitration (Sutherland, “Legal Alert”). Critical Evaluation of the Case Prior to proceeding towards the evaluation of the arguments made by the concerned parties, it would be significant to set forth some of the issues that has not been raised in the case. For instance, the Plaintiffs did not assert that the obligatory arbitration clause that was enclosed in the Card Acceptance Agreement was not considered to be worthy enough to cover their anti-trust claim. Furthermore, the Plaintiffs i.e. Italian Colors Restaurant did not reject the fact that the case involved both lawful as well as evidentiary difficulties, whereby the claimants did not assert that their claims were too complex to be handled in a proper manner in the case of arbitration. The Plaintiffs claimed that they were not hesitant to proceeding in class-wide arbitration. The Plaintiffs did not attempt to renew the historical judicial antagonism towards arbitration signifying it, as one of the dispute resolution forms. The Plaintiffs demanded to limit the principle that most of the characteristics of the arbitration are to be left to the discretion of the contracting parties and thus unsupervised by judicial review. According to Section 16(a) (3) of the FAA legislation, it was stated that plead would be derived from the final decision made by the judges with respect to arbitration (FindLaw, “United States Court of Appeals,Second Circuit”). According to the Supreme Court, the challenges to the soundness of the arbitration agreement can be categorised into two forms. One form tends to challenge specifically the soundness of the conformity in order to arbitrate. The other form challenges the contract altogether, either on the ground that it tends to impact the overall agreement or on the ground that the misdemeanour related to one of the contract’s provisions provided the contract is termed as unacceptable. The Court further stated the fact that if the arbitration clause itself faces challenges, which is considered to be an issue that prepares an agreement to arbitrate, in such circumstances the federal court may proceed to deliver judgment for such cases. However, it is to be observed that FAA does not allow the federal court to consider claims that tends to challenge the contract on specified grounds. It was observed that the claimants challenged the arbitration clause of the Card Acceptance Agreement’s as they argue the enforceability of its class action waiver. They also challenged the validity of the parties’ agreement in order to arbitrate. The Plaintiffs challenge was mainly to the arbitration section itself instead to the totality of the Card Acceptance Agreement (National Association of Manufacturing, “Brief For Verizon Communications Inc and National Association of Manufacturers as Amici Curiae In Support Of Petitioners”). In particular, FAA was initiated in order to replace court complaints to arbitration. It can be considered as a strong federal policy that endorses arbitration as an alternative method of dispute resolution. One of the underlying facts concerning the law is that the support of arbitration is tempered by the fact that it (arbitration) is firmly a matter of contract. Improving the federal policy favouring arbitration can be considered as a matter related to making the arbitration conformities as enforceable as other contracts. This principle has been clearly stated in Section 2 of the FAA which offers that a degree of conformity in order to arbitrate shall be legitimate, irreversible as well as enforceable, save upon such assumptions that prevail at law or in equity for the revocation of any contract. Section 2 can be considered as the main substantive terms of the FAA generating the body of ‘federal substantive law of arbitrability’ which is generally implementable to any arbitration agreement within the coverage of the FAA. It can be stated in this regards that the Plaintiffs have demonstrated that enforcement related to the class-action waiver in the Card Acceptance Agreement in order to cover up their say against Amex under federal antitrust act would be mismatched with the ‘federal substantive law of arbitration’. It can thus be mentioned that a Plaintiff might be affirmed to have a right in order to take proceedings of an action in the federal court as a class-action waiver. The right can be deemed as procedural right, auxiliary to the law-making of substantive allegations. However, the Supreme Court has recognised innumerable times the utility of class action as one of the tools for justifying statutory rights. This is generally true with regard to the Court’s acknowledgment that the class action device is the only economically sensitive option in case more than one party concerned with various lawsuits have suffered an unjustified claim, even though the damages can be identified as less hazardous because of the engagement of the single entity in order to validate bringing an individual action (Kalbayer, “United States Court Of Appeals For The Second Circuit”). Case 2: Coneff v. AT & T Corp Summary The other case, i.e. Coneff v. AT&T Corp, comprised of accused contravention related to Federal Communications Act and state laws. The matter was presented before the Court on ‘Defendants Amended Motion to Compel Arbitration Pursuant to the Federal Arbitration Act and to Dismiss Action’. It was claimed by the Defendant, i.e. AT&T Corp that pursuant to an obligatory arbitration clause entered between the parties, claimants need to practise their disputes by means of individualised arbitration. It was also argued by the Defendants that the Federal Arbitration Act anticipate any state laws defences carried-out by the applicants in order to bring the enforceability of the arbitration clause. Coneff stated that the arbitration provisions are unenforceable, since they are substantively unconscionable. It was further indicated by the claimant that the pre-emption related discussion of the Defendant has been rejected by the Ninth Circuit (Williamette University, “Coneff v. AT&T Corp”). There are numerous reasons that have been set in further discussions stating why the Court agreed with the Plaintiffs and thus denied the Defendants’ motion to compel towards further arbitration. Judgement Given It was agreed by the U.S. Court of Appeal that there is almost no prohibition related to the class-action waiver since it does not allow the class-based arbitration of arguments. It was already mentioned by the District Court that the court must evaluate the enforceability related to class-action waiver given the entirety of the case. The Court asserted the fact that the central point to the dispute is whether the explicit conditions related to class-action waivers are independently unconscionable (New York Law Journal, “United States District Court Southern District of New York”). The Court does not consider the fact that AT&T Corp will pay for the arbitration in case the customer desires to practice individual arbitration. In this particular case, the Court identified the fact that current jurisprudence perceives class-action waivers in a negative way. However, four to five years back, at least seven courts in five distinct jurisdictions have declined to enforce class-action waivers. Class-action waiver, in case of immediate circumstances, is unconscionable according to the court. The Defendants are effectually exonerated from any kind of liability because of the provisions contained in their Wireless Service Agreements (WSAs). Such conduct tends to breach Washington’s essential public policy endorsing the availability related to class actions as one of the tools for implementing a consumer’s rights. Defendants state that if the class-action waivers related stipulation is unenforceable, in such cases the entire arbitration agreement tends to be unenforceable. Therefore, in lieu of this fact, the Court seeks that all languages in the appropriate WSAs leading to arbitration is not enforceable to a considerable degree under the Washington law (New York Law Journal, “United States District Court Southern District of New York”). Critical Evaluation of the Case In reference to the particular case of Coneff v. AT & T Corp, it can be observed that AT&T appealed the district court that had denied for arbitration. A case was filed against AT&T by Coneff grounded on the allegation that it had breached the contract by violating the Federal Communication Act along with numerous state consumer protection laws. It was claimed by Coneff that the arbitration agreement in the service conformity was unenforceable because of substantive as well as procedural unconscionability. It was concluded by the Ninth Circuit that the Federal Arbitration Act forestall Washington State law and the judgement of the Supreme Court in AT&T Mobility LLC v Concepcion administers. Therefore, in lieu of this fact, the Court upturned the findings of the district court in relation to the technical as well as substantive unconscionability of the arbitration conformity. It can be observed that the Plaintiff are the current as well as previous customers of the Defendants namely New Cingular Wireless Services, Inc as well as AT&T Mobility LLC which is collectively referred as AT&T. Class action was filed against AT&T, who responded by looking to implement an arbitration agreement that was written in its contract with the Plaintiffs. It was observed that the district court did not consent to implement the arbitration agreement on state-law unconscionability grounds. It relied essentially upon the agreement’s class-action waiver provision. In case of Coneff, the Ninth Circuit stated the fact that Concepcion was written largely. It also held that FAA needed enforcement of the arbitration agreement’s class-action waiver despite claimant’s discussion that she would not be capable of judging her statutory rights without any class action. It was because of the fact that her claim were worth quite less in comparison to the cost of litigating them (Harvard Business School, “Supreme Court to Decide Rule on Class Waivers in Arbitration Clauses”). It can be observed that when the district court declined the motion to force arbitration, it had supposed that the Federal Arbitration Act (“FAA”), which is recorded at 9 U.S.C. §§1-16, does not anticipate state unconscionability law relevant to class-action waivers in clauses of arbitration (Impact Litigation Journal, “Coneff v. AT&T: Recognizing the “Continued Vitality” of the Procedural Unconscionability Doctrine Post-Concepcion”). The court also raised the question stating if the FAA excludes States from breaking in the enforceability related to few arbitration agreements on the accessibility of class wide arbitration methods. The question was addressed by the court in a positive way. By mandating arbitration to administer methods essentially at odds with its character, a state court relies upon how unique an agreement is to arbitrate in order to attain a result which is impossible to obtain by the state legislature. One of the fundamental and inherent elements related to arbitration according to the court was individualised proceedings. The court further concluded the fact that a law prohibiting class-action waivers is not acceptable thereby needing the accessibility of class wide arbitration hinders with basic features of arbitration and thus generating a scheme which is inconsistent with the FAA (United States Court for Ninth Circuit, “United States Court Of Appeals for the Ninth Circuit”). While deriving similar conclusion, it was noted that majority of the people in the court did not accept the opponents’ discussion in relation to the possible exculpatory impact related to class-action waivers. The opponents claim that class proceedings are quite important in order to act against ‘small-dollar claims’ with all probability would be ignored in the legal system (United States Court for Ninth Circuit, “United States Court Of Appeals for the Ninth Circuit”). It was argued by the Plaintiffs that the case of Concepcion is quite noticeable and their arguments tend to be convincing. On the onset, it was argued by the Plaintiffs that Supreme Court precedents need arbitration related to statutory rights in case when a potential complaint may effectively claim those rights in the arbitral forum. Defendant also mentioned the fact that each Wireless Services Agreement comprises a choice-of-law clause making use of the legal system practiced in the Claimant’s home town, i.e. California, as the monitoring law. Defendants state that under the law related to each applicable state, the class-action waivers provisions, in the context of WSAs, are neither procedurally unconscionable nor substantively unconscionable. Furthermore, Plaintiffs stated the fact that the Washington Supreme Court’s rule upon unconsionability related to class action waivers is distinct from California’s rule. According to claimants, class-action waivers are unconscionable on the basis of the nature of cases. Plaintiffs mentioned the fact that Concepcion would not be applicable to an adequately narrow and fact-based state-law rule for negating class action waivers (United States Court for Ninth Circuit, “United States Court Of Appeals for the Ninth Circuit”). The foremost concern for the district court to identify is whether the choice-of-law provision comprised in the WSAs, is valid or not. It is asserted by the Plaintiff i.e., Coneff that implementation of the choice-of-law clauses would disobey Washington’s basic public policy against class-action waivers in the context of arbitration conformity. It is worth mentioning that the court, characterised to be diverse, as is the case here, makes use of the choice-of-law rules related to the forum state. It is in this context that there must be real conflict between the laws and interests of Washington as well as laws and interest of any other state to be identified prior to the involvement of the Washington courts in a dispute of law analysis. Subsequently, as noted by the district court it has been observed that the choice of the applicable law is generally a two-part investigation. The former part of investigation states that a court needs to determine if there is a significant difference between the potentially applicable laws. The later part of the investigation asserts that a court needs to determine if the parties’ choice-of-law is effectual or not (Jennefer, “United States District Court Western District of Washington At Seattle”). It has been observed that not only the Supreme Court 2009-2010 period continued the trend favouring arbitration; however, it also set up a argument for the subsequent term regarding the implementation of class-action waivers in case of arbitration agreements and the degree to which the FAA anticipates state contract law (Westover and Et. Al., “Supreme Court’s 2009-2010 Term Sets up Showdown over Class-Action Waivers in Arbitration Agreement”). Conclusion The best decision in the context of the two case studies i.e., Italian Colors Restaurant v. American Express Related Services Co and Coneff v. AT&T Crop, can be regarded as in the case of Coneff v. AT&T Corp. This particular emphasis can be regarded on the basis of the fact that in the context of first case the decision offered lacked transparency in terms that the refusal was not justified apparently during the session of arbitration in comparison to the later. However, the judgement rendered in the second case has been quite transparent. Arbitration is considered as one of the most significant dispute resolution techniques. It can be considered as a legal way to resolve the disputes outside the court. It can be noted that both the cases i.e., Italian Colors Restaurant v. American Express Related Services Co and Coneff v. AT&T Crop are related to each other in the sense that it deals with arbitration. In Italian Colors Restaurant v. American Express Related Services Co, Plaintiffs challenge was mainly to the arbitration clause itself instead to the entirety of the Card Acceptance Agreement. It is significant to make certain improvements in the arbitration clause so that the conflict can be resolved and proper judgement can be offered. Amendments in the arbitration clause will be of great assistance in offering the parties engaged with conflicts or disputes. It was stated by the court that the fees of the experts hired should be higher in comparison to the Plaintiffs revival. However, it was difficult to recover the expert fees in case of Italian Colors Restaurant v. American Express Related Services Co. In the second case, i.e. Coneff v. AT&T Crop, it was learnt that Defendants are generally forgiven from any kind of liability because of the provision contained in the WSAs. They stated that such activities tend to disobey Washington’s basic public policies. Therefore, it is quite significant for the judges to offer fair judgement when transferring the cost of litigation to the parties. Offering fair judgement will prevent the Plaintiff’s from bearing the overall cost of litigations even if they are defeated by the Defendants. Offering fair judgement related to the case will further assist in making the arbitration process more applicable and adequate with regards to dispute resolution. It will also enhance the significance of the arbitration. References Consumer Financial Service Group. Second Circuit Splits with Ninth Circuit on Enforcement of Class Action Waivers. Cases, 2012. Web. 19 June, 2011. FindLaw. United States Court of Appeals, Second Circuit. US 2nd Circuit, 2012. Web. 19 June, 2011. Harvard Business School. Supreme Court to Decide Rule on Class Waivers in Arbitration Clauses. Corpgov, 2010. Web. 19 June, 2011. Impact Litigation Journal. Coneff v. AT&T: Recognizing the “Continued Vitality” of the Procedural Unconscionability Doctrine Post-Concepcion. About, 2012. Web. 19 June, 2011. Jennefer. United States District Court Western District of Washington at Seattle. Introduction, 2012. Web. 19 June, 2011. Kalbayer. United States Court Of AppealsFor The Second Circuit. Uploads, 2007. Web. 19 June, 2011. National Association of Manufacturing. Brief For Verizon Communications Inc. And National Association of Manufacturers as Amici Curiae In Support Of Petitioners. Argument, 2012. Web. 19 June, 2011. New York Law Journal. United States District Court Southern District Of New York. Overview, 2012. Web. 19 June, 2011. United States Court for Ninth Circuit. United States Court Of AppealsFor The Ninth Circuit. Datastore, 2012. Web. 19 June, 2011. Westover, Gail L., Wilson G. Barmeyer and Brendan Ballard. Supreme Court’s 2009-2010 Term Sets up Showdown over Class-Action Waivers in Arbitration Agreements. Commentary, 2012. Web. 19 June, 2011. WIPO. Arbitration. Meeting, 2012. Web. 19 June, 2011. Williamette University. Coneff v. AT&T Corp.Admission, 2012. Web. 19 June, 2011. Sutherland. Legal Alert. Files, 2011. Web. 19 June, 2011. Read More