Attorney General Of Minnesota Say No, Joining Other Political Figures.
On October 4, 2016, Adam Betz reported for the Star Tribune that Minnesota’s Attorney General Lori Swanson opposes Wells Fargo’s use of arbitration clauses to require its customers to arbitrate claims concerning unauthorized accounts opened by Wells Fargo. And the LAT reports that on October 3, Sen. Sherrod Brown (Dem. – Ohio) introduced legislation in Congress to prevent Wells Fargo from invoking arbitration in contracts with customers.
The Maryland Judiciary has commissioned research to be conducted by independent researchers on the efficacy of mediation with small claims-type cases. The research claims to be “the only research in the country that compares the attitudes and changes in attitudes of participants who went through ADR to an equivalent comparison group who went through the standard court process.” The research also examines the long-term and short term effects of employing different mediation strategies, such as reflecting back the emotions and interests of the participants, and eliciting solutions, offering solutions, and caucusing.
The research showed significant benefits for those who went through the ADR process. Participants were more likely to resolve all their issues. They had an increase in their rating of their level of responsibility for the situation. Participants were more likely to be satisfied with the judicial system than others. They were more likely to emerge with a better attitude toward the other side, and with a higher satisfaction with the outcome.
The study also found interesting results regarding the strategies employed by mediators. In the short run, reflective strategies seemed to make participants feel more positive, though such strategies seemed not to have a statistically significant effect in any positive or negative outcomes. Frequent caucusing correlated with lower satisfaction, and with a higher likelihood of return to court. Also, “eliciting strategies” – asking participants to suggest solutions, summarizing the solutions, and asking them how the solutions would work for them – were strategies associated with a lower rate of return to court in the long run. Being directive by offering solutions was a less successful strategy than eliciting solutions.
Query whether reflecting back the emotions of participants, keeping them all in the same room without caucusing, and avoiding evaluation and directive solutions will work with equal success in more complex mediations.
Rule Would Not Apply To Consumer Sectors Outside Bailiwick Of Consumer Financial Protection Bureau
Jessica Silver-Greenberg and Michael Corkery, who have reported recently in the NYT about how arbitration clauses are spreading throughout consumer contracts, now report in the May 5, 2016 online edition of the NYT, that the Consumer Financial Protection Bureau will seek new rules to prevent lenders from forcing people to agree to mandatory arbitration clauses that bar class actions – a move that could be accomplished without Congressional action.
Vigorous opposition can be expected from the U.S. Chamber of Commerce and lenders, as well as other businesses that want mandatory arbitration clauses.
The rule can only apply to consumer financial companies the agency regulates, Therefore, “[i]t would not apply to arbitration clauses tucked into contracts for cellphone service, car rentals, nursing homes or employment.”
Recall the key case that opened up the widespread use of arbitration clauses in consumer contracts is AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), and the rule would not affect cell phone companies.
I posted about SingerLewak v. Gantman on July 31, August 31, and September 1, 2015. This is an interesting case discussing the so-called “public policy exception” that will sometimes justify review of an arbitral award by the superior court – though in the end, not in this case.
Previously, the Court of Appeal had ordered the case published in the morning, only to revoke the publication order in the afternoon, when it realized that the time to order publication had expired. The Justices then wrote a letter to the Supreme Court asking for publication. Yesterday, the Supreme Court ordered publication.
Ted Bacon, Mike Hensley, and Matt Hansen, my colleagues at AlvaradoSmith, represented SingerLewak, the appellant/plaintiff prevailing on the appeal. I was pleased to see publication was ordered, as I had written the letter to the Court of Appeal requesting publication.
Proposed New Exception To Mediation Confidentiality Statutes Would Utilize In Camera Screening Process.
On August 7, 2015, the California Law Revision Commission directed staff “to begin the process of preparing a draft of a tentative recommendation that would propose an exception to the mediation confidentiality statutes (Evid. Code sections 1115-1128) to address ‘attorney malpractice and other misconduct.’” For minutes of the meeting, follow the link. The excerpt of the minutes concerning this topic is found at pages 4 to 6.
COMMENT: I blogged on April 8, 2012, about legislative efforts to “fix” the mediation confidentiality statutes to allow the introduction of evidence from a mediation in cases involving attorney malpractice or breach of fiduciary duty.
A Failed Mediation: Report from The Times of India
In what is described as “a scene straight out of a curry western,” in the October 13, 2014 edition of The Times of India, rival gang members met at a gym in South-east Bangalore for a “mediation,” but “soon things started falling apart.” One group drew its weapons, and the other, seriously outnumbered, “suffered serious injuries, while Nakhra was hacked repeatedly till he died on the spot.” The gym owner absconded, “raising suspicion that he set up” the victim for his rivals. A senior police officer opined that “[t]he mediation was just a pretext” providing an opportunity to “strike with precision.”
Apparently the participants failed to follow JAMS or AAA rules for choosing a neutral mediator.
Mark D. Gough Of The Cornell University School Of Industrial & Labor Relations Has Studied The Outcomes
Mark D. Gough has published in the Berkeley Journal of Employment and Labor Law the results of a study of some 700 employment discrimination cases – and the results are striking, whether looked at from the perspective of management or labor.
Matthew M. Sonne, an attorney with an employer-based practice, draws the following conclusion from Dr. Gough’s study: “Should the Company Utitilize Arbitration Agreements? A Recent Empirical Study Says, ‘Yes.’” The Pros and Cons of Employment Arbitration Agreements, Orange County Business Journal, August 18, 2014, p. B-53.
Hunter Pyle, an attorney with an employee-based practice, surely agrees that arbitration agreements benefit employers, but has a different slant, as represented by his blog post entitled, “The Profoundly Negative Impact of Arbitration on Workers’ Rights.” Workers’ Rights Blog, March 2, 2014, published by Sundeen Salinas & Pyle.
While I have not found Dr. Gough’s article on line, Mssrs. Sonne and Pyle have summarized some of the key findings:
Employees pursuing employment discrimination litigation in courts were nearly 40% more likely to win. (Sonne).
Employee discrimination awards in court were nearly twice as large as in arbitration. (Sonne).
The average award to a successful discrimination plaintiff in court was $802,487, versus $412,052 in arbitration.
“Arbitration decreases the odds of an employee win by 59%.” (Pyle).
“Award amounts decrease by 35% in arbitration.” (Pyle).
Take a look at my earlier August 15, 2014 post entitled, “Executive Order Limits Pre-Dispute Arbitration Clauses For Federal Contracts Exceeding $1 Million In Title VII And Sexual Assault/Harassment Cases” – and draw your own conclusions.
Fair Play and Safe Workplaces Executive Order Is Announced July 31, 2014
One of the impactful judicial trends in recent years has been the expanded use of arbitration in employment disputes. Counter to that judicial trend is the recent Executive Order announced July 31, 2014 by the White House.
Section 6 of the Executive Order provides:
“Complaint and Dispute Transparency. (a) Agencies shall ensure that for all contracts where the estimated value of the supplies acquired and services required exceeds $1 million, provisions in solicitations and clauses in contracts shall provide that contractors agree that the decision to arbitrate claims arising under title VII of the Civil Rights Act of 1964 or any tort related to or arising out of sexual assault or harassment may only be made with the voluntary consent of employees or independent contracts after such disputes arise. Agencies shall also require that contractors incorporate this same requirement into subcontracts where the estimated value of the supplies acquired and services required exceeds $1 million.”
There are particular exclusions from this requirement for contracts or subcontracts for the acquisition of commercial items or commercially available off-the-shelf items; for employees covered by collective bargaining agreements; and, for valid contracts to arbitrate entered into prior to the bidding covered by this Executive Order.
Pointing to conclusions of the preliminary report that “larger institutions are more likely to use arbitration clauses, arbitration clauses in account agreements can often be complex, and the agreements often contain class-action waivers,” Mr. Zeisel comments that the CFPB’s preliminary report may leave a misleading impression that arbitration clauses disadvantage consumers.
He concludes, “we are pleased the CFPB now says it will compare the costs and benefits to consumers from arbitration with those derived from individual and class action litigation.” Indeed, such a result would be an excellent outcome, because it is devilishly difficult to compare litigation and arbitration costs and benefits, and such a comparison would be of great benefit to consumers, corporations, and legislators.
However, some of Mr. Zeisel’s comments deserve scrutiny:
He says that for nearly 90 years, arbitration has been a valuable means for consumers to quickly and easily resolve disputes in an efficient and affordable manner. Ninety years – that’s almost the exact age of the Federal Arbitration Act of 1925. But as Prof. Imre Szalai convincingly shows in his historical study of arbitration in the United States, the Federal Arbitration Act was created with an intent to provide an efficient and affordable dispute mechanism for merchants of equal bargaining power. See my February 19, 2014 review of Outsourcing Justice. Whether consumer arbitration is cost efficient is precisely the subject that deserves further study by the CFPB.
Mr. Zeisel comments, “Congress recognized the importance of arbitration as a means of resolving consumer disputes when it enacted the Federal Arbitration Act in 1925.” But “resolving consumer disputes” played a very minor part, if any, in the enactment of the Federal Arbitration Act. And that is precisely why the fairness and efficiency of consumer arbitration deserve further attention by Congress.
In support of the argument that consumer arbitration is cost efficient, Mr. Zeisel states that studies show: “the upfront cost to the consumer was far less than the fee required to file a complaint in the federal courts.” But that’s not a simple comparison. The fee for filing a complaint in federal court is $350. Given the restrictive requirements of federal jurisdiction, the cases filed in federal court are not going to be small claims cases. If the matter is a consumer class action, a $350 filing fee is not an excessive entry cost. Consumer advocates argue that class actions provide economies of scale. On the other hand, most consumer disputes are much smaller than class action disputes, and the litigation alternative is not federal court, but small claims court, where filing fees will be less than $350. (And in fact, many consumer arbitration clauses have a “carve-out” provision allowing for the filing of small claims.).
Now if the CFPB is able to methodically compare costs and benefits to consumers of arbitration versus litigation, that may help to answer the question we started with: whether consumer arbitration is really fair and efficient.
A DDOS attack is intended to make a network resource unavailable to intended users. A coordinated effort is made to overwhelm the webservers – as if everyone sitting around the dinner table conspired to reach with their forks for the steak at the same moment.
As bloggers, we find the resulting chaos here and under these circumstances to be enormously frustrating and unfair. A DDOS attack allows a small number of persons to disrupt the free speech of thousands, perhaps millions, of writers and readers.
DDOS attacks have sometimes been compared to “virtual sit-ins” or “Internet Street Protests” – especially when they invade a politicized target, be it the New York Stock Exchange, or a despised bank.
But why attack Typepad, of all targets? Attacking Typepad, which is a vehicle for free speech that reaches millions, is impossible for us to see as any legitimate political protest. Do the attackers simply want to shakedown SAY Media for ransom?
Individual bloggers are powerless to do anything about such an attack, because a DDOS attack reveals a systemic problem with the use and abuse of internet resources – a problem that simply cannot be solved at the individual level.
We hope that SAY Media will invest significant resources to develop security measures that make such attacks less disruptive in the future. Such an investment is essential to preserve the extraordinary value that Typepad provides to its owners, to its customers, and to the readers of blogs hosted by Typepad.
BLOG BONUS: Wikipedia defines a DOS or DDOS attack as follows:
“In computing, a denial-of-service (DoS) or distributed denial-of-service (DDoS) attack is an attempt to make a machine or network resource unavailable to its intended users. Although the means to carry out, motives for, and targets of a DoS attack may vary, it generally consists of efforts to temporarily or indefinitely interrupt or suspend services of a host connected to the Internet. As clarification, DDoS (Distributed Denial of Service) attacks are sent by two or more persons, or bots. (See botnet) DoS (Denial of Service) attacks are sent by one person or system.”