Kenneth Cesta of Carlton Fields has authored this article, available in JD Supra, discussing the Third Circuit’s decision in Sapp v. Industrial Action Services, LLC. The court was confronted with a provision similar to those often found in financial transactional documents, delegating the determination of disputes regarding monetary calculations to an accounting firm. The question for the court in Sapp was whether the contractual delegation constituted an agreement to have the accountants serve as arbitrators, or as experts in support of litigation of the dispute. The Third Circuit overruled the lower court’s determination that the provision constituted an arbitration agreement, and thus vacated the court’s order compelling arbitration.

“Second Circuit Upholds the Enforceability of an Arbitration Filing Deadline, and Finds Litigants Cannot Evade Arbitral Confidentiality Rules in Court Filings”

The Second Circuit’s recent decision in In re IBM Arbitration Agreement Litigation is the focus of this article by Sullivan & Cromwell, available on Lexology. The decision is notable for two propositions that often are of interest to drafters of contractual arbitration provisions. First, the courts conceptually will enforce the parties’ agreement to establish a shortened time period in which a claim may be brought, at least where the time limitation does not make “access to the forum impracticable.”

The second important issue from the decision draws on confusion by parties between arbitration privacy and confidentiality. The fact that an arbitration takes place in a private office rather than a courtroom does not necessarily preserve the confidentiality of the proceeding. In particular, a party’s expectation of confidentiality often meets with an unpleasant surprise when arbitration pleadings and evidence make their way into court filings in proceedings, for example, to confirm or vacate an award. A party’s attempt to have the information filed under seal may be rejected based on the right of public access to judicial proceedings. The Second Circuit, however, determined that there is a balancing required between the presumption of public access to judicial documents and the Federal Arbitration Act’s “strong policy protecting the confidentiality of arbitral proceedings.” Considering the competing factors at play in the case before it, the Second Circuit held that it was appropriate to seal the documents at issue.

Valerie Sanders of Eversheds Sutherland has authored this article, available in Lexology, discussing the Eleventh Circuit’s decision in Payne v. Savannah College of Art & Design.

As discussed in the article, the court rejected a claim of discrimination and retaliation by a college’s terminated fishing coach that it would be unconscionable to require him to arbitrate his claims where the contract included a an arbitrator fee-shifting provision, even though the school was required to advance the fees subject to potential reimbursement if it prevailed.

The claimant also unsuccessfully argued that the arbitration provision’s requirement that “required selection of a federal judge if one were available, and a person with five years’ experience in the relevant area of law, was unconscionable,” in that it “effectively limited the pool of arbitrators to two white men.”

There’s a lot to unpack in this article by Valerie Sanders of Eversheds Sutherland (available on Lexology), discussing the 11th Circuit’s opinion in Nuvasive, Inc. v. Absolute Medical, LLC.

NuVasive brought claims for breach of an exclusive distribution agreement, one of which–for breach of contract–was stayed by the court pending arbitration. After the arbitrators found breach but no damages, the judicial proceedings resumed, during which NuVasive discovered that an Absolute Medical arbitration witness who had testified remotely received real time text prompts from an Absolute Medical principal.

NuVasive successfully moved to vacate the arbitration award, for the reason that the award was procured by fraud. On appeal, the 11th Circuit affirmed the vacatur, not only on substantive grounds but also notwithstanding that the three month period to seek relief had expired. According to the court, the circumstances supported the narrow situation in which a court could equitably toll the limitations period.

While the granting of the extension of time in which to seek vacatur may be the important legal point decided by the 11th Circuit, perhaps the most important takeaway for attorneys and arbitrators in this era of Zoom arbitrations is the added importance of monitoring remotely testifying witnesses. While hopefully this case constitutes an outlier of witness and client misbehavior, it nonetheless serves as a reminder that permitting testimony outside the physical presence of the arbitrators calls for enhanced diligence.

Attention arbitration lawyers: the U.S. Supreme Court today issued its decision in Coinbase, Inc. v. Bielski, holding that a party who unsuccessfully seeks in federal court to compel arbitration will, by filing an interlocutory appeal, bring the court proceedings to a standstill pending the resolution of the appeal. The closely watched case will bring clarity to an issue that has divided appellate courts, and frustration to litigants whose eagerness to proceed will suffer delay by satellite litigation regarding arbitrability.

Apart from the holding, and more entertaining to a parent who reared young children in the 1990s, I particularly enjoyed this nugget from the dissent filed by Justice Jackson, as she cited one of my kids’ favorite reads: “In categorically resolving these conflicts in favor of the pro-arbitration party, the majority’s analysis comes down to this: Because the pro-arbitration party gets an interlocutory appeal, it should also get an automatic stay. Ibid.; see L. Numeroff, If You Give a Mouse a Cookie (1985).”

For those unfortunately not blessed by the umpteen recitations to young children, it starts like this: “If a hungry little mouse shows up on your doorstep, you might want to give him a cookie. And if you give him a cookie, he’ll ask for a glass of milk. He’ll want to look in a mirror to make sure he doesn’t have a milk mustache, and then he’ll ask for a pair of scissors to give himself a trim…”

Kenneth Cesta of Carlton Fields has authored this article, available in JD Supra, discussing the Alabama Supreme Court’s decisions in Women’s Care Specialists, P.C. v. Dr. Margot G. Potter and Dr. Karla Kennedy v. Dr. Margot G. Potter, in which the court held that a former physician employee’s claims for tortious interference and defamation “related” to her employment, so as to require the submission of the claims to arbitration.

Dena Stoddard and Richard Waddington of Chandler law tackle the pros and cons, as well as the enforceability, of arbitration clauses in law firm retainer agreements, in this article, available at JD Supra.

Arbitration is intended to be private. Unlike a court trial, arbitration occurs in a conference room, with no right of the public to enter. Privacy, however, is different than confidentiality. Unless the parties have an agreement specifically providing that they cannot discuss what transpired, or publicly distribute the transcript or exhibits generated during the arbitration, what transpires in an arbitration room does not necessarily stay in the arbitration room.

Also, a party seeking to judicially confirm or vacate an arbitration award may find it helpful or necessary to include in their public filings copies of exhibits or transcript passages. Even if one or both parties desire that information to be sealed from public view, there is another voice–the judge–who is required to consider the public’s interest in transparency.

A recent example is presented by the Delaware Chancery Court’s decision in Soligenix, Inc. v. Emergent Prod. Dev. Gaithersburg, Inc., discussed in this article by Sidley attorneys Ana Blinder and Alex Kaplan.

JD Supra has published this article, submitted by Orrick, Herrington, discussing the decision by the Western District of North Carolina in Granados v. LendingTree, LLC, holding that an a LendingTree customer, allegedly victimized by a cyber attack, must arbitrate his claims against the company. Upholding the recommendation of a Magistrate Judge, the court held that the company’s online Terms of Use provided sufficient notice to the plaintiff that claims would be subject to arbitration.

Melissa (Osipoff) Camire and Henry Thomson-Smith, of Fisher Phillips, have provided this article, discussing a pair of decisions issued by Judge Paul Engelmayer, who sits on the Southern District of New York. Addressing the recently enacted EFAA, which amended the Federal Arbitration Act by prohibiting employers from unilaterally enforcing arbitration agreement for disputes alleging sexual assault or harassment, the article notes that Judge Engelmayer found the statute–which uses the word “case” and not “claim”–serves to preclude arbitration of any cause of action asserted in a complaint alleging sexual harassment or discrimination.

However, in the other case, Judge Engelmayer, finding the allegations of sexual harassment to be insufficient to survive a motion to dismiss, determined that the EFAA did not serve to preclude arbitration of the other alleged claims.

The takeaway for the authors is that these decisions may encourage those with “plausible claims of sexual harassment” “to allege sexual harassment in order to avoid arbitration of other employment claims.”

For those interested, the cases are Johnson v. Everyrealm, Inc. and Yost v. Everyrealm, Inc.