Invoking a rarely utilized writ of prohibition, an employer successfully prevailed upon the West Virginia Supreme Court to prohibit a lower court from enforcing its order denying a motion to compel arbitration of claims brought by a former employee. In State of West Virginia Ex Rel. Troy Group, Inc., A Delaware Corporation v. The Honorable Judge David J. Sims, Judge of the Circuit Court of Ohio County, West Virginia, the Supreme Court rejected the circuit court’s finding that ““significant and troubling questions exist with regard to the authenticity of the agreement produced by [the employer].” The court’s opinion involved review and analysis of the circumstances underlying the agreement, and its existence only in a digital format, which led one member of the Court to dissent, taking issue with what he characterized as the Court’s substitution of “itself as lower court judge and jury, engaging in fact-finding and applying its factual determinations to render a determination the lower court declined.”

This article by Chris Cooke, available through Complete Business Update (CMU), discusses a Ninth Circuit dispute between HBO and the Michael Jackson estate regarding the duration of a non-disparagement provision contained in a 1992 contract between HBO and Jackson. The estate contends the provision endures forever, as well as a requirement that disputes arising under that provision be arbitrated. HBO argues that free speech rights, together with the “absurdity” of the notion that HBO would forever surrender the ability to seek judicial vindication of those rights, require a determination that the dispute is not arbitrable.

The lower court held the non-disparagement provision and arbitration requirement remain effective, but stayed its order pending Ninth Circuit review.

Steven Phillips of Jackson Lewis provides an excellent overview of FINRA arbitration rules and procedures applicable to employment matters in this article published by The National Law Review. This is well worth a read for those contemplating the submission of an employment arbitration to this forum.

“Many people opt for binding arbitration because it is supposedly faster and cheaper, and binding – thus final.  Some people have to arbitrate their matters that they cannot settle amongst themselves, because there are issues that they cannot try before a court given the court’s mandatory obligation to report certain matters to the proper authorities (e.g. taxing authorities). While many people seek the finality of a binding result, many others are concerned that because an arbitrator is human, she/he could make a mistake.  Accordingly, they want the ability to appeal the matter to a reviewing body of some sort.”

So begins this article by Eric Solotoff of Fox Rothschild LLP, found on JD Supra, offering guidance to parties who wish to preserve a more substantive right to appeal an arbitrator’s award.

JD Supra has published this article by Katherine Blankenship and David Pugh of Bradley Arant Boult Cummings LLP, discussing the Alabama Supreme Court’s decision in Fagan v. Warren Averett Companies, LLC.

Those involved in matters involving California law may find interesting this article by Peter Choi and Joshua Rodine of Seyfarth Shaw LLP, available through JD Supra.

I am exercising a bit of editorial discretion to share this article I was invited to write by the National Golf Course Owners Association:

Anticipating Conflict: How Golf Course Owners Should Contractually Prepare

My legal career has included a variety of roles. I represented clients in litigating commercial disputes for more than two decades. I have served as “in-house” counsel to financial entities for fifteen years. And, since 1990, I have had the opportunity to regularly serve as an arbitrator and mediator of business and employment disputes.

Each of the hats I have worn has provided me with exposure to the legal agreements that form the backbone of commercial relationships. Based on my experience, I am confident that the most important provisions contained in a contractual agreement are those that dictate what will occur in the event that a dispute arises between the parties.

Face it, once a contract is signed, it is filed away and likely not to be looked at again as long as the relationship is proceeding smoothly. However, when conflict occurs, a business owner or executive—or their attorney—will root out the contract from a file drawer or a network drive in search of guidance as to what happens next.

Typically, an agreement will address such dispute-related topics as:

• The circumstances in which a contracting party is deemed to be in breach of its obligations. Contracts sometimes provide detailed performance requirements along with a warranty that they will be met. If a party falls short, it may face liability for the deficiencies. Other times, a contract will specify that actionable liability will exist only in the event of a “material“ or “willful” breach of a party’s obligations.

• The damage exposure that a party will have in the event of a contract breach. A commercial contract may include provisions that limit the amount or type of damages that a party will be obligated to pay in the event a breach occurs. Sometimes, the contract will provide for the damage exposure to be commensurate to the revenues to be paid under the contract. Contracts also may exclude categories of damage claims—for example, a claim that, by virtue of a breach, the aggrieved party suffered lost customers and profits. Other times, a contract will provide for “liquidated damages” (i.e. a defined amount of recovery even in the absence of proof of damage) or for the recovery of attorneys’ fees in the event a party prevails in its pursuit of a claim for contract breach.

• The law that will be applied to interpreting the contract language. Parties often will specify that their contract will be interpreted in accordance with a particular state’s law. Usually, this will be the state which is home to one or both of the parties, but sometimes the parties will choose the law of a third party state (for example, Delaware) which has a fully developed and recognized statutory scheme and body of law that is viewed as authoritative. Because the laws of states can vary in some circumstances, the designation of law can have meaningful consequences. For example, certain states have enacted statutes to address unfair and/or deceptive trade practices that conceivably could apply. Others have adopted laws that provide for the recovery of interest and or fees under certain circumstances.

• In what forum will a dispute be litigated. When an agreement is silent on the subject, a dispute is subject to litigation in the courts. The rules of the court will provide the scope and sequence of events, including document discovery and depositions, motions to dismiss and for summary judgment, and trial and appellate procedures.

Parties may prefer to avoid a judicial process, which can be expensive, uncertain, toxic and public. They would prefer to address disputes in a different forum. When a conflict arises, the parties can always agree to pursue a non-judicial resolution; however, the relationship may be sufficiently emotional or poisoned at that juncture that reaching an agreement to forestall litigation is challenging.

Parties anticipating the possibility of a dispute at the time of contracting may elect to include in their agreement provisions mandating a non-litigation forum, specifically arbitration or mediation. In arbitration, the parties submit their dispute for resolution to a privately selected arbitrator instead of a publicly appointed or elected judge. Because arbitration is a “creature of contract,” the parties can agree to an arbitrator who has expertise regarding the dispute at issue, and can tailor a process to more directly and expeditiously reach the heart of a business dispute. An additional benefit of arbitration is that it is a private forum, meaning that the parties can avoid unwanted publicity that can accompany the pursuit of a case in the courts.

Mediation is a process involving the attempted negotiation of a resolution with the help of a third party mediator.  Studies and anecdotal evidence consistently confirm that mediation is a powerful and effective tool for the resolution of business disputes, and can serve to preserve a business relationship.

These general contract principles carry equal force in the context of agreements executed by golf course owners. An awareness of how contract drafting can be beneficial in the event that a dispute subsequently arises can provide advantages if a contractual relationship does not play out as hoped.

Based on whether the agreement is with investors, vendors, senior-level employees, lenders or others, the specific terms most beneficial to the golf course owner will be circumstantially specific, and should be explored with counsel. It is important for a golf course owner to be proactive and mindful of these issues.

In Gulf LNG Energy, LLC v. ENI USA Gas Marketing LLC,, the Delaware Supreme Court framed the issues before it as follows: “first, whether the Court of Chancery had jurisdiction to enjoin a second arbitration that collaterally attacks a prior arbitration award; and second, whether the second arbitration in fact collaterally attacked the prior arbitration award.”

The Court answered both questions affirmatively. As to the first question, the Court held:

“Once court review under the FAA is finished, the courthouse doors are closed to the dispute. Some parties, however, have tried to open a new door by filing a follow-on arbitration or legal proceeding. In the follow-on proceeding, the claims are changed but the goal is the same—trying to undo a loss in the prior arbitration award. Settled federal and state precedent recognizes these follow-on proceedings as improper end runs around the FAA’s exclusive review process. In the words of those cases, they are improper collateral attacks on the earlier final award.”

As to the second question, the Court held that the appropriate inquiry was not the specific articulation of claims raised by the challenging party, but rather that “the focus should have been on whether [the challenging party] sought through the Second Arbitration to, in effect, ‘appeal’ the Final Award outside the FAA’s review process.”

A New Jersey court’s decision in Asphalt Paving Systems, Inc. v. Associated Asphalt Partners, LLC provides a cautionary tale for those seeking to inject an element of levity into what is supposed to be a formal proceeding.

Plaintiff later alleged that as the arbitration ended, the arbitrator asked the parties and their counsel, “What would be the result if I determined the agreement is too ambiguous to enforce?” Plaintiff also alleged that, in response, defendants’ counsel replied, “I will tell you what happens. You get sued for malpractice.”

The arbitrator subsequently ruled in favor of defendant, and plaintiff claimed this exchange constituted a threat against the arbitrator, causing him to rule as he did.

Thus began the litigation after the arbitration, involving trial level proceedings and multiple appellate rulings. Ultimately, the court ruled that the exchange was in the nature of joking banter and was not a threat, thereby undermining plaintiff’s claim that the award was procured undue means. It also did not help the plaintiff’s cause that it did not raise the claim at the time of the exchange but waited for the arbitration award to issue.

Martinez v. Trans Union LLC presented a U.S. District Court with a logical conundrum. Plaintiff brought suit alleging that financial institutions violated the Fair Credit Reporting Act by not adequately investigating claims that a wrongdoer had appropriated his identity, using it to open accounts in his name.

Defendant Credit One Bank moved to compel arbitration, alleging that plaintiffs account documents provided for arbitration.

Recognizing that the bank’s claim begged the question of whether the accounts were opened by an imposter, the court determined that a trial on this issue is required.