The Arbitration Act of 1925 set up a regime aiming to settle disputes quickly and cheaply. The system depends on courts to make it work. Courts don't do quick and cheap. Sorry.
The Fifth Circuit proved the point this week. The appeal turned on whether a district court erred by ordering a respondent in an arbitration (Old Colony) to pay $29,600 as a deposit to cover American Arbitration Association fees. The arbitrators had directed the claimant (Dealer Computer Services) to front the money for Old Colony. The court held the question procedural and thus one for the arbitrators. Dealer Computer Services Inc. v. Old Colony Motors Inc., No. 09-20049 (5th Cir. Nov. 19, 2009).
The appeal took 10 months and cost Old Colony — the pauper – the writing of 50-page and 19-page briefs plus a trip to New Orleans for its lawyer. Quick and cheap?
Blawgletter gets the bee gotta buzz, bird gotta sing aspect of the federal court system. It can't help its nature — deliberative and collegial. (The bee says buzz buzz buzz; the bird sings tweedily tweedily twee; and judges think long and hard, but with little thought to cost).
Some courts have dealt with the slow and costly problem by granting sanctions for stringing out the process and threatening worse. (Recent case here.) Others have taken to advising corporations not to include an arbitration clause in their contracts and to use a jury waiver instead.
Neither the blunderbuss nor the dodge seems helpful to us. Ruling timely does.
By the way, why did DCS insist on forcing Old Colony to arbitrate and to pay its part of the deposit? You can't get blood from a turnip, they say. And you won't get any hint at the answer from the court's opinion. But the briefing reveals that Old Colony wanted to address DCS's claim through a pending class arbitration and that DCS preferred not to. The quicker and cheaper way, you know.
