Handshake with TearLast Thursday, the Association for Corporate Growth hosted a talk in Dallas about deals that result in a lawsuit or arbitration. Several dozen deal-makers, mergers and acquisitions lawyers, and consultants attended. The Honorable Jeff Kaplan of JAMS, Elizabeth Brandon of Vinson & Elkins, and I gave the talk. Ladd Hirsch of Diamond McCarthy organized and moderated the event. In a little over an hour, we discussed the characteristics that commonly occur in transactions that produce formal claims, offered suggestions on how deal-makers can manage the risk of earl disputes, and answered several thoughtful questions from the audience. I enjoyed the session immensely. Please see my review of the lively discussion below.
Continue Reading Why Some Deals Result in Disputes

Banned ItemsIn 2016, despite contracts that mandate one-on-one arbitrations, consumers will likely gain the right to bring claims against banks, credit card issuers, and other lenders in class actions. The new rule, which the Consumer Financial Protection Bureau announced on October 7, 2015 it will probably issue next year, will partially reverse a string of recent Supreme Court decisions that made class-banning arbitration clauses broadly enforceable.

The action by the Bureau will vastly raise the stakes for disputes involving practices affecting large numbers of consumer finance customers.
Continue Reading Banning Bans on (Some) Class Cases

In 2010, when it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress created the Consumer Financial Protection Bureau as a watchdog for consumers who buy financial products and services. The CFPB’s mission included looking at the effect of arbitration clauses in consumer contracts and proposing rules to regulate them if appropriate.

LuxotticaConcepcion in question

Last week, the Ninth Circuit found a way around the U.S. Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011). The panel held, 2-1, that a qui tam-like claim differs enough from a state-law class action claim to take it beyond Concepcion‘s preemptive reach.

The ruling means, in the Ninth Circuit, that Concepcion will not allow defendants to use arbitration clauses to defeat claims that private plaintiffs bring on behalf of the state and that defendants may therefore face individual cases, in court or arbitration, that put far more than the individuals’ claims at stake.
Continue Reading Qui Tam-Like Claim Eludes Arbitration Act Oblivion — For Now

imageBetter results

Lawyers who like to handle disputes on a basis that shares risk with their clients often prefer the speed and lower cost of arbitration. The process has its drawbacks; some people worry about fuzzy standards and the lack of review for legal errors. And some general counsel even swear that it costs just as much and takes every bit as long as a lawsuit.

To which I say: hire somebody who will work on a contingent-fee or hybrid basis. You’ll get better, more efficient results faster.

But sometimes courts render rulings that seem to put arbitration into a second-class legal stratum, a minor league of law, a dustbin of dispute resolution. The Eighth Circuit did such a thing just this week.


Continue Reading The Dustbin of Dispute Resolution

WIth apologies to The Clash
With apologies to The Clash

The class-action variety of plaintiffs’ lawyer abhors the federal Arbitration Act.

You can see why. The Supreme Court has turned the FAA into a class action killer. See AT&T Mobility LLC v. Concepcion, 563 U.S. 321 (2011) (holding that FAA pre-empts state law against bans on class treatment of claims),  and Am. Express Co. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) (holding that FAA requires enforcement of class action ban even if it thwarts claimants’ ability to vindicate their rights).

But a new FAA ruling by the Second Circuit may afford some comfort to other plaintiffs’ lawyers. Not a lot. Some.
Continue Reading Stay or Go?