With it being summer, there have been no blockbusters over the past couple of days, but a few interesting cases, reinforcing some basic principles.
Scope of the Arbitrator’s Authority – In Kinder Morgan, Inc. v. United Steel Paper and Forestry Rubber Mfg. Energy Allied Indus. & Serv. Works Int’l, 2020 U.S. Dis. LEXIS 157983 (S.D. Tex.)(Aug. 13, 2020), the Magistrate Judge reminds us that the arbitrator can’t simply impose “justice [and] equity….” In this case, which may win the 2020 award for the longest caption, the arbitrator “unabashedly admitted that he completely ignored the express limitations on his authority as forth in the [collective bargaining agreement]”, which provided that “the arbitrator shall not have the authority to add to, subtract from, alter, amend or modify any provision of this Agreement.” Rather than interpreting specific language of the CBA, the arbitrator, according to the court, based the award on alleged representations made by a Kinder Morgan negotiator. Even in recommending vacating of the order, the Magistrate Judge still reaffirmed the limited scope of arbitral review and the broad discretion of an arbitrator, “Had the arbitrator ruled in favor of [the union] based on his construction and application of the contractual language at issue, I would have been forced to recognize the arbitral award even if I believed the decision to be wrong, boneheaded, or silly.” I will track the case to see whether the USW files objections and, if so, what the District Court does.
Use of Mediation Reports in Subsequent Litigation – One of the on-going debates in mediation theory is the degree to which mediations are really confidential. Wanderer v. Kiewit Infrastructure West Co., 2020 U.S. Dist. LEXIS 158289 (E.D. Cal.)(August 31, 2020), puts a mediator’s report to interesting use in the court’s determination of whether to approve settlement of a representative action under the California Labor Code and Private Attorneys’ General Act. The parties reached a settlement and, as usual, the court held a fairness hearing to determine whether to approve the resolution. The case had been mediated and the mediator prepared a report. In resolving four of the seven prongs of fairness – “strength of the plaintiff’s case,” “risk, expense, complexity and likely duration of further litigation,” “extent of discovery completed and stage of the proceedings,” and “experience of counsel” – Judge Shubb considered the effect of preparing for mediation and gaining insight from a third party mediator on the parties’ analysis of risk and likelihood of success. The case is a great reminder of the benefits to both counsel and the court of the mediation of heavily contested cases.
The Standard for Determining a Motion to Compel – An otherwise routine application to compel arbitration, Ahmetasevic v. Citibank, N.A., 2020 U.S. Dist. LEXIS 157989 (E.D. Pa.)(August 31, 2020), contains an interesting discussion of the standard to be applied by the court in determining whether the parties have agreed to arbitrate. Judge Slomsky discusses whether to treat an application to compel arbitration as a motion to dismiss under Fed. R. 12(b)(6) or a motion for summary judgment under Rule 56(a). The difference in the two tests is what material the court will consider in resolving the issue. Under Rule 12(b)(6), the court considers only the complaint, attached exhibits, matters of public record and “undisputedly authentic documents.” Under Rule 56(a), the court has broader discretion to consider other documents. The court chose the summary judgment standard, which allowed consideration of the parties’ credit card agreement, which was attached to the motion to compel arbitration, but not the original complaint. The motion to compel was granted. The lesson from the case – attach the agreement to your motion to compel and save yourself some agita. The case also contains a succinct summary of the standards to be applied in determining whether there is an enforceable arbitration agreement.
That is it for today. I hope you will find these brief summaries useful. They are not an attempt at deep scholarship, but, rather, a heads up as to issues you might consider as you noodle your cases.
See you Friday.