American Arbitration Association Rules

Last year, the AAA amended its Commercial Rules, with the changes applying to cases filed after September 1, 2022.  An article by Lisa Romeo, an Assistant Vice President of the Association, in the current edition of “The Franchise Lawyer” summarizes those changes, “What’s Old Is New Again: Updates to the American Arbitration Association Commercial Arbitration Rules,” The Franchise Lawyer, p. 10 (Summer 2023) and on-line at https://www.americanbar.org/content/dam/aba/publications/franchise_lawyer/fl-summer-2023.pdf.   The article is useful, not only for those who have not yet dealt with a case under the new rules, but also as a quick, “desk drawer” reference for experienced counsel and arbitrators.

Failure to Pay Arbitration Fees; Mass Filings

In response to prohibitions against class proceedings which manufacturers and others inserted into their form arbitration agreements, Plaintiffs’ counsel have taken to filing thousands of consumer arbitrations as a group. Wallrich v. Samsung Electronics America, Inc., 2023 U.S. Dist. LEXIS 161193 (N.D. Ill. September 12, 2023)(Leinenweber, J), deals with some of the problems raised by such filings. The decision relates to demands filed on behalf of 49,985 alleged users of Samsung devices. Under the AAA’s rules, Samsung was responsible for approximately $4,125,000 of administrative filing fees. When Samsung failed to pay those fees, the AAA administratively closed the case.  Judge Leinenweber compels arbitration as to approximately 35,000 of the claimants, dismissing the case as to the remaining petitioners for lack of venue. The opinion addresses the appropriate venue for a motion to compel in the mass claim context and the obligation of a respondent to pay the fees which result from the “business decision[s]” it makes in drafting terms and conditions.

Sitcomm Arbitration Association

Counsel whose clients are presented with an “arbitration award” from Sitcomm Arbitration Association will find support for opposing confirmation of that “award” in Ferg v. Wells Fargo Home Mortgage, 2023 U.S. Dist. LEXIS 161716 (S.D. Ga. August 18, 2023)(Ray, M.J.). In recommending that the court dismiss as frivolous Ms. Ferg’s pro se attempt to confirm the award, the court provides numerous citations to decisions from varying jurisdictions which reject the results of proceedings before that “tribunal.”

David A. Reif, FCIArb
Reif ADR
Dreif@reifadr.com
Reifadr.com