Wednesday, September 26, 2007

Arbitration Notes

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  • First, the Supreme Court has granted certiorari in Preston v. Ferrer, on a Buckeye preemption issue.  "Judge" Alex  [E. Ferrer]  arbitrates petty civil disputes in a taped television series.  He signed an agreement containing an arbitration clause with Artist Manager Arnold Preston, but didn't make the stipulated payments.  Preston filed for arbitration, but Judge Alex challenged the legality of the entire agreement under the California Talent Agencies Act.  This Act, among other things, provides that  disputes under the Act must be referred to the California Labor Commissioner.  Judge Alex obtained an injunction in state court against the arbitration; the state court ordered that the legality of the Alex-Ferrer agreement be decided by the Labor Commissioner.  An appellate court affirmed, and the California Supreme Court denied review without opinion.  The issue on which the Supreme Court granted cert is whether the FAA and Buckeye require that an arbitrator determine the gateway arbitrability issue, or whether Buckeye is distinguishable because the California statute at issue in Preston vests initial jurisdiction in an administrative agency and does not involve a party seeking judicial determination of the issue.  Here's the writ petition.
  • Second, the Ninth Circuit has joined several other circuits in holding that arbitrators, like federal courts, have broad discretion in deciding whether to apply offensive non-mutual collateral estoppel.  The federal circuit courts currently are divided on the issue.  Part of the confusion among the courts results from the very different factual posture of cases in which a similar legal issue arises.  For example, was the original case an arbitral or judicial decision?  Were both or only one of the parties identical?  Was the issue below whether the arbitrator was required, permitted, or forbidden to apply collateral estoppel?  For the Ninth Circuit case, see Collins v. D.R. Horton, Inc.  Hat tip: Ross Runkel.

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