Miscellaneous: A Mediator’s Perspective of the M.O.U. Between the US and Iran
The Mediator’s Perspective.
In 2017, I reviewed the film The Journey for the Daily Journal. That film is about the negotiations that led to the Good Friday Agreement, putting an end to The Troubles in Northern Ireland. While our blog is focused on California mediation and arbitration, another opportunity to opine about negotiations from a mediator’s perspective seemed to good to pass up. The Memorandum of Understanding between the United States of America and the Islamic Republic of Iran presents that opportunity.
The full text of that MOU can be found here. But if the link breaks, you can easily find the text by googling the MOU. When I say that I will approach the MOU from a mediator’s third-party point of view, I mean here that I will not evaluate the substantive merits, but that I will focus on negotiation problems, such as not having all affected parties “at the table”, ambiguities, delay and impasse, and enforcement.
I will begin by reviewing each of the 14 points of the MOU with those background issues in mind. In a second part of this post, I will consider arguments that a defender of the MOU could advance for signing it. I have also made use of Claude Opus 4.8 to assist in the review of the MOU. Having provided a link to the MOU, I will not repeat the full text of the MOU.
Three problems are apparent throughout the text. First, the MOU is a two-party deal with absent stakeholders, such as Lebanon, Oman, other Gulf states, the IAEA, the UN Security Council, and unnaned regional parties. Second, most of the hard points are pushed off to a final deal. Third, the monitoring is weak. A mechanism is eventually to be set up, but nothing is said about what happens when someone breaks a promise.
Turning to each paragraph:
Par. 1 — Ceasefire on all fronts. But “all fronts,” “the current war,” and “their allies” are undefined. Lebanon is not a party, and parties that guarantee its sovereignty aren’t identified or signatories. The status of the ceasefire is unclear if a permanent deal does not occur.
Par. 2 — Mutual respect and non-interference. “Interfering in internal affairs” is vague — could mean proxy support, sanctions, broadcasting misinformation and propaganda, cyber activity, funding. Enforcement? Breach will be easy to allege and difficult to settle. Third parties who might interfere are not signatories.
Par. 3 — Final deal within 60 days, extendable by consent. Short time for big issues (sanctions, nuclear deal, $300B investment, asset release). Sixty days is extendable by mutual consent, so either side could torpedo extension.
Par. 4 — US lifts blockade in 30 days, pulls back forces 30 days after final deal. US undertakes to remove forces from proximity to Iran, but “proximity” is undefined. Sequencing: forces withdraw 30 days after final deal, but by then, some concessions may already have been made, and US forces don’t have to leave if there is no final deal.
Par. 5 — Iran ensures safe passage; talks with Oman on Strait of Hormuz. But Oman is not a signatory. Delay: demining “within 30 days” is technical and weather-dependent. Enforcement: “best efforts” to ensure safe passage is vague and failure does not carry clear penalty.
Par. 6 — Reconstruction plan of at least $300B. Missing parties: who will provide the money? No one is on the hook to pay and US has no obligation to fund. Scheduling: “develop a definitive plan with at least $300B” does not set forth a schedule.
Par. 7 — US terminates all sanctions, including UN and International Atomic Energy Agency measures. Missing parties: UN and IAEA. Release of some US sanctions may require legislation. US and Iranian “intention to immediately address these issues in the negotiations in order to achieve mutual agreement” is an intention, not an obligation.
Par. 8 — No nuclear weapons; handling enriched material; enrichment “to be discussed.” A key issue is deferred: a nuclear deal. The IAEA has a role in supervising nuclear enrichment, and it is not a party. Another enforcement issue: Iran “reaffirms it shall not develop nuclear weapons” is a statement of intention, not an inspection regime.
Par. 9 — Hold the status quo while negotiating. Vagueness: the “current status quo of its nuclear program” is not defined by date or any measures. Possibility for engendering future conflict as each side accuses the other of violating the status quo.
Par. 10 — Treasury waivers for Iranian oil exports. Missing parties? Whether oil flows may depend on third-party buyers, banks, insurers, and shippers who are cautious.
Par. 11 — Release of frozen Iranian funds. Missing parties, to the extent the funds are held abroad by third parties. The US undertakes to make funds available “upon the implementation of this MOU.” But there is no defined trigger for “implementation of this MOU.” And “procedures … agreed during negotiation” don’t exist yet.
Par. 12 — A mechanism to monitor compliance. Enforcement issue: an agreement to create a mechanism to monitor implementation of the MOU and future compliance leaves the compliance mechanism undefined. And monitoring is not enforcement.
Par. 13 — Talks on everything else depend on the early items being implemented. Because continuing negotiations are “subject to the beginning . . . and continuing implementation” of Paras. 1, 4, 5, 10, and 11, either side could create an impasse by claiming an early item has not been implemented.
Par. 14 — The final deal will be endorsed by a binding UNSC resolution. But the UN is not a party.
So what might an advocate of the MOU advance as arguments for signing it? They might acknowledge problems with implementation, while arguing that’s the price of getting any agreement. (Note that an MOU is not an agreement. The MOU here is more a statement of intention and an agreement to agree).
- BATNA: Best Alternative to a Negotiated Agreement. The advocate would argue that the best alternative to the MOU is ongoing violence.
- An MOU is a framework, so vagueness and deferral to a final deal are to be expected.
- The sequencing is smart. Build up momentum by addressing the easier problems, while deferring the harder issues.
- Reversibility protects the cautious signer. Waivers and licenses can be clawed back, providing an incentive to the order side to perform.
- The 60-day deadline concentrates minds and forces decisions.
- Freezing the status quo is better than the alternative; a loose definition of a freeze is better than escalation.
- Naming the IAEA carries the possibility of monitoring and verifying compliance.
So the advocate must argue that the loopholes are the necessary cost of having the possibility of a deal.
Will diplomacy breakdown? This will depend on the qualities necessary for a successful mediation: good faith, trust, and perseverance. Those qualities appear to be in short supply. Additionally, the parties need to see that a deal serves their substantive interests, an issue that I have not addressed.
Automobiles, Burden Of Proof: Consumer Compelled To Arbitrate
The Opinion Clarifies Shifting Burden Of Proof For Motions To Compel Arbitration.
The California Court of Appeal reversed a trial court’s denial of a motion to compel arbitration in a lemon law/warranty dispute. Kostandian v. American Honda Motor Company, B345489, (2/2 , pub. 5/27/26) (Chavez, Richardson, Gilbert).
Where a moving party meets its initial burden of establishing an arbitration agreement by producing a copy or reciting its terms verbatim, the burden shifts to the opposing party to dispute the agreement’s existence. If the opposing party fails to raise such a dispute, the motion to compel must be granted. The court applied this framework to both the lease arbitration clause (as to Standard Motor) and the warranty booklet arbitration agreement (as to American Honda Motor).
The court also held that a plaintiff’s own complaint allegations constitute judicial admissions that can satisfy a defendant’s prima facie burden.
COMMENT: Why publish? The opinion clarifies the burden-shifting framework for motions to compel arbitration, particularly regarding “Doing Business As” named parties and warranty booklet arbitration agreements, issues that arise in consumer vehicle litigation.
The DBA issue matters in arbitration disputes because a party seeking to compel arbitration must show it is actually a party to the agreement. If the agreement is signed under a trade name, a court may question whether the legal entity behind that name has standing to enforce it. California’s fictitious business name statutes govern DBA registrations, and Kostandian argued those statutes imposed an additional evidentiary burden on Honda, an argument the court rejected.
Kostandian himself had alleged in his complaint that “Standard Motor is doing business as Acura of Los Angeles Westside,” which constituted a judicial admission.
Add Your Heading Text Here
Supreme Court Holds Transport Worker Is Exempt From Arbitration
Section 1 of the Federal Arbitration Act Exempts Transport Workers Involved In Interstate Commerce.
The peculiar aspect of Flowers Foods Inc., et al v. Brock, 24-953 (S.Ct. 5/28/26) is that Angelo Brock, a transport worker who only worked in Colorado and did not deal with out-of-state employees, was held by SCOTUS to be a transport worker engaged in interstate commerce, and thus exempt from arbitration. Justice Gorsuch authored the court’s unanimous opinion, evidence once again that boring cases can still yield unanimity among the Justices.
Flowers Foods was out of state. Its baked products were delivered to a warehouse in Colorado. Brock picked up the goods and delivered them in Colorado. Thus, Brock worked intrastate as a transport worker, and did not deal with workers who crossed into Colorado. Because Brock carried out the last leg of an interstate transaction in commerce, he was exempt from arbitration
Health Care Arbitration: Unintended Consequences Of The No Surprises Act
A New York Times article dated April 22, 2026, authored by Sarah Kliff and Margot Sanger-Katz, includes the heading: “A $440,000 Breast Reduction: How Doctors Cashed In on a Consumer Protection Law.” The law is the so-called “No Surprises Act,” legislation that introduced baseball-style arbitration to disputes between insurers and out-of-network physicians.
The law was intended to take patients who had no choice but to go to an out-of-network physician out of the payment loop. If there was a disagreement as to the insurer’s amount of compensation to the physician, the provider could arbitrate in a framework of baseball arbitration, where the provider and the insurer each proposed the amount of an award to the arbitrator, and the arbitrator picked the most reasonable number, guided by a variety of factors, including the Qualified Payment Amount (QPA), the median contracted rate an insurer paid for a specific service, in a specific geographic area, as of January 31, 2019, adjusted annually for inflation.
Apparently the No Surprises Act has gone sideways, resulting in runaway costs. Because disputes between providers and insurance companies get resolved through baseball-style arbitration, the arbitrator is constrained to choose the most reasonable proposed award from the number proposed by the provider or the insurer. As the case law has evolved, however, arbitrators have not been constrained by the Qualified Payment Amount, and have often chosen the amount proposed by the provider, which may be much higher than the QPA. As a result, a mechanism that was supposed to be quick, efficient, and result in the most reasonable award has resulted in spiraling costs for the health care system. And presumably, as awards rise, so will the Qualified Payment Amount, which, however, currently serves as only one among other factors that the arbitrator can take into consideration. Because there is no provision for attorneys fees in the legislation, private equity has stepped in to provide litigation financing for the out-of-network providers.
Is there a solution?
One approach would be to simply do away with arbitration altogether, and impose fixed payment benchmarks adjusted for inflation.
Another approach would be to do away with baseball arbitration, allowing arbitrators to fashion awards that were not at extremes proposed by providers and insurance companies.
Another approach would be to make the Qualified Payment Amount the primary, if not determinative factor, for the arbitrator to consider what is reasonable.
Another approach would prohibit arbitrators from using past out-of-network rates, which, if inflated, can be used by providers to justify ever higher awards.
Another approach would be to weed out cases that are not appropriate for handling within the system of baseball-type arbitration — treatment cases that should have gone to in-network providers, or been handled by Medicare and Medicaid for the patients. Critics complain that many cases going to arbitration are actually ineligible and abusive claims, and there is a lack of oversight.
The No Surprises Act created a mechanism that was intended to take into account the interests of providers and insurers. No good deed goes unpunished. Any fix of the system will require congressional legislation. Any proposed change will trigger vigorous lobbying. Do not expect a fix anytime soon.
What do you think?
Arbitration/Jurisdiction: SCOTUS Holds That Fed Court Staying Arb Has Jurisdiction To Confirm Or Vacate Award
SCOTUS Resolved Circuit Split.
Adrian Jules sued his former employer, Chateau Marmont, in federal court in New York alleging employment discrimination under federal and state law. The district court stayed the case pending arbitration under FAA §3. Ruling against Jules, the arbitrator awarded sanctions to respondents. When respondents returned to federal court to confirm the award under FAA §9, Jules argued the court lacked jurisdiction because §9/§10 motions to confirm or deny an award presented no independent federal question and the parties were nondiverse with less than $75,000 at stake. The Supreme Court unanimously held a federal court previously staying claims under §3 retains jurisdiction to confirm or vacate the resulting arbitral award — no independent jurisdictional basis on the face of the §9/§10 motion is required. Jules v. Andre Balazs Properties, 25-83 (S.Ct. 5/14/26).
Comment. Previously, the Fourth Circuit had held that motions to confirm or vacate an award required an independent jurisdictional basis in federal court. In contrast, the Second, Third and Seventh Circuits held that a pre-existing federal case provided a jurisdictional basis to confirm or vacate an award, and thus an independent jurisdictional basis to confirm or vacate an award was only needed if the motion to do so was made as a freestanding action rather than in a pre-existing federal case. The resolution of the split in favor of the Second, Third, and Seventh Circuit should remove jurisdictional uncertainty when the motion to confirm or vacate an award is made in a pre-existing federal case. It will be possible to “look through” to the pre-existing federal jurisdiction in the pre-existing federal case to support federal jurisdiction for the motion to vacate or confirm the award..
After Cal Sup Ct Finds Provisions Unconscionable, Cal Ct Of Appeal Says Provisions Can’t Be Severed
Ramirez v. Charter Communications, Inc. (Ramirez III), (2025).
We previously posted on September 28, 2024, about the California Supreme Court’s Ramirez v. Charter Communications 2024 decision addressing unconscionability and severability in employment arbitration agreements, in which the California Supreme Court agreed that various provisions in an arbitration agreement were unconscionable, but remanded to determine whether the provisions could be severed.
On remand, the Second District Court of Appeal held that the multiple unconscionable provisions in Charter’s arbitration agreement so permeated the contract that they could not be severed, and the agreement was therefore unenforceable in its entirety. 108 Cal.App.5th 1297 (Cal. App. 2d Dist.).
Unconscionable But Severable
