Arbitration/Fees: Attorney Relies On Arbitration Provision To Arbitrate Fee Issue, And Obtains Very Substantial Award
$78,154.49 In Unpaid Fees Plus $126,406.25 In Fees Plus $36,681.57 In Costs Plus $133,362.50 In Fees From Court For Motion To Compel And Motion To Confirm Award.
On April 28, 2018, my colleague Mike Hensley posted on Caswell v. Jamgotchian, Case No. B271389 (2d Dist., Div. 3 Apr. 24, 2018) (unpublished) in our California Attorney's Fees blawg. In this case, an attorney arbitrated a fee dispute with his client, obtained a substantial arbitration award for fees and costs, and the superior court judge then added fees for having to bring a motion to compel arbitration and confirm the award. Mike cites this case as demonstrating "how fees/costs easily can outstrip base compensatory award." And the former client is also on the hook for fees on appeal, to be determined by a fee petition before the superior court judge.
Delegation: Petition To SCOTUS Presents Delegation Of Arbitrability Issue
Does Delegation To Arbitrator Of Arbitrability Issue Need To Occur Even If Arbitration Claim Is Wholly Groundless?
In the April 18, 2018 on-line issue of ScotusBlog, under "Petition of the Day," Aurora Barnes posts:
Issue: Whether the Federal Arbitration Act permits a court to decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes the claim of arbitrability is 'wholly groundless.'”
The boundaries of the delegation doctrine are being tested by the case.
Arbitration/Fees: 2/1 DCA Accepts “Incremental Or Successive Award Process” To Allow Party To Obtain Cost Award After Trial Judge Entered Judgment On “Partial Final Award”
Court Of Appeal Couldn't Find Case Or Rule Preventing This Procedure.
EHM Productions, Inc. v. Starline Tours of Hollywood, Inc., B281595 (2/2 3/28/18) (Chavez, Lui, Ashmann-Gerst), presents a situation that arises from time to time in arbitration: a prevailing party seeks to recover attorney's fees, costs, or both, after an earlier entry of judgment requiring Starline Tours to defend EHM Productions in a wage and hours case brought by bus drivers. This is problematic, because of the one judgment rule. The procedure can be confusing in arbitration, because we are accustomed to following procedures in civil trials to obtain costs and fees.
In EHM Productions, Defendant and Appellant Starline Tours challenged the trial court's confirmation of a cost award obtained in arbitration after a so-called "partial final award" on the merits had already been entered as a judgment. The trial court relied on Hightower v. Superior Court, 86 Cal.App.4th 1415, 1434 (2001) for the proposition that "utilization of a multiple incremental or successive award process may be appropriate."
The Court of Appeal, also relying on Hightower, accepted the approach taken by EHM Productions, the prevailing party in arbitration. The Court of Appeal explained, "Hightower suggests that an incremental award process may be appropriate in situations where not all issues may be resolved at the time of the initial partial final award." Also, the Court of Appeal could not find a case foreclosing obtaining the costs judgment here. And the very last footnote in the opinion notes that the arbitrator reserved jurisdiction to enforce appellant's defense obligation going forward, that the arbitrator might enter future substantive and cost awards, and that application of the one judgment rule could prevent confirmation of such awards in the future.
COMMENT: The Court's aside that it was unable to find a case preventing the approach it took, and that there was no requirement to amend the petition to confirm the substantive award "under the circumstances of this case," should make one cautious about what procedure to follow in the future. Best to have the parties discuss the matter with the arbitrator, get everyone on the same page, and avoid the pleasure of obtaining a published appellate opinion.
Articles: The Widespread Use of Workplace Arbitration Among America’s Top 100 Companies
Most Of The Top Companies Have Arbitration Clauses, And More Than Half Have Class Action Waivers.
Prof. Imre Szalai, Judge John D. Wessel Distinguished Professor of Social Justice, Loyola University New Orleans College of Law, has published an article entitled "The Widespread Use of Workplace Arbitration Among America's Top 100 Companies."
Prof. Szalai summarizes his key findings:
- 80 of the top 100 largest companies in America, including subsidiaries or related affiliates, have used arbitration agreements in connection with workplace-related disputes since 2010.
- Of the 80 companies with arbitration agreements in the workplace, 39 use arbitration clauses containing class waivers.
- Over half of the companies in the Fortune 100 appear to have imposed forced arbitration clauses on workers; such workers did not have a meaningful choice to accept or reject the arbitration clause.
Those conclusions present questions for us: if 80 of the top 100 companies use arbitration agreements in connection with workplace-related disputes, why don't 20 of the companies use arbitration agreements? If 39 of 80 companies use arbitration clauses containing class waivers, why don't 41? And if over half of the companies have imposed forced arbitration clauses on workers, why haven't nearly half not done so? Have the companies that don't rely on arbitration clauses, class action waivers, and binding arbitration made a conscious policy decision, or are they simply behind the curve set by other employers?
News/Celebrities: ADR, Donald J. Trump aka David Dennison, and Stephanie Clifford aka Stormy Daniels
Stormy Weather . . .
Above: Video/recording: Comedian Harmonists Sing Quand Il Pleut (Stormy Weather/Ohne Dich). 1933.
News about our latest reality show, Stephanie Clifford a.k.a. Stormy Daniels a.k.a. Peggy Peterson v. Donald J. Trump a.k.a. David Dennison, and Essential Consultants, LLC, LASC Case No. BC696568 (filed March 6, 2018) is now splattered across the information superhighway. The lawsuit seeks declaratory relief that a non-disclosure agreement or "hush agreement" created to prevent adult film actress Stormy Daniels from communicating about her relationship with Donald J. Trump a.k.a. David Dennison, is unenforceable. A copy of the secret non-disclosure agreement is attached as Exhibit 1 to the very public complaint.
Meanwhile — and this is where alternative dispute resolution enters into the picture — President Trump's press secretary Sarah Huckabee Sanders, has announced that President Trump has already won in arbitration, thereby perhaps inadvertently admitting that President Trump, who did not sign the non-disclosure agreement, is the real party in interest seeking to shut up Ms. Daniels.
Seth Abramson, in a series of Twitter tweets, has analyzed the enforceability of the arbitration agreement. The enforceability of the agreement is also discussed by Emily Bazelon, David Plotz, and John Dickerson, in their March 8, 2018 Political Gabfest podcast.
Here is my own somewhat random collection of issues relating to the enforceability of the arbitration agreement:
1. Is the agreement too ambiguous to be enforceable, because the parties are a shell corporation and/or Donald J. Trump (who is identified in a side agreement).
2. Does it matter that DJT did not sign the agreement, though there is a signature line for him?
3. Is the agreement enforceable, because there is an offer, an acceptance, consideration ($130,000), and a meeting of the minds?
4. Was there a meeting of the minds if the agreement, as DJT's press secretary apparently admitted, is for the benefit of DJT, yet he did not sign it?
5. Can DJT enforce the agreement as a third-party beneficiary?
6. Does DJT need to sue in his name to enforce the agreement on his behalf?
7. Did Ms. Daniels violate the non-disclosure agreement when she filed a public document attaching the NDA as Exhibit 1, rather than filing under seal?
8. How can a shell corporation make representations in the NDA on behalf of DJT, if the shell corporation is not his agent or attorney?
9. Did attorney Michael Cohen violate campaign election law by funneling a $130,000 payment to Ms. Daniels to help DJT win the presidential election, without declaring an in-kind campaign contribution?
10. Did attorney Michael Cohen violate rules of professional ethics by settling a legal dispute without a real client, or without the knowledge of the client, whose fingerprints are not on the agreement?
11. Has the NDA been compromised by public statements of the President's attorney and the President's press secretary, such that it cannot be enforced?
12. How do you feel about the use of NDAs to prevent someone from speaking about the sexual conduct of an important public figure? Is it important that the NDA was entered into just before the election, when DJT was not yet a public official, rather than after the election? Does it matter to you whether the person seeking to speak was a victim, or whether the conduct was consensual?
13. Is enforceability of this NDA, concerning the President, against public interest?
14. Is the million dollar liquidated damages provision in the NDA unenforceable as a forfeiture having no reasonable relationship to the actual injury? Has DJT ever been monetarily damaged by publicity?
15. If an award has been issued against Ms. Daniels in arbitration, how will it now be enforced? Does a petition to confirm the award in court lead to a public circus that will vitiate the benefit of such an award?
16. Are the private lives of important public officials fair game?
17. Was the original sin an effort to blackmail, making enforcement of the arbitration remedies with the help of a private arbitration process more acceptable?
Dear readers, please let us know if you spot additional issues worthy of consideration.
BONUS: The original Comedian Harmonists, who sing Stormy Weather in its French version in the recording above, were a German harmony ensemble active between 1928 and 1934. They are the subject of an entertaining 1997 German movie entitled The Harmonists, directed by Joseph Vilsmaier. Our blogger's grandfather, Eric Collin, was the second tenor in the group.
Arbitration/Delegation: SCOTUS To Consider Who Decides Arbitrability Of Federal Arbitration Act Section 1 Exemption
Arbitrator Or Judge?
SCOTUSBlog reports today that the Supreme Court has added an arbitration case to its next term:
"New Prime Inc. v. Oliveira
| Docket No. | Op. Below | Argument | Opinion | Vote | Author | Term |
|---|---|---|---|---|---|---|
| 17-340 | 1st Cir. | TBD | TBD | TBD | TBD | OT 2018 |
Issues: (1) Whether a dispute over applicability of the Federal Arbitration Act's Section 1 exemption is an arbitrability issue that must be resolved in arbitration pursuant to a valid delegation clause; and (2) whether the FAA's Section 1 exemption, which applies on its face only to “contracts of employment,” is inapplicable to independent contractor agreements."