Law Review Article | Still Litigating Arbitration in the Fifth Circuit, But Less Often

We invite you to read Donald R. Philbin, Jr. and Audrey Lynn Maness‘ latest Fifth Circuit law review article, Still Litigating Arbitration in the Fifth Circuit, But Less Often, 42 Tex. Tech L. Rev. 551 (2010). Here is an excerpt:

Arbitration remains under national klieg lights. It has “become a wide-ranging surrogate for civil litigation” in a wider variety of contracts than at any time in our nation?s history. This increased use has revealed stress fractures and drawn criticism. Congress has reacted, too: A party to a recent Fifth Circuit case was the impetus for the Franken Amendment, even though she ultimately won the right to take most of her claims to court. Other bills seek to exclude entire classes of claims (consumer, employee, franchise, and civil rights) from arbitration and to redraw the procedural line between decisions made by a court and decisions left to the arbitrator when the parties so provide. Arbitration is also being criticized in business circles for becoming “arbigation.”

But change has not awaited policy shifts, raising more questions about whether blunt legislative changes are necessary when commercial and judicial scalpels appear to be working. Pressure release valves, like unconscionability challenges, have been growing in popularity and use despite repeated petitions for writs of certiorari seeking to level geographic differences. That may change. The U.S. Supreme Court recently granted certiorari in a Ninth Circuit case to decide whether courts or arbitrators should decide unconscionability challenges to arbitration agreements when the parties clearly and unmistakably assign that gateway decision to the arbitrator. While major U.S. corporations expected overall disputes to increase in these tough economic times, one study indicates that corporations prefer to resolve their domestic disputes in litigation. This preference is already permeating standard contracts. The American Institute of Architects? widely used template for building contracts has changed arbitration from the default procedure to a mere party option. Even those that have not modified their standard contracts have focused on early case assessment, mediation, and tailored arbitration. While mediation is frequently used, and may be the current default procedure, it was not controversial enough to generate a Fifth Circuit opinion during this survey period. “In the current „toolbox? of approaches to conflict, mediation is the equivalent of a multi-functional Swiss-Army knife.” But lest anyone overstate the demise of commercial arbitration, the American Arbitration Association reports business arbitration to be relatively stable.10 And other studies show that it is still viewed as less costly and quicker than litigation.

The article may be downloaded (for free) here.

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